Barcelona-based Abertis to list its telecom division on the Stock Exchange in 2015

Barcelona (ACN).- The Catalan transport and telecommunications infrastructure multinational Abertis presented its new Strategic Plan for 2015-2017 to investors in London this week. The Barcelona-based company plans to list on the Stock Exchange its exchange telecommunications business next year, a decision which will allow it to raise funds and to focus on its toll road business, strengthening its commitment to financial solvency and shareholder dividend. Abertis, which owns 8,000 radio, television and mobile towers, also presented its figures for the first 9 months of 2014, which included a net profit of €560 million, an increase of 4.6% on the same period last year. The company’s decision to list its telecommunications business on the Stock Exchange will bring more financial flexibility and greater visibility. The Strategic Plan also envisages a 10% increase in the shareholder dividends, thanks to a 5% rise in dividends per share every year until 2017 and to allocating 1 additional bonus share for every 20 existing shares. The aim of Abertis is to get an 8% annual growth in gross operating profit, reaching €4 billion in 2017. The company will also launch a three-year plan to achieve efficiency savings of €450 million, concentrating on business in France, Brazil and Spain.  It also wishes to raise its profit margin on sales from the expected 64% in 2014, to 68% by 2017.

Third quarter results

Abertis, which also manages toll roads, exceeded expectations for the first nine months of 2014, with a 6.7% increase in revenue, which stood at €3,676 million. The gross operating profit (EBITDA) grew 11.1% reaching €2,415 million, and the net profit of the bank increased by 4.6% to reach €560 million between January and September this year.

The company said these results were affected by the impact of the exchange rate, especially important given the currency depreciation in Chile, Brazil and Argentina. Without taking these into account, Abertis' results for the first 9 months of the year would have indicated an increase of 11% in revenue (instead of 6.7%) and 15% in gross operating profit (instead of 11.1%).

The corporate figures indicated a growth in international business, an increase of 4.4% to Chile, 3.1% to Brazil and 2.3% to France. Overseas business is already 60% of the total consolidated group Abertis, with France and Brazil jointly contributing over half of revenue. Regarding business in Spain, Abertis has had the best quarter since 2007, with an increase of 1.6%.

Increasing shareholder remuneration

The dividend per share will increase by 5% each year to 2017. Taken together with the bonus share issue of 1 new share for every 20 existing shares, this equates to a 10% annual increase in shareholder remuneration. Under the new shareholder remuneration policy, the company is expected to distribute more than €2 billion over the next three years through the ordinary dividends alone.

"Interest" in Abertis

The CEO of Abertis, Francisco Reynés, highlighted the high influx of investors and analysts to the London event, a city which alongside New York is all important to the company, moving 60% of its shares. According to Reynés, the participation of the analysts demonstrated "the interest" in the Abertis generated by the City of London.

Reynés pointed out that the announcement of its stock market launch of the telecommunications business is "another milestone" in the direction of providing all divisions of the company to its "own life." Although he did not specify the exact value of the shares of the telecommunications business, Reynes said that the sector will generate "a lot of opportunities in the coming years."

His argument regarding the output, was that "these companies should be well equipped in terms of management, and already have a first division management team, but they should also be [well equipped] from the point of view of capital," he said.

According to Reynés the improvements in shareholder remuneration announced by the company in London, show a "commitment" to its shareholders, many of whom are "small savers looking for a steady course of action and well-paid." He pointed out that the Strategic Plan 2015-2017 is "attractive" for shareholders, managers and stake-holders alike and raises "significant investment opportunities" to expand the business in the long term.

Madrid's toll road conflict

Regarding the ongoing conflict in the toll highways in the Region of Madrid, Reynés explained that the issue resolution is still pending.  The company is present in both the R2 and the R3-R5 highways. In the case of the first one, two agreements have been proposed. "There is less than a month left unless the deadline is extended by the judge because the decision was to be made on 16 November. If any of the alternatives is accepted, the only option will be liquidation", explained Reynés. The toll roads in Madrid are currently run by a judicial management after the Region of Madrid stopped funding them and they went bankrupt.