I-595 up for sale as Hochtief boosts ACS’ H1 results

ACS' takeover of Hochtief has boosted its sales by 26.5% and doubled its international activities, which now account for 52.5% of its total sales. The firm has also announced that it will sell its stake in Florida’s €1.2bn I-595 highway.

Mission accomplished: as of June 1, 2011, Spanish developer ACS has consolidated German infrastructure group Hochtief on its books, following a protracted takeover process planned to boost ACS' finances and significantly increase its international footprint, the Spanish firm announced during its half-year results presentation.

Alongside the ongoing sale of its renewable portfolio, ACS also announced that it is planning to sell its stake in Florida’s €1.2 billion I-595 highway – the first infrastructure deal in the US to remunerate private investors using availability payments. Availability payments are paid by the government to the private sector partner in exchange for meeting certain levels of service provision. ACS also plans to sell its stakes in Chile’s Vespucio Norte and Tunel San Cristobal road concessions.

Thanks in part to Hochtief, ACS increased sales to €9.5 billion during the first half of the year, a 26.5 percent increase in relation to the previous comparable period. Hochtief added close to €2.1 billion to first-half sales in June alone, ACS said. Earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 22.5 percent to €897 million with net profit also rising by 20.5 percent to €604 million.

The most significant contribution from Hochtief’s consolidation, though, comes from its international portfolio, which was responsible for doubling ACS’ international activities. ACS’ international sales now account for 52.5 percent of its €9.5 billion in total sales. Compared with the first half of 2010, international sales grew 117.3 percent to €4.98 billion, ACS said in its results presentation. 

ACS now owns more than 53 percent of Hochtief, after spending the better part of a year conducting an unsolicited takeover of the German company.

Asset sales

The Spanish firm added to its asset disposal programme by announcing that it has put several road concessions up for sale, including Florida’s I-595 highway – in which ACS owns 100 percent of the equity – and Chile’s Vespucio Norte and Tunel San Cristobal motorways. 

According to ACS’ website, the firm has invested €155 million of equity in the I-595, which averages some 130,000 vehicles per day. It won the concession for the road in late 2008 and holds its lease until 2044. ACS owns 50 percent of Tunel San Cristobal and 46.5 percent of Vespucio Norte. Reports in the Chilean media suggest that Brookfield is in negotiations to buy ACS’ stake in the $320 million Vespucio Norte concession.

In addition to the new announcements, ACS also updated investors on the ongoing sale of its renewable portfolio, highlighting it has sold 100 megawatts (MW) of thermosolar assets in June and 752.5MW of wind assets over the summer. ACS said it expected to divest its remaining renewable energy portfolio, amounting to just under 1,000MW, over the next six months.

The asset sales are part of ACS' efforts to cut its €9.85 billion debt pile.