FCC, the environmental services, infrastructure and water management group, reported an EBITDA of 833.7 million euro in its 2016 annual results. The 2.3% increase on the previous year was attributed to a sharp reduction in structure and administration expenses throughout the Group. The EBITDA margin rose to 14.0%, from 12.6% in 2015, due to increased collaboration across business areas and improvements in productivity.

The group’s Environmental Services and Water divisions accounted for 80.4% of overall EBITDA in 2016, while cyclical businesses, related to infrastructure construction and building, accounted for 19.6%.

Another of the achievements in 2016 was the reduction in net interest-bearing debt. At the end of 2016, FCC had 3,595.8 million euro in debt, 34.3% less than at the end of 2015.

FCC's revenues declined by 8.1% in 2016 to 5,951.6 million euro, mainly as a result of the ongoing decline in construction activity in Spain as demand for public works continues to shrink.

The backlog ended the year at 30,589.9 million euro, 85.4% of which is concentrated in the Environmental Services and Water divisions, ensuring a high degree of visibility and strength for the Group's prospects.

Net income attributable to the controlling company amounted to -165.2 million euro, compared with a loss of -46.3 million euro in 2015. The difference between years was due broadly to recognition of 299.9 million euro in impairment of goodwill in the Cement division, Cementos Portland Valderrivas (CPV), in September 2016, and to the impact of downsizing provisions in the disincorporation process. A net profit of 149.8 million euro would have been reported in the absence of those two effects. FCC has been reporting a recurring net profit each month since April 2016.

Capital expenditure amounted to 448.6 million euro in 2016, 3.9% than the 431.9 million euro registered in 2015.

Milestones in the year

FCC Medio Ambiente expanded its international portfolio in the UK and the US

FCC Medio Ambiente, the Environmental Services division, expanded its international portfolio with contracts in Scotland and the United States. In Scotland, it began development work on the Edinburgh and Midlothian Recycling and Energy Recovery Centre, which has an associated backlog of 511 million euro. Towards the end of the year in the US, it was awarded a 10-year contract by competitive tender to collect municipal solid waste in Polk County, Florida, representing a backlog of approximately 102 million dollars, and a five-year contract, renewable for another five, to treat and market all the recyclables of the city of University Park, Texas.

These contracts are in addition to the backlog in Spain, where the largest increase came in September when the City of Madrid awarded FCC one of the three municipal waste collection contracts in the Western area, which covers much of downtown Madrid. This contract is for four years and represents a backlog of 227.5 million euro.

FCC Aqualia obtained new international contracts worth 318 million euro

FCC Aqualia, the Water division, obtained a number of international contracts, including construction and management of two sewage treatment plants in Colombia, worth 148 million euro and serving over three million people, and a desalination plant in El-Alamein (Egypt), worth 114.6 million euro. It also secured network contracts in Riyadh (Saudi Arabia) worth 23 million euro. Order intake enabled the total order book to remain at record highs: close to 15 billion euro at year-end.

FCC Construction exceeded 500 million euro in order intake in industrial construction

FCC Industrial, a subsidiary of FCC Construction specialising in industrial and energy installation, greatly expanded its business in 2016. The contracts it obtained during the year — such as the Samalayuca-Sasabe gas pipeline in Mexico, upgrading of fuelling facilities at Dublin airport (Ireland), and the electromechanical installations on Riyadh Metro lines 5 and 6 (Saudi Arabia) — boosted the order book by 14.4% with respect to 2015. Additionally, FCC and CICSA were recently awarded the contract for the new airport terminal in Mexico City, a project worth 3.9 billion euro.

Further steps towards consolidation and financial optimisation of the Group

In September, the bulk of the FCC, S.A. convertible bond was repaid early. This, combined with smaller payments in subsequent months, resulted in the repayment in 2016 of a nominal amount of 417.7 million euro, nearly 93% of the total. The result was a substantial reduction in the interest expenses on this issue (6.5% interest rate). This followed the repayment in April of 76% of Tranche B of FCC, S.A.'s syndicated loan by means of a Dutch auction in which an average 15% haircut was obtained. The new funding structure for CPV came into force in July after repayment of 295 million euro with funds from the March equity issue, including arrangement of a five-year maturity and a substantial reduction in funding costs. This will make it possible to adapt the Cement division's funding structure in order to generate cash flow as planned.

In the words of FCC's CEO, Carlos M. Jarque, "with these transactions in 2016, the FCC Group made major progress towards strengthening and optimising its capital structure, to provide it with a solid funding platform and strengthen its capacity and operational flexibility."  
Delisting bid for CPV.

The period for acceptance of the delisting bid for 100% of the shares representing the capital stock of Cementos Portland Valderrivas, S.A. (CPV), in which FCC owns 77.9%, commenced on 30 December, with the intention of delisting the company from the Madrid and Bilbao Stock Exchanges. The deadline for acceptance is 13 February 2017.

FCC Aqualia and FCC Medioambiente lead a new biogas production project

The Methamorphosis project, headed by FCC Aqualia and FCC Medio Ambiente in association with other private and public-sector agents, including Greater Barcelona (AMB), Catalan Energy Institute (ICAEN) and SEAT, seeks to develop an innovative process and new techniques for enhancing biofuel production from municipal and agribusiness waste. The project envisages the installation and operation of prototypes to increase biogas output and enrich its  content at a waste treatment centre owned by AMB and managed by FCC Medio Ambiente.