Ferrovial Q1 falls hit by costs and slower building

By Ben Harding

MADRID (Reuters) - Ferrovial's (FER.MC: Quote, Profile, Research) net profit fell 83 percent to 79 million euros (62.8 million pounds) in the first quarter, hit by a cocktail of higher costs at struggling unit BAA, a construction slowdown and fewer capital gains.

Figures released on Tuesday met expectations in a Reuters poll.

The Spanish building and infrastructure company said its EBITDA (earnings before interest, tax, depreciation and amortisation) fell 12 percent to 557 million euros while revenue dropped 5 percent to 3.25 billion.

Ferrovial has been diversifying out of construction over the past few years but, while some bets have paid off, it is suffering a thumping headache from its 2006 acquisition of British airport operator BAA. It now owns seven UK airports.

It said operating costs rose 33 percent at BAA during the period as it paid more for security and maintenance and the opening of Heathrow's Terminal 5, an effect compounded by a 14 percent appreciation in the euro versus the pound.

However, higher tariffs approved by the regulator would allow it to recoup extra costs, it said, forecasting that BAA's EBITDA would rise to 1.07 billion pounds this year and 1.36 billion in 2009.

Ferrovial said consolidated debt fell to 29.18 billion euros from 30.27 billion three months ago.

The company has been trying to refinance about 10 billion pounds of BAA debt for months, and last Friday said some banks have not signed up to secure the deal while shareholders had agreed to pump in another 400 million pounds of capital.