October 30, 2019 / 5:58 PM / 22 days ago

Ferrovial to retain some contracts in delayed service-unit sale

MADRID (Reuters) - Spain’s Ferrovial (FER.MC) said on Wednesday that it expects to retain some contracts after the sale of its services division, which is taking longer than expected due to changes in the deal’s terms.

The transaction will be split into two parts, the group’s UK services subsidiary Amey and the rest of the division which includes operations in Spain, Australia and other countries, Ferrovial said. No other details on the retained contracts or changes to the sale were disclosed.

Madrid-based Ferrovial has been exploring a sale of the services unit, which provides maintenance and environmental services, for over a year as it sharpens its focus on the more stable business of owning and operating infrastructure.

JP Morgan said in a recent report that the disposal could fetch around 2.7 billion euros, including debt.

Ferrovial booked a 104 million euros loss in its nine-month earnings, which were dragged down by continued losses at its construction business, offseting gains at its resilient toll-road unit.

Core earnings before interest, tax, depreciation and amortization (Ebitda) in the first nine months of the year fell to 3 million euros from 349 million euros a year earlier.

Construction, which generates the bulk of group revenues, reported a negative Ebitda of 320 million euros, following a provision booked in the first quarter.

Earnings from toll roads, the group’s most profitable unit jumped 45% to 332 million euros, the company said.

Reporting by Nathan Allen and Elena Rodriguez, editing by Andres Gonzalez and Cynthia Osterman

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