A recurring complaint among large Spanish companies is their low stock market valuation. The markets, they say, do not reflect value and that makes it difficult for them to raise funds, sometimes puts them within the reach of a takeover bid and discourages other companies from going public. Sacyr adds to this discomfort, but believes it has found a solution. Its stock market value is about 1,900 million euros, well below the 3,000 million of its assets. How to raise the first digit? Reducing debt. And that's what he's doing this year.
In the absence of reporting this month on the 2022 accounts, the construction group had achieved results by September that its own president, Manuel Manrique, describes as "spectacular." Revenues increased by 24%, to 4,092 million euros, while gross operating profit (ebitda) grew by 47%, to 924 million, and net profit stood at 68 million, 13% more. To top it off, the project portfolio is at its all-time high, of 53,122 million.
However, Sacyr needs to take a load off its shoulders before any complacency. Its objective for this year is to reduce the recourse debt to zero, if possible, which at the end of September stood at 689 million euros. This liability is for which the corporation is directly responsible and, in accordance with the group's strategic plan until 2025, it should remain at a minimum at the end of the period.
Company sources explain that the intention is to advance the fulfillment of the objectives by two years, until 2023, and that for this purpose various divestments are being actively studied. Last year, the group got rid of its historic stake in Repsol, which allowed it to reduce debt by 563 million, without having completely broken the relationship with the oil company, since Manrique continues as a director, albeit as an external one.
The two divestments on the table consist of the sale of 49% of both the water infrastructure business and the services business. For the first process, Société Générale has been hired and for the second, Santander and Nomura. To these sales will be added a non-strategic asset rotation strategy.
The sale of 49% of Sacyr Agua is also aimed at incorporating a partner with a strategic vision that will make it possible to take advantage of the opportunities in this infrastructure business. In the process, there is a knock on the door of the large international investment funds that have invested in Spain in recent years. "A partner is being sought to grow globally in a thriving concessions sector," the sources indicate.
The other major operation, the sale of 49% of Sacyr Servicios, is intended for a different investor profile, in which Spanish venture capital firms fit. The stake "offers a fixed return, highly priced, in a highly consolidated business," and it includes the subsidiary Valoriza. Both processes are in the phase of receiving non-binding offers.
The divestments have an additional objective, also of high strategic value: to increase the focus on the concession business. The traditional construction activity has more risk and, on the other hand, the concessions, of which the group adds three or four a year, offer better returns and profitability. Sacyr boasts that 85% of its ebitda is already generated through concessions, whether for hospitals, water or highways.
The company anticipates that 2022 has closed with revenues of more than 5,000 million euros, which for practical purposes is equivalent to saying that the goal of reaching the 5,500 million forecast for 2025 is within a stone's throw.
Last year, two of the company's main milestones were its return to the Ibex after six years of absence and its entry, through Valoriza, into one of the most important service contracts in Spain, cleaning, green areas and waste collection. Barcelona garbage.
In 2021 he entered the services of this city for the first time and has now managed to secure eight years of permanence.
