Ferrovial’s Q3 core profit up 36% on higher motorway traffic

MADRID (Reuters) – Spanish construction giant Ferrovial on Tuesday said its core third-quarter profit rose 36% to 400 million euros ($433 million) as investments in toll road concessions in North America continued to pay off.

Ferrovial’s core profit for the quarter was slightly above the average analysts’ expectation of 389 million euros, according to data compiled by LSEG. It reported quarterly revenue of 2.4 billion euros, in line with analysts’ estimates.

Toll roads, one of its most profitable units, reported an 11.4% rise in revenue to 321 million euros in the quarter, aided by the growth of traffic and revenue on the U.S. managed lanes, a company presentation said.

The highway 407 ETR in Canada, in which Ferrovial owns a 43.23% stake, generated a 16% increase in revenue during the quarter, supported by traffic growth.

But the firm could risk losing one of its prized assets after Ontario Premier Doug Ford did not rule out buying back the highway, saying “all options are on the table” during a press conference this month, as per local media.

Some analysts dismissed the idea of the government buying back the motorway, as it would have to pay more than 23 billion euros to Ferrovial and its partners.

The company’s construction revenues rose 1.6% in the quarter, and ended September with an order book worth 15.5 billion euros, with U.S. and Canada accounting for 49% of the amount.

Ferrovial is building a new international terminal at New York’s John F. Kennedy airport, and is in the process of selling its stake in London’s Heathrow airport.

It is also evaluating selling its stakes in Aberdeen, Glasgow and Southampton airports in Britain as it seeks to focus on the U.S. market.

The builder’s core profit rose 50% to 1 billion euros ($1.08 billion) in the first nine months of the year.

($1 = 0.9246 euros)

(Reporting by Corina Pons; editing by Charlie Devereux and Abinaya Vijayaraghavan)