The Spanish infrastructure and construction giant said on Monday that net profit reached €485m (£414m) in the nine months to September 30 after it received dividends of €355m from its investments in airports and toll roads. Revenue climbed almost 5pc to €5.9bn.
Heathrow performed “exceptionally well” during the period, Ferrovial said. Heathrow’s latest results show Britian’s biggest airport paid £476m to its shareholders during the period, although the sum was inflated by a £300m one-off return from the sale of Stansted to Manchester Airports Group in February.
Ferrovial last week sold an 8.65pc stake in Heathrow to Britain’s second biggest pension fund, the Universities Superannuation Scheme, for £392m, pushing its holding down to 25pc.
However, the Madrid-based group cut its stake from 33.65pc after September 30. A spokesman for Ferrovial confirmed it benefited from £160m of the £476m payment made by Heathrow to its shareholders – who also include Qatari and Chinese sovereign wealth funds.
Ferrovial said in a statement on Monday that the funds from the USS deal would “greatly enhance the company’s flexibility to undertake new investments orientated towards international expansion”.
However, the dividend windfall is likely to further anger airlines which have hit out at proposed increases in landing charges at Heathrow from next year.
Carriers including British Airways have accused Heathrow of generating “excessive” returns for its shareholders at the cost of its customers.
Willie Walsh, the head of British Airways’ parent company IAG, yesterday poured further fuel on the fire by accusing Heathrow of “gaming” the regulatory system, which decides how much the airport should be allowed to charge carriers to use its facilities.
Heathrow argues that shareholders have not yet made “anything approaching a market return” and the airport’s recent results have showed a profit after years of losses.
Heathrow spreading ‘scare stories’ over investors, claims Willie Walsh
October 28, 2013 Willie Walsh, the boss of IAG, has rebuked Heathrow over investment claims and accused Heathrow of spreading “scare stories” and expertly “gaming” Britain’s regulatory system to bump up prices for airlines and passengers. He hit out at Heathrow over claims that it will lose investors if it is not allowed to generate higher returns. He said last week’s £392m purchase by Britain’s 2nd biggest pension scheme of a stake in the hub “blows a hole” in the airport’s arguments. The deal saw the Universities Superannuation Scheme buy an 8.65% holding from Ferrovial, Heathrow’s top investor. The sale was struck at a 13% premium to Heathrow’s Regulatory Asset Base – the regulator’s proxy for the airport’s value. Willie Walsh said that without question there is no shortage of investors who would be willing to take a stake in Heathrow. “It is almost insulting that they announce the sale of a stake to a significant player like USS at the same time that they have been arguing that if they don’t get excessive reward at Heathrow, investors will leave.” Click here to view full story…
Ferrovial sells Heathrow stake to UK pension fund – the Universities Superannualtion Scheme – for £392m
Date added: October 22, 2013
Spanish infrastructure giant Ferrovial has further reduced its stake in Heathrow after agreeing to sell 8.65% of the airports group to UK pension fund, the Universities Superannuation Scheme (USS), for £392m. The USS is one of the UK’s largest pension funds and is the scheme for universities and other higher education institutions in the UK. The deal, which values Heathrow at £4.5 billion,(plus the extra value of some £10 billion in debts) is the 4th time Ferrovial has trimmed its holding in Heathrow (or BAA as it was) in 2 years. It reduces Ferrovial’s stake to 25%, down from 62% when it bought BAA in 2006 in a £10.3 billion deal. Heathrow Airport Holdings has, since 2006, had to sell Edinburgh, Gatwick and Stansted, but still owns Aberdeen, Glasgow and Southampton airports. Ferrovial will remain the largest shareholder in Heathrow following the deal with USS, which is expected to complete on Thursday. USS will hold the 7th biggest stake behind China Investment Corporation which bought 10% of Heathrow in October 2012. Click here to view full story…
CAA proposes Heathrow charges rise in line with inflation over next 5 years
October 4, 2013 .The airport regulator, the Civil Aviation Authority, has proposed that Heathrow should cap its landing charges so that they rise in line with inflation for the 5 years 2014 – 2019. Heathrow is complaining about this, as it wants a much larger increase in its charges and says this price cap would have “serious and far-reaching consequences” for passengers. Heathrow had submitted its request to the CAA for charges to be allowed to rise by 4.6% above the Retail Price Index (RPI), which is a measure of UK inflation. The CAA had initially proposed that the annual increase at Heathrow should be RPI minus 1.3% but said a key reason for its proposal to allow rises in line with inflation was “due to an increase in the cost of capital driven by higher debt costs”. If the proposals are accepted it will put an end to over a decade of prices rising faster than inflation at Heathrow. Airlines like BA at Heathrow had asked for a 9.8% a year cut in landing charges over the 5 years. The CAA propose allowing charges at Gatwick to rise by 0.5% above RPI for 5 years, and has deferred a decision on charges at Stansted. Click here to view full story…
Heathrow says its investment plans are at risk if CAA limits its charges to airlines
July 25, 2013 Heathrow wants to put up its charges to airlines significantly. The CAA controls how much the airport can charge, and it has indicated that it will limit the rise in the amount Heathrow can charge to the rate of inflation plus 4.6% per year. However, Heathrow says its shareholders would not be willing to proceed with plans to invest £3bn in the airport over the next 5 years if the CAA imposes stricter controls on price rises. Colin Matthews, chief executive of Heathrow. said they would not proceed with capital spending of no more than £2bn if the CAA does not let them charge the amount they consider acceptable as a return for investors. There is a long term battle between Heathrow and the airlines, and Heathrow has some of the highest charges of any global airport. Heathrow has just reported a pre-tax profit of £186 million for the half year up to June 2013, though they made a loss of £51 million in the same period in 2012. This is largely due to the sale of Stansted. Heathrow’s passenger traffic rose 2.4% in the 6 months to June 2013, compared to 2012, to 34.4 million. Most of the growth was European traffic, which rose 4.9% to 14.3 million passengers. Click here to view full story…
Heathrow proposes cutting airline landing charge rise to 4.6% above RPI for 5 years
July 23, 2013 In February Heathrow announced it was intending to increase its airline landing charges, from the current level of £17 per passenger to perhaps up to £25. This caused very negative responses from airlines that use the airport. Now Heathrow has moved to appease airlines by offering to reduce the rise it is seeking to charge between 2014 and 2019. Heathrow has submitted a plan to the CAA seeking approval to raise tariffs by 4.6% above inflation, as measured by the retail prices index (RPI), for the 5 years from April 2014. That is 1.3% lower than their earlier offer of a rise of 5.9%. Gatwick has also agreed to scale back their planned fee increases. Earlier this year Willie Walsh called the airport “over-priced, over-rewarded and inefficient”. However, the investors, including Ferrovial and the sovereign wealth funds of Qatar, China and Singapore, who have spent more than £10 billion on the airport over the last decade, expect to see a good return on their investment ie. they want high fees to airlines. Click here to view full story…