Empresas ICA, S.A.B. de C.V. (BMV:ICA) (NYSE:ICA), announced today
its unaudited results for the fourth quarter and full year 2015,
which have been prepared in accordance with International Financial
Reporting Standards. During the fourth quarter, the Company
suspended the sale of its social infrastructure projects.
Accordingly, these projects are no longer classified as available
for sale, and financial statements from prior periods have been
restated for comparability. In addition, ICA is no longer
consolidating San Martín, effective October 1, 2015, as a result of
the reduction in ICA’s shareholding to 31.2% from 51%.
- Total revenues decreased 53% in the fourth quarter,
compared to the same period of 2014
- Results for 4Q15 were affected by a 66% decrease in
civil construction revenues, compared to the same period of
2014
- Comprehensive backlog increased Ps. 1,578 million
compared to end-2014 levels, principally because of new ICA Fluor
contracts
- Operational and financial restructuring process
began
- Payment of parent company financial debt
suspended
- Headcount reduced by 51% to date from December 2014
levels, as part of restructuring process
- Allowances, asset impairments, and provisions totaled
Ps. 11,389 million for the full year
Financial and Operating
Results
Fourth quarter consolidated net revenues
decreased 53% to Ps. 5,504 million from Ps. 11,647 million in 4Q14.
This reduction was principally the result of a lower volumes of
construction work on various projects, the completion of
international projects that contributed to results in 4Q14, and the
deconsolidation of San Martín effective 4Q15. Revenues of the
Construction segment decreased to Ps. 2,824 million in 4Q15 from
Ps. 8,427 million in in 4Q14.
The consolidated net loss was Ps. 10,510 million
in 4Q15 and Ps. 13,833 million in the full year 2015. The net loss
was principally the result of the reduction in Construction segment
revenues, allowances for doubtful accounts, asset impairment
losses, and the depreciation of the peso against the U.S. dollar.
Loss per share was Ps. 17.33 (US$ 4.00 per ADS) in 4Q15 and Ps.
23.65 (US$ 5.46 per ADS) in 2015.
|
|
|
Consolidated
Results |
|
|
|
12 months |
|
|
Ps.
million |
4Q14 |
4Q15 |
% Chg |
|
2014 |
|
|
2015 |
|
%
Chg |
|
|
Revenues |
|
11,647 |
|
|
5,504 |
|
|
(53 |
) |
|
39,428 |
|
|
33,229 |
|
|
(16 |
) |
|
|
Operating Income
(Loss) |
|
1,695 |
|
|
(10,284 |
) |
-- |
|
6,044 |
|
|
(6,359 |
) |
-- |
|
|
Consolidated Net
(Loss) |
|
(1,826 |
) |
|
(10,510 |
) |
-- |
|
(2,086 |
) |
|
(13,833 |
) |
-- |
|
|
Net Loss of Controlling
Interest |
|
(2,082 |
) |
|
(10,591 |
) |
-- |
|
(3,024 |
) |
|
(14,511 |
) |
-- |
|
|
Adjusted
EBITDA |
|
2,184 |
|
|
(9,873 |
) |
-- |
|
7,807 |
|
|
(4,371 |
) |
-- |
|
|
Operating Margin |
|
14.5 |
% |
|
-186.8 |
% |
|
|
15.3 |
% |
|
-19.1 |
% |
|
|
|
Adjusted
EBITDA Margin |
|
18.8 |
% |
|
-179.4 |
% |
|
|
19.8 |
% |
|
-13.2 |
% |
|
|
|
EPS (Ps.) |
|
(3.38 |
) |
|
(17.33 |
) |
-- |
|
(4.97 |
) |
|
(23.65 |
) |
-- |
|
|
EPADS
(US$) |
|
(0.92 |
) |
|
(4.00 |
) |
-- |
|
(1.35 |
) |
|
(5.46 |
) |
-- |
|
|
|
|
|
|
|
|
|
|
Allowances for doubtful accounts and asset impairment
losses
ICA increased its allowance for doubtful accounts, recognized
asset impairments, and made restructuring provisions totaling Ps.
11,329 million in 2015. Of the total, Ps. 5,381 million were
increased allowances for doubtful accounts related to the
construction contracts for the Barranca Larga –Ventanilla tollroad,
the TECII terminal in the port of Lázaro Cárdenas, and the Rio de
los Remedios tollroad, as well as real estate inventories. In
addition, there were Ps. 5,053 million in asset impairment losses,
principally for the investments in the Barranca Larga –Ventanilla
and the Faros property in Panama. The impairment charges and
write-offs during the quarter and full year 2015 represent
management's best estimates and necessarily are based on estimates
and projections, which are subject to change based on future
developments. Accordingly, we may be required to adjust the amount
of impairment charges and write-offs in the future.
Provisions and impairment losses in 2015 |
Ps.
million |
|
4Q15 |
2015 |
|
By
Line item, and category |
|
|
|
Revenues: |
Reversal of costs and
estimated earnings in excess of billings |
447 |
447 |
|
Costs: |
Allowance for doubtful
accounts |
5,309 |
5,381 |
|
Costs: |
Asset impairments |
4,859 |
5,053 |
|
Other Expenses: |
Restructuring
provisions |
439 |
492 |
|
Other Expenses: |
Professional services for
restructuring |
15 |
15 |
|
Total |
|
11,069 |
11,389 |
|
By
Segment |
|
|
|
|
Construction |
|
6,550 |
6,655 |
|
Concessions |
|
3,431 |
3,441 |
|
Corporate and Other |
|
1,088 |
1,292 |
|
Total |
|
11,069 |
11,389 |
|
|
|
The allowances and impairment losses affected
the balance sheet as well as the income statement. In addition, the
balance sheet reflects the reclassification to short-term of
certain debt obligations in the Construction and Concessions
segments and the three corporate bonds that became due once there
was a non-compliance on payment obligations. As a result,
current liabilities increased to Ps. 57,618 million as of December
31, 2015, compared to Ps. 27,742 million as of December 31,
2014.
Liquidity and Debt
Total consolidated debt increased 7% to Ps.
67,617 million as of December 31, 2015, as compared to December 31,
2014. The increase was principally the result of the
depreciation of the peso against the dollar. Foreign currency
denominated debt was 45% of the total.
Total cash was Ps. 9,258 million as of December
31, 2015. Of this, Ps. 4,442 million was restricted cash, and
Ps. 4,816 million was unrestricted, of which Ps. 2,697 million was
unrestricted cash held at OMA.
Comprehensive backlog
Comprehensive backlog, including ICA’s share of
backlog reached Ps. 64,873 million as of December 31, 2015, an
increase of Ps. 1,578 million compared to December 31, 2014.
The increase was the result of increases in backlog of
non-consolidated affiliates and joint ventures (principally at ICA
Fluor), which grew 49% to Ps. 65,366 million; ICA’s proportional
share was Ps. 32,163 million, as of December 31, 2015.
A graph accompanying this announcement is available
at http://www.globenewswire.com/NewsRoom/AttachmentNg/77b42009-79e3-4959-a449-07e2ced63ab2
Restructuring Activities
During the fourth quarter of 2015, ICA entered
into a process of operational restructuring, in order to reduce
costs and expenses. Through December 31, 2015, technical and
administrative headcount decreased 22%, and costs decreased 15%
from the levels as of December 2014. As of the date of this
report, technical and administrative headcount has decreased 51%
and costs 46%. In addition, ICA suspended payments related to its
non-guaranteed financial debt, including the three corporate bonds
maturing in 2017, 2021, and 2024; the Company is currently focusing
its efforts on the definition of a restructuring plan.
ICA is designing the financial restructuring
plan together with its advisors, Rothschild México and FTI
Consulting. These initiatives are led by ICA’s new management team
headed by Chief Executive Officer Luis Zárate Rocha and Chief
Restructuring Officer Guadalupe Phillips Margáin.
Subsequent events
Payment of secured debt and sale of OMA
shares. The suspension of payment by ICA of interest
on the three corporate bonds triggered cross-default clauses on
credits from Santander, Deutsche Bank, and Barclays that were
secured with Series B shares of OMA. As a result, Ps. 4,704
million of debt was paid in February and March 2016. In addition, a
Ps. 600 million loan from Value, also secured with OMA B shares,
was paid in March 2016 upon sale of the pledged shares.
As a result, as of the date of this report,
ICA’s total debt is as shown in the following table:
|
12/31/15 |
Payments |
3/29/16 |
Securities debt, short
term |
23,348 |
|
23,348 |
Bank debt, short term |
10,988 |
|
(5,304 |
) |
5,683 |
|
|
|
|
Securities debt, long
term |
24,309 |
|
24,309 |
Bank debt, long term |
8,972 |
|
8,972 |
|
67,617 |
|
(5,304 |
) |
62,313 |
|
|
|
|
|
12/31/15 |
Payments |
3/29/16 |
Civil construction |
6,394 |
|
(2,940 |
) |
3,454 |
Concessions |
30,534 |
|
(2,199 |
) |
28,335 |
Airports |
4,878 |
|
(165 |
) |
4,713 |
Corporate and Other |
25,811 |
|
25,811 |
Total |
67,617 |
|
(5,304 |
) |
62,313 |
|
ICA’s shareholding in OMA, direct and indirect,
was reduced to 14.32% as of the date of this report. ICA
exercises control of OMA through its holding of 74.5% of SETA, the
strategic partner of OMA, which holds all OMA’s Series BB
shares.
Palmillas – Apaseo El Grande
financing. ICA and CKD EXI signed an agreement by means of
which the EXICK trust granted a Ps. 750 million convertible loan to
provide the resources necessary for the completion of the Palmillas
– Apaseo El Grande tollroad project.
ICA’s complete earnings report is available at
http://ri.ica.mx.
Conference Call
ICA’s 4Q15 earnings conference call will be held on Wednesday,
March 30, at 5:00 pm Eastern Time (3:00 pm Mexico City time). To
participate, please dial toll-free (855) 826-6151 from the U.S. or
+1 (559) 549-9841 internationally. The conference ID is 81976558.
The conference call will be Webcast live through streaming audio
and available on ICA’s website at http://ir.ica.mx.
A replay will be available until April 13, 2016 by calling
toll-free (855) 859-2056 from the U.S. or +1 (404) 537-3406
internationally, again using conference ID 81976558.
This press release contains projections or other
forward-looking statements related to ICA that reflect ICA’s
current expectations or beliefs concerning future events. Such
forward-looking statements are subject to various risks and
uncertainties and may differ materially from actual results or
events due to important factors such as changes in general
economic, business or political or other conditions in Mexico,
Latin America or elsewhere, changes in capital markets in general
that may affect policies or attitudes towards lending to Mexico or
Mexican companies, changes in tax and other laws affecting ICA’s
businesses, increased costs, unanticipated increases in financing
and other costs or the inability to obtain additional debt or
equity financing on attractive terms and other factors set forth in
ICA’s most recent filing on Form 20-F and in any filing or
submission ICA has made with the SEC subsequent to its most recent
filing on Form 20-F. All forward-looking statements are based on
information available to ICA on the date hereof, and ICA assumes no
obligation to update such statements.
Empresas ICA, S.A.B. de C.V. is Mexico's
largest infrastructure company. ICA carries out large-scale civil
and industrial construction projects and operates a portfolio of
long-term assets, including airports, toll roads, water systems,
and real estate. Founded in 1947, ICA is listed on the Mexican and
New York Stock exchanges. For more information,
visit ir.ica.mx.
For more information, contact:
Gabriela Orozco
gabriela.orozco@ica.mx
Christianne Ibánez
christianne.ibanez@ica.mx
relacion.inversionistas@ica.mx
+(5255) 5272 9991 x 3012
Pablo García
pablo.garcia@ica.mx
Chief Financial Officer
In the United States:
Daniel Wilson, Zemi Communications
+(1212) 689 9560
dbmwilson@zemi.com