MEXICO CITY, June 17, 2016 (GLOBE NEWSWIRE)
-- Empresas ICA, S.A.B. de
C.V. (BMV:ICA) (NYSE:ICA) made a preliminary summary of
its business plan, attached to this press release, publicly
available to creditors and investors. This preliminary
business plan does not take into account the signing of the US$215
million secured convertible loan announced today, and as a result
should not be relied upon by any party in performing a valuation of
ICA's assets. In particular, these projections do not account
for the dilution of ICA's interest in certain concession and
construction subsidiaries and entities that would result from the
exercise of the conversion feature or the payment-in-kind option
under the convertible loan.
ICA encourages a more comprehensive discussion of
its future plans, including any future restructuring of its
existing debt, with all of its stakeholders.
This press release contains
projections or other forward-looking statements related to ICA that
reflect ICA's current expectations or beliefs concerning future
events. Forward-looking statements involve inherent risks and
uncertainties. We caution you that a number of important factors
could cause actual results to differ materially from the plans,
objectives, expectations, estimates and intentions expressed in
such forward-looking statements. These factors include
cancellations of significant construction projects included in
backlog, material changes in the performance or terms of our
concessions, additional costs incurred in projects under
construction, failure to comply with covenants contained in our
debt agreements, developments in legal proceedings, unanticipated
increases in financing and other costs or the inability to obtain
additional debt or equity financing on attractive terms, changes to
our liquidity, economic and political conditions and government
policies in Mexico or elsewhere, changes in capital markets in
general that may affect policies or attitudes towards lending to
Mexico or Mexican companies, changes in inflation rates, exchange
rates, regulatory developments, customer demand, competition and
tax and other laws affecting ICA's businesses 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.,
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 http://ir.ica.mx/.
Summary of Empresas ICA, S.A.B. de C.V. ("ICA")'s
Business Plan
Basis of Preparation
|
|
|
|
|
|
Legal Entity |
Division |
Financial Statement Treatment (Q3 2015) |
Business Plan Treatment |
|
Controladora de
Operaciones de Vivienda, S.A. de C.V. |
Housing |
Consolidated |
Held
as an unconsolidated investment, proceeds to be paid to its
creditors |
|
Grupo Aeroportuario
del Centro Norte, S.A.B. de C.V. |
Airport |
Consolidated |
Equity Investment |
|
Controladora de
Operaciones de Infraestructura, S.A. de C.V. |
Concession |
>50% owned - Consolidated; < 50% owned - Equity
Investment |
>52% owned -
Consolidated; <52% owned - Equity Investment with the exception
of DIPESA, MITLA & TUCA II which are treated as
investments |
|
|
Construction |
All Consolidated (Facchina,
Mexican Construction, International Construction, San Martin)
except for Los Portales (Equity Investment) |
Same but
San Martin & Facchina treated as Equity Investments |
|
Constructoras ICA,
S.A. de C.V. |
|
Ingenieros Civiles
Asociados, S.A. de C.V. |
|
|
-
Note: The reason that the threshold for
consolidating concessions increases to 52% in the business plan
(from 50%) is to reflect the fact that the OVT concessions (which
ICA own 51%) are treated as equity investments in the business plan
(vs. being consolidated in the Company's financial
statements). Also note that Facchina and ICA Fluor are
incorporated in the business plan as long-term investments.
-
Accordingly, the Business Plan has been
simplified, and does not follow the IFRS consolidating accounting
policies that the Company follows for its financial statements.
However, this method presents a clearer picture of these
concessions' profits and cash generation that would be available
for debt service.
Business Plan Principles
International and Housing / Real Estate
Divisions
1. The international Division along with the
Housing / Real Estate Division are being wound down.
2. In addition, the Company will be exiting its
International Concession projects that have not yet started.
Concessions
3. The expansion of the Concession division will
be limited to completing the Palmillas project in the near future.
Post restructuring, ICA will assess investing in new concessions,
although no such investments are reflected in the Business
Plan.
4. The Company will return or have the Government
invest in the Barranca Larga concession as it is not viable to
complete on a stand alone basis.
Construction
5. Going forward, the Construction Business will
be limited to the Mexican operations.
6. The strategy going forward will be to get back
to the basics:
a) Minimize the amount of work that is performed
out of scope and without a contractual change order.
b) Profitability will be the main driver.
Airports
7. Continue to own the control shares in OMA.
High Level Summary of Projected
Income Statement
|
|
|
|
|
|
|
|
(in
millions of MXN) |
Proj |
Proj |
Proj |
Proj |
Proj |
|
|
|
2016 |
|
|
2017 |
|
|
2018 |
|
|
2019 |
|
|
2020 |
|
|
Revenue |
|
14,479.9 |
|
|
12,659.3 |
|
|
11,890.8 |
|
|
9,982.8 |
|
|
11,266.2 |
|
|
Cost of Goods
Sold |
|
(11,829.0 |
) |
|
(9,411.5 |
) |
|
(8,537.4 |
) |
|
(6,606.0 |
) |
|
(7,618.9 |
) |
|
Gross Margin |
|
2,650.9 |
|
|
3,247.8 |
|
|
3,353.5 |
|
|
3,376.7 |
|
|
3,647.3 |
|
|
Margin (%) |
|
18.3 |
% |
|
25.7 |
% |
|
28.2 |
% |
|
33.8 |
% |
|
32.4 |
% |
|
|
|
|
|
|
|
|
Selling General and
Administrative |
|
(1,691.9 |
) |
|
(1,002.0 |
) |
|
(1,048.1 |
) |
|
(1,095.3 |
) |
|
(1,146.8 |
) |
|
% of Sales |
|
11.7 |
% |
|
7.9 |
% |
|
8.8 |
% |
|
11.0 |
% |
|
10.2 |
% |
|
Operating Income |
|
959.0 |
|
|
2,245.8 |
|
|
2,305.3 |
|
|
2,281.4 |
|
|
2,500.5 |
|
|
% of Sales |
|
6.6 |
% |
|
17.7 |
% |
|
19.4 |
% |
|
22.9 |
% |
|
22.2 |
% |
|
|
|
|
|
|
|
|
Add Back: Depreciation
and Amortization |
|
194.9 |
|
|
477.4 |
|
|
441.9 |
|
|
395.6 |
|
|
395.6 |
|
|
EBITDA |
|
1,153.9 |
|
|
2,723.1 |
|
|
2,747.2 |
|
|
2,677.0 |
|
|
2,896.2 |
|
|
Margin (%) |
|
8.0 |
% |
|
21.5 |
% |
|
23.1 |
% |
|
26.8 |
% |
|
25.7 |
% |
|
|
|
|
|
|
|
|
Depreciation and
Amortization |
|
(194.9 |
) |
|
(477.4 |
) |
|
(441.9 |
) |
|
(395.6 |
) |
|
(395.6 |
) |
|
Interest Expense |
|
(1,631.0 |
) |
|
(1,697.0 |
) |
|
(1,672.9 |
) |
|
(1,555.1 |
) |
|
(1,455.7 |
) |
|
Foreign Exchange Gain
(Loss) |
|
(211.1 |
) |
|
(163.8 |
) |
|
(167.4 |
) |
|
(153.1 |
) |
|
(137.0 |
) |
|
Dividends |
|
72.3 |
|
|
194.0 |
|
|
133.2 |
|
|
235.9 |
|
|
357.3 |
|
|
Other Income
(Loss) |
|
510.0 |
|
|
367.0 |
|
|
351.9 |
|
|
331.9 |
|
|
357.0 |
|
|
Earnings Before Taxes |
|
(300.8 |
) |
|
946.0 |
|
|
950.1 |
|
|
1,141.0 |
|
|
1,622.3 |
|
|
|
|
|
|
|
|
|
Income Taxes @
30% |
|
90.2 |
|
|
(283.8 |
) |
|
(285.0 |
) |
|
(342.3 |
) |
|
(486.7 |
) |
|
Net
Income (Consolidated) |
|
(210.6 |
) |
|
662.2 |
|
|
665.1 |
|
|
798.7 |
|
|
1,135.6 |
|
|
|
|
|
|
|
|
|
Minority Interest |
|
97.3 |
|
|
(49.1 |
) |
|
0.0 |
|
|
0.0 |
|
|
0.0 |
|
|
Net
Income Attributable to ICA |
|
(113.3 |
) |
|
613.1 |
|
|
665.1 |
|
|
798.7 |
|
|
1,135.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Projected Revenues
|
|
|
|
|
|
|
|
(in
millions of MXN) |
Proj |
Proj |
Proj |
Proj |
Proj |
|
Consolidated
Revenues |
2016 |
2017 |
2018 |
2019 |
2020 |
|
Domestic
Construction |
7,911.7 |
8,159.7 |
7,175.0 |
5,038.6 |
6,077.4 |
|
International |
46.5 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Concessions |
6,521.7 |
4,499.6 |
4,715.8 |
4,944.2 |
5,188.8 |
|
Total
Revenue |
14,479.9 |
12,659.3 |
11,890.8 |
9,982.8 |
11,266.2 |
|
|
|
|
|
|
|
High Level Summary of Projected
Income Statement
-
For 2016, approximately 97.3% of revenues from
the Construction segment are projected to come from existing
projects.
-
Revenue from concessions only include the
revenues of the Autopista Río de Los Remedios Ecatepec (ANESA),
Sarre and Papagos Penitentiaries and the Autopista Apaseo -
Palmillas (Palmillas) concessions.
-
Concession revenues are expected to decrease
after 2016 as a result of the completion of the construction of the
Palmillas toll highway.
-
From 2018 to 2020 revenue from concessions is
projected to come exclusively from the operation of the concessions
and it is expected to grow at a 4.9% 3-year CAGR during 2017 -
2020.
Gross Margin
-
Gross margin is projected to be 27.7% per year
on average. The Concession segment has higher margins which brings
up the overall average margins - compared to Domestic Construction
which has much lower gross margins.
-
Gross margin is projected to increase after 2016
as a result of the completion of the Palmillas highway, since the
margin of construction is significantly lower than the margin of a
toll road concession in operations.
-
The Concessions segment is expected to increase
its margin mostly as result of the projected price increase of the
ANESA toll and the projected growth of ANESA and Palmillas'
traffic. Palmillas is projected to start operations in late
2016.
EBITDA
|
|
|
|
|
|
|
|
(in
millions of MXN) |
Proj |
Proj |
Proj |
Proj |
Proj |
|
EBITDA by Business
Segment |
|
2016 |
|
|
2017 |
|
|
2018 |
|
|
2019 |
|
|
2020 |
|
|
Construction |
|
327.4 |
|
|
303.9 |
|
|
202.7 |
|
|
(24.1 |
) |
|
46.8 |
|
|
Concessions |
|
2,051.4 |
|
|
2,932.4 |
|
|
3,081.3 |
|
|
3,262.0 |
|
|
3,436.7 |
|
|
Corporate |
|
(1,224.9 |
) |
|
(513.2 |
) |
|
(536.8 |
) |
|
(560.9 |
) |
|
(587.3 |
) |
|
Total |
|
1,153.9 |
|
|
2,723.1 |
|
|
2,747.2 |
|
|
2,677.0 |
|
|
2,896.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
For the projected period, for the most part,
EBITDA is expected to grow in line with revenue and gross
margin.
-
EBITDA margin is projected to remain between
21.5% and 26.8% after 2016.
-
For 2016, EBITDA margin is projected to be lower
than in 2017 - 2020 because it includes the completion of the
construction of the Palmillas highway, and more significantly, one
time severance payments to right size the business.
High Level Summary of Projected
Income Statement
Other Profit and Losses Projected Items
-
The interest included in the income statement
relates to the accrued interest related to the entities whose
operations are consolidated. These include the interest of the
Construction, Concessions and the International segments. Note
that for the most part the business plan does not accrue interest
on the Corporate debt.
-
For the projected period, the Company is
expected to have a total foreign exchange loss mostly related the
increase in US denominated debt balance as result of the projected
devaluation of the Mexican Peso against the USD.
-
Projected dividends include dividends from a
partly owned water treatment plant and partly owned Construction
company, various projects in Latin America, ICA's 51% interest in
OVT Concessions, minority interests in other Concessions and
OMA.
-
Other income relates mostly to management fees
from partially owned subsidiaries.
High Level Summary of ICA's
Statements of Cash Flows
|
|
|
|
|
|
|
(in
millions of MXN) |
Proj |
Proj |
Proj |
Proj |
Proj |
Proj |
Statement of Cash
Flows |
|
2016 |
|
|
2017 |
|
|
2018 |
|
|
2019 |
|
|
2020 |
|
Total |
EBITDA |
|
1,153.9 |
|
|
2,723.1 |
|
|
2,747.2 |
|
|
2,677.0 |
|
|
2,896.2 |
|
|
12,197.4 |
|
Change in
Working Capital |
|
|
|
|
Change
in Accounts Receivable |
|
2,173.0 |
|
|
2,619.5 |
|
|
127.5 |
|
|
248.2 |
|
|
(548.3 |
) |
|
4,620.0 |
|
Change
in Client Advances |
|
(1,791.1 |
) |
|
(638.6 |
) |
|
(263.2 |
) |
|
(207.9 |
) |
|
577.4 |
|
|
(2,323.5 |
) |
Change
in Accounts Payable |
|
(3,431.8 |
) |
|
(3,184.7 |
) |
|
(1,938.7 |
) |
|
(1,247.7 |
) |
|
192.8 |
|
|
(9,610.0 |
) |
Monthly IVA Received / (Paid) |
|
5.4 |
|
|
0.0 |
|
|
(4.0 |
) |
|
8.7 |
|
|
(1.3 |
) |
|
8.8 |
|
Other |
|
0.0 |
|
|
0.0 |
|
|
0.0 |
|
|
0.0 |
|
|
0.0 |
|
|
0.0 |
|
Total
Change in Working Capital |
|
(3,044.5 |
) |
|
(1,203.8 |
) |
|
(2,078.4 |
) |
|
(1,198.7 |
) |
|
220.6 |
|
|
(7,304.7 |
) |
Other Cash From Operations |
|
(1,625.6 |
) |
|
(1,120.7 |
) |
|
(944.1 |
) |
|
(1,152.9 |
) |
|
(1,076.3 |
) |
|
(5,919.7 |
) |
Total
Cash Flow From Operations |
|
(3,516.3 |
) |
|
398.6 |
|
|
(275.3 |
) |
|
325.4 |
|
|
2,040.5 |
|
|
(1,027.0 |
) |
|
|
|
|
|
|
|
Cash Flow From
Investments |
|
(1,867.2 |
) |
|
588.8 |
|
|
507.9 |
|
|
595.5 |
|
|
740.4 |
|
|
565.5 |
|
Cash Flow From
Financing |
|
630.6 |
|
|
(2,542.1 |
) |
|
(2,598.1 |
) |
|
(2,914.3 |
) |
|
(3,215.3 |
) |
|
(10,639.3 |
) |
|
|
|
|
|
|
|
Attributable Minority
Interest |
|
97.3 |
|
|
(49.1 |
) |
|
0.0 |
|
|
0.0 |
|
|
0.0 |
|
|
48.2 |
|
|
|
|
|
|
|
|
Change in Cash |
|
(4,655.6 |
) |
|
(1,603.7 |
) |
|
(2,365.5 |
) |
|
(1,993.4 |
) |
|
(434.5 |
) |
|
(11,052.6 |
) |
|
|
|
|
|
|
|
Cash Flow Summary |
|
|
|
|
|
Beginning Cash
Balance |
|
2,025.3 |
|
|
(2,630.3 |
) |
|
(4,234.0 |
) |
|
(6,599.5 |
) |
|
(8,592.9 |
) |
|
2,025.3 |
|
Change in Cash |
|
(4,655.6 |
) |
|
(1,603.7 |
) |
|
(2,365.5 |
) |
|
(1,993.4 |
) |
|
(434.5 |
) |
|
(11,052.6 |
) |
Ending Cash Balance |
|
(2,630.3 |
) |
|
(4,234.0 |
) |
|
(6,599.5 |
) |
|
(8,592.9 |
) |
|
(9,027.3 |
) |
|
(9,027.3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
The change in accounts receivable is
largely driven by the collection of overdue receivables and then
collecting going forward in a normalized time frame.
-
Client advances is mainly the amortization of
the advances during 2016 and 2017.
-
The change in accounts payable is the
amortization of the outstanding payables. Most of the non-project
payables are amortized straight line over 3 years starting July 1,
2016.
-
Other Cash From Operations primarily includes
cash taxes (in excess of MXN 5.1 billion during the projected
period), and one-time cash outflows including restructuring
fees.
-
Cash Flow from Investments mainly relates to
distributions / management fees from subsidiaries, assets that have
already been sold, offset by capital expenditures on the Palmillas
Concessions project in 2016.
-
Cash Flow from Financing primarily includes debt
service and new financing in the Concession segment, and to a
lesser extent the Construction segment. The Company's business plan
excludes debt service on Corporate debt and international project
debt that is to be sold or is unsecured.
Disclaimer &
Limitation
This summary contains information on the Company. Statements that
are not historical facts, including statements about the Company's
strategy, plans, objectives, assumptions, prospects, beliefs and
expectations, are forward-looking statements. Forward-looking
statements are not guarantees of future performance and involve
inherent risks and uncertainties. These forward-looking statements
are based on current plans, estimates and projections, and
therefore the reader should not place undue reliance on them.
Actual results could differ materially and adversely from those
expressed or implied by the forward-looking statements as a result
of factors that may be beyond the Company's control.
For more information, contact:
Christianne Ibánez
christianne.ibanez@ica.mx
relacion.inversionistas@ica.mx
+(5255) 5272 9991 x 3607
Pablo García
pablo.garcia@ica.mx
Chief Financial Officer
In the US:
Daniel Wilson, Zemi Communications
+(1212) 689 9560
dbmwilson@zemi.com
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Empresas ICA, S.A.B. de C.V. via
Globenewswire
HUG#2021566