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1   conference call 1 q11 1 conference call 1 q11 Presentation Transcript

  • Conference Call 1Q11 Earnings Results May 16, 20111
  • NOTICE This presentation contains forward-looking statements relating to the prospects of the business, estimates for operating and financial results, and those related to growth prospects of OHL Brasil, these are merely projections and, as such, are based exclusively on the expectations of OHL Brasil’s management concerning the future of the business and its continued access to capital to fund the Company’s business plan. Such forward-looking statements depend, substantially, on changes in market conditions, government regulations, competitive pressures, the performance of the Brazilian economy and the industry and are, therefore, subject to change without prior notice.2
  • IFRS – MAIN CHANGES IN ACCOUNTING STANDARDS From 2010, the Company shall submit financial statements in accordance with accounting standards established by the International Accounting Standards Board - IASB (known as International Financial Reporting Standards - IFRS) and reflected by CVM Instruction 457, July 13 2007 and amendments thereto. PAST PRESENT Permanent Assets Intangible Assets Classification * Others assets of the company remain the same. Useful lives of assets/term Term Contract/Curve contract Traffic Amortization * The differences between the tax bases and accounting bases should generate new effects related to deferred taxes (temporary differences). Results Toll Results Construction and Tolls Revenues * Revenue from construction is determined by the fair value of their service, without margin. Fixed assets and Results (provision) depreciation Maintenances Expenses * The provision for maintenance is recognized by the present value.3
  • TRAFFIC Var% Var% Vehicle-Equivalents 1Q11 4Q10 1Q10 1Q11/4Q10 1Q11/1Q10 State Concessions 42,004,545 43,368,736 34,922,349 -3.1% 20.3% Autovias 9,949,949 10,804,999 9,369,499 -7.9% 6.2% Centrovias 11,064,688 9,740,527 5,903,316 13.6% 87.4% Intervias 13,367,517 14,627,675 12,615,450 -8.6% 6.0% Vianorte 7,622,391 8,195,535 7,034,084 -7.0% 8.4% Federal Concessions 118,876,822 124,803,543 100,353,676 -4.7% 18.5% Planalto Sul 7,094,193 6,969,184 6,233,449 1.8% 13.8% Fluminense 11,549,643 12,195,769 10,462,909 -5.3% 10.4% Fernão Dias 36,433,486 37,998,784 25,499,092 -4.1% 42.9% Régis Bittencourt 34,831,167 36,507,333 32,024,667 -4.6% 8.8% Litoral Sul 28,968,333 31,132,473 26,133,559 -7.0% 10.8% Total 160,881,367 168,172,279 135,276,025 -4.3% 18.9%  Traffic Growth The volume of toll-paying traffic of state and federal concessions presented, respectively, 20.3% and 18.5% increases in 1Q11 compared to 1Q10. These increases were mainly influenced by the performance of the Brazilian economy, the toll collection starts at the Mairiporã’s toll plaza in Fernão Dias’ highway, in September 2010, and the implementation of bidirectional collection in four toll plazas in Centrovias concessionaire, located at the municipality of Brotas, Dois Córregos, Itirapina and Rio Claro, in July and November 2010.4
  • TOLL TARIFF Var% Var% Var% Average Toll Tariff (R$ / Vehicle-Equivalents) 1Q11 4Q10 1Q10 1Q11/4Q10 1Q11/1Q10 State Concessions 5.65 5.92 6.14 -4.6% -8.0% Autovias 5.96 5.94 5.75 0.4% 3.8% Centrovias 5.38 6.55 9.15 -17.8% -41.2% Intervias 4.88 4.88 4.70 0.1% 3.9% Vianorte 6.98 7.01 6.73 -0.4% 3.8% Federal Concessions 1.66 1.50 1.51 10.6% 9.7% Planalto Sul 3.10 2.93 2.90 5.9% 6.9% Fluminense 2.73 2.60 2.56 4.9% 6.4% Fernão Dias 1.30 1.13 1.10 15.1% 18.2% Régis Bittencourt 1.70 1.50 1.50 13.3% 13.3% Litoral Sul 1.28 1.20 1.17 6.4% 8.8% Total Total 2,73 2,89 -5,5% 2.70 2.64 2.71 2.3% -0.2%  State Concessions The increase of average toll tariffs of the Autovias, Intervias and Vianorte concessionaires is explained by the contractual adjustment based on the IGP-M. At Centrovias, despite the contract adjustment, average toll tariff dropped 41.2% due to the fact that toll collection switched to bidirectional (both side directions) in four plazas, and toll tariff were reduced by 50%.  Federal Concessions In the months of December 2010 and February 2011, the toll tariffs charged by federal concessionaires were adjusted according to (i) the criterion for rounding the first decimal place, and the cumulative variation of the IPCA in the 12 months prior to adjustments. The result of this adjustment increased the average tariff applied by federal concessionaires, which rose from R$ 1.51 to R$ 1.66 (+9.7%).5
  • GROSS SERVICE REVENUE Var% Var% GROSS SERVICE REVENUE 1Q11 4Q10 1Q10 1Q11/4Q10 1Q11/1Q10 GROSS SERVICE REVENUE 601,596 627,534 504,169 -4.1% 19.3% Toll plazas revenue 434,400 443,856 366,141 -2.1% 18.6% State 237,332 256,730 214,485 -7.6% 10.7% Autovias 59,337 64,148 53,837 -7.5% 10.2% Centrovias 59,521 63,775 54,024 -6.7% 10.2% Intervias 65,239 71,326 59,279 -8.5% 10.1% Vianorte 53,235 57,481 47,345 -7.4% 12.4% Federal 197,068 187,126 151,656 5.3% 29.9% Planalto Sul 21,992 20,393 18,078 7.8% 21.7% Fluminense 31,509 31,709 26,825 -0.6% 17.5% Fernão Dias 47,364 42,904 28,049 10.4% 68.9% Régis Bittencourt 59,213 54,761 48,037 8.1% 23.3% Litoral Sul 36,990 37,359 30,667 -1.0% 20.6% Others 24,163 25,093 16,701 -3.7% 44.7% Construction services 143,033 158,585 121,327 -9.8% 17.9% DEDUCTIONS FROM REVENUE (42,258) (42,985) (34,626) -1.7% 22.0% NET SERVICE REVENUE 559,338 584,549 469,543 -4.3% 19.1%  State The state concessionaires accounted for 54.6% of the total amount collected from tolls, closing the first quarter of 2011 with R$ 237.3 million (+10.7%). The main reason was the tolled traffic growth of Centrovias, reflecting the implementation of bidirectional charging the toll plazas in the towns of Brotas, Dois Córregos, Itirapina and Rio Claro.  Federal The federal concessionaires reported in 1Q11 revenue of R$ 197,1 million (+29.9%), R$ 45.4 million more than 1Q10. The main reasons for the revenue growth were: the opening of the toll plaza of Mairiporã (SP), located at Fernão Dias, which accounts approximately 21.3% of all traffic tolled the concessionaire, adjustment of the basic rates charged by Planalto Sul, Fernão Dias, Régis Bittencourt, Fluminense and Litoral Sul.6
  • ELETRONIC PAYMENT SYSTEMS (AVI) AVI State Concessions AVI Federal Concessions 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 58.0% 56.7% 57.3% 38.1% 39.8% 56.0% 35.4% 36.9% 29.6% 30.2% 31.6% 53.7% 53.8% 53.9% 27.5% 53.0% 25.0% 50.7%  Eletronic Collection The revenue from the electronic payment systems (AVI System) at state concessionaires’ toll plazas accounted for 58.0% of total revenue in 1Q11 against 53.9% recorded in 1Q10. In the federal concessionaires the average percentage of revenue from electronic billing was 39.8% versus 31.6% in 1Q10.7
  • EBITDA and Adjusted EBITDA EBITDA (In thousands of Brazilian reais) Var% Var% 1Q11 4Q10 1Q10 1Q11/4Q10 1Q11/1Q10 NET REVENUE 559,338 584,549 469,543 -4.3% 19.1% Cost and expenses (excl. depreciation and amortization) (346,502) (374,992) (285,968) -7.6% 21.2% EBITDA 212,836 209,558 183,575 1.6% 15.9% EBITDA Margin 38.1% 35.8% 39.1% (+) Provision for maintenance in highways 49,371 57,581 25,217 -14.3% 95.8% (-) Consolidation Adjustments (11,050) (11,670) (5,856) -5.3% 88.7% Adjusted EBITDA (before IFRS) 251,157 255,469 202,936 -1.7% 23.8% EBITDA Margin 44.9% 43.7% 43.2%  EBITDA The operating income as measured by EBITDA amounted to R$ 212.8 million in 1Q11, showing an increase of 15.9% in comparison with 1Q10. The increase of R$ 29.3 million reflects growth of R$ 89.8 million (+19.1%) on the net revenue and the increased costs and expenses for the period.  Adjusted EBITDA Adjusted EBITDA for 1Q11 totaled R$ 251.2 million, indicating growth of 23.8% compared to 1Q10. As a consequence, the margin increased 1.7 percentage point.8
  • FINANCIAL RESULT Var% Var% Net Finance Incom e / Costs (R$ thousand) 1Q11 4Q10 1Q10 1Q11/4Q10 1Q11/1Q10 IGP-M - Quartely Finance Incom e 37,004 30,680 10,083 20.6% 267.0% Finance Costs (97,606) (91,767) (58,693) 6.4% 66.3% Finance charges (80,220) (72,106) (40,656) 11.3% 97.3% Inflation adjustment of concession fee (12,298) (14,957) (13,625) -17.8% -9.7% 3.15% 2.75% 2.41% Other expenses (5,088) (4,704) (4,412) 8.2% 15.3% Net Exchange Variation (63) - (320) - -80.3% Net Financial Result (60,665) (61,087) (48,930) -0.7% 24.0% 1Q10 4Q10 1Q11 IPCA – Quartely  RESULTS In comparison with 4Q10, the net financial result in 1Q11 decrease of R$ 422 thousand. The 2.42% effect was caused primarily by changes in the interest rate of debt and financial applications. 2.21% 2.05% Compared to 1Q10, the net financial result negative increased 24.0% , from R$ 48,9 million to R$ 60,7 million. 1Q10 4Q10 1Q11 The main factors contributing to such variation include: CDI – Quartely Average  Increase of R$ 39.6 million in financial charges generated by the issue of debentures which were realized by state concessionaires;  Reduction of R$ 1.3 million in "Monetary Correction of Fixed Concession Charge“ caused by the decrease in the IGP-M inflation index; 10.7% 11.7% 8.6%  Increase of R$ 26.9 million in revenues from financial investments due to the increase of CDI. 1Q10 4Q10 1Q119
  • NET INCOME RESULTS EVOLUTION 11.9% 78.0 70.8 63.3 1Q10 4Q10 1Q11  Main Factors Leading In 1Q11, the consolidated net income grew 11.9% over the previous quarter. The main factors leading to the increase were: star-up of 100% of the toll plazas operation in federal concessions, contractual tariff adjustments, and two-way charging at the Centrovias toll plazas.10
  • INDEBTNESS GROSS INDEBTNESS (R$ MN) LEVERAGE RATIO AND NET DEBT (R$ MN) 2.5 2.6 3,0 2.4 2.000 2.2 2,5 1.9 1.8 1.7 1.7 1.6 2,0 2,789 2,754 2,474 2,504 1.500 1,5 1,0 1,936 1,794 1,822 1,554 1,657 1,223 0,5 1,425 1,287 1,882 1.000 37 - 739 267 847 1,450 1,455 1,523 1,453 922 1,291 1,325 1,346 1,354 (0,5) 1,174 1,784 500 (1,0) 1,158 1,197 1,186 1,281 1,234 735 947 873 (1,5) - (2,0) 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 Short Term Long Term Net Debt Net Debt / Ajusted EBITDA - Fixed Concession Charge (last 12 months) DEBT COST BREAKDOWN AMORTIZATION SCHEDULE OF DEBENTURES (R$ MN) 76.3% of long-term debt consisted of debentures 0.7% 13.1% 36.3% 36.3% 63.0% 335.1 335.8 278.4 50.5% 250.8 118.0 118.1 TJLP CDI IPCA BNDES Debentures Others 2012 2013 2014 2015 2016 201711
  • INDEBTNESS  BNDES Bridge Loan (Federal Concessions) Until March 31, 2011 R$955.4 million already has been disbursed, with R$541.1 million as bridge loans for the concessionaires Autopista Fluminense, Autopista Litoral Sul and Autopista Fernão Dias.  BNDES Long Term Loan (Federal Concessions) On March 31, 2011, two such bridge loan agreements relating to the concessionaires Autopista Régis Bittencourt and Autopista Planalto Sul were replaced by long-term debt. The following conditions approved: RÉGIS BITTENCOURT RÉGIS BITTENCOURT CREDIT A CREDIT B CREDIT A CREDIT B CREDIT C R$ 446,395,000 R$ 623,100,00 R$ 184,057,000 R$ 90,007,000 R$ 57,280,000 Amort. 144 months Amort. 126 months Amort. 144 months Amort. 138 months Amort. 120 months Grace Period: 12 months Grace Period: until 06/15/14 Grace Period: 18 months Grace Period: until 06/15/14 Grace Period: until 12/15/15 Cost TJLP + 2.21% p.a Cost TJLP + 2.21% p.a Cost TJLP + 2.58% p.a Cost TJLP + 2.58% p.a Cost TJLP + 2.58% p.a Total: 1,069,495,000 Total: 331,344,000 Until March 31, 2011, R$ 414,3 million were disbursed as long term loans for the concessionaires Autopista Régis Bittencourt and Autopista Planalto Sul. The long-term financing from BNDES to concession companies Autopista Fernão Dias, Autopista Litoral Sul and Autopista Fluminense are being examined by BNDES.12
  • CAPEX AND MAINTENANCE 1Q11 1Q10 IFRS IFRS Capex Before Before Cash Flow (R$ Thousand) IFRS (A + B) Intangible and Maintenance IFRS (A + B) Intangible and Maintenance Property (A) Realized (B) Property (A) Realized (B) Autovias 5,967 286 5,681 5,140 1,580 3,560 Centrovias 6,451 3,632 2,819 10,240 7,582 2,658 Intervias 16,748 1,868 14,880 6,042 2,963 3,079 Vianorte 8,542 1,896 6,646 9,990 3,245 6,745 State Concessions 37,708 7,682 30,026 31,412 15,370 16,042 Planalto Sul 18,717 18,717 - 13,035 13,035 - Fluminense 19,115 19,115 - 9,301 9,301 - Fernão Dias 34,164 34,164 - 26,473 26,473 - Régis Bittencourt 39,883 39,883 - 27,693 27,693 - Litoral Sul 25,641 25,641 - 15,192 15,192 - Federal Concessions 137,520 137,520 - 91,694 91,694 - Total 175,228 145,202 30,026 123,106 107,064 16,042 Others invest. and consolidation adjustments 2,913 2,913 - 6,281 6,281 - Total 178,141 148,115 30,026 129,387 113,345 16,042  Investments in Intagible Assets OHL Brazil companies invested about R$ 148.1 million in fixed and intagible assets in 1Q11, a significant portion of that amount (92.8%) was allocated to projects conducted by federal concessionaires, R$ 137.5 million, standing out duplication of Serra do Cafezal, implantation of pedestrian crossing, implementation of marginal and recovery of pavement.  Maintenance of Roads Regarding state concessionaires, it was spent R$ 30,0 million in maintenance work for state highways which, in turn, have already reached an advanced stage of maturity, investmentwise.13