Abengoa boosts net profit as operations expand in North America

Spanish renewable energy group Abengoa on Tuesday reported revenue of €3.4 billion in the first half of 2014, unchanged from the same period a year ago, and a 2% increase in net profit to €69 million.

The company’s earnings before interest, tax, depreciation and amortization (EBITDA) climbed 31% to €695 million year on year.

Abengoa’s geographic diversification continues to be one of the key factors behind its growth and strategy: the group achieved 39% of its first-half revenue in North America (the United States and Mexico), which has become its leading region, 25% in South America, 14% in its domestic market in Spain, 13% in the rest of Europe and 9% in Asia and Africa.

The company’s total backlog in the first six months of the year totaled more than €48 billion, representing a year-on-year increase of 11%.

Abengoa CEO Manuel Sánchez said the group was able to continue with its strong operating performance, increasing EBITDA more than 30% year on year in the first half of the year, as a result of improved margins in all its activities.

"Without any doubt the successful creation of Abengoa Yield is key in our strategy since it will help us maximize our return on the equity investments in the concessional assets on a recurrent and long-term basis, while at the same time it reduces Abengoa’s cost of equity and improves our business model," Sánchez added.

The group’s Abengoa Yield subsidiary closed its initial public offering (IPO) in June, raising gross proceeds of $828.7 million (€611.0 million) before fees and expenses. Abengoa currently holds a 64.3% stake in Abengoa Yield, which is traded on the NASDAQ Global Select Market.

Revenue from the Abengoa’s engineering and construction segment, including the result from technology and manufacturing activities, decreased by 5% to €2.07 billion while EBITDA rose 5% to €366 million, representing a 17.7% margin.

The company said the engineering and construction division continued with a positive bookings performance in the second quarter, driving new bookings for the first half of the year to €2.9 biillion, an increase of 16% compared to the first half of 2013 and bringing the engineering and construction backlog to a record €7.67 billion in the period.

Additionally, division’s project pipeline stood at some €165 billion at the end of June. The unit saw a slight and expected decrease in revenue during the first half of 2014 due to the completion of several large projects, including the 280 MW Solana CSP plant in the U.S. state of Arizona.