OHLA 1H25 presentation slides: 46% EBITDA growth despite revenue dip

Introduction & Market Context

Obrascon Huarte Lain SA (BME:OHLA) released its first half 2025 results presentation on July 30, showing a substantial improvement in profitability despite a slight revenue decline. The Spanish infrastructure and construction company saw its stock price rise 0.91% to €0.334 following the announcement, as investors responded positively to the improved margins and strategic initiatives.

The company’s performance comes amid a challenging global infrastructure market, with OHLA maintaining its position through geographic diversification across North America, Europe, and Latin America. The presentation highlighted the company’s continued focus on its core construction business while addressing challenges in its industrial division.

Quarterly Performance Highlights

OHLA reported sales of €1,689.5 million for the first half of 2025, representing a modest 1.8% decrease compared to the same period in 2024. However, the company achieved a significant 46.3% increase in EBITDA, which reached €84.1 million, resulting in an improved EBITDA margin of 5.0% compared to 3.3% in the previous year.

As shown in the following financial highlights table, the company also reduced its attributable net loss to €29.7 million, a 13.2% improvement from the €34.2 million loss recorded in the first half of 2024:

The construction division, which accounts for 94% of total sales, demonstrated robust performance with a 4.3% increase in revenue to €1,590.3 million and an impressive 68.2% growth in EBITDA to €108.5 million. This division achieved a healthy EBITDA margin of 6.8%, up from 4.2% in the previous year.

In contrast, the industrial division faced significant challenges, with sales plummeting 53.3% to €82.3 million and EBITDA turning negative at -€13.3 million compared to a positive €7.5 million in 1H24. The division’s EBITDA margin deteriorated to -16.2% from 4.3% in the previous year, partly due to an unfavorable ruling received in July.

The company’s geographic diversification is illustrated in the following breakdown of sales and new awards:

Detailed Financial Analysis

OHLA’s balance sheet as of June 30, 2025, showed total assets of €3,314.8 million, a 7.2% decrease from December 31, 2024. The company’s equity position improved by 10.2% to €585.2 million, reflecting the impact of capital increases during the period.

The consolidated balance sheet reveals the company’s financial position:

The company’s debt profile showed improvement following a successful recapitalization operation in February 2025. Gross borrowings decreased by 33.4% to €348.3 million, while net borrowings stood at -€314.9 million, indicating a cash-positive position. The recapitalization extended bond maturity, released over €100 million of pledged cash, and improved the leverage ratio to approximately 2x.

The following chart details the company’s debt and borrowings:

Cash flow from operating activities was negative at -€153.5 million for the first half of 2025, compared to -€100.8 million in the same period of 2024. This was partially offset by positive cash flows from financing activities of €235.3 million, which included a net capital increase of €110.6 million.

Strategic Initiatives

OHLA implemented several strategic initiatives during the first half of 2025 to strengthen its financial position and operational efficiency. The company completed a capital increase of €50 million following litigation related to a Kuwait project and received a favorable ruling from the International Chamber of Commerce, which awarded €269.7 million to claimants in the SAMSUNG C&T - OHL (BME:OHLA) - QATAR case.

Additionally, OHLA approved a new strategic reorganization plan aimed at reducing structural costs by €40 million. This plan is expected to improve operational efficiency and support the company’s profitability goals.

The company also received the final award on the Sidra Hospital contract in Qatar, resulting in a net payment by the Joint Venture of €24.3 million.

Forward-Looking Statements

OHLA’s order book stood at €8,627.6 million as of June 30, 2025, representing a 1.7% increase from year-end 2024. The short-term order book amounted to €7,662.2 million, with 98.8% in construction and 1.2% in industrial projects.

The following chart provides a breakdown of the company’s order book:

New order intake during the period totaled €2,218.2 million, with a book-to-bill ratio of 1.3x, indicating strong future revenue potential. Major new projects included the Design-Build Finance Port of Miami N Bulkhead Berth 1-6 Realignment in the US (€403.6 million), Lo Ruiz Tunnel in Chile (€279.4 million), and EPC Panamericana East in Panama (€221.9 million).

The company’s construction order book is diversified by project type, with 30.7% in roads, 28.0% in railways, 21.9% in building, 13.6% in energy and mining, and 5.8% in ports and airports.

OHLA’s share price performance has lagged behind market indices, with a 25.5% decrease year-to-date compared to the Ibex 35’s 20.7% gain and the Construction Index’s 17.5% increase:

Looking ahead, OHLA’s first half results confirm its guidance for 2025, with the company expecting to maintain the improved EBITDA margin of 5.0%. The company’s focus remains on strengthening its core construction business while addressing challenges in the industrial division and implementing cost-reduction measures to improve overall profitability.

Full presentation:

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