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Sacyr SA reported strong financial results for the third quarter of 2025, with revenue increasing by 5% to 3.412 billion euros and net profit surging 81% to 132 million euros, excluding the impact of its Colombia divestment. Despite these robust figures, Sacyr's stock price fell by 1.09%, closing at 3.766 euros per share. This decline comes amid a broader market trend and investor expectations around future earnings and strategic initiatives.
Key Takeaways
- Revenue grew by 5% year-over-year to 3.412 billion euros.
- Net profit, excluding divestments, increased by 81% to 132 million euros.
- Operating cash flow rose by 11% to 890 million euros.
- Stock price decreased by 1.09% post-earnings announcement.
- New concession projects awarded in Italy, Chile, and Paraguay.
Company Performance
Sacyr's performance in Q3 2025 highlights its strategic emphasis on concession activities, which contributed 92% of the company's EBITDA. The company has been expanding its footprint in key markets such as Italy and Chile, while also eyeing opportunities in North America and Australia. Notably, Sacyr has secured four new concession projects, reinforcing its position in the infrastructure sector.
Financial Highlights
- Revenue: 3.412 billion euros, up 5% year-over-year.
- Net profit: 132 million euros, an increase of 81% from the previous year.
- Operating cash flow: 890 million euros, up 11% from last year.
- Equity invested in concessions: 2.17 billion euros.
- Debt reduction: 400 million euros.
Outlook & Guidance
Sacyr aims to grow its concession asset valuation to 5 billion euros by 2027 and further to 9-10 billion euros by 2033. The company plans to distribute 225 million euros in shareholder returns from 2024 to 2027. Sacyr is also focusing on closing its Colombian asset sale in November and continues to bid on strategic projects globally.
Executive Commentary
Pedro Sigüenza, CEO of Sacyr, emphasized the company's commitment to sustainability and strategic growth. "We continue to advance in our commitment to sustainability," he stated, highlighting the company's focus on sustainable practices and long-term growth. Sigüenza also noted that "our concessions have distributed 114 million euros in the first nine months of the year," reflecting the company's strong performance in its core business areas.
Risks and Challenges
- Market volatility and economic uncertainties could impact future earnings.
- Potential delays in project approvals or completions.
- Exchange rate fluctuations affecting international operations.
- Competition in securing new concession projects.
- Regulatory changes in key markets like Italy and Chile.
Q&A
During the earnings call, analysts inquired about potential earnings from Colombian arbitration and variations in cash flow. Sacyr's management reaffirmed their commitment to the water division and addressed the possibility of further rating upgrades from other agencies.
Full transcript - Sacyr SA (SCYR) Q3 2025:
Pedro Sigüenza, CEO, Sacyr: Good morning. I'm Pedro Sigüenza, CEO of Sacyr. Joining me today is Carlos Mijangos, the company's Chief Financial Officer. Thank you all very much for attending the earnings call of Sacyr for the third quarter of fiscal year 2025. Sacyr continues to grow in line with its 2024-2027 strategic plan, bolstered by the strength of our concession model and backed by the key figures reported in Q3. Revenue grew by 5% compared to the prior year, reaching EUR 3.412 billion. Net profit, excluding the effect of divestments in Colombia, rose by 81% to EUR 132 million. 92% of EBITDA comes from our concession activities. Operating cash flow increased by 11% to EUR 890 million, and we have invested EUR 232 million of new capital in the first nine months of the year, bringing the total equity invested in our concessions at the end of September to EUR 2.17 billion.
Among the most significant milestones of the year, I would like to highlight the four that are shown on the slide: the four new concession awards in Italy, Chile, and Paraguay, which I will describe later and which represent a clear success in terms of backlog. The investment grade rating obtained from the global agency Morningstar DBRS, which will facilitate and increase our sources of financing. Next, our presence in tenders for the most relevant concession projects currently on the market, where we are confident that we will continue to win contracts. As a fourth milestone, I can announce that the divestment of our three concession assets in Colombia has already obtained all the necessary authorizations, so the transaction will be closed and payment will be received during the month of November.
As I mentioned, in fiscal year 2025, we have been awarded four new concession projects, which implies a hit rate of 50% on the bids timely submitted. However, this ratio is actually higher as one of the eight concession standards, the Red Deer Hospital in Alberta, in Canada, was canceled prior to its award. The four new concession projects include the Novara City of Health and Science project in Italy, in the Piedmont region. This is a multifunctional complex that will comprise a new hospital and a university campus with an investment of EUR 525 million. This contract will be valid for 25 years and will consolidate our position in Italy, which is one of our core strategic markets.
Next, the Antofagasta plant, the largest wastewater reuse plant in Latin America, a key project to ensure sustainable water supply in the ARE region of Antofagasta in the Atacama Desert, with an investment of EUR 300 million and a duration of 35 years. Next, the Asunción Elevated Urban Highway, which extends the eastern route in Paraguay, a EUR 174 million project with a duration of 23 years. Last week, we won the tender for the construction of the Pedemontana route in Chile, a 20 km section of highway that is key to the road modernization plan in the Biobío region in Concepción. This investment totals EUR 330 million, and the project will be valid for 45 years. These four greenfield concession projects enable us to continue ensuring our commitment to steady growth.
On this slide, you can see a map highlighting the main opportunities that we are currently bidding for, pre-qualifying for, or analyzing. These align with our strategic plan's goal to strengthen our presence in English-speaking countries, with a particular focus on tenders in North America and Australia while continuing to prioritize our core markets in Italy and Chile. In the short term, we are awaiting the outcome of the tenders for the Ontario Science Museum in Toronto, Canada, and the Coquimbo Desalination Plant in Chile, both concessions lasting 30 and 21 years, respectively. In the United States, as you know, we have pre-qualified for the managed lanes projects in Atlanta, as well as for the I-285 and I-24 projects in Tennessee, where we plan to submit bids in the first half of the next year.
We are also in the process of pre-qualifying for the I-77 project in North Carolina. In Canada, we have pre-qualified for the Trans-Canada Highway concession, for which bids will be submitted in the first quarter of 2026. We are pursuing various hospital concession opportunities, such as the Windsor Hospital for Ontario Infrastructure. In Australia, we are competing in three major water projects: the Adelaide Desalination Plant for northern water supply, the WireLong Water Treatment Plant south of Brisbane, and the Aurora Reuse Plant in Melbourne. In addition, we are pursuing several hospital projects, such as the Parkville Hospital in Victoria and several landmark buildings for the 2032 Olympic Games in Brisbane. In our strategic Italian market, we are preparing to submit our pre-qualification for the Brenner Motorway, the A22, which connects Modena to the Brenner Pass in Austria.
We're also monitoring the upcoming tenders for the Chieri-Milan-Ambrècia-Padua sections of the A4 motorway, which are expected to be launched soon. Finally, in Chile, in addition to awaiting the result of November 14 of the Coquimbo Desalination Plant, we are pursuing several water projects and highway concessions on Route 5, such as the Caldera-Antofagasta Highway, which is a private initiative developed by Sacyr, and the Rio Bueno-Puerto Montt section. I'll give the floor to Carlos Mijangos to report on the financial performance in greater detail. Thank you very much, Pedro. Let's move on to analyze the company's operational and financial performance. In the first nine months of the year, revenue rose by 5% compared to the prior year, reaching EUR 3.412 billion. The total also grew by 7%, reaching EUR 1.18 billion. In addition, the in-time margin rose, improving the company's operational efficiency.
In terms of net profit, if we exclude investments, there has been a very significant increase of 81%, reaching EUR 134 million. However, the sale of assets in Colombia had a one-off impact of EUR 72 million, reducing the final net profit to EUR 62 million. This provision of EUR 72 million has increased this quarter compared to the prior one as a contribution in this period. Positive profit from the three assets held for sale also pushes the value of its equity up. However, the effect is neutral as a positive contribution to the income statement is offset by the increase in the provision for the sale. Operating cash flow grew by 11% to EUR 890 million, showing the company's ability to generate cash. The operating cash flow to EBITDA conversion margin reached 88% compared to 85% in the prior year.
Another important point is the update of the valuation of concession assets carried out in June this year. As of December 2025, these assets are worth almost EUR 4 billion, and the trend is clearly upward, our aim being to outstrip EUR 5 billion in 2027 and reaching EUR 9-10 billion in 2033. With regards to shareholders, the company has fulfilled its cash remuneration commitment, paying a cash dividend of EUR 0.045 per share in July 2025 and maintaining the policy established under its strategic plan to remunerate shareholders, allocating at least EUR 225 million in cash during the period of the 2024-2027 strategic plan. In the financial sphere, the company has obtained an investment grade rating from Morningstar DBRS, a clear sign of strength and investor confidence. This achievement enables the company to diversify its financing sources, reducing financing costs and streamlining pre-qualification processes for new projects.
In addition, it opens the door to issuing debt in the U.S. market through private placements known as USPPs. As we announced a few months ago, a significant milestone has been the sale of three motorways in Colombia for EUR 1.6 billion, which represents a very attractive multiple on the initial investment of 2.7 times and 12% above our internal valuation. All the necessary authorizations have already been obtained, and the closing and receipt of funds will take place during November. We're talking about more than EUR 300 million. We continue to advance in our commitment to sustainability, both in project financing and in emissions reduction and social inclusion, aligning ourselves with the most demanding international standards.
By way of example, we can mention the financing of the Buenaventura-Boga project that was closed in August, amounting to EUR 780 million, with indicators for reducing polluting gases and hiring women in the areas of influence. As for the evolution of consolidated debt in the course of these nine months, it has been reduced by EUR 400 million. It is worth highlighting the strong operating cash flow generated by business activity, amounting to EUR 890 million, the financial result, which mainly contributes to project debt amounting to EUR 446 million, and the fact that we have invested almost EUR 500 million in our assets.
Finally, under the heading of miscellaneous, we find the effect of the consolidation of Chilean assets that were held for sale in 2024 and the deconsolidation of Colombian assets, amounting to EUR 215 million, which together with the exchange rate effect of EUR 302 million in leases and dividends generates a total impact of EUR 439 million. That is how we come to EUR 6.489 billion as of September 2025. In terms of recourse debt evolution, the most remarkable event reported over the quarter is the payment of a dividend to our shareholders, amounting to EUR 36 million, together with the cash working capital recovery of EUR 15 million. We have invested EUR 33 million, of which EUR 24 million corresponds to equity in our concessions, the rest being machinery. Once the cash inflow from the divestment in Colombia is obtained, recourse debt will be reduced markedly.
Now, Pedro, we'll give you more color on the performance of each business area. Thank you very much, Carlos. Now, I will provide details on the performance of our three business areas. The concessions division posted revenue of EUR 1.266 billion, representing an increase of 2% year on year. The positive contribution of Chilean assets, especially the Itata route and Route 68, reduced the negative accounting impact of financial assets on both operating income and EBITDA for the division, which fell by 8% and 9%, respectively. Revenue from construction grew by 37%, thanks to the contribution of major greenfield projects such as the Belindre Hospital in Cardiff, the Boga-Buenaventura Highway in Colombia, or the Fruit Route in Chile. Our concessions have distributed EUR 114 million in the first nine months of the year.
So far, we have invested EUR 225 million, bringing the total equity invested in our infrastructure concession assets to EUR 1.889 billion. This year, we have also brought three assets into operation, all of them in Chile. The Atacama Airport in January, the Itata route, the north access to Concepción in April, and Route 68 on July the 1st. As I mentioned earlier, we have been shortlisted for two managed lanes projects in the U.S., the I-285 in Georgia and the I-24 in Tennessee, and we're currently in the pre-qualification phase for the I-77 in North Carolina. On the other hand, we have received further recognition for the I-10 highway project in Louisiana in the U.S. This being the seventh award received by our concession. Let me remind you that this is the largest financing in terms of volume and complexity, carried out through a public-private partnership in the state of Louisiana.
In the Engineering and Infrastructure division, revenue grew by 12% to EUR 2.205 billion, thanks to the significant growth of our activity in Italy, and particularly the contribution of the A21 motorway. For this same reason, EBITDA rose to 42%, up to EUR 407 million. If we analyze the construction activity in isolation, since, as you know, Italian concessions are included in this division, the EBITDA margin remains stable, standing at 4.8% over revenue. The division's backlog has set a new record, climbing by 15% in the first nine months of the year, reaching EUR 12.151 billion, of which 71% of the backlog corresponds to activity for our own concessions.
Some of the highlights of the last quarter include the completion of a 32 km road in Sweden, the execution of the contract for the Dublin Airport underpass with an investment of EUR 265 million, and the completion and opening to traffic of an 11 mi section of the SR-23 highway in Jacksonville, Florida, our largest construction project to date in the U.S. Our water division continues to post double-digit growth in 2025, both in terms of revenue, which rose by 17% until September and now exceeds EUR 200 million, and in terms of EBITDA, which reached EUR 46 million, up 23% year on year. The backlog grew by almost 50% to EUR 7.148 billion, largely thanks to the award of the Antofagasta Reuse Plant. Total equity invested in the concessions of this division reached EUR 128 million.
A major milestone this quarter was the fact that our Perth Desalination Plant in Australia reached its first million megaliters of water produced since operations began in 2011. This facility is the largest producer of desalinated water in Australia, the seventh largest in the world, and is recognized as a benchmark in the industry. To conclude this presentation, and by way of conclusion, I would like to express our confidence in the successful attainment of our 2024-2027 strategic plan, thanks to the highlights we have just explained. First, our success in securing concessions with four new awards in the first nine months of the year. Second, the manifold growth opportunities we are bidding on in our strategic markets, where we are confident we will continue our successful track record in terms of backlog.
Third, the 11% increase in operating cash flow to EUR 890 million, and finally, achieving investment grade rating and delivering returns to our shareholders through the first cash dividend payment, thus fulfilling our commitments. We are now available to answer any questions you may have. Good morning, everybody. Next, we're going to start with the Q&A session. We're going to start with the questions coming through the telephone line, and next we're going to continue with the questions posted via chat in the webcast. Luis Prieto from Kepler Cheuvreux, you have the floor for the first question. Good morning. Good afternoon, rather. I have two questions, two quick questions. Thank you very much for answering this question. As for the earnings of Colombia, in terms of some pending offsets, how likely is it for Sacyr to receive the full amount that was timely agreed during the sales agreement?
The next question, and I do not mean to be impatient, I would like to know which is the current situation with Pedemontana in terms of rebalancing. Could you give us an update on how the situation evolves with regards to Pedemontana? Okay, we are going to answer in just a moment, please. A ver. Okay, Luis. As for Colombia, according to the purchase and sale agreement, we agreed that the result of the arbitration award will go to the construction consortium, where we hold 60%. The amount has not been ultimately agreed. This has to be decided upon by the arbitration award, but the proportional amount will correspond to Sacyr, and this is what we announced as a relevant fact that was timely disclosed. Luis, as for Pedemontana-Beneteau rebalancing, as we mentioned in the past, as our Chairman mentioned in the past, we have no concern whatsoever.
We have made steady progress with our technicians in Pedro Sigüenza-Beneteau. We are also making steady progress with the financial advisor in the region, KPMG, in order to rebalance the financial and economic plan that is tied to this concession project. Luis, do you have any additional questions? Yes, let me go back to what Carlos answered. As for Colombia, you cannot provide any degree of certainty as to the final numbers, right? Do you think that you can provide any numbers as for the final earnings? Luis, as you may understand, we have submitted all the necessary arguments when our construction works were halted, but for the moment, we cannot actually provide an answer. However, we stand very high chances. Thank you very much, Luis. The next question is by Miguel Gonzalez-Toquero from JB Capital. Please go ahead. Hello, good morning. Thank you very much for addressing my question.
I have two questions. Actually, I have three questions. The first question is as for the evolution of the first nine months. I have a question as for FFOs, even though cash conversion was a little bit weaker this quarter compared to the prior year. Is this due to the effect of intangible assets? Could you give us some more color in this regard? Also, I would like to know whether you can mention, setting Colombia aside, what your estimates are in terms of growth for Q4. Along these lines, now that you have officially closed the project in Colombia, can you give us some information as to the loss in terms of FFOs that this could represent and whether this is going to be offset by the new projects that you have won?
Lastly, concerning the water division business, you are performing very well, but margins have come down slightly over this quarter. I do not know whether this is due to the mix between concessions and other integrated businesses. I would like to know whether you can give us some more color as to what you expect in terms of sales growth in 2026 and how you think the margins might evolve into the future. Finally, I would like to know whether any value should be continued to be materialized in this division going forward. Thank you very much, Miguel. We will answer in just a moment. Okay, as for the first question concerning operating cash flows for the first nine months, since most of our assets are assets held for availability, not all payments are monthly. Sometimes we get paid every six or nine months.
Therefore, our quarters can be compared one against the other and not against the prior quarter. With regards to last year, the difference is very small. Conversion and exchange rates play a key role here, so there is nothing remarkable in this respect. From a company perspective, we continue to grow at a rate of 11%. As for the closing of the year, we will continue to consolidate operating cash flows in Colombia until the very end. We believe that this is going to happen in November. Of course, the last month, we are not going to price this in, but we believe that we will be posting about EUR 1.3 billion, just like in the prior fiscal year. New projects are, of course, contributing cash, such as the Itata Road or the I-68 and I-21 motorways.
As for the losses coming from the assets sold, we are talking about EUR 170 million. That is our estimation for 2026. Taking into account, however, that we are going to offset this amount thanks to the projects that have been awarded to the company over the past months. As for the question concerning the water division, Pedro will answer that. We continue to remain right on course this quarter. That was a slight percentage fall, but we are now commissioning some projects we have been awarded, such as the Antofagasta project. Therefore, EBITDA margin will be around 21%-22% in the division. Since we are growing, and as we showed during the presentation, we are now focused on carrying out some key projects, for example, concession projects in Chile and Australia, respectively.
Based upon this growth, we aim at keeping on growing strategically within this division, and we are not considering to sell the water division partially at all. Thank you very much, Miguel. Do you have any further questions? No, that's all. Thank you very much. There are no further questions from the conference call. Now we are going to read aloud the questions received through webcast. Ángel Pérez from Renta 4 asks whether we can give some color as to dividend for next year for shareholders. Okay, we're going to answer in just a moment. Ángel, under our strategic plan, we said that we're going to distribute EUR 225 million between 2025 and 2028. Therefore, next year, we are going to increase our dividend year on year.
However, this decision is to be made by the board of directors when the time comes, and this is going to be submitted for approval at the GSM. Actually, it should be 2024-2027, rather. Filip Leite asks whether we can give more details as for the provisions of EUR 50 million in terms of traffic for Q3 and whether we should expect more provisions in Q4 or in early 2026. The second question is whether the construction backlog that we have reported on includes anything about the Messina Bridge project or not. We're going to answer in just a moment. Filip, as for provisions, this is a technical issue, an accounting issue. We have been awarded four projects from day one you begin to receive some revenue, but you cannot amortize anything that you have not invested in yet.
Right now, we are allocating provisions to these projects: the A68, the Itata project, and the A21 project. These projects will become operational within two or three years when amortization will take place in our accounting records. Provisions will be kept in 2025. However, this corresponds to amortizations that will take place once investments are made. Filip, let me add that the construction backlog does not include the Messina Bridge project. The construction backlog has risen by 15%. In attachment 32, we list other concession contracts that are included in the concession backlog but have not been included in the construction backlog yet because actually they are included two months later. The next question is by Julius Nickenson from Bank of America. The first question is the following: concerning the rating, we have been awarded the investment grade rating from Morningstar.
Are we working with Moody's and Fitch or not? That is the first question. The next question is about the A22 project in terms of investment. Next, he asks whether we can provide any estimate as to net recourse debt at the end of the year once we have collected the funds from Colombia. The fourth question is whether the complimentary incentive plan that the chairman and the company's management have will be paid in Q4 and whether it is going to be postponed until 2026. Julius, we will get back to you in just a moment. Thank you. Muy bien, pues te contesto, Julius. Okay, Julius. We are working with other rating agencies. Each rating agency has its own methodology. We are making progress to engage with other agencies.
Now that we are about to close our financial statements for 2025, we believe that we are going to complete some of these conversations we are engaged in. We'll see what plays out. As for the net recourse debt, once we receive funds from Colombia, this debt will be reduced considerably. We are not concerned about this debt anymore. EUR 20 million, more or less, is not relevant, taking into account that Q4 is normally strong in terms of working capital in terms of construction. We are also estimating some significant investments in assets equity. We believe that this debt, however, will be reduced markedly. The answer is yes. As for the A22 highway that runs along 313 km, we are talking about EUR 2 billion in terms of investment. As for the incentive plan, it is going to be paid next year.
Okay, thank you very much for all the questions. Now let me once again turn to Pedro Sigüenza, the CEO, for some closing remarks.
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