Earnings Call: Q1 2021

May 6, 2021

Good afternoon, everybody, and welcome to Ferrovia's conference call to discuss the financial results for the Q1 of 2021. Just as a reminder, both the results report and the presentation will have been sent to you via email and will be available shortly on our website. As in previous results, we would like to highlight the financial information included in our report has been impacted by the COVID-nineteen outbreak, mainly since the second half of March twenty twenty. Given the uncertainty regarding the speed and the extent of resumption in activity, it is not possible to predict how the health crisis will affect Foterval Group's information and performance in 2021. Foterval will continue to closely monitor trading conditions and further evidence of wider economic impacts. I am joined here today by Ernesto Lopez Motto, our CFO and the CFOs of our business unit. If you have any questions, you may ask them through the forum included in the webcast. During the Q and A session at the end of this call, we will be reading out your questions and who they are from. With this, I will hand over to Mr. Lopech Mofo. Ernesto, the floor is yours. Thank you, Begonia, and hi to everybody. Thanks for joining the call. If we move to the first slide, the main highlights of this Q1, really toll roads show how vaccination advances Can help the recovery of the economy and also to recover mobility. Full business reopening in Texas happened at the end of March, given the fast vaccination. And we'll see in the slides ahead that NT and NT 35 West Are already above 2019 levels and of course, higher in revenues. Regarding the 407 ETR, still impacted by severe Restrictions, I mean restrictions that could be similar to the ones we saw in April 2020. It's good To confirm, no scheduled 2022 payments in 2020. Also, we'll provide more color of the general understanding of the clause after discussions with the MTO. Airports, we have a resilient financial position despite all the challenges, but Israel has been able to Raised in the Capital Markets EUR 1,300,000,000 additional funding has good position and liquidity position, the same as AGS. The CAA has produced the reaction to our petition, I mean, the Heathrow petition for RAP adjustment, they provided a small adjustment, and they will address all the conditions of regulation in the end of the year for the H7 regulatory settlement. Regarding contracting, we have seen solid performance In Construction and Services, in Construction, Budimex keeps improving with 4.6% EBIT, just considering the operations without the real estate business that is being sold, as you are all aware. As I said, services also with a solid operating performance. And of course, the end of the quarter, we hold a net cash position ex Structured projects of around €1,900,000,000 and we have total liquidity of more than €7,500,000,000 Okay. So we move on to a €1,000,000,000 Okay. So we move on to the businesses, starting with toll roads. We see the revenues impacted by lower traffic due to COVID-nineteen. Really, the start of the year More restrictions and cases and also we saw severe winter storms in February in Texas. That has been partially offset by higher toll rates. And we'll see in following the slides That if we take out the effect of the winter storms, really the impact in Revenues and EBITDA would have been much smaller, almost, I would say, no impact this would be last year. There is a strong presence in the U. S. That we have and the highest profitability from the U. S. Assets is clearly 76% of total revenues and 93% of total EBITDA comes from the U. S. And the U. S. Is probably accelerating ahead of our expectations of GDP recovery. Just a reminder of Projects that we are developing that will be material in the coming years will then be 35 We're segment 3. SC, I mean, this one, it's around 6.7 miles, should open at the end of 2023 And it's advancing at good pace. As I said, this is a continuation in profile to the NT 35 with 383B, so very good prospects for this asset. In terms of the I-sixty six in Virginia, this is also advancing on schedule and They should be ready for completion in at the end of 2022, beginning of 20 and 2023. We are clearly accelerating investment here. In the quarter, we saw also good Investment here, €62,000,000 We still have above €500,000,000 spending of investment in this important asset. Other ones that are being developed are mentioned here in Colombia, Slovakia and Australia. I would also like to mention and probably we will Be updating this information as we go on that an important component of the good performance of revenues In the managed lanes in the U. S. And also really the 407 in Canada, we have more than 30%, three-zero, In commercial revenues, commercial revenues is mostly trucks, but also accounts that are paid for by companies rather than individual Okay. So we move on to review the managed lanes. Probably the most important data on this slide are in the banner. And here, we see a range Of vaccination percentage in the different counties where we where our totals Right. And it's between 45% and almost 60% of one dose of vaccination in population over 16 years of age. This is data of April 29. Also, I mean, this performance that we'll see and here we are talking about a graph where you can basically tell that T35 West and NT are above or at the pre COVID level, I mean, the 20 And then, team levels, this is happening even with around 25% work from home index. Of course, these In the SECS are numbers that you have different calculation from different sources. This is from the University of Maryland COVID database, but we think this is quite telling that we get this kind of performance and performance in revenues with this level of work from home. One of the things that we've done, given this kind of tricky to analyze how these mobility patterns With work, you said, do polls with uses of the managed lanes and the corridors in Dallas forward and what is They may use in terms of or the expected trips compared to the pre COVID levels and the answers that we're getting is that They will have a usage very close to what the pre COVID usage was, right? So 95%, 97%. Here, we are not talking about online e commerce. It's just the most of our individual users. Okay. So good to see the performance of this graph, probably more telling are the graphs we see on the next slide, where we have more detailed quarterly traffic and also the initial stages of April. So clearly, you see, I mean, the trough in the 3 toll roads of the winter storms were Basically, traffic was halted due to the dramatic storms. And you see, on the other hand, That once that has been put behind, you have reopening of the economy, a performance That is clearly above 20 19 in 35 words. It's already above in NTE, just one And LPGA is also improving. I mean, probably when we look at LPGA lagging, It's also important to bear in mind that the capacity of the Freelance is higher in this corridor in LPGA than the rest. So Congestion is, let's say, will appear later in time compared to the other ones. So let's move on to the next slide where we see other some interesting data. And here, we have the impacts from restrictions. Really, if we look at the right hand side of the slide, We see that the until March, they said there were restrictions, right? But heavy vehicles showed a lot of resilience even with those Restrictions, very good to see that in March 2021, NT had more mandatory mode events. That means when there There's such congestion that we need to operate automatically above the cap. And there were more events In March 2021 than in February 2020, pre COVID, right? So probably the PM peaks Very close to pre COVID levels. The morning still, we still have, as we said, some work from home, not everybody back in the office, still School is not for reopening in person. So all these things are affecting the morning peak, but clearly the evening It's already there. As I mentioned before, the impact in February of the winter storm was quite severe. All three concessions were closed since February 13, and they reopened 8 days later. I mean, if we I mean, this was so impactful really that if we look at the banner in yellow, if we exclude The winter storm impact, revenues have been plus 7% for NTE. That's It's quite relevant given that it was down almost 2%, including the winter storm. In the LPGA, it was down only 16% compared to 26%. And in the NTE 35 West, growth would have been 23%. And also helping here, of course, is the performance The average revenue per transaction that is impacted by a higher proportion of heavy vehicles, I mean, the So multiparries between 2 times to 5 times and also higher toll rates. Okay. So the region really keeps Being a magnet for growth and you see that population keeps growing there, Texas is the 3rd fastest state in terms of population growth from 2010 2020. And you have people still moving to Texas. It's an attractive area for business and People are moving there. Dallas Fort Worth is projected to be the number one industrial real estate market in the U. S. This year, and this is according to Commercial Edge. You have 28,000,000 square feet of new industrial space expected to be delivered in 2021, And that's 8% of all industrial space projected nationwide. So businesses are also relocating headquarters to Dallas Fort Worth. You have Several names, CBRE, Charles Schwab, you have a variety of them. So we are glad to see really this Region reopening, the reaction to polls from our customers and I mean that winter is over, we are looking to rebound in GDP growth and action in the region. Okay. So if we move to the next slide, We also mentioned on the I77, still small compared to the rest, also lagging a little bit, But in the right direction. And we can see that Charlotte has remained in Phase 3 Since early October 2020, there has been some additional easing of restrictions late in the quarter, that is March 26. And now, I mean, at the end of the quarter, business can now open at 100% capacity. Restaurants and fitness centers can open at 75% capacity. And bars entertainment venues can open at 50% capacity with certain safety guidance rules to be followed. And well, the Charlotte's largest school district has expanded the number of students in the classroom, okay? So A lot of reopening the very last part of the quarter, also the effort in vaccination. Now you have 38% of the population of Charlotte That has received at least one dose as of 29th April, right? And well, you see the Growth in traffic also accelerating in the last part of the quarter. From February To March, traffic grew by 33.6%. Okay. So The decline in traffic compared to 2020 has been kind of offset Partially with higher toll rates and a better traffic mix. The important thing is to see restrictions and They're being removed and vaccination going up that we see as key for all the mobility boost. Okay. So if we move to the following slide, we now get into the 407. And here again, I will concentrate in the banner at the bottom. And we have different estimates from the government of Canada, they want to be able to vaccinate 64% of the total population in Canada by the second Quarter of 2021, I mean, that's the intention. I mean, the pace will also be affected by people willingness to Vaccinate and you have that on the 29th April, we already have 40% of the population of Toronto having received at least one Those. Please bear in mind when you see this graph that again, this graph that compares Traffic visavis2019pre pandemic that really when we look at February, March in Toronto this year, mobility restrictions were pretty similar to the ones in April last year 2020. And Now you have a 44% drop compared to an 80% drop last year, right? So things are reopening. And Another of the myths that we see with people trying to extrapolate traffic in the alternative routes For one another from different sources, they get to very different numbers. I mean, we've Just consult us to check on the different data points that could derive how the traffic is performing in the 401 And it's performing very from the frozen, but it's still far from 2019 levels, so probably a drop close or around 30%, 3-0 compared to 2019. As I said, I mean, we've used consultants to check different data points. Okay. So we move to the next slide. We can see in more detail the Performance in the quarter. And we see, as I was mentioning, that even with Similar restrictions to March last year, and as I said before, even similar to the ones in April, You have a better performance, but still Toronto has to gain momentum as it's happening In the U. S, let's hope that the vaccination speeds up and everything reopens more. Okay. So let's move to the following one where we get into more detail on different other aspects Of the 407, right? So probably starting with the bottom right hand corner with Schedule 22, I mean, the Forest Signater and the Minister of Transportation reached an agreement regarding the interpretation and the application of the COVID-nineteen pandemic related to schedule 2022. Those parties have agreed that the concession and ground lease agreement Considers a pandemic a forced major event and the COVID-nineteen pandemic fills in that definition. The parties also agreed That the reduction in traffic and inability to meet the traffic thresholds defined in the schedule 22 is caused by that event of 4th Mayur. And therefore, the concessionaire is not subject to congestion payments until the end of the 1st major event. And the parties agreed that the 4th May year includes 2020 and any subsequent year until the traffic volumes in 407 ETR And main interchanges reached pre pandemic levels. By this, the pre pandemic levels are defined as average from 2017 through 2019 or under a condition or until there is an increase in toll rates or user charges for any segment of The 407 ETR. Okay. So if we look into the financial position, I mean, cash and cash equivalents It stood at close to CAD 600,000,000 and really this expectation to maintain sufficient liquidity to satisfy all the Financial obligation 2021, there is no meaningful bond maturities until 2022. And in 2022, it's C18,000,000 Canadian dollars for maturities, 2032 is 3.18, but again in 2023, it's only 20,000,000 Canadian dollars So it's a Comfortable maturity profile. In terms of dividends, I mean, no dividends have been paid to shareholders in the Q1. That's all you all know, Something you all know, and last year, the 407 distributed CAD 300 and CAD12.5 million at 100 percent in that first quarter. The 4th 7 ETR board will monitor the pandemic and Review of potential dividend distribution in 2021. So we'll have to see how the asset reopens, looking for vaccinations to ramp up. Ton raise, there's been no change in this increase in February 2020. And reviewing the financial performance, This is all news. You saw that more than a week ago, and These revenues were impacted by the lower traffic. You have revenues down by 41.2% And EBITDA down by 45.2%. The average revenue per trip increased 5% in this Quarter, please bear in mind that it compares to also last Q1 of 2020, where there was a rate increase in February 2020. So January compares with a lower rate. Okay. So let's move on to airports, where we have Heathrow, also results published last week. And you saw how Heathrow has worked in response to COVID-nineteen in the right hand side of the Slide with a loss of cost mitigation and revenue protection initiatives, and that shows in the number below that is Reduction in OpEx of 33.5% versus the Q1 of 2020. So there's been organizational Changes, I think, the theme of Heathrow is to also set a base for a more, let's say, for a leaner and dynamic, let's Let's say, a structure for the future is digitized and is doing many different things, right? For the Current operations, there's been consolidation of terminals. There's 2 terminals and 1 runway, renegotiation of suppliers' contracts and utilization of furlough This is Kim. There was no benefit from business rates. I mean, here, there was not that possibility compared to other airports in In terms of CapEx also, it remains constrained to safety and resilience. So there's a 77% reduction in CapEx versus the Q1 of 2020. Very important to keep this Strong liquidity position, I mean, the EUR 4,500,000,000 if you take into account the issuances in April before the Results released by Heathrow, that will be DKK 4,500,000,000 even if we don't consider that at the end of March, it was DKK 4,000,000,000 so very Solid liquidity and reducing cash burn while we await restrictions of in travel to be lifted. So there's been some news of reopening. It's gradual. We hope For more reopening and more vaccination to really boost travel. As we said, this liquidity position enables We'll say for 15 months under no revenue scenario, something we see quite unlikely or into 2024 under the different And SMP and FEED share firm the credit ratings as investment grade. Okay. So that's good news. As I mentioned in traffic, if we look into the left hand side of the slide, We see, I mean, the EUR 1,700,000,000 passengers quite reduced, almost 89% versus The same quarter last year, but please focus on the Global Travel Task Force is very relevant. The risk based approach is important. Red amber and green countries, the more green countries, the better. Amber will be able to travel. So I mean, this is the Key in terms of reopening, it will depend, of course, on the situation in different countries and the levels of vaccination. Key information is still required, right? So it's not that easy. I mean, you need different types of tests, there's costs and then the process to fulfill. International travel is expected to resume on the 17th May at the earliest and very critical and Heathrow has been very vocal about this It's to have border force resilience to support the recovery and the I mean, the increase in passenger numbers. I mean, it's taking Too long for passengers and this should get better. Okay. So if we move to the next slide, we Touch on regulation. There was a reopener statement on the 27th April. The CAA Accepted the need for immediate action in order to meet its duties to consumers and to Heathrow's financeability, confirming an immediate GBP 300,000,000 wrap adjustment. Indeed, this Adjustment really falls short. I mean, it's needed to immediately restore regulatory depreciation in line with regulatory principles. And this is really needed to keep all the confidence on investments In the regulated assets that are regulated because it's key to deliver on the key infrastructure and you need to deliver these investments with a level of certainty. The CA will need to address all the issues related to adjustment fully in H7. So this will be in the 2nd part of the year to track the investment needed to maintain services, keep prices lower and protect resilience through the recovery. The H7 framework also needs to rebalance risk and return. Heathrow's revised business plan was submitted in December 2020, And the CEA will publish the initial proposals in the summer this year and the H7 period will start in 2022, January 2022. Okay. So also regarding outlook, I mentioned before about the reopening, the lifting of restrictions. That provides uncertainty on the passenger Forecast. And Heathrow has revised and provided a range of passengers from EUR 36,000,000 to EUR 13 €1,000,000 And here, the case is that there is a lot of pent up demand and they're really Looking for international travel to restart, I mean, one of the I don't know if it's the top query in Google In the UK now is work, can I go on vacation, right? So people are really looking forward to the opportunity to move internationally, right? So I mean, did I say the scenarios are related to restrictions being in place or more restrictions In the fall and in the lower part of the range, there could be covenant breach at Heathrow Finance. In terms of interest I mean, in terms of interest leverage levels are more comfortable, but there could be pressure in interest coverage ratios. Elkhisto will update more in the June 2021 investor report and also that we'll be more news of how the lifting of restriction is working. Okay. Regarding expansion, it's a topic that it's in the back burner, but it's Top priorities as well that you have Heathrow remains committed to a long term sustainable expansion. There was a positive outcome last year. This is all news, but it's good to remember. The Supreme Court unanimously ruled that the AMPS was lawful and legal government policy. And Heathrow will be consulting investors, government, airline customers and regulators for the next steps. And last But not least, and I think Heathrow is leading here, is leading in sustainable aviation. I mean, the Get 0 Council is an opportunity to accelerate the UK Aviation net zero plans. There's 2 major work streams, sustainable aviation fuel and serial emissions aircraft. Also Heathrow 2.0 is aligned with the United Nations Sustainable Development Goals. So Heathrow is clearly taking a leading role in this in the UK and internationally. Okay. So we move on. Just closing on airports, we have Aegis, of course, is suffering from restrictions as well. It has a good and strong liquidity position. As we mentioned, both shareholders committed £50,000,000 or £25,000,000 each to be injected to support liquidity. And then the position now is we say £47,000,000 of cash and equivalents. So in for Avial accounts, you will see the impact of the GBP 25,000,000 roughly Almost €29,000,000 of investment in that airport. I mean, this airport is expected to recover with the lifting of restrictions. In the meantime, there's ongoing dialogues to stand the Current financial maturity of 2022 and try to extend it for at least 2, 3 years for at least 3 years. Okay. So this is kind of the plans that are being discussed. As I said, also another airport with pent up demand is Glasgow, others are having more activity like Aberdeen related to oil and gas and Southampton was impacted by FlyOver's collapse in the past. Okay. So again, a lot of management action. This is very important, all the efforts On cost reduction, I won't dwell into this. Also, CapEx It's limited to safety, priorities and compliance, but it's a 27% cut versus last quarter Q1 in 2020. Okay. So let's move on to construction. Construction had a solid performance improving last year's 1st Quarter, of course, Budimex keeps really leading The PAC with a 4.6 EBIT margin in the Q1 and also a reminder that the real estate TBD is held for sale, is advancing for close this quarter. And well, Budimis is communicating to the stock market on quite a lively basis developments here, okay? So we should Here of the closing in this quarter, as I mentioned, that's the expectation. Okay. In terms of Revenues and EBIT margin just comment that there was no material impact in production, And really in revenues from COVID-nineteen in the Q1, there has been good activity contracting the order book Has performed well. And we have more, let's say, pending Backlog, right? Because you know that we won a big contract in San Antonio, Texas. It's not part of the order book. So usually, we have Something like EUR 1,000,000,000 of pending contracts pending to be incorporated in the backlog. Right now, it's almost double that. I mean, it's €1,900,000,000 and this is thanks in part to that project and other contracting in Poland mainly. Okay. So other events apart from that sale With IMEX that I mentioned, you have the numbers there, quite a substantial deal. We also have orders that have been signed that are pending authorization from the relevant bodies, right? So you have Figueres and Rubixa that are more than €56,000,000 €57,000,000 that are Pending approval by the regional government, again, I mean, we cannot talk on timing from them, but the natural The theme would be to get them in the second, third quarter should be getting the approvals more closer to the second than the third. Then another sale was the Nalanda sale agreement, not that big, but it's still EUR 17,000,000 Our share and also that spending competition authorities approval. Okay. So no change in the outlook at This point in time, remember that we still expect to advance at good pace in the big works in the U. S. That will consume cash there. Of course, you have All these divestments that should bring cash to the division, but in the U. S. To services, services in the Q1 of 2020 Profitability and program. Okay. It seems that the sound is not that Great. I'm going to try and speak a little bit further. If not, I will go try and work. Okay. So It seems there was a lot of background noise. I don't know if that's better. It seems it's better. Okay. So I'm moving on. Hopefully, it will be audible. I will try and speak a little bit more slowly. Okay. So in services, As I said, we have good improvement in sales and EBITDA in Spain and EMEA. Spain is in the back of both activities, environmental waste treatment and collection and in infrastructure maintenance. And Amy is also We're having a good performance vis a vis last year, thanks to higher volumes in social infra and transport. And again, here, there has been no material impact in production from COVID-nineteen. Okay. So in terms of the sales process, it's advancing Well, of course, the first milestone, as you know, it's quite old now, the sale of Broad Spectrum. The waste Treatment and collection is advancing very well in Spain. We expect signing and closing this This year, I cannot comment any further, but it's advancing at very good pace and with a A lot of detail. In terms of the waste treatment activity in the U. K, this part we have We classified as continuing activity, although we will continue with its divestment process in the future. But I mean, we think it can take more than 12 months. The reason for this decision is that we have really 4 plants here. One of them is reaching construction end and others are increasing availability in the following months. I mean, this is like initial years of some of these Projects, right? So it pays to have some of our good management from waste treatment working Here, it preserves value. Could we accelerate and maybe do it before the More than 12 months that we're saying, yes, we could, but we prefer to be prudent here, and therefore, we keep it. I mean, it has no Impact really in EBITDA in the numbers this year, so it's kind of, I mean, net It's 0 or close to, I mean, something like €1,000,000 in the account. So no material, but it's important to basically and develop these plans before they go to the market. And of course, we remain committed to the by investment of services division. The other parts are also advancing. All the processes are moving with Preparation of staff and interested parties and different discussions. As I said, the one that is more advanced is waste treatment in Spain. Okay. So let's move from services into the consolidated P and L. Okay. So we have And the consolidated level and improvement in EBITDA, I mean, on top of the different things I've discussed at the operating At level, remember that we took up a provision last year for restructuring, streamlining of overheads and also Part of the preparation for more digitization of the support functions. So that's already over. That compares well. Then in terms of financial results, it would have been very similar, but we have an increase that It's of 20 something close to €30,000,000 from an Outema mark To market impact, remember two things. I mean, first is, Outema was reclassified from financial asset to an intangible Asset last year when we lost the case to the Supreme Court, And that means that part of the derivatives are inefficient. So we should expect volatility in the P and L from that. It's not a cash element. It's not on the ex infrastructure project perimeter. It's just infrastructure project without any cash outflow, I will expect volatility there. It's important also to mention that there's probably not that much value in the equity for us, but there's book value of minus €117,000,000 So were we to divest this asset, we would have an immediate positive impact in P and L of that amount. So I would extract this part from, let's say, the recurring performance of the company given what I mentioned. Then in terms of equity accounted results, we have the 470 TR at Heathrow that I mentioned though Main extraordinary things there, when traffic recovery, we should see a rebound. And then in 8 years, we have a zero impact. Our equity accounting value at the moment is 0. And therefore, since it's consolidated and you don't consolidate any impact that could be negative there. Okay. And then in terms of Discontinued operations, we have a positive impact of €11,000,000 from Fravial Services in Spain, and that is basically the results that have been achieved given the headroom In valuation have been recorded. And then we have the real estate activity from Budimex That is currently held for sale and also impacted in €5,000,000 Okay. So that would be a quick review of the whole P and L, and we should move into the final part of the presentation. That would be the cash and the concluding remarks. Pardon me, I just hope that the sound is better. Okay. So in terms of net cash position, not much movement. The working capital impact this quarter was less than other first quarters Other years are quite contained, and this is probably held by the Services division Better payment profile, thanks to the U. K. Measures. And also in terms of Help the cash position is the Budimex real estate activity that is part of these numbers. So the other remark I would like to make is that investments have been higher than the others for 1st quarters, Recent ones and we have in the EUR 129,000,000, the main numbers are investment on the EUR 66,000,000 investment in AGS, that is the EUR 25,000,000 €29,000,000 And a €9,000,000 investment in electricity transmission lines. Those are the 3 concepts that basically Build up all the investment there. Okay. So we can move on to the Concluding remarks, I want to leave you with and here the first one is probably The boost we are seeing in GDP rebound, especially in Texas, in the U. S, this should help to Dry traffic and revenues and overall activity. In airports, a reminder, we're going to be the pent up demand and the How we are awaiting a wider reopening. Let's see how the summer pans out. And then in Spain, the services divestment is advancing well. I mentioned Waste Trindon especially, everything is advancing. Then we also I mean, the Board approved the 1st scrip dividend That was kind of set by the international shareholders meeting for the board to decide. And here we have the amount. So end of May, beginning of June should finalize this process. And then very important, we are communicating What has been communicated to the stock market regulator, 2 new independent board members that will add Experience, knowledge, so more depth, more breadth, more independence, more diversity. So welcome to all these new brilliant Board members, I hope you can have a look at the information that has been posted in the CNMB. So thanks for bearing with me. Apologies for the No, it's that has not been the sound has not been that great. And let's move into the Q and A session. So the first set of questions come from Alejandro Vigil from Westinberg. First question, could you give us your thoughts on Highway 413 versus the current capacity in the 407 as well as on the proposal to subsidize trucks in the 407 ETR. Thanks, Peconia. Thanks, Alejandro, for your question. This is Pedro Rosada, FINTR's CFO. With respect to your first question on the proposal to subsidize trucks on the 407, we have No conversations whatsoever about this matter with the NTO, so nothing to comment on that matter. With respect to the Highway 413, remember that in full year, we gave Some opinions from the company about this project over the last few months. There has been Even more opposition from municipalities and regions on the project. The environmental assessment, the main change is that since this last Monday, the federal government We'll enter into play to also make an analysis and opinion about that analysis about the environmental As I said, sorry. So under our standpoint, that means that, number 1, they can After the analysis, that will take some time for sure, could maintain the scope, could change the scope or even could cancel The project, but this is based on our own information that is based on public information. In the case, we assume This potentially will delay significantly the process because probably to make that assessment, The federal government will need to start from scratch. Thanks very much. Thank you, Pedro. The next question also from Alejandro. Could you comment on the investment opportunities in connection with the economic recovery plans in Ferrovial's market? Well, hi, thanks for the question. I mean, this is quite an ample question. I mean, In European Spain, you have about the next gen funds. The next gen funds are related Two opportunities allowed based on energy efficiency, renewables, other digital initiatives. So I mean, there's going to be investment in urban, let's say, improvement for this sort Energy efficiency that I mentioned that will be part of projects we can put in. There's, of course, things in mobility related to 5 gs, and this could be not only NextGen here, but also could be things related to the U. S. And other areas, right? So you can have opportunities of Development of products to optimize traffic, to also provide services to And safety to your drivers, there's different things here that are more related To solve our own IT, where we have capabilities and can be done. But all these things that are more related to The recent flavors and we look into some things that we can do here and it's not a small amount, What we see is, in any case, a need for infrastructure in many countries. The U. S. Being the main one. And here is a mixture. There's Some public things where we will compete, there's others that are being in what we call the development phase and that we can only comment when they come To the market, but we are talking about opportunities that in the next 4 years It could be several 1,000,000,000 of total equity, for instance, in the U. S. I'm not being more specific here, given Tomara, in the development phase, orders will be for a bid. And I don't know if maybe later on in the conference, we can comment some of the public projects. But in general, Some of them will be more public when they are out of the development phase. So it's several billion opportunities In these different markets and of course, it's not only these possibilities, also we'll be looking at possibilities that could Come up in airports that could be attractive and in general other infrastructure, right? So there's opportunities that I'm not being more Thank you, Ernesto. The next set of questions come from Jacob Odenardo from Latitude. Looking at congestion data around the world that has reopened, it seems like there is not a huge amount of difference versus 2019, apart from maybe a flatter curve of congestion around the day. How are you thinking about the overall tariffs once the States of emergency are lifted in your North American markets. Thank you, Sakupol for the question. This is Pedro Rosada again. Well, as you mentioned, your Telegrapol 1's Restrictions are lifted and we're still in the middle of a lot of restrictions in many of our regions and The impact in our assets, it's true that we are seeing improvement as restrictions are easing a little bit, But it's too premature, probably not prudent to share with you our views. Even we need to wait a little bit more To have more data points to take those decisions. Just to give you a little bit more color, perhaps we can say that we are serving a small change in Traffic patterns during the day with less trips being done during the AM peaks and a full recovery on mid days and PM peaks Driven by home based non work related trips and trucks. Again, it's we are monitoring how Traffic profiles are evolving, and we will adjust the toll rates policy accordingly. Thank you. Thank you, Pedro. The next question also from Jack Hopper. You sold the Budimex house builder in Poland for circa 2x tangible book value. What would you like to do with the proceeds? Will they be reinvested in Poland? Thank you, Jacopo. I mean, this is Inaki Garcia for Real Costracion, CFO. I think part of the question has been already Answered by Ernesto, I mean, we reached a conditional agreement on March. It's still to be closed, But it's been communicated to the Securities and Exchange Commission that the deadline has been extended to the 14th May, but it's very likely that we close the sale. And of course, I mean, your numbers are right. The proceeds are going to be around €330,000,000 with a surplus before tax So EUR 150,000,000 Regarding what to do, I mean, with the proceeds, I think it's very soon, I mean, to talk about this in this moment. 1st, because it's not closed. And second, because whatever decision will be taken by the supervisory and shareholders Meeting of Pudimax. But of course, I mean, we are analyzing all the opportunities, I mean, considering What Rafael could do, a balance between dividends and potential investments in Poland. And of course, there are good opportunities in Poland that will be analyzed as we do always. Thank you. Thank you, Inaki. The last question from Jacopo. You've now a very high net cash position. Would you consider a buyback of larger dimensions to shrink the discount to your net asset value? Hi, thanks for the question. You're right, I mean, we have a priority to invest and many of you guys have pointed that out. I mean, we have a net Cash position that is quite important is liquidity, and we need to invest to create value. We are working on industrial investments. That's The preference, because we think that we are at a time where a lot of infrastructure will happen. I know that There has been a lot of comment that a big chunk could have been Maryland, but there's others coming. And we have a priority for that. Of course, We cannot deliver that. Maybe that could be entertained. I mean, closing the discount to the net asset value is something That is very important. We think that the best way to do that is to invest wisely, but we don't rule out in case we don't consider it. So priority For the house is to invest profitably and then develop and clinch the opportunities that could be coming. The next question, come from Niccolo Pessina from Mediobanca. Regarding the Faroo 7 ETR, what are your expectations in terms of traffic recovery? Thanks, Niccolo. Again, based on the restrictions and that we are currently under shutdown and the stay at home order, It's too premature to try even to share our own views. We need to wait a little bit more once Restrictions are lifted and also looking quite close to the vaccination evolution that is Going nowadays better than a few weeks ago is speeding up and that will give Probably the opportunity to have more views in the coming months, but today is too soon to answer that question. Thank you, Pedro. Also from Niccolo, how are the nearby highways to the 407 performing? Well, we typically do not share this Type of information, sometimes this information is not public and we are By far, obligations with the public authority that could share this type of info, what we can share is we Work with technical services providers that gave us some views about How congested could be our corridors all around our assets? 1 of the companies, Streetlight, what we can say with you is that, that company End up with the conclusion that 401 particularly, but probably that could be extrapolated to the rest of the corridor, but 401 Has 30% down traffic performance with respect to 2019? That can give you a little bit of Thank you, Pedro. 3rd question from Nicolas. Considering Ontario Ministry of Transport seems to be increasing the tariffs for Highway 407 in June, Would you expect 407 ETR to do the same at some point this year? Thank you, Nicole, again. Just to clarify, follows 7 ETR contract has nothing to do with Follow-up 7 extension contracts. So despite the fact that probably there's unscheduled tariff increase For this next July, some of the extensions, again, that has nothing to do with the 407. Besides, As Ernesto has explained during the presentation and based on the agreement with the NTO and based on the fact That we are still under a force majeure event is not foreseeable that we can change at all the tariffs during 2021. Thank you. Thank you, Niccolo. Thank you, Pedro. The last question from Niccolo. With the current traffic outlook, would you expect NTE and LBJ to Thank you, Georgina. Well, we as we have mentioned in the presentation After this quarter and the lifting of restrictions in the Dallas area, We feel more confident that the performance is going to evolve much better during the rest of the year. As per the financing contract, We are allowed to pay dividends in June December. So we need to wait till those months, Comply with the covenants and ratios of the financing contracts. And then hopefully, If the Board decides, we will distribute dividends, yes. Thank you. Thank you, Pedro. The next question comes from Filipe Leite from CaixaBank BPI. Why does the EBITDA from other activities stand at €15,000,000 in the Q1 of 2021 versus minus €38,000,000 in the Q1 of 2020? Okay. Well, thanks for the question. Well, one main driver and our 2nd one more than any other thing. The first main driver is that in the Q1, we took a provision to streamline overheads And the digitized support functions that affected the Q1 of 2020. In the Q1 of 2021, you We have an impact that is quite sad for management that we got much less shares and Bonus given the COVID-nineteen affecting the performance of the share and the results And that was released this part this year. And then other minor parts are, As I mentioned before, waste treatment from the UK. Thank you, Ernest. The next set of questions come from Elodie Rall from JPMorgan. You mentioned that no Schedule 22 will be due until there is an increase in toll rates or user charges for any segment of the 407. Can you clarify on what level Of the increase in tariffs, is this based on? Is it 2019 or 2020 level? Thank you. Thanks, Elodie. This is Pedro Lazada. The tariffs are referring to the current ones. So we can wish we are restricted to change Tariffs with respect to the current ones that we are handling in the concession, that would be once we have the impact. Thank you, Pedro. The next question also from Elodie. You last said you expected 407 ETR to resume dividends by the end of 2021. Is this still the case? Or has the situation changed? Did the schedule 'twenty two outcome affect the way you look about dividends? Thanks, Alodi, again. Starting with the last part of the question, I would say the other way around. Schedule 22 changed the way we see dividends on the positive side. On the first part of the question, yes, we maintain that the idea is, Again, based on how traffic evolves, and that means how the ratios in terms of financial restrictions on paper written leases evolved during the year. We are assuming that based on all of that, Depaul could take a Decision to back load it, as we said on the full year results, the potential dividend distribution by the end of 2021. Thank you, Pedro. The next set of questions come from Luis Prieta from Kepler Cheuvreux. After the initial decision from the Maryland DOT regarding the protest of the I270 outcome. Should we expect Sintros Consortium to further appeal against this decision? Thank you, Luisa, for the question. Unfortunately, we are still stuck On our NDA with the administration, as we were back in February, when we started to receiving these questions, we have read the press as you guys, but we are By the confidentiality agreement, so we can not make any comment whatsoever on this process. Thank you. Thank you, Pedro. The next question also from Luis. Is there any update you can provide us with on the Managed Lanes pipeline in the U. S? Are you seeing increased competition? Is there any change in your views on the country on account of the President's infrastructure plan proposal, particularly in light of the potential tax changes? Thanks, Luis. Well, with respect to the increasing competition and pipeline in the U. S, we are Monitoring different alternatives, we have mentioned some of them in the last Results presentation, we are looking for several opportunities in different states as Georgia, Florida, Texas, I mean, some of them that were mentioned before, some others are a little bit confidential, but still Looking for managed lease opportunities with high concessional value, as you know, that is one of the main goals of the company. With respect to the competition, as we have seen in the last process here with we're involved in Maryland, We have not seen too much rise in terms of competitors. So we still see the usual Suspects on this. With respect to your comment on tax, I think it's a little bit soon to see the scope of items tax reform. Although, potential tax hike could hit our tax position Because we have significant amount of tax credit, we do not expect a significant cash tax impact. But again, a little bit Thank you, Pedro. The next set of questions come from Marcin Wodgall from Bank of America. Considering the agreement reached On schedule 22, is your intention to keep toll prices at the 407 unchanged until traffic volumes reach pre pandemic levels? Or could you consider raising prices sooner than that? Thank you, Martin. Yes. Again, sorry, I'm repeating myself too many times that it's so soon to answer these type of questions. We need to see how things Yuval, sorry. We definitely, we need to see whether when and how we are going to Reached this pre pandemic level and then to understand which is the trade off to increase prices or to maintain them for the sake of the interest of the concessionaire. But again, this is too soon to answer these questions. Thanks. Thank you, Pedro. The next question also from Martin. Do you anticipate to present bids for new U. S. Managed lanes projects before the end of 2021. Please, Martin. We are not we don't have a Pipeline for Maslanes before the end of 2021, it's true that we are working on several initiatives That could create that pipeline in the coming 12 to 18 months. But no, the answer is no. We don't have any specific projects of managed lease in this year. Thank you. Pedro, the next question and last from Maarten. Do you expect Heathrow to require an equity injection over the next 12 months and would Ferrovejal be willing to participate? Thank you, Begonia. Hello, Marcin. Hydro has a healthy cash position Amounted GBP 4,500,000,000 that is enough to meet our forecast needs for the next 15 months under the very extreme A scenario of no revenues. On top of that, the balance sheet has got very strong because of the recent capital increase €600,000,000 in the SP vehicle and the reopener amounted to £300,000,000 So strong liquidity, a strong balance sheet. Having said all that, there might be downside scenarios resulting into potential breach of covenants at At Heathrow Finance, we would see those breach of covenants are technical and temporary ones. So we don't expect to have an equity injection at Heathrow level because of these reasons. Thank you, Marcin. Thank you, Ignacio. The next question comes from Kenton Moorhead from DWS. What percentage of Spain Services is waste business. Is this the entire business in Spain or just a portion of it? Yes. Hi, Kenton. It's a portion this is a big one. I mean, it's between 70% 80% of the value of the business in Spain. Thank you, Ernesto. The next question or set of questions come from Patrick Creuset from Goldman Sachs. How is the light track or e commerce related traffic currently trending on the managed lanes and the 407 as a percentage of pre COVID levels? Thank you, Patrick. We have mentioned several Time is the trend. It's better in terms of the performance in heavies versus pre COVID and most of them is busted by the e commerce. Thank you. Thank you, Pedro. The last question from Patrick. The I-sixty six is now more than 60% complete. How do you see the chances of an early opening mid next year as achieved with the Dallas Managed Lanes? Thanks, Patrick. As of today, we are running according schedule. So we cannot say that there's a real chances for early opening mid next year. So we maintained by the end of 2022 as the goal for ending the construction. Thank you, Pedro. The next Question comes from Jose Manuela Royas from Santander about the mechanics of the new Schedule 22 rules. You say the suspension of Schedule 22 lasts until there is an increase in toll rates for any segment. Just to confirm, if the ETR raises tolls in just one segment of the road, does this mean Schedule 22 is back in full application as per usual across all 24 segments of the 407 ETR. Thanks, Jose Manuel. The answer is yes. If you Increase in the tariffs in the ERS1 segment, you pay for the year's 2022 full amount. Thank you very much. The next question comes From Nabi or the set of questions come from Nabi Lakhmeid from Barclays. Could you please provide an idea of Texas Managed Lanes Pricing in the Q1, excluding the mix, I. E, heavy vehicles? Thank you, Neville. Sorry, we do not provide a breakdown on this. We share the average and 30% transaction and that is a mix of the heavy vehicles impact In terms of the weight for that average calculation, but also on tariffs and as we have mentioned in the presentation, Those studies has went up in all of the 3 Texas managed lanes. Thank you. The next question also from Nabil. How do the motorways traffic trend look like in April? Is there any improvement in the 407 ETR? Thank you, Neville. Well, the way we see April is pretty much in line With Marceau, it's good evolution. But keep in mind that April, we have seen Higher level of mobility restrictions, but in line with March. Next question also from Nabil. Has the LBJ started to recover? And did you see a continuation of the March trend for the NTE and for 35 West? Yes. Thank you, Navil. Yes, we have seen in the presentation that The $3, tollway has performed much better during March with compared to 2020, and we keep on seeing the same type of evolution During April, so the answer to your questions is yes. Thank you. Thank you, Pedro. The next question also from Nabil. Could you please update on your savings plan at group level? Well, you know that we aim for €50,000,000 saving per annum. We are pretty close to that amount, close to €40,000,000 savings, the reason for not being getting €50,000,000 is part of it comes So with digitization that needs implementation of systems and so on, right? So We are currently above 30, approaching 40, and the 50 should be achieved once the implementations of the IT is finalized. And for that, we should be looking to 2022 in the second half. Thank you. The next question also from Nabil, how much cash consumption would you expect for construction in full year 2021? Hi, Nabil. Thank you for your question. This is Inaki. Well, it's too soon, I mean, to give you any guidance on the Gas consumption, but just to give you some color, I would say that there are 3 levers, I mean, that will be I mean, the first one is the, of course, we have these provision for losses in the U. S, no impact on the P and L, but of course, I mean, these losses should be paid. On the other hand, I mean, you know that we are contracting and still we have high expectations Of high contracting, high awarding. So that will that could give, sorry, some advance payments. I mean, if All the contracts are awarded in time during the year. And the third thing are the investments that have already commented that Thank you, Inaki. The next question and last from Nabil, how much CapEx do you expect for the group in full year 2021. Hi, Nabil. Well, the main driver of CapEx here is investments in I66 that are Kind of accelerating from Sintra that could get close to €400,000,000 And then you've Seeing investment in the AEGS by airports and other investments in the group would be minor, but We could easily be in the high €500,000,000 close to €600,000,000 for the year. Thank you, Ernesto. The next set of questions come from Tobias Werner from Stifel. Have you You have seen a significant improvement in the services divisions. Can you explain a bit on why, please? Well, there's different things going on, right? I mean, in you've Got Amy. Amy had more activity in social infrastructure, defense contracts and maintenance and also More highway maintenance, this higher activity was reflected in higher EBITDA. In terms of Spain also had an improvement in industrial waste and also in waste from Hospitals and so on. So waste treatment vis a vis last year was also a clear improvement And also some contracts that were more affected by the pandemic last year related to Maintenance of maintenance services to infra like the, let's say, The trip attendant in rail in Spain, the Renfrew contract also was performing better than last year that had Reduced activity given the pandemic. So overall, more activity also in the parts that could have a higher margin. Thank you, Ernesto. The next question from Tobias, Tobias, the AGS at Equity result was significantly less bad than last year. Could you explain why? Hello, Tobias. This is Ignacio Castellon from Farrubias Airports. The reason is accounting, In particular, International Accounting Standard No. 28. Basically, the share of losses for an 8 years has exceeded the interest of Forovial Into that company, therefore, Ferro Real has discontinued recognizing further losses coming from AGS. Thank you, Tobias. Thank you, everyone. Thank you, Natia. The last question from Tobias. Are you Starting to see more projects in Spain and Poland on the back of the EU's next generation recovery plan? Thank you. Inaki again. I can tell you About construction, still it's too soon, I mean, and we need more clarity on the plans and we expect Disclarity in the second half of the year, but what is true is that, for Rafael Costracion has already presented expressions of interest Around €3,400,000,000 Basically Green Real Estates and Energy Related, no? I mean, Urban rehabilitation, industrial real estate. So I mean, there are projects we expect, I mean, As mentioned, more clarity on these projects, but we expect some kind of pipeline. I mean that we have The capabilities, I mean, to get 2,000, no? Thank you. Thank you, Inaki. The last questions come from Nicholas Moura from Morgan Stanley. Looking at NT and NT 35 West, Most advanced in the recovery, westbound traffic on NTE gets a premium pricing. When could eastbound traffic also jump On the bandwagon of dynamic pricing, what about the 35 West? Thank you, Niklas. It is true that eastbound is performing better, but also westbound is getting Closer to the to those same levels, probably we'll need to wait a little bit further, but we are positive that we will Get there and that will apply not only for the NTE, also for the NTE 35 West. Thank you, Pedro. And then last question from Nicholas. What would you say is needed for LBJ traffic to return to 2019 performance, Dallas Fort Worth International Airport further ramping up, the end of works on the eastern stretch, which are expected for late 2024, economic growth and lesser impact from working from home? Thank you. Yes. Thank you, Nicolas. Probably, I would say that will more to do with people coming back To the office, keep in mind that LPGA is an urban corridor with higher percentage of commuters. So And we see out of the 3 that the probably you have less traffic even in the corridor. And that's why This is more impacted in terms of traffic overall, but it's probably more related To commuters than the other things that you are mentioning. Thank you. Thank you, Pedro. We have a last set of questions, which is just coming in. We'll be reading them shortly. The next set of questions come from Charles Maynard from Kempen. Could we expect further divestments of some of your mature toll road assets in the short term? Hi, thanks. No, not really this year, but we expect this to finalize to close the pending ones that are Just pending authorization, but not at this point in time. No, thanks. The last question from Charles Meinez here. Given the changes to your Initial estimates for the managed lanes, traffic mix, dividends, etcetera, and the inclusion of new assets, do you expect at some point after the pandemic to give visibility to the market through an updated or simplified version of the toll roads valuation file you provided in 2019. Thanks. Yes, I mean, we should. I mean, we really need to look at more Information patterns, how things are, we have to make the decision just on how patterns, let's say, become more apparent and also our investment activity. The combination of those two things means that not in the short term, but it's something that is helpful for our investors, it has been in the past And it's something we should carefully look at. Now with all the activity ramping up and more investment, I don't think it's the Thank you, Ernesto. There are no further questions. Well, thank you all for attending the call, for being with us. I think that the