Good afternoon, everybody. I'm Silvia Ruiz, and I would like to welcome you to Ferrovial's conference call to discuss the financial results for the first quarter of 2022. Just as a reminder, both the result report and presentation are available to you on our website. As in previous results, although main restrictions to mobility have been lifted during the first quarter of the year, we would like to highlight that the financial information included in our report is still impacted by the COVID-19 outbreak. Given the uncertainty regarding the speed and the extent of the full resumption in activity, it is not possible to predict how the health crisis will affect Ferrovial's group information and performance in 2022. In addition, the uncertainty caused by the Ukraine-Russia crisis is expected to affect global markets.
Ferrovial will continue to closely monitor trading conditions and further evidence of wider economic impacts. I am joined here today by Ernesto López Mozo, our CFO, and by the CFOs of the different business divisions. If you have any questions, you may ask them through the forum included in the webcast. During the Q&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 Ernesto. Ernesto, the floor is yours.
Thank you, Silvia, and hello everybody. Probably you have noticed by our results release a little bit shorter that we will be focusing on the operational results and trends and let the floor for discussion on those topics, and we will be publishing as required the full consolidated results in June and December as usual. Okay, starting with the overview, the first slide, we see that operational recovery on track across the board. In toll revenues we saw a strong growth in the U.S. assets despite Omicron and weather impacts. The 407 ETR was also highly impacted by Omicron at the beginning of the year, and is starting to recover as the restrictions are eased.
In airports, we had a slow start to the year, but demand recovered strongly in March, in particular in the Easter season once the U.K. travel restrictions were removed. In construction, we continue to have a record level backlog and producing in all our different geographies. We closed the quarter with a strong cash position EUR 2.2 billion net cash ex infrastructure projects. As an introduction, last but not least, some ESG awards that basically reflect top performance in the sector in terms of sustainability. This is one of our main priorities. Of course, it is a business savvy decision, and we are looking forward to improvements along the way.
If we move to the following slide, we can see that in toll roads, there was a very strong growth, as I mentioned before. I mean, revenues more than 38% and EBITDA 41%. In particular, I would like to highlight the U.S. performance. In north of 50% both lines, revenues and EBITDA. Also it's very important that we are advancing well in the development of very important infrastructure that is fast approaching opening. The first one the I-66 it's in Virginia 22 mi a 50-year concession and it's 66% complete. By the end of the year we should see the opening. We have pending equity investment here north of EUR 400 million.
The 35 west Segment 3C in NTE is also approaching fast this one to open in 2023. We would be adding 6.7 mi. It's a 66% addition to the I-35W and here the pending investment is more it's EUR 78 million. Really looking forward to the opening of these two assets. If we move to the following one we discuss the 407 ETR. I mean, results were released some time ago and we'd like to focus on the financial growth vis-à-vis last year. Really higher revenues due to increase in traffic and with longer trips. In terms of financial position showing a very strong liquidity position with limited maturities in the coming years.
I mean, almost 320 CAD this year but only 20 in 2023 and 271 in 2024. If we combine this with the fact that there's liquidity of EUR 360 million in cash and undrawn facilities of EUR 800 million. The 407 ETR is a very robust position in the reopening after the pandemic and all the restrictions. We also have a reminder of how the Schedule 22 applies and we would need to see traffic in the network really in the alternatives and the 407 to reach the averages of 2017, 2019 for this to apply or to have an increase in tariffs.
If we move to the following slide, we have a little bit more detail into the operational trends of the 407. The start of the year was really affected by Omicron and mobility restrictions. Something that maybe a lot of people were not aware, but it was pretty much on an almost full shutdown. We see the improvement along the way. In March, it reached a 26% drop versus 2019 with really worse weather conditions than in the comparable 2019 that I mentioned. We see it reopening. It's early to talk about trends. I mean, we can say it's a low return to the office. I mean, the occupancy index is around 20% in Downtown Toronto.
I mean, this is well below other areas in the U.S. that we follow. Clearly this started much later, right? We saw in Texas people going back not staying at home much earlier probably a year in advance. We will have to keep an eye on these trends going forward. If we look at the comparables, both the 401 and transit are clearly below the 2019 levels. This let's say low return to the office is implying reduced mobility and congestion across the network. As I said, it's clearly reopening. We will have to see how it gathers pace over time.
If we move to the following slide I mean, it's good always to keep an eye on the developments of the region. This is what really proves the value proposition of the 407. We have really put a slide that is it looks more like a page on a Bible, right? Because it's full of writing but it shows all the different announcements of new facilities real estate developments that would bring employment and activity overall. As we always say, I mean, all this growth usually happens along the 407 corridor. It's really encouraging to see all these signs that the region will keep growing.
If we move to the following slide, we can see that the performance in the managed lanes really gather pace after a start of the year that was affected by a pandemic and weather. If you look into the March numbers you see that NTE is clearly above pre-pandemic levels 2019. The same as the 35W . You are in double-digit growth here. LBJ that was lagging it's also closing in fast. Right? Activity is gaining a lot of momentum. You can see that also the revenues grew ahead of our expectations. I mean, you can see that the soft cap went up by the local inflation of 7%.
Really rates went higher. I mean, you see a limited elasticity and a lot of activity. In particular in the I-35W you're seeing higher proportion of heavy traffic impacting NT. It's a corridor that is related to industrial activity. The LBJ that is more, let's say, residential or related to office work is also catching up very fast. In terms of also activity in our roads the NT is seeing mandatory mode events. Not only the evening that is the usual situation but we also saw occasionally AM peak mandatory modes.
This really gives you an idea of the activity in the region. The revenues I would say is a consequence of that activity. We move to the next slide. We see that clearly all our managed lanes, also the one in North Carolina we'll touch that in a second is clearly above the pre-pandemic levels. As I said before NTE I-35W, NTE & I-77 traffic is above pre-pandemic already. Okay, if we move to the next slide, we can see the kind of magnet that the Dallas-Fort Worth area has become. I mean, you see a lot of even headquarters from major corporations relocating there.
One of the key drivers is not only ease of business conditions, even taxes. One of the advantages that business people mention is logistics and the multimodal transportation options. Clearly the Alliance area is a good example of that. No wonder that the I-35W is doing great. I mean, this trend is expected to continue, and we're looking forward to it. If we move to the next slide, talking about the I-77 we also see growth in this area and more people are relocating there.
It's not the Dallas-Fort Worth area, but clearly there's growth in population and unemployment, and the growth is also happening along the corridor of the I-77. It's growing faster than the region, and it seems that the asset is in the right place with revenue per transaction going nicely, growing nicely. If we move to the next one I would be getting into the airport division, starting with Heathrow. Here the restrictions were lifted in March, and we've seen really a surge in traffic the Easter season. A lot of this related to let's say, leisure travel for a vacation.
We see other type of traffic also recovering a little bit but mainly is this kind of leisure travel that is picking up. Having said that and having Heathrow updated the I mean, to the upside, the traffic projection, still I mean, there's restrictions in many countries. You need to plan in advance for this administrative stuff that you have to cover. It acts as a deterrent clearly, and we cannot ignore that there's uncertainty around with the war is still ongoing and the economy looking bumpy. Okay. Clearly very good recovery. There's still uncertainty ahead, but Heathrow has upgraded the traffic projection.
The financial performance reflects this important growth vis-à-vis last year. Inflation is affecting the OpEx, and also, I mean, all the ramp-up really needs all this additional growth in OpEx, but the financial performance has been very good. Inflation is helping the leverage of the assets. I mean, 0.3% deleverage on RAV is a very good, let's say sign of the Heathrow dynamics. We are waiting for the regulation. I mean, there's no visibility. Probably it should be announced by the summer, the final proposals, but we don't have visibility on what the CAA is up to here.
Okay. If we move to the next one. Looking at Aberdeen, Glasgow, and Southampton here as well, we see a good recovery and best traffic after the pandemic erupted. This well the milder COVID-19 impact has helped. People are looking forward to going vacation and traffic recovery. The revenues and the EBITDA are growing accordingly, and this is also helping the cash situation in the company that has a good cash position of GBP 41 million. It's stronger than expected at this point in time. If we move on to construction in the next slide. We see the growth in revenues in line with the growth in the backlog.
We see a lower EBITDA and margins than last year. A couple of things are affecting. Well, first of all, last year, 2021, was flattered by the sale of some equipment, boring machine for tunnels, that I mean, brought something like EUR 5 million of EBIT of that type. I mean, this and some other disposals that helped in this regard. We have already seen impact from inflation and some scarcity of supplies, right? We already have some impact there, and we have to keep an eye on this. I mean, the company has done all the reasonable initiatives to manage this.
I mean, the stockpiling beforehand, close contract with suppliers that are compliant. Nevertheless, I mean, you end up in bottlenecks in this kind of situation, in particular in Poland. Okay? We will keep monitoring this along the year. Also we, I mean, all this acceleration to deliver our infrastructure in the U.S. will imply cash consumption in the U.S. works in 2022. As I said, the backlog is high and in very good health. Going to the next slide, that is where we talk about the net cash evolution. Well, the net cash has done well in terms of working capital compared to other years.
The main impact comes from services in the U.K. a lso construction there didn't have the typical seasonal impact, although we expect working capital consumption in the remainder of the year for construction, and this is a very good start for the year. Also we cashed in divestments from services, mainly in this EUR 178 million. We have been buying back shares. I mean, the liquidity limited, but we have been buying EUR 110 million of shares. In other financing we basically have most of that close to EUR 40 million is the deconsolidation of the cash that was in the assets that were sold. Okay.
If we move on to the last slide before getting into the Q&A. Clearly this traffic recovery, I mean, post pandemic, all of our assets are looking towards that. I mean, the pace could be different in different assets, but clearly the trend is there. All our assets are located in growth areas. It's good to be in that area because in the end you have a limited physical space that has to serve all the growth around it. Our main infrastructure assets benefit from inflation. You have flexibility for tariffs or you can pass on inflation with a formula or link to your asset base. We have headwinds in construction.
That's something that nobody can deny from supply disruption and inflation. Of course, another tool that I didn't mention before is that in some countries there's price review formula that are in place or are being discussed, negotiated. This doesn't happen in the U.S. but just for instance, in Spain and Poland, there could be some angles there. Clearly this is something to monitor for the remainder of the year. Last but not least, and probably more important, there's attractive investment opportunities ahead. I mean, our focus remains on complex infra projects in the U.S. toll roads, airports. We're looking at opportunities there.
I mean, this growth with sustainable infrastructure, I mean, is more present and probably close than it was some time ago. Thanks for bearing with us, and now we move into the Q&A part.
Thank you very much, Ernesto. The Q&A session will begin shortly. Please stay tuned. Okay. Starting with the Q&A session first set of questions come from Nicolo Pessina from Mediobanca. First question, can you provide an update on the negotiations with Blackstone on JFK new Terminal One?
Thank you, Nicolo. This is Ignacio Gastón, CEO, Ferrovial Construction.
Just one first thing, negotiations are taking place with Carlyle not with Blackstone. Carlyle could be the counterparty, and the added would be that the negotiations under the exclusivity agreement signed with Carlyle back in February of this year are still ongoing and happening. Thank you.
Next question, can you provide an update on traffic for April for 407 ETR and the Texas managed lanes?
Hi Nicolo, this is Jose Velao from Cintra, CFO. All information related to April will be provided the next quarter but I can give you some flavor about some mobility trends in Dallas and Toronto. Dallas mobility is reaching pre-pandemic levels due to a sudden economic reopening after Omicron in part, thanks to they experienced mild lockdowns during 2021 that allowed them to return to the office earlier. Toronto reopening was completely different. They've just lifted restrictions, and they returned to the office for the first time and in a voluntary basis. That is important part voluntary basis. This is almost one year later than Dallas and for that reason we think that they need more time to gradually recover similar levels of of mobility. Thanks.
Okay, next set of questions comes from Luis Prieto from Kepler Cheuvreux. First question, how should we think about the impact of cost inflation on the pending investments in toll road concessions? Is the higher cost being assumed by the group's construction division with no impact on the toll road division? Would cost inflation trigger any form of concession rebalancing?
Hi. Hi, Luis. This is Ernesto here. Okay, the construction is independent of the concession here, right? The concession of course would benefit from an uplift in prices from what was expected, right? I mean, all this inflation probably provides a base that is higher than what was discounted in the model but then construction is independent. Construction usually does fixed price contracts with suppliers. Not all was fixed in the I-66 and also you need to balance a long time if suppliers subcontractors will deliver, right? Usually I mean, if there's pending prices that could impact that would be a possibility and would affect the construction division.
Also for subcontractors it's important if they see the opportunity of business going forward that is usually something that means they could be more flexible. Yes it's independent concessions clearly benefiting from a better start. In construction we'll need to see how these finalization plans pans out. There's no let's say formula to rebalance the concession.
Next question. What is the rationale behind the positive working capital performance this early in the year?
Okay. Luis it's again me even though this I mean, comprises different divisions, I mean, services and constructions. Probably there was less of let's say advanced payments in some countries at the end of 2021 that has helped a healthier start to 2022. In the case of services in the U.K. I mean , good payment terms still are there and really they ended the year also with a tight days of payment that can be relaxed a little bit, right?
There's been no let's say, a kind of a very symbolic or one-off payment or advanced payment that could have helped this working capital. It has been a mixture of all these things that I mentioned.
Okay. Next set of questions from Elodie Rall from JP Morgan. First question on Heathrow, are you still in the view there's no need for any capital injection?
Thank you, Elodie. This is Ignacio from Ferrovial Airports. I think we have learned in the past two years that uncertainty can be really brutal. COVID is still there, and there is a war in Europe. Having said all that Heathrow is increasing upgrading the traffic outlook for this year and has a massive amount of liquidity. In our base case for this year we are not anticipating any equity injection in that asset.
Next question from Elodie on construction. What is the outlook for margins for 2022?
Thank you, Elodie. This is Iñaki García from Ferrovial Construction. Sorry now is very difficult I mean, to tell you about the outlook for margins by the end of the year. You know that for some time we share with you that we are moving towards achieving the 3.5% EBIT margin for 2024. I mean, that is in our strategic plan of horizon. In this moment of uncertainty it's even tougher, no? The first quarter we have suffer inflation and this is something we are sharing with you.
The uncertainty is more on which are going to be also the movements from the different administrations in Spain in Poland and also what is going to be really the level of inflation that we will finally have now. Difficult to share in this moment. We usually don't give you guidance but in this moment it's particularly difficult. Thank you.
Next set of questions coming from Filipe Leite from CaixaBank BPI. In construction, EBITA margin stood below 3% at first quarter 2022 and EBIT below 1% which was worse than any quarter of 2021. Can you explain the reason for such low profitability and your expectations for full year 2022?
Thank you Philippe. This is Iñaki García again. On the margin on the first quarter we can give you that information that we have suffered. We estimate around EUR 10 million in inflation. Basically in Poland, you know, I mean, they are closer to Ukraine and they are having problems with the supply of iron and also with other subcontractors. No. Also in Spain and with the energy in our energy division we are also suffering the cost of energy. This is what we'll explain to you what is happening in Ferrovial Construction. In Poland, I told you I mean, this reduction in profitability is based on inflation.
In Webber, you know, that the last year we sold our materials division SCC that was very profitable. I mean, probably with a higher profitability than the heavy civil works. This is impacting also our lower profitability in this year compared with the previous year. Thank you.
Okay, next set of questions comes from José Manuel Arroyas from Santander. First question, 407 ETR paid two dividends in first quarter of 2021 right before Omicron. Only one of these dividends have been announced with the other coming as an add-on. Can you please tell us to what degree Omicron surprised the 407 ETR board then, and what traffic conditions the board was seeing and expecting?
Hi, this is Jose Velao again. Thanks, José Manuel Arroyas for your questions. Yeah it was completely unexpected Omicron for the 407 ETR board and for Ferrovial and for everyone. That's the reason that this first quarter we think that is too early to pay dividends considering that Toronto's just lifted the restrictions after the Omicron wave, and we need more visibility of traffic patterns. About future as you know we don't give any guidance about future dividends payment in our assets but we will monitor the performance on the following quarters. The decision will be taken once the board is comfortable enough. Sure.
Next question. On I-77, could you elaborate on the main factors explaining the +50% increase in average revenue per transaction in the first quarter of 2022?
Okay, we need to consider that the I-77 is in ramp up so we are seeing some improvement in the performance, in the traffic performance. Thanks to this contract that is similar than the I-66 where we have flexibility to increase the tariff. We are trying to capture all the value possible and that's the reason that we are showing this increase in the revenue which is positive, very positive for this asset. Thanks.
Next set of questions coming from Marcin Wojtal from Bank of America. How close to 2019 levels does the 407 ETR traffic need to be for the asset to increase tariffs?
Thanks for your question. We need to see an economic reopening similar than other U.S. cities and a reasonable levels of mobility and congestion before thinking about toll strategy in 407 ETR. It's too early considering that Toronto's just lifted the restrictions and the return to the office is a voluntary basis, as I mentioned it before. We will monitor closely mobility patterns and congestion in the free alternatives to raise the tariffs, but only when it makes economic sense. Thanks.
Next question. How much cash burn from here do you expect on the legacy U.S. construction projects previously provisioned?
Thank you, Martin. Iñaki García from Construction again. We cannot give you guidance till the end of the year. In this quarter, we have burned EUR 100 million in these U.S. projects. Remember that these projects are coming to an end so I-66 is going to have a big percentage of completion by the end of this year and also the I-285 almost the same, no? As previously mentioned I mean, it's going to depend also on the performance on final settlement and on these two projects and also what is going to be the impact on inflation that is still uncertain. Thank you.
Next question coming from Nabil Ahmed from Barclays. Please describe your project pipeline as it stands today. Anything on complex tunneling projects that could happen before year-end or 2023?
Hi, this is Jose Velao and thanks for your question Nabil Ahmed. We are optimistic in general about the pipeline in the U.S. as we saw in the presentation we are focusing on the maintenance plan announced by Georgia DOT that will start with the SR 400 project pre-qualification that is expected at the end of the year. Within the next 12 months we also expect to submit a bid for a large P3 project, the I-10. We are waiting for pre-qualification of the Inglewood project in California. In Latam we are interested in some projects in Chile and we just submit a proposal in Colombia this quarter. Thanks.
Next set of questions coming from Tobias Woerner from Stifel. First question: Where are you with regard to the Amey divestment?
Okay. We keep advancing. We said we expected it to be a transaction of 2022. We are still on schedule for that. Yeah, we are progressing. We cannot comment on specific dates, but we are progressing in the disposal.
Next question from Tobias also. Why the increase in the EBIT loss to -EUR 11 million in the airport division?
Thank you, Tobias. This is Ignacio from Ferrovial Airports. The increase amounts to around EUR 6 million. Basically it's an increase in activity of bidding and staff. 2021 was a very low activity year for us, given COVID. Basically this is just coming back to normal activity with respect to Ferrovial Airports. Thank you.
Thank you. There are no further questions.
Okay. Well, thank you, Silvia, and thank you all for joining us. I mean, we'll keep updating as the year goes by and all this reopening happens. Thanks for being with us. See you shortly in person. Thank you. Bye-bye.