Good afternoon, everybody. This is Silvia Ruiz speaking, and I would like to welcome you to Ferrovial's conference call to discuss the financial results for the H1 of 2022. Just as a reminder, both the results report and presentation are available to you on our website. As in previous results, although main restrictions to mobility have been lifted, 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 affecting global markets. Ferrovial will continue to closely monitor trading conditions and further evidence of wider economic impact.
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. When starting with the highlights of these first six months of the year, the traffic in toll roads has been strong with good growth and much stronger revenue growth, in particular in the U.S. assets, the managed lanes. In the 407 ETR, we saw a continuous recovery that is encouraging as well. Regarding airports, we've seen across the world, but also in our portfolio, strong traffic recovery. Regarding construction, the inflationary pressure has been mitigated by active management. Also, we've been involved in M&A transactions. The first one is the financial close of the New Terminal One at JFK Airport. Here is remarkable that in a situation where you see few deals going ahead, this one got a successful financing with a lot of oversubscription.
In the Dar es Salaam International Airport, we also achieved the completion of the 60% acquisition. Services divestment is ongoing. I must remind you that this is pretty much complete. I mean, we have Amey and a small BLM business still for sale. These processes are ongoing. In terms of the cash position, we have a solid EUR 1.5 billion net cash position, ex infrastructure projects. This is, I mean, the consumption in the quarter has been invested in some interesting and I would say value-creating opportunities like the I-66 equity injection and also by shareholder remuneration that has been accelerated. We've done more buybacks, and we have had cash dividends. In terms of construction, we have cash in from U.S. construction projects as expected.
From an ESG point of view, I mean, we remain with all the commitment to a full disclosure of the different KPIs. We measure probably more things than other companies in the sector, I mean, in particular with the water footprint and impact. Of course, we measure our achievements in terms of CO2 reduction. I mean, the most important thing is probably not being in the indices and awards, but also that the company is moving to deliver infrastructure that is needed and in the most sustainable way, be it with design and also with traffic models that avoid traffic jams and congestion. Also in airports with a focus led by Heathrow in terms of sustainable aviation fuel.
If we move on to the next slide to start reviewing the performance of the different businesses, we start with toll roads, where we see a strong growth in U.S. assets, as I mentioned in the introduction. I mean, the road division is growing more than 30% in revenues and EBITDA vis-à-vis last year with solid EBITDA margins. In particular in the U.S., we're having a revenue growth close to 50% and also EBITDA growth just above that mark. We saw dividends from the managed lanes NTE and LBJ these first six months of the year. Regarding new investments, as I mentioned for value creation, the I-66 in the introduction, we're looking forward to opening this road.
Probably I must remind people or maybe someone didn't even know of the configuration of this road. I mean, we are transforming the current three general purpose lanes into two plus two, so two general purpose lanes and two managed lanes, right? The balance I think is probably more interesting than in other roads in terms of capacity addition. In terms of the NTE 35, where Segment 3C is also advancing at very fast speed. I mean, we are accelerating production. Now, of course, these works are affecting the traffic because we are now connecting the additional managed lanes to the existing ones in the final part of the construction.
This brings traffic jams, and we have some traffic that is now trying to avoid that hassle. That hassle will be temporary, and we're looking forward to opening another fantastic asset. If we move on to the 407 ETR, here we have growth vis-a-vis 2021 of more than 50%. We also had higher revenue per trip versus the H1 of 2021, and this was helped by the longer average trip length. In terms of financial position, the 407 enjoys a lot of liquidity. It has cash and equivalents of more than CAD 450 million and undrawn credit facilities of CAD 800 million. There's no significant debt maturities ahead.
With the kind of performance we are seeing and this liquidity, it would be natural to see additional dividends in the coming months of the year. We already had at the July board meeting CAD 200 million dividend approved. As I said, this performance and solid financial position should allow for some further dividends this year. If we move on to the next slide, we can see a little bit more detail of the traffic evolution in the 407. We see that it has been progressively closing in to the 2019 levels. Of course, probably the June level was flattered by calendar effects.
I mean, there were two more work days in 2022 vis-a-vis 2019. That's the reason why we showed this -16%. In any case, all this improvement is done with still a lot of people working from home. I mean, we see the low return to the office on the graph on the right-hand side of the slide. I mean, 27% is quite low. I mean, we must re-remember that this is voluntary at the moment. I mean, when you survey different employers in the region and probably around the world, employers are more in favor of being at the office for a good interaction. Really, working from home is a little bit more of a perk.
Of course, employees are on the other side of the spectrum, but it'll take a long time to see where this settles. Clearly from, let's say, productivity and culture point of view, employers prefer to have more presence in the office. As I said, this is voluntary at the moment. Okay, so if we move on to the next slide. We always like to remind investors about the prospects of the regions we operate in, because, I mean, the long-term performance of the asset is also based on the growth in the areas and the need for use of the infrastructure, right?
When we look into the different news regarding the GTA, we see that, I mean, the expectations for real GDP growth and employment for 2022 are there and better than in other regions in the world. In particular, around the 407, we have a very hard market in terms of industrial real estate, and it keeps growing. The more businesses that are located along the 407 and the more we see a facility sprawl, the better performance that we'll see in the future from this asset, right? It's good to remind everybody about the long-term drivers of value.
If we move on to the next slide, we can review the traffic and performance of the managed lanes in Dallas-Fort Worth. Here we see that traffic has been very good in this quarter compared to the Q1 of the year. Of course, the first part of the quarter was better. Now it's a little bit softer in terms of catching up with or growing versus 2019. I mean, probably we see the consumer confidence in the whole of the U.S. at very low levels, so people are kind of preparing for a slowdown. In any case, I mean, we see the country really as dynamic and probably recovering quickly on.
Of any downturn that could affect the economy. In terms of the performance in revenues and EBITDA, we can see that there's solid growth, much higher in revenues than in transactions or traffic. This of course has been helped by inflation there that allowed to put the cap 7% higher, the soft cap. But of course, also, tariff management has allowed for further increases that bring higher revenues. Also the proportion of heavies is a tailwind in the case of 35 we're seeing in particular. I mean, very impressive growth from these assets.
I mean, if we go to the following slide, we see the graph in terms of traffic and revenues. We see that all revenues in all these assets, also the I-77 that I will cover in a moment, are growing a lot vis-a-vis the start of the pandemic and prior to the pandemic. We see some sort of a slowdown in traffic in 3C. To understand this probably is better to refer to the snapshot on the previous slide where you can see really the congestion on some of the lanes just because we are interacting now with the connections in this road. Okay, so if we move on to the next slide.
Again, the same as with Toronto, we like to highlight the growth prospect of the area. Dallas probably really stands out in the U.S. and other cities in Texas as well. Probably the state is kind of been a magnet for the growth investment headquarters relocation. Well, that is in good shape and expected to continue. Growth in population and employment along a long time. We refer some of the indications from labor statistics or the Bureau of Economic Analysis that can help you understand the drivers of the long-term and growth here.
If we move into the next slide where I cover the I-77, this one is also growing. The region is growing. Probably here the best part of the slide is the snapshot where we see one of the toll rates. Clearly, this is below Dallas-Fort Worth. I'm not implying that it can catch up with Dallas-Fort Worth, but I mean, there's definitely room for growth here. As I said, the area is also growing. Population is growing. Employment is growing in the area. Also very solid performance from this asset. Well, if we move into the airport space now and we look at Heathrow, I mean, everybody's aware of the traffic recovery.
I mean, the passengers reached a 26 million level. Well, Heathrow also released the investor report where they were forecasting north of 54 million passengers for the year. Heathrow has been preparing for this, let's say, return to full capacity, hiring security officers in advance. It started in November. End of July is at the same capacity or number of employees in security that it had in 2019 before the pandemic, right? Of course, I mean, the bottleneck is now more in ground handling, and ground handling is below the level that the current flows require.
That's the reason why Heathrow with airlines has agreed on a cap for 100,000 departing passengers per day, compared to probably a capacity of 120,000 in the pandemic. Everybody's working to try and deliver more capacity. As I said, Heathrow had warned of this and also of the cuts that are needed to deliver this, okay? The priority remains to serve the consumers, have them flying and with their bags. I mean, at the end of September, probably there will be a more complete situation. We have to see how airlines recover their ground handling capacity. In terms of regulation, I mean, I must be quite blunt here.
I mean, we are disappointed with the H7 final proposals from the CAA. We believe they do not reflect the risk profile. Heathrow now is going to submit changes to the proposals. I mean, some of them are on assumptions that were unevidenced or inappropriate in terms of OpEx. I mean, a particular example is the OpEx needed for the current situation. Also, there are errors in financial modeling and commercial revenues forecasting. I mean, some revenues are forecasted to happen when the law doesn't allow them to happen, right? These kind of things should be corrected and of course review the approach to cost of equity and a market-based approach.
I mean, we should hope that the CAA corrects errors. There's a big one that maybe gets unnoticed. I mean, the CAA has acknowledged that there was more risk in the airport than what was considered in prior regulatory periods. They are proposing a traffic risk-sharing mechanism to prevent that. Okay, we favor that kind of thing to the risk, the asset. And not of course that they come with an additional reduction on the allowed return once you do the risk with the traffic risk-sharing mechanism. It's a little bit discouraging to see that they don't make up for errors of the past.
You know, in the end, in the interest of consumers is to deliver all these terminals, Terminal five, Terminal two, the integrated baggage. I mean, all this comes with very high investments and with the expectation of recovery of these investments, right? Changing the rules of the game and making them not recoverable is something that is quite tough. As I said, I mean, the proposals came in the absolutely low range of the low part of the range and not close to the middle and with no, let's say, RAB restatement or regulatory asset base restatement. In the end, the asset has been depreciated without usage. This is equivalent to writing it off.
The airport should be given the opportunity, maybe a long time, it doesn't have to be right away, of recovering that investment. As I said, it's quite disappointing that the regulator came to this point. In terms of other airports, we can move on to Aberdeen, Glasgow, and Southampton. Here again, we see the strong traffic recovery and the COVID-19 impact was quite strong at the beginning of the year, but it has been recovering, and now it's in much better shape. If we look to other assets, I mean, we closed the Dalaman acquisition, and here the revenue is very close to the 2019 levels.
I mean, it's only 4% below, with traffic still 15% below in the H1 of 2019. This revenue performance has been driven by retail and commercial income increases 13% up. This asset, I must remind you that we consolidate with the global consolidation. The next slide goes to the New Terminal One. As I said, this is a big project. I haven't seen this kind of big projects achieving financial close this one has. It's an asset that is really needed to deliver capacity for international traffic at JFK.
We provide in this slide a little bit more detail into the uses of funds that are needed for phase A and then B1 and B2 that are expected to happen because, I mean, phase A is achieved pretty much with levels that are similar to pre-pandemic when there is demand to travel that is not catered for. We have these uses, and we have also the phase A funding detail, where you see the equity of EUR 2.3, and we have a construction bank facility of EUR 6.6.
It's important to mention that we don't expect equity injections for phase B, just the operations will generate the cash flow to I mean serve those needed funds. In terms of phase indications being quite successful, and we have the investment grade confirmed by Moody's, Fitch, and Kroll. Construction is already progressing, right? We see in the snapshot the green garage section that was closed to start preparation for demolition works. Okay, looking forward to this project in the coming months and years. If we move on to construction, we have seen active inflation management while focusing on delivery. We really need to deliver the infrastructure assets, these big projects. The margin in the end is very similar.
It's pretty much the same as the Q1 , 0.8%. Here the inflation impacts of supplies are being worked with different mitigating measures, right? One of them, of course, there's indexation or escalation formulas in Poland and Spain. This helps to preserve margins. From a cash flow perspective, I mean, we are paying subcontractors or suppliers, but revenues come when you finalize the works, right? I mean, all these price review formulas, right? Margins now are reflecting this recovery, but cash is not, right? We are not getting this collection that will come in the future. We also have claims because there have been disruptions and delays from COVID and price increases. These are in process.
We normally don't recognize these unless they are signed off by the client. You don't have any benefit from the accounting impact or from cash flow here, right? Again, it's remarkable that you get to the 0.8% without this benefit in margin and of course in cash. Also, we were doing more sales performance ahead of the expected surge in inflation and in construction in general in the U.S. in selective areas. That's also helping to weather the impact on inflation in these works. Of course, in the recent EBITDA processes, we include inflation leeway, escalation, other types of measures to protect here.
Okay, as I said, probably we are looking at a point in time when the accounting and cash are reflecting the worst situation, and we could have improvement in margins and cash going forward. Of course, for the remainder of 2022, as we said, we've been saying for months, we expect the U.S. works to consume cash. Okay, if we move on to the next slide, where we review the accounting results, we basically have discussed the operating figures, and we can go into the financial results. I mean, you see an important improvement in financial expenses. If we look into the different lines, the results from infrastructure projects will have more expense.
Here it's related to a particular asset that we have covered in the past. I mean, it's Autema, where we have a negative net worth. It's basically worth less in our accounting portfolio. This one is reflecting the impact of an inflation derivative that is not receiving accounting hedge, right? It doesn't have an impact in cash flow. It doesn't have an impact in value really now in our equity assessment. Regarding the financial results from ex-infrastructure projects, you see a big improvement there. The improvement is derived from two things. One of them is just the interest expense is better.
You have better remuneration on cash, and you have low cost on debt after repaying last year one of the older bonds in the portfolio. You have the benefit of pre-hedging from bond issues that did not take place. We're doing bank financing, and from an accounting point of view, it has to be reflected. It's not hedge accounting, right? In the end, we are having a better interest cost performance. Just looking at the equity-accounted investees also, we've turned the corner here, and we have a positive contribution, and therefore we end up with net income positive of EUR 50 million.
If we go on to the next slide, here's where we see the evolution in the cash position, the net treasury position. It has been coming down, but for some good reasons. Shareholder remuneration north of EUR 350 million, investments of EUR 230, and then we have the working capital evolution of EUR 248. It's important to remind everybody that we're not doing any factoring right now. Our balance is pretty much zero. I mean, it doesn't make sense from a financial cost point of view at the moment. It's another tool that we have, but it's not the most efficient one, right? So we are not taking advantage of any factoring in these numbers. Okay.
Probably that is for the net cash position. If we move on, clearly the summary of these results is that we are seeing the post-pandemic traffic recovery. Of course, there's macro uncertainties, but our assets have been performing really well. They are located in growth areas where infrastructure is needed. I mean, they benefit from inflation. It's not only that you have a formula to pass it on. I mean, you can have a pricing power in many of them. In construction, I mean, the key to accelerate production delivery is infrastructure assets in the current environment is a challenge, but has been managed in a very active way and have preserved the margins.
As I said, in the discussion, it's probably in the least flattering position because we should have better margins going forward and cash collections going forward. Last but not least, we're looking at attractive investment opportunities. Complex infra projects in the U.S. is the priority, and delivering them with a sustainable approach and showing our capabilities there is gonna be key for the success in the future. Okay. Thanks a lot for bearing with us, and we open the floor to the Q&A.
Thank you very much, Ernesto. The Q&A session will begin shortly. Please stay tuned. Let's start with the Q&A session. First set of questions comes from Robert Grimes from Insight. First question: In terms of tariffs for JFK Terminal one, Ferrovial Airports CEO mentioned a cost per enplaned passenger of $81 at Terminal four in its 144A issuance document. Does this provide a reasonable guide for tariffs at Terminal one in 2026 at open?
Thank you, Robert, for the question. This is Ignacio Castejón from the Ferrovial Airports team. With respect to your question, of course, any tariff or terminal at JFK is a reference point for the NTO team. What I would like to remind you is that the goal of the NTO project is providing a new facility with best-in-class services for long-haul passengers. The attractiveness of this approach has been confirmed through agreements with four airlines already signed and committed with a specific tariff for the project. We are very convinced that we'll be able to deliver the tariff that we are expected.
Next question from Robert Grimes: Why did you initially use syndicated loans for New Terminal One at JFK and not issue Private Activity Bonds, as did the private consortium at LaGuardia Terminal B? Any indication of the interest cost of the loans?
Thank you, Robert. This is Ignacio Castejón again. Basically, the main goals to use bank facilities at that moment in time was taking advantages of trying to avoid a high cost of the potential, perhaps given the volatility in the market, the new potential issue premiums coming from a new transaction, and also avoiding the widening of the spreads at the moment of financial close. That's why we use the flexibility of the bank financing, in order to wait and see the developments in the market. With respect to your second question, that's commercially sensitive, so I cannot say at this moment in time. Thank you.
Next set of questions coming from Luis Prieto from Kepler Cheuvreux. First question: Although you already registered a very favorable revenue per transaction frame in your managed lanes in the Q1 , could you please remind us what the key moving parts of this performance have been in the H1 ? In particular, I would be interested in your views on the sensitivity of revenue per transaction to a softening of traffic if we were to go into recession.
Thank you, Luis, for your question. This is José María Velao from Cintra. In our assets in Texas, we are close enough to the soft cap during peak hours, but we have some room in middays and weekends in the younger asset that we got. That is the NTE 35W. But it's important to note that we have an alternative mechanism to increase tolls even in a soft cap situation, as I said, like the CPI escalation that is very important in inflationary environment that we are living right now. The mandatory mode events that we, as we know, are an important revenue inflow in the NTE.
We have revenue optimizations in all the assets that we're working on that with the algorithm. We know that our assets are in Texas, in Dallas, that even though we have to keep an eye on the economic softening, we are in a very strong economy with very dynamic, as Ernesto said in the presentation. We're seeing a strong growth prospect, solid population with high household income that will allow us to navigate better any potential economic downturn.
Next question from Luis Prieto. Could you provide a rough idea of what the cost inflation impact on the construction division should be for the full year? What percentage of the damage do you think could be mitigated by price escalation clauses?
Thank you, Luis. This is Ignacio García, CFO of Ferrovial Construction. What we can say to you is the net impact that we are having as of today, as you know, and this is around EUR 50 million. Of course, in the H2 of the year, probably we are going to have an impact closer to that. I mean, due to the contracts that we still have in the backlog, unless there are some changes in the protection of formulas, indexes, et cetera, no. You're also asking about what percentage. I mean, you know that still there are a lot of uncertainties.
We know that in Poland, the cap has been raised, I mean, for road construction from 5% to 10% cap. Now they are thinking that in railways, probably there could be another increase. Also, this is going to be extended, I mean, to other administrations. In Spain, it's almost the same. I mean, you know that there are some limitations. I mean, there are caps of the percentage that can be applied. Also there are some, for example, Comunidad de Madrid or Aena that still are out of the indexation formulas. Energy is still out. I mean, we are still fighting as construction companies, I mean, to raise this cap, no.
Probably, I mean, I'm talking about net effects, but the broad effect is double than the number we have. In any case, I mean, despite the inflation impact, we believe that the margin at the end of the year, the EBIT margin, will be positive.
Next set of questions coming from Augustin Cendre from Stifel. First question: The construction order book has fallen -4.1% year-on-year like-for-like. How has the order intake evolved during the semester? Should we see this as a sign of a slowdown in activity?
Thank you, Augustin, Ignacio Garcia again. We have sent you this information in the presentation that in the month of July we have signed or we have won, I mean, contracts in the value of EUR 1.8 billion. I mean, this is mainly in the geographies we want to be. EUR one billion in Poland, EUR 400 million in Webber and the rest in Australia, that is Coffs Harbour. Considering that, we shouldn't see that fall in the backlog. This is basically, I mean, because in Poland we have increased our income due to the climate.
you know that we were about to sign certain contracts due to the doubts about the indexation formulas, they were not signed, and this is about PLN three billion. Now that the contracts are including these formulas with the new caps, is when we are starting to sign. In this moment, we don't see a recession in the contracting in the H2 of the year. Thank you.
Next question, from Augustin Cendre. How much of the Ferrovial Agroman underperformance is due to unprovisioned cost of the I-66 and I-285 contracts? Should we expect them to have a more negative impact on margins as it reaches completion?
Thank you, Augustin. No, the fact is that these are loss-making contracts. I mean, all the losses of these contracts are already included in the profit and loss account. It's true that not all was provision. I mean, so we have lost in this half year EUR 60 million, more or less. I mean, it's true that we had internal fees, and this is basically because two things. I mean, one is the inflation that we have suffered. These are contracts, I mean, at fixed price, and we suffered this inflation.
Also, please bear in mind that due to the COVID and all the delays in the supply chains, I mean, we are trying to finish the jobs at the time, I mean, and with acceleration. Also sometimes, I mean, assuming changes proposed by the client that they still are not agreed, this will come into claims. Due to the prudent approach that we have to claims, we are not recognizing in the results. As I mentioned, I mean, all the impact is already covered in June. Thank you.
Next set of questions coming from Marco Weaver from JP Morgan. First question: With June LBJ traffic at -13% and 407 ETR traffic at -16% versus 2019 levels, excluding positive calendar impact, are you seeing any positive recovery trends in July? Why are these assets still lagging? And any update on work from home trends within the regions?
Thank you. Thank you, Marco, for your question. This is Gemma. Let me start with the 407 ETR. It's true that the traffic is at -16%. If you check the graph in the presentation, the improvement in the congestion and mobility in the region and the performance in the 407 is quite good. This month it's the best traffic performance that we have since the pandemic began. We are in July. We see that the traffic performance is in line with the general mobility in the area, but we have to keep an eye, as Ernesto mentioned in the presentation, on the economic softening. In the long term, we have strong economic indicators in Toronto, such as GDP and population growth in the area that has the 407 ETR, which is positive considering the long duration of the asset, very positive.
Going back to the LBJ traffic, what is happening in the LBJ, we identified two things. The first one is that in the area where the LBJ is is more exposed to residents and companies that can work from home, so they got more flexibility and that is affecting the traffic performance. The second impact comes from the ongoing works, construction works in the I-635 East. That is an important feeder of the LBJ. These two concepts are what is behind the lag.
Next question. You mentioned inflation protection measures on your construction activities in Poland and Spain. Can you give an indication of amount of contracts indexed on inflation?
Yes. Thank you, Marco. I think I already mentioned, I mean, in Spain and in Poland is just for public clients. Spain, we can say that about 50% of our backlog and our revenues are with public clients. As I mentioned before, only Comunidad de Madrid and Aena are still out of the section, no? I mean, probably they will come sooner or later, no? About this 50% will be the percentage. In case of Poland, the percentage of public contracts is higher with the distinction that I made. I mean that for roads there is a higher cap than for railways, but 60% could be the percentage of protection in public contracts. Thank you.
Next set of questions coming from Marcin Wojtal from Bank of America. Can you provide an update of the new managed lane opportunity in Atlanta? When do you expect this project to be awarded?
Thank you, Marcin, for your question. Chema. This is Chema again. Yeah, we are working on that project. We are very motivated because it's our target. We are working on the prequalification in these weeks. We expect to have the bid process at the end of the year. Everything goes under expectations.
Next question. When could we expect first dividends to be distributed by the NTE 35W project?
Yeah, as you know, we are constructing the Segment 3C at this moment, and we need to wait till the end of this construction works to receive any dividends for the 35W. We are expected to finish this construction works on September 2023. Probably at the end of the year we will see any dividend.
Last question from Marcin. Can you provide a comment on how mandatory mode in the Managed Lanes are impacting financial results?
Okay. As you know, the mandatory mode, just to keep a good level of service in our highways, that led us to increase the tariff even though we are in a soft cap. The impact in revenues is relatively important, but is relatively important, you know, one, this happens only in certain periods of time and in certain segments of the highway. In general, the impact is not so huge, but it relatively is important for us in particular in our asset that is the NTE, that is the asset that is experienced this kind of mandatory mode at this moment.
Next set of questions coming from Stéphanie D'Ath from RBC. Could you please let us know when 2023, 2024, 2025, you will share key traffic and revenue and margin assumptions on JFK investment?
Thank you very much, Stephanie, for your question. This is Ignacio Castejón from Ferrovial Airports. I'm afraid that at this moment in time, the only answer I can give you, Stephanie, is that information remains highly confidential, so it's commercially sensitive. Thank you.
Next question. Are you confirming walking away from your 2024 construction guidance?
Yes. Thank you, Stéphanie. Yes, we can confirm, I mean, the 3.5% EBIT in 2024. Please bear in mind that the inflation impact in our backlog as of today is what we are suffering in profit and loss account today and we are going to suffer in 2022 mainly. In the new contracts, we are considering the inflation for sure.
Do you expect 407 ETR to be back to pre-pandemic levels in 2023?
Thank you. Thank you, Stéphanie, for your question. This is Chema again. We don't provide any guidance about the future performance of our assets. The pre-pandemic levels. Just to reach the pre-pandemic levels, it depends in that case on the mobility and congestion trend in the corridor. As you saw in the graph in the presentation, when the alternative increases congestion, the 407 ETR is getting more attractive to users, increasing its market share. That's the reason that we are closing the gap during this last quarter. Therefore, we have to keep an eye on how the return to the office evolve during the coming months, considering that at some point there should be a shift from voluntary to mandatory presence in the office.
That could have a positive impact in the congestion and the mobility and the general mobility in the area. No, esta es la . Vamos a la ahora.
Next set of questions coming from Tobias Woerner from Stifel Europe. First question: Schedule 22, what timeline would you expect force majeure to end?
Thanks, Tobias. As you know, this first major agreement that we got will come to the end with having one of these two things. The first one is that you increase the tariff in any segment of the highway, the toll rate, sorry, in any segment of the highway. The second, that we get a traffic level that is equal to the average of the traffic in 2017 and 2019. We will see how the asset and the traffic are performing in the coming months, and we will see if that happen in the coming future.
Next question. The net cash position at EUR 1.5 billion at the half year seems to be at the lower end. Can you remind us of the key contributors to this performance, please? Should we expect a rebound of the net cash position in the H2 of the year in line or above the one seen in the H2 2021?
Yeah.
Yeah, thanks, Tobias, for the question. Well, really the explanation, the 1.5, I can refer to the slide I covered in the presentation, but I would like to remind you that the main driver has been shareholder remuneration, both dividends and buybacks, and also investment. I mean, we are investing in the I-66. I covered that asset that we're looking forward to, and it's accelerating to reach the, I mean, the year-end opening, and we're also accelerating the CapEx in the managed lanes, right? In the presentation, you have the pending capital commitments there, right? That relates to the second part of the question. That is what we will expect for the H2 of the year, right?
Investment, we'll continue investing and remunerating shareholders, right? There's the component of the cash outflow in construction in the U.S. is related to the working capital unwinding in those projects, right? All these components will remain in the second part of the year, remuneration, investment, and the cash outflow in construction in the U.S. On the positive side, I mean, we could have dividends from the infrastructure assets, in particular the 407 that we mentioned. We also could be looking to maybe other works being closed and getting some advance payments to counter for this.
divestments that are being carried out could also bring some additional money. I mean, we've mentioned in the past that this year was the year for investing and that probably driving some cash outflow while the underlying businesses keep growing and delivering dividends and more in the future. I mean, I wouldn't guide to any specific number in the H2 .
Next set of questions coming from José Manuel Arroyo from Santander. What is the main factor explaining the longer average distances traveled on the 407 ETR +6.6%? Is it heavy vehicle traffic?
Thank you, José Manuel, for your question. We're seeing a faster increase in long distance trips along the 407, especially those exiting the 407 East, that there's a following of the toll in 412 and 418. In general, this is a trend, we see an increase in the share long distance vacationers or second residence users driving more in 2022 than in 2021.
Next question. Dallas -Fort Worth. When did the disruptions caused by the construction of NTE 3C started, and for how long will the disruption last? Is this disruption the single factor depressing traffic on NTE 35W in June or are there any other factors?
Thank you again, José Manuel. Everything started in June because it's when we started to divert traffic, and that is creating some bottlenecks in the northbound of the exit of the Segment 3B. We are seeing, you know, that is affecting mainly the light traffic. You can see an image in the presentation that you illustrate pretty well what is happening in this northbound exit on the Segment 3B. It started in June. We expect that everything will finish when the construction ends. We are doing everything that we can just to minimize the impact. For us, our priority is just to finish the 3C. That is a very important project for the connectivity and just to increase the length of our highway. Just answering your second question, mainly this is the impact. There's no more impact, except that we have to keep an eye on the economic softening.
Can you provide an update on the sale of Amey and Chile mining?
Thanks for the question, José Manuel. Yeah, well, in Amey, we have several bidders that are looking to clinch the transaction. The asset is performing really well, right? We are advancing. The typical topics of discussions would be pensions, the risk and this sort of thing. They're advancing in good shape. Chile mining is slower for macro and political reasons. I mean, the country is voting a constitution. Macro is uncertain, so that process is a little bit slower, but we are carrying on with both.
Next question coming from Felipe Leite from CaixaBank BPI. Can you explain us the reason for the strong working capital outflow at Q2 of 2022 and expectations for full year 2022?
Yeah, thanks, Felipe, for the question. Well, a combination of two things, well, three, I would say. In construction, there's two. One of them is the cash outflow in finalization of these big projects in the U.S., I-66, I-285. Those are big ones. To a similar degree is some working capital consumption in Budimex. I mean, Budimex probably could unwind part of this a longer time because they have delivered important works that have to be collected. As I was saying, the main driver is this working capital outflow in construction, but also we have some unwinding of favorable working capital in Amey that is also taking part of this.
They've been doing contracts for the defense ministry and the advanced payments are being unwound at the moment, right? That has affected. As I said, the main one we explain as kind of more important is the cash flow outflow in the U.S., and Budimex will have to see at year-end.
Next question coming from Pablo Officieri from Aster Asset Management. I would like to inquire whether you have, at this stage, any plans for the refinancing of your 2.124% hybrid bond, EUR 500 million total, with a call date February 14, 2023.
Yeah. Thanks, Pablo, for the question. Yes, I mean the hybrid is, I mean fits a role in the capital structure of the company, and the idea is to refinance it when conditions are ripe. Right now the markets are distorted, so there's no point in issuing a hybrid at this point in time. We are monitoring that to see when there could be a good opportunity, but right now there's no point.
Next question coming from Daniel Gandoy from JB Capital. Could you also provide an update on the pending equity commitments in infra projects in the H2 of 2022?
Thanks, Daniel. I will take this one. This is Ernesto. Okay. We have several important investments. I-66, we still have EUR 225 million pending. Other toll roads is EUR 81 million. Then we have airports with JFK EUR 56 million and Dalaman EUR 124 million. We are, I mean, around EUR 485-86 million before taking any investments in the second part of the year.
Next question coming from Augustin Cendre from Stifel. On Dalaman International Airport, is the aeronautical revenue per passenger regulated? At which level is it trending today, and how do you expect it to evolve in the future given the Turkish lira falling versus the euro?
Thank you, Augustin. This is Ignacio Castejón from Ferrovial Airports. Just to confirm to you that the tariffs, the aeronautical revenue per passenger are set in euros further to the concession agreement. The levels are EUR 15 per international passenger and EUR three per domestic passenger. Those are the levels as of today. Thank you.
Next question coming from Nabiel Ahmed from Barclays. First question, what level of return to office you believe you need for 407 ETR traffic to return to pre-pandemic level?
Okay. Mo, thank you for your question, Nabiel. Most of the companies in Toronto are in hybrid models under a voluntary basis, as I said before, and it will continue that way, at least till September. There is a consensus between the CEOs about the importance of the presence in the office in terms of collaboration, engagement and innovation, and employees are having the opportunity to see these advantages as well. We will see how evolves the return to the office during the coming months, considering that at some point there should be a shift from voluntary to mandatory presence in the office.
Next question. Could you please remind us the timing of NTE 3C works and the expected benefits when completed?
Yeah, everything is going well with the construction work, so we expect to finish o n September 2023. The benefit is that we are increasing the connectivity in the corridor and, you know, in the segment three and 3B. We are an additional 6.4 miles of managed lanes.
Next question. Could you please describe the I-77 vehicle mix compared to Dallas-Fort Worth managed lanes? What exposure to commuting and heavies?
Yeah. We are not providing this kind of breakdown of information for our assets. The only information that I can give you is that approximately 40% of the business accounts is the only information that I can provide. There are some managed lanes in Dallas with better exposure to heavies. But as we said in the presentation, the 77 is performing quite well, even in light traffic and in heavy traffic.
Next question. Could you please come back on Ferrovial Construction losses in the Q2 ? Are these non-cash provisions? How do you see margins going forward?
Thank you, Nabiel. Well, Ferrovial Construction is basically impacted by inflation, as I mentioned, EUR 42 million out of the EUR 50 million that I commented. Also, I mean, the contracts in the US. But the contracts in the US, I-66 is finishing this year. I-285 is almost finishing. I mean, will finish next year, but they are coming to an end. The impact on the cash outflows is going to be suffering this year, and there is no need for provision. I mean, the losses are already and will be considering in the profit and loss account. No?
Regarding the inflation, one thing important to mention is that, although there are compensation formulas, this will be covered at the end of the contracts. I mean, they will be collected at the end of the contract. Inflation you're suffering today, even if in P&L you have less impact, but you are paying for this inflation in this moment. Unfortunately, will be collected or compensated at the end of the contract and maybe not in this year. That's why also you see our working capital destruction in construction in this half year. Regarding margins, I mentioned that construction we expect being positive by the end of the year, around the margins that you are seeing now. We cannot give a further guidance. Thank you.
Next question coming from Nicolas Mora from Morgan Stanley. Can you explain why clients collections at 407 ETR was so low versus revenue in the Q2 of 2022?
No, there's not any problem with collection. What is happening here is that the collection has one month of delay. You will see the collection of June the next month in the Q3 , in comparison with our revenues. That is why we're seeing so low this figure at this moment.
Next set of questions coming from Robert Johnson from.
Just say hi.
BNP Paribas Exane. First question, during June, to what extent was 407 ETR peak hour traffic below the average level seen during 2017, 2019? Given that the 407 ETR force majeure agreement will remain in place until peak hour traffic returns to average levels seen during 2017, 2019, rather than total traffic, this is an important metric for the pricing outlook. Does Ferrovial plan to disclose this metric going forward?
Yeah. Thanks for the question, Robert. Ernesto here. Well, my understanding is that we have to check this, but is that the force majeure agreement relates to average traffic, not peak hour traffic, right? That's what we have to compare to 2017, 2019. Really, the peak hour traffic is something that is, I would say fluid. It's changing all the time with different patterns. That's something that all the time we'll assess how patterns could be changing and discuss that with you guys more than just putting a metric now that probably is outdated. We'll be discussing patterns going forward as they stabilize.
There are no further questions.
Well, thank you guys for attending the results conference call. For those fortunate that can enjoy some vacation, please do that. Let's see you in the not too distant future. Bye.