Morning, I am Manuel Manrique, the Chairman of Sacyr. Joining me at this presentation are Pedro Sigüenza, the CEO, and Carlos Mijangos, the company's CFO and Managing Director. Thank you very much to all of you, analysts, investors, and media representatives, for attending this earnings call of Sacyr for the first half of fiscal year 2025. At Sacyr, we continue to make steadfast progress in line with our strategic plan 2024-2027, generating value in our concession assets and increasing our cash flow to invest in new projects, thus confirming that our business model is increasingly solid, growing, and profitable. As a result of the work performed in the first year since our last Investor Day, the valuation of our assets has grown by €406 million to €3.957 billion as of December 2025. This significant progress also makes us optimistic about the prospect of market recognition of this growth.
The main figures for the first half of the year bolster this trajectory I am describing. Revenue grew by 6% to €2.237 billion. Net income, excluding the effect of divestments, increased by 85% to €96 million. 91% of our EBITDA comes from concession activities. Operating cash flow climbed by 7% to €615 million, and furthermore, we invested €208 million in the first half of the year, bringing our total equity invested to almost €2 billion. I would also like to highlight the successful issuance of a new bond for €500 million, extending terms and significantly reducing interest rates. We shall refer to this transaction in more detail later. We are also securing our future sustainable growth thanks to new concession awards, two in the first half of the year, namely the expansion of the highway network in Paraguay and the largest water recycling plant in Latin America, in Chile.
This growth is also secured by the commissioning projects that are beginning to generate cash flows: the Atacama Airport, Ruta del Irata, and the all-important Ruta 68. All these projects being run in Chile. We are also strengthening this future growth with the rotation of mature assets through the transaction formalized in Colombia that you already know. This transaction consists in the divestment of three highways for $1.6 billion and with the recovery of operational assets with Voreantis. Although it is not necessary for the development of our concessions, the process continues to move forward until the market is in the best possible condition to start off operations. As we have always stated, the investment targets for the 2024-2027 plan are safe harbored with existing cash.
Another way to put this shows that there is some surplus going forward, and we are also ensuring sustainable growth by providing the company with the best corporate governance possible to this. We have appointed a Chief Executive Officer to add even more management capacity in this period of strong activity and have thus achieved the diversity targets set for the Board of Directors. The distribution of a cash dividend last June at a rate of €0.045 per share is also a way to strengthen the shareholder base and make investing in Sacyr even more attractive. This cash dividend is, in addition to the scrip dividend paid in January, in the ratio of one new share for every 40 old shares. By carrying out all these actions, we have met the targets set out under the 2024-2027 strategic plan.
That's given confidence to investors that Sacyr is achieving its objectives one by one, which is being valued positively. Regarding our environmental performance, I would like to underscore the important milestones achieved over the first half. Renowned agencies and institutions have acknowledged that we are successfully meeting our objectives in the fight against climate change. As a summary of the highlights of the first half of 2025, I would like to underscore the growth boasted by our most representative magnitudes. Operating cash flow rose by 7%, net income, excluding divestments, went up by 85%, and EBITDA to cash flow conversion grew from 87%- 95%. There were also some surpluses from the distribution of concessions by 2033, as we are going to explain later.
Next, Carlos Mijangos will give you more color as specific details of the company's income statement and balance sheet, and Pedro Sigüenza will subsequently delve into the evolution of each of the business lines.
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Thank you very much, Mr. Chairman. We are going to talk about the operating and financial performance of the period. First off, we updated the valuation of our concession assets. As you know, this went up by more than €406 million, and the main hypotheses supporting this valuation are as follows. First off, we keep discount rates on the cost of capital in each country where we discount the flows of projects, even though some interest rates have been cut in the case of some countries. We have not included any increase due to rolling solvent compared to 2024. We are keeping the same prudent approach, and we have not considered any contribution in the variation of the assets over which a sales agreement has been reached. As for the performance of this variation and the breakdown of impacts, they are as follows.
On the one hand, we have the rolling forward, which is implicit to concessions with future life cycles because here we discount cash flows within a lower term, pushing the value up, and this happens on a rolling basis. The second big impact has to do with increase due to inflation. Inflation rates went beyond our forecast, and therefore this led to an increase of €191 million. We should also mention that this is an accumulative inflation increase that sticks through the contracts and therefore pushes income on a yearly basis. Next, we have the exchange rate with a negative impact of -€213 million. However, the increase due to inflation and the exchange rate upset each other. Some countries have more inflation rates than others, so the impact varies.
We have also applied a prudent approach, and therefore we have included the equity to be committed to the projects in 2025, and we have included this as the value factor in for each project. We have not included any multiples here. I would like to mention that this €117 million is part of the €650 million of new equity to be contributed as a result of the safe contracts that we have been awarded since we hosted the Investor's Day last year. Thus, we stand at €3,957 million, up 11% compared to our valuation as of December 2024. Next, when we get cash inflows, and here we are talking about the Garganza in Colombia as a rotation inflow, we are going to receive 12% more compared to what we had priced in the valuation of 2024.
Thus, you can see that concession assets value is growing in line with the trend, the growing trend that we described during the investor's day, reaching nearly €4 billion. We are on the course to be in the north of €5 billion in 2027, our goal being reaching €9 billion by 2030. We have to take into account capitalization as of June 2023, 2025, standing at €2.763 billion. If we now take a look at distributions of concession assets over their life cycle or life period, we should highlight that they're going to contribute more than €17 billion, that's to say 6x the company's capitalization today. The award of the six contracts I mentioned before over the past 12 months led to distributions being added to the 2024 portfolio, reducing therefore the assets sold in Colombia. Thus, we come to €17 billion, €410 million per year on average.
We are talking about more than €360 million for the 2025-2033 period, €421 million for the 2034-2043 period, and more than €441 million thereafter. If we zoom in the subsequent periods, we can observe how distributions will perform the same as equity and the €2 billion capacity that the company has in order to allocate this to different needs. For example, in 2025, we see 14 distributions, and we had €277 million that we are going to be receiving from Colombia, more than €400 million in cash inflows. Capital contributions from 2025, as we mentioned during the investor's day, are the most important ones because they account for €300 million. In the 2025-2027 period, we are going to receive nearly €1 billion in distributions, investing more than €700 million, and therefore we're going to be left with €250 million.
If we now zoom this in further, by 2028-2033, we're going to receive more than €2.570 billion, with the net amount being almost €1.9 billion. We are talking about more than €3.5 billion in distributions, €1.4 billion in equity, and more than €2.0 billion in net value. Here we have not taken into account the dividends from the assets that have been sold in Colombia, and this is going to be finalized by the end of the year. As for the Colombia's agreement, these are the key features of this transaction. The enterprise value of all three assets stood at $1.6 billion, that is to say 12% above the valuation informed during the Investor Day. After this divestment, we confirmed we even increased the value of these assets as part of our valuation. As you can see, this is quite realistic and conservative.
We have obtained a 2.7 x the invested equity multiple. We have been able to surpass the median values. We have been able to strengthen our balance sheet to speed up our growth plan, and we reduce exposure in the Latin American market to better balance the current portfolio of our assets, which is one of the key messages under our strategic plan, to have one set in Europe, one set in Latin America, and one set in English-speaking countries. The IR therefore stands at 18%. We have reached 2.7 x the invested equity. We're going to collect $318 million, and then we have some earnouts in the north of $70 million. As for financial transactions per se, we have renewed our investment rating with the SC Finance Credit Agency. We continue exchanging information with other rating agencies, and we are paying attention to their outlooks.
As for the bond issues that the Chairman mentioned, these are the key features. We refinanced $370 million of maturities for 2026, 2027, and we incorporated $139 million of new money for a total amount of €500 million, the maturity term being five years, and we reduced the coupon of 2026 maturities down to 4.75%. This leads to a $26 million positive impact on our income statement, and this is the difference between the present value of cash flows at the initial rate now compared to this lower percentage. This is a one-off impact that is going to be recorded in our 2025 income statement. As for net debt evolution, I would like to highlight that the company is making huge investing efforts. Particularly in the first half, we have invested more than €208 million. That's two-folding our investments in 2024 and three-folding our investments in 2023.
Therefore, equity amounts to almost €2 billion as of June 2025. We have deducted the Garganza project, and we are going to do the same after the sale of the assets in Colombia. As for consolidated net debt evolution of the group, we stood at €6.891 billion in December 2024. We have been able to reduce this amount. The most important impact is the flow of impact, €615 million. In our assets with financial results standing at €289 million, this company has a big financial burden due to the use of project finance to finance its projects. Net investment stood at €357 million over the past half of the year. As for financing flows and other variations, we reported €478 million. I would like to underscore that the rationale behind this value is connected to impact.
We consolidated under the balance sheet of the company seven assets that were held for sale in Chile. We have to wait and see what happens in the short term. We have to materialize that investment, and we have consolidated three assets from Colombia with their related debts after the sale agreement that has been signed. Therefore, that had an impact of $176 million, - $176 million and more than $300 million. That was the other effect. Now, talking about net debt, we recall it went up by $21 million over the quarter, mainly due to a significant investment effort in our concession assets. I would like to highlight that transactions stood at $98 million, and over the past quarter, working capital was positive, standing at $2 million. It was quite steady. We received distributions of $66 million. Finance expenses were $13 million. Investments stood at $79 million.
$6 million corresponds to machinery and other assets. $27 million corresponds to finance inflows and exchange rate and other variations. This also corresponds to the exchange rate applied to recourse cash at hand in different countries. Thus, we come to $297 million, but this is going to be reduced significantly after the sale of the assets in Colombia. That's all. Mr. Chairman. Pedro, you have the floor.
Good morning, and thank you very much, Mr. Chairman. Thank you very much, Carlos. It is an honor for me to be present for the first time at a Sacyr results presentation. I will now explain the most relevant facts of the first half of 2025 for the three business areas of the company. The concession division, which is a unique platform for value creation, reported revenues of €818 million, similar to the same period of the prior year. Operating income and EBITDA have been affected by the negative accounting impact of the evolution of financial assets, an effect that will undoubtedly be offset at the end of the year by the new assets that have been recently put into operation: Ruta 68 and Ruta del Irata.
In turn, construction revenue grew by 34% thanks to the contribution of relevant greenfield projects such as the Belindre Hospital in Cardiff and the Buga-Buenaventura Highway in Colombia. It has also been a period of intense investing activity, as the Chairman pointed out, with investments totaling €208 million. With the contributions made during the first half of the year, the total equity invested in our concession assets in this division reached €1.872 billion. Distributions from concessions amounted to €101 million during the first half of 2025. During this period, we have commissioned three assets, namely the Atacama Airport in January, Ruta del Irata on April 1st, and Ruta 68 on July 1st. All these assets are located in Chile. Regarding the U.S. market, our consortium is already shortlisted on two mega projects: the I-285 in Atlanta and the I-24 in Tennessee.
We have also both are managed lines, and we have also signed the addendum to Route 2 in Paraguay, which includes four kilometers of urban highway in Asunción, the Pacaray bypass, and a new access branch to Luján-San Bernardino. This concession will result in revenue of €487 million with an investment of €163 million. We have just been advised of the final award in Italy of the Novara Hospital in the Piemonte region. This hospital accommodates more than 700 beds under a 25-year concession with an investment of €525 million. Its construction will bring about many synergies with the recently awarded Turin Hospital. I would especially like to highlight the startup of the Ruta 68 highway on July 1st. This is the largest public-private partnership project ever tendered in Chile.
Since that date, we have already begun to post revenues from the concession, in which we plan to invest €1.5 billion in new lanes, pavement improvements, connectivity for adjacent communities, and traffic technology. This highway connects Santiago with Valparaíso, the two most important political, social, and economic poles of the country, running along 141 kilometers, and will have a lifetime revenue of €3.3 billion. With respect to the engineering and infrastructure division, it is worth highlighting the growth obtained in both sales and EBITDA, accounting for 18% and 34% respectively. This was due to the incorporation of the A21 highway in Italy and the progress of works in Spain, Chile, and the United Kingdom respectively. If we analyze the purely construction activities, since, as you know, the concessions in Italy are included in this division, we can see that the EBITDA margin with respect to revenue remains stable at 4.8%.
The backlog continues to grow, setting a new all-time record at €10.8 billion, 70% of which corresponds to activity for our own concessions. This portfolio ensures 59 months of activity in this division. In May, we signed the contract for Empresa de Ferrocarriles del Estado for the €271 million Alameda-Melipilla section in Chile, and in early July, we started operating the SR417 for CFX of the Central Florida Expressway in Orlando. This is already the 10th project delivered in the U.S., which shows our ability to successfully execute projects in this country.
Among the main contracts awarded during the period, we can highlight the Turin Health Park in Italy for €332 million, the Alameda-Melipilla section in Chile for €271 million, several real estate projects for first-year developers, many in Malaga and Madrid, for €245 million, the North Airport network also in Chile for €199 million, an underpass for vehicles at Dublin Airport for €160 million, the Joan XXIII Hospital in Tarragona for €76 million, the extension of line 5 of the Madrid Metro for €63 million, the construction of the DG Catalunya in the port of Barcelona for €54 million, the Mostel University Hospital in Madrid for €37 million, and the engineering contract for the renovation of an LNG terminal by our engineering company, Soci Proyecto, for €31 million, among other projects.
The water division has significantly increased both its revenue by 20% and its EBITDA by 36%, reflecting the major contracts that we won in recent months. This means that the EBITDA margin on revenue increased significantly to 23.2%. That is 218 basis points more than in the same period of the previous year. The portfolio grew by 54% to €7.408 billion. Equity invested in this division amounted to €121 million. The most relevant milestone of the first half of the year in this business area was undoubtedly the award of the water recycling or reuse plant in Antofagasta, Chile, the largest of its kind in Latin America.
The revenue portfolio of this concession project amounts to more than €2.5 billion over the 35-year concession period, secured by contracts with mining companies that are well established in the area and that need water, which is scarce in the region, and they need water for their operations. This contract was signed in June with the Chilean state-owned utility Econ Sacus for an investment of €300 million in a 900 liters per second capacity treatment plant and a recycled water supply facility. This project represents a very important leap in scale for Sociedad Agua or the SIC water division, allowing it to make solid progress in meeting its growth objectives within the 2024-2027 strategic plan. Now let me hand over to the Chairman once again.
In closing, we can say that we continue to make steady progress in the fulfillment of the 2024-2027 strategic plan, driven by the continued creation of value in our concession assets portfolio. As we said, we were able to increase its valuation by more than 11% in 2024, the strength of operating cash flow up 7%, and the 95% conversion of EBITDA into cash. The divestment of the Colombian assets in the north of 12% our valuation, a strict fulfillment of our commitment to net recourse debt, as we mentioned before, the solid growth reported by the water division. I would like to underscore the €1.230 billion after paying everything in order to invest in equity before now and 2033, €2.130 billion in equity. We are now at your disposal to answer the analysts' questions.
Thank you very much, Mr. Chairman. Good morning. Next, we are going to open the floor for questions, as usual. We are going to start with the questions coming via telephone, and then we are going to allow for questions posted through the chat function in the webcast. Luis Prieto has one question from Kepler Chevret. Please, Luis, go ahead with your question.
Thank you very much, Alberto, and thank you all for your time. I have three questions, three quick questions. The first question, which is the current negotiation situation for the Pedemontana project to balance things out. Second, can you be more specific with regards to market conditions that should be more positive in the case of Voreantis? Do you think that there is little demand? Could you give us more color here? As for slide 31 on your presentation, I believe that we are all aware of high competition in the U.S., but how competitive are your key projects in Australia, Canada, Italy, or Chile, respectively?
Thank you very much, Luis, for your question. We will get back to you in a minute.
Good morning, Luis. This is Pedro Sigüenza. Let me answer your question about the rebalancing of the Pedemontana-Veneto project. We are making progress in negotiations with the Veneto region authorities and the agents I have appointed in order to rebalance things, taking into account that additional investments were made during the project execution. The second question, as for the most favorable conditions regarding Voreantis, I would say that over the past weeks or months, three big investments were halted in our sector, three major operations in Spain, because the conditions are not suitable enough. There is this feeling of uncertainty, I would say, with regards to the macroeconomic climate. We are going to do things when the time comes. We do not need to rush. We have set this already. Oftentimes, we set this during the Investor Days. We have €2.130 billion available.
We are going to carry out those investments when the best timing comes according to the best interest for Sacyr. As for the market context, I would say that competition always exists, and there is an upside to competition, but we should analyze the past decade of Sacyr's history. We can analyze 10 concession projects in the health, water, and infrastructure areas. We tendered five or six projects. We rejected the rest due to the risks entailed or the bid intents and conditions that did not fit into our approach. Out of five or six projects, we won three, I believe, that is to say around 33% out of a total of 10 potential projects. In the past, we used to win three projects. Now we have already been awarded four projects.
At the end of the day, we believe that this will continue to be the trend because this can really set a real trend over time.
Thank you very much. The next question is by Joao Safara from Santander. Please, Joao, go ahead.
Good morning. Thank you for taking my question. The first question, just to clarify, the value stated in euros regarding the transaction in Colombia, I believe that you have hedged this exposure. Could you please confirm that you have done so and at which value? The second question is the following. It's concerned with the slide of the expected valuation of assets. You mentioned €5.1 billion by 2027. By taking a look at your current backlog and the projects and your rollover effect and the projects in the pipeline, I believe you do not need to win many more projects in order to reach that target. Am I wrong, or do you think that this target is something that you do not need to deliver right away until the economic results are clear?
As for the business lines, I would like to get some more color on the expected timeline or schedule, not only in the case of the projects for which you have been shortlisted. Do you have any estimated timeline that we could use by way of reference?
Thank you, Joao. We are going to answer those questions shortly.
Joao, let me answer your question. We are going to receive that amount, not to hedge ourselves against any foreign exchange fluctuations while we wait for the relevant permits to get through. Joao, as for the valuation that we estimate by 2027, standing at €5.1 billion, these are targets that we set for ourselves, taking into account a four-year scenario. We believe that we are going to go beyond that. This reference is not the last word. We are going to try to attain as much as possible, provided that the conditions are suitable enough, as we normally do. I'm sure that we are going to go beyond the forecast, and we have no ceiling. Joao, regarding your questions in the U.S., there are four consortiums that have been shortlisted for the projects. There is a change to the financing requirements, increasing financing from 33%- 49%.
That is a decision that has been made, and therefore, this will have an impact on the I-77 in North Carolina, the S-495 in Virginia, among other projects.
The next question is by Álvaro Lence from Alhambra. Please go ahead.
Thank you very much for answering my question. After the said transaction in Colombia, your net corporate debt stands at virtually zero. Since you have some cash surpluses of $2.1 billion by 2033, which would enable you to two-fold your equity investments, and you have the Voreantis upside as well, should we expect this corporate leveraging to be around zero from a structural standpoint, or do you keep your leveraging targets, the ones that you set in the past, or do you believe that we should expect something different given this new scenario?
We will answer shortly, Álvaro. Thank you.
What you said is correct. Your statement is correct. We are going to be at very low net recourse levels, but we have to be careful. This activity has some seasonal effects as well. We have committed ourselves to be below the ratio of one, so the net debt with recourse divided by EBITDA with recourse and distributions. However, if we confirm the Colombia cash inflows over the year, and this is where we expect, no doubt, leveraging figures from a recourse perspective will really be very low.
Thank you. With such low leveraging, do you expect any investment pipeline in order to pay that or to use those €2.1 billion in surplus cash? Do you have any other shareholder remuneration expectations in the short term? Do you think that this could actually improve after 2027, or do you think that there are other opportunities to use all this equity?
We will answer in a minute.
The surplus amount will be allocated to the major projects described by Pedro in the United States, Australia, or Canada. As for shareholder remuneration, we have committed ourselves that at least between 2024 and 2027, distribution will amount to €225 million. This is up to the relevant committee to decide when it comes to the dividend payer policy. The truth is that the situation, the prospects are very optimistic.
Thank you very much.
There are no further questions via telephone, so we are now going to start with questions via webcast. The first question is by Victor from Beispen. Is there any news as to getting an investment rating? Thank you very much.
Victor, as I mentioned before, we keep on making steadfast progress with credit agencies. They are learning more and more about our company. We are exchanging information with them, so there is an active interaction with those agencies.
Next, questions are from Julius Nicholson from Bank of America. The first question is as follows. By taking a look at equity in the first quarter of 2025, it seems that some equity has shifted from 2025- 2026. Could you give us more color in this regard? The second question is the following. Regarding the first quarter, there is an additional €200 million in equity. We understand that this corresponds to Antofagasta Rutas del Este. Are there any other projects involved here? Finally, given the company's valuation and the market cap, do we consider the possibility of formalizing forward contracts at some point in time down the road? We will answer shortly. Thank you.
Let me answer your question, Julius. As a matter of fact, there have been some variations of capital allocation from 2025- 2026. This has been carried forward in line with the formalization of concession agreements and the execution of projects. This is just a pass-through and a transfer of something that we fulfilled for 2025 and that we are carrying forward to 2026. As for the second question, equity went up due to the six projects that we were awarded since the investor's day, particularly over the past quarter, mainly due to the Antofagasta plant project and the update of equity related to the previously awarded contracts. As for forwards, this is an instrument that the company can use or that uses. Oftentimes, €30 million have already been issued, so we will have to wait and see the market conditions and what the future scenarios might be.
The next question is by Philip Leiter from Kaiser Bank PPI. As for the concession asset valuation of €4 billion, which amount or % approximately is associated to Voreantis assets? The second question is concerned with valuation details. Philip, if you agree, we are going to get back to you afterwards from the Industries Relations Department to answer that. As for net debt with recourse after the formalization of the agreement in Colombia, could we expect a net cash of zero by 2025 as a result of that transaction? I believe that question has already been addressed. We are going to answer the question about Voreantis in just a moment.
Yes, regarding the first one. As for the first question, Philip, Voreantis accounts for one-third of the valuation approximately. Those are the assets that would be making up the perimeter as for net cash flows. As we said, we are going to have some room, but it's not that relevant. Ignacio Lara from Bessemer says the following: the value in euros of the Colombian transaction, how much could it account for? Carlos said it was $318 million.
There are no further questions, so now let me turn back to the Chairman.
Thank you very much. If there are no further questions, we wish you a happy summer, and thank you for your interest in attending this earnings call. We bid you farewell until the next event. Thank you very much and have a nice day.