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March 4, 2008 |
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EMPRESAS ICA: Incurs MXN1,170 Mln Net Loss in Qtr. Ended Dec. 31 Empresas ICA S.A.B. de C.V. posted a net loss of MXN1,435 million for the three months ended Dec. 31, 2007, compared to net income of MXN367 million for the same period in 2006. For the full year of 2007, the company incurred a net loss of MXN$804 million compared to net income of MXN1,072 million in 2006. During the fourth quarter, revenues and costs each increased 8%. However, general and administrative expenses increased at a faster rate, principally as a result of the hiring of new staff and payment for services related to the expansion of Housing and Infrastructure as well as start-up expenses for recently awarded projects that are not yet generating significant revenue. Backlog as of Dec. 31, 2007, reached MXN29,155 million, equivalent to 17 months construction work at fourth quarter levels. The results for the fourth quarter were also affected by the Mexican government’s tax reform, which included the enactment of a new corporate flat rate tax. In accordance with Mexican Financial Information Norms (Mexican NIF), ICA reviewed and evaluated its tax-related asset and liability balances as of year-end 2007 for the effect of the tax law changes. The company recognized the estimated effect that the tax changes will have on its future financial statements over the next 50 years. As a result, non-cash provisions were taken totaling a net MXN1,536 million. The tax charges are primarily related to our airport operating subsidiary, OMA. The overall provision for taxes in Fourth Quarter 2007 was MXN1,748 million. Despite volatile conditions of the financial markets, ICA was able to close a total of Ps. 4,482 million in financings during the quarter. These include: -- long term financings for the Queretaro-Irapuato highway PPP, the Aqueduct II in Queretaro, and the Naval Specialties Hospital; -- a bridge loan to finance the startup of construction of the La Yesca hydroelectric project; and -- working capital loans for the Faros de Panama and Esmeralda Resort projects. Revenues were MXN6,753 million, an increase of 8%. The increase in revenues was principally due to increases in Industrial Construction, Rodio, Infrastructure, and Housing revenues. This was partially offset by a decrease in Civil Construction revenues, since the new projects awarded in this segment are not yet contributing significantly to revenues. Revenues generated in Mexico represented 86% of the total. Revenues denominated in foreign currency, both dollars and other currencies, were 34% of the total. Cost of sales was MXN5,812 million, as compared to MXN5,371 million in 4Q06. Cost of sales was 86% of revenues in the both periods. Total assets as of Dec. 31, 2007 decreased by MXN1,691 million, total liabilities fell MXN5,783 million, and capital increased by MXN4,092 million, as compared to Dec. 31, 2006. Total debt decreased MXN6,342 million to MXN7,705 million as of Dec. 31, 2007, as compared to MXN14,047 million one year earlier. The decrease is a result of payment of 100% of the debt related to El Cajon Hydroelectric Project, which was partially offset by the incurrence of new financings during the quarter. Net debt decreased to MXN834 million, compared to MXN8,722 million at the close of 4Q06, as a result of the payment of the debt related to El Cajon Hydroelectric Project and the increase in cash and cash equivalents from the capital increase in September 2007. As of Dec. 31, 2007, 22% of ICA’s total debt matures in less than one year. Debt denominated in foreign currency, principally dollars, is 34% of total debt, and 61% is securities debt. Based on source of repayment, all debt was project debt. ICA had no parent company debt outstanding at Dec. 31, 2007. Empresas ICA -- http://www.ica.com.mx/ -- the largest engineering, construction, and procurement company in Mexico, was founded in 1947. ICA has completed construction and engineering projects in 21 countries. ICA's principal business units include civil construction and industrial construction. Through its subsidiaries, ICA also develops housing, manages airports, and operates tunnels, highways, and municipal services under government concession contracts and/or partial sale of long-term contract rights. As reported in the Troubled Company Reporter-Latin America on Sept. 20, 2007, Standard & Poor's Ratings Services affirmed its 'BB-' long-term corporate credit rating on Empresas ICA S.A.B. de C.V. S&P said the outlook is stable. |
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