Mota-Engil turns losses to profits of €8 million

Mota-Engil, Portugal’s largest construction group, returned to the black in the first half of this year, with a profit of €8 million, against a loss of €5 million in the same period last year, it said in a statement on Thursday.

“In a period in which there has been a gradual recovery, although at different paces between markets, of production levels, and depending on the quality of the portfolio raised in recent semesters, the group focused its efforts on developing operations with greater profitability and cash generation,” reads the statement, which was in Portuguese.

In the first half, the group recorded a turnover of €1.138 billion, down 2% in the first half of 2020.

EBITDA (earnings before tax, interest, depreciation and amortisation) were up 25% on the year to €181 million.

In its statement, Mota-Engil highlighted the “growth of the order book (+22% compared to December) to a record in the history of the group, of €7.4 billion, that will support growth in the coming years, and significantly in Africa, a market historically with the highest operating profitability.”

The company also recalled the conclusion of “the Strategic Partnership and Investment Agreement with China Communications Construction Company (CCCC), the fourth largest construction company in the world, which is now a reference shareholder of the Mota-Engil Group” along with the founding shareholder, the Mota family.

These two main shareholders “will have a very relevant role in a new development cycle that will begin with the New Strategic Plan that will be announced in the fourth quarter of the year and which will present the strategic and financial guidelines and objectives in the timeframe up to 2026,” the statement adds.

The group also highlighted “the signing in this period of the largest contract in its history in Nigeria (Kano-Maradi railway project of €1.5 billion) which will start between the end of the year and the beginning of 2022.”

According to Mota-Engil, “this achievement contributed decisively to reaching the record of €7.4 billion, with the extension of the mining contract in Mozambique for Vale signed in August for $427 million [€361 million] not being integrated in the portfolio.”

As for performance by region, the company highlighted the 8% year-on-year growth in turnover in Portugal in the half, which it said places “the national market as the largest Engineering and Construction market in the group” for the first time in “many years”, surpassing Mexico and Angola.

Mota-Engil also said that it “maintained its investment commitments in line with what was projected at the beginning of the year” with Capex (investment) of €98 million, of which “70% related to medium and long-term contracts, with emphasis on mining in Africa, railways in Mexico and the environment in Portugal.”

The group said that it expects to keep total capital spending this year “above €200 million.”