Construction Sector
The Worst Has Passed
􀁠 Ahorro Corporación expects Spain’s GDP to come in at
–3.7% in 2009e and –0.9% in 2010e
In the construction sector, ACF expects drops of –12.7% and –6.9% for 2009e and
2010e and, although it will be sharp in the residential sector (–22.8% and –15.2%,
respectively), GDP should remain stable in the other activities, including civil
works.
􀁠 Growing diversification of the Spanish construction sector
We believe that the impact stemming from Spain’s economic difficulties should be
limited give that: 1) exposure to the Spanish construction business accounts for
13% of EBITDA, (residential building 1%), 2) 36% of the backlog comes from
abroad, and 3) coverage of financial costs improved in 2009e (2.6x vs. 1.9x
EBITDA/financial costs ratio).
􀁠 Ferrovial (Buy, target price: