ACS sinks 5% by having to provision 400 million for the Cimic business in Dubai

  • The Australian subsidiary will not provide financial support to its investee in the Middle East BICC
  • The construction company sinks to its lowest since March 2018, but will maintain the ‘pay-out’

ACS closed this thursday to the tail of the Ibex 35 with a collapse of 5.3% as a result of the negative impact of 400 million euros that it will suffer in its consolidated accounts. This cut comes as a result of the decision of its Australian subsidiary Cimic to not continue to provide financial support to its Middle East investee BICC.

In this way, Cimic will provision all the risks contracted with the company, which will have a negative effect of 400 million euros on the ACS accounts, the group chaired by Florentino Pérez reported to the National Securities Market Commission (CNMV) on Thursday.

Nevertheless, ACS has highlighted that this impact “will be offset” by the improvement in operating results and for the capital gains obtained in 2019, for which the The group’s annual profit will exceed 950 million euros, “in line with forecasts”. However, this message does not reassure investors, since the Spanish construction company has closed this Thursday on the stock market at 31.9 euros per share, lows since March 2018.

ACS has specified that Cimic’s provision for the withdrawal of its financial support to BICC It will not have any effect on the sales figure for 2019, nor on the gross operating result (Ebitda) nor in the net operating result (Ebit).

Likewise, ACS has highlighted that will maintain shareholder remuneration of 65% of net profit (pay-out) and that maintains good prospects for the current year.