ACS Actividades de Construccion y Servicios SA

MAD:ACS

Earnings Call Transcript 2021-Q3

[Ángel Manuel García Altozano, Corporate Managing Director]

Good morning, and thank you for joining in this September 21 results presentation. As always, we'll briefly analyze the key aspects of our results, which were released yesterday, and then we'll have a Q&A session. We are referring growth rates to 2020 pro forma figures that is with Industrial Services reclassified as discontinued operations after the sale agreement to [ VINCI ] and accounting for a 50% stake in this as equity method in both years. In the first 9 months of 2021, sales decreased 2.8% to EUR 20.4 billion, affected by the U.S. dollar depreciation of 5.6% year-on-year. FX adjusted sales remained virtually stable. Backlog at historical highs, closing at EUR 66.4 billion, that is 8.6% higher than the prior year. EBITDA reached EUR 1.16 billion, increasing by 12.5%, thanks to the positive contribution from Abertis and operating margin resilience. As you know, Abertis was highly affected by worldwide mobility restrictions imposed after the COVID-19. And as these restrictions have eased traffic rates lifted up to similar pre-pandemic levels, mainly in the last 3 months have increased 2019 levels. Likewise, EBIT increased by 12.1%, up to EUR 775 million. The group net profit reached EUR 545 million, growing by 24.7%. This growth is underpinned by the recovery of Abertis activity and the positive performance of core activities. As of September 30, 2021, the group had a EUR 3.6 billion net debt meaning $734 million decreased in the last 12-month basis after extracting [indiscernible] from Industrial Services business unit, was EUR 859 million at year-end 2020 related to the sale agreement with VINCI. Looking at the sales breakdown with the reclassification of sales services and perimeter as is convening operations, the group sales are rebalanced towards core strategic regions. The weight in North America increased up to 60%. Australia now represents 19% of the total sales and Europe increases to 17%, still being Spain the core market of the region, representing 11% of the overall sales of the group.In more detail, North America sales reached EUR 12.1 billion, particularly affected by the U.S. depreciation and the termination of large projects. FX-adjusted sales went down by 5.4% year-on-year still affected by the economic setback from COVID-19. Full recovery is expected by the year-end, with the initiation of new projects awarded in the period. Asia Pacific experienced a quick turnaround driven by the solar markets, which consolidated its recovery with 8% sales growth in local currency terms. Europe has recovered regular production growing by 4.2% against the comparable period. Core countries, Spain, Germany and Britain have even surpassed pre-pandemic production levels. Operating performance. In Construction, margins evolution reflects project migration towards a more balanced risk profile. Service recovered pre-pandemic operating margins. Meanwhile, in concessions operating efficiency improvement is mainly driven by Abertis which contribution rose by EUR 118 million year-on-year. Let me give you a bit more color on Abertis performance. Abertis average daily traffic till September 21 was 22% higher year-on-year due to the issuing of mobility restrictions introduced last year and benefiting from the resilience afforded by the diversified portfolio of toll roads. Individual country performances varied based on the timing and extent of lockdown measures as well as prevailing to our restrictions. France, plus 14%; Spain, plus 24%; Italy, plus 20%; Brazil, plus 12%; Chile, plus 45%; Mexico, plus 19%; and the U.S., plus 18%. Some of these countries are at or even over pandemic traffic levels such as Mexico or Brazil. Operating revenues rose 22% year-on-year in the 9-month period to EUR 3.65 billion, with an EBITDA up 32% year-on-year to EUR 2.530 billion, an increase of 32% helped by the full consolidation of Mexico, RCO and Elizabeth River Crossing in the U.S. acquired during 2020.Abertis net profit per PPA amounts to [ EUR 116 million ] for the 9 months of 2021, a 62% increase year-on-year due to improvement in traffic trends and operational performance. The company remains with a strong liquidity and significant debt reduction we paid with proceeds from hybrid bond issuance, company rating remains unchanged AB as recently confirmed by Fitch credit rate agency. In addition, Abertis announced on October 10 that it has signed an agreement with the Chilean Minister of Public Works for the deployment of a major CapEx project over EUR 200 million to build the channel in Santiago that will improve mobility in the city. As part of this agreement, Chilean visas enter concession period will be extended for 20 more months.Net profit activities. Construction net profit amounted to in EUR 209 million up by 2%. Concessions raised to EUR 107 million, driven by EUR 87 million contribution from Abertis in the period whereas last year contributed with a negative EUR 8 million. Industrial Services reached [ EUR 225 million, 34% ] higher than the previous year, partially due to the fact that this period has no asset depreciation after the sale agreement with VINCI.Service net profit reached EUR 20 million fully recovering pre-pandemic levels. Finally, ACS headquarter accounted for a negative net result of EUR 115 million, affected by nonrecurring financial results related to the change in value of derivatives having no cash impact. Overall, the group net profit as of September 31 reached EUR 545 million, 24.7% higher year-on-year.Year-to-date, today, net debt evolution. As of September '21, the group had a net debt of EUR 3.57 billion. Our 2020 year-end Industrial business net cash of [ EUR 115 million ] was reclassified as assets held for sale after the agreement with VINCI , therefore, excluding from the group net debt balance. The increase in net debt is basically due to the seasonality in working capital with an outflow of around EUR 1 billion, which is around EUR 200 million lower than in September '20 in comparable terms. As you can notice in the graph, function operations plus cash from asset disposals compensate any cash outflows from trailing business and hold remuneration to both ACS and HOT. Backlog diversification and order intake. Over 80% of the backlog comes from 3 core countries. U.S., 43%; Australia, 31%; and Spain, 8%. The solid growth trend across regions is confirmed by the early intake momentum, which reached EUR 27.2 billion in the first 9 months of 2021, fostered by third quarter out performance. Furthermore, we have a positive outlook based on the stimulus plans and win these agreements as part of the crisis response from government. For instance, the U.S. Congress has recently approved Biden's 5-year infrastructure bill for a total amount of $1.2 trillion. This figure includes a yearly baseline EUR 130 million funding that the Congress approved plus the yearly EUR 110 million spending aimed at modernizing the protect for coming 5 years. The funding for the incremental investment will be partially paid by unspent COVID relief, no longer relying on an increase on the U.S. corporate taxes. Net debt evolution. As of September 31, total group backlog amounted to [ EUR 66 billion, ] beating historical records in a like-for-like basis, that is excluding Industrial Services and 50% of cash contribution. Analyzing 5 year evolution, backlog experienced 6.3% annual growth coming from both construction and service activities. In this slide, we see -- have some recent awards for the year in Australia, U.S. and Spain. You've got a variety of projects. So just to finish, I would like to highlight the group's third quarter results, confirming the resilience of our businesses backed by strategic decision to focus in the most developed markets and activities that render high visibility and better balanced risk profile.Key take aways of the group performance in the first 9 months of '21, sales recovery trend and operating resilience of productivities, risk balance sheet -- balance free cash flow with high visibility and stability, backlog at historical highs and the team by positive momentum in other intake. These sets of results are post recovery trends in profitability, cash flow and backlog, positioning the group on track to meet the 2021 targets.Looking forward, [indiscernible] team in respective of Chilean government and identified tender price worth EUR 530 billion for 2021 and beyond, included EUR 200 billion in PPP projects provide a positive outlook. Just to finish then and remind that we look forward to closing the net service transaction by the end of next month, as almost all permits required have been already given. And now we are ready to answer any questions that you might have.

[Operator]

[Operator Instructions] The first question comes from Philippe Blade from CaixaBank.

[Unknown Analyst]

I have 3 questions, if I may. First one, if you can give us an additional or additional visibility or details for the reason why working capital excluding factory in this quarter, ACS exotic was so strong and what's your expectations for full year. Second question, if you can give us also an update on AP-7 litigation? And when do you expect a final decision from the court? And last one is just a confirmation regarding Radiales, I would like to confirm that the amount related with both R3 and R5 are already full provision. And also if the amount related with R2 results of full provision?

[Ángel Manuel García Altozano, Corporate Managing Director]

Okay. Well, the working capital excluding HOCHTIEF, basically obviously as of -- in the last year, we had Industrial Services included. Now it is excluded and the performance of the working capital has been probably stronger than it was in the past. As you asked about the litigation, the [ Royal ], this is a very technical question. But basically, I guess, what I allow you to say is that we have very solid jobs to support and the sentence that we can revolve in the field court. Do not forget that in the letter of support that they refer, what is guaranteed is the maintenance of rank creditors and not the repayment. You get into a very complicated matter in the impression of alloys and the centers can be revoked, and it will be appealed shortly.And on top of it, the full amount of this risk is fully provisioned in our accounts as well as in the accounts of our revenue, which also made a disclosure to the market. So I think this is a very technical issue. And you get -- the creditors are distressed that holders, which have their strategy to communicate things in a different manner, but we are comfortable that our loyal tellers and centers have very strong grounds to be revoking the appeal court.

[Operator]

The next question comes from Alejandro Vigil from Bestinver Securities.

[Alejandro Vigil, Senior Analyst]

The first question is about the Industrial Services divestment. And you mentioned that you're expecting to close the transaction at the end of next month. Can you confirm also that you will receive the EUR 5 billion at that time? And your expectations overall about the net debt by the end of the year. And that will be the first group of questions. And the second is about the reinvestment of the proceeds from Industrial Services. Your thoughts, if you can say your thoughts about these reinvestment options, particularly about Abertis. Yesterday Atlantia was openly talking about the Abertis as the vehicle of growth in motorways for the company. So if you can share your thoughts on Abertis strategy.

[Ángel Manuel García Altozano, Corporate Managing Director]

Okay. Thank you, Alejandro. I guess in the -- as we said, we hope that the investment of the Atlantia transaction will be closed before the end of the year. The contrary is -- provides for the authorization, which need to be obtained from competition authorities. We are getting one by one. The largest one which was Europe, which is where the strongest competition was possible between both groups had already been granted. And you've got different ones in different countries. We do not have any concern about it. And obviously, when the transaction closes, the payment will be received immediately. So we think that will be close as expected before the end of the year. And in terms of the reinvestment strategy, I think we've made it very clear that we want to focus our investment mostly in the development of the concession business, we have with Atlantia joint investment vehicle, which is Abertis. We would like to strengthen the Abertis capacity to grow. It's a fantastic vehicle for growing in this market, quite diversified asset base geographically and -- but also mostly in developed markets, and we think this is the way going to continue.As you know, this is a project we have with our partners, and we have to agree both in what things that company does. It's a 50-50 joint venture. But we also on top of it, have the capacity to develop new concessions ourselves and which we can invest if they were to be -- a project, which is of interest for us and our partner would consider -- would not be a appealing. So we have the 2 options. The main one is obviously Abertis which is the established concession company -- but also we can develop greenfield projects directed to international -- ourselves. But the focus of the investment is going to be in concessions. And obviously, we're working -- we've been working for the last month on it. I guess we've got quite a lot of work done, and we think there's a attractive opportunities coming in the market. So we have no problem in consign the reimbursement process will continue as we can to the transaction.

[Alejandro Vigil, Senior Analyst]

And just a follow-up, are you planning to provide a kind of a strategic update after you have a clear view about this reinvestment strategy, the kind of Capital Markets Day or a strategic update about this strategy?

[Ángel Manuel García Altozano, Corporate Managing Director]

As you know, in the investment program, you first make the investment, and then you announce it. Obviously, we are looking at different projects already and probably it's much better to communicate once you completed the acquisition. But yes, once the basic framework of the investment is already our company will provide a capital market view on how we see the concession business going forward and what our role will be.

[Operator]

The next question comes from Bosco Ojeda from UBS.

[Bosco Ojeda]

I have a couple of questions. The first one on your backlog. If you could give us some color on where are you growing in terms of sectors? You gave the geographic breakdown, but maybe in terms of sectors? Or is it that you're getting that growth in contrast and the margin outlook for that growth. And second question I wanted to ask is on your Industrial Services activity that you still -- that you keep the one that you are consolidating, I can see the debt has moved to around EUR 500 million in the last reported data. I'm not sure if you could give us detail, is that the renewable skin car line? And are you making any progress in renewable investment or looking for more investments in that area or in size and then the timing for that?

[Ángel Manuel García Altozano, Corporate Managing Director]

Bosco, thank you for the question. First of all, backlog, as you've seen, obviously, has grown in the U.S., in Australia and in Spain, basically, the 3 markets. I guess, probably the one which is in contrast with last year, probably a stronger growth is in the Australian market. I think this is a market where all governments have a very clear view on infrastructure development. And regardless of the color of the government are different regions, and they all share the same view. I guess with reinforcing of CIMIC strategy, I think we've been able to attract good projects, and this backlog is important. It basically civil works, all of it. In Spain, it's also some building growth because the building market in Spain is growing quite a bit. And in the U.S. basically, you've got a little bit of everything. Turner has grown its backlog and its institutional building and also civil works. But mostly, I think its institutional portion of it. In terms of Industrial Services, on the debt that we have there is obviously the asset that we have, a few of them are still under construction. So the growth is basically investment in those projects. I guess we keep completing them and will depend how we see that. We may dispose off them. If we see a favorable reason, we'll keep them in the long term. We do not have a clear decision yet as what we will do with each of them. but some have been sold. And the others, we see an attractive value for them, we will sell them. Otherwise, we'll keep them because they are providing good returns.

[Operator]

The next question comes from Marcin Wojtal from Bank of America.

[Marcin Karol Wojtal, Analyst]

Yes. So my first question is on the transaction with VINCI. You are, I believe, in negotiations to set up a joint venture between ACS and VINCI that would, in the future, acquire some renewable energy projects. Is there actually any update on that joint venture? Is there any deadline? Can you give us some color if this is progressing at all? And question number 2 is on share buybacks. I think we saw an announcement that ACS would be increasing that the share buyback to 7%. So can you update us a little bit on the rationale? Are you planning to reduce the share count? Or this is just to offset the dilution that is coming from the payment of dividends, partly in shares? And can you also comment a little bit on the HOCHTIEF share buyback? What is the rationale? And how do you see that from the point of view of ACS?

[Ángel Manuel García Altozano, Corporate Managing Director]

In reference to the VINCI joint venture vehicle for the renewable assets, is basically not much to be negotiated. The agreement is that we'll do a project jointly with 51% owned by VINCI and up to 49% owned by us. I guess they are all themselves and ourselves focused on developing the closely the transaction. But we mean all assets which will be developed by VINCI, our ex-Cobra unit will be put in that vehicle, and we have the capacity to invest. We haven't really paid much attention. I guess the first thing is to close the transaction. And then starting to develop the vehicle. But the vehicle is a company we'll be housing the assets as we finish them, so it's not very complicated.In terms of share buybacks, we've actually canceled in the Board of yesterday, we announced a cancellation of 6 million of ACS shares. And the rationale is we want it, obviously, we saw the price was below and we saw it was a good complement to the contribution to shareholders. And of this they had a 3.5% equity treasury stock, and they allowed the company to go up to the 10% capacity, the rationale was and the value was -- of the shares they considered was low. And it was, again, a way to compensate the shareholders. So it's basically taking advantage of a low price to give an attractive return to the shareholders. That is -- there's nothing more to it than that.

[Operator]

The next question comes from Luis Prieto from Kepler.

[Luis Prieto, Head of Construction and Building Materials]

I had a couple of them, if I could. The first one, and I know it's very difficult to talk about these things, but you just reiterated your concession investment approach inside and/or outside of Abertis. In this context, would you be able to provide a bit more granularity on what amounts could be potentially committed through Abertis and how the dialogue with Atlantia is progressing on this particular front. And the second question is just a very quick one, how comfortable are you with Aberti's financial gearing?

[Ángel Manuel García Altozano, Corporate Managing Director]

Okay. Luis, thank you for the question. A couple of comments. The reason why I mentioned investing in concessions with Atlantia through Abertis or without -- basically refers to the type of projects that we might consider investing. Obviously, Abertis is mostly the brownfield, and we think the greenfield would add additional capacity and additional profitability return because, obviously, when you compete for a greenfield, you've got a more limited amount of competitors. If you go to buy a brownfield, you've got all funds that pension companies, infrastructure funds, which some of them have very low cost of capital and it's very difficult to obtain. But obviously, part needs to be confirmed with the type of risk that we will be incorporating. That is the reason why it might be that we are not going inside in the interest project.And then if that is the case, and we think it's an attractive rate they consider to risk the bill, we can take that ourselves alone. But the normal investment vehicle will be through Abertis, obviously, Abertis if we want to pursue a large investment with Abertis, we have to strengthen their capital base. But our assets are well prepared and agreed, then we will do that to foster the growth of Abertis. So it's not any particular amount determined to commit, but we will provide the fund -- significant funds to develop according to the investment capacity that we see in the market. We see an attractive project, both partners will provide capital to the company so that the company can put through the investment if we decide to go ahead.So it's not an amount set. We have the ambition to get Abertis as the larger infrastructure company, and we have the resources and so will have a partner. So we share the view, and we'll provide enough funding for the company to pursue. We cannot keep on leveraging the company for last project because that would go in an amount we were probably in excess of what the company should bear. But we can provide capital so that the company can do that without any problem.

[Luis Prieto, Head of Construction and Building Materials]

And regarding the rest, financial gearing?

[Ángel Manuel García Altozano, Corporate Managing Director]

Luis. Yes, you can follow with the question.

[Luis Prieto, Head of Construction and Building Materials]

Hello, do you hear me?

[Ángel Manuel García Altozano, Corporate Managing Director]

Yes.

[Luis Prieto, Head of Construction and Building Materials]

Yes. The second question is how comfortable are you with Abertis' financial gearing, level of financial gearing?

[Ángel Manuel García Altozano, Corporate Managing Director]

For the time being, we do not have any problems. It's being confirmed the BBB rating. But obviously, Abertis were to pursue a large investment, we think it will be helpful to provide a stronger capital raise. But obviously, that depends on the opportunity. And again, with the existing portfolio, the company can manage that as confirmed by the rating agency, but if there is new investment, and we think there will be new investment of large size, we'll have to write additional capital, there's no problem for it.

[Operator]

The next question comes from Fernando Lafuente from Alantra Equities.

[Fernando Lafuente Seseña, Equity Research Analyst]

Just 2 -- well, 3 quick questions for me, please. The first 1 is a follow-up on the Abertis capital injection. I fully understand the regional injecting capital. My question here is where you'd be able to or decide to do it directly through ACS or HOCHTIEF would be proportional to its stake? I mean I understand that Atlantia wants to keep their stake as it is. But my -- I was wondering if you could take the opportunity to increase your direct stake against that of HOCHTIEF. The second question is on dividend buybacks. It was very clear, you have canceled 6 million shares. Last year, you did so with around 4 million shares, if I recall correctly. Is this as something that we should expect every year as a complement for the dividend? Or it's just on an opportunistic basis? And the third one is on disposals. On the one hand, renewals I guess, in the past, you were a bit -- or you were willing or considering potential disposals of the assets that you keep on renewals. And on the other on services, given all the comments that we've heard impress over these last few weeks, if you would be willing to make something with your services division or were a merger or a disposal, part of disposal or something like that?

[Ángel Manuel García Altozano, Corporate Managing Director]

In the shareholder structure that we have in Abertis, Atlantia, 50%; HOCHTIEF, 20%; and ourself, 30%. In principle, there is no consideration to change that structure. So obviously, the capital increase will be provided by the ACS Group, including HOCHTIEF as part of the ACS Group. We would not have any problem to inject the capital in the existing -- with the existing shareholder base. I don't think if we wanted to change that we can do it but no decision will be taken in that regard. As you go to the buybacks and buybacks by definition, is adding that we do on an opportunistic basis. So it's not something that we're going to do every year as I talk to the shareholder compensation. We'll do it. If and when we think the value is attractive and without any commitment to recurrence. And in terms of disposal, the lower that we keep from the carve-out of Industrial Services, the ones that we're not selling. There are different stages, and there are different nature. Some are still under construction. Some are ready to be disposed off.And again, the one we saw the construction will first complete them. And then the disposal basically is in an opportunistic basis, but there's no rush. They're all contributing to regular profit. And if we see a good price we certainly will not keep them until we get a better offer.Nothing. I mean as you referred to the services, Clece which is a service company. It's a company which we've never considered to pull in the market for sale. The fact that some competitors selling the divisions has no relation plus for us -- plus it is a very important company. We have -- we think, besides being a profitable operation, a very profitable operation in reference to the capital employed within provides a good service to society, and we are very proud of it. We're not considered to sell it by any means.

[Operator]

Next question comes from [ Ivan Safara ] from Banco Santander.

[Unknown Analyst]

Yes. Sorry, it's [ Ivan Safara ] from Banco Santander. Sorry, I was on mute. Just one quick question. It's actually a clarification from the first question that Ángel answered. You mentioned, and that's in your accounts that R3 and R5, they're fully provisioned. I didn't understand if that is the case also for the R2 since that there is no explicitly that it doesn't explicitly say in your account neither on Abertis' account.

[Ángel Manuel García Altozano, Corporate Managing Director]

Hello. Just you hear it well. In terms of ACS, we made a statement and they're fully provision. And Abertis also made a statement to the market that is also fully provisioned. As you refer also to R2, despite of the provision in consideration, our lawyers tell us that even in this case, it's even more remote the possibility of being sanctioned because of it. It is in their opinion, without any legal substance. But obviously, we have to wait until we see the judgment in court.

[Unknown Analyst]

Okay. Understood. So the lower likelihood implies that you haven't provisioned all the potential liability from the R2? That's my understanding.

[Ángel Manuel García Altozano, Corporate Managing Director]

We have the list fully provisioning our account. And it is probably disclosed if you go to yearly annual statements, even in the interim results. You got that fully explained. But again, it is something that despite of the fine alloys, you have to wait until the full appeal process is confirmed. It is completed, but we have a good opinion that we're not going to have to spend that amount of money, which has been in persistence against us.

[Operator]

Next question comes from Nicolas Mora from Morgan Stanley.

[Nicolas J. Mora, Equity Analyst]

Actually, just one question for me. Can you please just clarify in the question was put that your debt expectations or net debt expectations for the end of 2021. And from there, how much do you genuinely think you have in terms of firepower for reinvestments looking into 2022, putting aside the cash managed by our team. Are we talking about EUR 5 billion, talking about EUR 4 billion, EUR 3 million, EUR 2 million the range are quite wide. So any hint on where you think into 2022, you can set the cursor on reimbursement would be grateful.

[Ángel Manuel García Altozano, Corporate Managing Director]

In terms of debt, basically, the debt we have obviously depends on the evolution of working capital. We think the last quarter of the year is always very, very -- normally, it tends to be the best quarter in terms of what [indiscernible] will probably finish the year with a significant less debt than what we have now. But the exact amount will depend on many things, investments and what have you, but also working capital, which is probably the lightest component. In terms of firepower, we expect to get EUR 5 billion in cash from the divestment of [ 4.95 ] or whatever. And obviously, we will probably devote this -- up to this amount in the investments. Obviously, it will depend on the opportunities and whether we invest more than will depend on whether we see more or less attractive opportunities. But the firepower in principle is the amount that we were getting.

[Nicolas J. Mora, Equity Analyst]

So you don't consider you need from the, I mean, from the net debt position at the end of the year, you don't feel the need to pay back a fair amount of that debt and come back to basically a quasi net cash position?

[Ángel Manuel García Altozano, Corporate Managing Director]

Well, obviously, it depends very much on the investment opportunities. But with the present cost of debt, I think we will get investment opportunities over a long period of time, which will be much more interesting than debt reduction that we have is very comfortable at 3x EBITDA, and we don't have any problem. Obviously, from a net debt from a pricing standpoint, since we have the cash, the net debt will be reduced from that standpoint, but that doesn't imply that we use the proceeds to cancel that the debt now has a cost level, which is not necessarily urgent to cancel it. So I think we will look to invest in new business who will generate revenue for the future rather than using that to concentrate. The debt will be canceled with the cash flow from the operation going forward.

[Jose-Luis del Valle Perez]

And Nico, just to remind you on the working capital evolution in the last 3 years, even the worst scenarios we have been able to recover around EUR 1 billion every year. It's true that this year, we are performing better in terms of previous years for the first 3 quarters. But I mean it wouldn't be a surprise if we get around this figure for the year-end. So we aim to be neutral in working capital consumption.

[Operator]

[Operator Instructions] The next question comes from Alejandro Vigil from Bestinver Securities.

[Alejandro Vigil, Senior Analyst]

Last question from my side. It's about the remaining Industrial Services portfolio and revenues have been EUR 160 million in this 9 months and EBITDA of 76%. Which is the nature of this EBITDA on revenues? Is that recurring activity? Or is it just the one-off from disposals you can give us any color about the recurring level of EBITDA contribution from this portfolio.

[Ángel Manuel García Altozano, Corporate Managing Director]

Alejandro, I think the EBITDA of this portfolio. I understand it's difficult to assess from the outside mostly because it's a very diversified type of assets. So you've got assets such as Manchasol which is thermosolar plant, which is up to speed and generate significant EBITDA. Kincardine, which started recently and also is producing attractive EBITDA and others which are under construction. So I think we will have to wait until we find the transaction and at the same time, try to gain time to complete some of tender contraction, and we'll disclose kind of in a pro forma what is going to be the sales, EBITDA and net income of this asset because some of them are now under construction, some are completed.So it's very difficult to give -- there are very many small things. I think we have to once the transaction's completed, and we are able to focus on this. We probably give a view of what do we have, how it is performing. And again, most of them are available for sale, but we'll only sell them, we see an attractive price. Otherwise, we'll keep them. And we'll provide you with the visibility on that.

[Operator]

The next question comes from Fernando Lafuente from Alantra Equities.

[Fernando Lafuente Seseña, Equity Research Analyst]

Sorry, Angel, just one last question on construction. You've posted quite strong margins in this Q3 on a separated basis, recovering versus Q2. What are your views on this construction, basically, the Dragados. I mean your views on these margins going forward in this context of high cost inflation and supply disruptions, et cetera.

[Ángel Manuel García Altozano, Corporate Managing Director]

It's probably on a quarterly basis. And obviously, that depends very much on the -- on a yearly basis, I guess the margins already have not changed significantly. On a quarterly basis, if you compare 1 quarter with the previous 1 or the same quarter of last year, you might get discrepancies. But I think the margins in construction will basically be as they are. if anything, probably can be reduced a bit because the profile of the projects we are focusing on reducing significant risk is more alliance type of contracts, predevelopment agreement, things where you share the risk with the clients. And obviously, risk is reduced, but margins probably will not increase by any means. So this is basically the is situation. But I don't think we've gotten, on a yearly basis, a significant change in the margins. It is basically, as you say, if you look quarter-by-quarter, it depends very much if [indiscernible] is finished and you get the pickup in the margin because you are finally in the project, but nothing significant.

[Operator]

The next question comes from Daniel Gandoy from JB Capital.

[Daniel Gandoy, MD & Head of Equity Research]

Luis, Angel. My question is about the follow-up on the working capital issue. You maintained the guidance for a flat consumption of working capital in the year. But I would like to know if this is including the factory reduction, which you are mentioning, which, to some extent, could be considered to be extraordinary. And also, if this target of breakeven includes the HOCHTIEF group as well or if it's only ACS?

[Ángel Manuel García Altozano, Corporate Managing Director]

Thank you Daniel. I guess, basically, the objective is to get 0 consumption in working capital. But without taking into consideration the factory reduction, basically the operational working capital, the objective is to get it basically a 0 investment, and we'll see. But this applies to the whole group, including obviously HOCHTIEF with we have the American and the Australian operation. This is the objective we've been able to accomplish it in the last year, but let's see this year how it comes because it's also in effect. For instance, in the last month, in Australia, there was a real slowdown in the administration because the pandemic effect pick up significantly, and they closed some offices. So all the paperwork for the requisite orders were slow down. I think we keep the same objective we have to see at the end of the year time. But basically, it's a working capital operation without taking into consideration in the factory.

[Operator]

There are no further questions. Dear speakers, the floor is yours.

[Ángel Manuel García Altozano, Corporate Managing Director]

Okay. Well, thank you very much, then. If there are no further questions, I thank you again for joining the call. And if you have any further clarification required, give us a call. Thank you.