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Ferrovial SA
Earnings Call Analysis
Q3-2023 Analysis
Ferrovial SA
Ferrovial's financial call opened with Silvia Ruiz introducing Ernesto Mozo, CFO, along with divisional CFOs to discuss the nine-month performance of the company.
The company experienced another strong quarter, with improved performance across its infrastructure assets, including the 407 ETR, which saw higher dividends compared to the previous year. Managed lanes also contributed to revenue growth and additional dividends. Heathrow performed outstandingly with traffic surpassing pre-pandemic levels. However, construction was impacted by the completion of large projects in the U.S. The first nine months closed with a net cash position of EUR 635 million at the infrastructure level.
Dividends from infrastructure projects amounted to nearly EUR 400 million with significant cash outflows attributed to the repayment of a hybrid bond among others. The company also continued to progress towards a U.S. stock market listing and announced a second scrip dividend.
Revenue and EBITDA growth were driven by U.S. assets, which accounted for a significant percentage of revenues and EBITDA. Dividends from managed lanes, particularly from 35 West, were substantial, reaching USD 435 million for Ferrovial's shareholder base.
The 407 ETR's operational performance improved, resulting in a 17% growth in VKTs, and revenues and EBITDA rose by about 16%. Dividends increased by CAD 100 million compared to 2022, and an additional CAD 650 million dividend was announced.
Toronto's population continues to grow, leading to improved mobility in the region, and thereby supporting Ferrovial's traffic growth and business opportunities.
Transactions across managed lanes showed growth above inflation, contributing to solid EBITDA and margins. Growth in revenue and traffic was particularly noted for the I-77 and I-66 assets.
Heathrow airport upgraded its expected traffic for the year to 79.3 million passengers while AGS also showed growth, albeit not as significant as Heathrow compared to 2019 levels.
Discussions revealed no immediate plans for a tariff increase for 407 ETR despite strong peak traffic. Updates on the SLR400 project and dividend expectations for 2024 were provided, although specifics on future dividends are not disclosed by the company.
Construction has improved in profitability with a solid quarter in EBITDA margin, and losses from U.S. projects were reportedly accounted for. There was continued attention to user value in the U.S., and no fatigue was noticed among U.S. consumers. The company also expressed comfort with its current level of cash, suggesting confidence in financial stability and growth opportunities.
Ferrovial maintained its openness to different alternatives for its portfolio assets, including Heathrow. There was also satisfaction expressed regarding the progress of projects such as MTO, with the company confident in successful delivery despite the complexity of the development context.
The LBJ project is showing performance improvements, and construction-related disruptions are subsiding, providing a positive outlook for traffic recovery. The company has anticipated all potential losses to date and expects continued growth in new employment and population in related areas.
Customer responses to pricing have been positive, with increased revenues fueled by safe travel times and a good review of heavy vehicle use. Ferrovial expects profitability on projects in early stages, and while future projections are not shared, the I-66 and I-77 are noted for their good performance, exceeding ambitious expectations.
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Good afternoon, everybody. This is Silvia Ruiz speaking, and I would like to welcome you to Ferrovial's conference call to discuss the financial results for the nine months of 2023. Just as a reminder, both the results report and presentation are available to you on our website. I am joined here today by Ernesto Mozo, our CFO; and by the CFOs of the different business divisions. If you have any questions, you may ask them to the [ form ] included in the webcast. During the Q&A session at the end of this call, we will be reading out your questions and who they are from. With this, I will hand over to Ernesto. Ernesto, the floor is yours.
Thanks, Silvia, and welcome, everybody, to the first nine months of 2023 results for Ferrovial. Well, really, this was another strong quarter. I mean our infrastructure assets performed really well, starting with the 407 ETR. We had distributions in the first nine months were higher than last year and also another one was announced post-closing of the quarter. And this was done on the back of improved traffic performance. The managed lanes as well posted a strong revenue growth and additional dividends from 35 West. In airports, with a strong summer performance and improvement along the year, Heathrow was outstanding with September already above pre-pandemic levels. Construction, I mean, with a profitable quarter, the full nine months are affected by the first half year results with impact from completion of large projects in the U.S. In terms of net cash position, we closed the first nine months with a net cash of EUR 635 million at infrastructure level. And this cash evolution is driven by dividends from infrastructure projects close to EUR 400 million and in particular, the first one from NTE35W. The main cash outflow was the repayment of what we said, the buyback of the hybrid bond that implied EUR 511 million outflow. And then we invested in equity and also in shareholder remuneration, EUR 338 million. Of course, these months were full of corporate events with listing in Euronext Amsterdam. We are also progressing with the U.S. listing. That, of course, depends on SEC approval. And we announced the second scrip dividend expected to be paid at the end of this month. From an ESG perspective, probably I would like to highlight the issuance of a sustainability-linked bond, our first one, EUR 500 million. Okay. We move to the next slide. We start with the performance, the operating performance from toll roads, and here we see the growth both in revenues and EBITDA. Really, the U.S. assets are contributing to these consolidated numbers, 83% of revenues and 93% of EBITDA. [ Segment ] 3C that opened to traffic at the end of June implies a 66% additional length to the NTE35W. It meant EUR 81 million investment are part, and it has a concession term that ends in 2061. Dividends from the managed lanes, the main one was this 35West upto 100% of our shareholder base was USD 435 million. But also we got regular dividends from NTE and LBJ for 100 shareholder base, it was USD 123 million. Also in NTE, I mean the success of performance means the ultimate configuration has been brought forward. And here, we're going to be building additional lanes, managed lane segment 2, and a general purpose lane in segment, 1. I mean this additional capacity that was part of the concession, as I said, was brought forward, is much needed in a corridor that has more growth than expected, that is important to keep the appeal of the corridor for the long term. This ultimate configuration has been financed fully with debt. In August, we issued USD 414 million of private activity bonds. And of course, this construction will start soon, and traffic will start to be affected since the start of 2024 next year. If we move on to the next slide, please. Here is the 407 ETR dividends, as I mentioned in the introduction, are above the 2022 numbers. And of course, you see that the operational performance has an important increase vis-a-vis 2022. Traffic in terms of VKTs is growing close to 17%, but as revenues at EBITDA are close to 16% growth. Here, we have the revenue per trip fairly stable with a little increase on average triplet. In terms of dividends, we do not only have the increase reflected in these numbers of CAD 300 million versus CAD 200 million, so CAD 100 million increase. But also there was an announcement of an additional CAD 650 million dividend. When you see the traffic performance, you see that we keep improving. We are, I mean, closing the quarter close to a 4% drop vis-a-vis 2019, and 9.4% increase versus 2022. Clearly, we've seen increased mobility and commuting patterns. And also, we've seen construction activities in Highway 401. I mean this is usually done in terms of maintenance of the main alternative. We move to the next slide. Clearly, here, we touch on the long-term drivers that we like to have a look at. And well, the mobility that you see is pretty much shared in comparable terms in terms of evolution between the main alternatives, the 407 and also urban transit, so you see mobility improving across the board. Toronto really is important, it keeps growing in terms of population at a high rate. It's the first of Canada's big 3 cities to keep a growth rate of 3% in terms of population. And well, the Ontario population grew slightly above 3%. And you see that in general, Canada is also growing well, and it was the highest growth rate recorded for a 12-month period since 1957. When we look into the return to the office statistics, we see that, that keeps improving. Of course, the 54% is an average of peak days and low days, right? But clearly, the trend is more presence in the office. If we move on to the next one, please. Here, we are looking at the managed lanes in Dallas-Fort Worth. And we see that all the three of them grew revenue per transaction, the average revenue per transaction above inflation that is how the soft cap evolves every year, right? So with inflation of 6.5%, you had double digits in two of them, and an 8.4% increase in NTE. That has driven this growth in revenues and EBITDA, as I said, across the board with very solid EBITDA and margins. I mean, NTE clearly, there's a strong performance ongoing with frequent mandatory modes. LBJ is still impacted by construction works in the area, the Eastern entry point of that road. Well, an NTE 35West is showing a positive performance in traffic. Independent of the additional segment we see, right, I mean, it would have grown at 5.6%. But if we consider the increase in traffic from that segment, that is a 14.4% increase. NTE and LBJ also grew traffic nicely. Okay. So we move on please to the next slide, and we first look at the I-77 that keeps building our most optimistic expectations. Transaction is growing close to 20%, revenues more than 56% and EBITDA to 7%. So it's clearly and growing more than another, is a fantastic asset where you see the revenue per transaction is growing at 31.8%. And on the right, we have the I-66 that is also ramping up. I mean you have the quarterly revenue per transaction growing up. And the third quarter of the year had a 43.6% increase versus the first quarter of 2023, and traffic also going up close to 30%, the third quarter versus the first quarter, quarterly transaction. So as we like to say, cautiously optimistic, but clearly, a very strong ramp-up. Moving into airports, we look at Heathrow, well, Heathrow results were released last week. So probably you are aware of all the numbers, but if we just stop on some of them, I think that they are remarkable. I mean we ended September above 2019 levels. But really, it has been trading at those 2019 levels pretty close throughout the summer. Clearly, demand is there, and Heathrow has upgraded the expected traffic for the end of the year to 79.3 million passengers. So it's not only leisure, inbound leisure that is experiencing a notable increase. I think that all the different segments are increasing. And it's good to see business travel reaching 27% of total traffic and the pre-pandemic was 32%. So as I mentioned, all sectors and nationalities are traveling out or through Heathrow. In brief, we look into the CMA appeal that finally came to a conclusion, the final determination didn't move much the needle. I mean they corrected some things like the 8-K factor, the cost of debt and passenger forecast. So I mean, his expectation is that it should have a meaningful impact and the message Heathrow sent is that it's time to move on. It's disappointed, but it's time to move on with the operation of the airport. If we move to the next slide, please. We see the remainder of the portfolio. All of it is growing. I mean, AGS is growing, not as much as Heathrow compared to 2019 levels, but we still have very solid performance and looking for the airlines to also come back or sign new flights in the area, I mean, making up for some of the airlines that have left operations. If we look into that amount, that's much better in terms of comparison to 2019 and even 2022. So beating both years, it's close to 4% above 2019 levels and with a good showing of revenues and EBITDA. Last but not least, it's a new terminal one that keeps progressing, and the project remains and valid on the schedule. I mean there was a reaffirmation of the ratings that were done at financial close and then negotiations with international carriers are ongoing. We had the agreement with Korean Airlines. But I mean that negotiation with Airlines is in good shape. But we have already contributed close to EUR 200 million of the total equity. Remember that this project has investment concentrated in 2023, '24 and '25. '24 being the peak of investment. Moving on to Construction. As I mentioned, we had a profitable third quarter. I mean, the Budimex keeps having a strong showing, where we keep some EBIT margins stable. And for real construction, I mean, the first six months were affected by completion works in some large projects still is finalizing some of them, but I mean the contribution is more in line with what we saw in the similar quarter last year. While order book keeps a strong showing and you have the breakdown by geography on the slide. If we move on to the discussion of net cash, well, remember that in this quarterly information, we have the operational update. We don't have other lines of results that will come at year-end. So in the net cash evolution, we have the different blocks here. And I would like to again underscore the dividends from projects block. Of course, we have equity investments and investments in other businesses, and this is basically to help self-performance in construction that helps in a stable environment. Then we have EUR 110 million of shareholder remuneration. And as I mentioned in the introduction, the main cost of cash outflow is the repayment of the hybrid bond. In other financing cash flow, the main component here is the positive carry we have with the interest in the cash being higher than the interest we pay in that. Okay, so if we move on to the last slide, clearly the portfolio is performing strongly. We have the increase in dividends helping the cash generation here and the pricing flexibility is providing to be very valuable in these assets. We are still looking through a very interesting investment pipeline ahead, in particular, in the U.S. We are progressing with the U.S. listing application and of course, advancing on the decarbonization road map. Okay, so thanks for bearing with us for the presentation. And now, we open the floor to the Q&A session. Thank you.
Thank you very much, Ernesto. The Q&A session will begin shortly. Please, stay tuned. Okay. So starting with the first set of questions from Nicolo Pessina from Mediobanca. First question. Is 407 ETR peak traffic strong enough to allow for a tariff increase in 2024?
This is Jose Velao, CFO of Cintra. You're right. The peak hours traffic is strong and is growing in these nine months. But at this moment of time, we have no any update about the great increase. We are pointed in the right direction. That's what we can say.
Next question from Nicolo. Can you provide an update on the tender for the SLR400 project?
First, tender is progressing well. We are working hard just to submit our proposal in the coming months. So everything is working under expectation.
Last question from Nicolo. Would it be fair to expect a sizable increase of the dividend to Ferrovial shareholders in 2024, considering the increase of dividends received from the underlying assets?
Well, I mean you're right to point out that the strong showing of all the infrastructure assets and their dividends. I mean the Board will have to make a call on this, of course, taking also into account that we are facing quite interesting investments ahead. So it's not the time to discuss that. But I mean, we're very happy with the performance of the assets, as you mentioned.
Next set of questions coming from Filipe Leite from CaixaBank. First question to a listing process. Is the process to be listed in the U.S. stock market delayed? Why and when do you expect to have the process completed?
Okay. Well, really in the U.S. stock market listing, we are running as fast as possible. Of course, it's the prerogative of the SEC. So we'll have to see how the process evolves. So I don't think it's delayed. It just takes the time it takes. Okay. So the most likely outcome now could be a first quarter listing, but as I said, it's the SEC prerogative.
Next question from Filipe on 407 ETR. Until when should the [ 401 ] be impacted by expansion, construction activity?
Filipe, this is Jose Velao from Cintra again. The 401 construction works [ central cost of ] business. It's part of the plans on the MTO that is published. And in the case of the current construction works effect to the central section of the 401, we expect it to continue to year 2025.
Next set of questions coming from Robert Joynson from BNP. First question, with the run rate of 407 ETR workday traffic around 8%, 10% below the 2019 baseline during May, September. To what extent would potential total increases in 2024 be dependent on further traffic improvement?
Robert, as I said before, we are in the right direction in terms of traffic performance. The traffic performance that we're seeing right now in these eight months is above our expectation, but we cannot any update about this toll increase with in the future, when it makes economic sense.
Next question from Robert. With COVID restrictions in Ontario ending almost 18 months ago, is the 407 ETR, -- are there any pressure from the MTO to end the 2021 first [indiscernible] agreement?
Robert again, there's a fluent communication between the concession and MTO, but this is not one of the topics that they are treating. I mean, they have a lot of things to speak about. This is not on the table.
Last question from Robert. When the U.S. listing is completed, is Ferrovial committed to maintain a listing in Madrid?
Robert, Ernesto here. Well, more than using the word commitment, I think it makes sense to maintain the listing in Madrid for European funds and retail investors alike, right? So it would make sense to keep the listing in Madrid.
Next set of questions coming from Fernando Lafuente from Alantra. First question. Strong quarter in construction with EBITDA margin of 3.7% versus 1.1% in the second quarter, and 3.9% in the first quarter. What the reasons for the improvement? Is it sustainable in the fourth quarter and onwards?
Thank you, Fernando, for the question. This is Ignacio Gaston from Construction. Yes, this is basically that Budimex and Webber are keeping the same trend of profitability that we saw in previous quarters. And the result of the rest of the business of Ferrovial Construction that was hugely impacted by the provision of losses in the U.S. projects finishing this year was mainly accounted in second quarter, or in the first half of the year. In terms of sustainable for the fourth quarter, we expect the same trend in Webber and Budimex. And we think that we have accounted for all the losses in these ending projects in the U.S.
Next question from Fernando. What is the expectation of dividends from concessions in 2023?
Fernando, Ernesto here. I mean we don't provide that kind of information. I mean there's very strong performance. We don't provide the short-term guidance, sorry.
Next question from Luis Prieto from Kepler Cheuvreux. Any hints you could provide us to understand a bit better the potential stream of schedule '22 payments, we should see over the short or medium term?
Sorry. I had a problem with my computer, Luis. I can provide you some hints about how it's working. I think it's part of the contracts, as you know. It depends on the traffic on peak hours and the threshold just to calculate the amount of Schedule '22 payments. But as you know, we don't need to reach because we repeat in previous calls, we don't need to reach 2019 traffic levels to increase toll rate. That means that we can pay a significant amount of Schdule '22 in the future. But with the [ component ] effect of the revenues, increase when we restart, we will compensate, we will offset this amount of payments.
Next set of questions coming from Sathish Sivakumar from Citi. First question. Can you comment what percentage of contracts in the construction segment are still on 2019 to 2022 pricing?
Yes. Thank you for the question. All our contracts are with current prices. I mean, the value of the contracts are updated with the current costs. In terms of the sale and in some contracts that there is an intersection of prices, it has also been updated. So we can say that all the contracts are at current prices.
Next question from Sathish also. What is the reason for increasing revenue per transaction of I-66? Do you expect it to continue to increase further going forward?
This is Jose Velao from Cintra. The main reason here is that the asset is ramping up, and we are seeing a good value for money in peak hours for our customers, and that is good for our revenue as well.
Next set of questions coming from Marcin Wojtal from Bank of America. First question. Do you anticipate the 407 ETR to distribute another dividend before the end of calendar year 2023?
After the additional distribution approved in October by the Board, we reached a level of CAD 950 million. I think it's a good level. our dividend for this year, thanks for the good performance of the asset. It's not likely to see an additional dividend during this year.
Next question from Marcin also. Can you comment if the I-66 is so far performing in line or above your internal forecast?
Marcin, the I-66 is performing quite well according to our expectations and continuing, as I said, the ramping up. The corridor volumes have already reached per construction and some segments are above construction levels. And customers, as I said, are experiencing an [ unattractive ] time savings in peak hours, and we are seeing a high and really good performance of heavy vehicles as well. So perspectives are quite good.
Next question from Marcin. Do you expect Heathrow to distribute dividends to its ultimate shareholders in 2024?
Here Laura Lopez, CFO Ferrovial Airports. Heathrow in last week's call stated that they don't expect dividends in 2023. So no further comments here. What is important is to highlight that the assets has deleveraged more than expected. And at the end of the day, operational performance will be key for dividends. As Ernesto mentioned before, the performance is being remarkable.
Next set of questions coming from Elodie Rall from JPMorgan. First question, what is the minus EUR 18 million reported and others on the EBITDA line, please?
Elodie, probably it's not minus [ EUR 18 million ]. It's another figure. But I mean, in the others, we have the costs from the restructuring transaction and the listing in the U.S. So you have all these sort of fees that goes from the advisers, auditing of the [ COB ] accounts, lawyers for 20F. So you have all that main impact over there.
Next question from Elodie. Do you have an update on the timing of the U.S. listing? What are the main considerations? And also on timing of your upcoming Capital Markets Day?
Well, we commented before, right? I mean, timing is probably more likely to -- they have our U.S. listing in the first quarter of the year, but I mean, we cannot be more precise given that it's SEC's prerogative. And well, the Capital Markets Day, when we have visibility, will be announced and we're looking forward to it.
And last question from Elodie. If you maintain a listing in Madrid, do you expect to get sufficient liquidity in the U.S. line to move the primary listing to the U.S.? Or you think the U.S. will be a secondary listing most likely?
Well, the U.S. initially will -- I mean, it's expected to be a secondary listing. But the idea here is that given that our business is in the U.S., we like U.S. investors, and we have so much growth ahead is that it will become more and more relevant. So I mean it would be natural to have more weight in the U.S. in the long term, but initially, we shouldn't expect that to happen.
Next set of questions coming from José Manuel Arroyas from Santander. First question on 407 ETR. Can you please outline the main factors that matter in defining the dividends that follow 407 ETR campaign in 2024 and in particular, the interplay of debt maturities, liquidity and the ability to issue new bonds?
Of course, the main factor is the performance of the asset, the traffic performance, the revenue is the main factor of the 407 ETR. Of course, we need to deal with other stakeholders like rating agencies, and that means that we need to [ sell then ] how strong is the performance of the asset. Yes, to ask for additional debt or negotiate with then the liquidity at the end of the year, but it's part of the normal cost of the business. But these are the main factors.
Next question from José Manuel Arroyas. On construction, can you provide an update on cash outflows from construction in full year '23? Have your expectations changed relative to the first half when you hinted that outflows of EUR 120 million, EUR 100 million could be possible?
Yes. Well, as you have seen in September, the working capital in construction has been minus EUR 193 million. As you know, in the last quarter of the year is when usually we have our first payments from certain clients, particularly in Budimex and specific contracts. So yes, we can keep this this forecast of gas consumption [ online ] in working capital of between EUR 120 million and EUR 150 million.
Next set of questions coming from Pierre Rousseau from Barclays. Heathrow, what's the plan to adapt to the new pricing environment?
Laura again. Currently, Heathrow is working in the update of the business plans. In December, they will see more detail updated in the investor report as they have announced in last week [ recall ].
Next question from Pierre. USD 1 billion of orders in the U.S. announced in September, other the risky projects? What is the margin outlook? Is it instrumental to get to your construction margin target?
Well, as previously mentioned, our backlog in this moment, once we finish the current rates in the U.S. is quite healthy. I mean, with [indiscernible] case inflation and the bid was in a better situation with knowing the impact of inflation, COVID, et cetera, and prices of the materials. So we expect profitability on those. But remember that they are in early stages, like Ontario or some others. And probably the margin will be shown more as the previous [ project ].
Last question from Pierre. You mentioned performance for I-66 and I-77 compared well with your most ambitious expectations. Could you share them?
Pierre, we cannot share with you future projections. So sorry for that. But I agree with you that the I-66 and I-67 are having a really good performance.
Next set of questions coming from Augustin Cendre from Stifel. First question, LBJ. Could you please elaborate on the LBJ traffic recovery in context of working conference and of the ongoing works? Do you have any visibility on the timing of a recovery?
Sorry, Augustin. Thank you for your question. Yes, I can elaborate. LBJ is performing quite well. The general mobility and the congestion is improving in the area and Q4 in part for this recovery in the presence in the [ office ] and the economic growth of the area on the corridor. I think that LBJ performing is in the right direction and the only issue that we can see in the traffic mobility in the area in the 635 is construction works that's expected to end in the beginning of 2025. But LBJ as a conclusion, I can say that is performing quite well.
Next question from Augustin. From your construction, I understand that the end of the I-285 project has been delayed to the first quarter of 2024 from the third quarter from '23, and that discussions regarding the I-66 contracts are still ongoing. Should we then expect further losses from the Ferrovial Construction division or is it mostly behind us?
Well, substantial completion of the I-285 project is going to be in this year. I mean, probably there will be some further works, but they're small in terms of [indiscernible] and other small things. But [indiscernible] will be in Q4 2023. Regarding losses, I mean, as of September, we have considered all the potential losses that we can have in this contract. So in terms of this particular project, yes, I think that the worst is behind us. And now it's time I mean for the -- we are both in mediation processes, I mean with the clients. So we expect that there should be a recovery on [indiscernible].
Next set of questions coming from Graham Hunt from Jefferies. First question. For the I-77, can you talk about the developments you're seeing around the corridor which is supporting such strong volume and price growth from the corridor?
This is Jose Velao from Cintra. What we are seeing in the area is very attractive and is attracting a lot of new employment and the population is growing as well, and we think that the trend will continue in the future. We have to take into account that there is not a real alternative. And this is part of the reason that has this volume and strong volume.
Next question from Jefferies. So for the I-66 can you provide any more color on how the consumer is responding to the ramp-up of pricing? And did you see a meaningful change in heavy vehicle contribution in the third quarter versus the second one?
Yes. What I can say here is that there's a good safe travel times during peak hours. And this value is attracting users to use or highway. And at the same times, the heavy traffic vehicles are having a good behavior during this quarter. So both factors are [ improving ] our revenue.
Last question from Graham. For MTO, what percentage of MTO capacity is now covered by airlines agreements? And have there been any discussions with retail partners for the commercial operation?
Out of the 2027 traffic, around 25% is committed with current international carriers contract, Air France, LOT, KLM, Etihad and Korean. In relation with the retail MTO commercial program is managed by URW through a master concession agreement. URW is progressing along with MTO with the definition of the program, launching the procurement process during next year.
Next set of questions coming from Nicolas Mora from Morgan Stanley. First question, can you help us understand the traffic performance on NTE35West? Underlying, it's up only 5% despite end of construction disruption. Why is traffic failing to recover against a very disrupted third quarter 2022 basis? Are you charging the same price per mile on the Segment 3C than the rest of the Segments [ AB ]?
First, I don't think that is underperforming. You have to take into account that after a long period of construction disruption in the corridor, there's some ramp up here. And there's still been some construction works in the US175 connector that is affecting to the general mobility as well in the corridor. So I think that things are going and are progressing well in terms of traffic performance in the Segment AB and the Segment C. Under Segment C, we are seeing a strong ramp up. In terms of tariffs, toll rates, the Segment 3C is in line with the toll rates of AB.
Next question from Nicolas Mora. On the U.S. manacles overall, are you starting to see some fatigue from the U.S. consumer?
Nicolas, the answer is no. I think there is a lot of value that the users are evaluating. And we see that in different poles that we are sending to our customers, and we don't see any fatigue on our U.S. consumer.
Okay. Another set of questions from Stifel, Tobias Woerner.First question. The buyback of the hybrid bond has reduced your NCP quite markedly. Are you comfortable with this level of cash? If not, what are you going to do about this?
Yes, we are comfortable with the level of cash. Actually, cash should be used to earn double-digit returns or return to shareholders, right? So I mean, we've been holding cash and looking for opportunities. We are in a very comfortable position. So there's no need to raise in the additional hybrid or to look for new cash.
Next question from Tobias also. Given a CMA decision, have you changed your attitude to your stake in Heathrow? If so, would you consider selling it?
Well, Heathrow, I guess that the answer is like any other asset in the portfolio. I mean we are open to different alternatives as with any other in the portfolio. So if an opportunity keeps knocking on our door, we will look at it on financial merits.
And last question from Tobias. Can you give us a bit of color on the progress seen at MTO? And what does it mean in terms of timing of the development of these assets, please?
Tobias, really happy to share the progress in MTO. The project is in good progress. So we in the third quarter, truly visible advance. But still of the forefront of the terminal has been erected with the first steel three columns. The total demolition is almost completed, and the air training closure is well advanced. Targeting to be opened very soon by Thanksgiving. The design phase is 97% achieved. There's really good progress. If you have in mind that we are in a complex context of the full development of GSK with interference service effectors from other works that are being performed at the same time in different terminals, though there are effective mitigation plan in collaboration with the port authority, and we are confident in the satisfactory delivery of the project. Thank you.
Okay. So it seems that there are no further questions.
Okay. So thanks, Silvia, and thank you, everyone. I mean we're looking forward to what's coming up and the potential U.S. listing and the Capital Markets Day. So I hope to see you soon, guys. Thank you. Bye now.