Heathrow owner Ferrovial to invest in power grid, water and mobility

By Clara-Laeila Laudette

MADRID (Reuters) - Spanish engineering and construction firm Ferrovial <FER.MC>, owner of London's Heathrow Airport, plans to sell mature assets and buy into water infrastructures and Latin America's electricity grids, company executives said on Wednesday.

The builder, which presented its "Horizon 24" plan for 2020-24 envisaging a rise in pre-tax earnings, will continue developing its existing urban mobility, toll highway and airport services, including Heathrow, whose divisive third runway is due for completion by 2029.

CEO Ignacio Madridejos said that in the meantime, it intends to sell some unspecified completed infrastructure projects to institutional investors such as pension funds, considered the "logical investors" for such assets that offer low but stable returns.

Ferrovial will invest proceeds from the sales in infrastructure projects in water and electricity grids. The firm has already bought two power lines in Chile.

It expects its total projects to rake in 4 billion euros (3.4 billion pounds) in dividends over the 2020-2024 period.

The five-year plan should allow Ferrovial to boost its earnings before interest, taxes, depreciation and amortisation (EBITDA) by 11% a year until 2024. It intends to save over 50 million euros annually by eliminating duplication, integrating activities and fusing shared services.

Ferrovial will release its full-year results for 2019 on Feb. 27. Some analysts warn the firm's share price - which grew more than 53% in the past 12 months - has become overvalued given its weakening earnings outlook. Its shares rose 0.4% on Wednesday to close at 29.22 euros.

By 2024, Ferrovial aims to reduce its CO2 emissions by 32% relative to 2009 levels, and Madridejos described climate concerns as a "huge opportunity" for the infrastructure sector.

He added that this would not dull the business significance of Heathrow, which the firm bought in 2006.

"Heathrow is a huge asset for us ... There will be 4 billion more airplane passengers in the next 4 years" globally, he said, adding that many things could be done to reduce emissions produced by airports, such as changing the type of fuel.

(Reporting by Clara-Laeila Laudette; editing by Inti Landauro, Andrei Khalip and Dan Grebler)