* Combined sales fall around 1 bln euros in 2013
* Debt trimmed by nearly 4 bln euros in 2013
* Unlikely to maintain share rise momentum -investor
(Recasts, rewrites throughout, adds Sacyr, wraps builders'
By Sonya Dowsett
MADRID, Feb 28 Even though Spain is emerging
from recession, its debt-laden builders see growth prospects for
2014 in overseas construction projects after a year of falling
Building companies in Spain, saddled with debt after a
decade-long construction boom crashed five years ago, are
cleaning their balance sheets by writing down soured investments
and selling off assets.
ACS, FCC, Sacyr registered a
combined fall of around 1 billion euros ($1.4 billion) in
revenue for 2013, hurt by falling spending on public works as
the Spanish government slashed costs to hit budget targets.
The builders have made moves to reduce exposure to Spain
with, for example, FCC winning contracts to build a metro
network in Saudi Arabia and a river bridge in England, and Sacyr
signing a Chilean motorway contract.
ACS said on Friday it was interested in buying more shares
in German builder Hochtief. It currently owns around 49 percent
of the firm.
"We want to grow more outside of Spain," ACS Chairman
Florentino Perez told analysts. "We have had some bad years,
particularly in the construction sector in Spain."
FCC, which generates most of its earnings from services and
water treatment, made big writedowns on items including
renewable energy assets. Its full-year net loss for 2013 grew 47
percent to 1.5 billion euros ($2.1 billion), year-on-year.
The company scaled back profit targets for the coming years
due to massive provisions of 1.68 billion euros. Its shares
closed down 8.5 percent, the biggest percentage loss among
Spanish blue-chips on Friday.
Sacyr, fresh from reaching a preliminary deal between its
consortium and the Panama Canal to finish work on the widening
of the waterway, reported a net loss of 496 million euros, half
the loss registered in 2012.
Sales at Sacyr fell 10 percent, while the company made
writedowns on real estate assets and renewable energy assets.
The Panama Canal project had a negative impact of 124 million
euros on 2013 net profit, the company said.
The project had been fraught with disputes about costs since
the beginning of 2014 and work was halted for two weeks while
the parties tried to come to an agreement.
ACS, meanwhile, swung back into the black in 2013 with a net
profit of $702 million after making a writedown on its
investment in power utility Iberdrola in 2012.
It increased sales in its services units for business such
as recycling and street cleaning. Water treatment was the only
business unit that registered a rise for FCC.
However, cuts in spending by Spanish councils meant that
prices and profits were falling for these kinds of activities,
said Jose Lizan, fund manager at Auriga Securities with 30
million euros of assets under management including a small
amount of ACS shares.
"Cash-strapped town halls are trying to get cheaper prices
for contracts up for renewal and this will affect profit
margins," he said.
The Bank of Spain said spending on public works rose in 2013
for the first time since the crash five years ago. But investors
say it will take time for any uptick to register on companies'
Spain accounted for 14 percent of sales at ACS, 58 percent
at FCC and 47 percent at Sacyr in 2013.
Shares in Spanish builders have lost about 80 percent of
their market value since 2007 but they put on a good performance
in 2013, with Sacyr leading the pack - up 140 percent compared
with a 21 percent rise in Spain's blue-chip index.
FCC made headlines in recent months when billionaire
investors Bill Gates and George Soros bought into its shares.
Lizan of Auriga Securities said the shares of builders would
have a hard time keeping up momentum this year until a timid
economic rebound is reflected in improved sales. Spain emerged
from recession in the second half of the year.
"They are all about restructuring, it's a case of buying on
the cheap," said Lizan.
"Selling assets and paying down debt will make a more nimble
company, better placed for an economic upturn, that's the idea.
But this will happen much more slowly than the jumps in the
share prices would have you believe."
ACS, FCC and Sacyr made progress on cutting debt piles,
trimming them by a combined 3.8 billion euros during the year.
FCC, in the process of restructuring about 5 billion euros
of debt, said net debt fell 16 percent year-on-year to just
under 6 billion euros, reaching management's year-end target.
Chief Executive Juan Bejar told analysts on Friday the firm
had no need for a rights issue and that it would hold back on
dividend payments until it got its debt position under control.
($1 = 0.7309 euros)
(Reporting By Sonya Dowsett; Editing by Pravin Char)