The construction and concession operator Sacyr has identified water as one of the fastest growing businesses in the coming years. Climate change, drought and the demands of cities force us to address a major adaptation that entails investments, and companies such as the one chaired by Manuel Manrique are prepared to take advantage of the opportunity.
In the company’s new strategic plan, presented last week, the water division emerges as one of the pillars for the coming years, along with the main business, concessions. Between 2024 and 2027, Sacyr will bet on water infrastructure as part of a broader plan, until 2033, in which it aims to triple its size and reach an asset value of between 9,000 and 10,000 million euros.
“Sacyr Agua is our independent and specialized division, which we are going to strengthen and promote to consolidate it as an operator of cutting-edge technology infrastructure,” said the president of the company in the presentation of the new strategy to investors. “There is a clear commitment to high growth,” he added.
The United Nations warns in a recent report of the challenge of managing water in the midst of climate change. Only 0.5% is drinkable and rising temperatures will affect glaciers and other natural storage sources. It will rain differently and the melting of ice at the poles will increase the availability of water, although the rise in sea level will threaten to salinize many aquifers. The outcome of these factors is uncertain, although governments and companies agree on the need for more desalination plants, treatment plants and better distribution networks.
Faced with these challenges, construction companies have something to contribute. Sacyr warns that, in 2030, 47% of the world’s population will live in areas of water stress. And his proposal comes in the form of new equipment. On paper, he aims to increase income from water concessions by 75% to reach 350 million in 2027.
Water will also be the main area of ??investment in Spain, since the rest of the effort will largely be directed abroad. A desalination plant was recently awarded in the Almeria town of Carboneras and another in the Alicante town of Torrevieja, in this case together with Ferrovial.
The new bet also implies a change with respect to the company’s previous plans. Last year, Sacyr planned to divest 49% of this division and other assets. It sold its large service subsidiaries, which are Valoriza and Sacyr Facilities, but decided instead to stay with the water infrastructure business.
Water is just one part of the new strategic plan, which sounds ambitious. “We want to be the first company in the world in developing transportation, health and water infrastructure in 2030,” Manrique went on to say. “We have a vertically integrated business model” and “great capacity to launch new projects.”
Concessions are now the core of the business. Sacyr has been going beyond its activity as a construction company for years and also aspires to manage assets. This is what allows it to obtain recurring income from roads, hospitals, ports and all types of infrastructure in which it is involved.
Another of the big announcements of the strategic plan has to do precisely with the concessions business. It consists of the creation of Voreantis, a new company in which all assets of this type will be integrated from 2026. It will be valued between 1,700 and 2,000 million euros, and the company’s intention is to bring into its capital one or several partners with minority stakes.
The new company will “value the assets” of concessions brought together in recent years and “accelerate growth,” according to the company president. It will contribute to the company’s profit reaching 265 million euros in 2027, 73% more than currently.
Like other large Spanish construction companies, its sights are set on English-speaking countries. The United States, Canada, the United Kingdom and Australia are on the radar, with opportunities for concessional assets that Sacyr estimates at 32 billion euros.
The company’s directors are confident of achieving an investment grade rating from the debt rating agencies in these years without giving up the distribution of dividends. Compared to flexible remuneration, in which shareholders chose between dividends in cash or shares, there will now be the possibility of distributing a part of the profit in cash. The company has committed to at least 225 million going this way.
Sacyr values ??all of its assets at 3.6 billion euros and hopes to raise this figure to 5.1 billion in 2027. The water division will have its share of prominence. For now, the forecast is that this business will increase income at a rate of 15% annually. To do this, it analyzes projects worth 62 billion in different regions of the world, from the Middle East to America, including Spain.
