Mexico's fewer concessions seen driving competition in infrastructure tenders

Competition in the infrastructure sector is set to be fierce due to the larger portion of projects that will be structured as public works than concessions, Victor Bravo, CFO of Mexican construction company ICA (NYSE: ICA) said during a 4Q13 results call.

"The government is likely to package projects as public works instead of concessions and so this will attract more bidders [for the concessions], generate more competition and perhaps result in smaller margins," said Bravo.

By way of example, Bravo pointed to the passenger train projects that will be tendered as civil works projects instead of concessions.

Concessions typically account for 40-50% of ICA's portfolio but Bravo expects this to be below 40% going forward.

RESULTS

ICA posted a net profit of 1.08bn pesos (US$1mn) for 4Q13, compared to a 174mn-peso loss in the prior-year period.

Total revenues for the quarter were down 16% at 7.73bn pesos.

Adjusted Ebitda was 1.26bn pesos, a 401% surge compared with the same quarter in 2012.

The full results are available in English here and in Spanish here.