MADRID (Reuters) - Spanish infrastructure and services group Ferrovial (MC:FER) said on Thursday it would mitigate some of the impact of Brexit by currency hedging as it reported a 29 percent drop in first-half net profit.
Ferrovial, which makes over a third of its revenue in Britain and is the main shareholder in London's Heathrow airport, said sterling currency hedging contracts worth 368 million euros ($410 million) would allow it to guarantee its dividend for three years.
The fact that its UK contracts were linked to inflation would also help offset the impact of the British vote to leave the European Union. It said Heathrow was resilient to Brexit risks such as a possible economic slowdown.
Ferrovial said it would cut 600 jobs at its UK services company Amey due to public spending cuts in Britain restricting clients' budgets. This would save 20 million pounds over the rest of the year, it said.
Amey's services range from repair and maintenance of water supply to street cleaning. Its clients are in British state-owned and regulated sectors that have borne the brunt of government spending cuts.
Ferrovial said the impact of Brexit on these kinds of contracts were not yet clear, but one of the measures against a predicted slowdown in economic activity could be increased public spending.
Ferrovial reported first half profit of 189 million euros, down from 267 million in the year-ago period, hurt by the fall in value of sterling following the vote to leave the EU.
($1 = 0.9030 euros)