Bloomberg News

Ferrovial Falls After Cap Set on Tax Deductions: Madrid Mover

April 03, 2012

Ferrovial SA (FER), a Spanish builder and airport operator, dropped the most since October last year after government changes to corporate taxes capped deductions on financial costs.

Ferrovial fell as much as 6.6 percent, the biggest intraday drop since Oct. 5, and closed in Madrid at 8.24 euros, a decline of 6.4 percent. It was the worst performer on the benchmark IBEX 35 (IBEX) Index today.

As part of its budget measures affecting taxes, the government will cap deductions on financial costs to 30 percent of earnings before interest, tax, depreciation and amortization. Ferrovial may be among Spanish companies most affected by the change, Banco Sabadell SA’s research department said in a note published yesterday.

Still, in a separate note published yesterday, Sabadell’s research team said other builders may be more affected than Ferrovial, which has a lower taxable base in Spain.

Builder Fomento de Construcciones & Contratas SA fell as much as 3.3 percent.

To contact the reporter on this story: Charles Penty in Madrid at cpenty@bloomberg.net

To contact the editor responsible for this story: David Risser at drisser@bloomberg.net


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