Peter Wise reports on the Portuguese firms that are making a name for themselves on the international stage.

Portuguese companies were traditionally passive exporters. But as globalisation took hold and the domestic market became too small for the bigger firms, many groups have successfully internationalised. The best companies are using innovation, diversification and overseas investment to gain greater value from established skills and aptitudes.

In co-operation with the country’s investment banks, a growing number of Portuguese construction engineering and energy companies are competing successfully for overseas infrastructure deals and project finance contracts, often in partnership with local companies. Manufacturing sectors in which the Portuguese compete with international market leaders include steel construction and wood products, including cork, pulp and paper.

An ambitious government policy to produce up to 60% of the country’s electricity from wind, sun, wave and other clean sources by 2020 is attracting strong investment in the renewable energy sector; Portugal’s wind capacity being one of the fastest growing in Europe. Three of the world’s biggest solar power stations are also being built in Portugal and €2.6bn is being invested in 18 hydro-power projects.

Brisa(Motorways)

www.brisa.pt

Brisa’s core business is the construction, maintenance and operation of toll motorways in Portugal and overseas. These activities are supplemented by a cluster of independent business units focused on motoring services. The company made net profits of almost €260m last year, 55.3% up on 2006. Earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 10% to €459.5m. Brisa’s chairman is Vasco de Mello.

In Portugal, the group manages 14 motorways with a total length of 1368 kilometres (km). It also runs motorways in Brazil, the Czech Republic, the US and the Netherlands. Brisa was the first company in the world to introduce the concept of electronic tolling. Its Via Verde (Green Way) system has been widely adopted internationally and has gained significant advantages for the company in economic, road transport and environmental terms.

Brisa aims to lift its international business to 50% of total earnings within the next decade, focusing on expansion in the US, Latin America, Europe, Turkey and Russia. The group also plans to move into other transport infrastructure areas, including projects arising from the building of a new airport in Lisbon and high-speed rail networks in Portugal.

Energias de Portugal(Power utility)

www.edp.pt

Energias de Portugal (EdP) was founded in 1976 from the merger of 13 of the country’s 14 power companies, following a wave of nationalisations after Portugal’s 1974 Carnation Revolution. Its subsequent privatisation attracted huge interest from small savers, paving the way for an era of Portuguese ‘popular capitalism’ in the late 1990s. The group posted a net profit of €907.3m in 2007. EBITDA increased by 14% to €2.62bn. The company’s chief executive is António Mexia.

Later this year, EdP plans to follow the lead of the Spanish energy group Iberdrola with a stock market flotation of its renewables division, selling 20% to 25% of a company worth up to €11bn to raise funds for further investment in wind and hydro capacity. Morgan Stanley, UBS and Citigroup, as well as Portugal’s BES Investimento, Caixa BI and Millennium BCP Investimento have been appointed to organise the initial public offering (IPO).

Led by Mr Mexia, EdP is investing strongly in renewable production. Wind and hydro power are forecast to account for 45% of EBITDA by 2010 and 68% of capital spending. The group, which operates wind farms in Portugal, Spain, France, Belgium and the US, is currently the fourth largest wind producer in the world and plans to invest €7.6bn in renewable energy over the next two years.

Galp Energia(oil and gas)

www.galpenergia.com

Founded in 1999, Galp Energia, an integrated oil and natural gas utility, posted a net profit of €418m in 2007 and EBITDA of €891m. Its CEO is Manuel Ferreira De Oliveira. In 2006, the government sold most of its 30% stake in Galp in an €1.1bn IPO, Portugal’s second largest to date. The only oil company listed on the Portuguese stock market, it is the country’s largest listed company by revenue.

Its exploration and production business has interests in 54 blocks in Brazil, six in Angola, and three in Portugal. Oil reserves total 50 million barrels. It operates two refineries in Portugal, more than 1000 petrol stations and 204 convenience stores, as well as a natural gas distribution network totalling 9014km. It is aggressively expanding into Spain, where it already operates several hundred petrol stations.

The government wants EdP and Galp to compete with each other in the electricity and natural gas sectors. It has awarded Galp a contract to build a 816 megawatt (MW) combined-cycle power plant, and another to generate 480MW of wind capacity. Galp has reached an agreement with Petrobras, the Brazilian state oil company, to produce 600,000 tonnes of biofuel a year in Brazil.

Martifer(steel construction and energy)

www.martifer.com

Founded in 1990, Martifer is now the fourth largest steel construction company in Europe. Over the past five years, operating revenue has grown by an average of 30% a year, an impressive rate of expansion that has been achieved almost exclusively through organic growth. In June 2007, a highly successful IPO led by Banco Espirito Santo de Investimento and Caixa BI raised €199m. A group of Martifer directors and Mota-Engil, the Portuguese construction group, own equal stakes of 37.5%.

The group posted a net profit of €7.8m for the first three quarters of 2007, an increase of more than 100% on the same period in 2006. EBITDA grew by 44.8% to €19.8m. Martifer’s chairman is Carlos Martins. The company provides steel structures for sports stadiums, bridges, airports, residential and commercial buildings, hotels, factories, shopping centres and other applications. It focuses on Spain and Portugal, where it is the market leader, as well as eastern Europe and Angola, one of the world’s fastest-growing economies. Martifer has diversified into supplying energy systems for wind and solar power and begun generating electricity from renewable resources.

It also produces biofuels. Overseas operations account for about 29% of total revenue.

Mota-Engil(construction)

www.mota-engil.pt

Created in 2000 by a merger between Mota and Engil, two leading construction companies, greater critical mass has given the group the financial and marketing capacity to expand its order book at a rapid pace. As Portugal’s biggest construction company, it is well placed to benefit from a pick-up in the construction sector, where investment began to recover in the second half of last year after a long downturn.

The company recorded a net profit of €107.7m in 2007 and EBITDA grew by 17.7% to €248.5m. Former government minister and Socialist Party member Jorge Coelho has been invited to become CEO. He wants shareholders to approve a five-year strategic plan that he has been working on as a consultant. Current chairman and CEO António Mota will remain chairman.

Mota-Engil, which forecasts turnover growth of more than 10% in 2008, has successfully diversified into the environmental protection and water treatment sectors. It is also expanding in eastern Europe, Latin America and Africa. The firm recently won a motorway- building concession in Mexico and has a 50% stake in a $400m residential construction project in Angola.

Portugal Telecom(telecommunications)

www.telecom.pt

Portugal Telecom (PT) is the country’s leading telecoms provider. In 2007, the group recorded a net consolidated profit of €741.9m. EBITDA grew by 5.3% to €2.3bn. Zeinal Bava became CEO in March and the previous CEO and chairman, Henrique Granadeiro, has stayed on as chairman. Following the collapse last year of an €11.6bn hostile bid to acquire PT by Sonaecom, a smaller Portuguese rival, PT reverted to its previous model of appointing a separate chairman and CEO.

The main focus of PT’s overseas operations is Brazil, where it owns a 50% stake in Vivo, Latin America’s biggest mobile operator. Spain’s Telefónica owns the other 50%, but PT has so far declined offers to sell control of Vivo to the Spanish group. PT also plans to expand its African interests beyond Angola and Mozambique to include potential high-growth markets such as Nigeria, Tanzania and Kenya.

PT Multimedia, the group’s cable television arm, which was recently renamed Zon, was spun off from the PT group in October. This was part of a remuneration package worth €6.2bn between 2006 and 2009, promised to shareholders as part of PT’s defence against the Sonaecom bid.

PT, which has a monopoly of Portugal’s fixed-line market, now competes with Zon, the dominant cable operator in the voice, pay-to-view television and broadband markets. Earlier this year, PT announced the launch of a nationwide internet protocol television and satellite television service to compete with Zon’s cable offering.

PLEASE ENTER YOUR DETAILS TO WATCH THIS VIDEO

All fields are mandatory

The Banker is a service from the Financial Times. The Financial Times Ltd takes your privacy seriously.

Choose how you want us to contact you.

Invites and Offers from The Banker

Receive exclusive personalised event invitations, carefully curated offers and promotions from The Banker



For more information about how we use your data, please refer to our privacy and cookie policies.

Terms and conditions

Join our community

The Banker on Twitter