Ferrovial Construction UK suffered a £30m loss last year after big provisions for forecast losses on the £2bn Silvertown Tunnel project in East London.

The firm revealed total provisions of £54m on the project for the year ending 31 December 2022. This figure is made up of £19.6m for defects and warranties and £31.3m of forecasted losses.

Ferrovial said the expected losses were driven by inflation in materials and labour markets against the constraint of a fixed price contract.

Revenue over the year rose 8% to a record £493m. Despite operating losses, Ferrovial’s net cash balance increased 9.2% in like-for-like terms to £213m.

Karl Goose, Managing Director for the UK & Ireland said that Ferrovial Construction continued to pursue its strategic plan to grow sustainably in the UK and improve margins.

He said that across the rest of the UK business portfolio, Ferrovial made an underlying EBIT profit of £22m.

“The impact of world events on our industry has been unprecedented and certainly came to a head over 2022.

“Our focus has been on financial certainty and resilience as we face the potential impact of these events with the rest of our industry.

“We have therefore taken the correct and prudent decision to make a provision for these factors,” said Goose.

He added that Ferrovial ended the year with an order book of £795 (2021: £1bn).

It has now started to target more and smaller projects in order to make order book growth more consistent going forward.