Conconcreto, Construcciones El Condor See 4Q 2017 Profits Dip Year-on-Year

Medellin-based construction giants Conconcreto and Construcciones El Condor separately reported in late February that fourth-quarter (4Q) net earnings dipped slightly in 2017 versus 2016.

For Conconcreto, net income fell 14.9% year-on-year in 4Q 2017 versus 4Q 2016, to COP$78 billion (US$27 million), while earnings before interest, taxes, depreciation and amortization (EBITDA) fell 6.6% year-on-year, to COP$220 billion (US$77 million).

Explaining the dip in profits, Conconcreto cited “evidence of the lower dynamism of the [Colombian] economy and therefore of the [construction] sector, reflected in the decrease in volume of construction and lower margins of the projects,” as well as “lower profits of the road concessions and associated companies.”

Among Conconcreto’s 2017 highlights: Continuing build-out of the 2.4-gigawatt “Hidroituango” hydroelectric plant in Antioquia – due for intial start-up in late 2018 — as well as several road, tunnel and bridge works around Colombia, according to the company.

As for two big potential projects still in the planning stage: the proposed “Darien International” ocean-freight port at Necocli, Antioquia, in which Conconcreto has a contract covering all the civil works, as well as a proposed, four-lane divided road connecting the existing Las Palmas highway east of Medellin to the El Tablazo neighborhood near Medellin’s international airport in Rionegro.

El Condor Results

As for Construcciones El Condor, this company saw its 4Q 2017 net profits dip slightly year-on-year, to COP$185 billion (US$64 million), versus COP$186 billion (US$65 million) in 4Q 2016.

Operating income rose by 66.9% year-on-year, to COP$603 billion (US$210 million), while construction EBITDA rose 58%, to COP$119 billion (US$41 million).

Among 2017 highlights: El Condor saw financial close on the “Ruta al Mar” highway concession totaling COP$1.47 trillion (US$511 million) through a syndicate of local banks and international finance.

The company also finalized an engineering, procurement and construction (EPC) contract between El Condor and “Concesion Ruta al Mar SAS.”

As for the “Pacifico 2” highway project in Antioquia, the company achieved certain compliance milestones enabling the first payment of credit on the project.

Meanwhile, at year-end 2017, El Condor had a project and investment portfolio with a combined book value of COP$802 billion (US$280 million), the company noted.

Among the projects in the portfolio:

1.Concesión La Pintada S.A.S. in Antioquia (21.15% share), where construction has begun on a new bridge over the Rio Cauca. The “La Pintada” project had advanced by 29% at year-end, with capex to-date totaling COP$275 billion (US$96 million).

2. Concesión Pacífico Tres S.A.S. in Antioquia and Caldas, in which El Condor has a 48% stake. All licenses and permits have been approved, and the project had advanced 36% by year-end, with a to-date capex of COP$308 billion (US$107 million)

3. Concesión Aburrá Norte S.A.S. (Hatovial S.A.S.) in Antioquia, now 100% built, with El Condor having a 21.1% stake. Capex totaled COP$1.3 trillion (US$454 million).

4. Concesion Vias del Nus SAS, in Antioquia, where El Condor has a 21.15% stake. This project recently won regulatory approvals for the crucial “Tunel de la Quiebra” highway tunnels that will smooth freight transport between Medellin and northern Colombian ports.
Capex invested: COP$15 billion (US$5.2 million), with project advance at 1.56%

5. Concesión Vías de Las Américas S.A.S., in northern Colombia (66.67% participation), with capex at COP$1.16 trillion (US$ 405million) and project advance at 89.3%

6. Concesión Túnel Aburrá Oriente S.A.S., linking Medellin eastward to the international airport at Rionegro through new tunnels (already 71% complete at year-end 2017). El Condor has a 12.5% stake, with COP$500 billion (US$174 million) capex.