Construcciones El Condor 3Q 2023 Net Loss More-Than-Doubles Year-on-Year

Medellin-based highway construction giant Construcciones El Condor announced November 10 that its third quarter (3Q) 2023 net loss topped COP$136 billion (US$33.8 million) — more-than double the 3Q 2022 net loss of COP$57 billion (US$14 million).

Revenues dipped by a more-modest 2.6% year-on-year, to COP$621 billion (US$154 million), while 3Q 2023 earnings before interest, taxes, depreciation and amortization (EBITDA) delivered a net loss of COP$14.8 billion (US$3.67 million) — a sharp reversal from the COP$102 billion (US$25 million) EBITDA net gain in 3Q 2022.

The growing net losses this year are partly due to a “drop in billings for the highway construction contracts of Ruta al Mar, Pacífico 3 and Normalización, which are ending, while we continue working to increase the billings of the Magdalena 2 and Ruta al Sur projects,” according to El Condor.

Negative results also are partly due to losses incurred in termination of fourth generation (4G) highways via the “Farallones Consortium” and the “Francisco Javier Cisneros” consortium, according to the company.

Another big factor hurting El Condor so far this year: finance expenses, which for 3Q 2023 jumped by 56.7% versus 3Q 2022. “Of this effect, 77.78% corresponds to the increase in interest rates, this being the main variable generating the net loss. The company expects that the evolution of inflation will allow interest rates to decrease in the medium term.”

On a more positive note, “the company hopes to begin to reverse this trend with the start of the execution of San Agustín Zona Norte and Zona Sur (Ruta al Sur), and the start of the massive placement of asphalt mix in the Magdalena 2 project,” according to El Condor.

Similarly, El Condor cited a new, COP$20.6 billion (US$5.1 million) civil-works contract with Aris Mining — with an advance payment of 20% — to build a new access road to the “Los Indios” mining beneficiation platform at Marmato, Caldas department.

However, “the recent announcements by the national government not to allocate resources for the completion of ‘4G’ highways in Antioquia generate great concern among businessmen and unions, since resources are still needed to complete projects and maintain the dynamics of economic activation associated with the program.”

As for El Condor’s fiscal position, total assets for 3Q 2023 add up to COP$2.39 trillion (US$593.7 million), while liabilities closed at COP$1.54 trillion (US$382.6 million), with current liabilities at 83% and non-current liabilities at 17%, according to the company.

“The high proportion of current liabilities over total liabilities is due to the maturity period of the structured credit of the investment business, which is less than one year (May 2024),” according to the company. “However, the source of payment is the sale of the participation of the Pacífico 3 Concession, which was classified in the short term as an asset held for sale,” according to El Condor.

“With the objective of improving liquidity indicators, the company continues working on the re-profiling of its long-term debts while continuing its efforts to sell assets in the short term.”

As for El Condor’s construction backlog — the balance of contracted works and to-be-executed — this stood at COP$2.44 trillion (US$606 million), according to the company.