Construcciones El Condor Full-Year 2020 Profits Dip 14% Year-on-Year

Medellin-based highway construction giant Construcciones El Condor revealed February 25 that its full-year 2020 net income dipped 14% year-on-year, to COP$31 billion (US$8.5 million).

Gross revenues also dipped 7% year-on-year, to COP$825 billion (US$226 million), according to the company.

Covid-19 shutdowns during March-to-May 2020 caused some of the revenue and profit declines.

In addition, 2020 profit differences versus 2019 are partially explained by a one-time, COP$40 billion (US$10.9 million) boost in income in 2019, via the sale of El Condor’s stake in the “Tunel de Oriente” highway project between Medellin and its eastern suburbs. No such large-scale sales benefitting El Condor occurred in 2020.

“We also emphasize that the 2020 revenues are not comparable with those of the previous year because the paralysis in the mandatory quarantine on the occasion of the Covid-19 pandemic implied the non-execution of works from the end of March to May, and the resumption of these at levels lower than normal during the months of May, June and July,” according to El Condor.

“Additionally, the effects of the ‘La Niña’ weather phenomenon generated an increase in rainfall above the average during the second half of 2020, generating impacts on the execution of works with respect to the budgeted [planning] curves.

“The company assumed during all those months of paralysis the idling costs, the stand-by costs of machinery and equipment and production facilities,” although government road-building contracts also include compensation mechanisms, which eventually would help offset those extra costs, according to El Condor.

Earnings before interest, taxes, depreciation and amortization (EBITDA) came-in at COP$100 billion (US$27.4 million), with an EBITDA margin of 12.62%, down sharply from 18.5% in 2019.

However, “we consider that the EBITDA margin is not comparable, because during 2020 the company could not carry out work at the usual rate and assumed all the costs” of the Covid-19 shutdowns and weather issues. “If this paralysis had not occurred, then the EBITDA margin would have been in a range between 17 to 18%,” according to El Condor.

Future anticipated earnings – the backlog of works contracted and to-be-executed — stood at COP$1.1 trillion (US$27.4 million) at year-end 2020, the company added.