Construcciones El Condor Posts 2Q 2024 Net Loss

Medellin-based highway construction giant Construcciones El Cóndor announced August 9 a net loss of COP$64.7 billion (US$15.9 million) for second quarter (2Q) 2022 — but that was a 19% year-on-year improvement over the COP$79.6 billion (US$19.5 million) net loss in 2Q 2023.

Gross income also improved by 34.7% year-on-year, to COP$583 billion (US$143 million), versus COP$433 billion (US$106 million) in 2Q 2023.

Earnings before interest, taxes, depreciation and amortization (EBITDA) improved dramatically – more than six-fold – to COP$66.9 billion (US$16 million), from COP$8.7 billion (US$2 million) in 2Q 2023.

During 2Q 2024, El Condor also inked various debt restructing or “re-profiling” deals that would extend payback deadlines either to mid-2027 or to 2028.

“With the signing of these contracts, the debt reprofiling plan that the company began a year ago in relation to its financial obligations is successfully completed, so that the debt profile was organized and the payment sources were separated, guaranteeing that all liquidity resources are allocated to the execution of the projects in charge, making the construction business independent,” according to the company.

As for the overall state of Colombia´s civil-works construction sector, El Condor noted that this sector “had a growth of 7.5% in the first quarter of 2024 compared to the same period of time in the immediately preceding year, but compared to the fourth quarter of 2023, the sector presented a contraction of 6.7%.”

On the other hand, “it is expected that with the progressive decrease in interest rates by the Bank of the Republic, the sector in general will improve its indicators and growth,” the company added.

Even so, “we cannot leave aside that currently the sector continues to be affected by the excessive increase in prices of materials and inputs for construction [as well as] uncertainty due to the lack of definitions for the completion of ongoing projects and the start of new projects that will boost the sector.”

“It is important to highlight that in the last two years no new Public-Private Partnership (PPP) contracts have been signed and additionally, variables such as the implementation of tax incentives, the reduction of interest rates and a stable regulatory framework are essential to encourage investment in the sector,” El Condor added.

DUring 2Q 2024, “interest expense increased 32.76% compared to the first quarter of 2023, of which 32.35% corresponds to the increase in interest rates, this being the main variable generating the net loss,” according to the company.

Howeverr, “the company expects that the evolution of inflation will allow interest rates to decrease in the medium term, and that indebtedness will decrease with the positive results already observed in the first quarter of the year,” El Condor concluded.