Construcciones El Condor Posts COP$31 Billion Net Loss in 1Q 2023

Medellin-based highway construction giant Construcciones El Condor on May 12 posted a COP$31.6 billion (US$6.8 million) net loss for first quarter (1Q) 2023, more than triple the COP$9.2 billion (US$2.03 million) net loss in 1Q 2022.

However, revenues from ordinary activities rose 36% year-on-year, totaling COP$219 billion (US$48.3 million), versus COP$151 billion (US$33.3 million) in 1Q 2022.

The revenue boost “reflects the upward curve in the execution of the following works: EPC [engineering, procurement and construction] with the Rio Magdalena Highway Concessions, public works at the El Toyo [Antioquia highway tunnel) project and the Putumayo highway project with Invias [Colombia’s national highway agency],” according to El Condor.

Operating costs during 1Q 2023 rose 67% year-on-year, to COP$223 billion (US$49 million), resulting in a net-negative gross margin, at -1.51% for the latest quarter.

“This result in 1Q 2023 is mainly due to deficits in highway construction consortia that are in the [financial] closing stage, including Consorcio Farallones and Consorcio Aburra Norte, along with execution of the final stage of some projects such as the EPC Ruta al Mar and the EPC Pacifico 3 and for the pre-operational stage of the EPC Ruta al Sur,” the company added.

Earnings before interest, taxes, depreciation and amortization (EBITDA) likewise declined year-on-year, to COP$12.6 billion (US$2.78 million) down from COP$33 billion (US$7.3 million) in 1Q 2022

“Interest expense increased by 147.39% compared to the same period in 2022, all due to increases in interest rates,” the company noted.

Net quarterly losses “will continue to occur for several periods while the concessions begin to generate accounting profit, a behavior that obeys the normal cycle of the concessions due to their project-finance nature,” the company added.

Meanwhile, El Condor’s assets at the end of 1Q 2023 totaled COP$2.42 trillion (US$534 million), while liabilities closed at COP$1.46 trillion (US$322 million), of which current liabilities were 86% and non-current at 14%.

“The company’s indebtedness decreased with respect to the end of the first quarter of 2022, by 3.11%, due to payment of debt,” according to El Condor.

Construction backlog – defined as works under-contract and to-be-constructed — now stands at COP$2.78 trillion (US$614 million), the company added.