Construcciones El Condor Posts COP$69.7 Billion Net Loss in 2022

Medellin-based highway construction giant Construcciones El Condor announced March 31 a full-year 2022 net loss of COP$69.7 billion (US$14.9 million), a sharp reversal from the COP$8.8 billion (US$2.2 million) net profit for full-year 2021.

El Condor blamed the profit decline on “the unrealized net exchange difference” between Colombian pesos and U.S. dollars, along with “accounting effects that do not have an impact on the company’s cash. If this effect is discounted, the net loss is COP$$14 billion [US$3 million) and the net margin is a negative1.62%,” according to the company.

“This effect will continue for several periods while the highway concessions begin to generate accounting profit, a behavior that obeys the normal cycle of concessions due to its project-finance nature,” the company added..

Despite the net loss, gross income from ordinary activities in 2022 rose 55% year-on-year, to COP$876.7 billion (US$188 million), according to the company. Gross margin hit 10%, better than in 2021, “since new projects gain revenue share over fourth-generation highway EPCs [engineering, procurement and construction contracts],” according to El Condor

“The increase reflects the upward curve in the execution of the following works: EPC with the Concesiones Autopista Rio Magdalena, Ruta al Mar and Pacífico Tres, public works for the El Toyo tunnel and Putumayo project with Invias, and the standardization contract with the Ruta al Sur Concession,” according to El Condor.

Meanwhile, operating costs in 2022 rose 50% year-on-year, hitting COP$790 billion (US$170 million), increasing 50% compared to 2021. Operating profit came-in at COP$57 billion (US$12 million), with an operating margin of 6.56%.

Earnings before interest, taxes, depreciation and amortization (EBITDA) came-in at COP$128.7 billion (US$27.6 million), “equivalent to an EBITDA margin of 14.68%,” up from 12.5% in 2021.

“Interest expense increased 72% compared to 2021. Of this effect, 54.3% is due to the increase in interest rates and 18.13% is explained by the increase in the company’s indebtedness,” according to El Condor.

At year-end 2022, total assets hit COP$2.45 trillion (US$526 million), “of which our investment portfolio at book value is COP$1 trillion [US$214.7 million]. The ratio of current and non-current assets is 61% and 39% respectively,” the company added.

“Liabilities closed at COP$1.47 trillion [US$316 million], while current liabilities are 86% and non-current 14%. Current liabilities increased due to the maturity of the structured loan in less than one year. This does not have a negative effect on the company’s liquidity, since the Pacífico 3 Concession was classified as an asset held for sale and is a source of payment for the structured credit,” according to El Condor.