Construcciones El Condor Posts Worst-Ever Full-Year Results
Medellin-based highway construction giant Construcciones El Condor announced February 28 a full-year 2023 net loss of COP$259.6 billion (US$65.8 million), “the most difficult year in the history” of the company.
The net loss in 2023 is almost four times worse than the COP$69.7 billion (US$17 million) net loss for full-year 2022.
Earnings before interest, taxes, depreciation and amortization (EBITDA) likewise delivered miserably, at a net negative COP$86 billion (US$21,8 million), with a 9.87% negative net margin.
Explaining the losses, El Condor cited much-higher debt financing costs, a drop in operating margin because of rising labor and materials-cost inflation, termination of contracts for the Pacífico Tres and Ruta al Mar highway projects, and “consolidation of the loss associated with accounting adjustments,” according to the company.
As its financial outlook started to darken during the first quarter 2023, the company moved to start cutting its losses, including renegotiation of engineering, procurement and construction (EPC)) contracts as well as reprofiling of its debt agreements with creditors, according to El Condor.
Colombia’s declining gross domestic product (GDP) during 2023 hurt all construction activity, but “the outlook for 2024 presents a markedly brighter outlook,” according to the company, citing likely cuts in interest rates and a hoped-for restart of stalled infrastructure projects.
“With the restoration of the profitability of the EPC contracts of Magdalena 2 and Ruta al Sur, an increase in billing is expected in 2024,” according to El Condor.
