Construcciones El Condor Suffers 415% Year-on-Year Drop in 3Q 2020 Net Income
Medellin-based highway construction giant Construcciones El Condor on November 12 reported a 415% year-on-year plunge in third quarter (3Q) 2020 net income, to COP$16 billion (US$4.4 million).
Gross income for 3Q 2020 was down 11%, to COP$565 billion (US$155 million), “explained by the paralysis in the execution of the works on the occasion of the Covid-19 pandemic,” according to the company.
The crisis “implied the non-invoicing during this time and the decrease in the invoicing in the months of May, June and July,” but “as of July [we] had high levels of execution in projects,” according to the company.
Operating costs for the latest quarter hit COP$517 billion (US142$ million), “representing 91.55% of income from ordinary activities, while administrative expenses reached 3.2% of said income,” according to the company.
“Operating costs include idle costs, machinery and equipment stand-by costs and personnel costs assumed by the company 100% during the suspension . . . Once these costs have been recognized in the contractual agreements, the respective recognitions will be made to the executors to bill them for each concession,” the company added.
Earnings before interest, taxes, depreciation and amortization (EBITDA) hit COP$68 billion (US$18.6 million), with an EBITDA margin of 12%, down from 15.75% in 3Q 2019, according to the company.
“Said decrease in EBITDA margin is due again to idle costs due to [Covid-19 shutdown] paralysis. By the end of the year, we expect the EPCs [engineering, procurement and construction contractors] to be able to bill the concessionaires for these costs, which will allow the recovery of the EBITDA margin,” according to the company
As of September 2020, total assets totaled COP$2.29 trillion (US$628 million), while liabilities totaled COP$1.21 trillion (US$332 million), according to El Condor.
As of September 2020, the construction backlog — the balance of works contracted and to be executed –totaled COP$552 billion (US$151 million), including COP$227 billion (US$62 million) of invoicing executed during the latest quarter, the company added.