Enka 3Q 2018 Net Income Jumps 66% Year-on-Year
Medellin-based textile manufacturer and plastics-recycling specialist Enka Colombia announced November 14 that its third quarter (3Q) 2018 net income rose 66%, to COP$1.8 billion (US$564,000), from COP$1.09 billion (US$342,000)in 3Q 2017.
Both domestic and export sales revenues improved by 15% year-on-year, to COP$304 billion (US$95 million), from COP$264 billion (US$82.7 million), while volume (in tons) also rose 5% year-on-year, to 43,780 tons, from 42,660 tons in 3Q 2017.
Earnings before interest, taxes, depreciation and amoritization (EBITDA) also rose 19% year-on-year, to COP$19.8 billion (US$6.2 million), from COP$16.7 billion (US$5.2 million) in 3Q 2017.
Colombia revenues rose 19% year-on-year, while Brazil sales climbed 12%. USA/Canada sales jumped by 113% and Argentina sales soared 99%. The only sales declines were in Mexico, Peru and Spain, but these were relatively small.
Greater sales volumes and better realized prices in foreign markets were especially virtuous, given the weakening Colombian peso against the U.S. dollar, Enka noted.
The local Colombian market also improved thanks to greater efforts by the Colombian government to thwart below-cost contraband along with good performance in Enka’s recycled-plastics fibers markets.
Exports grew by 12% in pesos and 6% in volume, mainly in the USA and Canada, the company noted. Brazil and Argentina sales also rose despite recent economic difficulties in those nations, Enka added.
The “EKO-Fibras” line – derived from processing of waste plastics – saw a 16% boost in sales (in pesos) and 4% by tonnage, mainly to export markets, according to the company.
Meanwhile, the “EKO-Poliolefinas” recycling-production line is performing as expected in its first few months of operations here, according to Enka.
The export outlook for the fourth quarter 2018 is “in line with our expectations,” given a favorable situation in principal markets and a relatively weak Colombian peso-to-U.S. dollar rate. However, Enka added that it’s taking note of political and economic turbulence in Argentina and Brazil, which could affect future sales there.
As for the possible impact of higher USA tariffs on various Chinese goods, it’s possible that Colombian goods could gain greater market shares in the USA as a result. On the other hand, if China retaliates via devaluation of its currency — and redirects more exports to South America – then this could negatively impact Colombian producers, Enka warned.