Enka Net Income Falls 51% Year-on-Year but ‘Green’ Recycling Thrives
Medellin-based textiles and plastics-recyling multinational Enka on March 14 reported a 51% year-on-year decline in full-year 2024 net income, at COP$9.7 billion (US$2.36 million), from COP$20 billion (US$4.88 million) in 2023.
Revenues also declined 20% year-on-year, to COP$477 billion (US$116 million), while earnings before interest, taxes, depreciation and amortization (EBITDA) fell 22% year-on-year, to COP$36.3 billion (US$88.5 million).
Despite the 2024 decline in profits, revenues and EBITDA, the company’s novel plastics-recycling business nevertheless continued to grow, accounting for 57% of sales in 2024 versus 45% in 2023.
“This increased share was driven by the consolidation of the new bottle-to-bottle plant, which increased ‘EKO-PET’ exports by 138% (73% in volume),” according to Enka.
On the other hand, “the textile and industrial business results have been impacted by the increased presence of low-priced Asian products, which, favored by their vertical integration, excess installed capacity, and lower local demand, have increased their exports to our markets. This resulted in a 33% reduction in revenue from this business line.”
To counteract the Asian textile-clothing import problema, Enka launched a “cost and fixed-expense adjustment plan in 2024, allowing us to achieve a 7.3% reduction compared to 2023. This decrease is even more significant considering that in 2024 we were pressured by increases in inflation of 9.28% and the minimum wage hike of 12.07%,” the company added.
What’s more, during 2024 Enka “continued to reduce its debt, which generated savings in financial costs of COP$8.2 billion [US$2 million] and an increase in cash yields of COP$1.69 billion [US$412,000],” the company explained.
“For the first time in Enka’s history, ‘green [recycling] businesses’ exceded 50% of total revenue, reaching COP$270.77 billion [US$66 milllion].
“For the Colombian market, the PUSU [single-use plastics recycling] law for PET [polyethylene terephthalate] will require, starting in 2025, a minimum recycled resin content — ‘EKO-PET’ in Enka’s case — in bottles: 20% for [flavored] beverages and 50% for water, in addition to a 25% container collection rate compared to what is currently on the market).
“These percentages will continue to increase year after year, reaching a minimum content of 35% for beverages, 90% for water, and a minimum collection rate of 50% by 2030, which represents significant opportunities for the company.”
Similarly, in international markets, “we have been taking advantage of the trend toward sustainable products,” according to Enka.
“The strategy of market diversification with high-value-added products allowed ‘EKO-PET’ exports to grow by 138% in revenue and 73% in volume, primarily to Central America,” the company concluded.
