Friday, November 27, 2020

Become part of our community

Enka Plant in Girardota, Antioquia Enka Plant in Girardota, Antioquia Source: Enka Colombia

Enka 9-Months 2020 Profits Drop; Petrotemex Unveils Bid for 25% Equity Stake

Published in Companies Written by  November 13 2020 font size decrease font size increase font size 0
Rate this item
(1 Vote)

Medellin-based textile and plastics recycling giant Enka Colombia announced November 12 that its nine-months 2020 net profits have dropped by two-thirds, to COP$2.2 billion (US$604,000).

Earnings before interest, taxes, depreciation and amortization (EBITDA) dipped modestly, to COP$23.8 billion (US$6.5 million), from COP$26 billion (US$7.1 million) in nine-months 2019.

Gross revenues likewise have fallen sharply in this Covid-19 year, to COP$254 billion (US$70 million), from COP$306 billion (US$84 million) in nine-months 2019.

Meanwhile, Mexico-based Grupo Petrotemex revealed in a November 13 filing with Colombia’s Superfinanciera oversight agency that it is seeking to buy from 15% to 25% of the outstanding shares of Enka Colombia, assuming that Superfinanciera approves the proposed transaction.

While Enka has had a rough year this year because of the Covid-19 crisis, third quarter (3Q) volumes and EBITDA “show a strong recovery, with volumes similar to 3Q 2019 and an EBITDA higher by 4%,” according to the company.

The modest profit and EBITDA results this year “manage to offset a negative accounting effect due to [Colombia peso to U.S. dollar] exchange differences” that cost the company COP$6.8 billion (US$1.86 million) in the latest quarter.

“Strengthening of the operating cash flow made it possible to pay in advance all the short-term financial obligations contracted to face the [Covid-19] pandemic, reducing the debt ratio to 0.2-times EBITDA, lower than the end of 2019 (1.3-times),” according to Enka.

In 3Q 2020, “sales volume reached a level similar to that of the same period in 2019 (-1.0%), highlighting the good performance of green [recycled plastics] business sales, which offset the lower sales of filaments, while the industrial threads line reached similar levels,” according to the company.

EBITDA in 3Q 2020 “recovered from a practically balanced level in 2Q 2020” thanks to “recovery in volume, the highest exchange rate and the commercial, operational and administrative efforts to face the pandemic,” according to Enka.

“These results allow us to be optimistic about the recovery prospects for our markets, without losing sight of the risks associated with Covid-19 and the measures to contain it. We continue to closely monitor the recovery of beverage consumption, a fundamental factor to increase again the volumes of [plastic] bottle recycling in the country,” the feedstock for its “green” synthetic fibers.

To date, exports represent 44% of operating income, down from 46% last year. “Abroad, the North American market has been the one that has presented a better performance due to less restrictive measures on its economy,” according to Enka.

“For their part, Latin American markets, particularly Brazil and Argentina, although they took longer to reactivate, already show positive signs in demand and their recovery is expected to continue in the coming months.”

As for the Colombian domestic market, “we highlight the good performance in sales of ‘EKO-PET’ and ‘EKO-Polyolefins,’ despite the lower consumption due to Covid-19, which has partially offset the lower sales of textile filaments,” according to Enka.

Read 73 times Last modified on Last modified on November 13 2020

Leave a comment

Make sure you enter all the required information, indicated by an asterisk (*). HTML code is not allowed.

About Medellin Herald

Medellin Herald is a locally produced, English-language news and advisory service uniquely focused upon a more-mature audience of visitors, investors, conference and trade-show attendees, property buyers, expats, retirees, volunteers and nature lovers.

U.S. native Roberto Peckham, who founded Medellin Herald in 2015, has been residing in metro Medellin since 2005 and has traveled regularly and extensively throughout Colombia since 1981.

Medellin Herald welcomes your editorial contributions, comments and story-idea suggestions. Send us a message using the "contact" section.

Contact US

logo def
Medellin Herald: Find news, information, reviews and opinion on business, events, conferences, congresses, education, real estate, investing, retiring and more.
  • COL (4) 386 06 27
  • USA (1) 305 517 76 35
  •  This email address is being protected from spambots. You need JavaScript enabled to view it. 
  • Medellin, Antioquia, Colombia

Medellín Photo Galery

Medellin, contrasting colors and styles by Gabriel Buitrago