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Enka Plastic Bottle Recycling Line Enka Plastic Bottle Recycling Line Source: Enka de Colombia

Enka Nine-Months 2021 Profits Up Sharply Versus Nine-Months 2020

Published in Companies Written by  November 13 2021 font size decrease font size increase font size 0
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Medellin-based textiles and plastics-recycling giant Enka de Colombia reported November 12 net income of COP$42 billion (US$10.8 million) for nine-months 2021, a huge improvement over the COP$2.2 billion (US$566,000) net income in nine-months 2020.

Nine-months 2021 earnings before interest, taxes, depreciation and amortization (EBITDA) likewise have nearly tripled year-on-year, to COP$61 billion (US$15.7 million), while revenues hit COP$398 billion (US$102 million), up from COP$$254 billion (US$65 million ) in nine-months 2020.

“The construction of the new PET [polyethylene terephthalate] Bottle-to-Bottle recycling plant, which will double the installed capacity, is progressing smoothly with investments of COP$29.7 billion [US$7.6 million] -- 27% of the total investment -- and it is expected to start operations by the end of 2022,” according to Enka.

The positive results came despite negative macro impacts of the global Covid-19 pandemic over the past 18 months, including global demand weaknesses and logistics problems especially in maritime freight, the company noted.

Fortunately, Enka management had accelerated its acquisition and supply of many raw materials “before the severe shortages” emerged, according to the company.

As a result, by the end of September 2021, Enka’s total assets grew by COP$81 billion (US$20.8 million) year-on-year, to COP$693 billion (US$178 million), “mainly due to an increase in working capital derived from the increase in sales and higher international prices, and due to capital investments for projects in execution,” according to the company.

Total liabilities also increased, to COP$244 billion (US$62.8 million).

“The company continues with a positive financial position at the end of this quarter, with available cash of COP$44 billion [US$11 million] and a low net debt of COP$5.8 billion [US$1.5 million], even after making capital investments in the year for COP$32 billion [US$8.2 million], mainly in the new PET Bottle-to-Bottle recycling plant,” according to Enka.

As for sales of its various products in various markets so far this year, “sales in the local [Colombia] market increased by 65%, reaching COP$233 billion [US$60 million], while exports increased by 46%, ending at COP$164 billion (US$44 million), going from a share of 44% to 45% of the total,” according to Enka.

In the NAFTA market (United States, Mexico and Canada), sales grew by 56% year-on-year, “mainly in the industrial wire line, positioning Enka as a strategic supplier to the main tire manufacturers. Similarly, the Brazilian market recovered and grew by 47%, increasing its share to 18% of sales,” according to Enka.

As for its “green” line of recycled products, sales grew 23% year-on-year, to COP$110 billion (US$28 million), accounting for 30% of total corporate revenues. Exports represented 13% of the income of the “green” lines.

The “EKO PET” (13,027 tonnes output) plant operation “is at full capacity. Virgin PET supply restrictions continue due to the international freight situation and some production problems from large global suppliers that affect supply,” according to Enka.

As for “EKO Fibras” (8,317 tonnes), sales volume increased by 17% year-on-year “due to the recovery of local and Brazilian demand affected by Covid-19 in 2020 and due to difficulties in the supply of Asian products due to high rates of logistical restrictions,” according to the company.

As for “EKO Poliolefins” (1,281 tonnes), sales “decreased by 27% due to consumption in 2020 of high inventories generated at the start-up of the plant and due to the negative impact of the national strike [the ‘Paro Nacional’] in May 2021 on the collection of bottles. This year sales are adjusted to the availability of byproducts (caps and labels) from current recycling processes,” according to Enka.

As for all the “Eko Red” lines that involve recycling plastic bottles, “bottle collection continues to recover after the impact of the pandemic in 2020. Bottle collection was related to the national strike, which strongly affected recycling volumes in the south of the country and generated difficulties and logistical cost overruns in much of the national territory. However, it has since been possible to recover pre-Covid-19 levels,” the company added.

As for the textile and industrial businesses lines, these grew 55% year-on-year “due to the recovery of strategic markets and the high international prices of raw materials,” according to Enka.

“Exports represent 59% of the revenues of this business segment and 91% of Enka's total exports, reaching US$40 million,” the company added.

As for industrial yarns (9,775 tonnes), “volume increased 18%, mainly in canvas (+ 30%) due to its positioning in strategic clients,” according to Enka.

The “Hilo Técnico” line grew by 7%, “mainly in the USA and Colombia,” according to Enka.

Finally, the “textile filaments” line saw sales grow by 34% year-on-year “due to the recovery in demand previously affected by Covid-19 and difficulties in the importation of Asian products, mainly benefiting the sales of nylon filaments, which already exceeded to those of polyester filaments,” Enka added.

Read 151 times Last modified on Last modified on November 13 2021

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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.

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