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Fabricato Textile Machinery Fabricato Textile Machinery Source: Fabricato

Fabricato 3Q 2022 Net Income Drops 68% Year-on-Year

Published in Companies Written by  November 10 2022 font size decrease font size increase font size 0
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Medellin-based textiles and real-estate giant Fabricato on November 10 reported a 68% drop year-on-year in third quarter (3Q) 2022 net income, to COP$3.06 billion (US$625,000).

However, gross revenues rose 5.7% year-on-year, to COP$129 billion (US$27 million), while earnings before interest, taxes, depreciation and amortization (EBITDA) rose 10% year-on-year, to COP$$45.7 billion (US$9.5 million).

In its textile division, accumulated gross profit rose 7%, to COP$3.7 billion (US$770,000).

In total, “90% of the result achieved at the EBITDA level corresponds to the textile operation,” according to Fabricato. “Accumulated textile EBITDA as of September 2022 was COP$41 billion [US$8.5 million], 3% higher than in 3Q 2021,” according to the company.

In its real estate division, gross income rose COP$4.27 billion (US$888,000) year-on-year, while net income rose by COP$4.7 billion (US$978,000) year-on-year. Real estate EBITDA nearly tripled year-on-year, to COP$4.7 billion (US$978,000), according to Fabricato.

“In the third quarter of the year a slight reduction in [textile] demand is observed, and is less than cumulative growth behavior for the year,” according to the company.

“International logistics service fluctuations in placement of containers has resulted in higher freight cost [although] exports show a year-to-date growth of 21%,” the company added. "Our main markets abroad (for all of 2022) are: Ecuador 37%, Mexico 28%, Peru 17% and others, 18%.

“In the third quarter there is a significant reduction in the Honduran market (August), mainly for the execution of tenders for the military forces. However, the trend of sales maintains growth in the rest of the countries.

“Volatility and uncertainty persists for the main raw materials. The raw material with volatility and greatest impact due to price variation is cotton; its price has fluctuated between US$116.85 and US$85.16 per-pound in the period. A downward trend continues.

“The textile market maintains high product inventories, mainly due to an increase in textile imports (28% more than in 2021, according to Inexmoda) and also due to post-pandemic recovery," the company added.

“During this quarter we had important advances in the operation in terms of new projects and innovation in products and processes. We have concluded the project for the installation of rotor spinning machines; a total of 18 open-end spinning machines were installed. This translates into an autonomy of 75% of the thread needs required for the textile operation.

“We continue to advance in the development and production of natural fibers other than cotton, seeking to minimize the ecological footprint left by our textiles. We have installed equipment for the extraction and preparation of these fibers to be processed in the fiber machinery infrastructure for cotton.

“The ozone washing machine business is complete, which will represent a substantial decrease in water consumption for denim washing, generating less wastewater discharges for our treatment plant and offering the market a denim product with characteristics that will result in better garment laundry processes, better performance in laser uncovering and reduction of resources,” the company added.

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