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'El Toyo' Highway Construction in Antioquia 'El Toyo' Highway Construction in Antioquia Source: Construcciones El Condor

Construcciones El Cóndor Posts 3Q 2022 Net Loss on Project-Finance Accounting

Published in Companies Written by  November 11 2022 font size decrease font size increase font size 0
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Medellin-based highway construction giant Construcciones El Cóndor reported November 11 a COP$57 billion (US$11.8 million) net loss for third quarter (3Q) 2022, down from a COP$16 billion (US$4.1 million) net profit in 3Q 2021.

“The results are recognized by the equity method and the unrealized net exchange difference,” according to El Cóndor. “These items present accounting effects but have no impact on the company's cash. If this effect is discounted, the net profit is COP$4.178 million [US$869,000] and the net margin is 0.65%.

“This effect will continue to occur for several periods while the [highway] concessions begin to generate accounting profit, a behavior that is due to the normal cycle of the concessions due to their project finance nature,” the company explained.

Income from ordinary activities totaled COP$638 billion (US$133 million), increasing by 57.86% compared to 3Q 2021.

“The increase reflects the upward curve in the execution of the following works: EPC [engineering, procurement and construction] with the Concessions Autopista Rio Magdalena, Ruta al Mar and Pacífico Tres, El Toyo and Putumayo public works with Invias and the normalization contract with the Ruta al Sur Concession,” according to El Cóndor.

Operating costs rose 47% year-on-year, to COP$564 billion (US$117 million), while gross profit came-in at COP$74 billion (US$15 million), “equivalent to a gross margin of 11.60%, which is higher than the gross margin of 2021, since new projects earn revenue share on 4G [fourth-generation highway project] EPCs,” according to the company.

Earnings before interest, taxes, depreciation and amortization (EBITDA) hit COP$102 billion (US$21 million), “equivalent to an EBITDA margin of 16%, increasing with respect to the EBITDA margin for the year 2021, which was 12.62%,” according to El Cóndor

“Interest expense increased 56.71% compared to the third quarter of 2021. Of this effect, 51.86% is due to the increase in interest rates and 4.85% is explained by the increase in the company’s indebtedness,” the company added.

Construction backlog at end-September -- defined as the balance of works contracted and to be executed -- stood at COP$2.99 trillion (US$622 million), the company added.

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