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Conconcreto Construction Workers Conconcreto Construction Workers Source: Constructora Conconcreto

Conconcreto 1Q 2020 Profits Fall 34% Year-on-Year

Published in Companies Written by  May 27 2020 font size decrease font size increase font size 0
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Medellin-based construction giant Constructora Conconcreto revealed in a May 26 filing with Colombia’s Superfinanciera oversight agency that its first quarter (1Q) 2020 net income fell 34% year-on-year, to COP$20 billion (US$5.3 million).

Earnings before interest, taxes, depreciation and amortization (EBITDA) also fell 16% year-on-year, to COP$44.7 billion (US$11.9 million), while gross income fell 12%, to COP$169.7 billion (US$45 million), according to the company.

While the Covid-19 crisis hurt all construction companies in Colombia because of temporary quarantines and project shut-downs in March, most of the decline in profits this year came from extraordinary gains in 1Q 2019 that were absent in 1Q 2020, according to Conconcreto.

The profit variation “mainly corresponds to the results of 2019 that were affected by around COP$28 billion (US$7.5 million) by the dividends and profits for sale of the CCFC concession,” a one-time event last year, the company explained.

On the other hand, Conconcreto saw 1Q 2020 profit improvements from several other projects and investments “as well as a greater contribution from [commercial real-estate development consortium] Pactia,” according to the company.

Among initiatives to confront the Covid-19 crisis, Conconcreto renegotiated terms on its credit lines and accelerated certain divestments that have been in the works since 2018, according to the company.

“Since the start of the [divestments] plan in 2018, COP$274 billion [US$73 million] in cash has been received,” according to Conconcreto.

On the other hand, “the company has chosen to keep and pay the salaries of employees during the emergency period,” according to Conconcreto.

Construction backlog at end-1Q 2020 totaled COP$1.8 trillion (US$480 million), “which corresponds to around two years of operation,” according to the company.

Infrastructure projects account for 87% of the backlog and 13% in housing/building projects, according to Conconcreto.

In housing, “as of March 31, 2020, there are eight projects under construction, concentrated in Bogotá, Medellín, Neiva and Barranquilla,” according to the company.

These projects include 74 government-subsidized housing units “expected to sell on average in approximately nine months, 455 middle-class units expected to sell on average in 23 months, and 67 upper-income units expected to sell. on average in a period of 21 months,” according to Conconcreto.

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