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Medellin-based highway construction giant Construcciones El Condor announced November 11 that its third quarter (3Q) net income nearly matched that of 3Q 2020, at COP$16 billion (US$4.1 million).

However, revenues dropped 34% year-on-year, to COP$372.7 billion (US$95.7 million), according to the company.

The drop in revenues “is associated with the completion period of the projects that were executed during previous years with significant billings, with the suspension of some projects that are awaiting environmental and property decisions, and execution of public-works contracts that have not yet begun,” according to the company.

“Additionally, the Paro Nacional [protest marches] that began at the end of April 2021 also affected the pace of the works for reasons of physical security of our collaborators in some areas and shortage of the main supplies in the projects.”

Cost increases in raw materials and supplies generated an operating loss of COP$4.7 billion (US$1.2 million) in the latest quarter, the company added.

Earnings before interest, taxes, depreciation and amortization (EBITDA) came-in at COP$24 billion (US$6.16 million) with EBITDA margin at 6.5%, down from 12.06% in 3Q 2020.

As of September 2021, El Condor’s assets totaled COP$2.34 trillion (US$601 million), while liabilities totaled COP$1.26 trillion (US$324 million).

“With the payment of the series of bonds issued in September 2019 for COP$81.5 billion (US$21 million) and the new funding of the structured loan granted by Bancolombia and Davivienda with a term of 24 months, the structure of current liabilities is maintained at levels close to 50%,” the company added.

Medellin-based Grupo Argos – parent of Cementos Argos (cement), Celsia (electric power) and Odinsa (highway/airport concessions) – announced November 11 that its corporate-wide profits for third quarter (3Q) 2021 hit COP$375 billion (US$96 million), up from COP$78 billion (US$20 million) in 3Q 2020.

Revenues hit COP$4.1 trillion (US$1.05 billion), up from COP$3.45 trillion (US$877 million) in 3Q 2020, while earnings before interest ,taxes, depreciation and amortization (EBITDA) rose to COP$1.16 trillion (US$298 million), compared to COP$857 billion (US$220 million) in 3Q 2020.

For the first nine months of 2021, net income has skyrocketed by 477% year-on-year, while revenues are up 14% year-on-year, to COP$11.9 trillion (US$3.06 billion), according to the company.

“In the construction materials business, cement sales volumes showed favorable dynamics during the quarter with an increase of 12%, consistent with the good economic performance recorded in all Cementos Argos regional offices,” the company noted.

“In infrastructure, the company began the execution of the contract to supply the concrete for one of the main works of the Bogotá Metro, which over the next 14 months will demand about 100,000 cubic meters of material.

“The airport concessions business registered in September the highest number of passengers mobilized since the [Covid-19] confinement measures began, with 2.4 million people, and also with a positive net result, this being the first quarter with a favorable balance since 2020.

“On highways, all Odinsa concessions are operating under normal conditions with a traffic of 128,000 vehicles per day on average, 70% higher than the same period in 2020 and 68% higher than the same period in 2019,” the company added.

Medellin-based multinational cement/concrete giant Cementos Argos reported November 8 a 68% year-on-year hike in third quarter (3Q) 2021 net income, to COP$73 billion (US$18.8 million).

Comparable earnings before interest, taxes, depreciation and amortization (EBITDA) rose by 2.4%, to COP$473 billion (US$122 million), “due mainly to the good performance of Colombia in a combination of better market environment and commercial efforts to increase the company’s exposure to the retail segment,” according to Argos.

Meanwhile, 3Q 2021 revenues rose 5.3% year-on-year, to COP$2.36 trillion (US$609 million).

“Strong market dynamics during the quarter led to like-for-like increases in 3Q 2021 consolidated cement and ready-mix volumes of 11.9% and 5.7% respectively versus 3Q 2020,” according to the company

Meanwhile, cement prices rose by 1.1% and ready-mix concrete by 2.3% year-on-year in the U.S. region and the Central America/Caribbean region saw cement prices jump 6.1%, according to the company.

As for the future, “approval of the US$1.2 trillion bipartisan infrastructure deal in the U.S. sets out a favorable environment for increased demand in Argos’ most relevant market,” according to the company.

“Argos holds a privileged position given its capacity to locally produce clinker and cement in each of the regions where we operate,” added Cementos Argos CEO Juan Esteban Calle.

“Additionally, the strategic geographic location of our network of ports and our own fleet of vessels facilitate the integration of the Cartagena plant --one of the most efficient in the Americas -- with the grinding stations and ready-mix operations in the U.S. and the Caribbean,” he added.

U.S. Region Results

The U.S. region operations saw cement sales volumes rise 11.6% while ready-mix concrete volumes rose 1.5% versus 3Q 2020.

“These results are particularly good taking into account the challenging weather conditions of places like Houston and Georgia, which exhibited during the quarter the highest number of bad weather days in the last four and five years, respectively,” according to Argos.

“These improvements in volumes are due mainly to the economic reactivation of the country, especially of the oil industry and the tourism sector, which are important drivers of economic growth in the regions where Argos operates in the U.S.,” the company added.

“Market dynamics continue to be positive in the residential segment. Housing starts and building permits increased during the quarter 8.7% and 6.2% year over year, confirming the continuation of the positive trend on this segment.”

Colombia Results

Meanwhile, the Colombia market experienced “full recovery of demand across the country, following the social unrest experienced on April and May. Argos’ dispatches of both cement and ready-mix evolved accordingly, increasing 14.4% and 9.3% respectively versus 3Q 2020,” according to the company.

“These improvements are associated to the commercial efforts deployed by the company to increase its exposure to the retail segment, in the case of cement, and to the improvement of the formal construction sector following the pandemic, in the case of ready-mix.

“In terms of pricing, the cement segment remained stable sequentially, while ready-mix prices decreased 1.9% versus 2Q21.

“The commercial dynamics of the market continue to improve. On residential construction, year to date sales of social [government-subsidized] and non-social housing grew 48% and 47% respectively year over year, and housing starts reached in July a new all-time high monthly figure, signaling the continuation of the positive trend on this segment.

“Additionally, the infrastructure pipeline of the country remains strong with projects such as Santana-Mocoa-Neiva, Malla Vial del Meta and Malla Vial del Valle [highways] which are scheduled to begin construction in 2022.”

Caribbean-Central America Region Results

In this region, “cement dispatches increased 10.1% year over year, mainly due to the 71.3% increase in the trading business. This positive performance of the trading segment is an indirect effect of the exports to the U.S., which have grown consistently compared to the previous year, accounting for 109,000 tons exported to the U.S. during the quarter and 272,000 tons during the entire year,” according to Argos.

“Volume evolution versus 3Q 2020 was steady in the case of Dominican Republic, positive in Honduras, Panamá and the French Guiana, and negative on the case of Haiti and Puerto Rico.

“Haiti was affected by a combination of social and political uncertainty, together with technical difficulties in the plant derived from the earthquake of mid-August.

“Puerto Rico was affected by a higher comparison base for 3Q 2020 derived from the pent-up demand following the quarantines experienced during the pandemic. All the other countries benefited from good commercial dynamics.

“Across the region, average prices increased 6.1% year over year, reaching the highest average quarterly price of the last two years, resulting from the combination of recovering local market and the increase in import parity prices,” the company added.

Cementos Argos now operates in 16 countries with favorable market positions in the U.S., Colombia, Caribbean/Central America and total annual capacity of 23 million tons of cement and 14.4 million cubic meters of concrete, according to the company.

Fabricato 3Q 2021 Profits Soar Year-on-Year

Sunday, 07 November 2021 10:11 Written by

Medellin-based textile giant Fabricato reported November 6 that its third quarter (3Q) 2021 net profit came in at COP$11.1 billion (US$2.86 million), a big reversal from the COP$3.3 billion (US$852,000) net loss in 3Q 2020.

As for the first nine months of 2021, net income reached COP$12.1 billion (US$3.1 million), up from a COP$22 billion (US$5.7 million) net loss for the first nine-months of 2020.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for nine-months 2021 jumped 386% year-on-year, to COP$41.5 billion (US$10.7 million), with EBITDA margin at 13.3%, up sharply from 3.2% in nine-months 2020.

“The textile operation accounted for 96% of total EBITDA,” according to Fabricato.

Revenues through nine-months 2021 are up 55% year-on-year, to COP$311 billion (US$80 million), the company added.

“So far this year, we have achieved positive operating profit and EBITDA every month,” Fabricato reveraled in its filing with Colombia’s Superfinanciera oversight agency.

Through September 2021, “we present the highest gross profit of the last seven years, at a value of COP$58 billion [US$15 million],” the company added.

Meanwhile, technological innovation is moving hand-in-hand with improved profitability, according to Fabricato.

“Recently, machines were acquired to recover cotton from used garments, and investments will be made aimed at optimizing/reusing the water and some chemicals used in the textile process, thus contributing to mitigating the environmental impact of disposal of textiles in landfills and contributing to the circular economy.

“They will be in operation in early 2022 with great environmental benefits and cost optimization,” according to the company.

Also boosting results: “We increased self-generation of energy with respect to 2019 in the same period of time by 30% with a positive impact on cost,” according to Fabricato.

“The focus on making the company profitable both in the textile operation and in the real estate activity continues, complemented by rigorous monitoring of spending efficiency.

“Despite the international crisis in the supply of raw materials, we have lowered the average lead times of the different production lines by between 15% and 20%, compared to 2019.

“The quality index of all production lines has been improved between 2 and 3 basis points, compared to 2019.

“Labor productivity measured in meters produced per capita rose 20% compared to 2019.

“The various structural factors that are manifested by global shortages and logistics restrictions worldwide will continue to arise and for this we have prepared ourselves with improvements and efficiencies in all areas of the company,” the company added.

Medellin-based electric power giant Celsia – a division of Grupo Argos – on November 4 reported third quarter (3Q) 2021 net income of COP$105 billion (US$27 million), up 51.8% year-on-year.

Revenues in 3Q 2021 climbed 19.4%, to COP$978 billion (US$252 million), while consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) rose 23%, to COP$316 billion (US$81 million).

For the first nine months of 2021, revenues are up 9.8%, to COP$2.89 trillion (US$745 million), consolidated EBITDA is up 7%, to COP$966 billion (US$249 million) and consolidated net income is up 22%, to COP$309 billion (US$79.5 million), according to the company.

Meanwhile, capital spending so far in 2021 has hit nearlyCOP$1 trillion (US$257 million), according to the company.

On the “green energy” front, Celsia recently won a 225 gigawatt-hour renewable energy auction that will be supplied by the “Celsia Solar Escobal 6” solar photovoltaic farm to be built in Ibagué.

“Celsia Solar Escobal is part of our goal of having more than 25% of our installed power in non-conventional renewable energies,” added Celsia CEO Ricardo Sierra. “For next year we will multiply our capacity for unconventional renewable energy in Colombia by 18 times, compared to 2017.”

On a related “green” front, Celsia announced it has now cut the intensity of its CO2 emissions by 76% compared to 2015, while its similarly environment-friendly “ReverdeC” program -- aiming to protect vulnerable water basins -- has resulted in planting of 1.5 million trees over 4,452 hectares.

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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.

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