Fabricato 2Q 2020 Sales Plummet 51% on Covid-19 Crisis, but Net Loss Trimmed
Medellin-based textile giant Fabricato on July 31 reported a 51.2% decline in sales for second quarter (2020) because of the Covid-19 health crisis.
Despite sales falling to COP$42.4 billion (US$11.3 million) in 2Q 2020, net loss came-in at COP$10.4 billion (US$2.78 million), an improvement over the COP$12.7 billion (US$3.4 million) net loss in 2Q 2019.
Earnings before interest, taxes, depreciation and amortization (EBITDA) also improved to a net positive COP$279 million (US$75,000), versus an EBITDA net loss of COP$469 million (US$125 million) in 2Q 2019.
“The social isolation and the closure of many economic activities [resulting from Covid-19 quarantines during 2Q 2020] put a brake on the positive trend that had been perceived since the second half of the previous year,” according to Fabricato.
“In general, the company’s focus was to take care of our workers and take maximum care of cash flow, especially since a freeze in collection flow was felt from the first days.”
To trim labor-cost overhead during the crisis, “a staggered percentage of salary was retained, from 15% to 50%, from the second half of March to the second half of June,” according to Fabricato.
The company also sought and obtained “extensions by financial institutions ranging from 90 to 180 days on existing credits,” and took advantage of emergency payroll subsidies from the Colombian government’s “PAEF” (formal employment subsidy program) from April to July.
Fabricato also converted part of its traditional textile output to production of non-surgical masks for local producers, “with strict vigilance, accompaniment and learning of the rules and requirements demanded by [Colombia’s medical-supplies regulator] Invima in the materials used for face masks,” according to the company.
“Thanks to the experience accumulated in recent years on textile finishes, we were able to bring to the market very quickly textile bases with anti-fluid and/or anti-microbial finishes,” according to Fabricato.
“Another market segment that had good dynamics and reduced the potential impact in the quarter were the textile requirements of the Armed Forces, which we met with the required level of quality, design and time.”
As for Fabricato’s real estate operations, its “Ciudad Fabricato” development in the northern Medellin suburb of Bello continues in construction, with the first five of six total towers of the “Oceana” apartment complex now being commercialized. For the nearby “Mediterranean” apartments, “the four towers of the project are being commercialized,” according to the company.
For the shopping-center portion of “Ciudad Fabricato,” construction progress is “approximately 46% over the first stage consisting of 50,000 square meters,” according to the company.
As for the Fabricato Industrial Park in Rionegro (Riotex), the company “finished the second quarter with the same 70% of the available area leased.”
However, “lessee companies [at Riotex] have also suffered the negative impact of [the Covid-19 crisis] in the period, which is why we made some payment agreements for the due dates of this quarter, basically extending the term for the payment thereof,” the company added.