Fabricato 3Q 2020 Net Loss Trimmed by 75% Year-on-Year
Medellin-based textile giant Fabricato announced November 3 in a filing with Colombia’s Superfinanciera oversight agency that its third quarter (3Q) 2020 net loss came-in at COP$3.29 billion (US$861,000), a 75% improvement over the COP$13.27 billion (US$3.47 million) net loss in 3Q 2019.
Earnings before interest, taxes, depreciation and amortization (EBITDA) rose to COP$6.7 billion (US$1.7 million), up from COP$3 billion (US$785,000) in 3Q 2019, while sales fell 26% year-on-year, to COP$78.9 billion (US$20.6 million), according to the company.
As for nine-months 2020, Fabricato has posted a net loss of COP$22.69 billion (US$5.9 million), a 42% improvement over the net loss for nine-months 2019, according to the company.
Commenting on the results, Fabricato observed that “Colombia began to go through a recovery path (in 3Q 2020) after the strong impact of the second quarter. This process will be slow and gradual and will be determined by the sectoral opening approved by the national and local governments.
“The months from July to September were characterized by staggered quarantines with different levels of openness that were increasing over the months, mainly with regard to trade.
“According to data from the Ministry of Commerce, the main obstacles faced by companies in the fashion sector were: 23% reduced sales, 12% higher prices of raw materials, 10% restrictions imposed by local authorities such as quarantines and 9% shortage of raw materials.
“Although the fashion industry has shown a slight reactivation compared to the previous quarter through strategies such as changes in the communication model of companies, restructuring of the commercial strategy, readjustment of the portfolio of products and services, financial restructuring and the increase in the share of sales in the e-commerce channel, they still continue at a low level compared to the same quarter of 2019.
“The 41% reduction in textile exports in the third quarter has an impact on business finances and production volumes. Tthe main reason for this drop was due to the closure of borders and the stimuli of each country to boost local consumption.”
Fabricato’s textile sales have benefitted from increased demand for garments for medical and hospital use.
Demand for fabric for military use and non-woven fibers “also played an important role in the basket of products sold,” the company added.
Improving Commercial Outlook
Since July 2020, “a positive trend in sales began to be seen, mainly in the bidding and institutional market segment,” according to Fabricato
“The month of August and September continued with a positive trend in sales including the export of 300,000 medical gowns to the United States,” the company added.