Fabricato Posts COP$82 Billion Net Loss for Full Year 2020
Medellin-based textile giant Fabricato on March 30 posted a COP$82 billion (US$22 million) net loss for full year 2020, worse than the COP$17 billion (US$4.6 million) net loss in 2019.
Sales revenues fell 21% year-on-year, to COP$272 billion (US$74 million). However, thanks to cost reductions, 2020 earnings before interest, taxes, depreciation and amortization (EBITDA) actually tripled, to COP$9.8 billion (US$2.6 million), versus COP$2.7 billion (US$737,000) in 2019.
Commenting on the 2020 results, Fabricato President Alberto Lenis Steffens noted the negative impact of Covid-19 shutdowns on sales and profits.
“As a reference, in April 2020 [the peak of the Covid-quarantine shutdown], the market size of the Colombian textile sector decreased 45% and fell to COP$1.1 trillion [US$273 million], while in the same month of 2019 it was COP$2 trillion [US$546 million],” Lenis explained.
“By November 2020, the market improved and finished with sales of COP$2.1 trillion [US$573 million] compared to COP$2.2 trillion [US$601 million] in November 2019.
“The textile sector in 2021 will continue to adjust to meet the challenges, as it has throughout history. For the year 2021, the figures are expected to be better, but it is very likely that the results that were achieved in 2019 will not be achieved,” he cautioned.
More than half of 2020’s net loss came from a recent Constitutional Court ruling requiring Fabricato to hand-over its former Sibate, Cundinamarca textile factory to now-bankrupt Textiles Konkord SA. The ruling came as a surprise to Fabricato since lower-court rulings had denied Textiles Konkord claims, Fabricato noted.
Pension payments to 1,427 retirees now total COP$12 billion (US$3.27 million), while Fabricato’s current 1,617 employees enjoy average salaries “considerably higher than the national industry average, in addition, and the [employee] benefit package impact is 75%, compared to the legal mandate of 52%,” the company added.
Commercial Real Estate Businesses Gain
Meanwhile, Fabricato’s other main line of business – commercial real estate – showed encouraging results in 2020, despite the limits imposed by the pandemic.
The “Industrial Park” in Rionegro, Antioquia, closed 2020 with 73% of area leased, with total income between leases and services rising 17% year-on-year, to COP$6.76 billion (US$1.8 million).
As for its Ibague housing project with Triada S.A.S, the now-approved master plan from early 2020 is being developed “Currently the development of the project is 85% complete and the delivery of the apartments is estimated to be completed in May 2021,” according to Fabricato.
“The second stage, which comprises a top housing development called “Valle Lindo” with 1,152 apartments, is in pre-sales and is expected to be completed in the second half of 2023.
“Fabricato received flows of COP$182.5 million [US$50,000] during 2020 and expects to receive COP$18.9 billion [US$5.16 million] by the end of 2024,” according to the company.
As for the Fabricato building in Medellín, the company has three floors available for lease or sale, with an appraised value of COP$5.36 billion (US$1.46 million).
In the “Fabricato City” project in the Medellin suburb of Bello, Fabricato captured COP$6.8 billion (US$1.86 million) in cash flow during 2020. “In future flows projected to 2027, the company will receive COP$71.3 billion [US$19.5 million],” according to the company.
While the “Fabricato City” project was “slightly affected by the pandemic, currently it continues to be very well received by the different clients of housing, commerce and services,” according to the company.
“The ‘Mediterránea’ and ‘Oceana’ housing projects are in the top three of the projects with the best sales in the last year. The shopping center is scheduled to open in October 2021,” the company added.