Grupo Argos 2Q Consolidated Net Income Dips 5.7%, but EBITDA Rises Year-on-Year
Medellin-based Grupo Argos – holding company for electric power producer Celsia, cement maker Cementos Argos and highway/airports concessionaire Odinsa – on August 12 reported a 5.7% year-on-year dip in second-quarter (2Q) 2019 net income, at COP$219 billion (US$63 million).
However, 2Q 2019 earnings before interest, taxes, depreciation and amortization (EBITDA) rose 18% year-on-year, to COP$1.05 trillion (US$304 million), according to the company.
“Despite non-recurring charges that impact the figures for the [second] quarter, net income of the parent company grew 16% in the first half [1H 2019],” according to Grupo Argos.
For 1H 2019, Grupo Argos consolidated EBITDA hit COP$2.1 trillion (US$609 million), up 12% over 1H 2018. “This result has allowed the holding company, in a period of five years, to double EBITDA,” according to the group.
“The AAA [bond] rating of Fitch Ratings that Grupo Argos received for the first time in its history stands out,” the company added. “This is the highest note delivered by this entity in Colombia and demonstrates the confidence of the capital market in the strategy of the organization to achieve an increasingly efficient and profitable portfolio.
“Several [other] milestones that will positively impact the long term materialized in this period — among others, the incorporation of [Tolima department] transmission and distribution assets in our energy subsidiary Celsia, for about COP$2 trillion [US$580 million], and financial optimization operations in our business of [highway/airport] concessions, which included bond issues for about COP$2.5 trillion [US$725 million],” stated Grupo Argos president Jorge Mario Velásquez.
“In addition, it is important to highlight two recent relevant facts: in energy, we have announced the signing of an agreement for the divestment of thermal [power generation] assets in Zona Franca Celsia, for US$420 million, which will allow for a cleaner and more balanced generation matrix, and whose resources will give greater flexibility and profitability on the capital invested in this business,” Velásquez added.
In the concession business, revenues dipped 8% year-on-year, “which is mainly explained by the decrease in income by equity method from Quiport, as a result of the decrease in the net profit of the concession after [reconfiguring] the debt in this asset to optimize the capital structure at the level of the portfolio of Odinsa. We also saw a decrease in construction activity, given the optimization of working capital in the ‘Farallones de Pacífico 2’ highway consortium.”
As for the group’s real-estate business, the “Pactia” commercial real estate joint venture [of which Argos has a 32% shareholding] “has had effective annual yields of 7.25% since its incorporation date on January 20, 2017,” according to the company.
