Grupo Argos 3Q 2017 Net Profit Grows 38%

Medellin-based construction, electric power and cement giant Grupo Argos announced November 14 that its third quarter (3Q) 2017 consolidated net profit grew 38% year-on-year, to COP$452 billion (US$150 million).

Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) for 3Q 2017 rose 28% year-on-year, to COP$1.2 trillion (US$398 million).

Revenues soared by 253% “thanks to the sale of the Compas [ocean ports] shares, to the lots appraisal in the real estate business and to the positive results of all businesses,” according to the company.

“Grupo Argos now has a solid cash position for the closing of the quarter of COP$267 billion [US$88 million], and a reduction in the leverage indicators of 2.2 times the EBITDA, well below the 3.8 times obtained in the same period last year. Both indicators give flexibility to the holding company to develop its strategy of capital allocation and active management on investments,” according to the company.

Grupo Argos is the multinational parent company of Cementos Argos, Celsia and Odinsa, all based in Medellin.

“The cement business showed a positive growth dynamic especially in the United States, which along with significant advances in operational efficiency in all geographies allowed us to show the best figures of the year, with an adjusted EBITDA of COP$428 billion [US$142 million], equivalent to 19.5%, if non-recurring expenses are excluded,” according to Grupo Argos.

“In the energy business, on October 26 [2017], Celsia announced an issuance of common shares and a public offer of acquisition of up to 14% of the Epsa shares. Both operations [Celsia and Epsa] are supported by Grupo Argos, as they will strengthen the energy business and offer greater transparency to the market regarding the capital structure of the holding.

“In terms of the [highway and airports] concessions business, we are confident with the stock market Odinsa strategy, a Grupo Argos road and airport concession company. As shown by the results, we issued bonds for COP$400 billion [US$132 million], with an oversupply of 2.3 times what was offered, making it the first issuer of the sector which in the last 10 years issued securities in the market with an AA- rating.

“Odinsa also achieved the first disbursement and final closure of its US$250 million loan for the construction of the Pacifico 2 highway, under the fourth generation [4G highway] concessions program,” the company added.

During the latest quarter, Odinsa’s revenues were COP$200 billion (US$66 million), up 9% year-on-year, thanks to “stability in the growth of vehicle and passenger traffic, with increases of 3% compared to the same period of 2016, with 73,000 vehicles per day on road concessions, while consolidated from January to September [Odinsa] registered 27 million passengers at airports.”

As for cement operations, “the results for Argos confirm the recovery shown as of June of this year. The EBITDA margin of 19% reached in the third quarter is the same achieved during 2016. This has been achieved thanks to a 17% growth in cement volumes compared to the same period last year, the recovery in the Colombia and competitive efficiencies through the ‘Best’ program,” according to Argos.

In energy, “Celsia obtained revenues of COP$785 billion w[US$ million] with an EBITDA of COP$294 billion [US$97.5 million], an increase of 20% compared to the same period of 2016, and reached an EBITDA margin of 37%,” according to Grupo Argos.

“During this period, the entry into operation of the Celsia Solar Yumbo project stands out, which represents the first of the projects announced by the company to develop a portfolio of non-conventional renewable energy generation in excess of 200 megawatts.”

In real estate, Grupo Argos reported the deeding of 19,000 square meters and COP$29 billion (US$9.6 million) of revenue from sales of lots. Accumulated income from January to September for the sale of lots amounted to COP$221 billion. The company’s participation in the “Pactia” real estate fund “has had a growth in the value of the unit with effective annual yields of 7.7%,” the company added.