Industrias Estra Full-Year 2023 Net Profit Drops 59% Year-on-Year

Medellin-based plastic-products-manufacturer Industrias Estra announced March 21 that its full-year 2023 net profit declined 59% year-on-year, to COP$640 million (US$164,000), from COP$1.58 billion (US$406,000) in 2022.

Sales revenues likewise dipped 7% year-on-year, to COP$90.3 billion (US$23 million), resulting “mainly from the decrease in demand in our environmental-products category, in our traditional-products categories, and from a decline in export sales,” according to the company.

Earnings before interest, taxes, depreciation and amortization (EBITDA) also fell 7.8% year-on-year, to COP$14.3 billion (US$3.67 million), according to the company.

While profits and sales declined last year, Estra still managed to keep plant operating capacity at a fairly decent 75% — and managed to cut costs of original raw materials by 24.6%.

Those relatively healthy operating-capacity levels and cost-cutting measures “were key in cost improvement for the total company, and resulted in a gross profit of COP$32.6 billion [US$8.37 million] — a growth of 2.7% in 2023 versus 2022,” according to Estra.

Average gross margin also improved in 2023, hitting 36.2%, from 32.8% in 2022.

However, operating expenses grew by 8.1% year-on-year, tied to interest-rate hikes.

“The increase in consolidated financial expenses for the year 2023 was due to the increase in interest rates, which grew by 54% compared to 2022. Those higher rates were applied to financial obligations we had at the end of 2022 (COP$13.6 billion/US$3.5 million) and the new obligations that we took-on in 2023 (COP$2.2 billion/US$565,000),” according to Estra.

“As a consequence, we were only able to comply with part of our investment plan, which meant we only bought support molds for existing products, thus slowing down our investment plan in growth,” the company added.

During 2023, new products grabbed a 29% share of Estra’s total sales. Those 41 new products were spread across all five Estra sales categories: environmental, organizational (packaging), industrial, housewares and entertainment (toys).

“Within these innovation sales — which included a portfolio of circular and sustainable solutions that we offer under the ‘Estraeco’ recycled-plastic lines – we saw a sales growth of 126% and a share of 9.6% of our total gross sales in 2023,” the company added.