As the world economic recovery goes on, Colombia seems to be on the right path. According to DANE, as of November 16, the construction sector kept showing recovery signals in 2021. During the third quarter of the year, the construction sector rose 1.3% in comparison to the same period of 2020; and although some projects experienced a reduction in this quarter mainly due to the increase in commodities and production prices, the firm continued on the 12-month growth pattern, largely driven by the sub-segments of bridges, elevated highways, and tunnels.
As in the previous quarterly report, Construcciones El Condor continued presenting some problems in its financial results, mostly driven by the closure and beginning of projects.
Revenues from ordinary activities totaled 372 billion, a decrease of 34% compared to the same period in 2020. These results are associated in general with the completion period of projects that were executed during previous years with significant billings, the suspension of some projects that are awaiting socio-environmental decisions, and property decisions about the displacement at the beginning of the execution of public works contracts with Invias due to environmental and design definitions.
Another thing was the National Strike that began at the end of April which affected the pace of works due to concern for the physical safety of our employees at the worksite and the impact of the La Niña phenomenon on the projects, mainly in Magdalena 2.
Operating costs as of September 2021 were COP 379.326 million, which generated a gross loss of 6.628 million. The loss is explained by the increase in the prices of some raw materials and inputs used in the construction, which in turn cannot be charged to customers due to the EPC contracts and the lower profitability margins generated in the construction of new buildings. Administrative expenses represented 5.25% of total revenues.
The operating loss amounted to COP 4.748 million, equivalent to -1.27% of revenues. In the same way, EBITDA amounted to COP 24,216 million, equivalent to an EBITDA margin of 6.50%, which represents a decrease in comparison to the EBITDA margin of 12.06% in 2020. As previously mentioned, the impact on the EBITDA margin is due to the transition that the Company is going through in 2021 (the end of the 4G EPC contracts, the start of the new construction contracts, the increase in the construction contracts, and the increase in raw material and input prices).
Net income was $16,014 million, equivalent to 4.30% of revenues, which is stable compared to the same period of 2020. This profit was generated specifically due to the results of the Ruta al Mar Concession incorporated by the equity method.
Regarding its balance sheet, the firm presented the following results:
As of September 2021, total assets amounted to COP 2.34 trillion, of which its investment portfolio at book value is COP 1.07 trillion. The ratio of current to non-current assets is 36% and 64%, respectively. On the other hand, total liabilities closed at COP 1.26 trillion of which 53% are current and 47% are non-current.
Regarding the firm’s debt, the Company's indebtedness increased with respect to the end of December 2020 by 11%, due to the working capital needs of new projects.
And finally, the firm’s backlog -understood as the balance of contracted works to be executed- stood at COP 2,798,794 million. This calculation takes into account $109.632 million of the invoicing executed during the quarter.
As can be seen, the firm’s status was very similar to the previous quarter. It is expected that this process ends soon and the company can return to its optimum levels.
