Financial results

The consolidated net income of Grupo Argos grew by 31%, closing in the accumulated of 2018 at COP 864,000 million

14 November 2018

Business | NOVEMBER 14, 2018

Medellin. The consolidated net income of Grupo Argos grew by 37% during the third quarter of 2018, excluding the effects of the divestment of the port business carried out in the same period of 2017, to reach COP 410,000 million. This result allows the company to achieve an accumulated profit of COP 864,000 million during the first nine months of the year, with a growth of 31%.

The consolidated income of Grupo Argos during this period reached COP 3.6 billion, which are in line with the adjusted income in the same quarter of the previous year. This data is supported by positive contributions from all strategic businesses – cement, concessions and energy – that were higher by COP 97,000 million compared to the same quarter of the previous year. Similarly, ebitda reached COP 1.02 billion to achieve an ebitda margin of 28%.

In this trimester, it should be noted that Grupo Argos was recognized as the most sustainable company in the world of the construction materials industry, by the Dow Jones Sustainability Index. A fact that adds to that achieved by Cementos Argos, which entered the same world ranking, and Celsia, which for the first time is part of this index for the MILA-Pacific region. In addition, Cementos Argos was ratified as one of the companies with the best reputation in the country, being ranked 5th in the Merco index.

“These results are supported by a common DNA of the entire Business Group with which we seek to generate the greatest shared value for all stakeholders, within a framework of deep responsibility, ethics and concern for sustainability,” says Jorge Mario Velásquez, President of Grupo Argos.

Separate results of Grupo Argos
Net income for the period was COP 191,000 million which, excluding the effect of disinvestment in the port business, represents an increase of 39% compared to 2017, and allows to reach an ebitda of COP 223,000 million, with an increase of 11% . These data allow to add a net accumulated profit for the first nine months of the year of COP 711,000 million, with a growth of 48%. Finally, we must highlight the control of expenses, where we have a significant decrease of 21% during the year, which allows us to reach an EBITDA margin of 67%.

On the other hand, it should be noted that Grupo Argos will begin reporting during this next quarter with an ESG approach (environmental, social and corporate governance) along with the transmission of financial results.


Highlights in the quarter

• Odinsa (through Opain) and Celsia, our Concessions and Energy subsidiaries, began the installation of 10,000 solar panels that will generate 12% of the energy in El Dorado, which will consolidate it as the airport with the largest photovoltaic installation in Latinamerica
• The Pacific 2 highway concession of Odinsa, reached 100% of the execution of functional unit 1 and has a global fulfillment of the work of 55%, with a 7% progress with respect to the schedule.
• Cementos Argos closed a financing operation, with a syndicated loan of US $ 600 million that, in addition to the favorable impact on debt cost reduction without affecting the indebtedness indicator, ratifies the market's confidence in the company.
• Celsia has made progress in optimizing its corporate structure, whose next step seeks to concentrate Colombia's operating assets in Epsa, a company destined to be the group's growth vehicle in the energy sector.

Business results
Concessions. Odinsa closed the trimester with significant growth both in the level of ebitda, with a figure of COP 162,000 million for a growth of 122%; as in net income, which goes from COP 2,000 million to COP 69,000 million. These figures are driven by the good performance of all concessions, especially airports, which closed with increasing traffic of 2%. It is important to note that a substantial part of these increases comes from the good dynamics that Mariscal Sucre Airport is presenting in Quito, with growth of more than 5% throughout the year, which confirms the good effects of the economic recovery that is living Ecuador. Regarding road traffic, the daily average was 74 thousand vehicles, growing 2.5% compared to the same quarter of the previous year.

Cement. Cement shipments grew by 2% thanks to the better performance of the regional Colombia, where we grew above the sector. At the same time, there were greater sales volumes of concrete, which grew by 3% in Colombia, thanks to greater shipments to civil works, demonstrating the leadership that Cementos Argos has taken in infrastructure projects in the country.

Energy. Highlights the announcement of the increase in shareholding in Begonia Power, with four wind projects that will add 330MW and contribute to the goal of increasingly clean energy matrix. In this trimester, Celsia had an 8.5% growth in consolidated income, which reached COP 852,000 million.

Real estate. In the third quarter, the urban development business recorded COP 31,016 million of income, including deeds for COP 4,157 million, valuations of Grupo Argos and deferred income. With respect to the real estate rental business, assets under management totaled COP 3.6 billion, which generated COP 81,000 million of gross operating income.