Higher administrative expenses and sales costs led to a drop in the real estate company's numbers, while at the same time a substantial increase in the amount of debt was observed during fiscal year 2023.
Socovesa, a Chilean company in the construction sector, shared its financial results as of December 2023, which show losses of $25.3 billion (US$ 25.7 million) during the last year, erasing the $6.389 million (US$ 6 .4 million) 2022 earnings.
In this way, the post-pandemic crisis that hits the sector leaves the company in the red. Current debt even grew by 14.4% to $846,151 million (US$860 million), mainly due to a 23.4% year-on-year increase in its net financial debt, which reached $712,245 million (US$723 million). .
And although revenues grew by 14.5% to $267,191 million (US$ 271 million), they did not meet initial projections and even the operating result registered a contraction of 15.8% compared to 2022 to $11,837 million ( US$ 12 million), thanks to an 18% increase in cost of sales and a 10.6% increase in administrative expenses.
SOCOVESA CLOSED 2023 WITH LOSSES AND STRONG DEBT LEVEL
According to Pulso , last year the construction company obtained two loans for UF 1 million (about US$ 45 million), with BancoEstado and BCI on the one hand and with a fund related to LarrainVial on the other. This is in order to improve the company's liquidity.
Regarding the first, Socovesa claimed to breach a covenant (commitment that debtors make with creditors when receiving a loan) of total assets, but that it would have had the approval of the banks.
During 2023, the company's total equity fell 6.7% year-on-year to $364,796 million (US$ 370 million), “as a result of the fall in the “Accumulated profits (losses)” subaccount and the lower equity attributable to minority interests. (-12.3% and -13.4%), respectively,” the company explained according to Pulso .
Net promises grew to 5,792 million UF (-14.1%), thanks to the 15.4% drop in units sold and partially offset by a 1.6% increase in average prices. For its part, the withdrawal rate grew to 19.9%, about six percentage points more than last year.
“This increase is mainly attributed to more demanding credit conditions for clients and delays in the deed of certain projects, which resulted in a volume of withdrawals higher than historical,” they said from Socovesa.
Finally, Ebitda rose 17.7% to $28,382 million (US$ 28.8 million), according to Pulso.
