Barranquilla-based glass and window maker Tecnoglass brought in $68.5 million USD in revenue in the first quarter of 2017, a record high for the first three months of any year, according to a recent filing by the company.
Tecnoglass’ profit dropped compared to last year, however, with gross profits coming in at $22.3 million USD compared to $24.7 million USD in the first quarter of 2016. The plunge in net income was even more pronounced. The first quarter of 2016 accounted for $14 million USD while the net income from January through March in 2017 was just $1 million USD.
The company said that much of the drop was related its $35 million USD acquisition of Miami-based glazing company Giovanni Monti and Partners Consulting and Glazing Contractors, Inc. (GM&P). “The gross margin difference was primarily due to a higher mix of engineering and installation revenues attributable to GM&P project activity, additional D&A resulting from the robust growth capex program finalized in 2016, and higher direct labor costs,” said Tecnoglass in a statement.
This quarter, the company also moved forward a 12-megawatt solar energy project at its Barranquilla plant and opened two new branches. One branch is aiming to help the company enter new markets in the U.S. West Coast and the other is a sales office in Italy charged with pushing new business in Europe and the Middle East.
The overall picture increased operating expenses, which hit $15.4 million USD in 2017 compared to $12.9 million USD in the first quarter of 2016. In terms of operating expenses as a percent of total revenue, this represents an increase from 20.3% in the first quarter of 2016 to 23.4% this quarter.
Despite the lower income, Christian Daes, chief operating officer of Tecnoglass, believes the company has progress in needed areas and set itself up to continue seeing high margins for the foreseeable future through “high-return projects focused on innovation, productivity, and capacity expansion.”
The solar project in particular is something he believes will yield benefits. “Our recently initiated multi-year investment to convert a portion of our energy needs to solar should reduce our natural gas needs by over 20% over the next several years as well as provide tax incentives for the years to come,” said Christian Daes.
Record-high first-quarter revenue means that Tecnoglass is continuing to predict annual revenue to land in the range of $360 million USD to $390 million USD in 2017. This would be a significant increase over the $305 million USD in revenues for 2016 and lead to earnings (adjusted EBITDA) that come in between $82 million USD to $90 million USD, stated the firm.
“Overall, we are encouraged by the very sturdy foundation we continue to build for Tecnoglass, which supports our unchanged outlook for 2017,” said José Manuel Daes, chief executive officer of Tecnoglass.
With higher first-quarter revenue — up 3% over 2016 — Tecnoglass is also planning to increase its dividend. The company paid out a dividend of $0.125 per share on April 28 and will do the same on July 28. But for the third quarter, it will raise the dividend to $0.14 per share in a payment on September 29.
Photo credit: Tecnoglass