Tecnoglass Cuts Profit Outlook as Costs Squeeze Margins
Second-quarter revenue reached a record $295.3 million as U.S. demand strengthened.
Architectural-glass maker Tecnoglass Inc. (TGLS) cut its full-year profit outlook after higher aluminum, currency and tariff costs outweighed accelerating sales growth.
Revenue rose 15.6% from a year earlier, accelerating from 12.0% growth in the first quarter and 2.4% in the fourth quarter of 2024. Net income fell 44.3% to $24.6 million, or $0.55 a diluted share, while adjusted earnings declined to $0.54 a share from $1.03.
Growth broadened across the business. Multi-family and commercial revenue increased 15.7% to a record $168.8 million, while single-family residential revenue rose 15.4% to $126.5 million after declining in the fourth quarter and remaining relatively stable in the first. The residential rebound was due to market-share gains, geographic expansion and orders placed before May price increases.
U.S. revenue climbed 18.1% to $286.2 million and accounted for nearly all sales, offsetting declines in Colombia and other international markets. The backlog reached a record $1.38 billion, though its 15.6% growth slowed from 19.1% in the first quarter.
The stronger volume did not carry through to profit. Gross margin narrowed to 37.3% from 44.7% a year earlier, and adjusted EBITDA fell 35.2% to $51.7 million as its margin contracted to 17.5%. A roughly 77% increase in the all-in U.S. aluminum price, a roughly 14% appreciation of the Colombian peso and higher labor costs contributed to the decline.
Selling, general and administrative expenses rose 38.3% to $73.5 million, driven primarily by about $17.0 million in Section 232 tariff expense, along with higher transportation and commission costs. The company reduced headcount 10% by June 30 through automation and efficiency measures and recorded about $0.7 million in related severance costs.
Tecnoglass now expects full-year adjusted EBITDA of $220 million to $230 million, down from its tariff-adjusted April range of $225 million to $245 million. It narrowed revenue guidance to $1.08 billion to $1.12 billion and pricing implemented in May is expected to begin supporting revenue in the third quarter. The lower profit outlook is due to sustained aluminum costs and a stronger-than-assumed Colombian peso, while demand remained intact.
First-half operating cash flow fell to $11.1 million from $64.8 million as tax and tariff payments and strategic aluminum purchases absorbed cash. Liquidity declined to about $360 million, and second-quarter capital returns consisted of $6.7 million in dividends after the company repurchased $16.5 million of shares in the first quarter. Tecnoglass completed its U.S. redomiciliation in July and identified land for a proposed U.S. facility, though it had yet to commit to construction.