Tuesday, March 19, 2019

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Medellin-based multinational gold mining giant Mineros SA announced March 13 that its full-year 2018 net income rose 33% year-on-year to COP$156 billion (US$50 million), from COP$117 billion (US$37 million) in 2017.

Gross revenues and gold prices also rose a bit more than 1% year-on-year. But earnings before interest, taxes, depreciation and amortization (EBITDA) dipped 8.7%, to COP$260 billion (US$83 million), while EBITDA margin declined 9.7%, to 32.4%, according to the company.

The mainly alluvial-based gold mining operations in Colombia produced 97,921 ounces of gold-equivalent in 2018, down from 103,370 ounces in 2017, according to the company. On the other hand, Nicaragua gold production rose from 104,681 ounces in 2017 to 109,305 ounces in 2018.

As for fourth quarter (4Q) 2018, net income nearly tripled year-on-year, to COP$97 billion (US$31 million), thanks to a 15% hike in output, a favorable COP/U.S. dollar exchange rate and a 1.3% hike in world gold prices.

On a related front, the US$30 million acquisition of the Gualcamayo gold mining operation in Argentina last December netted Mineros an additional 2,791 ounces of gold in 2018, on top of its Nicaragua and Colombia production, the company added.

As for the 2019 outlook, Mineros projects that corporate-wide production should be in the range of 280,000 to 300,000 ounces of gold-equivalent. The company warned that it foresees “high volatility” in world gold prices, but nevertheless sees an “upward tendency.”

USAID, Mineros Continue Boosting Social Projects

On another front, the U.S. Agency for International Development (USAID), the Colombian national government and Mineros this month will launch yet another project aiming to help poorer rural families in El Bagre, Nechi and Zaragoza (all in Antioquia) through a new “Women of Gold” (Mujeres de Oro) program.

According to USAID, the “Mujeres de Oro” program will help rural women with projects that boost their economic, social, political and cultural well-being.

Mineros has a long history of sponsoring numerous projects that benefit poorer rural families in its areas of operations (see Medellin Herald 09/21/2016, “USAID Projects Boost Ecological Mining, Honey Incomes for Antioquia Families”).

In addition, Mineros years ago banned the use of toxic mercury -- in sharp contrast to reckless, criminal and informal gold-mining operators.

What’s more, Mineros routinely restores any lands disturbed by its mining through various reforestation and wildlife conservation projects – unlike the criminal mining groups tied to guerrillas and “paramilitary” organizations that devastate tropical forests and wreck riverside habitats (see Medellin Herald 03/21/2017, “Mineros SA Boosting Environmental, Social Projects”).


Medellin-based multinational banking giant Bancolombia announced March 12 that it’s now offering companies the opportunity to rent all-electric, zero-emissions delivery trucks in Colombia’s major cities – at the same annual cost as conventional trucks.

The goal is to put into circulation 1,000 electric trucks over the next three years, replacing diesel- and gasoline-powered trucks that today are causing much of the air pollution in Medellin, Bogota and other major cities, according to Bancolombia’s “Renting Colombia” subsidiary.

Major companies in Colombia including Nutresa, Bimbo, Bavaria, Colombina and Éxito are already testing these electric trucks, in an alliance with Medellin-based electric vehicle marketer Auteco, according to Bancolombia.

The scheme enables both smaller and larger companies to rent rather than buy the trucks, at a cost of operation “equal to that of [trucks] with traditional gasoline or diesel combustion, so in this way overcoming the [initial purchase price] limitation” of electric trucks, according to Bancolombia.

Besides eliminating toxic particulate matter (PM), nitrogen oxides (NOx) and carbon monoxide (CO) emissions, the electric trucks also slash net carbon dioxide (CO2) emissions -- since most of Colombia’s electric power comes from zero-emissions hydroelectric plants.

“Launching the first [nationwide] fleet of electric trucks in Colombia responds to our commitment to do business well and sustainable,” explained Bancolombia president Juan Carlos Mora.

The vehicles being offered are local delivery trucks rated between three-to-10 tons. These are the type of trucks that are the most numerous in Colombia’s biggest cities.

Diesel-powered delivery trucks are so numerous in big cities that they cause 50% more total pollution than dump trucks, 400% more than buses and 500% more than cars, according to Bancolombia.

Hence eliminating such high-polluting vehicles would help cities including Medellin and Bogota to slash pollution that today has forced city officials to enact severe “pico y placa” driving restrictions on vehicles (alternating-day bans tied to license-plate numbers), Bancolombia noted.

Switching just 1,000 delivery trucks to zero-emission electric power would slash CO2 emissions by 24,800 tons over three years, equivalent to the CO2-removal work of 1.5 million trees, the company noted.

What's more, the latest-generation electric trucks employ new technologies that deliver 40% more power than a conventional diesel- or gasolina-powered truck, according to Auteco.

While an electric truck will consume an annual average of 11,300 kiloWatt-hours of electricity at a total cost of COP$5 million (US$1,590), an equivalent diesel truck would consume 1,200 gallons of diesel fuel and 10 gallons of lube oils, costing a total of COP$12 million (US$3,815) annually, or more than twice as much as the electric truck, Bancolombia noted.

 


Medellin and its neighboring suburbs expanded “pico y placa” driving restrictions on all conventional combustion-engine cars, trucks, buses and motorcycles to nine hours daily for the week of March 2-9, because of worsening air pollution.

The only personal transport vehicles exempted from such driving restrictions are electric cars, along with Medellin’s “Metro” electrified railcar system, the expanding “Metrocable” electric-powered aerial tram system, an incipient electric-powered roadway tram system, the upcoming expansion of pure-electric “Metroplus” electric buses this year, and free zero-emissions bicycles at Metro rail stations.

What’s more, Medellin debuted its first all-electric taxicab on March 3 -- right on the heels of the debut of the “Line M” Villa Hermosa-Buenos Aires aerial tram system on February 28.

“Line M,” serving 350,000 people in northeastern districts, is the fifth aerial-tram system now operating in Medellin, with a sixth coming in a few more months.

All these moves are further signs of the upcoming conversion to zero-emissions transport modes for Medellin -- and likely for many other global cities facing similar air-pollution problems.

On the taxi front, the “Tax Belén” cab company debuted its first BYD all-electric cab this month – exempt from “pico y placa” driving restrictions.

Medellin hopes to see as many as 1,500 electric taxis over the next few years. But the relatively high cost of electric-car acquisition today -- compared to cheaper, conventional gasoline-powered taxis -- is the key sticking point (see Medellin Herald 09/27/2018).

“Tax Belén, one of the largest taxi companies in Medellín with more than 2,300 cabs, will be in charge of operating these public-service cars, while BYD will provide after-sales service and will contribute its experience as one of the world’s leading manufacturers of electric vehicles,” according to BYD.

“Fuel savings compared to other combustion vehicles will be approximately 70% and operating costs will be 50% lower than natural-gas or gasoline taxis,” according to BYD.

BYD claims that range-between-recharge should be around 400 kilometers, while fast-charge stations can recharge the vehicle in 90 minutes.

 


Medellin-based multinational electric power transmission operator and highways concessionaire ISA announced March 7 that its full-year 2018 net income rose 6% year-on-year, to COP$1.5 trillion (US$483 million).

Revenues also rose 4% year-on-year, to COP$7.2 trillion (US$2.3 billion), while earnings before interest, taxes, depreciation and amortization (EBITDA) grew 8.4% year-on-year, to COP$4.8 trillion (US$1.54 billion).

EBITDA margin came-in at a fat 66.5%, or 73% if excluding construction activities during 2018. Return on equity likewise came-in at a favorable 12.8%.

ISA credits the profit gains to “entry into operation of new projects in Peru, Colombia and Chile; the update for inflation of the [power] tariff cycle, the recovery of taxes and [tax deductions from] fiscal losses in Brazil, and lower taxes for the application of the Financing Law in Colombia,” according to the company.

As for fourth quarter (4Q) 2018 profits, ISA netted COP$581 billion (US$187 million), up 116% over 4Q 2017, according to the company.

In ISA’s electric power transportation unit, 4Q 2018 revenues rose 17.8%, to COP$187 billion (US$60 million).

“The variation is explained in Colombia, by the remuneration of the new projects such as the San Antonio Substation (230 kiloVolts) and associated transmission lines; the Ituango-Medellin Substation (Katíos) and the Caribbean Coast reinforcement (500 kiloVots); the Caracolí Substation and associated lines, the charge for connection to the network of the El Bosque transformer project, the extensions of the Nueva Barranquilla substation and the Ternera substation,” according to ISA.

Entry-into-operation of several new transmission lines in Chile along with higher power tariffs in Brazil also boosted revenues, according to the company.

Also in Brasil, ISA’s “Companhia de Transmissão de Energia Elétrica Paulista” (CTEEP) subsidiary completed its first emission of “green bonds,” which will finance “energy infrastructure projects with environmental benefits,” according to ISA

ISA’s highway concessions revenues in Chile dipped slightly in 4Q 2018 because of higher maintenance costs and an adjustment in accounts receivable, according to the company.

During 2018, ISA and its subsidiaries invested a total of COP$2.4 trillion (US$772 million) in power transmission, highway concessions, telecommunications infrastructure and technological developments.

What’s more, for the period 2019 through 2023, the company now projects estimated capex investments of COP$10.575 trillion (US$3.46 billion).

ISA’s corporate-wide net assets totaled COP$44.9 trillion (US$14.4 billion), up 3.6% year-on-year. The increase in assets incorporated “entry into operation of new projects in the electric energy transport business in Colombia, Chile and Peru,” as well as the incorporation of assets, profits and revenues from its “TAESA” and “IENNE” power businesses in Brazil, according to the company.


Medellin-based telecom/internet/cable-TV giant TigoUne announced March 5 that its full-year 2018 earnings before interest, taxes, depreciation and amortization (EBITDA) rose 6% year-on-year, to COP$1.43 trillion (US$460 million), on revenues of COP$5 trillion (US$1.6 billion), described as “similar to 2017” revenues.

TigoUne – whose ownership is split 50-50 between Luxembourg-based telecom multinational Millicom and Medellin utility Grupo EPM -- didn’t disclose its net income for 2018. But it did reveal in a separate filing with Colombia’s Superfinanciera oversight agency that it plans to retain all 2018 profits rather than distribute any earnings to shareholders.

TigoUne also separately revealed that it plans to make a COP$1 trillion (US$322 million) bond offering in the Colombian stock market, but didn’t offer further details.

Other 2018 operating highlights cited by TigoUne were a total of COP$941 billion (US$303 million) invested in “digital highways that connected more Colombians” as well as investments that “revolutionized the mobile [cell-phone] market in Colombia by being the first operator to have ‘4.5-G’ zones and ‘value proposals’ so that users are always connected.”

“We consolidated [our offering] as the leading telecommunications company in innovation as the first [in Colombia] to perform testing of ‘5G’ networks and having the first ‘4.5G’ zones in the main cities of the country,” boasted TigoUne president Marcelo Cataldo.

The strong revenues “allowed the company to make a debt repayment of COP$183 billion [US$59 million], reducing our obligations and strengthening our financial situation” as well enabling "an ambitious investment plan,” according to TigoUne.

“In the last four years, the company has invested close to COP$4 trillion (US$1.3 billion) to promote the development of the country.

“Investments in the fixed [telecom] network were reflected in the commercial launch in seven cities: Pasto, Tuluá, Tunja, Sogamoso, Funza, Mosquera and Fusagasugá. Likewise, we increased the network coverage in cities where we already have presence,” according to the company.

“In addition, TigoUne obtained [bond rating] certifications from the three most important risk rating agencies. Fitch Ratings confirmed the rating of the telecommunications company UNE EPM Telecomunicaciones S.A. as a stable perspective (AAA) at the local level, the highest rating a company can have.

“In turn, the credit rating agency highlighted the strength of the company and ratified its international rating "BBB" for the third consecutive year.

“For its part, the technical committee of BRC Standard & Poor’s also confirmed the highest local qualification of payment capacity 'AAA' to UNE EPM Telecomunicaciones S.A. and its subsidiary Colombia Móvil S.A. E.S.P., as well as to the three issues of outstanding bonds that it currently has in the market. To complete, in February 2019, the Moody's firm awarded TigoUne the Baa3 international rating,” the company added.


Medellin-based textile giant Coltejer revealed in a March 5 filing with Colombia’s Superfinanciera oversight agency that it suffered a COP$29 billion (US$9.3 million) net loss for full-year 2018, 17% worse than the COP$24.7 billion (US$7.9 million) net loss in 2017.

Sales also dropped 15% year-on-year, to COP$144 billion (US$46 million), compared to COP$169 billion (US$54 million) in 2017.

Operating plus non-operating income combined dipped 17% year-on-year, to COP$176 billion (US$56.7 million), according to the company.

The net loss for 2018 is “basically owed to financing costs and reduced sales,” according to the company.

Meanwhile, fellow Medellin-based textile giant Fabricato revealed March 5 in a separate, one-sentence filing with Superfinanciera that its full-year 2018 net loss hit COP$31.75 billion (US$10.2 million), worse than the COP$6.4 billion (US$2.2 million) net loss in 2017. That filing failed to offer any other details.

Colombia’s textile manufacturers have been suffering severe losses in recent years in part because of massive below-cost contraband textile imports, mainly from Asia.

Textile Contraband ‘Czar’ Arrested

On a related front, Colombia’s Attorney General announced March 5 the arrest of Salim Ricardo Yamhure Daccaret of Imetex Ltda. and his alleged associate René Romero Sánchez on charges of illegal textile imports and money-laundering, totaling at least COP$177 billion (US$57 million) in avoided taxes and duties.

According to the Attorney General, Yamhure Daccaret allegedly evaded taxes and duties on imports of more than 19,000 tons of fabrics from Panama, Hong Kong and China, followed by the fictitious export of 12,000 tons of textiles.

“The raw material entered under the appearance of legality via Colombia by the ports of Cartagena, Barranquilla and Buenaventura,” according to the Attorney General.

“But this material wasn’t processed into products that were reported as exported. On the contrary, it was found that the merchandise remained in the country and, apparently, was sold at very low prices,” according to the Attorney General.

“Imetex Ltda. reported operations generating income totaling US$57 million, supposedly covered with tariff exemptions and [exclusions from] value-added tax. So, it is estimated that the fraudulent scheme generated losses to the state of at least US$57 million,” according to the Attorney General.

“In 2015, Imetex Ltda. was fined for COP$47 billion [US$15 million] for breach of tax commitments. Yamhure Daccaret in an attempt to divert the attention of the authorities, changed the name of the company registered it as Prointexco,” according to the Attorney General.


Medellin-based multinational electric power giant EPM on March 1 unveiled a long-awaited consultant’s report on the causes behind the April 2018 tunnel collapse that has resulted in a three-year delay in power output from the 2.4-gigawatt “Hidroituango” hydroelectric plant in Antioquia.

“The results determine that the hypothesis of greater probability is that the obstruction of the auxiliary diversion tunnel (GAD) was due to the ‘progressive erosion of areas of weakness of the rock,’ located on the floor of the tunnel,” according to EPM, quoting the report from Norwegian-Chilean engineering consulting firm Skava Consulting.

“The zones of weakness of the rock were not treated properly, due to a deficiency in the design during the advisory stage,” which was undertaken by Ituango Generation Consortium (Integral - Solingral), according to EPM’s summary of the study.

A full copy of the study is available here: https://www.epm.com.co/site/estudio-causa-raiz-hidroituango .

“The study, which employed scientific methods, was only aimed at analyzing the root cause of a specific event: the plugging in the auxiliary diversion tunnel (GAD) structure that had been in operation since September 2017,” according to EPM.

For the Skava report, seven German, Swiss and Chilean engineers with more than 25 years experience undertook a geotechnical engineering study tapping their expertise in tunnels and dams, in rock engineering, in geology and hydrology, and in civil engineering for mining projects, metering systems and hydroelectric power plants, according to EPM.

“The auxiliary GAD diversion tunnel, which was supposed to operate temporarily, was planned from the end of 2013 -- when the original diversion tunnels were still under construction -- as an alternative that would avoid an additional delay of one year or more in the construction of the main works,” according to EPM’s summary.

When EPM took over the project via a build-own-operate-maintain-transfer (BOOMT) contract in March 2011, “the project schedule already had considerable delays, which could affect [Colombia’s] energy supply,” the company noted.

“The results of this study do not impact the recovery process of the project, in which we continue to work tirelessly. The Ituango hydroelectric project advances in its recovery and in the reduction of risks for people living below the main works.

“If everything progresses as planned, it will contribute electric power [to the national grid] from the year 2021,” EPM concluded.

Blame Games Begin

Meanwhile, a host of Colombia regulatory agencies have already begun piling-on accusations against former EPM and Hidroituango officials over the tunnel collapse and the inevitable economic impacts on consumers and the city of Medellin, which gets 25% of its annual revenues from EPM.

The three-year delay in lost power sales, plus clean-up and reconstruction costs, likely will add at least US$1 billion to the original US$4-billion to US$5-billion cost estimate for the project.

Colombia Attorney General Nestor Humberto Martinez announced February 27 that he’s planning to bring charges against former Hidroituango SA manager Luis Guillermo Gómez Atehortua, and former EPM-Ituango manager Luis Javier Vélez Duque for alleged failure to meet legal contract requirements.

In addition, Martinez announced that he’s also considering bringing charges against six other former officials connected to the project, including former EPM E.S.P. manager Juan Esteban Calle Restrepo and former Hidroituango project board members Ana Cristina Moreno Palacios, Hugo Alejandro Mora Tamayo, Juan Felipe Gaviria Gutiérrez, Jesus Arturo Aristizábal, and Maximiliano Valderrama Espinosa.

The Attorney General’s investigations focus on the project contracting process and environmental damage arising from construction and the subsequent tunnel collapse in 2018.

The Attorney General stated that preliminary investigations have discovered “improper management of solid waste” that “had a negative impact on natural resources with effects such as the quality, quantity and fluidity of the water; the erosion of the soil and the eventual instability of the mountain” adjacent to the dam.

“During the execution of the project there were contingencies that would have been rejected by those in charge of the project, who would not have had the capacity to attend them because they were prepared for a situation of lesser dimension,” according to the Attorney General.

The Attorney General’s investigation has “identified alleged inconsistencies from the beginning of the project as alleged anomalies in the pre-contractual phase and alleged deficiencies in the execution of the contracts, the studies of design and execution of the work, as well as in the additions authorized to the signing contractor,” according to Martinez.

In response to the allegations, EPM issued a statement saying that it has “acted transparently and within the framework of what the law allows. The company reiterates its permanent disposition to collaborate with the Attorney General’s Office in its investigative process, and with all the control entities that are [regulating] the Hidroituango project, as it has done so far.”

CGR Probe

A parallel investigation now underway by Colombia's Controller General of the Republic (CGR) finds that to date, the cost of the Hidroituango project is close to COP$11.5 trillion [US$3.7 billion], "of which 38.23% (more than COP$4.3 trillion/US$1.4 billion) correspond to EPM's own resources. The remaining 61.77% comes from debt with multilateral banks, equivalent to almost COP$7.1 billion [US$2.3 billion].

"The CGR will estimate the additional costs that will be generated in the future due to deficiencies and adverse situations that have arisen during the planning and development of the project," according to the agency.

EPM Insurance Policy

Subsequent to the CGR probe announcement, EPM issued a statement March 1 noting that the HidroItuango project "has an all-risk construction and assembly policy with an insured value of US$2.5 billion for material damages and US$628 million to cover the loss of profit [from lost power sales] of the first year of operation of each of the [turbine] units." However, it's still unknown whether or to what extent insurors will cover the costs of physical repairs as well as economic losses from three years' of lost power sales.


Medellin-based insurance and financial services giant Grupo Sura announced March 1 that full-year 2018 net income (excluding divestments) rose 7.6% year-on-year to COP$1.4 trillion (US$475.7 million) while fourth-quarter (4Q) 2018 profits rose 28% year-on-year, hitting US$101.8 million.

The “Suramericana” insurance division saw 2018 profits rise 3.6% year-on-year, to COP$524.8 billion (US$170 million), while the “Sura Asset Management” division (pensions, savings and investment) saw revenues grow 6.1% year-on-year in Colombia’s “mandatory” pension-contributions sector and 10.7% in the “voluntary” pensions sector.

“In comparable [year-on-year] terms, the revenues of Suramericana grew in all its segments: general (13.3%), life (15.8%) and health (21.1%),” according to the company.

Revenues in 2018 were trimmed by the divestment of the life-insurance annuity operation in Chile and a decision against participating in the bidding for another pension-insurance scheme in Colombia.

“The operating growth of the main lines of business of Suramericana and Sura Asset Management in 2018, as well as the higher efficiencies, allowed us to offset part of the impact that the high volatility of the financial markets had on the returns of our own investments throughout the year,” added David Bojanini, President of Grupo Sura.

“Under these conditions, the total consolidated revenues of Grupo Sura were COP$19.2 trillion (US$6.5 billion) and decreased 0.8%, during a year marked by the high volatility of the capital markets, which affected income from portfolio returns of pension funds and insurers.

“In addition, the strategic decisions mentioned in the insurance business and the devaluation of local currencies influenced results. Total expenses decreased 0.4%, to COP$17.6 trillion (US$5.94 billion), due to lower loss ratios and reserve adjustments, as well as greater control of expenses.

“As a result, earnings before accounting effects increased 7.6% to COP$1.41 trillion (US$475.7 million) and the net profit was COP$1.34 trillion (US$454.4 million), 7.7% less than in 2017, which reflects the lower income from yields and the accounting effects associated with the mentioned divestments, which do not impact the cash flow,” he added.

In the Suramericana division, “the good operating result contrasts with the 7.3% decrease in investment income and lower non-operating income. If the latter are excluded, the growth in net income is 27.2%. In addition, the retained loss ratio went from 54.8% to 51.5%,” according to Sura.

“In the last year we made important progress in consolidating 'Seguros Sura' in the region, highlighting that we met our income and profit budgets,” added Suramericana president Gonzalo Pérez.

“Also in 2018 we evolved our value offer, for example, with the introduction of individual and patrimonial life-insurance solutions in countries other than Colombia,” he added.

Meanwhile, Sura Asset Management grew its commission income by 6.6%, which totaled COP$2.1 trillion (US706.6 million). The assets under management (AUM) increased 2.8%, for a total value of COP$418.6 trillion (US$128.8 billion), covering 19.6 million customers, up 4.1% year-on-year.

The normalized operating profit of the Sura Asset Management subsidiary grew 0.4%, although net profit actually decreased 39.7% year-on-year because of an accounting loss due to the divestment of life annuities in Chile and lower income from reserves, the company added.


Medellin-based multinational retail foods-and-housewares giant Exito reported March 1 that its full-year 2018 net income jumped 28.3% year-on-year, hitting COP$279 billion (US$90 million), while revenues rose 8.9% year-on-year, to COP$55 trillion (US$17.8 billion).

Net sales in Exito’s four South American markets grew by 10.7% in Brazil, 0.2% in Colombia, 5% in Uruguay and 27.9% in Argentina, according to the company.

Consolidated recurring earnings before interest, taxes, depreciation and amortization (EBITDA) margin closed 2018 at 5.7%, 40 basis points above 2017, according to Exito.

“In Colombia, innovative [store formats] such as ‘Éxito Wow’ and ‘Carulla FreshMarket,’ which grew in double digits, and e-commerce channels, which increased their sales by 33.4%, contributed positively to the increase in total sales,” according to Exito.

In Colombia, Exito reported COP$11.2 trillion (US$3.6 billion) in revenues (up 1.1% year-on-year) and a 5.8% EBITDA margin (up from 3% in 2017).

“In addition, e-commerce channels had a growth of 33.4% in 2018 and represented 3.4% of total sales in [Colombia]. The cash-and-carry format through the ‘Surtimayorista' brand totaled 18 stores with sales that exceeded US$100 million,” the company added.

“These positive results are mainly due to ‘exito.com’ and ‘carulla.com,’ which added more than 60 million visits in the year, 20% more than in 2017, and thanks to the [Exito-organized] marketplace that exceeded 1,000 sellers and 60,000 products offered,” according to Exito.

The 18 stores of the “Surtimayorista” cash-and-carry format “seduces both the professional buyer (shops, hotels, restaurants, etcetera) and the popular consumer,” according to Exito.

As for commercial real-estate ventures in Colombia, “the company has maximized the value of its real estate spaces with shopping centers under the ‘Viva’ brand that have been consolidating year after year [as] 2018 closed with a portfolio of 34 shopping centers and galleries with an occupancy rate of 96%,” according to Exito.

“In 2018, Viva Malls put into operation two shopping centers: Viva Envigado [adjacent to Medellin], which marked the arrival of a new generation of shopping centers in Colombia, with experiential [store formats] in more than 138,000 square meters and which in its first three months of operation received close to 9 million visitors. For its part, Viva Tunja, with 35 thousand square meters, received between October and December more than 240,000 visitors,” the company added.

In Brazil, Exito’s sales growth was driven by the “Assaí” chain, the “Multivarejo” retailing scheme and digital transformation initiatives, according to the company. Revenues in Brazil rose to the equivalent of COP$40 trillion (US$12.9 billion) “thanks to the growth in sales of 24.2% of Assaí in local currency and the good commercial performance of the ‘Extra’ and ‘Pão de Açúcar’ brands,” according to Exito.

In Uruguay, sales grew 5% year-on-year and recurring EBITDA margin hit a favorable 7.7%, according to the company.

As for Argentina operations, which combine both retail and real-estate businesses, sales grew 27.9%, while recurring EBITDA margin hit 4.1%.

At year-end 2018, Exito boasted 1,533 large-format stores: 554 in Colombia, 863 in Brazil, 89 in Uruguay and 27 in Argentina. The company has more than 2.8 million square meters of retail-sales area, and more than 140,000 employees.


Colombia’s national economics statistics agency (DANE, Departamento Administrativo Nacional de Estadistica) on February 28 revealed that its latest studies indicate national gross domestic product (“PIB” in Spanish initials) hit 2.7% for full-year 2018, up from a feeble 1.4% in 2017.

Meanwhile, Fedesarollo – Colombia’s leading economic think-tank – now foresees a continuing rebound in the national economy, with GDP likely hitting about 3.3% this year and gradually increasing to around 3.8% GDP by 2022.

For 2018, relatively strong growth (4.1%) came in public administration and defense; compulsory social security plans; education; health care activities, and social services, according to DANE.

Wholesale and retail sectors, repair of motor vehicles and motorcycles, transportation and storage, lodging and food service sectors meanwhile grew by 3.1%, according to DANE.

Professional, scientific and technical activities, as well as administrative and support services activities grew by 5.0%, according to DANE.

Mining and quarrying, however, declined by 0.8% year-on-year, including a 12% drop in extraction of metalliferous minerals and a 6.7% drop in extraction of coal and lignite.

Extraction of crude oil and natural gas and support activities grew by 1.4%

In manufacturing, this sector grew by 2.0%, mainly thanks to a 3.7% hike in manufacture of furniture and mattresses, along with a 3.2% hike in production of food products, beverages and tobacco products.

The study also found a 2.2% hike in sectors including manufacture of basic metallurgical products; manufacture of fabricated metal products; manufacture of electrical apparatus and equipment; manufacture of computer, electronic and optical products; manufacture of machinery and equipment; manufacture of motor vehicles, trailers and semi-trailers; manufacture of other types of transport equipment; and installation, maintenance and specialized repair of machinery and equipment.

Manufacture of textile products; clothing; tanning and retanning of hides; footwear manufacturing; manufacture of travel articles, suitcases, handbags and similar articles; and manufacture of saddlery and saddlery articles decreased by 0.2% year-on-year.

In construction, 2018 growth came-in at a relatively weak 0.3% year-on-year, with residential and non-residential building growth at 1.0%. Meanwhile, “specialized activities for the construction of buildings and civil engineering works (rental of machinery and construction equipment with operators) decreased by 0.9%,” according to DANE.

Construction of roads and railways, public service projects and other civil engineering works also decreased by 0.6%.

As for the information and communications sector, this grew by 3.1% year-on-year, matched by the same 3.1% growth in the financial and insurance sector, according to DANE.

As for real estate activities, this sector grew 2.0% year-on-year, according to DANE.


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Medellin Herald is a locally produced, English-language news and advisory service uniquely focused upon a more-mature audience of visitors, investors, conference and trade-show attendees, property buyers, expats, retirees, volunteers and nature lovers.

U.S. native Roberto Peckham, who founded Medellin Herald in 2015, has been residing in metro Medellin since 2005 and has traveled regularly and extensively throughout Colombia since 1981.

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  • Medellin, Antioquia, Colombia

Medellín Photo Galery

Medellin, contrasting colors and styles by Gabriel Buitrago
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