Friday, August 18, 2017

Written by August 16 2017 0

Two of Antioquia's leading producers of Hass avocados on August 15 hailed a new decision by the U.S. government to allow imports of Colombian avocados into the U.S. market starting September 15.

“Unlike Peru and Chile, Colombia enjoys permanent production of Hass avocados during 12 months of the year,” said Ricardo Uribe Lalinde, general manager of Medellin-based Cartama, a group of leading Colombian companies producing avocados and cut flowers for major export markets.

“At a time when the North American market demand for Hass avocados remains unsatisfied, here in our country we can supply it,” he added.

Having first launched Hass avocado production in Amaga, Antioquia in 2007, Cartama later expanded production into Caldas and Risaralda, and then opened a packing and shipping plant in Pereira for the export market in 2016.

Also during 2016, British supermarket chain Marks and Spencer awarded Cartama with its “Growers Best Quality” certification for Colombian Hass avocados.

The new U.S. approval would at least double Colombian exports of Hass avocados, which already topped US$25 million through the first half of 2017, according to Colombia’s Ministry of Commerce, Industry and Tourism.

Meanwhile, Pedro Aguilar, president of Westsole Fruit Colombia -- which has major warehouse, packing and shipping facilities on the Medellin-Bogota highway in Antioquia -- added that Colombian avocado producer insistence upon meeting strict sanitary standards has been crucial to winning more export markets.

Of the US$35 million in avocado exports from Colombia in 2016,  52.7% of the total came from Antioquia; 22.7% from Risaralda; 7.4% from Bogotá;  5.8% from Caldas; 4.6% from Quindío; 4.5% from Cundinamarca and the remaining 1.8% from Valle del Cauca, according to the Ministry of Commerce.

Meanwhile, according to an August 15 press release from Expo Agrofuturo – which is hosting its ninth annual trade show at Medellin’s Plaza Mayor convention center September 13-15 – Colombia is already the third-largest global avocado producer, and the new U.S. market opening is expected to prompt "rapid growth over the medium term."

Avocado production and export will be among the featured topics at Expo Agrofuturo 2017. The trade show will include 420 national and international exhibitors, some 20,000 registered attendees and an expectation of business deals topping US$300 million, according to Expo Agrofuturo.

Agricultural experts from Spain, Germany, Holland and Colombia will be among the featured speakers at Expo Agrofuturo 2017, including Nicolas Cock, co-founder and president of Medellin-based Ecoflora Agro.

Written by August 16 2017 0

Medellin-based construction giant Construcciones El Condor announced August 11 that its second-quarter (2Q) 2017 net income rose nine-fold year-on-year, to COP$159 billion (US$53.6 million), while revenues jumped 55%, to COP$455 billion (US$153 million).

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose five-fold, to COP$226 billion (US$76 million), according to the company, which focuses mainly upon highway construction.

Operating revenues for first-half 2017 were COP$275 billion (US$92.7 million), up 62% over the same period last year “mainly due to considerable construction revenues in [Colombian highway] projects which are in the construction stage as is the case with Pacifico 2, Pacifico 3, Transversal de las Americas and Ruta al Mar among others,” according to the company.

“The company expects to continue achieving its revenue budgets, which could generate an additional increase for the second semester of 2017,” the company added.

The big jump in net income “is explained principally by the income from sale of investments (non-recurring event) and the increase in profit from construction services provided, which the company expects to maintain during the second semester. Net margin was 57.6%,” according to the company.

“The infrastructure sector continues to be a key economic driver and this quarter´s figures reflect projects that are maturing and increasing their rate of execution. The projects that supported the construction revenues in the second quarter of 2017 were Transversal de las Americas, Caucheras, Pacifico 3, Pacifico 2 and Cesar Guajira,” the company added.

As of June 2017, the company administers an investment portfolio with infrastructure projects that have a book value of approximately COP$668 billion (US$225 million).

Debt ratio was 26% (calculated over total assets) and net equity as of June 31, 2017, was COP$905 billion (US$305 million), up 16.9% year-on-year.

Meanwhile, order backlog -- the balance of works hired and works to be implemented -- was COP$2.782 trillion (US$938 million), the company added.

Written by August 15 2017 0

Medellin-based multinational insurance, pensions and investment giant Grupo Sura announced August 15 that its first-half (1H) 2017 net income dipped 34.6% year-on-year mainly because of Colombian peso devaluation against the U.S. dollar.

However, revenues rose 22.4% year-on-year to COP$9.9 trillion (US$3.3 billion), while investment income jumped 61.5%, to COP$1.1 trillion (US$372 million), according to the company.

“These results reflect the dynamic operation of our affiliates Sura Asset Management – specialized in pensions, savings and investments – and Suramericana, in the sector of insurance and risk-management,” according to Sura.

Its affiliation with associates Bancolombia and pension specialist Proteccion delivered US$169 million in revenues, according to the company.

Expenses rose 29.7% year-on-year, to US$3 billion, mainly due to the acquisition of insuror RSA.

Leaving aside the impact of peso devaluation and certain non-recurring charge provisions, net income would have grown 11.4% year-on-year, according to the company.

Assets grew 4.9% year-on-year, to COP$71.2 trillion (US$23.3 billion), while shareholder equity grew 0.9% year-on-year, to US$7.5 billion, according to the company.

The Suramericana insurance subsidiary saw premium income rise 47.2%, to US$1.8 billion, sparked by the acquisition of RSA last year.

Meanwhile, the Sura Asset Management subsidiary saw its assets under management grow 14.4%, to US$126 billion.

Operating income from its pension administration group rose 11.7%, to US$383 million, with the voluntary pension segment growing 28% year-on-year, according to the company.

Written by August 15 2017 0

Medellin-based multinational supermarket giant Exito reported August 14 that its first-half (1H) 2017 net profits rebounded to COP$61.6 billion (US$20.7 million), up from a COP$47.7 billion (US$16 million) loss in 1H 2016.

Revenues also rose 12.4% year-on-year, to COP$26.8 trillion (US$9 billion), while recurring earnings before interest, taxes, depreciation and amortization (EBITDA) rose 40% year-on-year, to COP$1.7 trillion (US$573 million), according to the company.

While Colombia’s relatively weak economy this year pinched over-all results, a rebounding Brazilian economy boosted Exito’s corporate-wide earnings, according to the company.

In Brazil, Exito’s “Grupo Pão de Açúcar” (GPA) chain saw revenues rise 8.1% year-on-year (measured in local currency) and the “Assai” cash-and-carry supermarket chain saw a 28% jump in operational earnings.

In Uruguay, sales rose 7.4% year-on-year (measured in local currency) and EBITDA margin hit 8%, according to the company.

In Argentina, the company’s commercial real-estate business expanded to 161,000 square meters of rentable space, putting Exito in the number-one position (outside of Buenos Aires) in offering commercial gallery space.

In Colombia, Éxito’s “Surtimayorista” cash-and-carry chain continues to grow, with eight stores now open and showing promising results.

Surtimayorista is “one of the strategies of the [Éxito] group to confront the challenging macroeconomic situation” in Colombia, according to the company.

The private-label clothing business also is showing exemplary results, as 97% of all Éxito-branded clothing ítems are produced in Colombia, generating US$6 million in export income, according to the company.

Synergies between all of Éxito’s business lines in Latin America are now expected to deliver US$50 million in corporate-wide savings this year, the company added.

The company now has 1,563 retail locations, with 568 in Colombia, 884 in Brasil, 81 in Uruguay and 30 in Argentina.

“The first-half results continue to show us that our internationalization strategy is producing good results and positive diversification in income and profits for our group,” added Grupo Éxito president Carlos Mario Giraldo.

Written by August 14 2017 0

Medellin-based multinational cement giant Cementos Argos reported August 11 that its first-half (1H) 2017 earnings before interest, taxes, depreciation and amortization (EBITDA) fell 26% year-on-year, to COP$641 billion (US$216 million).

Revenues dipped 4% year-on-year, to COP$4.2 trillion (US$1.4 billion), but second-quarter (2Q) net income rebounded over the first quarter, to COP$48 billion (US$16 million), indicating “better prospects in the market in Colombia . . . as well as a greater contribution to the results of the business coming from the United States,” according to Cementos Argos.

Through 1H 2017, Cementos Argos saw 73% of its corporate revenues generated in U.S. dollars, the company added.

Volumes of cement delivered rose 15% year-on-year, to 8 million tons, but concrete shipments dipped 7% year-on-year, to 5.4 million cubic meters, according to the company.

“The good results obtained in the U.S. and in the Caribbean and Central America far outweigh the challenges we are facing in the Colombian market,” said Cementos Argos president Juan Esteban Calle.

“As of June 30, 73% of revenues and 77% of EBITDA were generated abroad, in dollars or in highly dollar-denominated currencies. Additionally, we expect a better second half in the local [Colombian] market as a result of growth in shipments to 4G [fourth-generation highway construction] projects and the recovery in consumption that should be presented as a result of the reduction in interest rates,” he added.

As of June 30, Argos USA generated US$759 million in revenue and US$99 million in EBITDA, “in line with expectations announced by the company in early 2017,” according to the company.

“Argos supplies cement and concrete to important works such as Procter & Gamble in West Virginia, Liberty Mutual in Texas and State Farm in Atlanta, and is a key supplier in the construction of the Atlanta Falcons stadium, where ‘Super Bowl 53’ will be played in February 2019," the company added.

In Colombia, Argos is already involved in 39 of the 56 awarded “4G” highway construction projects and is bidding on another 46 projects currently under negotiation, according to the company.

At mid-year 2017, Colombian highway and infrastructure projects represented 28% of company revenue and 23% of EBITDA, according to Argos.

In its Caribbean and Central America markets, Argos recorded cement and concrete supply growth of 7.6% and 7.5%, respectively, compared to the first half of 2016.

“Honduras and Panama continue to be the main drivers of this region,” according to Argos. “The company’s participation in key projects for the development of the region include the European space station in French Guiana, the third bridge over the Panama Canal, the wastewater treatment plant in the Dominican Republic, the Civic Government Center in Honduras, the Royalton Hotel in St. Lucia and the Nobo Hospital in Curacao, among many others.

“Cementos Argos reached additional milestones during the semester, such as the opening of a new mill in San Lorenzo, Honduras, the purchase of an integrated cement plant in Puerto Rico, the launch of new products such as advanced concrete and cement and integration of the new plant in West Virginia, among others,” the company added.

Grupo Argos Sells Port Stake to Goldman Sachs

Meanwhile, parent company Grupo Argos announced August 11 that it has sold its 50% stake in the “Compas” ocean port facilities to an affiliate of U.S.-based investment banker Goldman Sachs.

The deal nets Argos US$137 million, a 2.5-fold return on investment since 2012, when it acquired the stake from affiliate Cementos Argos. In addition, the transaction is equivalent to 25 times EBITDA generated by Compas in 2016, according to Argos.

“Grupo Argos, through its investment in Compas, managed to transform a group of terminals --mainly bulk carriers dedicated mostly to the import and export of cement and coal -- into integrated logistics and multipurpose [terminals] with top national and international allies such as APM Terminals (Maersk group) and the Singapore Port Authority,” according to the company.

“This transaction consolidates Grupo Argos as a matrix of investments in infrastructure focused on the cement, energy and highway concessions and airports businesses, maintaining financial flexibility that allows it to efficiently manage its capital,” added Jorge Mario Velásquez, president of Grupo Argos.

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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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