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Written by November 09 2018 0

Medellin-based banking giant Bancolombia announced November 7 that its third quarter (3Q) 2018 net income rose 20.5% year-on-year, to COP$543 billion (US$172 million).

However, this positive year-on-year result in 3Q 2018 was offset by an 8.2% decline in net income compared to 2Q 2018.

“Gross loans [in 3Q 2018] grew by 4.0% when compared to 3Q 2017 and 0.9% during the quarter. This annual growth shows moderation in the credit demand in Colombia,” according to Bancolombia.

Colombian peso-denominated loans grew 5.8% in 3Q 2018 versus 3Q 2017.

“Net interest income was COP$2.57 trillion [US$813 million] for 3Q 2018, increasing by 0.6% when compared to 3Q 2017. This positive performance is mainly explained by the growth in the loan book [as] net interest income increased by 0.9% during the [latest] quarter,” according to the company.

“The annualized net interest margin for the quarter was 5.8%. The margin decreased by 10 basis points during the quarter and registered the same number when compared to 3Q 2017, mainly affected by the reductions in the reference rate in Colombia that were reflected in the repricing of the loan portfolio.

“Provision charges for the quarter were COP$1.0 trillion [US$316 million] and the coverage ratio for 90-day past due loans was 160.7%. Provision charges increased by 4.3% when compared to 3Q 2017 and by 3.8% compared to 2Q 2018.

“These provisions allow us to maintain a solid coverage ratio amid a challenging environment [even as] new past-due loans totaled COP$847 billion [US$267 million] for the quarter.

“Net fees were COP$631 billion [US$199 million] and increased by 4.1% compared to 3Q 2017. This growth was mainly driven by an increase in fees related to credit and debit cards and trust services, [although] net fees decreased by 2.1% during the quarter,” the bank added.

Bancolombia “maintains a strong balance sheet supported by an adequate level of loan loss reserves,” according to the company. Allowances for the principal for loan losses were 5.7% of total loans at the end of 3Q 2018, increasing as compared to 2Q 2018, the company added.

 

Written by November 08 2018 0

Medellin-based multinational electric power transmission and highway concessionaire ISA announced November 7 that its third quarter (3Q) 2018 net income rose 30.2% year-on-year, to COP$413 billion (US$131 million).

Gross revenues rose 8.3% year-on-year, to COP$1.9 trillion (US$605 million), with power transmission revenues showing the biggest yearly gain, by 16.7%, according to the company.

Earnings before interest, taxes, depreciation and amortization (EBITDA) hit COP$1.4 trillion (US$446 million), up 15% year-on-year, while EBITDA margin came-in at a hefty 71.7%, according to ISA.

The positive results don’t include any extra income from a one-time-only power-transmission tariff “regularization” program in Brazil last year, but do include power-tariff increases this year.

Revenues improved this year mainly thanks to recent entry-into-operation of power-transmission and highway-concession operations in Peru, power-transmission expansions in Colombia and Chile (since September 2017), and the incorporation of results from recently acquired Brazilian and Chilean power operations.

As for investments, ISA so far this year has invested COP$1.9 trillion (US$605 million) in infrastructure expansions and upgrades, according to the company.

Colombia revenues rose 8.4% year-on-year, to COP$447 billion (US$142 million), while Chile revenues rose 12.8%; Brazil revenues rose 12% and Peru operations declined 7.6%, according to the company.

Power transmision revenues in Colombia rose mainly because of a boost in national power tariffs, favorable COP/US dollar exchange rates, plus a new transformer connection, the company added.

Written by November 07 2018 0

Medellin-based electric-power giant Celsia announced November 6 that its third quarter (3Q) 2018 net profit dropped 31% year-on-year, to COP$64 billion (US$20 million).

However, nine-months 2018 net profits so far have risen 35% year-on-year, to COP$243 billion (US$77 million), according to Celsia.

Consolidated revenues for 3Q 2018 rose 8.5% year-on-year, to COP$852 billion (US$271 million), with Colombian revenues rising 18%, to COP$698 billion (US$222 million).

Earnings before interest, taxes, depreciation and amortization fell 12% year-on-year in 3Q 2018, to COP$259 billion (US$82 million), but nine-months 2018 consolidated EBITDA rose 0.5%, to COP$818 billion (US$260 million).

“In Colombia, accumulated energy demand during the [latest] quarter rose 4% with respect to the same period of 2017. The regulated market demand grew at a rate of 3% and the increase exceeded 6% in the unregulated market,” according to Celsia.

While Colombian average energy prices fell 4% year-on-year in 3Q 2018, the average marginal cost of energy in Panama was US$73 per MW-hour, 98% higher than in 3Q 2017, according to Celsia.

Commenting on the results, Celsia president Ricardo Sierra emphasized that the company “has a great emphasis on the development of renewable energies . . . The wind and solar projects that we have will lead us to add, over the next five years, 560-megawatts [MW] of renewable power in addition to the current 77-MW,” he said.

Four of the wind-power generation projects are in the Guajira region (northern Colombia), totaling 330-MW. These power projects already won environmental licenses and grid-connection approvals, according to Celsia.

In solar projects, Celsia Central America acquired in Panama its first photovoltaic plant, incorporating 33,000 solar panels, with a net capacity of 9.9-MW and a transmission line of 2.8 kilometers, according to the company.

“In Colombia, the Celsia Solar Bolívar photovoltaic farm is about to enter into operation. Located in Santa Rosa de Lima in Bolívar, Colombia, with a capacity of 8.06-MW and an estimated generation of 15,542-MW-hours per year, it will deliver the equivalent of the energy consumed by 7,400 households,” according to Celsia.

Written by November 04 2018 0

Medellin-based textile giant Fabricato on November 2 posted a third quarter (3Q) net loss of COP$9 billion (US$2.8 million), an improvement over the COP$19 billion (US$5.9 million) net loss in 3Q 2017.

Earnings before interest, taxes, depreciation and amortization (EBITDA) also improved year-on-year, with a positive COP$909 million (US$285,000) in 3Q 2018 versus a COP$6 billion (US$1.9 million) net EBITDA loss in 3Q 2017.

Sales also rose 13.6% year-on-year, to COP$96 billion (US$30 million), from COP$84.9 billion (US$26.6 million) in 3Q 2017.

As for nine-months (January through September) 2018 results, Fabricato’s net loss rose to COP$28 billion (US$8.8 million) versus a net loss of COP$13 billion (US$4 million) in nine-months 2017. However, EBITDA improved to a positive COP$5.6 billion (US$1.7 million) versus a negative COP$1.5 billion (US$471 million) in nine-months 2017.

Commenting on the latest results, Fabricato pointed out that “the third quarter of 2018 continued presenting the trend of moderate recovery of the [Colombian] economy, perceived since the beginning of this year.

“Some indicators such as controlled inflation, the low basic interest rate and the price of oil above US$80 per barrel allow us to believe that this scenario will remain positive, which generates a favorable environment for the country's economic activity.

“In relation to the textile sector, a resumption of the natural business cycle is perceived, that is, an increase in sales was noted in the third quarter of this year, a sign that the garment industry is preparing for a higher volume of sales for the end of the year.

“The retail sale of garments, accumulated to September 2018, indicated an estimated growth of 5% [year-on-year], which should reflect a resumption of the garment production sector and consequently of the textile sector.

“However, what’s important to note in this case is the increase in the imports of garments made for the large retail chains, which will surely reduce the transfer of the positive impact of their sales to the Colombian productive sector.

“When the new [Colombian national] government took office [this year], hopes were renewed regarding the fight against smuggling and informality, the main problems of the textile and clothing sector in Colombia.

“Some campaign promises, such as the reduction of VAT [value-added tax] for the textile sector, may face political resistance and face difficulties in its processing. However, measures such as the review of import tariffs and thresholds for imports are expected in the short term, as well as anti-dumping measures, which would be the beginning for the restoration of an environment of legal competition in Colombia and the consequent reactivation of this sector so important for the generation of jobs.”

As for the future, “we remain convinced that all of Fabricato’s efforts should be aimed at generating value for our clients, either because of the excellence in the product offer, or because of the speed of response, which is increasingly relevant in the purchase decision, with adequate prices.”

As for Fabricato’s real-estate business ventures, the company reported that its “Ciudad Fabricato” project continues to generate more revenues, while the former “Riotex” factory in Rionegro has achieved 55% leasing of available space to commercial third parties.

“In the case of full occupation [of the former Riotex factory], the leases of the industrial park should generate annual revenues between COP$5.5 billion [US$1.7 million] and COP$6 billion [US$1.9 million]. To this value should be added what will be received for the services available to the tenants, such as water and steam,” Fabricato added.

Written by November 01 2018 0

Medellin-based multinational power and utilities giant EPM announced October 31 that its nine-months 2018 net profits rose 12% year-on-year, to COP$1.7 trillion (US$528 million), while earnings before interest, taxes, depreciation and amortization (EBITDA) also rose 12%, to COP$3.9 trillion (US$1.2 billion).

So far this year, EPM has spent COP$251 billion (US$78 million) in compensation costs to cover problems arising from a diversion-tunnel collapse in the US$5 billion, 2.4-gigawatt Hidroituango hydroelectric project. But this hasn’t stopped EPM from generating profits, general manager Jorge Londoño de la Cuesta said.

“As complicated as it has been for our company to address the contingency in the Hidroituango hydroelectric project, thanks to our EPM people and their commitment to the quality of life of the community and the development of the country, we have achieved growth in the group’s profits,” Londoño added.

The city of Medellín – EPM’s sole shareholder -- has netted COP$806 billion (US$250 million) in profit transfers so far this year, while EPM’s gross revenues rose 10% year-on-year, to COP$12 trillion (US$3.7 billion), the company noted.

EPM’s main holding company contributed 49% to earnings, foreign subsidiaries 33%, national energy subsidiaries 16%, and national water subsidiaries 2%, according to the company.

A hike in Colombian national power sales this year mainly explains the boost in revenues and profits, according to the company.

Meanwhile, EPM so far this year has invested COP$2.3 trillion (US$714 million) in infrastructure, 84% of which has been in Colombia, the company added.

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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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