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Written by August 28 2018 0
Colombia’s Ministry of Commerce, Industry and Tourism (MinCIT) announced August 28 that Antioquian milk-products producers Colanta and Proleche are among 11 companies that just won certifications and approvals to export certain dairy-based products to Mexico.
 
MinCIT, ProColombia and Invima collectively worked to open Mexico’s doors to Colombian milk products from 13 newly licensed processing plants in nine Colombian departments, according to the Ministry.
 
“The products that can be sold [to Mexico] vary depending on the establishment,” according to MinCIT.
 
On the newly approved list are mozzarella cheese, white cheese, whole and skimmed milk powder, whey powder, buffalo whey, whole and buffalo flavored yogurt, buffalo arequipe, industrial milk powder, canned condensed milk, canned cream, arequipe, dulce de leche, chocolate milk, strawberry and vanilla flavored milk, whole milk-based drink with oatmeal, and almond-flavored milk.
 
“This is excellent news for the dairymen of Colombia and, in addition, it is a sign of the great benefits that will bring for the national producers from a foreign trade policy focused upon taking advantage of the commercial agreements that we have in force,” added MinCIT Minister José Manuel Restrepo Abondano.
 
Prior to the Mexico deal, Colombian regulatory authorities had identified and then controlled an outbreak of foot-and-mouth disease in some ranching areas of the country. That control work eventually convinced Mexican authorities that Colombia is a reliable trade partner, ensuring sanitary practices.
 
“The work of health diplomacy is key, which in this case was anticipated -- and that should be the norm for us to continue opening the doors of the markets to our products,” Minister Restrepo added.
 
According to Invima, certified Colombian dairy plants now have access to 18 export markets including Bangladesh, Canada, Chile, Costa Rica, Cuba, the United States, Hong Kong, India, Japan, Morocco, Mexico, Panama, Peru, and the Eurasian Economic Union (Russia, Belarus, Kazakhstan, Kyrgyzstan and Armenia).
Written by August 25 2018 0
Wall Street bond rater Fitch announced September 12 that it has decided to maintain its "AAA (col)" investment-grade rating for Medellin-based multinational electric power giant EPM -- but issued a cautionary “negative” outlook.
 
The Fitch decision follows in the wake of fellow Wall Street bond rater Moody's, which last month likewise maintained an investment-grade rating on EPM -- but issued a similar cautionary outlook because of an EPM-estimated COP$7 trillion (US$2.27 billion) financial shortfall resulting from infrastructure damage and power-sales delays from the 2.4-gigawatt "Hidroituango" hydroelectric plant in Antioquia.
 
Commenting on the action, EPM general manager Jorge Londoño de la Cuesta added that “the rating of Fitch Ratings is in addition to that recently obtained by Moody's Investors Service that ratified the international rating of EPM at 'Baa3,' an investment-grade level, and assigned a 'negative' outlook, as a demonstration of our company's efforts to overcome the contingency in the Hidroituango hydroelectric project and continue to advance in our mission to contribute to the well-being of millions of people in the regions where we have a presence."
 
The Moody’s rating reflects EPM’s “revenue diversification geographically and, of among businesses, a significant contribution to EBITDA [earnings before interest, taxes, depreciation and amortization] by our energy distribution businesses, the condition of relative control of the contingency of the Hidroituango hydroelectric project and the asset-sale plan announced by the company,” according to EPM.
 
“Moody’s rating also incorporates EPM’s rapid response to the required adjustments in terms of its commercial policy, ensuring the supply of natural gas to dispatch [electric power from] its La Sierra combined-cycle natural gas thermal power station, with an installed capacity of 450-megawatts, as well as the purchase of energy through medium-term contracts to meet the energy obligations contracted for 2020 and 2021.
 
“With this rating granted by Moody’s, EPM maintains -- along with the current BBB (-) rating of Fitch Ratings -- a double investment grade, a category considered in the financial market that provides an adequate credit quality and certainty of repayment to the most demanding investors in risk profiles,” EPM added.
Written by August 23 2018 0
Medellin-based multinational electric-power grid operator ISA reported August 13 that its second quarter (2Q) 2018 net income dropped 16% year-on-year, to COP$232 billion (US$77.6 million).
 
Earnings before interest, taxes, depreciation and amortization (EBITDA) for 2Q 2018 likewise dropped 3.8% year-on-year, to COP$945 billion (US$316 million), according to the company.
 
As for first-half (1H) 2018 results, net income is up 2.3% year-on-year, to COP$530 billion (US$177 million), while 1H 2018 EBITDA rose 4% year-on-year, to COP$2 trillion (US$669 million).
 
“In the second quarter of 2018, there were no extraordinary events. However, for comparative purposes, it should be taken into account that in second quarter 2017, the [upward] adjustment of the value of the RBSE [power transmission network] in Brazil was included,” according to ISA.
 
“This factor generated net operating income of COP$359 billion [US$120 million], a deferred income tax of COP$122 billion [US$41 million] and net income of COP$85 billion [US$28 million). Because this was a non-recurring event, we will exclude it in the [current] analysis.”
 
The 1H 2018 profit results “include the recovery of taxes in Colombia and Brazil, the entry into operation of new energy transmission and roads projects in Peru, Colombia and Chile and the incorporation of the results of [recently added transmission networks] TAESA and IENNE,” according to ISA.
 
As for 2018 plans, ISA plans to invest COP$3.5 trillion (US$1.17 billion), “one of the highest in recent years,” with 92% of that in its electric energy transmission businesses, followed by 4.5% in its highway concessions and the remainder in information technology, telecom and systems management, according to the company.
Written by August 23 2018 0

August is the month when both Medellin and Detroit celebrate classic cars -- and the joyful return of positive vibes -- via the “Desfile de Autos Clasicos” here and the gigantic “Woodward Dream Cruise” in Detroit.

Written by August 07 2018 0

While sales and export revenues are starting to improve for Medellin’s textile manufacturing giants, net profits are still hard to come by, as evidenced by the latest second quarter (2Q) 2018 results from Enka Colombia and Coltejer.

In a financial report issued August 6, Enka revealed that gross income rose to COP$196 billion (US$67 million) in 2Q 2018, up from COP$169 billion (US$58 million) in 2Q 2017.

“Sales grew 16% in pesos and 8% in volume, with good performance in all businesses” and “the increase in sales compensates the impact of the revaluation of the peso [against the U.S. dollar],” the company added.

However, rising administrative, tax and sales costs resulted in a dip in 2Q 2018 earnings before interest, taxes, depreciation and amortization (EBITDA), to COP$10.6 billion (US$3.6 million), versus COP$12 billion (US$4.1 million) in 2Q 2017, according to Enka.

As a result, Enka posted a relatively slim COP$999 million (US$345,000) net loss for 2Q 2018, versus a net profit of COP$1.9 billion (US$655,000) in 2Q 2017.

Recycling plant start-up

Meanwhile, Enka started-up its new, 3,300 tons/year polyolefin recycling plant during July, “thus venturing into the recycling of polyethylene and polypropylene” for synthetic fabrics.

The plant “will transform the byproducts of the PET recycling process (plastic caps and labels) into sustainable products with high quality standards for the plastic sector. In addition, it will serve as a pilot plant for the search for sustainable solutions for other types of plastics and as a gateway to future growth and innovation,” according to Enka.

As for its first half (1H) 2018 results, “operating income as of June 2018 reached COP$196 billion [US$67 million], an increase of 16% compared to the same period of the previous year, mainly due to the growth in sales volume and the higher international prices of the petrochemical chain, which offset the revaluation,” according to Enka.

Recycled plastics markets rebound

As for sales to the Colombian domestic market, revenues grew 17% year-on-year and volume rose 5%, “favored by the good results of the measures implemented by the [Colombian] government to avoid under-invoicing [by contraband importers] at the beginning of the year,” according to Enka.

Similarly, “the continuous development of markets for high-value-added [products] and the deepening of the free-trade agreements with strategic partners have allowed us to increase exports by 16% in revenues and 13% in volume, reaching an [export] share over total sales of 48% ,” according to Enka.

“We highlight the sales growth of the U.S. and Canadian markets, thanks to new approvals [for import into North America] of special technical threads, as well as in Brazil and Argentina, where new business opportunities continue to be identified,” according to Enka.

For its recycled plastic fibers, 1H 2018 sales rose 24% year-on-year, to COP$62 billion (US$21 million.

“EKO-Pet” sales grew 22% in pesos and 3% in volume year-on-year, with the plant “operating at maximum capacity. Sales are destined 100% to the local market, supporting the sustainability strategies of the main producers of [plastic-bottled] beverages in Colombia,” according to Enka.

As for its “EKO-Fibras” synthetic fibers, “lower Asian offer [from China to nations where Enka competes with Asian producers] due to greater environmental restrictions in China and the import price thresholds implemented by the [Colombian] government have allowed sales to grow 27% in pesos and 15% in volume, especially in the Brazilian market,” according to Enka.

Textile, industrial businesses grow

Operating income from textile/industrial products grew 13% year-on-year, to COP$134 billion [US$46 million], according to Enka

Industrial thread sales grew 9% in revenues and 4% in volume, “driven by higher sales of technical threads to the U.S. and Canada, markets that the company has defined as strategic due to its high specialization,” according to Enka.

As for the filaments-textiles business, “the implementation of the measure of minimum price thresholds for textile imports [into Colombia’ has given greater transparency to the Colombian market, favoring local sales. In addition, new businesses with Argentina are being developed, taking advantage of the greater economic activity and the free trade agreements with Mercosur. As a result, sales grew 17% in revenue and 14% in volume,” according to Enka.

Coltejer exports soar

As for Coltejer, this textile giant saw 1H 2018 gross revenues rise to COP$75.5 billion (US$26 million) compared to COP$72.5 billion (US$25 million) in 1H 2017, thanks to a 124% jump in exports year-on-year.

Cost of sales also declined, to COP$70.5 billion (US$24 million) in 1H 2018 versus COP$73 billion (US$25 million) in 1h 2017. However, finance costs in 1H 2018 rose to COP$21 billion (US$7.2 million) versus COP$14 billion (US$4.8 million) in 1H 2017.

As a result, Coltejer posted a net loss of COP$13.7 billion (US$4.7 million) for 1H 2018 versus a net loss of COP$21 billion (US$7.2 million) in 1H 2017.

For 2Q 2018, gross revenues improved to COP$39 billion (US$13.4 million) versus COP$31 billion (US$10.7 million) in 2Q 2017. Finance costs also rose in 2Q 2018, to COP$10.7 billion (US$3.7 million), versus COP$6.8 billion (US$2.3 million) in 2Q 2017.

As a result, Coltejer posted an after-tax net loss of COP$12.5 billion (US$4.3 million) in 2Q 2018 versus an after-tax net loss of COP$10.8 billion (US$3.7 million) in 2Q 2017.

Page 3 of 16

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About Medellin Herald

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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