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Written by March 14 2018 0

Private real estate development fund Pactia – administered by Medellin-based Fiduciaria Bancolombia – on March 14 announced that full-year 2017 net income jumped 41.8% year-on-year, hitting COP$132 billion (US$46 million).

Gross income also rose 25% year-on-year, to COP$224 billion (US$78.7 million), while earnings before interest, taxes, depreciation and amortization (EBITDA) hit COP$107 billion (US$37.6 million), according to the company.

Year-on-year results aren’t fully comparable as 2017 was the first full year in operation of Pactia’s “Fondo de Capital Privado” (private capital fund), the company noted.

Pactia has real-estate investments in Colombia, Panama and the U.S.

During 2017, Pactia expanded its U.S. market holdings, taking a 45% stake in a portfolio of 14 commercial properties in Virginia, in which it invested COP$115 billion (US$40 million). Pactia also bought a commercial lot in Miami for a future mixed-use building project, according to the company.

As for 2018 plans, Pactia aims to invest an estimated COP$400 billion (US$140 million) this year in new projects, according to the company.

“We closed the year [2017] with very good results and we have the satisfaction of achieving our strategic goal of internationalization and diversification of our real-estate portfolio,” added Pactia president Nicolas Jaramillo.

Among Pactia’s recent flagship projects: the “Gran Plaza” commercial center in Bogota and another “Gran Plaza” in Bosa, Colombia.

The company added that it has obtained licenses to develop a new distribution center for Colgate Palmolive in Valle del Cauca (near Cali), as well as a new Hilton Hotel adjacent to the Corferias convention center in Bogota.

Estimated value of the current backlog of pending projects now totals COP$1 trillion (US$351 million), which when completed would yield another 281,000 square meters of leased space, according to the company.

Written by March 08 2018 0

U.S.-based global power tools, appliances and security-systems manufacturer Stanley Black & Decker just decided to make Medellin its new Americas-region financial services unit for commercial customers -- creating 200 new jobs here over the next 12 months.

According to Medellin’s business-development agency (Agencia de Cooperación e Inversión de Medellín y el Área Metropolitana, ACI), Stanley Black & Decker (SBD) now has some 50,000 global employees with annual sales now topping US$12 billion.

According to ACI, the company chose Medellin for the new financial-services offices “because of its solid business environment and its capacity to provide high-quality commercial services,” as well as the joint recruitment-and-collaboration efforts of ACI, Medellin’s high-tech “Ruta N” commercial landing space and Colombia’s “Procolombia” investment promotion agency.

SBD financial director Jamie Ritter added that “Medellin is a growing city, focused upon innovation and with a great quantity of talent, making it an attractive location for Stanley Black & Decker to develop a world-class center tied to strategic growth initiatives.”

Written by March 07 2018 0

Medellin-based construction giants Conconcreto and Construcciones El Condor separately reported in late February that fourth-quarter (4Q) net earnings dipped slightly in 2017 versus 2016.

For Conconcreto, net income fell 14.9% year-on-year in 4Q 2017 versus 4Q 2016, to COP$78 billion (US$27 million), while earnings before interest, taxes, depreciation and amortization (EBITDA) fell 6.6% year-on-year, to COP$220 billion (US$77 million).

Explaining the dip in profits, Conconcreto cited “evidence of the lower dynamism of the [Colombian] economy and therefore of the [construction] sector, reflected in the decrease in volume of construction and lower margins of the projects,” as well as “lower profits of the road concessions and associated companies.”

Among Conconcreto’s 2017 highlights: Continuing build-out of the 2.4-gigawatt “Hidroituango” hydroelectric plant in Antioquia – due for intial start-up in late 2018 -- as well as several road, tunnel and bridge works around Colombia, according to the company.

As for two big potential projects still in the planning stage: the proposed “Darien International” ocean-freight port at Necocli, Antioquia, in which Conconcreto has a contract covering all the civil works, as well as a proposed, four-lane divided road connecting the existing Las Palmas highway east of Medellin to the El Tablazo neighborhood near Medellin’s international airport in Rionegro.

El Condor Results

As for Construcciones El Condor, this company saw its 4Q 2017 net profits dip slightly year-on-year, to COP$185 billion (US$64 million), versus COP$186 billion (US$65 million) in 4Q 2016.

Operating income rose by 66.9% year-on-year, to COP$603 billion (US$210 million), while construction EBITDA rose 58%, to COP$119 billion (US$41 million).

Among 2017 highlights: El Condor saw financial close on the “Ruta al Mar” highway concession totaling COP$1.47 trillion (US$511 million) through a syndicate of local banks and international finance.

The company also finalized an engineering, procurement and construction (EPC) contract between El Condor and “Concesion Ruta al Mar SAS.”

As for the “Pacifico 2” highway project in Antioquia, the company achieved certain compliance milestones enabling the first payment of credit on the project.

Meanwhile, at year-end 2017, El Condor had a project and investment portfolio with a combined book value of COP$802 billion (US$280 million), the company noted.

Among the projects in the portfolio:

1.Concesión La Pintada S.A.S. in Antioquia (21.15% share), where construction has begun on a new bridge over the Rio Cauca. The “La Pintada” project had advanced by 29% at year-end, with capex to-date totaling COP$275 billion (US$96 million).

2. Concesión Pacífico Tres S.A.S. in Antioquia and Caldas, in which El Condor has a 48% stake. All licenses and permits have been approved, and the project had advanced 36% by year-end, with a to-date capex of COP$308 billion (US$107 million)

3. Concesión Aburrá Norte S.A.S. (Hatovial S.A.S.) in Antioquia, now 100% built, with El Condor having a 21.1% stake. Capex totaled COP$1.3 trillion (US$454 million).

4. Concesion Vias del Nus SAS, in Antioquia, where El Condor has a 21.15% stake. This project recently won regulatory approvals for the crucial “Tunel de la Quiebra” highway tunnels that will smooth freight transport between Medellin and northern Colombian ports.
Capex invested: COP$15 billion (US$5.2 million), with project advance at 1.56%

5. Concesión Vías de Las Américas S.A.S., in northern Colombia (66.67% participation), with capex at COP$1.16 trillion (US$ 405million) and project advance at 89.3%

6. Concesión Túnel Aburrá Oriente S.A.S., linking Medellin eastward to the international airport at Rionegro through new tunnels (already 71% complete at year-end 2017). El Condor has a 12.5% stake, with COP$500 billion (US$174 million) capex.

Written by March 06 2018 0

Medellin-based UNE EPM – the minority shareholder in Colombia’s “TigoUne” cell-phone service partnership as well as related internet, cable TV and land-line services – announced last month that the company's full-year 2017 consolidated revenues dipped slightly year-on-year, to COP$5.06 trillion (US$1.7 billion).

Net loss in 2017 also improved year-on-year, to COP$40 billion (US$14 million), compared to a net loss of COP $190 billion (US$66 million) in 2016.

The majority shareholder is Luxembourg-based Millicom Spain SL along with partners Peak Record SL, Peak Five SL, Global Albion SL and Global Locronan SL.

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose slightly year-on-year, to COP$1.349 trillion (US$472 million) in 2017 versus COP$1.346 trillion (US$471 million ) in 2016, according to the company. EBITDA margin rose to 27%, from 26.9% in 2016.

Revenues reported separately for UNE (not including the partnership) slipped year-on-year, to COP$2.38 trillion (US$833 million), versus COP$2.4 trillion (US$840 million) in 2016, but net loss improved dramatically, at COP$10 billion (US$3.5 million million) in 2017 versus a net loss of COP$145 billion (US$50.7 million) in 2016.

Millicom View

Meanwhile, commenting on the TigoUne 2017 results, majority partner Millicom added: “In Colombia, our strategy has been to build for the future, enhancing our convergence capabilities to provide long-term, stable growth.

“We are adding 4G users, building our HFC [hybrid fiber coaxial] network and connecting homes, improving bundling, differentiating our brand, and improving our internal operations in order to serve our customers more efficiently.

“In mobile [cell-phone service], we added almost a million 4G smartphone data customers, a year-over-year growth rate of 98% [and] an acceleration over 2016’s year-over-year growth of 79%.

“[As a result], 4G smartphone data users now represent 26% of our B2C [business-to-consumer] mobile base [now totaling 2.016 million users] and have contributed to driving data use up by 39% to 1.7 GB [gigabytes] per user.

“We continue to expand the reach of our HFC network in Colombia, with just over 612,000 additional homes passed and 93,300 new homes connected [now totaling 1.108 million homes].

“In addition, the bundling ratio of our HFC customers has risen steadily in recent years as Revenue Generating Units (RGUs) growth of 15% has outpaced the growth in homes connected.

“We also launched next generation television this year; ‘Tigo ONEtv’ integrates traditional linear television content with leading streaming and video-on-demand platforms. The service is the result of a partnership with TiVo.

“Service revenue declined by 0.7% year-over-year, as we faced regulatory headwinds, but results improved in the second half, indicating that our strategy is gaining traction,” according to the company.

Written by February 27 2018 0

Medellin-based multinational cement, power and highway/airport-concession giant Grupo Argos announced this month that its full-year 2017 net income rose 29% year-on-year, to COP$453 billion (US$158 million).

Argos also reported earnings before interest, taxes, depreciation and amortization (EBITDA) rose 7% year-on-year, to COP$630 billion (US$220 million), with EBITDA margin hitting 53%.

Consolidated EBITDA results hit COP$3.9 trillion (US$1.36 billion), the highest in the history of the company. This was the result of “good moment of the concessions and energy businesses and the moderate recovery tendency of the cement sector in Colombia,” according to the company.

Year-end 2017 assets rose 6.3% year-on-year, to COP$47.6 trillion (US$16.6 billion), with liabilities totaling COP$23 trillion (US$8 billion) and equity at COP$24 trillion (US$8.4 billion).

While debt grew 9% year-on-year, “given the substantial improvement of EBITDA, we highlight that the adjusted net debt/EBITDA indicator stands at 2.3x, being one of the lowest leverage levels in the history of this group,” according to Argos.

“This indicator, added to the 4.7x operating cash flow/interest, shows the high flexibility that Grupo Argos has in order to continue with the growth strategy. At the cash flow level, it closed the year surpassing COP$300 billion [US$105 million],” according to the company.

Corporate revenues rose 7% year-on-year, to COP$1.2 trillion (US$419 million). “This variation is mainly explained by the divestiture of [ocean port operator] Compas, which generated COP$403 billion [US$141 million] in revenues,” according to Argos.

“In addition, revenues from the real estate business increased by COP$53 billion [US$18.5 million] to COP$260 billion [US$91 million], due to the contribution of Pactia and adjustments in the fair value of investment properties,” the company added.

As for the Cementos Argos division, adjusted EBITDA excluding non-recurring items came in at COP$375 billion (US$131 million) with a 17.8% margin. However, Cementos Argos posted a full-year net loss of COP$80 billion (US$28 million) mainly due to “effects of the [deferred] tax reform in the USA” along with lower sales volumes in Colombia, the company added.

Cementos Argos produces and markets cement and ready-mix concrete in 15 countries including the USA, Colombia, and the Caribbean & Central America (CCA) region. Total annual capacity is estimated at 24 million tons of cement and 18 million cubic meters of concrete.

Despite the 2017 financial setbacks in the USA, Argos foresees a “positive outlook in the United States after the fiscal reform, which is expected to generate positive effects in the country’s economy, the industry and in Argos operations.”

Meanwhile, the Celsia electric-power division – operating in Colombia, Panama and Costa Rica – now boasts 2.4 gigawatts of generation capacity through 28 hydroelectric, thermal, photovoltaic and wind-power plants, generating around 6,317 gigawatt-hours (GWh) per year, according to Argos.

During 4Q 2017, Celsia’s consolidated power generation was 1,769 GWh, “up 12% compared to the same quarter last year and up 23% compared with Q3 2017. Out of the consolidated generation, 77% came from hydroelectric generation, 20% from thermal power plants, 3% from the wind farm in Costa Rica, and 0.20% (4 GWh) from the new solar farm in Yumbo,” according to Argos.

However, Celsia’s full-year 2017 electric power generation dipped 11% year-on-year, to 6,317 GWh, the company added.

Celsia’s consolidated revenue for 4Q 2017 rose 4% year-on-year, to COP$824 billion (US$288 million) , while full-year 2017 revenue fell 18% year-on-year, to COP$3 trillion (US$1.05 billion), “in line with our expectations given the lower generation volume of the thermal power plants and the spot price decrease, influenced in 2016 by the El Niño phenomenon,” the company added.

Celsia’s 4Q 2017 EBITDA rose 21% year-on-year, to COP$309 billion (US$108 million), as “good performance in Central America together with a more efficient operation in Colombia allowed the power generation facilities to make a significant contribution to the results, which added to the stability of the distribution and retail sales business,” according to Argos.

Celsia’s full-year 2017 net earnings rose 47% year-on-year, to COP$251 billion (US$88 million) while net profit attributable to controlling shareholders more than tripled, to COP$149 billion (US$52 million), 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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