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Roberto Peckham

Medellin-based recycled plastics textile manufacturing specialist Enka Colombia announced March 15 that its full-year 2017 net profit fell to COP$1.7 billion (US$595,000), down from COP$10.6 billion (US$3.7 million) in 2016.

Colombia’s weak economy in 2017 combined with a 25% drop in domestic demand for textiles hurt Enka sales and profits -- but growing exports helped to compensate for domestic declines, according to the company.

Operating revenues rose 10% year-on-year, to COP$357 billion (US$125 million), once excluding the negative impact of sales terminations in economically wrecked “socialist” Venezuela.

Exports (excluding Venezuela) now account for 48% of Enka sales, up from 41% in 2016, according to the company. Sales to Brazil rose 29% year-on-year, while sales of filament for the fisheries industries in Perú, Chile and Spain also rose, according to the company.

México and the USA also boosted purchases of certain Enka fibers for production of tires and specialty clothing, the company added.

Following US$100 million invested in high technology, Enka is now the leading recycler of PET (polyethylene terephthalate) plastic from plastic bottles -- turning this waste material into novel textiles for clothing as well as specialty filament for tire manufacture.

“Our company is totally immersed in the global economy, taking raw materials from Asia, Europe and the Americas and then transforming and distributing products to clients in 19 countries,” according to Enka.

Today, 51% of its products are made from recycled plastics. But this is about to grow thanks to further investments in machinery that will convert not just plastic bottles but also plastic caps and labels into textile material, according to Enka.

This new process will start-up in second-half 2018, producing a recycled resin of “excellent quality and contributing to the sustainability of the plastic sector in Colombia,” according to the company.

Enka now has two PET recycling plants with capacity to process 34,000 tonnes per year; its national recovery system also is capable of collecting and reprocessing more than 1 billion PET bottles every year, according to the company.

Growing environmental consciousness around the world is helping to boost this business, further spurred by Organization for Economic Cooperation and Development (OECD) initiatives that have been embraced by the Colombian government.

Thanks to advanced technology investments, product innovations and productivity gains, “we have developed a wide portfolio of differentiated products that meet the needs of the most profitable market niches, thus reducing our exposure to Asian commodity producers,” according to Enka.

Novel textile materials generated COP$246 billion (US$86 million) in sales last year, up 4% year-on-year, accounting for 69% of total sales.

Meanwhile, Enka’s virgin PET sales would have been even greater in 2017 except for the situation in Venezuela, the company added.

Industrial thread 2017 sales grew 8% by volume and 18% by revenues year-on-year, with 85% of those sales going to export markets.

While filament sales were hurt by the plunge in Colombian textile production, filament sales to Brazil and Argentina helped compensate. As a result, filament sales showed net drop of 2% year-on-year, while Colombia sales dropped from 22% of sales in 2016 to just 15% of sales in 2017.

Thanks to investments in “EkoPET” technology, industrial thread modernization and self-generation of electric power, Enka added that it has boosted earnings before interest, taxes, depreciation and amortization (EBITDA) by 80% over the past eight years.

For 2017, EBITA came-in at COP$23 billion (US$8 million), up 4.7% year-on-year when excluding Venezuela..

Gains in cash-flow also cut financial debt, so that by year-end 2017, Enka’s debt ratio fell to 1.6-times EBITDA, according to the company.


The Chamber of Commerce of Medellin for Antioquia (CCMA) projects that Antioquia likely will see 3% growth in gross domestic product (“PIB” in Spanish initials) this year, up from 2.2% last year.

As noted in a March 15 bulletin from Confecamaras (the Colombian national association of chambers of commerce), Antioquia out-performed Colombia nationally last year, with 2.2% GDP growth locally versus just 1.8% nationally.

As for 2018, the Medellin chamber foresees 3% GDP local growth thanks to “lower interest rates, growth in industrial exports, better prospects for private investment and public spending,” the report noted.

In a related report posted to the Medellin chamber’s web-site (http://www.camaramedellin.com.co/site/Noticias/Desempeno-economico-de-Antioquia-y-perspectivas.aspx), CCMA noted that exports from Antioquia grew 3.3% last year – to US$4.478 billion. Gold, fruits (especially bananas), coffee, vehicles, flowers, clothing, plastics, machinery and essential oils were the leading export products.

Meanwhile, copper exports jumped by 126% year-on-year --mainly to Spain and Singapore – while textile exports grew 15%, mainly to Brazil, Ecuador and Mexico, according to CCMA.

While local government spending grew 4% here, up from 2.4% in 2016, “industry, commerce and construction showed lower growth because of slow growth in internal demand and the negative impact of the [2017] tax reform, affecting personal consumption,” the CCMA report notes.

Investment in private corporations last year grew 18.6% year-on-year, by COP$1.01 trillion (US$353 million), with management consulting, road transport, metal-mining, machinery installation and maintenance, lumber and fisheries, health-care, and telecommunications taking leadership among all investment categories, according to the report.

However, industrial production in metro Medellin declined by 4.6% year-on-year through September 2017, while local industrial energy demand fell 7.9%, the report noted. The biggest declines were in textiles, iron works, foundries and clothing manufacture, according to CCMA.

While 139 companies relocated to Medellin from elsewhere in Colombia (mainly Bogota and Barranquilla) during 2017, 133 other companies decided to leave Medellin, mainly going to Bogota, Cali, Barranquilla and Cartagena, the report found.

Factors attracting companies to Medellin include relatively favorable access to clients and suppliers, the existence of local companies providing required services and information, relatively good urban and social infrastructure, qualified labor, relatively efficient public administration, and the existence of research centers (such as universities), the CCMA report found.

However, negative factors cited by companies included relative costs of public services, relatively high land costs, lack of local natural-resources, labor costs, lack of fiscal incentives and some concerns about security.


The annual “Medellin Como Vamos” (“how are we doing?”) citizen survey released March 15 finds that while most Medellin residents remain relatively optimistic, Colombia’s economic slowdown in 2017 pushed the favorability index downward.

The face-to-face survey in November 2017 of 1,500 residents across all zones and all socio-economic strata found that in general -- compared to the 2016 survey -- Medellin residents trimmed their relative satisfaction with the city as a place to live, while individual satisfaction with the quality of life “fell appreciably compared to 2016 and compared to the historical average of each one of the ratings,” according to the survey report.

With employment and health being the top-two concerns of Medellin citizens, “it is telling that in [2017] the national economy showed signs of stagnation, with a consolidated growth of 1.8%, the lowest registered since 2010, and very similar to that registered in 2009, when the economy grew by 1.7%,” the report noted.

“This was reflected in fewer job opportunities for all those who sought employment in the city and the metropolitan region, with an unemployment rate that remained above 10%. Thus, while 27,000 new jobs were created, the population that was looking for work also grew, resulting in 7,000 more people unemployed.

“Regarding health, the results of the survey show that, in a context of greater coverage of the health service and greater reported access, there are still pending challenges to be solved, specifically in terms of quality,” the survey added.

Availability of prompt outpatient service declined year-on-year, “with two out of 10 Medellin residents having to wait more than 30 days,” the survey found. “Although satisfaction with the health service remained stable, comparatively [the ranking] remains one of the lowest among the goods and services investigated by the survey.”

For Medellin’s poorest sectors (“estrato 1” and “estrato 2”), the overwhelming majority of them are in the government-subsidized sector affiliated to the Savia Salud “EPS” (health maintenance organization), in which the city of Medellin owns 36.65%, the departmental Antioquia government another 36.65%, and worker-benefits cooperative insurer Comfama owning the remaining 26.7%.

Problem: Savia Salud is running more than US$250 million in the red, as spending far out-runs income -- and politicians warn of potential financial collapse. Such a collapse would leave some 1.7 million of the poorest residents in Antiqouia --the majority of which live in and around Medellin – without health insurance.

Among the 13 measurements in the survey: “subjective well-being,” in which those surveyed indicated average satisifaction of 6.99 points on a scale of 0 to 10, where 0 is the worst possible and 10 the best possible.

As for “poverty and inequality,” the percentage of inhabitants of Medellín considering themselves as “poor” fell slightly in the 2017 survey, at 19%.

As for “citizen security,” the percentage of people in Medellín who considered the city to be safe “decreased by four percentage points [in 2017] compared to 2016,” the survey found.

As for “environment,” air-pollution concerns grew, as “air is the environmental aspect of Medellín with which fewer citizens are satisfied,” according to the report. Only 15% of citizens surveyed said they were “satisified” with air quality – by far the worst result among all survey questions, the report noted.

As for “public management,” the survey found that “employment, health and housing are the agenda items that citizens propose” for the Medellin Mayor to put as highest priorities.

As for “economic situation, food and employment,” only 38% of Medellin households said their economic situation improved in 2017, wheareas in 2016, 51% cited improvements.

As for “education,” 79% of the surveyed homes in Medellín indicated they were “satisfied with the education received by children and young people between 5 and 17 years old.”

As for “housing and public services,” Medellin citizens “remained highly satisfied with their housing and their neighborhood. The public natural-gas home service maintained the highest satisfaction while internet [service] rated the lowest satisfaction," according to the report.

As for “mobility and public space,” 35% of those surveyed “affirmed that their trips took longer in 2017 than in 2016,” because of continuing growth of the motor-vehicle population -- without a corresponding growth in road infrastructure or a corresponding increase in high-capacity, high-quality public-transit options.

As for “citizen responsibility,” the survey found that “ethnic minorities, reintegrated people [those fleeing the countryside to relocate in the city] and people with different sexual orientations were the groups about whom there is less respect in Medellín.”

The annual “como vamos” surveys are sponsored by Fundación Proantioquia, the Medellin and Bogota Chambers of Commerce, Eafit University, Comfama, daily newspapers El Colombiano and El Tiempo, and Fundación Corona.

 


Colombia’s Agencia Nacional de Infraestructura (ANI) infrastructure-project agency president Dimitri Zaninovich on March 13 publicly hailed what he termed as multi-billion-dollar investments in “fourth generation” (4G) highways connecting Medellin and Antioquia to key ocean freight ports.

In a speech following inspection of Colombia’s first-ever unified air-freight inspection zone at Medellin’s Jose Maria Cordova (JMC) international airport – now 56% complete and due for start-up by December 2018 -- Zaninovich cited “4G” investments that would top COP$23 trillion [US$8 billion], benefitting Medellín and Antioquia.

Zaninovich claimed that the projects are moving ahead promptly. But he failed to highlight that the crucial “Pacifico 1” divided highway -- linking the southern Medellin suburb of Caldas to Colombia’s main Pacific port at Buenaventura via the under-construction “Pacifico 2” and “Pacifico 3” highways -- has been stalled for years, with little explanation on the hang-up.

“Pacífico 2 and Pacifico 3 have advanced by 33% and 40% respectively,” he said. “We can’t lose forward progress that Colombia has achieved until now, because we’re moving ahead -- and great infrastructure projects already are a reality,” he said.

“Public-private association” (APP in Spanish initials) contracts involved in highway, ocean-port and airport projects are unprecedented in Antioquia, he added. These 4G highway projects will cut freight transport times by at least 30%, he added.

Major cities in Colombia (including Medellin) are severely penalized by expensive freight transport costs -- the result of Colombia’s decades-long delays in building high-speed, divided highways over-and-through the nation’s steep, mountainous terrain.

To overcome this problem, the national government is working with private-sector development consortiums on all the "4G" highway projects including Pacífico 1, 2 and 3; Mar 1 and Mar 2; Conexión Norte; Autopista al Río Magdalena 2; and the 100%-private initiatives “Vías del Nus” and the “Antioquia-Bolívar” highway links, he added.

What’s more, ANI is also working to push-forward the “Transversal de las Américas” highway linking Atlantic ports as well as the proposed “Vial del Oriente” highway connecting the “oriente” (east of Medellin) region to Llanogrande (next-to the JMC international airport).

Zaninovich added that ANI also favors development of two proposed ocean-freight ports near Turbo, Antioquia: “Puerto Antioquia” and “Puerto de Pisisi.”


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.


In an unprecedentedly massive primary turnout, Colombia’s voters on March 11 chose moderate presidential candidate Ivan Duque of the center-right Centro Democratico party to face-off against socialist-populist Gustavo Petro in this spring’s presidential elections.

As the polls closed, the soft-speaking, diplomatic Duque publicly announced that he has chosen moderate Conservative Party candidate Marta Lucia Ramirez – the runner-up in the center-right primary contest yesterday -- as his vice-presidential candidate.

In his post-election speech, Duque promised that if elected, he would reach across the broad political spectrum of Colombian politics to guide his administration’s policies. However, Duque added that he would fight any attempts by communists and populists to impose a Venezuelan-style dictatorship in Colombia.

"Our proposal is to include all Colombians, without exclusions," Duque said.  "The time has come to turn the page on impunity, clientelism, tax asphyxiation, distrust of institutions. We do not want to succumb to the temptations of populist authoritarianism in Venezuela, which has ruined Venezuela and has delivered the crudest kind of socialist reaction, whose reality is bread for today, hunger for tomorrow."

In contrast, Petro’s venomous, conspiracy-filled post-election speech insulted Duque, Ramirez and their mostly moderate allies, terming them “the extreme right.”

Many Colombians fed-up with the murderous violence of nearly 60 years of communist and narco-terrorism – over the last 20 years tacitly or overtly supported by members of Venezuela’s socialist dictatorship -- have protested at Petro’s populist-socialist campaign rallies, some of which have featured hundreds of bussed-in supporters aiming to create the illusion of majority support for Petro.

In his post-election speech, Petro denounced these protests against his socialist-populist campaign as a “conspiracy” which fails to provide “guarantees” for his candidacy.

In contrast to Petro’s venom, the ever-polite, calm-but-firm Ramirez -- a veteran Colombian politician – modestly and warmly welcomed Duque’s primary victory. Ramirez would become Colombia’s first female vice-president if she is elected this spring.

The Duque/Ramirez ticket -- uniting Conservatives and Centro Democratico – is now seen by many political analysts as likely to win either in the first or second round of Colombia’s presidential elections this spring, facing Petro and four other less-popular presidential candidates.

Duque and Ramirez collectively won twice as many votes as Petro in the Sunday primaries -- a strong indication of Colombian voter intentions.

Voter sentiment here in favor of moderate-conservative candidates is partly a reaction to the horrors of the economic collapse of the socialist dictatorship in neighboring Venezuela, as well as voter anger over what many see as current President Juan Manuel Santos’ betrayal of former President Alvaro Uribe’s anti-terrorism policies and Uribe's relative economic-policy successes.

Meanwhile, socialist-populist candidate Petro – a former Bogota mayor that left a legacy of administrative chaos and divisive, political venom -- has been an apologist for the totalitarian Venezuelan government, issuing statements that have attempted to discredit independent news reports on the devasting impact of the Chavista regime on the majority of Venezuelans.

Also in Sunday’s voting, former president Alvaro Uribe won reelection in the national Senate races -- getting far more votes than any other Senate candidate – while Uribe’s center-right Centro Democratico party gained 13 more seats in the House but dropped one seat in the Senate.

However, in Colombian congressional politics, party ideology typically plays a lesser role in policymaking, as Senators and Congress members of most parties typically form partial alliances with whomever becomes the next President.

Hence a Duque/Ramirez administration – which campaigned on a platform critical of the generous “peace” deal negotiated with the communist FARC by outgoing President Juan Manuel Santos -- likely will be less generous in clarifying or confirming some still-unclear deal terms -- either with the current FARC political leaders or the politically similar ELN terrorist group.

Many members of the new Congress -- from various parties – are now seen by analysts as likely to work cooperatively with a Duque/Ramirez administration, as is typical of Colombian politics.

Following the President Santos “peace” deal, which guarantees the FARC 10 seats in the House and Senate -- even without them having to win any popular vote -- the FARC subsequently formed a political party, using the same FARC initials. In yesterday’s elections, the FARC gathered a paltry 85,000 popular votes -- out of more than 15 million votes cast.

It’s yet another sign of Colombian voters’ overwhelming disgust with the communist FARC -- and also a back-handed slap-in-the-face to President Santos, who went ahead with the “peace” deal despite a public plebiscite that voted to reject the deal.


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.”


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.


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.


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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SILLETEROS PARADE 2016 by JOHN AND DONNA STORMZAND (click to enlarge)

MEDELLÍN PHOTOS by Gabriel Buitrago (click to enlarge)

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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.

Medellin Herald welcomes your editorial contributions, comments and story-idea suggestions. Send us a message using the "contact" section.

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Medellin Herald: Find news, information, reviews and opinion on business, events, conferences, congresses, education, real estate, investing, retiring and more.
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  • Medellin, Antioquia, Colombia

Medellín Photo Galery

Medellin, contrasting colors and styles by Gabriel Buitrago
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