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Medellin-based multinational processed-foods giant Nutresa announced February 22 that its full-year 2018 net income rose 20% year-on-year, to COP$508 billion (US$163 million).

Earnings before interest, taxes, depreciation and amortization (EBITDA) climbed 7% year-on-year, hitting COP$1.1 trillion (US$354 million), while sales rose 3.7% and EBITDA margin came-in at 12.5%, according to the company.

Sales in Colombia grew 4.4% year-on-year, to COP$5.7 trillion (US$1.8 billion), according to Nutresa. International sales meanwhile rose 2.3%, to US$1.1 billion.

Costs of operations fell 42% year-on-year thanks to lower financing costs, lower debt levels and lower interest, according to the company.

Grupo Nutresa – founded in 1920 – now boasts of having some 45,600 employees in eight business units, including processed meats, baked goods, chocolates, pastas, coffees, ice creams and packaged foods.

The company also operates 46 production plants in 14 countries; its various products are sold in 81 countries across five continents.

Medellin-based multinational banking giant Bancolombia reported February 21 that its full-year 2018 net income rose 2% year-on-year, to COP$2.66 trillion (US$851 million).

Fourth-quarter (4Q) 2018 net income jumped 84% versus third quarter (3Q) 2018, hitting COP$1 trillion (US$320 million), according to Bancolombia, Colombia’s biggest bank.

Gross loans in 4Q 2018 grew 8.3% when compared to 4Q 2017 and by 5.5% during the quarter.

“The quarterly growth shows a positive trend in credit demand in Colombia,” according to the company. Colombian peso-denominated loans in 4Q 2018 grew 6.5% when compared to 4Q 2017.

Net interest income was COP$2.82 trillion (US$903 million) for 4Q 2018, up 6.1% year-on-year. “This positive performance is mainly explained by the growth in the loan book,” according to the company.

Loan provision charges for the latest quarter were COP$987 billion (US$316 million) and the coverage ratio for 90-day past due loans was 180%, according to Bancolombia.

Provision charges in 4Q 2018 increased 6.1% year-on-year but decreased by 2.1% compared to 3Q 2018. New past-due loans totaled COP$4 billion (US$1.3 million) in the latest quarter.

Net fees were COP$735 billion (US$235 million) and increased by 7.1% in 4Q 2018 versus 4Q 2017. “This growth was mainly driven by an increase in fees related to credit and debit cards, trust services and bancassurance,” according to Bancolombia.

At year-end 2018, Bancolombia’s assets totaled COP$220 trillion (US$70 billion), up 6.5% compared to 3Q 2018 and up 7.9% compared to 4Q 2017. “The increase in total assets during the quarter is largely explained by the growth in the loan book,” according to the company.

During the latest quarter, the Colombia peso (COP) depreciated 9.3% versus the U.S. dollar and the COP fell 8.9% versus the U.S. dollar for all of 2018, Bancolombia noted.

At year-end, 2018, Bancolombia’s operations in Banco Agricola in El Salvador, Banistmo in Panama and BAM in Guatemala represented 26% of total gross loans.

Bancolombia describes itself as s “full service financial conglomerate incorporated in Colombia that offers a wide range of banking products and services to a diversified individual and corporate customer base of more than 13 million customers.”

Besides its Colombia perations, the company also owns El Salvador’s financial conglomerate Banagricola S.A., plus off-shore and local (Banistmo S.A.) banking subsidiaries in Panama, Guatemala, Cayman and Puerto Rico.

Celsia Full-Year 2018 Profits Jump 39% Year-on-Year

Wednesday, 20 February 2019 09:39 Written by

Medellin-based electric power producer Celsia announced February 19 that its full-year 2018 net income rose 39.7% year-on-year, to COP$350.7 billion (US$112.6 million), from COP$251 billion (US$80 million) in 2017.

Fourth-quarter (4Q) 2018 net income also rose year-on-year, hitting COP$108 billion (US$34.7 million), up from COP$71 billion (US$22.8 million) in 4Q 2017.

Gross revenues likewise rose 10.7% year-on-year, hitting COP$3.4 trillion (US$1.1 billion) for 2018, versus COP$3.1 trillion (US$995 million) in 2017. Colombia accounted for 81% of revenues, while its Central America power sales accounted for the remaining 19%.

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 1% year-on-year, according to Celsia, a subsidiary of Medellin-based Grupo Argos.

Celsia mainly credited income growth to consolidation of its EPSA (Empresa de Energia del Pacifico S.A.) power subsidiary; start-up of the Celsia Solar Bolívar photovoltaic plant; and the completion of its “Plan5Caribe” power projects in Cartagena and Valledupar.

“The strategy of optimizing our capital structure decreased interest rates, which allowed for a reduction in financial expense,” according to Celsia.

“Net debt at the end of the year amounted to COP$3.06 trillion [US$982 million] with a net-debt-to-EBITDA indicator of 2.7 times, below the 3.2 times [ratio] registered in 2017,” according to the company.

Income tax also fell 22.5% year-on-year thanks to favorable tax-law credits and deductions, the company added.

Consolidated investments rose 20% year-on-year, hitting COP$618 billion (US$198 million), COP$592 billion of which was in Colombia.

“Through EPSA, Celsia structured an issuance of ‘green bonds’ worth COP$420 billion [US$135 million] for the development of unconventional renewable energy projects,” with COP$140 billion [US$45 million] bonds already having been sold.

Medellin-based multinational concrete/cement giant Cementos Argos reported February 18 that its full-year 2018 net income rocketed by 271% year-on-year, to COP$291 billion (US$93 million), from COP$78 billion (US$25 million) in 2017.

Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) rose 8% year-on-year, to COP$1.54 trillion (US$494 million), while EBITDA margin hit 18.3%.

“This result is supported by geographic diversification, the increase in financial flexibility as a relevant factor for the successful long-term execution of the customer-focused strategy, and the efforts of the entire organization to advance efficiency and competitiveness, among which the 6% decrease in administration and sales expenses stands out,” according to Cementos Argos.

The company ended 2018 with a net debt-to-EBITDA index (plus dividends) of 3.7 times, a big improvement over the debt-to-EBITDA index of 4.6 at year-end 2017, “as a result of capex optimization, the release effort of working capital and a successful execution of disinvestments of non-operational and non-strategic assets,” according to Cementos Argos.

A bond issue totaling COP$500 billion (US$160 million) with an average life of 9.5 years, plus a new syndicated loan totaling US$600 million “significantly improved the debt profile,” according to the company.

“In the middle of a highly challenging business context, the company shipped 16 million tons of cement, with a variation of -1%, and 10.3 million cubic meters of concrete, with a variation of -3%, which delivered consolidated revenues of COP$8.4 trillion [US$2.69 billion], 1.4% less than in 2017,” according to the company.

In its USA operations, “public spending on infrastructure continued to show very good dynamics, while the housing market slowed down as a result of the rise in interest rates,” according to Argos.

“Shipments [in the USA market] reached 5.7 million tons of cement, with a variation of -2%, and 7 million cubic meters of concrete, 2.5% less than in 2017, generating revenues of US$1.49 billion, with a variation of -3.4%, and an EBITDA of US$239 million, very similar to the previous year,” according to the company.

“In 2019, Argos expects growth in volumes, both for public construction, which represents 40% of total USA consumption, and for the commercial segment in the midst of a healthy work environment, the positive trend in consumer confidence, the highest household income available after the tax reform and the expectation of a more moderate increase in interest rates,” according to the company.

“In Colombia, the construction sector began to show signs of recovery from the second semester, with volume growth both in cement, and in particular due to greater demand in the mass consumption segment, a better macro environment and an increase in civil works, particularly of 4G [fourth-generation highway] projects, where Argos is a leader and provides about 70% of the functional [construction projects] that have been awarded.

“In Colombia, an EBITDA of COP$433.9 billion [US$142 million] stands out, with a variation of 16.7% with respect to the previous year. On the other hand, cement dispatches were 5 million tons, with a variation of -1.8%, and dispatches of concrete totaled 2.9 million cubic meters, with a variation of -3.6%; which resulted in COP$2.3 trillion [US$738 million] in revenues, 0.4% less than in 2017.

“Several indicators generate optimism in relation to the recovery [in Colombia] that is beginning to be evident in the industry, especially the growth of concrete dispatches for civil works and better dynamics in the construction of non-[subsidized] housing expected from the second semester of 2019.”

As for operations in its Caribbean and Central America markets, “shipments reached 5.1 million tons of cement, with a growth of 1%, and 412 million cubic meters of concrete, with a variation of -6.9%; which represented revenues of US$593 million, 2.2% more than in 2017, and an EBITDA of US$178 million, 3.4% higher than the previous year,” according to Argos.

“Puerto Rico -- driven by the reconstruction works after the impacts of hurricanes Irma and María -- presented a significant increase of close to 40% in cement dispatches,” the company added.

Medellin-based textile, fibers and filaments manufacturing specialist Enka de Colombia revealed in a February 7 filing with Colombia’s Superfinanciera corporate-oversight agency that its full-year 2018 profits more-than doubled year-on-year, to COP$4.3 billion (US$1.37 million).

Operating earnings rose 15% year-on-year, to COP$411 billion (US$131 million), thanks to higher prices in international markets and a 3% hike in sales volumes, according to the company.

Especially notable was the 122% jump in sales to North America, along with an 8% rise in sales to Brazil and a 21% hike in sales to the local Colombian market, according to Enka.

Earnings before interest, taxes, depreciation and amortization (EBITDA) jumped 38% year-on-year, to COP$31.8 billion (US$10 million), according to the company.

The positive earnings enabled Enka to invest nearly COP$17 billion (US$5.4 million) mainly in projects to expand and modernize its novel recycling operations that convert waste plastics into specialty fibers and textiles, according to the company.

Medellin-based multinational paints, chemicals and water-treatment technology manufacturer Grupo Orbis revealed February 14 in a filing with Colomba’s Superfinanciera corporate oversight agency that it posted a COP$3.2 billion (US$1 million) net loss for full-year 2018, compared to a COP$40.7 billion (US$12.9 million) net profit in 2017.

Full-year 2018 sales dipped slightly year-on-year, to COP$1.46 trillion (US$464 million), down 0.9% from COP$1.69 trillion (US$538 million) in 2017, according to the company.

The company includes the giant “Pintuco” paints subsidiary along with chemicals unit Andercol, water-treatment specialist O-Tek and aerosol-spray specialist Mundial.

On another front, Icontec -- the Colombian Institute of Technical Standards and Certification – last month awarded Pintuco a special certification for its recent efforts to slash net global-warming emissions through the “BanCO2 Plus” project, which helps Antioquian farmers replant native trees and conserve local water resources.

“Being ‘carbon-neutral’ is the result of the commitment that our organization has toward reduction and compensation for greenhouse gases (GHG) emissions,” according to Pintuco.

Medellin-based commercial real estate investor Valores Simesa revealed February 14 in a filing with Colombia’s Superfinanciera corporate-oversight agency that its full-year 2018 after-tax profits rose to COP$24 billion (US$7.6 million), up from COP$12 billion (US$3.8 million) in 2017.

Bancolombia’s investment-bank division held 68% of the stock of Valores Simesa, according to the company’s most recent annual report (issued March 2018).

A core holding of the company is Medellin’s giant “Ciudad del Rio” center, which includes shops, restaurants, offices, residential apartments, parking garages and the Modern Art Museum.

Valores Simesa is a spin-off from the former Siderugica iron foundry complex, now occupied by Medellin's Modern Art Museum.

Besides real-estate deals, Valores Simesa also invests in other companies. Part of its income has come from royalties from the Drummond coal mines in Colombia, but this arrangement is due to expire at year-end 2019, according to the company.

China-based electric vehicle (EV) manufacturer BYD on February 7 launched sales of zero-emissions EV cars at its first-ever retail showroom in Medellin – simultaneous with the Mayor’s office announcing new driving restrictions on polluting vehicles with internal combustion engines (ICEs) for the entire Medellin metro area.

BYD’s new dealership on Avenida El Poblado opposite the Premium Plaza mall comes on the heels of winning a contract to supply 64 pure electric buses to Medellin’s “Metro” public transit agency later this year (see Medellin Herald on December 29, 2018). It's a further sign that Medellin aims to slash air pollution by replacing ICE vehicles with EVs of all types, including cars, motorcycles, buses,  taxis, local-delivery vehicles, rail transit, cable-cars and trams.

“Medellín is among the places with the greatest potential in Colombia for the development of mobility with electric vehicles,” said Juan Felipe Velásquez, BYD’s commercial director for Antioquia.

“Both the municipal administration and private companies [including EV sellers Renault, Nissan and Mitsubishi] have made important bets in the development of sustainable mobility . . . The environmental [air-pollution] contingency of the metropolitan area has caused the authorities to focus their efforts on electric vehicle replacement,” he added.

Medellin also aims to expand the fleet of EV taxis, Velasquez said. “This project is very important for us as BYD, so much so that we are structuring two electric-taxi pilot [projects] with different individual public transport administration companies, which will start in a few months,” he said.

Beyond EV cars, buses and taxis, BYD “intends to exploit a high-potential market with last-mile cargo [local delivery] vehicles,” according to the company.

Meanwhile, Medellin and the regional planning agency (Area Metropolitana del Valle de Aburra, AMVA) on February 7 jointly announced greater “pico y placa” restricions on more ICE vehicles over more days -- including six days/week (rather than the current five) and sequentially hitting six of the last nine digits on license plates each day, rather than just the current four of the nine digits.

The existing “pico y placa” vehicle-driving restrictions alternately ban circulation of vehicles -- depending upon the final digits of license plates -- during morning and afternoon rush-hours. However, zero-emissions EVs are exempt from such driving restrictions.

Under the new scheme – debuting February 18 and lasting until at least March 30, the typical "dry" season for air-pollution alerts – older, higher-polluting vehicles will face even greater hours-of-operation restrictions, from 5 am to 8:30 am, and then from 4:30 pm to 9 pm Monday through Saturday, according to AMVA.

Bogota-based cement/concrete manufacturing giant Cemex LatAm Holdings announced February 7 that its fourth-quarter (4Q) 2018 region-wide net profits fell 33% year-on-year, to US$10 million, from US$33 million in 4Q 2017.

But full-year 2018 profits improved 36% year-on-year, to US$63 million, from US$46 million in 2017, according to the company, which operates in Colombia, Panamá, Costa Rica, Nicaragua, El Salvador and Guatemala.

As for its Colombia operations, full-year 2018 sales slipped 7% year-on-year, to US$524 million, while 4Q 2018 sales dipped 6% year-on-year, to US$125 million, from US$134 million in 4Q 2017, according to Cemex.

Colombian sales of grey cement for full-year 2018 dipped 6% year-on-year, but rose 4% in 4Q 2018, while Colombian concrete sales fell 11% for full-year 2018 and by 8% in 4Q 2018.

Sales of aggregates in Colombia declined 14% for full-year 2018 and 15% in 4Q 2018 versus 4Q 2017, according to the company.

Cemex foresees 2019 demand for cement in Colombia either flat or rising by 1%, while demand for concrete and aggregates would rise by 1% to 3%, according to the company. Product prices also began to recover slightly in the Colombian market during 4Q 2018, according to the company.

Colombia’s residential-sector demand rose slightly during 4Q 2018, according to Cemex, especially in the “informal” and “self-built” housing segments.

For these lower-income “social housing” sectors, “there are encouraging signs for the future, given that sales and construction permits [in those sectors] through September 2018 rose by 5% and 15% respectively . . . supported by continuing government subsidies,” according to the company.

However, the middle- and upper-income housing sectors in Colombia continue to face challenges as new-starts and housing-permit applications had fallen 18% through September 2018, while inventories in these sectors remain relatively high, at 16-months turnover rate.

As for the Colombian infrastructure sector (highways, airports, tunnels, hospitals, sewage-treatment-plants, schools, marine ports), 4Q 2018 demand continued relatively strong, according to the company.

Cemex dispatched its products to 15 “fourth-generation” (4G) highway projects including the “Mar 1” and “Vias del Nus” projects in Antioquia, plus the “Autopista al Rio Magdalena 2;” “Bucaramanga-Barranca-Yondó;” “Bucaramanga-Pamplona;” and “Pasto-Rumichaca” projects. Cemex boasts that it achieved 36% market participation in 4G projects during 2018.

For the rest of 2019, Cemex expects demand for cement in Colombian infrastructure proejcts to rise by low-single-digits, including several large road-building projects in Bogota, according to the company.

Medellin-based multinational electric power giant EPM announced Tuesday, February 5, that it successfully shut the last water-intake tunnel at its giant Hidroituango hydroelectric dam, hence accelerating the planned diversion of the Cauca River over the dam’s engineered spillway by several weeks – and also enabling repairs to begin.

Temporarily, the decision means that downstream fish populations will be affected for about three days -- because the Cauca River still requires three more days to rise to the level of the engineered spillway at the top of the dam.

In a press conference, EPM general manager Jorge Londoño de la Cuesta explained that technical experts advised EPM to accelerate the closure of the water-intake tunnels in order to avoid a possible collapse of those tunnels.

Rising pressure differences between the water behind the dam and the water entering the tunnels would increase with rising water levels, threatening a potential tunnel collapse, the experts warned. Such a possible collapse would have prevented EPM from controlling water levels through the machine room, potentially wrecking the US$5 billion project and possibly endangering downstream populations.

As the last intake-gate was shut to the water tunnel, downstream water flows below the dam started falling drastically – to an estimated 35 cubic meters per second, down from around 450 cubic meters per second in recent days.

But flows should return to “summer-season” normal by next weekend (February 8-9) when the dam spillway outflow gradually restores normal Cauca River levels in the downstream area, he explained.

To reduce temporary impact on fish, EPM hired and trained 700 local fishermen to help rescue fish trapped in pools as water flow diminishes, he added.

In addition, EPM released extra water from its Porce hydroelectric dam system near Guatape, Antioquia, in order to boost river flows where the Nechi River meets the Cauca River at the town of Nechi, Antioquia, downstream from Hidroituango.

Cauca River flows have been decreasing in recent weeks because of the typically low-rainfall “summer season” of February and March. That decline in flow prompted EPM to hire local people to help rescue some 32,000 fish recently trapped in pools downstream of the dam.

Now that the final water-intake gate at the dam is closed, EPM personnel can start the process of entering the machine room, which has been flooded since last May because of an unexpected collapse in a nearby diversion tunnel. Since the dam and the spillway weren’t yet finished last year, EPM made an emergency decision to divert Cauca River water through the machine room, in order to avoid a dam collapse.

Since then, EPM and its engineering partners discovered a big hole that had opened between water-intake tunnels one and two, which lead to the machine room. The hole probably developed because of water erosion -- caused by the emergency evacuation of river water through the machine-room tunnels, according to EPM.

Now, EPM not only will have to repair damages to the machine room, but also to the water-intake tunnels damaged by erosion over the past 10 months.

The company still hopes to start-up the 2.4-gigawatt Hidroituango project by year-end 2021, which eventually would supply fully 17% of Colombia’s entire national electricity demand.

But EPM can’t be certain of the start-up schedule until it has the opportunity to inspect the damages in the machine room and the tunnels.

The city of Medellin gets nearly 25% of its entire annual budget from city-owned EPM. So, restoration and recovery of the Hidroituango project will be crucial to city finances in the coming decades.

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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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