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Roberto Peckham

Colombia-based Cemex LatAm Holdings announced February 11 that it suffered a full-year 2020 net loss of US$121 million, a huge drop from a US$4 million net profit in full-year 2019.

“The net loss for the entire year was mainly due to non-monetary impairment of goodwill and inactive assets by US$121 million, registered in the third quarter 2020,” according to the company.

Sales also fell 20% year-on-year as the Covid-19 crisis triggered economic shutdowns, which depressed demand for cement and concrete in various markets.

Despite the losses, earnings before interest, taxes, depreciation and amortization (EBITDA) margin improved by 2 percentage points, “supported by our pricing strategy and cost-savings program, even though our volumes were heavily impacted by the pandemic,” according to Cemex LatAm.

In addition, “we reduced net debt by 11% during 2020 and our leverage ratio remained relatively stable at 3.7 times from December 2019 to December 2020, despite of the drop in operating cash flow,” according to the company.

As for fourth-quarter (4Q) 2020, corporate-wide net income improved to US$8 million, compared to a loss of US$3 million in 4Q 2019.

Colombia Results

“Operating income in Colombia reached US$30 million, 1% higher in comparable terms, compared to the fourth quarter of 2019. Net sales increased 1% in comparable terms, compared to the same period of the previous year, reaching US$120 million,” according to Cemex LatAm.

For all of Colombia, industry-wide cement volumes rose 2% in 4Q 2020, but fell 10% in 2020 versus full-year 2019. For Cemex LatAm in Colombia, “our cement volumes fell 17% in 2020, reflecting an impact of our strategy price increase and a new competitor,” according to the company.

Cement prices for Cemex LatAm in Colombia rose 8% in 2020, as measured in local currency. Full-year EBITDA in Colombia rose 6%, despite a 10% drop in sales.

Rest-of-Latin-America Results

In Panama, Cemex LatAm's 4Q 2020 sales fell 40% year-on-year, to US$23 million.

In Costa Rica, 4Q 2020 EBITDA rose 34% year-on-year, to US$8 million. Net sales rose 7%, to US$22 million.

In the rest of its Central America and Caribbean markets, 4Q 2020 EBITDA increased 20% in comparable terms, to US$16 million, while net sales rose 12%, to US$58 million, according to the company.


Medellin-based textile and plastics-recycling giant Enka Colombia announced February 10 that its full-year 2020 profits rose to COP$15.2 billion (US$4.3 million), up slightly from COP$15 billion (US$4.25 million) in full-year 2019.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for full-year 2020 rose 7% year-on-year, to COP$38 billion (US$10.7 million), while EBITDA margin rose to 10.7%, from 8.9% in 2019.

“In 2020, Enka showed a solid operating performance as a result of the good performance of strategic markets, the devaluation of the peso and the active management of fixed costs and expenses, which offset the lower sales volume due to Covid-19,” according to the company.

Coltejer Losses Worsen

Meanwhile, Medellin-based textile giant Coltejer revealed in a February 4 filing with Colombia’s Superfinanciera oversight agency that its full-year 2020 net losses hit COP$94.6 billion (US$26.8 million), worse than the net loss of COP$24.9 billion (US$7 million) in 2019.

Sales also dropped to COP$74.8 billion (US$21 million), down from COP$141.9 billion (US$40 million) in 2019.

Operating loss rose to COP$67.7 billion (US$19 million), compared to an operating profit of COP$13.2 billion (US$2.7 million) in 2019, the company added.

Sales declines caused by the Covid-19 crisis are largely to blame for the poor results.

 


In what critics see as a disturbing habit of recklessness and political capriciousness, Medellin Mayor Daniel Quintero and his hand-picked Board of Directors of city-owned public utility EPM on February 1 fired EPM general manager Álvaro Guillermo Rendón.

Rendón -- himself hand-picked by Quintero to take over as EPM general manager in January 2020 upon Quintero’s election as Medellin Mayor – is just the latest victim of  growing turmoil inside EPM, as EPM unions and civic groups slam Quintero's capriciousness and his appointments of political hacks rather than technocrats in several key executive positions.

Quintero, with a circus-empresario political flair -- accompanied by his now-departed, sedate alter-ego Rendón, a lawyer with no engineering experience in a company that is overwhelmingly engineering-driven -- last August had made what critics say could turn out to be a catastrophic decision to sue EPM’s construction contractors at the US$5 billion Hidroituango hydroelectric project, as well as propose a mind-boggling, quixotic series of changes to EPM’s business model.

Those moves -- taken without consulting EPM’s prior Board of Directors -- triggered an unprecedented mass resignation of the entire Board last August.

Then, two days ago (on January 31), Rendón publicly released a letter asking EPM’s board to consider Quintero’s previously secret demand for his resignation, only days after Quintero had falsely denied publicly that Rendon must resign.

But as of this morning (February 2) neither Quintero nor the EPM Board have given any public explanation for the firing -- or explain what is really happening inside EPM – in defiance of EPM’s mandatory, legal requirement for transparent corporate governance.

Meanwhile, in a February 2 interview with Colombia’s Blu Radio network, Rendon revealed that his clash with Quintero arose because Quintero has been pressuring Rendón to appoint political hacks to key management positions.

“The mayor, on January 14 [2021], asked me to resign, a decision that I found a bit intriguing," Rendon stated in the Blu Radio interview. “Mayor Quintero told me: 'I want a person to copy me more.' I think the mayor still assumes that EPM is his personal dispatch secretary,” he added.

Proantioquia Slams Manipulations

Medellin’s leading civic group Proantioquia on February 1 publicly slammed the Mayor’s manipulations, “just as we did on August 12, 2020, after the massive resignation of the Board of Directors.”

“It is an obligation to respect the administrative independence of the company as defined by the principles of good corporate governance and the framework agreement of relations between the municipality of Medellín and EPM, in force since 2007,” Proantioquia noted in a press statement.

“In just one year of the current administration, EPM has been immersed in various crises. First, the request to change the corporate purpose of EPM that alerted the international risk-rating agencies and over which there was no political control prior, nor a participatory public conversation.

“Then, the full resignation of the Board of Directors for the decisions that were not consulted on the change of the social object of the company, and the lawsuit filed against the builders and auditors of Hidroituango.

“Third, the inappropriate way of handling matters related to the constitution of the new Board of Directors, ignoring what is required by corporate governance to guarantee transparency, rigor and plural participation in the formation of the company.  And more recently, the departure of the General Manager appointed by the Mayor after just one year, his trusted interlocutor and whom he supported only 10 days ago in the media via a communication to all citizens.

“We emphatically reiterate that EPM’s administration requires technical, legal and financial rigor. Therefore, we demand that the Mayor of Medellín and the Board of Directors -- assuming the statutes of the company and the rules of corporate governance -- make decisions based on the institutional stability of the company, guaranteeing the provision of public services and transparency before the community and its groups of interest.

“Finally, we summon the citizens, the Medellín City Council and the national and territorial control entities to activate their social and legal mechanisms for EPM’s protection. The welfare of our city, and the energy stability of the country, are linked to the sustainability of EPM,” Proantioquia concluded.

Medellin Chamber of Commerce Rips Political Schemes

Meanwhile, Medellin Chamber of Commerce executive president Lina Vélez on January 31 issued a public statement slamming Mayor Quintero’s bizarre behavior in directing EPM.

“It is incomprehensible that, for a young mayor who by his own academic merits achieved a specialization in finance at the University of the Andes and a Master's degree in business administration from the University of Boston, does not want to understand and abide by governance statutes for public administration that are written in basic Spanish,” Vélez said.

“For the sustainability of the company and for the confidence of the international and national financial markets [upon which EPM’s financing depends] it is essential that another crisis does not repeat itself.

"[Mayor Quintero and the EPM Board] have the obligation to publicly explain why, for the first time in EPM’s recent history, a manager lasts barely a year. The responsibility of directing Grupo EPM, made up of 47 multinational companies with an equity of more than COP$22 trillion (US$6.15 billion) . . . is in the hands of its Board of Directors and common sense.

“If the current framework agreement governing relations between the municipality of Medellín and EPM is not the most appropriate, then from the Chamber of Commerce of Medellín for Antioquia we call upon the City Council to prioritize its debates and establish a scheme of mandatory compliance with the model of corporate governance for EPM.

“I also urgently await the IDB's [International Development Bank] intervention in this [corporate governance] model,” she added.


Medellin-based Healtix Home IPS and Bogota-based WTA Latam IPS jointly announced January 29 the start-up of Covid-19 testing services at Medellin’s José María Córdova (JMC) international airport in Rionegro.

“From today, our airport will have a laboratory to carry out Covid-19 detection tests,” according to a bulletin from JMC. “This service will be provided by WTA Latam IPS and Healtix Home IPS.”

All international passengers arriving to or leaving from Colombia are now required to pass a Covid-19 test within 96 hours of flights to-or-from most destinations including North America, Europe and much of Latin America.

Many nations (including Colombia) currently accept either the relatively rapid-result (but less accurate) antigen test (results in 20 to 40 minutes) or else the more-accurate but lengthier PCR test (24 to 36 hours for results). Passengers unable to get a Covid-19 test before boarding a flight to Colombia must get this test upon arrival and face quarantine as well.

The antigen test here at JMC is priced at COP$80,000 (US$22) while the PCR test costs COP$230,000 (US$64.50), according to the companies involved.

Colombia’s medical-services regulator Invima has certified both of these tests, according to JMC.


Colombia Health Minister Fernando Ruiz announced last night (January 29) that the first 337,000 doses of Covid-19 vaccine will be administered starting February 20.

Thanks to recent purchase deals, “Colombia has secured the 35 million vaccines necessary to immunize 70% of its population against Covid-19, with which we will achieve herd immunity,” according to the Ministry.

“We have managed to buy 20 million doses for 10 million Colombians through Covax, and through bilateral [purchase] mechanisms another 41.5 million doses for 25.25 million people. In this way we reached 61.5 million doses for 35.25 million people to be vaccinated,” Minister Ruiz revealed.

Total government spending for vaccine acquisition now totals COP$2 trillion (US$560 million), he aded.

The “National Vaccination Plan” (PNV in Spanish initials) now includes the following vaccines:

Pfizer: 10 million doses purchased for 5 million people (two shots per person), using the “messenger RNA” chemistry. “This vaccine differs from the traditional ones because it does not incorporate live or attenuated virus agents, or fragments of it,” explained Ruiz.

AstraZeneca: 10 million doses for 5 million people, similarly a “non-replicating viral vector vaccine that must be applied in two doses.”

Janssen (Johnson & Johnson): 9 million doses for 9 million people, as a “single-dose vaccine that is easy to take to dispersed areas” since it doesn’t require ultra-cold refrigeration.

Moderna: 10 million doses for 5 million people, “a new technology vaccine also of messenger RNA that requires deep freezing,” he said.

Sinovac: 2.5 million doses for 1.25 million people. “It is an inactivated, two-dose vaccine that can be stored in standard refrigeration at 2°C to 8°C,” according to the Ministry.

All these vaccines “have shown efficacy, all exceed the minimum standard required by the WHO [World Health Organization] for vaccination processes and allow us a diverse portfolio of maneuverability in the event of any eventuality,” Ruiz said.

Updated Vaccination Rollout Schedule

Thanks to the recent acquisitions and updated delivery schedules, the following dose schedule is now foreseen starting February 20, 2021:

February: 337,000 doses
March: 3,333,764
April: 4,663,843
May: 3,939,843
June: 7,553,450
July: 8,294,941
August: 11,258,941
September: 5,642,941
October: 6,260,116
November: 4,934,352
December: 3,166,666

As a result, “Colombia has the possibility of completing 100% of targeted vaccinations in 2021,” rather than an earlier estimate of 2022, he said. “Bear in mind that 35 million people represent almost the entire population over 16 years of age in Colombia,” he added.

“This is the opportunity for the country to unite, regardless of any divergence, towards a safe and effective vaccination process, because that is the basis for our country’s ability to turn the page on Covid-19” -- enabling both public health improvement as well as fuller economic recovery, he concluded.


The latest Invamer poll of voting-age residents here (see: https://www.scribd.com/document/492368867/Informe-INVAMER-Poll-140#from_embed\) finds that Medellin Mayor Daniel Quintero’s favorability rating has plunged from 84% at the start of his term in 2020 to just 55% today, with unfavorability rising to 42%, from just 12% initially.

What’s more, 56% of Medellin residents now say that their situation is getting worse under Mayor Quintero, while only 34% see their situation improving, the poll shows.

According to Invamer, the January 2021 telephone/cell-phone survey of 1,200 voting-age residents nationally has a 95% confidence margin.

While Quintero had won admiration for some management initiatives during the initial stages of the Covid-19 crisis last year, subsequent economic and social problems arising from Covid-19 shutdowns, along with mishandling of EPM’s prior board of directors -- tied to his potentially catastrophic decision to sue the construction contractors at EPM’s “Hidroituango” hydroelectric project -- have damaged his public image.

The relatively weak favorability ranking for Quintero today contrasts sharply with that of his immediate predecessor, Federico Gutiérrez, whose favorability rankings during his four-year term hovered between 80% to 84% and unfavorability never rose above 18%, the Invamer poll shows.

One possible reason: Gutierrez, unlike Quintero, never stooped to attacking Medellin’s popular business sector with unproven, Trump-like allegations including baseless conspiracy theories claiming that Grupo Empresarial Antioqueño (GEA) essentially resembled a “deep state” supposedly looting city-owned EPM, Medellin’s single-biggest financial supporter.

No such wild allegations have been brought or proven in court -- and dozens of local and national business trade associations, civic groups and trade unions have since publicly denounced these Quintero claims as shameful and unfounded.

Other notable findings from the latest Invamer poll:

1. While Colombia President Ivan Duque has seen his popularity fall because of the economic and social fallout from the Covid-19 crisis, Duque has gained praise -- compared to his predecessors -- for rapid advancement in Colombia’s crucial highway construction projects, expanded access to health services and accelerated construction of subsidized housing for low-income populations, even in the face of the Covid crisis, the poll shows.

2. Antioquia Governor Anibal Gaviria has seen his favorability ranking improve from 58% at start of his term last year to 67% currently -- even despite facing new allegations of “corruption” tied to an obscure bridge-building contract 16 years ago, during Gaviria’s first term as Governor.

3. Perennial left-wing demagogue, former guerrilla and presidential pretender Senator Gustavo Petro continues to have a poor public image nationally, at 55% unfavorable versus 35% favorable.

4. Colombia’s Vice President Marta Lucia Ramirez has a relatively weak 31% favorable ranking and 39% unfavorable.

5. Former Colombia Vice President German Vargas Lleras, another possible presidential contender, has a 50% unfavorable ranking and just 30% favorable nationally.

6. Left-wing presidential hopeful Senator Jorge Robledo has a 24% unfavorable ranking with just 21% favorable.

7. Centro Democratico posible presidential candidate Senator Paloma Valencia has a 29% unfavorable ranking and just 16% favorable.

8. Possible presidential candidate Senator Roy Barreras – a fiery critic of former President Alvaro Uribe -- has a 42% unfavorable ranking and only 12% favorable.

9. Possible Centro Democratico presidential candidate Rafael Nieto has a 10% favorable ranking and 10% unfavorable, with most having no opinion.

10. U.S. President Joe Biden enjoys a 60% favorable ranking among Colombian voters, with only 11% unfavorable.

11. Colombia’s business class has a 47% favorable ranking nationally, with 44% unfavorable.

12. Colombia’s mainstream news media currently has a 53% unfavorable ranking with 43% favorable. But during former President Alvaro Uribe’s second term – coincident with Uribe’s full-scale war against the narco-communist FARC terrorists -- the mainstream media enjoyed an 80% favorable ranking, reflecting the Colombian population’s absolute disgust with the FARC and its overwhelming approval for Uribe’s war on narco-terrorism.

13. The special “peace” court (JEP, Jurisdiction Especial para la Paz) that has generally granted immunity to FARC terrorists has a 50% unfavorability ranking, but 42% nevertheless are "favorable," willing to accept such immunity for the sake of a tenuous “peace.”

14. Colombia’s Supreme Court -- which has consistently ruled against former President Uribe in legal disputes and has been involved in numerous corruption scandals -- has a 65% unfavorable ranking, with 28% favorable.

15. Colombia’s Congress has a 78% unfavorable ranking, with 16% favorable.

16. Despite having signed a “peace” deal, the FARC still has an 85% unfavorable ranking, while the similar ELN narco-communist group has a 92% unfavorable ranking. Another 65% in the poll agree that the FARC is NOT complying with terms of the “peace” deal.

17. A notable 60% of Colombians continue to favor foreign investment and multinationals here, with only 37% unfavorable. Similarly, 60% favor free-trade agreements, while 35% oppose.

18. As for the idea of legalizing dangerous drugs such as cocaine and heroin in Colombia, 73% are against, with 25% in favor.

19. Asked about getting a Covid-19 vaccination whenever it becomes available here, 58% said they would, while 39% said no.


Colombia’s mostly state-owned Ecopetrol oil company announced January 27 that it’s making a bid worth an estimated US$3.8 billion for the Colombian government’s existing 51% share stake in Medellin-based multinational electric power transmission giant ISA.

The bid, if successful, would help boost Colombia’s government finances because Ecopetrol soon would sell more of its stock -- along with “non-strategic” assets -- to pay for the government’s 51% share of ISA.

Bottom line: the proposed deal would take money from private investors and transfer it into Colombia’s Treasury Ministry -- helping to reduce billions of dollars of new debt arising from massive government subsidies to help citizens and companies overcome huge losses from the Covid-19 crisis.

ISA would still remain 51% government-owned, but the government stake in Ecopetrol would be diluted to around 80%, from nearly 90% currently.

The deal simultaneously would help Ecopetrol prepare for the world-wide transition away from fossil hydrocarbons and reposition it to supply more “green” electric power along with non-polluting electric vehicles. Ecopetrol is already building new solar-power production farms here in Antioquia and elsewhere in Colombia.

“The investment in ISA would represent a transformational step for Ecopetrol in its energy transition and decarbonization path,” according to Ecopetrol’s press statement.

“Ecopetrol would be strengthened with world-class energy infrastructure assets that would generate a material stream of income in low-emission businesses.

“ISA is a leader in the continent with significant positions in the transmission of electricity in Colombia, Brazil, Chile and Peru, among other countries. It stands out for its outstanding financial and operating results, and a robust growth plan that Ecopetrol would maintain.

“The [combined] operation would contribute to the economic reactivation of the country and would represent an opportunity for shareholders by having a unique energy conglomerate in America, with greater capacity to generate value from the complementarity of its businesses and geographic presence.

“The resilience of [Ecopetrol] Group would be strengthened by having a greater portion of stable and predictable income in the long term, while reducing exposure to oil price volatility. The nation would maintain control of both companies through the participation of at least 80% in Ecopetrol.

“The transaction would be financed with a scheme that includes a new capitalization of Ecopetrol through the issuance of shares, equity and other available financing schemes, including the divestment of non-strategic assets. The financial structuring of the operation would maintain a level of Ecopetrol indebtedness aligned with its investment grade.

“The transaction would be carried out through an inter-administrative contract between Ecopetrol and the Ministry of Finance and Public Credit. To make this investment, it is not necessary to make a Public Acquisition Offer (OPA) to ISA shareholders, to the extent that the nation would continue to be the real beneficiary of ISA’s shares and would maintain ultimate control over them.

“If an agreement is reached between the parties (Ministry of Finance and Public Credit and Ecopetrol), the closing of this transaction will be subject to the performance of a detailed due diligence, as well as the issuance and placement of shares by Ecopetrol, prior obtaining the required authorizations,” the company added.

While Ecopetrol potentially could have the upper hand in the proposed deal, other potential buyers include Bogota's GEB power company.


The long-awaited “doble calzada oriente” (DCO) four-lane divided highway between Medellin's "Las Palmas" eastern highway and the Jose Maria Cordova (JMC) international airport just won a final approval from the Antioquia departmental government.

As a result, construction on the COP$926 billion (US$265 million), 13.7-kilometers-long project will start this year, project leader Constructora Conconcreto announced last night (January 19).

Construction time is estimated at 36 months, meaning the highway would open for traffic by 2023 or 2024.

The entire project will be privately funded, rather than tapping any government funds. Toll booths will enable developers to recoup the investment over the coming decades.

The highway will spur further development in the booming “Oriente” (east of Medellin) region including Rionegro and portions of Envigado.

The new DCO highway will connect with the existing Las Palmas four-lane divided highway eastward from Medellin near the “Sancho Paisa” roundabout, passing through the outlying El Tablazo neighborhood of Rionegro and connecting onward with the existing highway bordering JMC airport into central Rionegro.

Partners in the project include Constructora Conconcreto, Castro Tcherassi and Procopal.

On the new highway, “estimated travel time between the Sancho Paisa roundabout and the José María Córdova Airport in Rionegro will be 12 minutes, with an average speed of 80 kilometers per hour,” according to Conconcreto.


Antioquia Governor Anibal Gaviria announced last night (January 19) that “pico y cedula” shopping restrictions will hit the entire Medellin metro area (including “Oriente”) starting the first minute of Thursday, January 21, until midnight Tuesday, January 26.

In addition, curfews will be imposed from 10 pm today (Wednesday) until 5 am daily through January 26.

As a result, people with cedulas ending in even numbers can go shopping on even-numbered days (including today, Wednesday January 20), while odd-numbered cedulas are green-lighted for shopping on odd-numbered days.

Restaurants and hotels are exempted from pico-y-cedula, as well as essential workers, home-delivery workers and emergency situations.

The mandates hit Medellin and the other nine municipalities in Valle de Aburra, as well as the Oriente (east of Medellin) cities of Rionegro, Marinilla, El Santuario, Guarne, El Carmen de Viboral, El Retiro and La Ceja, according to Governor Gaviria.

This latest extension of pico-y-cedula and curfew regulations are the result of the continuing surge in Covid-19 infections and a dangerously high 91.5% occupancy of intensive care units (ICUs) in local hospitals, he said.

However, “we are beginning to perceive a stabilization [in Covid-19 hospitalizations] that we hope will be maintained -- and we can hope for a little-by-little decline,” Gaviria added.


Colombia Health Minister Fernando Ruiz announced last night (January 14) that another 71,473 vaccination specialists soon will join the existing 7,000 nationally qualified Covid-19 vaccinators via a new training program that starts today.

The “Management of Vaccination Against Covid-19 in Colombia” course now underway with Colombia's SENA training institute includes more than 42,000 nursing assistants, 13,000 registered nurses, 6,800 doctors, 3,500 dentists, 3,500 public health workers and 2,200 bacteriologists.

Of the 71,473 new trainees, Antioquia accounts for 8,637, according to the Ministry.

Course materials cover basic information on Covid-19 infection, technical and operational guidelines for vaccination, preserving the ultra-cold-temperature-storage chain, an “open bottle policy”on how to handle vials of vaccines, patient monitoring and data-information systems for correct registration of those receiving vaccines.

By end-January, yet another batch of trainees will enter the national program. For that upcoming session, “we will be inviting other professional health workers with a whole contingent that is working with us throughout the year, and with the territorial entities, the EPS [health insurance networks] and IPS [hospitals and clinics], in vaccination programs,” Ruiz added.


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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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