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Medellin-based multinational cement/concrete giant Cementos Argos announced August 12 that its second-quarter (2Q) 2019 net income hit COP$73 billion (US$21 million), from COP$29 billion (US$8.5 million) in 2Q 2018.

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 44% year-on-year, to COP$475 billion (US$140 million), according to the company.

As for first half (1H) 2019 results, “revenues increased 10.6%, driven mainly by higher cement volumes in the United States and the start of price recovery in Colombia,” according to Argos.

“Cement shipments were close to 8 million tons, 1.2% higher than in the first half of 2018, and concrete shipments were 5 million cubic meters, with a decrease of 2.5% due to the impact of heavy rains in some regions of the United States.”

“In the first half of 2019 we continued to strengthen our operation and our presence in the United States with the execution of the ‘BEST 2.0’ efficiency plan, which, together with better price dynamics that we began to see in Colombia, allowed us to compensate for the pressure we experienced in energy costs," said Juan Esteban Calle, president of Cementos Argos.

“The significant progress of our divestment plan in non-strategic assets allows us to continue to focus on improving the competitiveness of the company and innovating in products, services and solutions to accompany the growth of our customers,” he added.

In the USA, 1H 2019 revenues rose 3.5% year-on-year, to US$781 million, while EBITDA remained stable at US$108 million.

Cement shipments in 1H 2019 in the USA increased 6.9%, exceeding 3 million tons, while concrete shipments decreased 3.8%, mainly due to heavy rains in the south-central region.

In Colombia, 1H 2019 revenues rose 3.3% year-on-year, to COP$1.1 trillion (US$324 million), but EBITDA dipped 4%, to COP$186 billion (US$55 million) because of higher energy costs.

Colombian cement shipments totaled 2.4 million tons in 1H 2019, down 2.5%, but concrete shipments held steady, at 1.4 million cubic meters.

As for its Caribbean and Central American markets, Argos stated that “operations in the Dominican Republic and Haiti continue with a positive performance, compensating to some extent the challenging political environment that was evident during the period in Honduras and Panama.”

In Caribbean/Central American region, 1H 2019 revenues dipped 4.5% year-on-year, to US$286 million, while EBITDA fell 19.8% year-on-year, to US$79 million. Cement shipments dipped 1.5% year-on-year, to 2.5 million tons, while concrete shipments declined 3%, to 194,000 cubic meters, according to the company.

Despite the regional declines, “Argos maintains its favorable outlook in a region that advances important infrastructure and housing plans, which add to the progress in the reconstruction of Puerto Rico,” according to the company.


Medellin-based construction giant Constructora Conconcreto announced August 9 that its second quarter (2Q) 2019 earnings jumped 70% year-on-year, to COP$57 billion (US$16.8 million).

Earnings before interest, taxes, depreciation and amortization came-in at COP$105 billion (US$31 million), essentially flat year-on-year, while EBITDA margin was 25%.

Consolidated revenues hit COP$417 billion (US$123 million), down 9.5% year-on-year.

“The business segment that contributed most to the ordinary income was construction, at COP$312 billion (US$92 million)," according to Conconcreto.

The company also cut its consolidated financial liabilities by COP$120 billion (US$35 million) compared to year-end 2018 debt levels.

Among other 2Q 2019 highlights:

• “The CCC Ituango consortium met the objective of bringing the Hidroituango dam [in Antioquia] to 435 meters above sea level, its maximum height. This is one of the most important milestones for the safety of the communities downstream of the project. The top of the dam will be the road to the municipality of Ituango,” according to the company.

• “On June 12, we proudly received recognition for the ‘Contree’ project [in Medellin] as the best vertical housing project during the celebration of the LADI [Latinoamericanos de Desarrollo Inmobiliario] awards, a Latin American event that seeks to highlight innovation, development, architecture and marketing applied to the real estate industry.”

• Construction of the “Logika Siberia” warehouse portal gateway in Cundinamarca, employing Conconcreto’s novel large-format concrete “3D Printer” to build the portal building.


Medellin-based electric power giant Celsia reported August 8 that its second quarter (2Q) net income fell 56% year-on-year, to COP$43 billion (US$12.6 million), mainly because of financing costs for its purchase of Tolima departmental power company EPSA.

Another COP$19 billion (US$5.6 million) of the difference between 2Q 2019 versus 2Q 2018 profits was the one-time 2Q 2018 cancellation of foreign credits, according to the company.

The EPSA purchase involved issuance of ordinary bonds totaling COP$1.1 trillion (US$324 million) as well as contracted loans with national and international banks for COP$800 billion (US$235 million), according to Celsia.

“Additionally, on July 11, the first issue and private placement of EPSA shares since its establishment was completed, in which resources were obtained in excess of COP$450 billion (US$132 million), which will be used for early payment of short-term loans,” according to Celsia.

“The results of this [latest] quarter reflect, to a large extent, the profound strategic changes we have made in the last 18 months and, additionally, are greatly influenced by the recent acquisition of the distribution and commercialization operation in Tolima,” said Ricardo Sierra Fernández, Celsia director.

Consolidated 2Q 2019 revenues rose 11% year-on-year, to COP$913 billion (US$269 million), while earnings before interest, taxes, depreciation and amortization (EBITDA) rose 7%, to COP$287 billion (US$84.6 million), according to the company.

“Colombia represents 83% of the consolidated revenues and Central America 17%,” according to Celsia.

“Revenue from retail [power] sales was COP$338 billion (US$99 million), up 35%, also favored by higher revenues from Tolima’s assets (COP$78 billion/US$23 million),” according to the company.

“The operation of the assets acquired in Tolima contributed favorably,” the company added. “With the integration of Tolima, the company reaches nearly 1,135,000 customers, meeting our goal of exceeding 1 million customers by 2025 -- well in advance” of its earlier forecast.

“The priority in the [Tolima] department is to improve indexes in quality and reliability in the provision of power service, for which COP$600 billion [US$177 million] will be invested in the first five years of operation,” the company added.

During the latest quarter, Celsia also hit a total capacity of 100 megawatts of solar energy in Colombia and Central America. The company also exceeded its goal of 3 million trees planted in the “ReverdeC” program, designed to offset “global warming” emissions from fossil-fueled power production.


Medellin-based specialty textiles and fibers giant Enka announced August 8 that its second-quarter (2Q) 2019 profits came-in at COP$4.9 billion (US$1.4 million), a big improvement over the 2Q 2018 net loss of COP$999 million (US$294,000).

Earnings before interest, taxes, depreciation and amortization (EBITDA) likewise improved by 35% year-on-year, to COP$14 billion (US$4.1 million), “driven by increasing the collection of PET [polyethylene terephthalate] bottles [as an environmentally friendly feedstock for specialty fibers] and the increase in the Colombian peso to U.S. dollar exchange rate,” according to Enka.

So far in 2019, Enka’s exports to the U.S. market are up 46%, and up 300% over the last two years, with the U.S. now representing 12% of total company revenues.

Meanwhile, first-half (1H) 2019 corporate-wide sales are up 1.8% year-on-year, hitting COP$200 billion (US$59 million), while total exports to all countries hit US$29 million, now representing 46% of the company's revenues.

In the local Colombian market, revenues grew 5% year-on-year, “driven by a higher exchange rate, which offset the lower volume compared to 2Q 2018 (-2%),” according to Enka.

Total export revenues to all markets dipped slightly (by 1%), “mainly due to spot [one-time sales] business carried out in 2018 and lower dynamics of the Brazilian economy, which has been compensated with the higher exchange rate and greater growth in the North American market,” according to Enka.

The three main specialty lines of synthetic fibers, filaments and resins products collectively showed steady revenues year-on-year, at COP$62 billion (US$18 million), representing 31% of the company’s revenues in the period.

About 85% of these synthetic products go to the Colombian local market, with the remaining 15% exported mainly to Brazil.

“EKOPet” product (8,335 tonnes output) “remains stable and [production] continues to operate at maximum capacity, allocating 100% of the production to serve the local market,” according to Enka.

“EKOFibras” fibers (4,948 tonnes) volume fell 18% year-on-year “ mainly due to the decree of minimum import thresholds that favored 1Q 2018 and due to an increase in inventories in preparation for the start of the modernization project of this production line, which is expected to start operations in third-quarter 2019,” according to Enka.

“EKOPoliolefinas” polyolefins (250 tonnes) sales rose 70% in 2Q 2019 versus 1Q thanks to growing acceptance of this product in various markets.

“Some of the uses of our recycled resin are for baskets, packaging material and household products, among others. We have identified a great commitment of some brands to incorporate recycled material into their products as part of their sustainability strategies, which confirms the positive perspectives of this project,” according to Enka.

"Our goal is to develop the market for recycled polyolefins, in the same way as was done in PET. To achieve this, we have established alliances with world leaders in the industry, seeking to develop new products aimed at high value-added applications," the company added.

Textile and Industrial Businesses

Textile sales grew 2% year-on-year, reaching COP$137 billion (US$40 million), of which 39% came from the national market, while 61% corresponds to exports.

Industrial threads (5,981 tonnes) sales dipped 11%, “mainly due to a lower demand for canvas for tires in the Brazilian market. However, higher sales to the North American market, in products with greater added value, have allowed this effect to be mitigated,” according to Enka.

Textile filaments (5,219 tonnes) volume declined 5% “mainly due to the decree of minimum import thresholds that favored the sales of polyester filaments in 1Q 2018 and lower sales to Argentina.”

Business Outlook: More Recycling

“In order to continue strengthening the circular [plastics recycling] economy in Colombia, last May [2019], in coordination with Bavaria, The Coca-Cola Company, Coca-Cola FEMSA, PepsiCo, and Postobón, the ‘Movimiento RE’ [recycling] program was launched in Barranquilla, Cartagena and Santa Marta, which seeks to promote and strengthen the recycling of PET in Colombia, with the aim of increasing the PET collection rate in this region by 30%,” according to Enka.

“Our [recycled] fibers plant modernization project is already in its final stage and is expected to be operational in 2019-Q3. We are convinced that with this project the value proposition of our ‘green’ businesses will be further strengthened, offering the market a broader portfolio with products of higher specifications.

“Once in operation, the homologation processes of the current products will begin and then the new developments will begin. In addition, with this project the foundations are laid for future growth of this business, because with additional investments in some processes, the current production capacity could be doubled,” the company added.


Medellin-based multinational banking giant Bancolombia announced August 5 that its second quarter (2Q) 2019 net income rose 58% year-on-year, to COP$936 billion (US$273 million).

Net interest income totaled COP$2.9 trillion (US$845 million) in 2Q 2019, up 13.5% from 2Q 2018, due to “higher volume in the loan portfolio, as well as a slight increase in the loan´s interest margin,” according to Bancolombia.

Also during 2Q 2019, its investments, interest rate derivatives and its repos portfolio generated COP$182 billion (US$53 million), up by 35.4% from first quarter (1Q) 2019, according to the company.

“The investment portfolio had a good performance due to a reduction in the Colombian government securities rates, therefore the investment margin presented an expansion during the quarter,” according to the company.

Gross loans grew 9% year-on-year, indicating a “moderate trend in the credit demand in Colombia,” while Colombian peso-denominated loans grew 8.5% year-on-year, according to the company.

Loan provision charges for the quarter were COP$816 billion (US$238 million), down 15.8% year-on-year, and the loan coverage ratio for 90-day past due loans was 165.9%, according to Bancolombia.

Net fees rose 10.6% year-on-year, to COP$755 billion (US$220 million). “The annual growth was mainly driven by an increase in fees related to credit and debit cards, banking services, trust services and bancassurance,” according to the company.

As of June 30, 2019, Bancolombia’s assets totaled COP$230.9 trillion (US$67 billion), up 12.9% year-on-year, while liabilities totaled COP$203.7 trillion (US$59 billion), up 12.8% compared to 2Q 2018.

Gross loans increased by 1.9% in 2Q 2019 versus 1Q 2019. Bancolombia’s subsidiary operations -- Banco Agricola in El Salvador, Banistmo in Panama and BAM in Guatemala -- represented 26% of total gross loans, according to the company.

Deposits by customers totaled COP$145.6 trillion (US$42 billion), or 71.5% of liabilities, up 11.7% over the last 12 months. The net loans-to-deposits ratio was 115.3% at the end of 2Q 2019, versus 114.1% at the end of 1Q 2019.

Bancolombia’s capital adequacy ratio was 12.94% in 2Q 2019, 394 basis points above the minimum 9% required by the Colombian regulator, while the basic capital ratio (Tier 1) to risk-weighted assets was 9.90%, 540 basis points above the regulatory minimum of 4.5%, according to the company.


ISA 2Q 2019 Net Income Jumps 89% Year-on-Year

Tuesday, 06 August 2019 13:22 Written by

Medellin-based multinational electric-power transmission builder/operator and highway concessions giant ISA announced August 6 that its second quarter (2Q) net income soared 89% year-on-year, to COP$439 billion (US$128 million).

“This variation was due to higher revenues from the entry into operation of new projects, the incorporation of the 50% of IESUL [a Brazilian power-transmission subsidiary], construction efficiencies and the adjustment of the tariff cycle in Brazil [as well as] lower expenses for foreign exchange differences,” according to ISA.

Operating revenues for 2Q 2019 rose 37.5%, to COP$2.1 trillion (US$612 million), “mainly due to the entry into operation of several energy transmission projects and to higher construction-related revenues.

Construction revenues for latest quarter reached COP$380 billion (US$11 million), 117% higher than in 2Q 2018.

Meanwhile, 2Q 2019 earnings before interest, taxes, depreciation and amortization (EBITDA) jumped 50.6% year-on-year, to COP$1.4 trillion (US$408 million).

During 2Q 2019 in its Chile operations, the ISA Interchile subsidiary put into operation the final section of the Cardones-Polpaico Line, “the most important transmission project in Chile of the last 50 years, contributing revenues of US$31.7 million per year,” according to ISA.

Meanwhile in Brazil, “beginning in September 2018, ISA CTEEP [another transmission subsidiary] and its companies started to recognize, on a monthly basis, the inflationary adjustment for revenues for the June 2018-May 2019 tariff cycle and subsequent tariff cycles,” boosting 2Q 209 income by COP$49 billion (US$14 million), according to ISA.

Currency Hedging Benefits

“ISA’s natural hedging strategy, through which each company incurs debt in the same currency as revenues, reduces the volatility of its results and therefore the impact on consolidated net income,” according to the company.

“For 2Q 2019, the variation was 5.2% (COP$12 billion/US$3.5 million) of net income . . . which is evidence of the effectiveness of the strategy,” according to ISA.


Medellin-based textile giant Fabricato announced August 1 that its second quarter (2Q) 2019 net loss hit COP$12.7 billion (US$3.8 million), 70% worse than the COP$7.4 billion (US$2.2 million) net loss in 2Q 2018.

On a parallel front, Fabricato and its manufacturing neighbor – Medellin-based textile giant Coltejer -- simultaneously announced that they’re cooperating on a new joint study on the textile market.

“Considering the different circumstances that impact the textile sector at present, Fabricato has agreed to contract jointly with Coltejer S.A. a study of the textile market,” according to filings with Colombia’s Superfinanciera corporate oversight agency.

“The objective of the study is to make a general diagnosis of the textile market, identify the variables of different nature that affect it and the opportunities and threats of the participants in that market, including Fabricato S.A. and to Coltejer S.A.,’ according to the filings.

According to Fabricato’s latest 2Q 2019 report, the national textile business hasn’t shared in Colombia’s economic rebound this year – at least, not so far.

“Unlike what one might expect, the Colombian manufacturing sector does not perceive this positive effect in the same proportion,” according to Fabricato.

“This is explained by a strong credit restriction, in addition to the factors already known as the increase in legal importation [of textiles and clothing], importation under unfair practices and contraband” of textiles and finished clothing.

In addition, “the second quarter of the year for the textile manufacturing sector presents a particularity: it is the quarter in which the need for production grows, demanding greater cash effort, but at the same time it is a quarter of low revenues, since accounts receivable were generated by first quarter sales, which is traditionally a low-sales quarter.

“This cash deficit is compensated in the fourth quarter, when production volumes already fall and the collections of the period are generated by third-quarter sales, historically the best sales period.

“Understanding this particularity of the business for this period, and in turn relating it to the almost non-existence of credit for the sector, the alternative is to continue financing with our own resources, if possible, or resort to the most expensive financing options.

“At Fabricato, we reduced the volume of inventory of finished products in the period, one of the sources to finance the operation, and reduced the volume of production in relation to the same period of the previous year.

“Both decisions negatively impacted the contribution margin, which we believe will be recovered in the following period by the decision to anticipate [cash] flows of one of our real estate projects, which will allow us to leverage the largest production volume needed for the third quarter; change the purchasing strategy of several raw materials, with a consequent reduction in the cost of the operation; reduce financial costs, and; increase sales, as there will be the opportunity to expand the offer of our ‘Essentials’ line, high demand classic products whose availability of some inventory invariably translates into business.

“The decision to anticipate future flows to allocate them to working capital reinforces the confidence of the management and the board of directors in the textile operation of Fabricato, based on its process of complete business conversion, with refocusing on the added value of our offer of both of products and services.

“The results of this reconversion process are perceived by the increase in our participation in specific market segments, such as recognized brands in Colombia, manufacturing companies exporting from Colombia and large foreign manufacturing companies,” according to the company.

In its real-estate division, “Fabricato decided to anticipate future cash flows derived from the economic rights it has on the sales of the first stage of the real estate project Plaza Fabricato Shopping Center and the Oceana and Mediterranean housing developments for the remainder of the year 2019, 2020 and until December 2021,” the company added.


U.S.-based global air freight giant FedEx announced July 31 the launch of six flights weekly between Miami, Medellin and Bogota.

The new service aims to grab a share of the six million pounds of perishables shipped via air-freight every day from Colombia to Miami, including flowers, fish, fruits, vegetables and coffee, according to the company.

“The new B-767 flight will facilitate the arrival of Colombian products to the U.S. via the installation of ‘Gateway’ in Miami and will open new markets for Colombian companies,” according to FedEx.

“FedEx has been present in Colombia for more than 25 years, with operations in the 12 main cities throughout the country,” added FedEx Express Latin America president Juan Cento.

“Adding capacity and a more direct connection with Miami will give Colombian companies a greater competitive advantage to reach markets and customers worldwide. In addition, it will also help boost the local economy in the two largest cities in Colombia, which are central hubs for some of the most important perishable goods in the country, including flowers,” he said.

New export facilities at Medellín’s Jose Maria Cordoba (JMC) international aiport now offer convenient cold-storage capacities and storage space for perishable cargo, the company noted.


Colombia President Ivan Duque announced July 31 on his state visit to China that Chinese President Xi Jinping signed protocol deals that eventually will boost exports of Colombian bananas, avocados, coffee, meats and shellfish to China.

Initial deals enable export of 4 million boxes of bananas (mainly produced in Antioquia) and 960 tons of Haas avocados to China this year, according to the announcement.

Further initial agreements “open up the possibility for us to have greater exports of Colombian coffee,” according to President Duque.

In addition, the Chinese government announced that it will grant 100 full academic scholarships so that more young Colombians can study in the best Chinese universities.

On another front, a new communications deal will enable exporters “to use the electronic commerce platforms of the People's Republic of China to offer Colombian products,” according to the announcement.

As for the possibility of expanding Chinese tourism to Colombia, President Duque said he talked to President Xi about a project that eventually would open a direct flight between China and Colombia.

“Chinese tourism in Colombia barely represents 0.5% of our visitors,” according to President Duque. “Last year [2018], we had only about 15,000 Chinese visitors to the country, and that figure can be multiplied,” he added.


Medellin-based multinational foods giant Nutresa announced July 26 that its first half (1H) 2019 net income rose 14.6% year-on-year, to COP$2.5 trillion (US$759 million).

Consolidated sales also rose by 7.4% year-on-year, according to the company.

“Colombia [revenues] continue with a positive performance, at COP$2.9 trillion [US$880 million], representing 62.7% of total revenues and up 5.2% compared to the same period of the previous year,” according to Nutresa.

International sales, at COP$1.7 trillion (US$516 million), represented 37.3% of total sales and were 11.2% higher than in the first half of 2018, according to the company.

Operating expenses grew by 4.5%, but operating income jumped even higher, at 16.2% year-on-year.

As for earnings before interest, taxes, depreciation and amortization (EBITDA), this metric rose 20% year-on-year, to COP$648 billion (US$196 million), while EBITDA margin came-in at 13.9%, according to the company.


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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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