Saturday, September 25, 2021

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Colombia’s on-again, off-again mandate for all international passenger arrivals to pass a PCR test against Covid-19 is – yes indeed – on again.

In an April 1 official bulletin from Colombia’s Health Ministry, the Ministry now insists that all airline passengers must have passed a PCR test within 96 hours of boarding an international flight to Colombia, or else face mandatory quarantine here.

This in spite of the Ministry recently having won an Appeals Court decision last month overturning a prior lower-court order that had mandated PCR tests since January 2021.

However, despite that Appeals Court ruling, Colombia’s border control agency (Migracion Colombia) hadn’t abolished the PCR test mandate. Reason: Migracion Colombia had never received an official order from the Health Ministry to rescind the requirement.

New, even-more dangerous Covid-19 variants from Brazil, South Africa, the UK and elsewhere explain the new decision to keep the PCR mandate, according to the Ministry.

“Given the appearance of the new variants and the contact with people of different origins in closed spaces, despite the ventilation of the airplanes, this forces us to take extreme measures,” stated Health Ministry epidemioglogy director Julián Alfredo Fernández Niño.

“Due to the pandemic, we had had several administrative acts for domestic flights that were updated and also two for international flights. Now we are merging into one, with specific recommendations that go into effect on April 7, 2021,” Fernández added.

For example: Prior restrictions banning the use of on-board entertainment systems are no longer necessary if such systems “are properly disinfected” by airline personnel, he said. Additionally, blankets once again can be used aboard flights, “subsequent to disinfection, given that the evidence of contagion by surfaces is little,” according to the Ministry.

“On the other hand, some recommendations are maintained, such as passengers keeping silent while on the plane. Likewise, on flights of more than two hours in which people can eat, they must do so at intervals assigned by rows, to avoid having all people remove their masks at the same time.”

Another continuing recommendation is that all passengers wear surgical masks during the flight, and in the case of adults over 60 years of age, N95 masks are specified.

In addition, passengers must continue to update their “CoronApp” data for domestic flights and the “Check-Mig” data for international flights.

“The reason we believe ‘CoronApp’ is effective is because it now connects to the results of Covid-19 samples and reveals whether people have tested positive in the last 14 days,” Fernández added.

As a result, “travelers who have had positive tests in the last 14 days, have been in contact with a suspected case of covid-19 or have symptoms, will not be able to travel,” according to the Ministry.

A complete copy of the new rule (Resolution 411 of 2021) is now published on the Health Ministry’s website (, explaining updates to Resolution 1517 of 2020 and Resolution 1627 of 2020 for domestic flights and Resolution 2532 of 2020 and Resolution 002 of 2021 for international flights, as well as Circular 007.

Medellin-based real-estate developer and timber producer Valores Industriales announced March 31 that its full-year 2020 net income soared to COP$14.7 billion (US$4 million), up from a COP$102 billion (US$27.8 million) net loss in 2019.

Revenues also rose, to COP$26.5 billion (US$7.2 million), from COP$18 billion (US$4.9 million) in 2019.

Valores Industriales (VI) -- a spin-off from Medellin-based multinational paper-products giant Grupo Familia – has two principal subsidiaries: “Reforestadora y Manufacturera Los Retiros,” a producer of timber and lumber mainly in the Medellin-metro “Oriente” area around the municipality of El Retiro, Antioquia, and the “Valores Inmobiliarios Cinco” developer of gated-community housing and parcel-lots mainly in the El Retiro area.

“Valores Inmobiliarios Cinco” had two significant project developments in 2020, including:

1. “Montealiso:” In fourth quarter of 2020, “the breakeven point was reached in the sale of lots and in December 2020 the parceling license was obtained for the execution of the Montealiso project, thus achieving the approval of business conditions for Alianza Trust for the start of the work that took place towards the end of December 2020,” according to VI.

2. “Montecerezo:” During 2020, the development of the second stage of the Fizebad Reserva gated-community (in rural El Retiro) included further designs and studies for the execution of the project.

“At the end of 2020, the pre-sales trust was established for the start of the commercialization of the project. During the year 2021, the license of Montecerezo is to be presented to the municipality of El Retiro for review and approval,” according to the company. “Although Covid-19 during the year 2020 decreased sales in the first semester, the second semester recovered positively, reaching a point of equilibrium and allowing the works to begin.”

Timber-Lumber Projects

Meanwhile, during 2020 VI completed the assembly and initial start-up of its “Aserrío” (timber sawmill) project in rural El Retiro. Lumber sales from this project “were very close to reaching the budget for the year despite the pandemic, in which [the sawmill] only stopped for 15 days until the Covid-19 biosafety protocol was completed, when safety equipment was acquired and staff were trained in care and protocols to follow,” according to the company.

Meanwhile, VI’s related “Finca los Bosques” forestry project continued to move forward, including “establishment and maintenance of plantations and the development of road infrastructure on the property,” according to the company.

Cortezza Commercial Building Update

On another front, VI’s “Cortezza” commercial office building on the Las Palmas highway just east of Medellin saw its leased space grow to 14,877 square meters during 2020, via VI’s participation in the “Azulgrana” joint venture.

Despite progress in leasing at Cortezza, the Covid-19 pandemic “generated a paralysis in the placement of new [leased] areas and the pandemic caused considerable unemployment in the building on the occasion of biosecurity measures, social distancing and work-at-home for all those positions that [lessee] companies could make. However, it was possible to make agreements with all tenants who have long-term contracts, thus enabling a [financial] balance-point for the business without considerable cost overruns for the project and its future viability,” according to VI.

As for VI’s separate investments in Colombian salt producer Brinsa S.A., VI boosted its share stake in Brinsa to 19.35% during 2020, up from 12.47% previously.

Toronto-based Gran Colombia Gold (GCG) – Colombia’s biggest gold miner, mainly in Antioquia – on March 31 reported a 21% jump in 2020 adjusted net income, to US$75.9 milllion, from US$60.5 million in 2019.

“The year-over-year improvement in adjusted net income in 2020 largely reflects the positive impact of higher gold prices in 2020, partially offset by the Covid-19 impact on gold production and operating costs, increased general and administrative (G&A) expenses, share-based compensation and social contributions in [part-owned Colombian gold miner] Aris, increased interest expense and gold premiums, and increased income tax expense,” according to GCG.

“For the full year 2020, gold production of 220,194 ounces in 2020 was within the expected range of 218,000 to 226,000 ounces, compared with 239,991 ounces of gold in 2019,” the company added.

Meanwhile, 2020 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) hit a new annual record of US$187.8 million, up 28% over 2019. As for 2020 revenues, these likewise hit a new record of US$390.9 million in 2020, up 20% over 2019, according to GCG.

“Despite the impact of the pandemic on production, operating costs and the execution of our capital and exploration programs, we had a solid year in many aspects and we look forward to continuing to advance the exploration and development of our high-grade Segovia Operations in 2021,” added GCG President Lombardo Paredes.

“Today we have also announced an update on our mineral resources and reserves at Segovia and we are pleased to report that we have not only replaced the mineral resources we mined last year, but we have identified many high priority in-mine, near-mine and brownfield targets for our 2021 drilling program.

“In 2020, we successfully created value for our shareholders through the spin-out of our Marmato mining assets, which are now in good hands with the Aris Gold management team,” he added.

All-in sustaining costs (AISC) for the Segovia, Antioquia gold mining operations averaged US$1,015 per ounce in 2020, up from US$878 per ounce in 2019, “reflecting the increase in its total cash costs, an increase in sustaining capital expenditures, and the impact of lower gold sales volume,” according to the company.

“Gran Colombia’s focus in 2021 will center on the exploration and continuing development of its high-grade Segovia operations, the epicenter of its free cash flow generation.

For 2021, GCG “expects to produce between 200,000 and 220,000 ounces of gold at Segovia. Over the last 10 years, the company has produced a total of approximately 1.3 million ounces of gold from its Segovia operations at an average head grade of 13.8 grams per ton. In 2021, the company expects that head grades will continue to average between 13 to 15 grams per ton over the course of the year,” the company added.

Medellin-based textile giant Fabricato on March 30 posted a COP$82 billion (US$22 million) net loss for full year 2020, worse than the COP$17 billion (US$4.6 million) net loss in 2019.

Sales revenues fell 21% year-on-year, to COP$272 billion (US$74 million). However, thanks to cost reductions, 2020 earnings before interest, taxes, depreciation and amortization (EBITDA) actually tripled, to COP$9.8 billion (US$2.6 million), versus COP$2.7 billion (US$737,000) in 2019.

Commenting on the 2020 results, Fabricato President Alberto Lenis Steffens noted the negative impact of Covid-19 shutdowns on sales and profits.

“As a reference, in April 2020 [the peak of the Covid-quarantine shutdown], the market size of the Colombian textile sector decreased 45% and fell to COP$1.1 trillion [US$273 million], while in the same month of 2019 it was COP$2 trillion [US$546 million],” Lenis explained.

“By November 2020, the market improved and finished with sales of COP$2.1 trillion [US$573 million] compared to COP$2.2 trillion [US$601 million] in November 2019.

“The textile sector in 2021 will continue to adjust to meet the challenges, as it has throughout history. For the year 2021, the figures are expected to be better, but it is very likely that the results that were achieved in 2019 will not be achieved,” he cautioned.

More than half of 2020’s net loss came from a recent Constitutional Court ruling requiring Fabricato to hand-over its former Sibate, Cundinamarca textile factory to now-bankrupt Textiles Konkord SA. The ruling came as a surprise to Fabricato since lower-court rulings had denied Textiles Konkord claims, Fabricato noted.

Pension payments to 1,427 retirees now total COP$12 billion (US$3.27 million), while Fabricato’s current 1,617 employees enjoy average salaries “considerably higher than the national industry average, in addition, and the [employee] benefit package impact is 75%, compared to the legal mandate of 52%,” the company added.

Commercial Real Estate Businesses Gain

Meanwhile, Fabricato’s other main line of business – commercial real estate – showed encouraging results in 2020, despite the limits imposed by the pandemic.

The “Industrial Park” in Rionegro, Antioquia, closed 2020 with 73% of area leased, with total income between leases and services rising 17% year-on-year, to COP$6.76 billion (US$1.8 million).

As for its Ibague housing project with Triada S.A.S, the now-approved master plan from early 2020 is being developed “Currently the development of the project is 85% complete and the delivery of the apartments is estimated to be completed in May 2021,” according to Fabricato.

“The second stage, which comprises a top housing development called “Valle Lindo” with 1,152 apartments, is in pre-sales and is expected to be completed in the second half of 2023.

“Fabricato received flows of COP$182.5 million [US$50,000] during 2020 and expects to receive COP$18.9 billion [US$5.16 million] by the end of 2024,” according to the company.

As for the Fabricato building in Medellín, the company has three floors available for lease or sale, with an appraised value of COP$5.36 billion (US$1.46 million).

In the “Fabricato City” project in the Medellin suburb of Bello, Fabricato captured COP$6.8 billion (US$1.86 million) in cash flow during 2020. “In future flows projected to 2027, the company will receive COP$71.3 billion [US$19.5 million],” according to the company.

While the “Fabricato City” project was “slightly affected by the pandemic, currently it continues to be very well received by the different clients of housing, commerce and services,” according to the company.

“The ‘Mediterránea’ and ‘Oceana’ housing projects are in the top three of the projects with the best sales in the last year. The shopping center is scheduled to open in October 2021,” the company added.

Colombia’s highway agency Invias announced March 30 that it awarded two contracts for road and bridge works that will join with the under-construction “Toyo” tunnel connecting Medellin westward to new and existing Atlantic ports via the “Mar 1” and “Mar 2” highways.

Under the deal, Medellin-based highway construction giant Construcciones El Condor won a COP$418 billion (US$119 million) contract for road-and-bridge work west of Santa Fe de Antioquia, while “Consortium Vías Colombia 061” won a related COP$389.9 billion (US$104 million) contract for road work connecting to the “Toyo” tunnel opening near Cañasgordas, Antioquia, according to Invias.

Total works include 11 tunnels, 13 bridges, four “false tunnels” and 12.5 kilometers of new roads on a project that stretches 19.4 kilometers in length.

Invias director Juan Esteban Gil Chavarría added that construction will begin between May and June 2021.

In total, 13 engineering contractors had bid on the project, according to Invias.

Eventually, this project also will include installation of electromechanical equipment inside the 9.7-kilometers-long “Toyo” tunnel (also known as “Tunel Guillermo Gaviria Echeverri,” honoring the father of a former Antioquia governor who was kidnapped and murdered by the narco-communist FARC army). The new tunnel -- longest in all South America --  will tie-together the under-construction “Mar 1” and “Mar 2” highways, drastically cutting freight-traffic-times between Medellin and the Atlantic ocean.

Including highway, bridge and tunnel work for the new connection to the main “Toyo” tunnel, Invias funding will total COP$1.4 trillion (US$375 million), according to the agency.

Medellin-based plastics-ware manufacturer and retailer Industrias Estra on March 25 posted a full-year 2020 net loss of COP$1.4 billion (US$377,000), down from a net profit of COP$1.25 billion (US$336,000) in 2019.

While the full year 2020 suffered from Covid-19 shutdowns and sales declines, the second half of 2020 produced a rebound, with a net profit of COP$1.01 billion (US$272,000), according to the company.

Gross revenues for full-year 2020 dipped to COP$70 billion (US$18.8 million), from COP$72.7 billion (US$19.6 million) in 2019, the company noted.

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose slightly, to COP$8.5 billion (US$2.3 million), from COP$8.38 billion (US$2.25 million) in 2019.

During the worst of the Covid-19 pandemic and shutdowns between March and May 2020, year-on-year company sales had fallen 29% and plant operations were slashed by 32%, equivalent to 30 days of operation, according to Estra.

“However, thanks to the diversification of commercial channels and the portfolio of products of the company, in the period from June to December 2020 -- compared to the same period of 2019 -- sales grew 2.6% and the operating level of the production plant increased 6.3%,” according to Estra.

“The good performance in the period from June to December 2020 made it possible to mitigate the impact caused by the pandemic, so we managed to close the year 2020 with total sales of COP$70.09 billion [US$18.8 million] compared to COP$72.7 billion [US$19.6 million] obtained in 2019, which represents only a decrease of 3.6%,” the company added.

Demand for certain Estra products designed for containing bio-hazards (from Covid-19 hospital workers and patients) jumped 20% year-on-year. Meanwhile, demand for the “Estralandia” line of plastic children’s games also soared as kids remained at home rather than in schools.

“Exports were reactivated in the markets of Ecuador, the Dominican Republic and Chile, generating a growth of more than 30%, where our portfolio of cans began to present a important differentiation from the local market supply,” according to Estra.

On the other hand, the Estra retail stores “suffered the most from the decrease in traffic as a result of the [pandemic] closures. However, as a company, the digital strategy through the e-commerce channel managed to recapture users and moderate the decrease,” according to the company.

“The final-customer channel including the portfolio of industrial boxes was the most affected in terms of demand.

“The issues of supply of raw materials, both in supply offers and the cost of goods, were one of the most relevant points of the year 2020 and will continue to affect the operation during 2021.

“The decrease in the consumption of plastic resins and the effect of the closure of many industries in the world because of the pandemic in turn generated a great slowdown in the petrochemical industry. While industries began to resume their activities, the restart of resin production was left behind, so a great supply/demand imbalance was generated with the consequent increase in the price of this input.

“Added to this, the decline in international trade during the strongest months of the pandemic also led to a global shortage of containers and ships and an increase in the cost of shipping up to five times the amount paid at the beginning of 2020.

“Despite the external factors that impacted the cost of all our products, the main impact occurred in the quarter between March and May due to the effect of low plant occupancy, which forced us to make internal adjustments in search of the least impact on the company’s results.

As a result, Estra suffered a 6.8% cut in average gross margin in 2020, to a net 31.5%, the company added.

Medellin-based telecom, internet and cable-TV giant UNE-EPM revealed a COP$25 billion (US$6.7 million) net loss for full-year 2020, down from a COP$61 million (US$16,500) net profit in 2019.

Revenues also dipped slightly, to COP$4.84 trillion (US$1.3 trillion), from COP$4.9 trillion (US$1.32 billion) in 2019, as the Covid-19 pandemic generated bad debts.

Earnings before interest, taxes, depreciation and amortization (EBITDA) dipped slightly year-on-year, to COP$1.6 trillion (US$432 million), from COP$1.626 trillion (US$439 million) in 2019.

UNE-EPM is a partnership between Medellin-based utilities giant EPM and Spain-based multinational telecom provider Millicom.

Besides the partnership’s “Tigo” cell-phone service and the “UNE” cable-TV, phone-line and internet services, UNE-EPM also owns the “Colombia Movil” cell-phone service, the “Edatel” rural telecom services company, the Orbitel “OSI” long-distance service and the “CTC” telecom service in Miami, Florida.

While 2020 revenues from services to households rose 4% year-on-year, cell-phone revenues from post-pay customers declined 3% during the Covid-19 pandemic, according to the company.

At year-end 2020, UNE-EPM had 1.647 million fixed telecom lines, 1.8 million internet connections, 1.3 million cable-TV connections, 10.7 million prepaid cell-phone connections, 1.78 million post-pay cell-phone connections and 2,300 cell-phone-tower antennas.

Commenting on the results, UNE-EPM President Marcelo Cataldo noted an unusual jump in demand for internet services in 2020, peaking at a 50% hike. Similarly, 70% of company employees switched to working from home rather than in corporate offices during the pandemic.

Having won a 700-MHz spectrum auction in Colombia in December 2019, UNE-EPM embarked upon a nationwide upgrade to cell-phone-tower antennas, bringing high-speed “LTE” coverage to customers in an area including about 10,000 square kilometers, he said.

Medellin-based electric power producer Isagen announced March 25 that its full-year 2020 net income hit COP$496 billion (US$134 million), almost even with the COP$495 billion (US$133.5 million) profit in 2019.

Gross income rose less-than-1% year-on-year, to COP$3.2 trillion (US$863 million), while earnings before interest, taxes, depreciation and amortization (EBITDA) dipped 6% year-on-year, to COP$1.8 trillion (US$485 million) due to a decline in generation and lower net energy prices in Colombia.

Isagen operates six hydroelectric plants totaling 2.76 gigawatts capacity, as well as a 134-megawatt (MW) thermoelectric plant.

The company is also developing new power projects focusing upon renewable wind, solar and hydro sources.

“The highlight is the start of the ‘Guajira I’ project, our first 20-MW wind power plant, as we managed to sign the construction and operation and maintenance contracts for the wind farm, which will be the first state-of-the-art technology to start operating in La Guajira in early 2022,” according to the company.

“In addition, we continue with the ‘Guajira II’ wind project, with the delivery of the Environmental Impact Study to the environmental authority and the protocolization of agreements of the prior consultation with the 12 Wayúu communities in its area of influence.

“Likewise, we evaluate other options for growth in wind, solar and water projects, as we carry out due diligence and present offers for the acquisition of various projects. As a result of these actions in January 2021, the company closed the purchase of the ‘Llanos 4 and 5’ solar projects, developed by Trina Solar, which will be ready to operate at the beginning of 2022, thus incorporating 40-MW located in the municipality of Puerto Gaitán, Meta.

“We also continue to advance in studies, other purchase options and licensing and review and approval processes internal of the San Bartolomé, Tafetanes and Palagua projects,” the company added.

Medellin-based Grupo Orbis – manufacturer of “Pintuco” paints, “Andercol” packaging products, “O-Tek” water-handling systems and distributor of “Mundial” hardware products – announced March 25 that its full-year 2020 profits rose 15% year-on-year, to COP$55.7 billion (US$15 million).

Gross income dipped slightly year-on-year, to COP$491 billion (US$133 million), according to the company.

Asset values dipped 3% year-on-year, to COP$1.6 trillion (US$433 million), while liabilities also declined, to COP$760 billion (US$206 million), with the result that net worth rose to COP$769 billion (US$208 million), according to the filing with Colombia’s Superfinanciera oversight agency.

The “Pintuco” paints division operates in Colombia, Ecuador, Venezuela, Curazao, Aruba, Costa Rica, Panamá, Honduras, El Salvador, Guatemala and Nicaragua. Its retail brands include “Viniltex,” “Koraza,” “Terinsa,” “ICO,” “Protecto,” “Fiesta” and “Pintulux.”

The “Andercol” chemical division operates in Colombia, Brasil, Venezuela, México and Ecuador, focusing upon renewable or recyclable materials including polyesters, polymers, adhesives, construction materials, pharmaceuticals and nutritional elements.

The “O-tek” division -- with plants in Colombia, México and Argentina -- makes polyester/fiberglass tubing for water and wastewater, mining and industrial applications, and desalination plants.

The “Mundial” division is a distributor of hardware to 453 municipalities in Colombia, with 16 different product lines under the “CRC,” “Brizze,” “Astral” and “Extermin” brand names.

The International Monetary Fund (IMF) on March 23 issued a detailed economic/social report finding that the Colombian government is responding wisely to the Covid-19 crisis.

“Colombia has been hit hard by the pandemic, but the policy response has been timely and well-coordinated,” according to the IMF official report.

“Covid-19 has taken a severe social and economic toll, including more than 60,000 deaths. Over 5 million jobs were temporarily affected and GDP contracted by 6.8% in 2020, the largest recession on record in Colombia,” IMF adds.

In the face of the economic-social crisis, government authorities “used the flexibility afforded by their very strong policy framework to deliver a coordinated and timely response to the exceptional shock.”

In addition, “emergency measures have supported the health care sector, households and businesses,” the agency added.

“A flexible exchange rate, monetary policy accommodation and liquidity support, temporary suspension of the fiscal [spending] rule and macroprudential measures mitigated the fallout from the pandemic.”

On another positive front, “a national vaccination program to cover most of the population started in February,” the IMF added.

Meanwhile, Colombia is enjoying a “gradual recovery with [GDP] growth expected to rebound to around 5 percent in 2021. Under our assumptions for declining infections, rising vaccinations and limited lockdowns, GDP is projected to recover gradually this year, although it is not projected to return to pre-pandemic levels until the second half of 2022,” the agency stated.

“Labor markets have partly rebounded with unemployment declining from its peak, although local lockdowns have recently dampened employment gains. Both external and domestic risks to growth remain tilted to the downside.

“External financing needs are expected to remain elevated. However, as non-oil FDI [foreign direct investment] recovers and public borrowing needs decline, the share of private capital flows in external financing is expected to increase.

“Finally, Colombia’s unwavering efforts to integrate Venezuelan migrants into the economy, most recently by granting them Temporary Protective Status, should raise Colombia’s potential growth in the medium term,” the agency concludes.

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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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