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Medellin-based multinational banking giant Bancolombia announced February 24 that its full-year 2020 net income fell 91% year-on-year, to COP$276 billion (US$77 million), down from COP$3.1 trillion (US$917 million) in 2019.

As for fourth quarter (4Q) 2020, Bancolombia posted a net loss of COP$266 billion (US$74 million), down from COP$878 billion (US$260 million) in 4Q 20219, according to the company.

As for its Colombia national operations, Bancolombia posted a 4Q 2020 net loss of COP$253 billion (US$71 million) here, a huge reversal from 4Q 2019 positive net income of COP$397 billion (US$111 million) in Colombia.

Corporate-wide, gross loans in 4Q 2020 totaled COP$191 trillion (US$53.6 billion), up 5% from 4Q 2019 but declining by 3.7% during the last quarter. Colombian peso-denominated loans in 3Q 2020 grew 5.8% when compared to 4Q 2019, according to the company.

Loan provision charges for the last quarter were COP$2 trillion (US$561 million), up 20% compared to third-quarter (3Q) 2020, while the coverage ratio for 90-day past due loans was 213.2%.

“This level of provisions was largely explained by the deterioration of the consumer portfolio, Covid-19 and the update of macroeconomic variables in our expected losses models,” according to Bancolombia.

Meanwhile, Bancolombia continued to boost its electronic banking strategy in 2020 “with a robust growth in its mobile platforms. As of December 31, 2020, the bank has 9.4 million digital accounts, 4.6 million users in ‘Bancolombia a la Mano’ and 4.8 million in ‘Nequi,’” according to the company.

“Shift of sales to digital channels continues to grow. During 2020, Bancolombia managed to distribute more than 3 million products through its web and mobile platforms, which represents 44% of the total sales completed in all channels,” the company added.

As of December 31, 2020, company operations at Banco Agricola in El Salvador, Banistmo in Panama and BAM in Guatemala represented 26% of total gross loans.

“Gross loans denominated in currencies other than COP, originated by the operations in Central America, the offshore operation of Bancolombia Panama, Puerto Rico and the U.S. dollar-denominated loans in Colombia, accounted for 32.3% and decreased by 12% during 4Q 2020 (when expressed in COP),” according to the company.

“Total reserves -- allowances in the balance sheet -- for loan losses increased by 9.9% during the latest quarter and totaled COP$16.6 trillion [US$4.65 billion], equivalent to 8.7% of gross loans at the end of the quarter,” the company added.

At year-end 2020, Bancolombia’s net investment portfolio totaled COP$29.5 trillion (US$8.3 billion), up 6.6% from 3Q 2020 and up 75.7% from 4Q 2019.

Liabilities at year-end 2020 totaled COP$227.4 trillion (US$63.8 billion), down 3.7% from the end of 3Q 2020 but up 9.7% compared to 4Q 2019, according to the bank. Deposits by customers totaled COP$180 trillion (US$50.5 billion), equal to 79.5% of liabilities, at year-end 2020 -- down 1.5% when compared to 3Q 2020 but up 15% compared to year-end 2019.

“The net loans-to-deposits ratio was 96.7% at the end of 4Q 2020, decreasing when compared to 100% at the end of 3Q 2020,” but “Bancolombia’s liquidity position continues to be adequate. During 4Q 2020, total funding cost indicates the undertaken efforts to sustain a high share of deposits over the total funding mix,” the company concluded.

Medellin-based multinational cement/concrete giant Cementos Argos on February 24 reported a 28% year-on-year decline in 2020 net income, to COP$141 billion (US$39.6 million), resulting from economic slowdowns during the Covid-19 crisis.

Earnings before interest, taxes, depreciation and amortization (EBITDA) also fell, to COP$1.6 trillion (US$449 million), from COP$1.7 trillion (US$477 million) in 2019.

However, adjusted EBITDA – once excluding the impact of the sale of pre-mixed concrete operations in the U.S. and payment of U.S. antitrust fines – actually improved by 4.5% year-on-year, according to the company.

Cost-reduction and efficiency moves totaled US$115 million during the year, enabling Argos to cut debt and maintain a “solid cash position” during the Covid-19 downturn, according to the company.

Corporate-wide, fourth-quarter (4Q) cement demand was aided by a "significant contribution from the Caribbean and Central America region, where growth was 13.5%,” according to the company.

However, in Colombia, Cementos Argos saw net profits decline 15% year-on-year, to COP$78 billion (US$22 million), while shipment volumes of cement fell 18% and concrete fell 25.7% here, according to the company.

“Although the industry as a whole was hit in its 2020 results, Colombia presented a favorable dynamic in the residential segment, reflecting the implementation of a successful national government program that seeks to deliver a total of 200,000 subsidies to acquire housing between 2020 and 2022,” the company noted.

Corporate-wide, cement shipments (excluding plant divestments in the United States) fell 15.8% during 4Q 2020 and 16.3% for the full year, “reflecting slower dynamics in the commercial segment in the United States and in formal construction in Colombia, in addition to impacts from hurricanes and heavy rains in the United States and closures between 10 and 12 weeks in Colombia and most markets in Central America and the Caribbean due to the pandemic,” according to the company.

“This impact was offset by improvements in prices in Colombia and the USA, efficiencies in costs and expenses in all operations and the devaluation of the Colombian peso,” the company added.

Celsia Full-Year 2020 Adjusted Net Income Rises 68%

Wednesday, 24 February 2021 07:58 Written by

Medellin-based multinational electric power giant Celsia on February 23 reported a 68% jump in net income for full-year 2020 -- after adjusting for the exclusion of its former 610-megawatt, natural-gas-fired “Zona Franca Barranquilla” power plant sold in September 2019.

For the full year 2020, consolidated net income hit COP$338 billion (US$94 million), while adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 17.9%, to COP$1.23 trillion (US$342 million). Adjusted 2020 revenues hit COP$3.54 trillion (US$985 million), up 17.6%.

As a result of selling the former Barranquilla plant, Celsia Colombia is now a 100% renewable-power producer -- mainly via hydroelectric plants, along with solar and wind-power farms.

Despite negative impacts on power demand and some financial hits resulting from the Covid-19 pandemic, Celsia still managed to push forward on several energy projects during 2020.

Among those were the San Andrés de Cuerquia small hydroelectric plant, the El Espinal (Tolima) and Carmelo (Valle del Cauca) solar farms, the La Paila solar farm in Córdoba, and the construction of a power-distribution facility tied to the El Tesorito thermoelectric project, also in Córdoba, according to the company.

Celsia’s strategic move away from fossil-based power generation to 100% renewable power accelerated in 2019 with the sale of the Barranquilla plant, tied to the acquisition of the energy service operation in Tolima and establishment of its “Caoba Inversiones” division, which now holds some of Celsia’s energy transmission assets.

During fourth quarter (4Q) 2020, consolidated generation dipped 11% year-on-year, to 1,185 gigawatt-hours (GWh). Of that total, 95.9% was hydroelectric, 2.9% wind and 1.2% solar, according to the company.

Celsia owns electric power generation, distribution and energy-service operations mainly in Colombia as well as in Panama, Costa Rica and Honduras, with total generation capacity of 1.8 gigawatts through 28 hydroelectric, thermal, solar and wind power plants, according to the company.

Colombia’s gross domestic product (“PIB” in Spanish initials) is likely to grow by 4.5% during 2021 -- up sharply from the 6.8% GDP net decline during the Covid-19 crisis of 2020, according to a just-released monthly survey of economists by Fedesarrollo, Colombia’s top economic think-tank.

According to the organization’s latest “Financial Opinion Survey” (FOS) for February 2021, Colombian economic growth for 2021 is now seen by most economists at 4.5%, with opinions ranging between 3.9% and 4.8%.

Other survey highlights:

Interest rates: Since the Colombian Central Bank (Banco de la Republica) set monetary policy interest rates at 1.75% during January 2021, “66% of the [economists] foresee an unchanged interest rate (1.75%) and 6.4% expect a reduction of 25-bps [basis points]” for the remainder of 2021.

Among those surveyed, 19% expect an increase of 25-bps, while 2.1% foresee a rate under 1%. Another 2.1% expect an increase to 2.25%, and the remaining 4.3% of those surveyed expect a 2.5% interest rate by the end of 2021, according to the survey.

Inflation: In January 2021, the annual inflation reached 1.6%, lower than the analysts forecast. In February, the analysts believe that inflation will be 1.5% , while inflation expectations for the end of 2021 are at 2.58%.

COP/U.S. Dollar Exchange Rate: In January, the exchange rate closed at COP$3,559.46 to the U.S. dollar, with a monthly appreciation of 3.69%.
According to the survey, “the exchange rate forecast by the end of [February] ranges between $3,450 and $3,550, with $3,510 as median response. The exchange rate forecast for the end of 2021 is COP$3,450, ranging between $3,400 and $3,530.

“Finally, the exchange rate forecast for next three months ranges between $3,400 and $3,550, with $3,475 as median response,” according to Fedesarrollo.

Colombia Treasury Bond Trading: In January, the traded volume of the Colombian treasury bonds reached COP$47.4 trillion (US$13 billion), up 183% from December 2020.

Now, 57% of analysts surveyed believe that T-Bill interest rates will range from 3.0% to 3.25% during the next three months, while 27% believe that the rate will be between 3.25% and 3.5% and the remaining 6.4% of those surveyed expect a rate over 3.5%.

“Regarding TES bonds maturing in 2028, none of the analysts considers that the rate will be under 4.5% during the next three months, while 29.8% consider it will be between 4.5% and 4.8%. The percentage of analysts who expect that the rate will be between 4.8% and 5.2% during the next three months was 66%. Finally, 4.3% expect a rate higher than 5.2%,” according to the survey.

Investment Determinants: “Economic growth continues ranking as the most important aspect considered for investing decisions, reaching 45.65%” of those surveyed.

“Fiscal policy and external factors placed second and third place, respectively. Concerns accounting for fiscal policy reached 28.26% (up from 20.9% in the previous month), while external factors reached 10.87% (down from 11.6% in the previous month),” according to the survey.

“Other factors” took fourth place, with the rate of Covid vaccinations being the main reason for “other factors.”

“Monetary policy, sociopolitical conditions and security conditions were the least in the investment determinants with 4.35%, 2.17% and 0.0% respectively,” according to the survey.

Investment preferences: Compared to January 2021, in Februrary 2021 “portfolio managers increased their preferences for private debt indexed to the CPI, foreign stock, private equity funds, international bonds, fixed rate private debt and cash,” according to the survey.

Colombia’s “Colcap” stock index: In February, 76.6% of the analysts (84.1% in January) expect a Colcap valuation [rise] during the next three months,while 19.1% of the analysts expect the index to devaluate and 4.3% to remain the same,” the survey found.

While many companies have suffered steep reversals in 2020 during the Covid-19 pandemic, Medellin-based multinational supermarket/dry-goods retailer Grupo Exito actually saw its net profits soar 300%, to COP$231 billion (US$64 million).

Recurring earnings before interest, taxes, depreciation and amortization (EBITDA) was nearly flat, at COP$1.27 trillion (US$353 million), while sales were up 7.2%, to COP$15 trillion (US$4.1 billion), according to the company's February 22 filing with Colombia's Superfinanciera oversight agency.

Operating income rose 2.9% year-on-year, to COP$15.7 trillion (US$4.4 billion), “as a result of the rapid adaptation of the company to the needs of customers and new ways of buying,” according to Exito.

Consolidated sales in Colombia rose 5.6% year-on-year, to $12.2 trillion (US$3.4 billion), representing 77% of the group’s consolidated income. while consolidated recurring EBITDA margin for the year was 8.1%, “mainly benefitting from the contribution of retail and the strict control of expenses,” according to the company.

“Electronic and direct commerce channels in Colombia represented 12.4% of the sales, multiplying 2.7 times compared to the previous year. More than 8.5 million orders, of which 85% were home deliveries, 1.8 times more than in 2019,” the company added.

“Differential formats also grew their sales significantly, twice digit, in the country: those of Éxito ‘Wow’ grew 13.9% in the year and represented 20.7% of the brand sales, while those of ‘Carulla FreshMarket’ increased by 18.4% and represented 26.5% of Carulla brand sales,” according to Exito.

Uruguay, Argentina Results

In Uruguay, Exitos saw revenues grow by 10.3% in local currency, above inflation, with recurring EBITDA margin at 10.3%. Electronic and direct commerce channels grew by 61% and accounted for 3.3% of total sales.

As for Argentina, Exito revenues grew 20.7% in local currency terms while recurring EBITDA margin came-in at 1.8%, according to the company.

Medellin-based electric power giant Isagen revealed in a February 22 filing with Colombia’s Superfinanciera oversight agency that it just signed a tentative deal to buy two smaller-scale hydroelectric plants (39.8 megawatts total capacity) owned by Generadora Luzma ESP in Amalfi, Antioquia

Price wasn’t disclosed as the transaction still must be finalized “in the coming weeks,” according to Isagen.

“This purchase is in addition to recent announcements about the ‘Guajira 1’ wind-power farm and the ‘Llanos 4 and 5’ solar-power farms [all in Colombia], which will allow us to add an additional 100 megawatts of clean energy with a total investment of approximately COP$700 billion [US$195 million], consistent with our strategy growth with renewable sources,” according to the company.

"With this [Luzma hydroelectric purchase] decision, we continue to strengthen our generation matrix, making it more resilient to climate change and contributing to [Colombia’s] energy transition at this key stage for the reactivation of the economy,” the company added.

American Airlines announced February 18 that it is launching daily nonstop flights to and from Medellin’s Jose Maria Cordova (JMC) international airport to New York’s JFK international starting May 6.

American simultaneously is expanding code-share flight deals with JetBlue for ticket purchases starting February 22, according to the companies.

“American’s customers will have access to 49 codeshare routes on JetBlue, while JetBlue customers will have access to more than 25 routes on American,” including future international routes, according to the companies.

Viva Air Expands Nonstops from MDE

On a related front, Viva Air announced February 16 that from its new “hub” at JMC, it will launch nonstop service to and from Mexico City starting June 8, while nonstop service to and from Cancun starts June 2. Medellin-Orlando nonstop service will start June 12, according to the company.

Cemex Colombia revealed in a February 16 filing with Colombia’s Superfinanciera oversight agency that it just won a key license modification from environmental regulator Corantioquia, enabling eventual start-up of its US$420 million Maceo, Antioquia cement plant.

“The [license] modification allows the extraction of 990,000 tons of materials (clay and limestone) and the production of 1.5 million metric tons of cement per year,” according to Cemex Colombia.

“The authorization issued represents an important advance to achieve the future operation of the cement plant, allowing us to continue with pending activities to be able to start operations such as: construction of the access road to the plant, completion of pending activities of the project and commissioning of the plant,” according to the company.

The plant project has been tied up in legal knots for years, but Cemex Colombia reached a crucial settlement in 2019 with Colombia’s Procuraduría General (corporate disciplinary regulator) that partly cleared the way to a future, hoped-for start-up of the cement-manufacturing plant.

The plant had been stalled over allegations of improper land transfers to Cemex through a company allegedly involved in a fictitious auto-parts exporting and money-laundering scheme (see Medellin Herald 06/22/2018, 02/09/2018).

During 2018, Colombia’s Attorney General had brought criminal charges against Édgar Ramírez Martínez (former Cemex Colombia vice president of planning) and Camilo González Téllez (former Cemex Colombia vice president legal affairs) in a land-acquisition scandal at the plant site.

The Attorney General also brought illegal-enrichment and money-laundering charges against Eugenio Correa Díaz, the legal representative of “C.I. Calizas SA,” which is alleged to have illegally sold land to Cemex for the Maceo plant.

The lands originally held by C.I. Calizas had been subject to another legal proceeding (“extinction de dominio”) over non-payment of Colombian taxes on allegedly phony exports of auto parts by former C.I. Calizas owner Jose Aldemar Moncada, who was assassinated in 2016.

According to the Attorney General, Ramirez, González and Correa “advanced negotiations to acquire several assets” of C.I. Calizas -- including lands that supposedly should have been in control of Colombia’s tax authorities because of the earlier tax-evasion charges against Moncada.

However, Cemex Colombia reached a “conciliatory agreement” with the Procuraduría General involving a “Special Assets Company” (SAE), CI Calizas y Minerales S.A. (CI Calizas), Cemex Colombia and its subsidiary Central de Mezclas S.A., “by means of which the signing of a mining operation contract, provision of manufacturing and dispatch services and leasing of real estate for cement production was endorsed.”

“This contract will allow Cemex Colombia to continue making use of the assets subject to the process of domain-extinction that include the rights derived from a mining concession and an environmental permit, including the land where the cement plant was built in the municipality of Maceo, along with and the assets of the Special Cement Zone of the Magdalena Medio SAS (ZOMAM), for a term of 21 years, extendable for an additional 10 years, provided that the extension of the mining concession is obtained,” according to Cemex Colombia.

Under that revised contract, Cemex Colombia and Central de Mezclas would pay a rental lease and certain fees to CI Calizas and ZOMAN – but conditional on plant reopening.

“Cemex Colombia clarifies that the subscribed contract will continue in force regardless of the result of the process of extinction of ownership that currently falls on the assets of CI Calizas including ZOMAM, except that the competent criminal judge recognizes Cemex Colombia and its subsidiary having property rights for the assets in domain extinction, in which case the contract will be terminated in advance, given that Cemex Colombia and its subsidiary would be the owners of those assets and the contract to operate and administer them would no longer be required,” according to Cemex.

“The cement plant is expected to enter into operation when the requests and procedures that are being processed with the competent authorities are resolved in a positive manner, such as: (i) the partial removal of the cement plant from the ‘Integrated Canyon Management District’ of Rio Alicante; (ii) the modification of the environmental license that allows the production of at least 950,000 metric tons of cement per year; (iii) the modification of land use allowing industrial and mining use, and; (iv) the obtaining of the permits to complete the construction of several sections of the road to the cement plant,” according to Cemex Colombia’s April, 2019 filing.

Colombia’s national economic statistical agency DANE on February 15 revealed that the national gross domestic product (PIB in Spanish initials) shrunk by 6.8% for full-year 2020 -- all because of the Covid-19 crisis.

However, GDP sequentially rebounded in third quarter (3Q) and fourth quarter (4Q) 2020, compared to the huge 15% decline in second quarter (2Q) 2020, the DANE report shows.

According to DANE, the economic sectors that contributed the most to the 2020 GDP decline were wholesale and retail trade; repair of motor vehicles and motorcycles; transportation and storage; construction; mining; lodging; and food services.

Commenting on the DANE report, Bruce MacMaster, president of ANDI (Colombia’s biggest industrial-commercial trade association), said: “We can see that in the [sequential] inter-quarter growth data, the economy presented an expansion of 9.4% in the third quarter compared to the second, and 6% in the fourth quarter compared to the third, which accounts for an important correction, accompanied by the lifting of the strictest quarantines since June.

“The indicators for the end of the year 2020 show us trends that suggest that we will reach positive data in the near future. The reactivation, accompanied by the vaccination process, puts Colombia in a more positive outlook,” he added.

Colombia President Ivan Duque announced this morning (February 15) that the nation will receive the first 50,000 doses of Pfizer Covid-19 vaccines today, followed by 1.6 million more doses from various providers over the next three weeks.

As a result, the first vaccinations will start here right away -- a few days in advance of an initially projected February 20 start-up date.

Front-line doctors and hospital workers are first in line for vaccinations through the “MiVacuna” national program (see: https://mivacuna.sispro.gov.co/MiVacuna), along with people 80 years and older. Next in line are those between 60 to 79 years of age.

“We have acquired through direct purchases from pharmaceutical producers as well as through the multilateral Covax program 61.5 million doses, with which we will vaccinate 35 million Colombians in 2021,” added Colombia Health Minister Fernando Ruiz.

According to Colombia’s Office of Information Technologies and Communications (OTIC) director Weimar Pazos Enciso, the “MiVacuna” national computerized database taps patient-data input from EPS health-insurance networks as well as "different sources such as the National Registry [citizen and resident cedulas], the Ministry of Education, and Migration Colombia, among others.

“From the consolidation and purification of data, today we have the information on more than 35 million [vaccination candidate] prioritized Colombians. This has been available since February 5, so that people can consult the vaccination [priority] stage according to the different criteria established in the ‘plan nacional de vacunacion’ [PNV]," he added.

The “MiVacuna” web page “has a very robust infrastructure supported by 22 servers that support the database and the concurrence of each of the different phases of PNV,” he said.

Meanwhile, Health Ministry Chief of Staff Germán Escobar added that Colombia expects to receive this month 100,000 doses from Pfizer via direct purchases; another 117,000 doses of Pfizer vaccine via the Covax program; 192,000 doses from Sinovac; and 750,000 doses from AstraZeneca via Covax.

In March, Colombia is scheduled to receive 500,000 more doses from Pfizer via direct purchase; another 2.3 million doses from Sinovac; then another 1.75 million doses from AstraZeneca via Covax.

“Based on these estimates, [vaccine distribution] planning processes have been developed with the different departments and districts to consolidate their respective requirements for the National Vaccination Plan,” according to Escobar.

Medellin Receives 1st Ultra-Cold Freezer

On a related front, Medellin’s Health Secretary Andree Uribe Montoya on February 13 confirmed the receipt here of the very first ultra-cold freezer for proper storage of the Pzifer-BioNTech vaccines.

This first of several freezers being delivered here can hold 40,000 Pfizer vaccines at a temperature of -80ºC, in addition to other freezers already existing at various locations here, she added.

As for the broader Antioquia departmental preparations, Antioquia’s Covid-19 program director Leopoldo Giraldo added that mayors, health agencies, health insurance network directors, hospitals, clinics and essential health workers throughout the department and the Medellin metro area have already undergone intense training and consultations on Covid-19 vaccination management and coordination.

Meanwhile, Julián Fernández-Niño, Colombia’s Director of Epidemiology and Demography for the Health Ministry announced that Colombia has already confirmed via the “MiVacuna” program vaccination appointments for 263,000 front-line medical personnel along with 19,000 medical support workers for Stage 1 of the program.

In addition, another 200,000 medical workers are now in the MiVacuna queue for Stage 2 vaccinations, he 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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