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Antioquia Governor Aníbal Gaviria Correa on May 20 hailed leadership by the “LivingLab-Telemedicina” patient-contact-and-testing center here in the continuing struggle to detect, contain and overcome Coronavirus.

“LivingLab-Telemedicine is developing as one of the greatest successes in Antioquia in confronting the Coronavirus contingency,” Governor Gaviria said following a personal visit to the lab.

“This, in a way, is a hospital not only for the present but also for the future. Here we have the functions of promotion and prevention, but also, especially, everything related to telehealth and telemedicine, which has been absolutely key to containment of Covid-19,” he added.

To date, the lab and its 200 health professionals have dealt with more than 200,000 calls from Antioquian citizens worried about suspected or possible cases of contagion, along with related concerns about mental health problems arising from the pandemic. 

“One of the keys to the [relatively low rates of contagion] that Antioquia has obtained has been telemedicine and, in this initiative, the University of Antioquia, the LivingLab, other universities in the city, the EPS [health-insurance networks] and the government of Antioquia are integrated,” the Governor said.

Antioquia Health Secretary Lina María Bustamante Sánchez added that the LivingLab-Telemedicine center not only screens initial calls from concerned citizens, but also refers patients with likely contagion for follow-up testing, diagnosis and treatment services.


Right on the heels of Colombia President Ivan Duque’s new announcement that Colombia will launch alternating-shifts of physical/virtual school and university education in August, Medellin Education Secretary Alexandra Agudelo Ruiz unveiled a record-setting COP$6.2 trillion (US$1.6 billion) budget for the coming school year.

If the Medellin City Council gives approval -- following initial Council debate May 27 and a scheduled final vote on May 31 -- then Medellín would have the highest investment in public education in its history, according to the Mayor’s Office.

“For primary, secondary and middle [high-school] levels, a budget of COP$5.3 trillion [US$1.4 billion] is projected,” plus hundreds of billions of additional pesos for Medellin’s three public universities, the Office added.

The proposed boost in education funding is core to Medellin Mayor Daniel Quintero’s development plan, which also includes further funding and promotion of Medellin as the “Software Valley” of Colombia, according to the Mayor’s Office.

“The figure contemplated in the education budget is historic -- 19% higher than the previous budget,” Secretary Agudelo said.

The budget hike will “strengthen attention to early childhood, curricular transformation, bilingualism, broader access, coverage and permanence, teacher training and physical and technological infrastructure,” she added.


Colombia Transport Minister Ángela María Orozco announced last night (May 20) in a nationally televised presentation on Coronavirus regulations that regular international passenger flights to and from Colombia will be banned through August 31.

The surprising announcement came just one day after President Ivan Duque stated that international and national flights -- except for rare emergencies and humanitarian repatriations -- would be banned at least through June 30.

However, aside from allowing repatriation and emergency flights, Colombia also continues talks with various air transport regulators and health regulatory officials on potential ways to reopen passenger air traffic, she said.

In the same televised presentation, President Duque and Commerce (MinCIT) Minister Jose Manuel Restrepo added that starting June 1 – in coordination with local mayors – shopping centers can start to reopen, but with maximum 30% capacity in order to avoid crowding and cross-contamination.

Medical specialties such as dentistry also would begin to reopen under strict health protocols from June 1, along with wholesale and retail operations (30% capacity limit), barber/beauty parlors (30% capacity limit) and other commercial operations.

On another front, Colombia’s Health Minister Fernando Ruiz announced during the same broadcast that new guidelines to contain Covid-19 have been issued for family homes.

Rationale: More Colombians are returning to work under biosafety rules and local mayor approvals, while children are now permitted to go outside three times/week and also will start returning to schools under alternating physical/virtual schedules in August.

The new biosafety guidelines “consider the new scenario, in which children can go out and some members of the household are authorized to resume work activities outside the home and must use means of transportation,” according to the Health Ministry.

The new advisory includes recommendations on personal washing, disinfection of the home and bathrooms, pets, prevention measures when entering and leaving the home and measures for users of private vehicles, motorcycles and bicycles.

"It also includes aspects at a psychosocial level such as the need to share domestic tasks and chores, free-time management and the balance of time in educational and work tasks and care-giver rotation,” Ruiz added.

In addition, the Ministry is developing new guidelines so that starting June 1, people 70 years and older -- and children 5 years and younger -- can start to escape quarantine for limited periods.


Medellin Mayor Daniel Quintero announced May 20 that shopping centers in Medellin gradually will reopen starting June 1 – right on the heels of President Ivan Duque’s May 19 announcement about Colombia’s transition from Covid-19 “national quarantine” to more city-specific “health emergency” status from June 1 to August 31.

“The openings will be staggered according to the level of risk that each establishment may have,” according to Mayor's official press announcement.

“In order to continue with the economic reactivation, and to avoid the loss of thousands of jobs in the city, Medellín Mayor Daniel Quintero Calle confirmed that from June 1 shopping centers will reopen when the period of ‘smart isolation’ begins as announced by President Iván Duque,” according to the Mayor’s office.

“For this process, a platform will be enabled with which a gradual and safe reopening will be coordinated, guaranteeing an adequate capacity inside the shopping centers and allowing a rapid tracking of [potentially] affected persons and their possible contacts in the event of a contagion.”

“For some time we have been preparing a platform thinking about the arrival of this alternative,” Mayor Quintero added.

“We will have a platform that allows a safe reopening of shopping centers. We have differentiated them by risk levels and based on this risk level, they will gradually enter into operation.”

On another front, Quintero announced the start-up of the “Medellín Me Cuida Hogares” home-care strategy, “with which the Mayor's Office will bring technology to more than 100,000 homes to reduce the chances that at-risk populations or Covid-19 patients may require [hospital] intensive care,” according to the press bulletin.

The Mayor explained that new health-care kits will be delivered to at-risk or already-infected homes. The kits will include a pulse oximeter -- which measures the level of oxygen in the blood-- a digital thermometer and additional measures such as antibacterial gels and face masks.

Meanwhile, the mayor announced that the production of relatively low-cost, Medellin-pioneered mechanical ventilators has already started with a first batch of 100. These first units will be employed in clinical trials and will be available for broader use “in case they are required” in future.


Colombia President Ivan Duque announced May 19 in a nationwide address that Colombia will transition from Covid-19 "general quarantine" to potentially less-severe, city-specific “health emergency” regulations starting June 1 through August 31.

Differences between “quarantine” and “health emergency” regulatory limits could prove to be relatively great in areas lacking Covid-19 threats. But regulations likely will be less liberal in other areas with greater relative problems and challenges with Covid-19.

For example: Mayors of big cities such as Medellin, Bogota and Cali likely would continue to enforce relatively stricter limits than those in rural areas, although “gradual reopenings” likely will expand to more economic sectors in both big and small cities.

Schools for example could start to offer limited in-person, physical attendance with alternating shifts -- along with mandatory masks and physical distancing -- perhaps alternating with “virtual classes,” starting in August, President Duque explained.

Likewise, libraries and museums could reopen with strict limits on total people entering, along with mandatory masks and other prevention measures, he said.

Meanwhile, all international and national passenger flights will continue to be banned through at least June 30, except for rare cases of emergencies or humanitarian repatriations, President Duque clarified.

However, President Duque also announced two days earlier in a separate nationwide address that international travel continues to be the most problematic. Therefore, it’s possible that Colombia could announce further bans or restrictions on international flights well beyond June 30.

One key reason: Such flights don’t depend solely upon Colombia decisions, President Duque explained. Rather, international flight health-protective standards and protocols must be developed in coordination with International Air Transport Association (IATA), various airlines, various airports, transport sector employees, the World Health Organization (WHO), various national governments and health regulators in various states or cities. What's more, Colombia might decide to have even tougher limits.

While Colombia’s national Covid-19 quarantine presumptively had been set to expire May 24, the new order extends it to May 31.

This means that metro Medellin and other big cities here are likely to extend “pico y cedula” shopping-days rotations for at least another week beyond May 24 – and possibly even beyond that.

Persons 70 years and older likewise will have mandatory quarantine extended through June 30, along with younger persons with pre-existing health conditions such as heart trouble and diabetes, President Duque said.

Public transport likewise will continue with a 35% capacity limit, while schools and universities will continue with “virtual” classes through all of June and July.

At least 80% of public employees likewise must continue telecommuting, while private-sector office workers also should continue to work from home whenever possible, he added.

Meanwhile, as of May 19, the Health Ministry had recorded 16,935 Coronavirus cases nationally, with 613 deaths and 4,050 recoveries.

Bogota leads with 5,934 cases, followed by Atlantico (1,923), then Cali/Valle del Cauca (1,883), then Bolivar (1,576), Amazonas (1,220); Meta (954) and Medellin/Antioquia (561).


Medellin-based Grupo Orbis – owner of “Pintuco” paints, “Andercol” packaging products, “O-Tek” water treatments and “Mundial” hardware products – revealed in a May 15 filing with Colombia’s Superfinanciera oversight agency that it posted a COP$2.28 billion (US$582,000) net loss for first quarter (1Q) 2020.

That was a 32% improvement over the COP$3.34 billion (US$853,000) net loss in 1Q 2019, according to the company.

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 7% year-on-year, to a positive COP$21.9 billion (US$5.6 million), according to the company.

“The first quarter of 2020 began with a positive dynamic for the Orbis Group,” according to the company, citing reduction of financial debt and smaller losses.

“Although the Group’s operations and sales were significantly affected in the last fifteen days of March by virtue of the measures adopted by governments to contain the impact of Covid-19, including preventive isolation and total closings. or partial closings of the production plants, as a Group we were focused on designing a strategy focused on the protection of life, health and well-being of all our stakeholders, optimization of existing capacities, profitability of recently made investments and the decrease in financial debt.

“To date, the impact and consequences that may be generated by the pandemic are uncertain and will largely depend on the extent and evolution of the contingency in the coming months.

“However, thanks to the level of diversification of the economic sectors in which the Group has a presence, the variety of goods and services offered, of which some participate in the chain of those declared ‘essential,’ we sit on strong foundations to combat uncertainty and continue to respond in a timely and effective manner to the emerging risks derived from the current situation.”

Orbis does business in 15 Latin American countries, while its popular “Pintuco” paint manufacturing and supply network operates in 11 countries: Colombia, Ecuador, Venezuela, Curaçao, Aruba, Costa Rica, Panama, Honduras, El Salvador, Guatemala and Nicaragua.


The Antioquia departmental government revealed May 15 that eight local municipalities that haven’t had a single case of Coronavirus have just won special permission from Colombia’s Interior Ministry to reopen nearly everything.

“The municipalities of Caracolí, Maceo, Puerto Berrío, Puerto Nare, Puerto Triunfo, Urrao, Caucasia and Yondó can now implement their gradual reopening protocols,” according to the Antioquia departmental government.

The liberation scheme nevertheless continues to ban reopening of bars, discoteques, canteens or any mass-gathering events or areas, at least for now.

What’s more, the Colombia Health Ministry requires business owners to meet biosafety regulations including use of personal protective equipment, while customers likewise must wear masks.

In addition, 21 checkpoint-control sites have already been installed on highways at the entrance and exit of various municipalities here -- including the Medellin metropolitan area -- and along the main trunk roads of the department, the department added.

Antioquia Governor Anibal Gaviria added that to date, 114 municipalities in Antioquia have yet to record a single case of Covid-19. So, many more towns here likely have a good chance of winning Interior Ministry approvals for widespread business reopenings. Abejorral, Sonsón, Argelia and Nariño are among towns now waiting for approvals, he added.

Medellin/Antioquia Outshines Colombia

Meanwhile, as of May 15, the Health Ministry reported 14,216 Coronavirus cases nationally, with 546 deaths and 3,460 recoveries to date.

Bogota is by far the worst performer at 5,008 cases, followed by Cali/Valle del Cauca (1,598 cases), then Atlantico (1,493); Bolivar (1,146); Amazonas (1,003); Meta (940), and – remarkably, given its relatively huge population -- Medellin/Antioquia, with just 509 cases, six deaths and 391 recoveries.

What’s more, Medellin has a rate of only one Coronavirus death per million inhabitants, best in all Colombia by far.

Bogota as of May 14 had the worst record with 149 total deaths, followed by Cali with 61 deaths, Cartagena with 47, Leticia with 25 and Barranquilla with 24. In contrast, the city of Medellin had just 3 Coronavirus deaths, while three other deaths in Antioquia towns bring the departmental total to just six deaths.

Medellin Construction Projects Restart

Meanwhile, on May 15, Medellin Mayor Daniel Quintero revealed that 40% of 80 municipal construction projects are now back in action, including Parques del Río, Metrocable Picacho and many crucial road projects, with 2,500 workers already back on those jobs.

On a related front, Medellin’s Health Department has now reviewed more than 85,000 Covid-19 prevention protocols filed by businesses here, of which 63,000 have already been approved.

Such protocols are mandated by Colombia’s Health Ministry and must be accompanied by registration in the “Medellín Me Cuida Empresas” computerized platform.

To qualify for reopening, the Health Department first checks to ensure “mandatory use of masks, provision of glycerinated alcohol for use by all staff, minimum [personal] distance of two meters in offices, cubicles, company restaurants, cafes, common areas, elevators, among others,” according to the Mayor’s Office.

“The main objective of our visits [to companies] will be to verify compliance with the national protocols, to identify possible risk factors and guarantee to citizens that the measures being adopted in the business sector allow control of contagion,” added Medellin Health Department secretary Andree Uribe.

ACI Cites More Foreign Investment Coming Here

On another positive front, the Agency for Cooperation and Investment of Medellin and the Metropolitan Area (ACI) announced May 15 that Medellin continues to enjoy relatively favorable status in the eyes of foreign investors.

In a “virtual” meeting with 70 Chilean businessmen organized by ACI and high-tech incubator Ruta N, these foreign investors “learned about all the advantages that the Antioquia capital offers for investment in the short- and medium-term,” according to ACI.

“In terms of investment, Covid-19 represents a great challenge because it challenges us to adapt and rethink our strategies for attracting and retaining national and foreign investment,” added ACI Director Eleonora Betancur.

“We see ‘virtual’ potential as strategic potential. To continue this path that we have traveled for more than 12 years, we have [to date] managed to attract more than US$2.68 billion and 257 investment projects from more than 35 countries,” she added.

Between 2008 and 2019 alone, Chilean investment in Medellin hit US$277 million in manufacturing, high-tech industries, commerce, leisure and entertainment, among others, according to ACI. Some of the most-recognized investments include those by La Polar (2011), Cryogas and Homecenter (2012), Protema (2015) and Co-Work Latam (2019), she noted.

Colombiamoda 2020 Goes Virtual

On yet another front, Medellin-based textile/fashion industry trade group Inexmoda announced that the 31st annual “Colombiamoda” fashion show here will move to the internet – from July 27 to August 2 (see: www.colombiamoda.com).

“In these moments of uncertainty that the world is experiencing, we are called to rethink and renew ourselves,” according to Inexmoda. “We adapt, and to support the fashion industry, we decided to bet on the realization of Colombiamoda 2020 while preserving its axes of knowledge, fashion and business through digital channels."

The “virtual” show this year will include:

“• Digital platforms for specialized fashion businesses with buyers from Colombia and the Americas;
“• E-commerce spaces to generate retail sales;
“• Digital fashion staging, featuring collections by brands and designers for sale in the ‘See Now, Buy’ Now format;
“• Lifestyle experiences together with brands that will excite us through virtuality;
“• Inexmoda-UPB Knowledge Pavilion that will offer open lectures to the public via streaming;
“• Online consulting and ‘Master Classes’ with experts from the fashion industry,” according to Inexmoda.


Toronto-based Gran Colombia Gold -- Antioquia's biggest gold miner -- announced May 15 that its first quarter (1Q) 2020 adjusted net income soared to US$21.2 million, up from US$7.9 million in 1Q 2019.

The company – whose principal mining operations are in Segovia, Antioquia – credited the profits improvement to “revenue growth resulting from higher gold prices in 2020 and the increased volume of gold sales” in the latest quarter.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) likewise rose to US$50.4 million, from US$35 million in 1Q 2019.

Commenting on the results, GCC executive chairman Serafino Iacono said:“Our first quarter results continued to show strength -- and that was when gold was more than $100 an ounce lower than where we are now [in mid-May 2020].

“The balance sheet also got stronger as we built up our consolidated cash position to about US$100 million and by the end of April, we had reduced our gold notes [debt] by 40% since the beginning of the year.”

GCC’s gold production in the first quarter of 2020 dipped to 56,247 ounces (from 60,601 in 1Q 2019) because of restricted movements of workers here during the Covid-19 crisis.

“The company’s mines have continued to operate during the national quarantine implemented in Colombia in late March,” according to GCC.

“However, restrictions on movement of people between communities has limited the availability of workers at the mines. Although April’s gold production totaled 12,602 ounces -- about 65% of the average monthly volume over the last 12 months -- the situation has improved and the Segovia [Antioquia] operations have been operating at about 95% of normal since mid-April,” the company added.

In other highlights, GCC announced that it has completed spin-out of its Marmato mining assets in Colombia through a reverse takeover transaction. As a result, GCC has a 74.4% interest in the resulting issuer, named “Caldas Gold Corp.”

Meanwhile, GCC recently signed a letter of intent with Renergetica Colombia to acquire am 11.2-megawatt solar-power project in Tolima, Colombia.

On yet another front, GCC announced May 25 the cancelllation of a proposed merger with Guyana Goldfields and Gold X, mainly to expand gold-mining operations in Guyana, South America. 

USAID ‘Legal Gold’ Project Sees Antioquia Rebound

On a related front, the Medellin-based “Legal Gold” project of the U.S. Agency for International Development (USAID) announced May 15 that gold miners in Antioquia are gradually returning to work following new Health Ministry protocols to avoid Coronavirus infections.

“The mandatory preventive isolation measure decreed by the national government on March 25, 2020, and which lasts until May 25, decreased the operations of the mining industry, despite the fact that this sector was included within the 34 exceptions of the Decree 457,” USAID noted.

“Large-scale mining companies tightened security measures and significantly reduced their operations. however, they gradually resumed them with biosecurity measures.

“A different scenario faced small-scale mining, especially the mining production units (UPM) of Bajo Cauca, North and Northeast Antioquia, and those of the department of Chocó, which had suspended activities due to the shortage of the supply chain, the fall of the local gold price, lack of buyers, mobility restrictions and fear of contagion by Coronavirus.”

These smaller-scale mining operations “began to resume activities gradually, motivated by the lack of income, the conditions offered by the territory and the isolation in which they find themselves, which [isolation] paradoxically becomes a point in favor of a possible active presence of the virus,” according to the agency.

“The commercialization of gold began to revive, despite the difficulties of moving within the municipalities -- especially in the UPMs that have contracts with international trading companies.

“In the case of the UPM of Antioquia (North, Northeast and Bajo Cauca) the picture is similar. Gold sales are made through the international trading company, located in Medellín, which is receiving the metal in this city but with a brief decrease in the price per gram -- between COP$10,000 and COP$12,000 [US$2.56 to US$3.07] --due to the unavailability of commercial flights, which has generated an extra cost for its mobilization.

“This situation has motivated some miners to sell their product to local gold purchases, where they are paid by the gram at a lower price,” USAID added.


Medellin-based textile and plastics-recycling specialist Enka Colombia revealed in a May 15 filing with Colombia’s Superfinanciera oversight agency that its first quarter (1Q) 2020 net income jumped to a positive COP$1.73 billion (US$443,000), up from a net loss of COP$3 billion (US$767,000) in 1Q 2019.

Earnings before interest, taxes, depreciation and amortization (EBITDA) likewise rose 79% year-on-year, to COP$11.3 billion (US$2.9 million), while EBITDA margin improved to 11.1%, from 6.2% in 1Q 2019.

“The first quarter ends with positive results, without significant impact from Covid-19,” according to Enka. “Our market diversification strategy has allowed us to expand our presence in the North American market -- up 33% -- reaching a corporate-wide sales share of 16%,” according to Enka.

“However, the effects of the mandatory quarantine measures will be seen and will be reflected as of the second quarter due to the reduction in sales and the stoppage of operations,” the company added.

Covid-19 Effects

“From the first period of mandatory preventive isolation ordered by the national government in Decree 457 of March 22, 2020, the company suspended most of its production, leaving only the ‘EKO-PET’ [plastic-bottle recycling] line in operation to guarantee the supply of an essential input for the manufacture of food packaging and cleaning products,” according to Enka.

“With the authorization of the national government and after the implementation of the biosafety protocols recommended by the Ministry of Health, on April 20 the company gradually resumed operations to supply raw materials to various sectors involved in managing the current situation, especially the manufacture of medical clothing, hospital equipment, agro-industrial products, supplies for the transport of goods, recycling of post-consumer waste, among others.

“Post-consumer bottle collection volumes have been reduced by some restrictions imposed on the recycling sector during the isolation stages.

“Said restrictions have been normalizing and, consequently, the collection volumes have been gradually recovering. In addition, to help waste recyclers over 60 years old, who cannot exercise their trade to protect their health, we coordinate resources with important companies such as Tetra Pak, Postobón, Bavaria and Alpina to deliver market-basket foods to more than 2,300 waste pickers in 17 departments, 40 municipalities and 108 waste picker organizations,” the company added.

Meanwhile, Enka has “strengthened its liquidity position by making use of its lines of credit with the financial sector to meet its commitments with its employees, taxes, suppliers and other stakeholders,” according to the company.

‘Green’ Businesses Mostly Positive

For Enka’s various recycling operations, total revenue in 1Q 2020 hit COP$33 billion (US$8.4 million), taking a 33% share of the company’s sales. Exports totaled US$1.5 million, equivalent to 16% of business income. So far in 2020,  post consumer plastic-bottle-collection has increased by 10% year-on-year.

The “EKO-PET” line (4,498 tons in 1Q 2020) “continues to operate at 100% of its capacity and has an increase in sales volume of 5%. Revenues for 1Q 2020 decreased 10% due to lower international PET prices, as a consequence of lower oil prices and lower world demand due to the effect of Covid-19,” according to Enka.

The “EKO-Fibras” line (3,162 tons) had a 15% increase in sales volume “mainly in the local market, covering greater market needs due to the uncertainty about the availability and prices of imported products by Covid-19 and the strong devaluation of the peso,” according to the company.

The “EKO- Polyolefins” line (566 tons) “continues to evolve positively, managing to consolidate recurring businesses in both the local and export markets. So far this year, sales have grown by 475 tons (up 521%),” according to Enka.

Textile, Industrial Business Lines

For this segment, revenue hit COP$69 billion (US$17.6 million), reaching a 67% share of the company’s total sales. Exports reached US$11.9 million, representing 61% of textile/industrial lines, with the United States, Canada and Brazil as main destinations.

The “Industrial Threads” line (3,083 tons) saw 5% sales growth “due to the good performance of the North American market and the development of new clients in this region, both in canvas for tires and in technical threads, which offset a lower demand from the automotive industry in Mexico and Brazil,” according to Enka.

The “Textile Filaments” line (2,533 tons) saw sales volume dip 5%, “mainly due to lower exports to Argentina due to credit restrictions and lower demand for textile ‘Nylon’ in Brazil, partially offset by the better performance of the local market,” according to Enka.

The “Resins” line (870 tons) saw sales grow 28% in tons “due to higher demand for Nylon resins for electrical cables -- especially abroad -- and higher demand for virgin PET for beverage containers and toiletries,” according to Enka.


Medellin-based insurance and investment giant Grupo Sura revealed in a May 15 filing with Colombia’s Superfinanciera oversight agency that it suffered a COP$75.9 billion (US$19 million) net loss for first quarter (1Q) 2020, down from a COP$560 billion (US$143 million) net profit in 1Q 2019.

The company cited a “challenging environment that has forced companies to adapt many of their operating models to be able to continue serving their customers and fulfilling their goal of creating added value” in the face of the Coronavirus crisis.

Operating earnings fell 71% year-on-year, to COP$244 billion (US$62 million), mainly due to “lower investment income as a result of a widespread depreciation of financial assets on a global level, which had a greater impact on the income obtained from the legal reserves of our pension fund management firms” as well as “lower revenues obtained via the equity method from [part-owned] Bancolombia mainly due to higher provisions, as well as from [retirement-fund specialist] Proteccion given lower returns obtained from its legal reserves,” according to the company.

These negative factors undercut “sustained growth in operating income from insurance premiums, health care services and asset management fees and commissions,” according to Sura.

The company’s financial-segment losses hit COP$324 billion (US$82.8 million) -- down 161% year-on-year – “mainly due to the accounting effect of the depreciation of the Colombian peso on the exchange difference, related to the unhedged portion of the dollar-denominated debt maturing in 2026,” according to Sura.

“All of this produced a net loss of COP$75.9 billion (US$19 million), which is mainly due to the aforementioned negative effects that do not constitute any cash outflow,” the company added.

“The negative effect of exchange-rate differences and hedging appraisals [are tied to] the depreciation of the exchange rate during the first quarter of this year. The company has hedged its U.S. dollar-denominated debt, but a portion of the principal due in 2026 still shows a total exposure to the dollar."

The “Suramericana” insurance division posted a 14.6% gain in premiums -- mainly in life, property, casualty and health insurance -- to COP$4.3 trillion (US$1.1 billion). But net income nevertheless fell 9.89% year-on-year, to COP$106.7 billion (US$27 million).

“In spite of a positive level of operating performance, net income was affected by a decline with investment income, mainly due to the loss of marked-to-market investment portfolios in some geographies,” the company added.

The “Sura Asset Management” investment division posted a net loss of COP$129.8 billion (US$33 million), mainly because of loss-making performance of the company’s legal reserves “as well as revenues obtained from [retirement-fund specialist] Proteccion via equity method, all of which produced a negative contribution given lower returns from the aforementioned portfolios,” according to the company.

“These losses mainly correspond to the negative returns posted on the pension funds' own investment portfolios (legal reserves) which were negatively impacted by losses in value with the large majority of financial assets on a global level, which nevertheless managed to partially recover in April and May,” according to Sura.

Results also were hurt by a drop in investment income “given falling prices of fixed-income securities in Argentina” as well as a “26.1% drop in retained premiums in Chile” and “increased administrative expense on the part of our Uruguayan subsidiary.”

Sura’s health care segment showed a drop in net income “mainly due to the IPS [Colombia hospital and clinic] and diagnostic-aid providers, since these health care subsidiaries invested in expanding their capacities for providing the support and services required in preparation for the Covid-19 crisis,” according to the company.

“This entailed increasing the number of health professionals, which today number approximately 10,000, as well as deploying the required technology for providing on-line attention as well as defraying the cost of [Coronavirus] sample taking.”

On the other hand, Sura’s EPS health-insurance network in Colombia “performed much better than in 1Q 2019, thereby confirming the current trend toward obtaining better results during the second half of 2019 and first quarter of 2020," according to the company.

“At the end of 1Q 2020, the technical results posted by Suramericana did not present any significant impact due to the Covid-19 pandemic, since the infection curve, as well as the corresponding government actions and the measures taken by the company in the different countries where present, were still at a very early stage,” according to Sura.

“At this juncture, and given the situation that Covid-19 poses for our different businesses, the estimates drawn up by the company show that corresponding impacts shall place pressure on sustaining our operating results in the short term, particularly with regard to the life and health care insurance segments as a result of the increase in claims that this pandemic represents, as well as the non-life insurance segment, given the economic and social consequences that the current lockdown measures may cause mainly in 2020,” the company cautioned.


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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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