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Medellin-based multinational supermarket and dry-goods retailer Grupo Exito on May 4 reported a four-fold jump in net income for first quarter (1Q) 2021, to COP$84.8 billion (US$22 million), versus COP$21.9 billion (US$5.7 million) in 1Q 2020.

Recurring earnings before interest, taxes, depreciation and amortization (EBITDA) rose 16.7% year-on-year, to COP$306 billion (US$79 million), even though sales dipped 7.9% (or 4.1% when including exchange-rate effects), to COP$3.6 trillion (US$933 million) in 1Q 2021 versus 1Q 2020.

“Sales were impacted by mobility restrictions and strict closures of trade to contain the levels of contagion of Covid-19” in the three countries where it operates: Colombia, Argentina and Uruguay, the company noted.

“Although the company’s income was affected, Grupo Éxito recorded a consolidated recurring EBITDA of close to COP$307 billion, mainly favored by the growth of expenses below inflation in the three countries, the royalties received by TUYA and the non-recurring income received from the closure of the development of the Envigado and Tunja real estate projects[ in Colombia],” according to the company

During the latest quarter, Grupo Exito “recorded higher income tax expenses and higher financial expenses. However, net income reached close to COP$85 billion, mainly due to the optimization of expenses in the operation in all countries and the contribution of the diversification strategy that favored better income from the real estate and financial businesses,” according to the company.

Consolidated revenues dipped 1.9% and sales by 4.1%, both figures excluding the exchange rate effect, “explained by the high comparison bases of the first quarter of 2020, due to the fact that the onset of the Coronavirus pandemic in mid-March led to accelerated sales growth in the region,” according to Exito.

Profit improvements came especially from “performance of innovative formats including ‘Exito Wow’ and ‘Carulla FreshMarket,’ dynamism in the electronic and direct commerce channels, and the diversification of our businesses,” according to Exito.

Home-delivery sales and electronic commerce accounted for10.7% of consolidated sales, “which places Grupo Éxito as one of the leaders in digital penetration in Latin America,” according to the company.

In Colombia, direct and electronic commerce channels represented 13% of total sales here, while the “Éxito Wow” and “Carulla FreshMarket” formats took a 19.7% share of the company’s sales in Colombia.

“The business diversification strategy contributed to counteract the negative effect that the financial and real estate businesses had in 2020,” the company added.

In Uruguay, “although border closures affected the summer vacation season, the operation reported high profitability levels thanks to activities to reduce spending and efficiencies in the operation, with a recurring EBITDA [earnings before interest, taxes, depreciation and amortization] margin of 10.3%,” according to Exito.

In Argentina, “sales remain resilient amid a challenging context, and grew at double digits in local currency,” according to the company.

 


Medellin-based multinational banking giant Bancolombia on May 4 reported a COP$542 billion (US$141 million) net profit for first quarter (1Q) 2021, up 61% over the COP$335 billion (US$87 million) net profit in 1Q 2020.

Net interest income in the latest quarter totaled COP$282 billion (US$73 million), up 26% over 4Q 2020 but down 3% from 1Q 2020.

“During 1Q 2021, the investment, interest rate derivatives and repos portfolio generated COP$273 billion [US$71 million], which is 193.8% higher than the value generated in 1Q 2020, mainly explained by the derivatives book performance during the quarter,” according to Bancolombia.

“Despite an adverse scenario in the capital markets, investments leveraged by derivatives obtained significant income with low capital consumption,” the company added.

Annualized net interest margin increased to 5.1% during 1Q 2021, “explained by the execution of strategies on the derivatives portfolio, offsetting the negative results of the public and private debt books, as a result of the devaluation in fixed income globally,” according to Bancolombia.

“The annualized net interest margin of the loan portfolio was 5.7%, increasing when compared to the one reported in 4Q 2020. This quarterly variation is mainly due to the impact on the valuation of the loan portfolio that was previously under credit reliefs,” the company added.

Loan provision charges for the latest quarter totaled COP$1.3 trillion (US$337 million), down 7.2% year-on-year, while the coverage ratio for 90-day past due loans was 221.8%. Such provisions are “largely explained by the deterioration in customer credit ratings due to Covid-19 in our expected losses models,” according to Bancolombia.

Capital solvency ratio ended at 14.8%, “well above the minimum regulatory levels required in Colombia,” according to the company.

As of March 31, 2021, Bancolombia’s assets totaled COP$257 trillion (US$66/7 billion), up 0.7% compared to 4Q 2020 – “largely explained by the growth in the loan book and repos portfolio” -- but down 6.7% compared to 1Q 2020, according to the company.

During the latest quarter, the Colombian peso (COP) depreciated 7.2% versus the U.S. dollar, but over the past 12 months, the COP had appreciated 9.3%. “The average exchange rate for 1Q 2021 was 3.6% lower than that of 4Q 2020,” the company added.

Total funding costs decreased during 1Q 2021, as “saving accounts and checking accounts have increased their share over the total funding mix during the last 12 twelve months. Saving accounts accounted for 35% as of 1Q 2020, while by 1Q 2021 they represent 41%,” according to Bancolombia.

“Checking accounts represented 14% as of 1Q 2020 and have increased to 16% as of 1Q 2021. The annualized average weighted cost of deposits was 1.57% in 1Q2021, decreasing by 25 basis points when compared to 4Q 2020 and by 99 basis points when compared to 1Q 2020,” the company added.

During 1Q 2021, “net fees and income from services totaled COP$799 billion [US$207 million], growing by 0.6% compared to 4Q 2020, and by 0.3% compared to 1Q 2020. The better performance in fees during the last quarter confirms a positive trend mainly due to the recovery in transaction levels, despite the seasonality of quarters,” according to Bancolombia.

“Fees from credit, debit cards and commercial establishments went down by 5.1% compared to 4Q 2020 and went up by 5.3% compared to 1Q 2020. Fees from asset management and trust services grew 4.4% compared to 4Q 2020 and 16.7% compared to 1Q 2020. Fees from our ‘bancassurance’ business decreased by 22.3% compared to 4Q 2020 and by 15.4% with respect to 1Q 2020,” the company added.

As of March 31, Bancolombia reported having 10.8 million digital accounts, of which 5.8 million are users in the “Nequi” electronic platform and the other 5 million in the “Bancolombia a la Mano” platform.


Antioquia Acting Governor Luis Fernando Suarez announced just after noon today (Monday, May 3) that current travel and shopping restrictions will continue tomorrow (Tuesday, May 4) through at least Tuesday, May 11 because of continuing excessive Covid-19 infections.

Under the latest control scheme, “pico y cedula” shopping limits are reimposed on Tuesday, May 4, enabling trips for people with cedulas ending in 0 and 1, while those with cedulas ending in 2 and 3 can shop on Wednesday, May 5. On Thursday, May 6, people with cedulas ending in 4 and 5 can shop.

“Urgent basic food-supply shopping” is allowed on Friday, May 7 for those with cedulas ending in 6 and 7, while “urgent” shopping is also allowed for cedulas ending in 8 and 9 on Saturday, May 8.

Those with cedulas ending in 0 and 1 can do “urgent” shopping on Sunday, May 9, while those with cedulas ending in 2 and 3 can shop on Monday, May 10.

In addition to “pico y cedula” restrictions, curfews and liquor-sales bans are imposed daily from 8pm to 5am May 4 to May 6, then continually from 8pm  Friday, May 7 to 5 am Tuesday, May 11, according to the Governor.

As in recent Covid-19 restrictions, home deliveries of food and medicines are allowed, along with emergency and authorized trips.


Toronto-based PharmaCielo – owner of a medical-marijuana production and processing facility in the eastern Medellin suburb of Rionegro – on May 3 posted a full-year 2020 net loss of Cdn$43.7 million (US$35.6 million), worse than the Cdn$34.7 million (US$28 million) loss in 2019.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) came in at a net loss of Cdn$23.5 million (US$19 million), worse than the Cdn$18 million (US$14.6 million) EBITDA net loss in 2019.

Revenues were the only bright spot in 2020, rising to Cdn$2.6 million (US$2.1 million), up from Cdn$787,000 (US$641,000) in 2019.

The company also reported a decline in cash and cash equivalents, to a total ofCdn$8.9 million (US$7.2 million) at December 31, 2020 compared to Cdn$13.7 million (US$11 million) at December 31, 2019. However, “subsequent to the quarter ended December 31, 2020, on April 7, 2021, the company closed an overnight marketed equity offering for gross proceeds of Cdn$13.5 million [US$11 million],” according to the company.

Commenting on the 2020 results, PharmaCielo CEO Henning von Koss stated that the year 2020 “was challenging for the world as a whole and PharmaCielo was not exempted. Despite these challenges, we accomplished several key operational milestones, particularly during the second half of 2020, which have positioned the company for growth through 2021.

“Since joining as CEO in December 2020, I have focused our team on streamlining operations, finishing the Processing and Extraction Centre (PEC) [in Rionegro] and aligning and strengthening our organizational structure, particularly on the sales side.

“The PEC is complete and operating with a unique combination of advanced upstream and downstream technologies that drive a broad portfolio including several value-add CBD, THC-free as well as high-THC content formulations. We are operating at a lower cost structure, and the organization is focused on execution, with recent entries into the UK, Swiss and Brazilian markets highlighting the success of our revised end market focus.

“The global cannabinoid supply chain continues to grow and mature. With our operational foundation complete and awareness growing, evidenced by growth in the number of potential customers requesting appointments to confirm GMP compliance, it is time to build-out a dedicated sales organization to secure PharmaCielo’s position as a preferred B2B supplier of cannabinoid inputs,” he concluded.


Medellin-based multinational foods manufacturing and retailing giant Grupo Nutresa reported April 30 that its first quarter (1Q) 2021 net profit rose 20.6% year-on-year, to COP$233 billion (US$62 million).

Earnings before interest, taxes, depreciation and amortization (EBITDA) also rose by 5.7%, to COP$397.5 billion (US$106 million), while sales rose 6.6%, to COP$2.8 trillion (US$746 million, according to the company.

Sales in Colombia rose 7.3%, to COP$1.7 trillion (US$453 million), while international sales rose 5%, to US$306 million, according to the company.

Gross profit rose 4.9% year-on-year, to COP$1.2 trillion (US$320 million), “the result of Grupo Nutresa’s increasing revenues and the higher costs of commodities associated to international prices, as well as the depreciation of several currencies in Latin America against the dollar,” according to the company.

Financial revenues declined 21.8% year-on-year, “due to lower interest rates on our cash investments during the period,” but financial expenses dropped 24.1% “mainly due to the lower cost of debt,” the company added.

 


Colombia-based Cemex LatAm Holdings reported a US$3.8 million net profit for first quarter (1Q) 2021, up sharply from a US$30.4 million net loss in 1Q 2020.

“Consolidated net sales during the first quarter of 2021 increased 7% on a like-for-like basis adjusted for currency fluctuations, compared to the first quarter of 2020,” according to the company. “Net sales improved in all countries except Panama.”

Cost of sales as a percentage of net sales increased 1.6pp during the quarter, from 59.4% in 1Q20 to 61.0% in 1Q21. The increase was mainly due to higher maintenance costs and higher variable costs in Nicaragua.

Operating expenses as a percentage of net sales decreased 2.7 percentage points during the latest quarter, from 28.3% in 1Q 2020 to 25.6% in 1Q 2021, “driven by our cost savings program,” according to Cemex LatAm.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for 1Q 2021 rose 12% in like-for-like terms, compared to 1Q 2020. EBITDA margin during 1Q 2021 also increased 0.8 percentage points versus 1Q 2020.

“The EBITDA margin expansion was mainly driven by higher volumes and lower selling, general and administrative expenses, despite higher maintenance expenses of US$5.7 million during 1Q 2021,” according to the company.

Net debt declined by US$35 million during 1Q 2021, to US$619 million. Free cash flow reached US$26 million in 1Q 2021 versus US$2 million in 1Q 2020.

“The improvement was mainly driven by a positive working capital effect and higher EBITDA,” according to Cemex. “Our average working capital days were negative during 19 days in 1Q 2021 versus seven negative days during 1Q 2020. Our financial expense decreased by US$2.4 million, or 18%, compared to the same period last year.

Net debt to EBITDA ratio improved to 3.4-times in March 2021, from 3.7-x in December 2020.

As for the rest-of-2021 outlook, “we are giving a strategic CAPEX estimate of US$40 million,” of which “US$35 million is related to the general development of our Maceo [Antioquia] cement plant project in Colombia,” according to Cemex.

Colombia Results

In Colombia, the cement/concrete industry “is experiencing robust growth, with the self-construction and infrastructure sectors as the main drivers of demand,” according to Cemex.

“Our cement volumes in Colombia grew 4% [during 1Q 2021], less than the industry in the quarter, mainly due to our pricing strategy and competitive dynamics.

“Our cement prices during the quarter improved by 4%, compared to the same period last year, and by 1% sequentially, in local currency terms.

“Despite the imposition of new [Covid-19 quarantine] containment measures in April, we believe the outlook remains favorable, supported by record home sales, the execution of existing 4G [fourth-generation] highway projects and the roll-out of new infrastructure programs,” the company added.

Central America Results

In Panama, 1Q 2021 cement volumes decreased 11% compared to the same period last year and improved 19% sequentially. “The industry's cement volumes remained weak during the first two months of the year, but showed signs of recovery in March,” according to the company.

In Costa Rica, “our cement volumes during the first quarter increased 7% due to better activity in the infrastructure and self-construction sectors. Our quarterly cement prices improved 2% compared to the same period last year, and 1% sequentially.

In Guatemala, El Salvador Nicaragua, “our cement volumes during the quarter improved by 16%, reaching the highest levels since 2016. Cement volumes increased in these three countries,” according to Cemex.

“In Guatemala, our cement volumes were driven by strong activity in the self-construction sector, a segment where we have a greater relative presence, as well as a gradual recovery in the formal sector. Our cement prices improved 1% compared to the same period last year and sequentially, in local currency terms.

“In Nicaragua, our cement volumes improved by 17% driven by the self-build sector, as well as government sponsored projects. Cement consumption during the quarter was also supported by the increase in remittances. Looking ahead, socio-political risks in the country could increase due to the presidential elections scheduled for November this year,” the company added.


EPM 1Q 2021 Net Income Rises 31% Year-on-Year

Wednesday, 28 April 2021 08:11 Written by

Medellin-based multinational electric power and utilties giant EPM announced April 27 that its first quarter (1Q) 2021 net income jumped 31% year-on-year, to COP$856 billion (US$230 million).

Revenues rose 18% year-on-year, to COP$5.6 trillion (US$1.5 billion), while earnings before interest, taxes, depreciation and amortization (EBITDA) rose 12%, to COP$1.7 trillion (US$457 million).

The company will hand-over COP$1.4 trillion (US$377 million) to the city of Medellin (its sole shareholder) this year thanks to continuing profits, according to EPM. To date, Medellin has already received COP$300 billion (US$81 million) of the 2021 projected profits, the company added.

EPM attributed its positive results to “a better result of commercial operations,” mainly because of “an increase in power generation, given the high water inputs and the reserves in the reservoirs” for its mainly hydroelectric power operations.

So far this year, EPM infrastructure investments total COP$511 billion (US$137 million), of which COP$257 billion (US$69 million) corresponds to the 2.4-gigawatt, US$5 billion "Hidroituango" hydroelectric project in Antioquia, according to the company.

Grupo EPM’s total assets during 1Q 2021 grew 1% year-on-year, to COP$64.7 trillion (US$17.4 billion), while liabilities rose 5%, to COP$$38.4 trillion (US$10.2 billion), resulting in COP$26.3 trillion (US$7.07 billion) in net equity, down 3%.

Financial indebtedness stands at 42%, while the debt/EBITDA ratio closed at 4.4 as of March 31, 2021, up from 3.80 at end-March 2020, according to the company.


Antioquia Governor Luis Fernando Suárez announced last night (April 24) that metro Medellin, the “oriente” region and the rest of Antioquia will continue restrictions on movements to Monday, May 3 because of overwhelming cases of Covid-19.

Curfews and bans on liquor sales will continue from 8 pm to 5 am daily to April 29.

Simultaneously, starting Monday, April 26, “pico y cedula” shopping restrictions only enable people with cedulas ending in 0 and 1 to make shopping trips.

On Tuesday, April 27, people with cedulas ending in 2, 3 and 4 can go shopping, while on Wednesday, April 28, shopping is permitted for those with cedulas ending in 5, 6 or 7.

On Thursday, April 29, shopping is permitted only for cedulas ending in 8 and 9.

As for Friday April 30, Saturday May 1 and Sunday May 2, a total quarantine is declared-- except for essential workers -- although home-delivery of food and medicines is allowed, along with emergency trips and authorized trips.

On the morning of May 1, Governor Suarez further announced a new order that abolishes a previous order that had allowed "essential food item" trips on Friday, April 30 and Sunday, May 2 for people with cedulas ending in even-numbers. The new order likewise abolishes shopping-trip rights for those with cedulas ending in odd numbers on Saturday, May 1. Only home deliveries and emergency trips are permitted on those days.

Hospitals jammed with Covid patients meanwhile report a critical shortage of oxygen tanks, partly because some now-recovered patients previously receiving home care have failed to return tanks to oxygen suppliers, Suarez warned.

As a result, even more extreme quarantine measures are being considered for all Colombia, while Antioquia might extend the current, existing restrictions to May 10, he cautioned.


The Antioquia departmental government’s Institute for the Development of Antioquia (IDEA) announced April 22 that it just signed an alliance deal with Medellin-based “green” project consultant Animal Bank.

Animal Bank is an initiative created by Medellin’s Portafolio Verde organization (see Medellin Herald 08/26/2019), which helps various commercial or industrial project developers to find novel ways to offset, avoid or minimize environmental impacts.

“IDEA will be a founding ally of Animal Bank, becoming the first public entity to support this initiative,” according to the agency. “The alliance will support the design, structuring and development of projects focused on the conservation of biodiversity.”

Animal Bank allies also include Renting Colombia (subsidiary of Bancolombia), Continental Gold, the Humboldt Institute of Colombia, Vanderbilt University and B Lab. Its board of directors includes environmental sustainability expert Brigitte Baptiste, rector of EAN University.

According to Portafolio Verde executive director Alejandro Zapata Arango, “through the management of partner organizations, the Animal Bank establishes sources of operation and financing that allow it to advance in the fulfillment of its purpose. Along this route, we have identified the importance of having the support of a public-sector company such as IDEA, an entity that shares the principles and meaning of [environmentally conscious] banking and that acts from a commitment to the development of society.”

The alliance between IDEA and Animal Bank “will contribute to the future of the territories and the next generations by creating social awareness with actions aimed at the efficient use of natural resources and carrying out collective work for the conservation of biodiversity,” according to the organization.


Sweden-based multinational personal-hygiene-products giant Essity announced last night (April 22) that it just paid US$1.54 billion to boost its shareholding in Medellin-based counterpart Grupo Familia to “at least 94%,” up from 50% previously.

According to company CEO Magnus Groth, “Essity has been a [partial] owner in Familia since 1985.With this acquisition we are building a stronger platform in Latin America to increase growth, profitability and efficiency as well as accelerate digital transformation.”

Grupo Familia has commercial operations in 13 Latin American and Caribbean countries and exports from Colombia to seven nations, selling personal-hygiene and paper products under the “Nosotras,” “Pequeñín” and “Familia” brands. The company just reported 2020 net income of COP$317 billion (US$87 million), up from COP$247 billion (US$68 million) in 2019.

Essity meanwhile has commercial operations in 150 countries, selling personal-hygiene and paper products under the “Tena” and “Tork” brands.

Essity’s net sales in 2020 amounted to SEK122 billion (US$14.5 billion), while full-year 2020 net profits came in at SEK11.7 billion (US$1.4 billion), up from SEK10.2 billion (US$1.2 billion) in 2019, according to the company.

“Essity's decision to acquire the majority shareholding of Productos Familia S.A. will help accelerate Grupo Familia's long-term growth strategy, ensuring its access to more markets in the region,” according to Familia.

“We are happy with this announcement and to start this new chapter in the success story of Grupo Familia,” added company president Andrés Felipe Gómez. “We know that by working more closely with Essity we can leverage innovation, build stronger and more sustainable brands, accelerate digital transformation and foster a culture more agile and enterprising,” he concluded.


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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.

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