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Medellin-based multinational supermarket and dry-goods retailer Grupo Exito announced May 3 that its first quarter (1Q) 2022 net income dropped 24% year-on-year, to COP$64 billion (US$15.9 million), from COP$85 billion (US$21 million) in 1Q 2021.

However, sales actually rose 22% year-on-year, to COP$4.37 trillion (US$1.08 billion), while recurring earnings before interest, taxes, depreciation and amortization (EBITDA) likewise rose 15.8% year-on-year, to COP$355 billion (US$88 million).

The company blamed the profits decline on “a higher tax rate than in the same quarter of the previous year and higher interest rates.”

On the other hand, the boost in EBITDA came as a result of “great commercial dynamism and operational efficiencies in the three countries where it has a presence,” namely Colombia, Argentina and Uruguay.

“The strengthening of the omnichannel strategy in Colombia allowed e-commerce and direct channels to reach a share of 11.8% of [Exito’s total Colombia] sales in the quarter,” according to the company.

Meanwhile, “innovative formats continue to be important levers of differentiation and competitiveness. ‘Success Wow’ represented 29.5% of the brand’s total sales while ‘Carulla FreshMarket’ took 46.3%. Likewise, ‘Super Inter Vecino’ took 47% and ‘Surtimayorista’ took 4.7% of the total sales of the operation in Colombia.

“Sales from electronic and direct commerce channels in Colombia reached $395.8 billion [US$98 million] in the quarter and already represent 11.8% of the company’s total sales,” according to Exito.

“The diversification strategy of complementary businesses, mainly real estate, continued to contribute to the result. The occupancy rate of shopping centers reached 93.1% in Colombia and 89.6% in Argentina in March.

“The gradual recovery of the economy in Uruguay, benefited by the tourist season, was reflected in a growth in sales of 11.8% in local currency, higher than the annualized inflation. A higher recurring EBITDA margin of the operation in that country (11.2%) was the result of greater productivity and strict control of expenses.

“The participation in sales of direct and electronic commerce channels in Uruguay was 2.6%. The stores that operate under the ‘Fresh Market’ model participated with 46.6% of total sales, growing 13.7 points more than the non-reformed stores.

“In Argentina, ‘Grupo Libertad’ sales in local currency grew by 62.4% -- above the high level of inflation -- and benefited by economic reactivation and the result of electronic and direct commerce channels, which reached a share of total sales of 2.3%,” the company added.


The International Monetary Fund (IMF) on May 2 unveiled a new report finding that the Colombian government continues to exercise sound economic, social and fiscal policies – even in the face of the Covid-19 pandemic, its unavoidable economic consequences, massive influx of millions of desperate Venezuelans -- but facing potential reversals from upcoming elections.

Assuming Colombia won’t suffer a dramatic political-economic reversal and would continue with its capitalist social democracy, the IMF just approved “a successor two-year arrangement for Colombia under the Flexible Credit Line (FCL), designed for crisis prevention, of about US$9.8 billion,” according to IMF, the global economic stabilizer for its 190 member nations.

“Colombia qualifies for the FCL by virtue of its very strong economic fundamentals and institutional policy frameworks and track record of implementing very strong policies and commitment to maintaining such policies,” according to IMF.

“Prior to the pandemic in 2020, Colombia had been on a path of gradually reducing access under its FCL arrangements, and the new arrangement resumes this path. The arrangement should boost market confidence, and combined with the comfortable level of international reserves, provide insurance against external downside risks.”

“Colombia has very strong economic fundamentals and policy frameworks anchored by a credible inflation targeting-regime, a solid medium-term fiscal framework, a flexible exchange rate, and effective financial sector supervision and regulation,” added IMF Deputy Managing Director Antoinette Sayeh.

“The authorities remain firmly committed to maintaining very strong macroeconomic policies going forward. There is also broad consensus in Colombia on the importance of preserving very strong policy frameworks.

“Colombia also has a very strong track record of macroeconomic management, which allowed the authorities to deliver a comprehensive response to the pandemic, promote a steadfast economic recovery, continue to integrate Venezuelan migrants into Colombian society, and support rising living standards.

“With a robust recovery underway but risks tilted to the downside, Colombia has taken steps to normalize policies from a crisis footing and manage higher inflation, while strengthening public finances and reducing external imbalances.

“Meanwhile, international reserves remain adequate. The structural reform agenda rightly aims at fostering inclusive and sustainable growth and enhancing external competitiveness,” Saveh concluded.

Among the IMF report highlights:

-- “Colombia’s strong economic recovery in 2021 places it among the region’s growth leaders. GDP growth for 2021 was 10.6%, on par with Chile and Peru as the fastest growing economies in the region. Buoyed by pent-up household consumption and higher credit growth, GDP growth is forecast at 5.8% in 2022 and 3.6% in 2023,” according to the report.

-- “Inflation has been well above the central bank’s target of 3% since August 2021, prompting the central bank to raise rates and to accelerate the pace of tightening. Amid strong domestic demand, supply-side constraints, and sharply rising commodity prices, inflation climbed to 8.5% in March, well above the central bank’s target.

“As supply constraints and commodity price pressures are alleviated, staff expects inflation to gradually return to the central bank’s target by mid-2024, although inflation risks are to the upside.

-- “Alongside the recovery, Colombia’s public finances are showing signs of improving with scope to make further gains. The fiscal deficit was smaller than expected in 2021. With stronger growth and broadly unchanged spending, the central government fiscal deficit was 8.2% of GDP in 2021, about 1.5% of GDP lower than in the 2021 Medium-Term Fiscal framework target.

“A lower fiscal deficit (6.1% of GDP) than what is required to comply with the new fiscal rule (7.9% of GDP) appears within reach this year, given higher tax collections due to the stronger-than-expected economic recovery and restraint on primary expenditures.

-- “The current account deficit widened further alongside demand-led growth. Alongside strong domestic absorption and higher import prices, the current account deficit widened noticeably from 3.4% in 2020 to 5.7% of GDP in 2021 . . . assessed as being temporary due to pandemic-related effects and domestic disruptions to oil production.

“FDI [foreign direct investment] has remained a strong and stable source of financing, while portfolio inflows were positive in 2021 but decelerated as investors adjusted their positions due to Colombia’s sovereign ratings downgrade.

--“ Colombia’s banks have withstood the pandemic well and the financial system remains sound. Credit growth, particularly consumer loans, appears to be entering an upswing amid a stronger growth outlook. Businesses and households improved their balance sheets, but leverage ratios remain elevated, particularly for non-financial firms. Banks exhibit strong capital and liquidity buffers, underpinned by effective supervision.”

--"While Colombia’s balance of payments and fiscal position stand to benefit from higher hydrocarbon prices, rising and volatile international prices for food and energy, as well as more persistent disruptions in global supply chains would exacerbate domestic inflationary pressures.

--"Notwithstanding the recent slowdown in migrant flows, higher-than-expected migration flows from Venezuela would raise near-term fiscal and external deficits. These shocks could heighten Colombia’s fiscal risks and are likely to be exacerbated by political uncertainty from the upcoming national election cycle,” the report adds.


Medellin-based multinational foods giant Grupo Nutresa announced April 29 that its first quarter (1Q) 2022 net income rose 28.7% year-on-year, to COP$295 billion (US$74.6 million).

Sales likewise jumped 27% year-on-year, to COP$3.6 trillion (US$910 million), while earnings before interest, taxes, depreciation and amortization (EBITDA) rose 17.8%, to COP$468 billion (US$118 million), with EBITDA margin at 13%.

For this latest quarter, “double-digit growth was reported in all the Group’s businesses and geographies,” according to Nutresa.

“In Colombia, sales amounted to COP$2.2 trillion [US$556 million], 26.5% higher than in [1Q 2021] the previous year, and represent 61.4% of the group’s total income.

“On the other hand, international sales amounted to COP$1.4 trillion [US$354 million], with a growth of 27.7%, and represent 38.6% of the total. In dollars, these international revenues are US$355.4 million, 16.1% higher than the first quarter of 2021.”

Financial income jumped 80% year-on-year, to COP$6.06 billion (US$1.5 million), while financial expenses likewise rose 25%, “mainly due to the higher cost of debt,” according to Nutresa.

“During 2021, we made progress in the digitalization of operations and the development of the value chain, which allows us to improve the relationship with suppliers, customers, buyers and consumers.

“We also created native digital brands, improved brand relationships with consumers, consolidated digital customer service in Colombia and the United States, and strengthened non-face-to-face sales through our own digital platforms and with allies,” the company added.


Colombia-based Cemex LatAm Holdings announced today (April 28) that its first quarter (1Q) 2022 net income jumped 324% year-on-year, to US$16 million, from US$3.8 million in 1Q 2021 – following a US$$335 million gain from the sale of Costa Rica and El Salvador assets.

Revenues also rose 8%, to US$208 million, but operating earnings before interest, taxes, depreciation and amortization (EBITDA) actually declined 12%, to US$36 million, according to the company.

In Colombia, 1Q 2022 sales rose 9% year-on-year, to US$110 million, but operating EBITDA declined by 19%, US$17 million.

In Colombia, “our domestic gray cement, ready-mix and aggregates volumes increased by 4%, 14% and 16%, respectively, during the quarter. Regarding pricing, our cement prices improved by 5% and 1% on a sequential and year-over-year basis, respectively, in local currency terms.

“The 5% increase in cement pricing on a sequential basis was driven by our price increase executed in December.

“In the ready-mix concrete business, our volume growth during the quarter was supported by increased market demand in the formal sector, and our recent investments to increase the ready-mix footprint mainly in the metro areas of Bogota and Cali,” according to the company.

Meanwhile, 1Q 2022 sales in Panama jumped 25% year-on-year, to US$36 million, while operating EBITDA there dipped 7%, to US$7.8 million.

In Panama, “our domestic gray cement, ready-mix and aggregates volumes increased by 5%, 15% and 20%, respectively, during the quarter,” according to Cemex.

“Volume growth in our cement and ready-mix was businesses was driven primarily by increased activity in the infrastructure sector, mainly in the third line of the Metro. Despite the improvement, industry volumes are still below pre-pandemic levels.

“During the quarter, our cement plant exported more than 80,000 tons of cement and clinker to nearby markets with supply shortages,” the company added.

Sales in its other Central American markets -- Guatemala and Nicaragua -- rose 7%, to US$63 million, but operating EBITDA fell 8%, to US$10 million, according to the company.

“In Guatemala, cement volumes improved during the quarter on a year-over-year basis, mainly driven by increased activity in the self-construction sector and a recovery in the formal sector,” according to Cemex LatAm.

“In Nicaragua, cement volumes improved during the quarter mainly driven by increased activity in the infrastructure sector,” the company added.

Corporate-wide, “net sales during the first quarter of 2022 increased by 13% on a like-to-like basis adjusting for foreign exchange fluctuations, compared with those of the first quarter of 2021,” according to Cemex LatAm. “Higher consolidated volumes and cement prices were the main drivers of the improvement.”

Meanwhile, corporate-wide cost-of-sales as a percentage of net sales increased by 4.2 percentage-points, from 61.4% in 1Q 2021 to 65.6% in 1Q 2022. “The increase was primarily due to higher variable costs, mainly in kiln fuel,” driven by the world-wide hike in oil prices this year.


EPM 1Q 2022 Net Income Jumps 46% Year-on-Year

Wednesday, 27 April 2022 11:08 Written by

Medellin-based multinational electric-power and utilities giant EPM announced April 26 that its first quarter (1Q) net income rose 46% year-on-year, to COP$1.2 trillion (US$302 million).

Revenues likewise rose 31% year-on-year to COP$7.3 trillion (US$1.84 billion) “thanks to higher energy sales and higher consumption of electricity, gas and water services, as a result of the economic reactivation” following prior lockdowns and restrictions resulting from the Covid-19 pandemic.

Earnings before interest, taxes, depreciation and amortization (EBITDA) grew 33% year-on-year, to COP$2.3 trillion (US$580 million), while EBITDA margin rose one percentage point, to 32%, according to the company.

“These good results also included a 13% growth in [hydroelectric] power generation thanks to the high water inflows from the prolonged rainy season,” according to EPM. “In addition, [EPM realized] a 27% increase in natural-gas consumption in the regulated market and in sales to thermal power plants.”

EPM Group not only includes operations in Colombia, but also power generation operations in Chile, El Salvador, Guatemala, Mexico and Panama. Those international subsidiaries accounted for 27% of corporate revenues, according to the company.

From its profits, EPM will pay the city of Medellin -- its sole owner -- COP$1.9 trillion (US$479 million), equivalent to 55% of the net profit of 2021.

At the end of 1Q 2022, EPM Group’s assets totaled COP$68 trillion (US$17 billion), up 0.3%, while liabilities rose 4%, to COP$40.5 trillion (US$10.2 billion).

Investments in infrastructure totaled COP$853 billion (US$215 million), of which COP$374 billion (US$94 million) went for the continuing construction of the US$5 billion Hidroituango hydroelectric plant in Antioquia, according to the company.


Colombia President Ivan Duque and Health Minister Fernando Ruiz jointly announced this morning (April 25) that the face-mask mandate aiming to stifle  the spread of Covid-19 will ease starting May 1, 2022 – but only in well-ventilated areas where at least 70% of the local population has gotten at least two vaccine doses and 40% have gotten “booster” (typically three) doses.

In addition, people won’t be required to show their “MiVacuna” Covid-19 vaccination card at entries to leisure sites and “mass” activities, according to the official government statement.

However, the mask mandate will continue “in classrooms, offices, churches, public transport, commercial establishments and places without direct ventilation,” according to the bulletin.

“These measures validate a message: we have been fighting this pandemic, not only doubling Intensive Care Units, strengthening the health system, but also achieving a massive, safe, free and equitable vaccination system,” President Duque added.

To aid public education, the Health Ministry will publish an official list of municipalities where local populations have achieved the 70% vaccination rate against Covid-19.

As for travelers 18-years-and-older visiting Colombia, “the recommendation is that they arrive in Colombia with a complete double-dose, or, in the case of the Janssen vaccine, a single-dose,” according to the bulletin.

“Those [travelers] who do not have complete schemes or are not vaccinated will require a negative PCR test that does not exceed 72 hours and may also present an antigen test that does not exceed 48 hours” before arriving in Colombia, President Duque added.

To date, Colombia’s Covid-19 vaccination coverage exceeds 83% of the population for first- and single-doses, 69.2% for complete (minimum two-dose) applications and 34.7% for booster (typically three-dose) regimes, Health Minister Fernando Ruiz added.

While Colombia had initially created 2,700 special points-of-vaccination against Covid-19 nationwide, “today there are 4,700 points, since vaccinations are being done in the country’s hospitals and clinics,” Ruiz added.

“In Colombia we have spent more than COP$15 trillion [US$3.8 billion] on this pandemic, and the health system was able to respond. Those [Covid-19] patients who wound-up in an intensive care unit [ICU] paid practically zero, and that is not everywhere. In other countries people had to pay millions to be in an ICU.”

In addition, the Health Ministry has now settled massive, historic debts that had been choking the finances of hundreds of hospitals and clinics nationwide – clinics that couldn’t collect anything from indigent patients or else didn’t get paid by some deliberately negligent or bankrupt health-insurance networks (“EPS” in Spanish initials), although many of those wobbly EPS networks have since been liquidated, he added.


Colombia President Ivan Duque and Antioquia Governor Anibal Gaviria jointly announced today (April 23) at a dedication ceremony that the long-awaited “Puerto Antioquia” ocean-freight port linking Medellin and other major Colombia cities to the Atlantic is now starting construction and due for start-up in 2025.

“Puerto Antioquia is an historic megaproject that will allow us to promote the construction of the social fabric and strengthen the ocean freight, agro-industrial and tourist vocations of the lands of Urabá,” Gov. Gaviria stated.

The new port near Turbo, Antioquia -- carrying an estimated capex of US$627 million -- will be linked to the under-construction “Mar 1” and :Mar 2” highways westward from Medellin as well as major existing highway connections to Colombia’s coffee region and other cities including the capital, Bogota.

The port initially expects to handle 4.5 million tons of freight per year, including 3 million tons of agricultural products and 1.5 million tons of general freight, according to the developers.

Principal investors include global shipping giant CMA Terminals (22% share); Pio S.A.S. (11.1%); Eiffage Infrastructures S.A.S (22%); Termotécnica Coindustrial (5.17%); banana exporter Uniban (15.51%); Agrícola Santamaría (5.69%); Banafrut (4.14%); CI Tropical (6.21%); and Unión Para la Infraestructura (8.21%),

Project financing packages are coming from the privately held Financiera de Desarrollo Nacional (FDN) group, including a US$103.7 million package involving JP Morgan with loan guarantee from the Multilateral Investment Guarantee Agency (MIGA).

Another part of the new funding comes from the Inter-American Development Bank Group with US$200 million, plus US$30 million from Colombia’s Bancoldex import-export promotion agency and US$60 million from the Davivienda bank group here, according to FDN.

Aside from debt finance (59.6% of the total capex), the remaining 40.4% of capex (equivalent to US$280 million) is to be provided by the project partners.

The port is designed to handle ships of up to 366 meters in length, handling bulk products including coffee, grains, plantains and bananas, as well as general and containerized freight including automobiles.

Port developers estimate that the project will attract another US$720 million in nearby private investments from some 11,000 companies involved in freight logistics, customs, warehousing, trucking, maritime services, hotels, restaurants and many others.


Medellin-based natural-fibers and consumer/industrial/agricultural-packaging specialist Compañía de Empaques revealed April 1 that its full-year 2021 net income rose 59% year-on-year, to COP$32 billion (US$8.5 million).

Sales in 2021 also rose 29%, to COP$613 billlion (US$164 million), while earnings before interest, taxes, depreciation and amortization (EBITDA) rose 29.6%, to COP$69 billion (US$18 million).

Also during 2021, the company adopted a new “Grupo Excala” brand name for all its products and operations including “fique” natural fiber -- not only in Colombia, but also in Ecuador and then later in Mexico, operations of which debuted in mid-2021, in Guadalajara.

“In our agricultural division, we continue to develop new products and applications for fique and its derivations, in order to use all its components including biomass, energy production and sub-products that can be used as source materials for other products,” according to the company.

The company also successfully realized its very-first “sustainable bonds” issue through BID Invest, putting the company on a stronger “green” pathway for the future.

“We continue promoting the cultivation of fique in Cauca, Nariño and northeast Antioquia and supporting indigenous communities and farmers in those regions,” according to the company.

“We are convinced that through the establishment of legal crops and dignified labor practices, these areas can leave-behind the cultivation of illegal drug crops that unfortunately threaten people in these areas,” the company added.

While gross revenues of the company rose 38.9% in 2021 versus 2020, operating costs rose even more, by 40.5% year-on-year, to COP$288 billion (US$77 million).

Meanwhile, a rise in prices for synthetic-fiber feedstocks – mainly caused by worldwide supply-chain disruptions – likewise triggered higher sales prices for some its products.

Similarly, “prices of natural fibers have been rising since the end of 2021 because of the high costs of labor for cultivation and harvest -- a direct consequence arising from competition from illegal-drugs cultivators, who offer salaries three times that of legal crop cultivators. This in addition to the impact of violence and social chaos caused by illegal cultivators,” the company added.

Aiming to help counteract this competitive problem, the company “continues to develop new technologies for the industrialization of fique cultivation, especially in the process of de-fibering, drying and management of sub-products,” according to Compañía de Empaques.

Corporate-wide capex in 2021 totaled COP$17 billion (US$4.5 million) “and we continue with 2022 and 2023 planned investments totaling around COP$46 billion [US$12.3 million], to expand our production and infrastructure capacities,” the company added.


Medellin-based Valores Industriales – an investment group dealing mainly in real-estate, forestry products and industrial/commercial operators including Medellin-based salt/chemicals giant Brinsa SA – announced March 31 that full-year 2021 profits jumped to COP$59 billion (US$15.7 million), up from COP$14.7 billion (US$3.9 million) in 2020.

The big jump in profits came from Valores Industriales sale of its entire 73-million shareholding in Medellin-based paper-products multinational Grupo Familia. Those shares were acquired by Sweden-based global paper giant Essity Group, which last year bought virtually all of Grupo Familia’s outstanding stock.

Valores Industriales subsequently reinvested those profits by boosting its shareholdings in Brinsa SA, with a 539-million-shares-buy that has brought Valores Industriales (and an affiliate) a net 31.37% stake in Brinsa.

Valores Industriales was born in 1997 via a spin-off from Productos Familia. But since then, the company has concentrated mainly on forestry and real-estate investments.

In 2021 alone, Valores Industriales investigated more than 30 potential investment deals in sectors including automotive chemicals, processed foods, brick production, dermatological products, commercial buildings, construction, eight potential forestry sites, proposed cannabis- and cacao-cultivation projects, small-scale hydroelectric projects and solar-power projects, according to the company.


Toronto-based GCM Mining (formerly known as Gran Colombia Gold, with principal operations in Antioquia) announced March 31 that its full-year 2021 net income rose to US$180 million, up from a US$27 million net loss in 2020.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for 2021 slipped year-on-year, to US$171.6 million, from US$187.8 million in 2020. Revenues likewise dipped to US$382 million, from US$391 million in 2020.

Cash costs in 2021 rose to US$824 per ounce, from US$768 per ounce in 2020.

Total gold production also declined in 2021 to 208,817 ounces, from 220,194 ounces in 2020. However, gold prices in 2021 rose to an average US$1,794, from US$1,751 in 2020, boosting net income.

On November 29, 2021, Gran Colombia Gold changed its name to GCM Mining Corp. “to reflect its strategy to grow through diversification, expanding its operations and investments to other countries and broadening its products to include other metals beyond just gold and silver,” according to the company.

Still, the majority of GCM’s production remains in Colombia -- principally at its giant Segovia, Antioquia, underground mining operations.

In June 2021, GCM “acquired all of the shares of Gold X Mining Corp that it did not already own and then closed a US$300 million offering in August 2021 of 6.875% senior unsecured notes due 2026 to fund the development of the Toroparu Project [in Guyana], to prepay the remaining US$18 million balance of its gold notes in September and for general corporate purposes,” the company explained.

“The updated MRE [mineral resource estimate] for Toroparu includes 8.4 million ounces of Measured & Indicated gold resources at 1.42 grams per ton, and 396 million pounds of Measured & Indicated copper resource at 0.1%, in 185 million tonnes of rock,” the company added.

Elsewhere in 2021, GMC “added a 27% equity interest in Denarius Metals Corp. to its portfolio, giving it exposure to the Lomero-Poyatos polymetallic deposit in Spain in the Iberian Pyrite Belt and to the Guia Antigua and Zancudo Projects in Colombia,” the company noted.


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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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