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The International Monetary Fund (IMF) announced April 9 that its executive board will recommend approval of a US$10.8 billion line-of-credit request to help Colombian businesses and workers weather the economic downturn caused by the Coronavirus crisis.

“This renewable credit line helps safeguard against external shocks by providing countries who have very strong policy frameworks and track records of economic performance with large, upfront access to IMF resources -- with no ongoing conditions,” according to IMF.

“Given Colombia’s very strong policy frameworks and track record, IMF managing director Kristalina Georgieva intends to recommend approval of the 2020 flexible credit line [FCL] arrangement for Colombia when the IMF executive board meets again to take a decision in the following weeks,” according to the organization.

In addition to the Colombian Treasury Ministry’s new expansion of finance totaling COP$12 trillion (US$3.3 billion) to micro-, small- and medium-sized enterprises through the “Fondo Nacional de Garantias” (FNG, National Guarantee Fund), Colombia President Ivan Duque announced April 9 further aid to help small/medium businesses meet payroll.

Government loan guarantees for MSMEs will increase to 80%, up from a prior range of 60% to 70%, Duque announced.

In addition, under the new aid program, the Colombian government will “finance for three months those payrolls of micro-, small and medium enterprises [MSMEs], especially covering people earning up to five monthly [minimum] salaries [COP$4.9 million/US$1,260],” according to President Duque.

Vice Minister of Finance Juan Alberto Londoño added that the payroll-finance scheme will enable MSMEs to issue bonds to be acquired by the financial system.

The government also will waive mandatory pension contributions for the next three months, aiming to help both workers and employers to reduce expenses. However, those already retired will continue to receive their normal pensions, he added.

Medellin-based Grupo Exito announced April 7 that it’s accelerating mass production of special masks to protect against Coronavirus infections – and plans to sell the masks at its Exito, Carulla, Surtimax, SuperInter and Surtimayorista stores throughout Colombia.

“Today more than 3,000 people are dedicated to making face masks in the workshops where the clothes of Grupo Éxito's own brands are usually made,” according to the company.

“Around 50 manufacturing workshops of Grupo Éxito's own brands, located in Antioquia, Valle del Cauca, Caldas and Tolima, are now spaces dedicated to the manufacture of fabric face masks, commonly known as face masks.”

The urgent need for mass production is not only to protect supermarket and pharmacy workers, public utility workers and many others exempt from the current quarantine, but also to protect the general public, the company noted.

“The national government has established the mandatory use of face masks in public transport systems, areas of massive influx of people, people with respiratory symptoms and high-risk groups,” according to Exito.

“Likewise, the making of these cloth masks represents an important boost in a [textile-clothing] sector hit by the effects of Covid-19, to preserve the employment of more than 3,000 collaborators linked to the project."

So far, 20 million face masks have been progressively manufactured since March 18.

“Weekly more than 2 million units are produced by 3,000 people in Cali, Manizales, Ibagué, Medellín, Sabaneta, Envigado, Itagüí, Bello, Santa Rosa de Osos and Don Matías, who as a result of this activity keep their jobs,” according to the company.

“With actions like this we promote work in about 50 textile companies, which brings relief in the face of the economic challenges that the sector and its workers are going through,” added Exito president Carlos Mario Giraldo.

Meanwhile, in an April 6 filing with Colombia’s corporate oversight agency Superfinanciera, Medellin-based textile giant Coltejer revealed that it has just restarted a production line -- dedicated to production of protective clothing and cleaning supplies for confronting the Coronavirus crisis.

Among other local companies already involved in mass production of special textiles to protect people against Coronavirus is clothing giant Everfit, as noted in a report in daily newspaper El Colombiano.

Colombia President Ivan Duque announced last night (April 6) that the current Coronavirus general quarantine – initially due to expire April 13 – instead will continue for another two weeks, until April 27.

What’s more, persons 70 years and older will continue to remain in quarantine until May 30, while school-age pupils of all levels (primary through university) will continue studying at home until May 31, Duque added.

Exceptions to the quarantine include limited trips for groceries, drugs, banking and health care. Healthy workers at supermarkets, pharmacies, banks, hospitals, freight transport, rural transport, farming, food production, public safety, critical construction projects, city public transport, public agencies, social services and certain specially permitted others are exempt from quarantine.

“This decision is made based on recommendations and analysis by a team of scientists and experts with the accompaniment of the Pan American Health Organization (PAHO) and the World Health Organization (WHO),” according to Duque.

“We had initially thought that children -- young people, university students -- would be out of school until April 20. But given the effort we must make [to stem the threat of Coronavirus infections], we are going to extend those measures until May 31,” he said.

The quarantine not only restricts travel just for basic necessities-- food, medicine, health care, banking -- but also includes border closings, air travel bans, closure of most commercial operations, restrictions on public events, closure of restaurants, bars and nightclubs, and -- in a growing number of municipalities -- “pico y cedula” rules that limit all grocery, pharmacy and banking trips to one or two days per week.

Masks, Medical Equipment Production Incentives

On a related front, Colombia’s Minister of Commerce, Industry and Tourism (MinCIT) José Manuel Restrepo simultaneously announced that starting April 13, a new government program will accelerate the conversion of more factories and workshops to produce more medical supplies and devices.

This “entrepreneurs for employment” program initially aims to accelerate production of more than 20 million protective masks for the general population as well as more than 2 million surgical masks, Restrepo said.

The scheme will enable “a properly endowed health system that has access to medical supplies and devices, disinfection and hygiene products, [general-population] face masks, antibacterial gels, gloves, protective glasses, and specialized masks and protective clothing needed in the health sector,” Restrepo said.

“The government seeks to find potential suppliers and know their production capacities, then connect them with clinics, hospitals and other institutions involved in the care of patients affected by Covid-19.

“Likewise, we seek to identify barriers and needs that entrepreneurs require in order to advance in the production or marketing of such products, in relation to the procedures that apply to them, such as health records, access to raw materials or machinery and technology, among others.”

Entrepreneurs interested in participating in this rapid-development scheme can find more information here: .

Mask Mandate Goes National

The mask-production acceleration scheme from MinCIT comes on top of an earlier, April 4 order by the Health Ministry that all people moving in and around congested areas in Colombia (including metro Medellin) must start wearing protective masks. According to the Health Ministry, examples include:

1. “Public transport systems (buses, Transmilenio, taxis);
2. “Areas where there is a massive influx of people (market squares, supermarkets, banks, pharmacies, among others) where it is not possible to maintain a minimum distance of one meter.
3. “People with respiratory symptoms: Risk groups (adults over 70 years, people with cardiovascular diseases, diseases that compromise their immune system, cancer, HIV, pregnant women and chronic respiratory diseases).”

In addition, “people with confirmed diagnosis for Covid-19 and their close contacts should not leave the place where they are carrying out their mandatory preventive isolation (14 days without exception),” according to the Ministry.

These Ministry of Health mask-mandates are in addition to a related order from the Mayor of Medellin requiring all passengers on the “Metro” rail, bus, aerial tram and streetcar system to wear protective masks as of April 7.

Treasury Ministry Expands Finance

On a related front, Colombia’s Treasury Ministry announced April 6 that it’s expanding finance totaling COP$12 trillion (US$3 billion) to micro-, small- and medium-sized enterprises through the “Fondo Nacional de Garantias” (FNG, National Guarantee Fund) to help them survive during the current crisis.

“In this scheme, the employer may request loans from the financial sector with the guarantee from the FNG for up to $3.316 billion [US$842,000],” according to the Treasury Ministry.

“These credits will have a grace period of four months and a [repayment] term of between 12 and 36 months.

“In this way, the credits required by small and medium-sized enterprises to meet liquidity needs and to assume personnel costs, fixed costs such as rent, public services, among others and other obligations that must be met to maintain their continuity [will be] sustainable,” the Ministry added.

The program will provide government guarantees on 60% on the value of the loan. Companies -- individuals or legal entities -- with sales of up to COP$51.95 billion (US$13.2 million) can access this scheme, according to the Ministry.

The FNG scheme also enables companies to restructure their guaranteed obligations “without having to pay commission for the guarantee for the first year of the restructuring and will only return to pay [commission] from the second year.”

In addition, “employers may defer up to four months the commission payment they must make for renewals or annuity of guaranteed credits,” according to the Ministry.

“Likewise, if the loan guarantees are reaching their final maturity during the next four months and the entrepreneur does not have the liquidity to pay the last installment, then the employer can request a loan extension -- and in this case the FNG will not charge commission until six months later.”

Transport Ministry Clarifies Inter-City Transport Rules

On yet another front, the Transport Ministry on April 5 announced that public inter-municipal transport services will continue to operate -- but with certain restrictions.

“Companies that provide mixed passenger transport service [that is, both passengers and freight] and transport terminals must take into account exceptional operating conditions,” according to the Ministry.

“Inter-municipal road passenger service is allowed for the purpose of access or provision of health services and to facilitate the mobilization of [certain] people . . .

“Routes that operate in nearby municipalities or with economic or social interrelationships with major cities must continue to operate in the same authorized origin and destination sites, according to demand conditions.

“Services other than those provided in dormitory or suburban cities will be understood as those road passenger transport services which usually have coverage for a distance greater than 40 kilometers between origin and destination.

“Due to the exceptional nature [of the Coronavirus quarantine], inter-municipal services must compulsorily establish telephone information points at transport terminals, and optionally by other non-face-to-face information means such as a website or email.

“The terminals that are in urban areas defined by the Ministry of Transportation and approved by the Logistics and Transportation Center will remain open to serve the routes authorized for this purpose.”

As for inter-city mass-transport of passengers, “according to the mobility analysis of each district or metropolitan municipal authority, the enabled offer [of passenger transport] may not exceed 50% of the maximum offer in each system,” the Ministry added.

Colombia President Ivan Duque announced April 4 that his administration likely will decide early this week whether and how strict the current national Coronavirus quarantine will extend beyond the presumptive April 13 expiration.

“We are working with scientists, epidemiologists, infectious disease specialists within the team of the Ministry of Health and the National Institute of Health [INS] -- and depending on how the reading of the epidemiological curve is, from the beginning of next week [April 6-11] we will be able to say if the current measures are extended or if, on the contrary, we go from a ‘total mandatory preventive isolation’ to an isolation that is intelligent,” meaning more-specific, targeted measures, President Duque said.

As of April 5, the Ministry of Health reported 1,485 cases of Cornavirus nationally, with 35 deaths (none in Antioquia) and 88 people fully recovered. Bogota continues to register the most cases (725) followed by Cali/Valle del Cauca (196) and then Medellin/Antioquia (172).

Currently, all Colombian residents 70 years and older are in quarantine until May 30 with the exception of venturing out for food, medicines, health care and banking.

What’s more, many cities (including metro Medellin) have additional “pico y cedula” restrictions that effectively limit even these grocery/pharmacy/banking trips to just two days of each week -- not just for those 70 and older, but rather for all residents.

Meanwhile, schools and universities are shut down during the current quarantine, with many students attending “virtual” classes via internet connections. Most commercial enterprises likewise are shuttered -- leaving millions temporarily unemployed -- although workers continue laboring in supermarkets, pharmacies, banks, fuel stations, power stations, utilities, health care, food production, farming, freight transport, public safety, certain essential construction sites and local public transport.

Further, air traffic is suspended along with much inter-city bus traffic -- with Medellin having already shuttered both its North and South terminals.

What’s more, the Ministry of Health announced April 4 that all people moving in and around congested areas in Colombia must start wearing protective masks. Examples include:

1. “Public transport systems (buses, Transmilenio, taxis);
2. “Areas where there is a massive influx of people (market squares, supermarkets, banks, pharmacies, among others) where it is not possible to maintain a minimum distance of one meter.
3. “People with respiratory symptoms: Risk groups (adults over 70 years, people with cardiovascular diseases, diseases that compromise their immune system, cancer, HIV, pregnant women and chronic respiratory diseases).”

In addition, “people with confirmed diagnosis for Covid-19 and their close contacts should not leave the place where they are carrying out their mandatory preventive isolation (14 days without exception),” according to the Ministry.

These Ministry of Health mask-mandates are in addition to a new order from the Mayor of Medellin requiring all passengers on the “Metro” rail, bus, aerial tram and streetcar system to wear protective masks starting Tuesday, April 7.

As for potential upcoming modifications or extensions to the existing national quarantine, President Duque explained that “intelligent isolation” measures would at minimum include “protection and restriction of the elderly,” plus “restrictions on the educational system” as well as “rules of distancing.”

“Measures such as those that have been implemented in South Korea or even in Singapore show that activities with greater and better health protocols” gradually can be adopted following an initial, drastic quarantine of nearly everyone, he said. But such gradual flexibilities will depend upon “improving testing capacity, improving capacity of isolating those with the disease and maintaining the protection of older adults, children and young people,” he added.

The ultimate goals of “intelligent isolation” during the crisis must include protection of "life, health, the most vulnerable, employment and maintainence of social and economic resilience,” he added.

Medellin-based electric power generation giant Isagen revealed in an April 2 filing with Colombia’s Superfinanciera corporate oversight agency that its full-year 2019 net income rose 9% year-on-year, to COP$495 billion (US$123 million).

However, fourth-quarter (4Q) 2019 net income dropped 62% year-on-year, to COP$144 billion (US$35.8 million), as lower rainfall in Colombia led to a 23% net decline in hydropower output.

Isagen is the third-largest power generator in Colombia at 3.03 gigawatts (GW) capacity -- 90% of which is hydroelectric power.

Full-year earnings before interest, taxes, depreciation and amortization (EBITDA) rose 28% year-on-year, to COP$1.9 trillion (US$472 million), while gross revenues rose 20%, to COP$3.2 trillion (US$795 million), according to Isagen.

During 2019, energy demand on Colombia’s national power grid (Sistema Interconectado Nacional, SIN) was up 4% year-on-year. However, accumulated generation by Isagen for full-year 2019 dipped 8% year-on-year.

During 4Q 2019, hydropower contributions to the SIN were only 77% of the historical average, although for full-year 2019, hydropower accounted for 88% of the Colombian total -- still down from 2018 because of lower total rainfall.

During 2019, the average power price received by generators to the national grid was COP$229 (US$0.057) per kilowatt-hour (kWh), 98% higher than the average price recorded in 2018.

Isagen credited its over-all improvement in 2019 financial results to “higher energy sales revenue in contracts as a result of better prices” as well as sales to the national grid “largely due to the fact that since March [2019], the [820-MW] Sogamoso power plant [in Santander] started to provide power” to the national grid.

Aside from the Sogamoso plant, Isagen’s other power plants include the 1.24-GW “San Carlos” hydropower plant in Antioquia; the 396-MW “Miel 1” hydropower plant in Caldas; the 300-MW “Termocentro” thermal power plant in Santander; the 170-MW “Jaguas” hydroelectric power plant in Antioquia; the 80-MW “Amoyá” hydroelectric plant in Tolima and the 26-MW “Calderas” hydroelectric plant in Antioquia.

Isagen’s majority shareholder is BRE Colombia Hydro Investments Ltd, a division of Toronto-based Brookfield Asset Management. BRE’s strategic focus is on “development of a portfolio of renewable energies that take advantage of sources such as water, wind and sunlight,” according to the company.

The Mayor of Medellin announced April 1 that to reduce Coronavirus threats, only persons with specific cedula numbers can venture out for groceries, drugs and banking – two days each week – starting the first minute after midnight April 2 until the national quarantine ends -- presumptively on April 13.

“Each person will have two days a week -- between 7:00 a.m.  and 8:00 p. m -- so that you can provide your home with groceries, medicines and toiletries, and carry out bank procedures,” according to the Mayor’s office.

“This measure will govern as long as the mandatory preventive isolation determined by the national government in decree 457 of 2020 is maintained.”

According to the Mayor, the following cedula numbers are EXEMPT from quarantine for shopping, drugs and banking trips on the following days:

Mondays: Cedula numbers ending in 1-2-3
Tuesdays: Cedula numbers ending in 4-5-6.
Wednesdays: Cedula numbers ending in 7-8-9
Thursdays: Cedula numbers ending in 0-1-2
Fridays: Cedula numbers ending in 3-4-5
Saturdays: Cedula numbers ending in 6-7-8
Sundays: Cedula numbers ending in 0-9

Medellin joins other nearby municipalities including Envigado, Rionegro and El Retiro, all of which have already adopted variable-number "pico y cedula" restrictions on shopping and banking.

In Medellin, violators of "pico y cedula" will face fines of up-to COP$932,0000 (US$228), according to the Mayor.

According to the Colombia Ministry of Health, as of April 1, Medellin/Antioquia accounted for 107 of the 1,065 Coronavirus cases nationally, of which nationally 17 have died --none in Antioquia -- and 39 have fully recovered so far.

Medellin-based nationwide telecom/internet/cable-TV giant UNE-EPM revealed March 31 that its full-year 2019 after-tax profits rose to a relatively modest COP$519 million (US$128,000) -- up from a substantial COP$65 billion (US$16 million) net loss in 2018.

The profits improvement is explained mainly by the sale of cell-phone towers along with more favorable results from affiliate Colombia Móvil, which operates under the “Tigo” trade name, according to UNE-EPM.

Earnings before interest, taxes, depreciation and amortization (EBITDA) also improved in 2019, to COP$1.6 trillion (US$394 million), versus COP$1.4 trillion (US$345 million) in 2018.

Revenues in 2019 climbed to COP$4.9 trillion (US$1.2 billion), up from COP$4.8 billion (US$1.1 billion) in 2018.

Highlights of 2019 included Colombia Movil winning a 10-MHz spectrum-use permit for a 10-year term, as well as potential gains from another spectrum auction in December. “Obtaining 40-MHz in the 700-MHz band will expand coverage to thousands of users and improve mobile data service,” according to the company.

The Colombia Móvil division saw revenues rise 4.2% year-on-year, to COP$2.24 trillion (US$552 million), while the division’s EBITDA hit COP$655 billion (US$161 million) and profits rose to COP$27 billion (US$6.6 million), according to the company.

Meanwhile, the Edatel subsidiary (telecom in rural areas) saw revenues rise to COP$210 billion (US$51.7 million), with EBITDA at $82 billion (US$20 million) and profits of COP$19 billion (US$4.6 million).

The “OSI” and “CTC” subsidiaries meanwhile generated EBITDA of COP$10 billion (US$2.4 million) and profits of COP$4 billion (US$986,000), according to the company.

Fiber-optic broadband coverage -- enabling 50-megabytes per second connections -- grew by almost 6%, “allowing us to reach more homes with internet, broadband, television and telephone services on this technology,” according to the company.

As a result, “in 2019 our subscriber base grew close to 7% on the internet, 6% on digital television and 2% on landlines; achieving an increase higher than 3% in new clients,” according to the company.

Mobile/Cell-Phone Business

“The prepaid [cell-phone service] market had little change in supply, where we continue to be competitive incorporating unlimited voice to all operators,” according to UNE-EPM.

“Prepaid had revenue growth of more than 1% versus 2018, leveraged mainly due to increased package sales. Additionally, the 4G prepaid user base LTE increased 42% versus 2018, both by new users and by penetration of existing users at the base.

“In postpaid we continue with our plans based on simplicity, which consist of three plans with unlimited minutes and messages and data to always be connected [and] where included, accessories to improve the user experience such as music, equipment insurance and preferential service.

“In addition, we make alliances with main banks in the country to offer cell-phone financing at a 0% interest rate. Also, we continue with differential offers on phones such as ‘2x1,’ so that our customers can access the latest generation phones in 4G.

“Thanks to this, in 2019 our base of customers increased by about 10% and the empowerment of more LTE sites supported the increase in our postpaid mobile data users by more than 18%,” according to the company.

Medellin-based multinational paper- and personal-hygiene products manufacturer Grupo Familia on March 30 revealed that its full-year 2019 net income rose 20.2% year-on-year, to COP$247 billion (US$61 million).

Sales rose 10.9%, to COP$2.65 trillion (US$654 million), with foreign sales (up 13%) accounting for COP$1.3 trillion (US$321 million) of the total. Colombia sales rose 8.8%, to COP$1.36 trillion (US$356 million).

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 14%, to COP$428 billion (US$105 million), while patrimony rose 8.9%, to COP$1.66 trillion (US$409 million).

At year-end 2019, Familia had 5,271 employees, nine distribution centers in four countries, commercial operations in 13 countries and exports from Colombia to seven nations.

“In Latin America and the Caribbean -- the region in which we operate -- 2019 brought new social and political challenges that seek social transformation. This phenomenon presented an unusual intensity in some countries,” the company noted in its annual report.

“Argentina faced a change of government that increased investor uncertainty, and also went through a new currency crisis that triggered a sharp devaluation -- all accompanied by an increase in inflation (over 50%) and a decrease in GDP.

“Ecuador presented a contraction of the economy by 0.9%, compared to the growth of 2018 that was 1.4%. The government’s proposal to eliminate fuel subsidies sparked social protests that led to lower consumer confidence, which translated into lower spending.

“The Dominican Republic maintained a good performance at the end of the year with a growth of 4.9% of GDP, boosted by private consumption, stimuli in monetary policy and improvements in the relationship with the United States, its main trading partner. The country had controlled inflation that allowed demand to be stimulated.

“Peru grew its GDP by 2.3%, a lower figure than the previous year after facing global economic uncertainty and lower prices for basic products. Low interest rates are expected to promote growth during 2020.

“Puerto Rico presented a noticeable improvement in 2019, after overcoming the consequences caused by the 2018 hurricanes. GDP grew close to 3.7%, while inflation held steady at less-than 1%. The plan to stimulate the economy through reconstruction, the growth of the United States economy and an improvement in the tourism sector contributed to the result.

“Chile closed the year with GDP growth close to 2%, after having a good 2018 that closed at 4%. This decrease was the result of social protests, in addition to a lower level of raw material prices and the depreciation of the peso.

“Bolivia had a GDP growth of 3.3%, less than the 4.2% it reached in 2018. From a political perspective, President Evo Morales resigned after 14 years in power, due to protests stemming from allegations of fraud in the elections.

“Colombia presented economic growth of over 3%, despite the complex regional environment. Tax reform, dynamic household consumption, public spending accompanied by infrastructure developments, and improved foreign investment were the main factors.

“The [Colombian peso to U.S. dollar] exchange rate registered an increase of 11% with an average in 2019 of COP$3,281 to the dollar, compared to COP$2,956 in 2018. However, at the end of 2019 it remained stable at COP$3,277, compared to the COP$3,249 at the end of 2018.
Inflation for the year was 3.8% and was within the target set by Banco de la República (between 2% and 4%),” the company added.

Toronto-based Gran Colombia Gold – Colombia’s biggest gold miner, principally in Antioquia – on March 30 reported a full-year 2019 net loss of US$131 million, far worse than the US$3.4 million net loss in 2018 -- all because of a one-time accounting write-down.

The loss was the result of an after-tax charge of US$153.6 million “associated with the company’s exploration and evaluation assets in Zona Alta and Echandia at the Marmato project” in Colombia, according to Gran Colombia.

Fourth-quarter (4Q) 2019 net loss was US$148.8 million compared with net income of US$8 million in 4Q 2018, all because of the Marmato write-down.

However, if excluding the Marmato write-down, then adjusted net income for 4Q 2019 actually rose to US$17.1 million, up from $14.5 million in 4Q 2018.

For full-year 2019, adjusted net income rose to US$60.5 million, up from US$42.5 million in 2018.

“The year-over-year increase in 2019’s adjusted net income largely reflects the positive impact of Segovia [Antioquia] production growth, the increase in realized gold prices and the reduction in total cash costs per ounce sold on income from operations in 2019, net of an associated increase in income tax expense,” according to the company.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose to US$146 million for full-year 2019, up from US$102 million in 2018, while 4Q 2019 adjusted EBITDA rose to US$40 million, from US$23 million in 4Q 2018, according to the company.

Commenting on the results, Gran Colombia Gold executive chairman Serafino Iacono stated: “We had a very solid year in 2019 with record production and new highs for revenue, adjusted EBITDA, free cash flow and adjusted earnings that helped us to significantly strengthen our balance sheet."

Gold production in 4Q 2019 rose 18% year-on-year, to 65,237 ounces, while total annual production for 2019 rose 10% year-on-year, to 239,991 ounces -- both all-time records.

Revenues in 4Q 2019 rose 30% year-on-year, to US$88.5 million, “getting a boost from the 21% increase in spot gold prices. For 2019, production growth, the higher spot gold and silver prices and the reduction in refining charges all combined to increase annual revenue to $326.5 million, up 22% over last year,” the company added.

Total cash costs per ounce averaged US$685 per ounce in 4Q 2019 compared to US$698 per ounce in 4Q 2018, “reflecting a reduction in Segovia’s total cash cost to $607 per ounce in 4Q 2019 from $623 per ounce in 4Q of last year. In 2019, the company’s total cash costs decreased to $661 per ounce from $680 per ounce in 2018,” Gran Colombia added.

Medellin-based textile giant Fabricato on March 30 announced that its full-year 2019 financial results improved 68% year-on-year -- but still produced red ink.

The net loss for 2019 was COP$10 billion (US$2.47 million), a big improvement over the 2018 net loss of COP$31.7 billion (US$7.8 million), according to the company.

Gross revenues rose 3.8%, to COP$342 billion (US$84 million), while earnings before interest, taxes, depreciation and amortization (EBITDA) soared to COP$4.4 billion (US$1.08 million), up from a paltry COP$90 million (US$22,000)  in 2018.

EBITDA margin for 2019 was 1.3%, up from zero in 2018, according to the company.

In Colombia, retail sales of ready-made products rose 6.6% year-on-year, the company noted.

“In 2019, in relation to the business environment for the textile and clothing sector, the most relevant issue corresponds to the issuance of the decree derived from articles 274 and 275 of the National Development Plan, through which the thresholds and tariffs were raised for the import of ready-made products,” according to Fabricato.

“The aforementioned decree was published in August and became effective in November and, as a consequence, the reactivation of demand during the second semester of Colombian clothing was perceived, partially replacing the import of ready-made products.

“Likewise, the volatility of the Colombian peso in relation to the dollar was relevant, whose impact in general terms favors domestic producers, since in this situation, imports may present greater exposure and risk.

“Unfavorable points within the business environment are the informality of the sector, credit restriction by the financial sector and the lack of definition on thresholds and tariffs by the executive branch [of the national government] for textile and clothing products.

“This last point is explained because the [import tariff] decree issued in August was sued by the [national government] among others, for considering it unconstitutional. Said demand was accepted by the Constitutional Court, which considered the decree to be unenforceable.

“At the date of publication of this report, there is an expectation that the executive branch will publish a new decree that covers the entire textile and clothing production chain,” the company added.

Page 13 of 61

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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