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Medellin-based electric power giant EPM on November 8 debuted a new, 550-meters-long highway atop its US$5 billion “Hidroituango” hydroelectric dam – and almost simultaneously highlighted numerous social reconstruction projects in communities affected by a May 2018 flood downstream of the dam.

The highway on top of the new dam -- which spans the Cauca River just upstream of Puerto Valdivia -- connects with 23 kilometers of newly built, adjoining highways between neighboring communities around the town of Ituango, according to EPM.

The new highway from the Toledo valley runs along the right bank of the Cauca River reservoir (behind the dam) to the western portal of a new road tunnel, then crosses the dam along its crest and, on the left side, continues its route to El Bombillo-- and from there towards the urban center of Ituango.

Social Recovery Projects

Meanwhile, in response to damage from last year's flood, EPM also touted the upcoming construction of a new “Simon Bolivar” bridge in the municipality of Valdivia. On a related front, in the municipality of Tarazá , EPM launched improvements to the structure of the “El Doce” bridge -- aiming to ensure structural conditions “superior to those that existed before,” according to the company.

“Parallel to these interventions, upgrades were completed in seven of 11 [nearby] educational institutions: Nutabes, La Paulina, Playa Rica, Puquí, Zorras, Marco A. Rojo and Cachirimé, [as well as] El Pescado , Barca Cautiva, Puerto Nery and Palomas, [the latter four of which] will be upgraded under a social contracting strategy with each community action board,” according to EPM.

“Other works of greater amplitude are the El Turcó and Palestine bridges which are waiting for environmental permits to advance the contractual process. In addition, [there will be construction of] an integrated community center and a health clinic in a lot that EPM acquired from the National Narcotics Directorate. The start of these constructions is planned for the second half” of 2020, according to the company.

On a related front, of the 2,250 residents of Puerto Valdivia evacuated last year because of the temporary flood, 1,908 (85%) have returned to the area. EPM is continuing projects to restore and refurbish damaged homes, businesses and public spaces, according to the company.

“Progress is being made in the process of recognizing impacts to formal and informal economic activities, as a result of preventive evacuation in Puerto Valdivia,” according to EPM. “To date, 163 complaints [from affected persons] have been processed, of which 126 have accepted [EPM’s compensation] offers. A total of 112 merchants [also] have received agreed-to payments from EPM,” the company added.


Medellin-based avocado producer/exporter Cartama announced November 7 its first-ever exports of Hass avocados from its Pereira (Risaralda department) operations to Japan.

Cartama – founded in the year 2000 with its first plantations in Amagá, Antioquia – gradually has expanded Colombian operations to Caldas and Risaralda departments, including a packing plant in Pereira.

Three years ago, the company scored a big hit with UK-based supermarket chain Marks & Spencer, which awarded Cartama its “Growers Best Quality” award -- following which Cartama expanded Colombian production to 515 hectares to serve its growing export markets to Europe and North America.

Together with partner Mission Produce, Cartama is now penetrating Asian markets via first container shipments from Risaralda to the Pacific port of Buenaventura, then onward to Yokohama, Japan, according to the company.

The Japanese market for Hass avocados is constantly growing, hitting 74,097 tonnes in 2018, up 22% year-on-year, according to the company. For the Japan market, Colombia will compete with producers from México, Perú and others, according to the company.

Japan consumers currently demand 0.5 kilograms of Hass avocados per-person/year -- and with a population of 127 million, ample opportunities for Colombian export expansion are on the horizon, according to Cartama.

Chiyoda, Japan-based Farmind Corp. is the initial buyer of the Colombian exports, according to Cartama.

This first-ever Hass avocado container shipment from Colombia to Japan is the result of major private-sector and governmental initiatives, according to Cartama director Ricardo Uribe.

Colombia’s “Instituto Colombiano de Agricultura” (ICA) has been working with Hass producers seeking to expand exports, following recent successful initiatives in the USA and now Japan. China is next in line to receive Colombian avocado exports following rigorous efforts to meet sanitary requirements.

“We are making use of all post-harvest alternatives to guarantee optimal delivery of this fruit including application of substances to prevent disease, the use of ethylene filters within the shipping container [for ripening], temperature controls and [favorable] harvesting” techniques, Uribe added.

Besides ICA, other government agencies that have aided the breakthrough into the Japanese market include Colombian President Ivan Duque, trade-association Corpohass (Corporación de Productores y Exportadores de Aguacate Hass de Colombia), the Colombian Ministries of Agriculture, Commerce and Foreign Relations, and export-promotion agency Procolombia, Uribe added.


ISA 3Q 2019 Net Income Dips 1.7% Year-on-Year

Friday, 08 November 2019 11:45 Written by

Medellin-based electric power transmission, highways concessions and telecom services giant ISA announced November 6 that its third quarter (3Q) net income dipped 1.7% year-on-year, to COP$406 billion (US$122 million).

Earnings before interest, taxes, depreciation and amortization (EBITDA) for 3Q 2019 also declined 10.7% year-on-year, to COP$1.24 trillion (US$371 million), according to the company.

On the other hand, nine-months 2019 net income is up 27%, to COP$1.2 trillion (US$360 million) versus nine-months 2018, while nine-months EBITDA is up 14% year-on-year, to COP$3.9 trillion (US$1.17 billion), according to the company.

“ISA Group formally entered the Colombian road business by signing a contract agreement for the purchase of 100% of the shares of Concesión Costera Cartagena Barranquilla, thereby reaching an important milestone of the ‘ISA 2030’ strategy and contributing to the company’s business diversification as well as the development of the country,” according to ISA.

“This fourth-generation (4G) concession spans 146 kilometers, connecting two important cities on the northern coast, and is part of the most important international trade and tourism corridor in northern Colombia,” the company added.

“With the completion of this transaction, ISA incorporates assets of approximately COP$2.2 trillion (US$660 million), financial debt of COP$1.4 trillion (US$420 million), and [projected] EBITDA of COP$231 billion (US$69 million) into its 2020 financial statements.”

Better financial results for nine-months 2019 “are mainly explained by the energy projects that have started operations, by the greater returns of [road] concessions, and by the good management of costs and expenses,” according to ISA.

“The company will keep moving towards the consolidation of its diversification strategy, seeking alternatives in new businesses that generate profit growth and working our way into the road business in Colombia, Peru, and Chile,” added ISA CEO Bernardo Vargas Gibsone.

First nine-months 2019 operating revenues closed at COP$5.9 trillion (US$1.77 billion), 15.4% higher than the first nine months of 2018.  As for 3Q 2019, revenues reached COP$2 trillion (US$600 million), up 1.4% year-on-year, according to the company.

As of September 2019, consolidated financial debt reached COP$18.6 trillion (US$5.58 billion), up 5.9%. The corporate net debt-to-EBITDA ratio stood at 2.72 times, while the EBITDA/financial indicator ratio closed at 6.17 times, according to the company.


Medellin-based multinational banking giant Bancolombia announced November 6 that its third quarter (3Q) 2019 net income rose 61.7% year-on-year, to COP $879 billion (US$263 million).

“Gross loans grew 11.7% when compared to 3Q 2018 and 3.4% during the [latest] quarter,” according to Bancolombia.

“The quarterly growth shows a moderate trend in the credit demand in Colombia. Peso-denominated loans grew 10.5% when compared to 3Q 2018,” according to the company.

Net interest income was COP$2.78 trillion (US$833 million), up 8.3% year-on-year. “This increase is mainly explained by the growth in the loan book [although] net interest income decreased by 3.7% during the quarter due to an adjustment in accrued interest associated to [certain] clients,” according to the company.

Loan provision charges in 3Q 2019 were COP$723 billion (US$217 million) while the coverage ratio for 90-day past due loans was 191%.

“Provision charges decreased by 28.3% when compared to 3Q 2018 and by 11.4% compared to 2Q 2019. New past due loans totaled COP$91 billion [US$27 million],” according to Bancolombia.

At September 30, 2019, Bancolombia’s assets totaled COP$236.8 trillion (US$70.9 billion), up 2.6% compared to 2Q 2019 and up 14.6% compared to 3Q 2018.

During the latest quarter, the Colombian peso (COP) depreciated 8.5% versus the U.S. dollar, while over the past 12 months, the COP fell 17% versus the dollar, the company noted.

“The increase in total assets during the quarter is largely explained by the growth in the loan book,” according to Bancolombia.

“In 3Q 2019, gross loans increased by 3.4% when compared to 2Q 2019. Peso-denominated loans grew 10.5% and the dollar-denominated loans (expressed in dollars) decreased by 2.5% when compared to 3Q 2018,” according to the company.

“As of September 30, 2019, the operations in Banco Agricola in El Salvador, Banistmo in Panama and BAM in Guatemala, represented 27% of total gross loans.

“Gross loans denominated in currencies other than COP -- originated by the operations in Central America, the offshore operation of Bancolombia Panama, Puerto Rico and the dollar-denominated loans in Colombia -- accounted for 34.8% and increased by 6.9% during 3Q 2019 [when expressed in COP], explained mainly by the depreciation of the COP against the dollar during the quarter,” according to Bancolombia.

During 3Q 2019, net fees and income from services totaled COP$781 billion (US$234 million), up 3.5% compared to 2Q 2019, and up 17.1% compared to 3Q 2018.

“The positive annual performance in fees is due to higher volumes of transactions and the good performance of credit and debit cards, trust services and bancassurance,” according to Bancolombia.

“Fees from credit and debit cards increased by 6.7% compared to 2Q 2019 and by 22.6% compared to 3Q 2018.

“Fees from asset management and trust services increased by 5.8% compared to 2Q 2019 and by 12% compared to 3Q 2018, due to an increase in the assets under management. Fees from our bancassurance business increased by 6.6% compared to 2Q 2019 and by 22.9% with respect to 3Q 2018,” according to the company.


Medellin-based textile giant Fabricato on October 31 reported a third quarter (3Q) 2019 net loss of COP$13 billion (US$3.8 million), worse than the COP$9 billion (US$2.67 million) net loss in 3Q 2018.

However, earnings before interest, taxes, depreciation and amortization (EBITDA) improved year-on-year, to COP$3 billion (US$891,000), versus COP$909 million (US$270,000) in 3Q 2018.

Sales also improved year-on-year, to COP$107 billion (US$32 million) in 3Q 2019 versus COP$96 billion (US$28 million) in 3Q 2018.

As for nine-months 2019 results, net loss to date stands at COP$39.8 billion (US$11.8 million), worse than the COP$28 billion (US$8.3 million) losses in nine-months 2018.

Despite the losses, Fabricato cited over-all business environment improvements in 3Q 2019 -- especially in retail clothing sales, up 4.9% year-on-year.

“There is an increase in demand for ready-made [clothing] products in Colombia, which in addition to the natural growth of the period is also explained by the volatility of the U.S. dollar [against the Colombian peso] and decrees 274 and 275 of the National Development Plan, which establish a tariff of 37.9 % for ready-made imported products [sold] at a price lower than US$20 per kilogram (as of November 2019), which makes importation less attractive,” according to the company.

“The increase in demand for Colombian ready-made products carries greater demand for textile products, which in turn demand more threads,” Fabricato added.

The 11.2% year-on-year increase in demand for Colombian textiles “is the result of good performance of the national market mainly in the fashion segment, but also the institutional segment has had a higher than expected level of demand,” according to the company.

“In exports, the main growth is Brazil, a developing market for our company since 2018 with an important potential in which we continue to focus resources for its consolidation.

“[G]rowth in sales in the higher value-added segments, as recognized brands of Colombia and abroad, the reduction of fixed costs, the efficiency in administrative and financial processes and the contribution to working capital by the advance of real estate business flows” have helped Fabricato boost sales and EBITDA, according to the company.

On the other hand, “there are still favorable conditions for importation (very low thresholds and tariffs), which is why many traditional textile marketers decided to import. Because [cheap imports] represent an attractive business -- given that the majority of its origin prices are extremely low (due to unfair practices at origin) -- other non-traditional marketers also dedicated themselves to importation,” Fabricato warned.

“As these products are oriented to the production of basic clothing, attributes such as quality and design remain in the background, but the truth is that they represent more than half of the market in some segments, such as denim, which is the fabric for pants jeans.”

Even so, “it is perceived at this time that the import of basic textile products does not show growth because these have already achieved a very high participation in the market.”

In addition, “currency volatility with an upward trend in the quarter -- although it greatly impacted production costs -- impacted imported products 100%, which allows us to believe in a partial recovery of the domestic products market in the coming months,” the company added.


Spain-based Cementos Molins and Colombia-based multinational construction-materials producer and retailer Corona announced October 30 the start-up of their US$380 million, 1.5-million-tons/year, 50-50 joint venture “Empresa Colombiana de Cementos” (Ecocementos) cement plant near Sonson, Antioquia, east of Medellin.

Commenting on the start-up, Cementos Molins spokesman Julio Rodríguez said that the new plant will help the company “focus on 2020 with renewed ambition.”

“The new plant incorporates the best-available technology, putting maximum priority on energy efficiency and environmental protection, with cement production under the ‘Alion’ brand name, a new product destined for the Colombian market,” according to the company.

The plant has enabled the creation of 120 direct jobs along with 180 indirect Jobs, according to the company.

The new plant also represents continued internationalization of Cementos Molins, which now operates 11 cement plants in Spain, Argentina, Colombia, Mexico, Uruguay, Bangladesh, Tunisia and Bolivia, according the company.

Simultaneous to the announcement of the plant start-up, Cementos Molins reported a 10% year-on-year rise in third quarter (3Q) 2019 net income, hitting €70 million (US$78 million).


Voters in Medellin and the surrounding Antioquia department on October 27 continued a long tradition of electing relatively young, energetic, politically moderate mayors along with older, more-experienced governors who are more interested in delivering practical, concrete results rather than poseurs flaunting left-wing or right-wing flamboyance.

Relative newcomer Daniel Quintero Calle – an independent and technocrat who supports continuation of EPM’s giant “Hidroituango” hydroelectric project but questioned EPM’s management – took 38.56% of the Medellin vote for Mayor, beating politically moderate Centro Democratico candidate Alfredo Ramos, son of a former Antioquia governor, who nabbed 29.88% of the vote.

Quintero publicly rejected attacks coming from former Colombia President Alvaro Uribe (leader of Centro Democratico) but simultaneously denounced an endorsement from left-wing politician Gustavo Petro, who was soundly defeated by moderate conservative Ivan Duque in last year’s Colombian presidential elections.

Meanwhile, politically moderate Anibal Gaviria Correa – who won the support of numerous political parties including Liberal, Cambio Radical, La U and Alianza Verde, and likewise supports continuation of the Hidroituango project – got 35.97% of Antioquia’s votes for Governor, beating similarly moderate Centro Democratico candidate Andres Guerra, with 28.78% of the vote.

While Centro Democratico came in second in the Mayor’s and Governor’s races, it nevertheless won the majority of City Council seats and a plurality of Antioquia departmental seats, ensuring that compromise and moderation will continue to dominate Medellin and Antioquia politics.


Medellin-based multinational foods giant Grupo Nutresa on October 25 reported that third quarter (3Q) 2019 net profits grew 6.9% year-on-year, to COP$412 billion (US$121 million).

Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) likewise rose 18% year-on-year, to COP$992 billion (US$292 million), while margin on sales grew by 13.8%, according to the company.

Total sales for the third quarter grew 8.9%, to COP$7.2 trillion (US$2.1 billion), while sales in Colombia rose 6.4% year-on-year, to COP$4.5 trillion (US$1.3 billion), thanks to a 5.8% rise in sales volume and a modest 0.5% hike in prices.

International sales rose to COP$2.7 trillion (US$839 million), up 1.1% in dollar terms or up 13.5% in Colombian peso terms.

The 3Q 2019 results are now stated using the new IFRS16 international accounting terms, according to the company.

“Innovation of both products and experiences for our consumers continue to be an important driver of growth and differentiation for the company,” according to Nutresa, citing a 21.9% jump in this type of sales.

Consolidated gross profit came-in at COP$3.2 trillion (US$943 million), up 7.5% year-on-year, but gross margin fell by 0.6% “mainly due to an increase in the cost of imported commodities,” according to Nutresa.

“Separating the effect of the previously mentioned new IFRS16 accounting standard, Grupo Nutresa’s operating profit would have grown by 8.0% and EBITDA by 4.7%, with a margin of 12.2% on sales,” the company added.

“Net post-operative expenses, which amount to COP$141 billion [US$41.5 million], include the accounting of the expenses related to lease contracts, as well as the reduction in financial expenses due to lower interest rates.

Meanwhile, “for the first time in its history, Grupo Nutresa was ranked as the most sustainable food company in the DJSI World Index 2019,” the company boasted.

Nutresa won this recognition because of “excellent standards in corporate practices related to tax strategy, health and nutrition, materiality, human capital development, corporate citizenship and philanthropy, operational eco-efficiency, packaging, water-related risks, and environmental reporting,” the company added.


Colombia-based Cemex LatAm Holdings announced October 24 that its third-quarter (3Q) 2019 sales of grey cement grew year-on-year, but profits declined.

According to Cemex LatAm – which produces and markets concrete and cement in Colombia, Panama, Costa Rica, Nicaragua, El Salvador, and Guatemala – 3Q 2019 produced a corporate-wide net loss of US$4 million, compared to net profit of US$19 million in 3Q 2018.

Operating earnings before interest, taxes, depreciation and amortization (EBITDA) in Colombia fell to US$20 million, down 25% year-on-year in U.S.-dollar terms or 12% lower in Colombian peso terms.

Net sales in Colombia year-over-year declined by 6% in U.S.-dollar terms but increased by 8% in Colombia peso terms, hitting US$127 million.

In Panama, operating EBITDA declined by 18% year-on-year, to US$14 million, while net sales fell 22% year-on-year, to US$45 million.

In Costa Rica, operating EBITDA fell 58% to US$5 million, both in U.S. dollar and local-currency terms. Net sales fell 25%, to US$25 million.

In the rest of its territories, operating EBITDA fell by 15% in U.S.-dollar terms or by 13% in local-currency terms, to US$14 million during the quarter. Quarterly net sales dipped 9% year-on-year, to US$51 million.

“In Nicaragua, the socio-political crisis continues without resolution and continues to affect the local economy including demand for cement,” according to the company. “Most of the highway projects sponsored by the government are in final stages of construccion -- and no new projects are replacing the prior projects."

For Cemex LatAm, corporate-wide consolidated prices in local-currency terms for domestic gray cement and ready-mix concrete declined by 1% and 2% year-on-year, while prices for aggregates increased by 1%, according to the company.

Commenting on the results, Cemex LatAm CEO Jesus Gonzalez said: “We are encouraged by the positive trends in Colombian cement demand and by our cement volume and price performance in this country during the first nine months of the year. Nevertheless, this positive trend in sales was not strong enough to offset the increases in coal, electricity and distribution costs in Colombia, and the much weaker markets across Central America.

“Despite this challenging environment, we are pleased with our free cash flow generation and debt reduction during the first nine months of this year. Our free cash flow reached US$50 million in this period, an improvement of 43% on a year-over-year basis. We reduced our net debt by US$62 million, from US$827 million as of December to US$765 million as of September [2019]”.


The 6th annual Medellin Bird Festival (organized by Sociedad Antioqueña de Ornitologia, SAO) kicks off October 10-14 with a colorful variety of birdwatching opportunities, expert conferences, special workshops and film festivals.


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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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