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Medellin-based construction giant Constructora Conconcreto revealed in a May 26 filing with Colombia’s Superfinanciera oversight agency that its first quarter (1Q) 2020 net income fell 34% year-on-year, to COP$20 billion (US$5.3 million).

Earnings before interest, taxes, depreciation and amortization (EBITDA) also fell 16% year-on-year, to COP$44.7 billion (US$11.9 million), while gross income fell 12%, to COP$169.7 billion (US$45 million), according to the company.

While the Covid-19 crisis hurt all construction companies in Colombia because of temporary quarantines and project shut-downs in March, most of the decline in profits this year came from extraordinary gains in 1Q 2019 that were absent in 1Q 2020, according to Conconcreto.

The profit variation “mainly corresponds to the results of 2019 that were affected by around COP$28 billion (US$7.5 million) by the dividends and profits for sale of the CCFC concession,” a one-time event last year, the company explained.

On the other hand, Conconcreto saw 1Q 2020 profit improvements from several other projects and investments “as well as a greater contribution from [commercial real-estate development consortium] Pactia,” according to the company.

Among initiatives to confront the Covid-19 crisis, Conconcreto renegotiated terms on its credit lines and accelerated certain divestments that have been in the works since 2018, according to the company.

“Since the start of the [divestments] plan in 2018, COP$274 billion [US$73 million] in cash has been received,” according to Conconcreto.

On the other hand, “the company has chosen to keep and pay the salaries of employees during the emergency period,” according to Conconcreto.

Construction backlog at end-1Q 2020 totaled COP$1.8 trillion (US$480 million), “which corresponds to around two years of operation,” according to the company.

Infrastructure projects account for 87% of the backlog and 13% in housing/building projects, according to Conconcreto.

In housing, “as of March 31, 2020, there are eight projects under construction, concentrated in Bogotá, Medellín, Neiva and Barranquilla,” according to the company.

These projects include 74 government-subsidized housing units “expected to sell on average in approximately nine months, 455 middle-class units expected to sell on average in 23 months, and 67 upper-income units expected to sell. on average in a period of 21 months,” according to Conconcreto.


Chile-based Latam Airlines – second only to bankrupt Avianca in Colombian air transport dominance -- announced May 26 that it filed for Chapter 11 bankruptcy in U.S. federal court.

The Covid-19 crisis – banning most air traffic -- forced Latam to absorb impossible losses, the company noted.

For example: Colombia has banned all regular passenger air transport for more than two months, with international flights continuing to be banned through at least August 31 and national flights banned through at least June 30.

“We want our stakeholders to know that we will continue to operate as travel restrictions and demand permit, paying our employees, meeting benefit obligations, and paying critical suppliers as well as respecting ‘Latam Pass’ miles and flight reservations as we work through the Chapter 11 reorganization process,” according to the company.

“In addition, all tickets, vouchers, or any form of credit will continue to be respected. We will also maintain partnerships with existing agencies, abide by corporate loyalty programs and sell tickets through our service platform, and you will be able to continue to interact with our customer service operators as you did prior to this announcement.

“The U.S. Chapter 11 financial reorganization process provides a clear and guided opportunity to work with our creditors and other stakeholders to reduce our debt, address commercial challenges that we, like others in our industry, are facing as a group. Latam will emerge from this process a more efficient, resilient, and ultimately strengthened airline group that is better placed to serve Latin America,” the company added.

The bankruptcy applies to Latam Group and its affiliates in Chile, Peru, Colombia, Ecuador and the United States, according to the company. "Entities incorporated in Brazil, Argentina, and Paraguay are not [in bankruptcy], due to the nature of their debt structure and current financial status,” according to Latam.

“Whether included in the filing or not, all of our affiliates are able to operate as travel restrictions and customer demand permit. Our cargo operations have been operating above capacity through these challenging times, and that will not change as a result of our reorganization.

“Through the Chapter 11 protection process, we will pay vendors for all goods and services ordered or delivered after the filing date in the ordinary course and according to our existing terms.

“A key part of the reorganization of the business is the right sizing and shape of the fleet to reflect the current and anticipated market conditions. To support these objectives and protect the value of our group, we have made the difficult but necessary decision to terminate certain leases that no longer serve the best interest of our business from an operational or financial standpoint,” the company added.

 


Medellin-based multinational utilities giant EPM on May 22 posted a COP$276 billion (US$73 million) net loss for first quarter (1Q) 2020 --solely because its debt accounting is in U.S. dollars, rather than in sharply-depreciating Colombian pesos.

“Due to accounting standards and due to the depreciation of the Colombian peso, understanding the debt that the company has in dollars, this accounting loss is generated by re-expressing it to pesos in accounting in Colombia,” according to EPM, 100% owned by the city of Medellin.

“This accounting loss is the result of the historical depreciation of the Colombian peso, which reached 24.03% in March as a consequence of the unusual behavior of world oil prices.

“In this sense, EPM must comply with accounting standards that imply that the depreciation of the Colombian peso leads to an increase in the debt balance in pesos due to the restatement of debt balances in dollars, even when the value owed in dollars does not change. The restatement negatively affects profits and generates high volatility,” the company added.

While depreciation hurts its accounting balance, “borrowing in dollars allows the business group to access the necessary funds to enable investments in infrastructure and growth, which are essential in generating employment,” the company explained.

Despite the accounting loss, EPM nevertheless maintained an investment-grade rating, actually “the highest credit rating among Colombian companies,” it noted.

During 1Q 2020, revenues rose 11% year-on-year, to COP$4.7 trillion (US$1.2 billion), while operating earnings rose 1%, to COP$1.2 trillion (US$318 million).

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 5% year-on-year, to COP$1.5 trillion (US$397 million), with an EBITDA margin of 32%.

“The pandemic caused by the Coronavirus did not impact these figures, since its appearance in the country occurred at the end of the quarter,” according to EPM.

Despite the accounting loss, “these results reflect the health and financial strength of the organization” thanks in part to portfolio diversification, added EPM General Manager Álvaro Guillermo Rendón López.

“Of the COP$4.7 trillion [US$1.2 billion] in revenue as of March 31, 2020, EPM parent company contributed 49%, foreign subsidiaries 34% and national energy and water subsidiaries 17%,” he added.

Meanwhile, profit transfers to the municipality of Medellín in 2020 -- which will reach COP$1.5 trillion (US$397 million) or about COP$29 billion (US$7.7 million) weekly – “generate a decrease in equity as of March. The resources for transfers, which allow for greater social investment in the Antioquia capital, are guaranteed given EPM’s liquidity situation,” the company added.

At the end of 1Q 2020, EPM Group’s assets totaled COP$57.2 trillion (US$15 billion), up 4%, while liabilities totaled COP$34.5 trillion (US$9 billion), up of 12%. Equity now stands at COP$22.7 trillion (US$6 billion), down 6%, according to the company.


Medellin Mayor Daniel Quintero announced May 22 via his Twitter account that three different types of malls will be opened to the public here -- under strict biosafety protocols -- starting Monday, May 25, as a run-up to the planned reopening of more malls starting June 1.

According to the Mayor, the three shopping malls – Oviedo (Poblado), La Frontera (Medellin-Envigado border) and Gran Plaza (downtown) -- will enable people to re-experience mall shopping, banned since start of the March quarantine.

However, strict biosafety controls will be enforced to avoid Covid-19 infections.

Besides mandatory use of masks and physical distancing by all employees and all shoppers, the biosafety protocols also will include disinfection stations, body-temperature-takings, data capture and limits on numbers-of-people at points-of-entry.

Personal data including cedula numbers and cell-phone numbers will be captured electronically in order to enable health officials to implement contact tracing and -- if necessary -- order individual quarantines in case of discovery of any Covid-19 infected person that might have come in contact with other shoppers or employees during the day of entrance into the mall.

Colombia’s new national biosafety protocol for shopping malls also limits total-people-access to 30% of capacity, so Medellin will follow those rules as well.


Antioquia’s General Secretary Luis Fernando Suárez announced May 21 that 115 towns in Antioquia that haven’t had a single case of Coronavirus have now been freed from quarantines for nearly all economic sectors.

None of these towns are in the Medellin metro area (Valle de Aburra), however. Nor is the city of Rionegro, where Medellin's international airport is located.

“The Ministry of the Interior gave the guarantee so that the municipalities of the department without Covid-19 cases and located outside the Aburrá Valley can advance in the gradual and safe reactivation of the economy,” according to the official press bulletin from the Antioquia departmental government.

“Although Antioquia is prepared for this new stage, Governor Anibal Gaviria, in a direct dialogue with the 115 mayors of the municipalities located outside the metropolitan area, gave them the freedom to each independently define whether the reopening of their municipality occurs.

“For this, the mayors must issue an administrative act based on the authorization that the Ministry of the Interior has already issued.”

However, “the pandemic is dynamic and every day the scenario changes,” so reopenings can be suspended depending upon future Covid-19 outbreaks, according to the bulletin.

"Every day we must be doing monitoring, measurement and control and it is at this stage that a municipality that was declared 'non-Covid,' the next day may be a 'Covid' municipality, because cases appear,” Suárez added.

“This scenario requires that the mayors who are going to issue the administrative act review the website of the Ministry of the Interior, in a link provided for them, so that upon the certification of [Covid-free] municipalities, a gradual and safe reopening of the economy” can occur.

“Control, monitoring, and compliance with protocols for the gradual opening of the economy are essential, with the use of personal protection measures by people who work in commercial establishments,” the bulletin added.

“We will continue recommending ‘pico y cédula’ [shopping-days rotations], mechanisms that ensure that there are no crowds in establishments and on public roads,” Suarez said.

“The restriction of the educational sector [banning physical attendance at schools] continues until the Ministry of Education authorizes it, just as the restriction for swimming pools and parks, and restaurants can only operate with home-deliveries,” he added.

Meanwhile, Governor Gaviria “has been leading a campaign so that children in the rural areas can return to school due to the [internet] connectivity problems that exist in these areas,” a petition that “awaits the approval of the Education Ministry,” according to the bulletin.

“For this gradual and safe reopening of the economy [in the 115 towns], health checkpoints [on roads] will be strengthened over the next 15 days, to prevent the virus from arriving from other regions, as has happened with the latest registered cases,” the bulletin concluded.


Medellin-based insurance and health-network provider Seguros Sura announced May 21 that it’s expanding a novel home-care testing-and-recovery program for Covid-19 patients.

“The company is a pioneer in this model that already operates in Antioquia, and from next week in Barranquilla, Cali and Bogotá, and then in other cities in the country,” according to Sura.

The scheme “will operate through the ‘Salud en Casa’ Sura home care program and also with other allied medical services of this type,” according to the company.

“The model has a great educational, self-management and interdisciplinary accompaniment component including [services from] professionals in general medicine, nursing, internal medicine, pediatrics, gynecology, infectology, nutrition, respiratory therapy and psychology.

“It includes periodic measurements of blood oxygen saturation levels, postural correction and respiratory therapy. With this, Sura wants to intervene directly in the reduction of two fundamental indicators for the control of the pandemic: mortality and hospital stays, especially in intensive care units (ICU),” according to the company.

“Educating people will allow us to empower them and make them participate in the management of their health and that of their family group,” added Sura EPS general manager Gabriel Mesa Nicholls. “For this we rely on technological advances to intervene early in populations that are symptomatic and require attention. Germany, for example, with a similar model, has achieved mortality levels 50% below the world average,” Mesa explained.

Home-care implementation of the scheme “begins with the delivery of a kit for positive or suspected patients with risk factors for Covid-19, consisting of a pulse oximeter, thermometer and an education plan with very precise and simple instructions for constant monitoring of [blood oxygen] saturation levels and temperature; as well as a guide to postures that patients with symptoms should adopt,” according to the company.

“Based on the data that users will permanently provide from the measurements,via WhatsApp, face-to-face or virtual accompaniments by general medicine doctors and specialists in internal medicine, [subsequent treatment schedules] will be programmed for pediatrics, gynecology, infectology, nutrition or psychology, according to the particular needs of each patient,” according to the company.

“This model benefits the affiliates and policyholders of EPS Sura, Complementary Plan, ARL Sura and Health Policies, and began in Antioquia on May 18.

“It will gradually be extended to the other cities where Seguros Sura Colombia has a presence, through the ‘Salud en Casa’ home-care model or through agreements with other home health service providers.”

Seguros Sura Colombia also processes 600 samples daily (25,000 tests to date) to detect possible Covid-19 infections -- either from patients driving to Sura locations or else at home. The company also is racking-up 9,000 related home-health services daily through virtual care and telecare services, according to the company.


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

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

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

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

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

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


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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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


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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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