Tuesday, November 29, 2022

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Medellin-based multinational Grupo Imsa – a spinoff last November from Medellin-based paints, chemicals and hardware multinational Grupo Orbis (the latter now part of global chemicals giant AkzoNobel) – on November 15 announced a third quarter (3Q) 2022 net profit of COP$13.7 billion (US$2.77 million).

Nine-months 2022 net profits likewise have soared by 165% year-on-year, hitting COP$27 billion (US$5.46 million), according to Imsa, a company that -- as a stand-alone -- is barely one-year old.

Grupo Imsa produces industrial tubing and posts (O-tek division), food additives (Addimentum) composite materials (Novascott, Novapol and Novaforma), cleaning/disinfectant products (MCM), and also develops commercial real-estate projects in Colombia. Imsa has eight production facilities in four nations: Colombia, Brazil, Mexico and Argentina.

According to the company, nine-months 2022 sales are up 39% year-on-year, to COP$$568 billion (US$115 million).

As for 3Q 2022, gross margin stood at 26.4%, up from 22.9% in 2Q 2022.

“The chemical business in Brazil [so far this year] has reached sales of COP$219.8 billion [US$44.5 million], 16.3% more than the accumulated figure for the third quarter of 2021, driven by a greater dynamism in the market and an improvement in the positioning of clients in the wind, swimming pools and industrial sectors,” according to Imsa.

Meanwhile, the “Addimentum” food additives businesses in Mexico and Colombia ended the third quarter with sales of COP$67 billion (US$13.6 million), up 26.3%, “mainly generated by the commercial consolidation in the local economies and in the international [export] markets, along with diversification of its portfolio and its client base,” according to the company.

As for the “O-tek” division – Imsa's pipes-and-poles businesses in Argentina, Mexico and Colombia – nine-months 2022 sales have jumped 88.2% year-on-year, to COP$221 billion (US$44.7 million), according to the company.

As for its “MCM” division -- specializing in home, vehicle and industrial products – sales are up 22.7% so far this year, to COP$66 billion (US$13 million), according to the company.

Grupo Imsa “continues without financial debt and its total liabilities only represent 3% of total assets, while this indicator as of December 2021 was 1.8%,” the company added.

Similarly, “current assets of COP$171.7 billion [US$35 million] exceed current liabilities by 10.5-times, maintaining a favorable liquidity situation,” according to the company.

“The main variations of the statement of financial position compared to December 2021 correspond to the increase in investments in subsidiaries that went from COP$194.9 billion [US$39 million, in 2021] to COP$259.3 billion [US$52.5 million, in 2022],” the company added.


Mineros 3Q 2022 Net Income Drops 68% Year-on-Year

Wednesday, 16 November 2022 08:17 Written by

Medellin-based multinational gold-mining giant Mineros SA announced November 15 that its third quarter (3Q) 2022 net income dropped 68% year-on-year, to US$2.6 million, from US$8.1 million in 3Q 2021.

Company president Andrés Restrepo blamed the decline on “impairment of assets related to the accident at the upgrading plant connected to the Llanuras dredger [at Nechi, Antioquia] on May 28 [2022] and for provisions for compensation in Argentina.”

That accident was the result of heavy rains and winds at its alluvial mining operation, “causing damage to the floating beneficiation plant connected to the suction dredge,” according to Mineros.

“Immediately after the accident, the company’s emergency protocols were activated. Investigations of the accident by Colombian authorities and investigators company-hired independents are underway.

“After a thorough review of the current status of the plant, as of September 30, 2022, management has not found a way to recover, repair or carry out any type of rescue or maneuver to return the plant to operations, therefore an impairment of US$4.8 million was recognized.

“Mineros has filed a claim with its insurers regarding damage to the Llanuras plant. The company has adjusted its production plan to compensate for the loss of the plant and, consequently, we do not expect any negative impact on our ability to meet our estimate of production or costs for 2022 at the Nechi alluvial property.”

As for gross revenues in 3Q 2022, Mineros reported a 13% year-on-year rise, to US$136 million, while adjusted 3Q 2022 earnings before interest, taxes, depreciation and amortization (EBITDA) rose 33% year-on year, to US$43 million, according to the company.

As for nine-months 2022 results, net income has dropped 24% year-on-year, despite a 6% hike in revenues and a 10% rise in adjusted EBITDA, according to the company.

During 3Q 2022, gold production rose 17% year-on-year, to 74,513 ounces, while all-in-sustaining-costs and cash costs both have declined year-on-year.

“The company has maintained a low ratio of net-debt to adjusted EBITDA, down 53% after paying financial obligations taken for the purchase of Luna Roja [Nicaragua gold mine],” the company added.

 


Medellin-based multinational electric power, cement and highways/airport concessionaire Grupo Argos announced November 14 that its third quarter (3Q) 2022 net income dropped 13% year-on-year, to COP$192 billion (US$40 million).

Revenues nevertheless rose 24% year-on-year, to COP$5 trillion (US$1.04 billion), while earnings before interest, taxes, depreciation and amortization (EBITDA) likewise rose 10% year-on-year, to COP$1.26 billion (US$262 million).

As for nine-months 2022, consolidated net income is up 10% year-on-year, to COP$1.05 trillion (US$219 million), with EBITDA up 14%, to COP$3.8 trillion (US$782 million), according to the company.

Despite the 3Q 2022 profits decline, gross revenues continue to rise in all of the Argos subsidiaries, including a 25% hike at Cementos Argos, a 33% jump at electric power division Celsia and a 57% jump in passenger traffic at Odinsa-concession airports, according to the company.

“These results show the financial strength of the organization and the positive performance of all its businesses,” according to Argos.

“In line with the announcement made at the beginning of 2022, we reiterate that the listing of the cement operation in the United States on the New York Stock Exchange continues to be a strategic priority for the organization,” according to Argos.

“Among the most relevant milestones for this operation, the refinancing of US$750 million of debt stands out, which strengthens the [Cementos Argos] capital structure and liquidity position with variable rate conditions tied to ESG [environmental, social and governance] indicators,” the company added.

Argos also highlighted its September 2022 announcement for a new collaboration with Macquarie Asset Management, “the largest infrastructure investment fund manager in the world, for COP$1.4 trillion [US$292 million] to develop private initiatives such as the new airport at Cartagena, maximization of the use of the current El Dorado Airport [Bogota] terminal and developing improvements in the runways and taxiways with state-of-the-art technology and the expansion of capacity.”


Sura 3Q 2022 Net Income Dips 2% Year-on-Year

Saturday, 12 November 2022 08:16 Written by

Medellin-based multinational insurance, asset management and health-care giant Grupo Sura announced November 11 that its third quarter (3Q) 2022 net income dipped 2% year-on-year, to COP$400 billion (US$83 million).

Total revenues nevertheless rose 19% year-on-year, to COP$7.9 trillion (US$1.6 billion).

Despite the 3Q dip in profits, through nine months 2022, Sura’s net income is up 34.6% year-on-year, to COP$1.4 trillion (US$291 million), according to the company.

“Revenues continue on an uptrend thanks to a double-digit growth with the insurance business, where written premiums rose by COP$1.1 trillion [US$229 million], that is to say 19.1% more compared to the same quarter last year,” according to Sura.

“On the other hand, fee and commission income amounted to COP$838 billion [US$174 million], remaining at similar levels to the third quarter last year.

“So far this year [nine-months 2022], total revenues have risen by COP$4.1 trillion [US$853 million], now standing at COP$22.3 trillion [US$4.6 billion], with written premiums scoring a growth of COP$3.7 trillion [US$769 million], thanks to good levels of performance in all segments,” according to Sura.

However, “while [nine-months] fee and commission income has declined by COP$15.4 billion [US$3.2 million] compared to the year-to-date figure corresponding to the same period last year, this is due to regulatory reductions in the amounts charged in Mexico as well as lower levels of performance for the voluntary savings segment due to losses in value on the financial markets,” the company added.

“During this period, the Suramericana [insurance division] portfolio continued to show higher yields thanks to higher interest rates and higher inflation throughout the region, hence the positive performance posted for the portfolios held in Chile, Colombia, Uruguay and the Dominican Republic.

“On the other hand, returns from [investment fund] Sura Asset Management’s legal reserves continued to be affected by the losses in value sustained on different financial markets throughout the region. Investments, on a year-to-date basis, came to COP$1.2 trillion [US$249 million], for a drop of COP$22.3 billion [US$4.6 million] compared to the same period last year,” the company added.

During 3Q 2022, the insurance claims rate “continued to be impacted by increases in average costs and higher claims frequencies with the auto insurance unit, as well the required update in reserves for the life insurance segment in the light of expectations of the increase in minimum wage in Colombia as well as a higher claims rate for the Mandatory Health Care subsidiary (EPS) due to a recent update to the PBS (Basic Health Plan) as well as increased frequencies with the amount of health services rendered,” according to Sura.

In its health-care segment, “the increase in the net loss posted was due to higher claims on the part of the EPS (mandatory health care) subsidiary as well as lower revenues posted by the Ayudas Diagnosticas Sura (Diagnostic Service Provider) subsidiary, which last year were driven up by a higher volume of Covid-related services,” which have since dropped dramatically as the Covid crisis has now subsided.


Medellin-based highway construction giant Construcciones El Cóndor reported November 11 a COP$57 billion (US$11.8 million) net loss for third quarter (3Q) 2022, down from a COP$16 billion (US$4.1 million) net profit in 3Q 2021.

“The results are recognized by the equity method and the unrealized net exchange difference,” according to El Cóndor. “These items present accounting effects but have no impact on the company's cash. If this effect is discounted, the net profit is COP$4.178 million [US$869,000] and the net margin is 0.65%.

“This effect will continue to occur for several periods while the [highway] concessions begin to generate accounting profit, a behavior that is due to the normal cycle of the concessions due to their project finance nature,” the company explained.

Income from ordinary activities totaled COP$638 billion (US$133 million), increasing by 57.86% compared to 3Q 2021.

“The increase reflects the upward curve in the execution of the following works: EPC [engineering, procurement and construction] with the Concessions Autopista Rio Magdalena, Ruta al Mar and Pacífico Tres, El Toyo and Putumayo public works with Invias and the normalization contract with the Ruta al Sur Concession,” according to El Cóndor.

Operating costs rose 47% year-on-year, to COP$564 billion (US$117 million), while gross profit came-in at COP$74 billion (US$15 million), “equivalent to a gross margin of 11.60%, which is higher than the gross margin of 2021, since new projects earn revenue share on 4G [fourth-generation highway project] EPCs,” according to the company.

Earnings before interest, taxes, depreciation and amortization (EBITDA) hit COP$102 billion (US$21 million), “equivalent to an EBITDA margin of 16%, increasing with respect to the EBITDA margin for the year 2021, which was 12.62%,” according to El Cóndor

“Interest expense increased 56.71% compared to the third quarter of 2021. Of this effect, 51.86% is due to the increase in interest rates and 4.85% is explained by the increase in the company’s indebtedness,” the company added.

Construction backlog at end-September -- defined as the balance of works contracted and to be executed -- stood at COP$2.99 trillion (US$622 million), the company added.


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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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