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Companies 235

Written by November 18 2019 0

Toronto, Canada-based Gran Colombia Gold (GCG) on November 14 reported US$9 million net income for third quarter (3Q) 2019, down from US$14 million in 3Q 2018 “primarily as a result of a non-operating loss on financial instruments in the third quarter this year.”

As for nine-months (January through September) 2019, net income rebounded to US$17.7 million, compared with a net loss of US$11.4 million in the first nine months of 2018..

Commenting on the results, GCG CEO Lombardo Paredes said: “As expected, our third quarter 2019 financial results reflected the positive impact of the higher gold prices while our high-grade Segovia [Antioquia] operations continued to deliver solid operating performance.

“With one quarter to go, we are on track to meet our production and cost guidance for the full year [2019]. For the first nine months of 2019, our revenue was up 19%, our adjusted earnings before interest, taxes, depreciation and amortization [EBITDA] was up 35%, our operating cash flow was up 22% and our free cash flow was up 31%, all compared with the first nine months last year.

“Our financial strength showed further improvement in the third quarter [2019] with our cash position increasing to US$63.3 million -- and we added another CAD$15 million [US$11 million] to our cash position in early November with the strategic investment by Eric Sprott,,” he added.

According to GCG, the company “remains on track to meet its gold production guidance for 2019. With 56,271 ounces produced in the third quarter of 2019, compared with 57,163 ounces in the third quarter of 2018, total production for the first nine months of 2019 was 174,754 ounces, up 7% over the first nine months last year.

“With another 21,011 ounces produced in October, the company’s trailing 12-months’ gold production at the end of October now stands at 232,960 ounces, up 7% over 2018’s annual production,” according to GCG.

Continental Gold Results

Meanwhile, fellow Toronto-based gold miner Continental Gold on November 14 reported a net loss of US$8.47 million for 3Q 2019, compared to a net loss of US$7.26 million in 3Q 2018.

For nine-months 2019, Continental posted a net loss of US$34 million, compared to a net loss of US$17.8 million in nine-months 2018.

The company reported an accumulated deficit as at September 30, 2019 of US$472.7 million and a positive working capital balance of US$31.8 million.

Development activities at the company’s flagship Buriticá, Antioquia project “remain on budget and on schedule for mechanical completion in 1Q 2020,” according to Continental.

Overall construction progress by mid-November 2019 was 90% complete, with 100% mechanical completion now forecast for January 2020.

In a separate November 13 presentation to the Colombia Gold Symposium here, Continental Gold’s Colombia operations CEO Luis Meneses boasted that the Buriticá project eventually will produce some 300,000 ounces of gold per year, generating about US$1 billion in taxes and royalties for Colombia (over the life-of-project) -- along with 4,700 direct and indirect jobs.

Not only has the project won wide community support, but also the project will be environmentally friendly, Meneses explained here.

Among the factors making Buriticá relatively benign: a new, US$44 million water treatment plant, and a tailings recycling scheme that eventually will fill-in the old mine excavation tunnels.

Community development projects sponsored by Continental include fish farms, poultry raising, coffee farming and natural-fibers production. In all, Continental has already invested COP$2.2 billion (US$638,000) in 320 development projects that benefit some 1,600 local people, he showed.

In addition, Continental has invested another COP$2.7 billion (US$783,000) in the “programa de encadenamineto productivo” (PEP) project, which includes laundry services, worker feeding, 500 employee houses, a hardware store, civil works, a mechanical shop, and a uniforms-production workshop -- all employing local people.

In all, some 80% of all Buriticá employees are from Antioquia, including “formalization” of some formerly illegal miners -- “although there are lots of threats surrounding this program” from criminal miners, Meneses cautioned.

On the environmental front, Continental is working with Fundacion Pantera, Animal Bank and Conservation International on biodiversity projects including efforts to preserve five species of wildcats in the greater area, he added.

Written by November 16 2019 0

Medellin-based multinational utilities giant EPM announced November 15 that its third quarter (3Q) 2019 consolidated net income fell 25% year-on-year, to COP$457 billion (US$134 million), down from COP$607 billion (US$177 million) in 3Q 2018.

The 3Q decline came despite a 9% year-on-year hike in gross revenues and a 13% boost in earnings before interest, taxes, depreciation and amortization (EBITDA), according to the company.

On the other hand, nine-months 2019 consolidated profits (January through September) rose 9%, to COP$181 billion (US$53 million), from COP$166 billion (US$48 million ) in nine-months 2018 -- mainly thanks to greater demand for energy and higher power prices in Central American markets, along with higher energy sales in Colombia’s regulated power market, according to EPM.

Nine-months 2019 EBITDA also rose 15% year-on-year, while gross income rose 11% over the same nine months in 2018, according to the company.

EPM’s international affiliates generated 36% of corporate revenues, at COP$825 billion (US$241 million), up 20% year-on-year.

Its “Ensa” affiliate in Panama generated COP$361 billion (US$105 million) thanks to a boost in client numbers and higher prices. The “EEGSA” affiliate in Guatemala generated COP$272 billion (US$79 million), thanks to greater power sales, while the “Delsur” affiliate in El Salvador brought-in COP$147 billion (US$43 million) mainly due to greater residential and industrial demand along with higher power tariffs.

As for EPM’s Colombia affiliates, the energy division’s income rose 7% year-on-year, while the water, sewage-treatment and trash-collection utilities boosted income 116% year-on-year, mainly thanks to the start-up of the “Aguas Claras” sewage plant north of Medellin.

Hidroituango Outlook

Meanwhile, EPM revealed that as of September 30, 2019, the Hidroituango hydroelectric project had reached 74.4% completion.

“For commissioning, it is estimated that the first power generation unit could enter service from the last quarter of 2021. However, this date of commissioning is very dynamic, due to the changes that occur in the variable techniques and the evolution and efficiency of the measures implemented to meet the contingency,” according to the company.

As for the company’s Mapfre insurance policy covering lost power sales and physical damage at Hidroituango, “the policy establishes an insured limit of US$2.55 billion for coverage of material damage to infrastructure and equipment. It also has coverage to cover the delay-of-entry-into-operation (money no longer received for damages arising from the contingency) for US$628 million, amounts that establish the maximum responsibility of the insurer,” according to EPM.

“The amount that the insurer will recognize and its corresponding payment schedule will be the result of a rigorous analysis of the quantification of damages, the results of which will be linked to the conditions of the policy such as deductibles, limits, additional coverage, among others,” the company added.

Written by November 15 2019 0

Medellin-based multinational Grupo Orbis – producer of “Pintuco” paints, “Otek” water-handling systems and numerous chemical products – on November 14 posted a COP$10 billion (US$2.9 million) net profit, a big reversal from the COP$8 billion (US$2.3 million) net loss in 3Q 2018.

Gross revenues rose 6.3% year-on-year, to COP$1.08 trillion (US$315 million), while earnings before interest, taxes, depreciation and amortization (EBITDA) jumped 125%, to COP$87.7 billion (US$25.6 million).

These positive results are mainly due to a 9% jump in paint sales and a 71% jump in paints-division EBITDA -- spurred by architectural-sector demand along with general repainting demand in Colombia, according to the company.

Meanwhile, the Orbis chemicals division is benefitting from efficiencies resulting from the recent transfer of production to its Cartagena, Colombia facilities.

The company also credited better financial results from its affiliates in Brazil, Argentina and Central America.

Meanwhile, corporate financial obligations -- net of cash and short-term investments -- declined year-on-year, to 2.9-times, versus 4.2-times, the company added.

Written by November 15 2019 0

Medellin-based multinational insurance and investment specialist Grupo Sura on November 14 posted a 35% year-on-year jump in third quarter (3Q) 2019 net income, to COP$1.5 trillion (US$438 million).

The biggest contributor to net income (COP$682 billion/US$199 million) in the latest quarter came from the Sura Asset Management (AM) division, which manages a growing basket of profitable pension funds in Central and South America.

Second-biggest net-income contributor was the Suramericana insurance division, at COP$300 billion (US$87.7 million), according to the company.

Corporate-wide operating revenues rose 14.8% year-on-year, to COP$16.2 trillion (US$4.7 billion), while operating expenses hit COP$13.8 trillion (US$4.03 billion), up 13%.

“This produced operating earnings amounting to COP$2.4 trillion (US$701 million), for a growth of 26.3%, thanks to our ongoing efforts to gain greater efficiencies, optimize the profitability of our operations and the positive returns on the investment portfolios,” according to Sura.

“Likewise, fee and commission income continued to show a resilient level of growth (+9.9% in COP or +2.4% in local currencies) due to lower fee and commission rates in certain operations,” the company added.

Meanwhile, the Suramericana insurance division’s written premiums hit COP$9.5 trillion (US$2.78 billion), up 15.1%, while revenues from services rendered came to COP$2.8 trillion (US$818 million), up 23.7% year-on-year.

While Suramericana’s 3Q 2019 net income dipped 24% year-on-year, this fall “does not reflect the positive of its main operations due to the non-comparable impacts that affected the company’s performance,” according to Sura.

“These mainly included the macroeconomic and political situation in Argentina, the current situation of [lagging cost recovery] in the public health sector in Colombia and the VAT [value-added tax] expense incurred with life insurance commissions, also in Colombia.

“The current growth in the number of users of our healthcare services, which also benefits the other healthcare provider companies such as ‘IPS’ and ‘Dinamica,’ accounted for the growth posted in both healthcare revenues and the cost of services rendered.

“The retained claims ratio increased from 54.1% to 54.8%, which was mainly due to the increase in car and mandatory road insurance [SOAT] in the non-life [insurance] segment,” the company added..

As for Sura’s life-insurance segment (including Seguros de Vida Colombia, Asesuisa Vida in El Salvador, Seguros de Vida SURA Chile and Seguros Sura Vida in México), “the merger between the life insurance and workers’ compensation subsidiaries in Colombia took place during the first quarter of this year, with the former now posting the results of their combined operations,” the company noted.

“The life insurance segment shows a growth of 39.3% in written premiums thanks in part to the acquisition of Seguros de Vida SURA S.A. in Mexico in 4Q 2018, which contributed a total of COP$22 billion (US$6.4 million) to the consolidated production figure for this past quarter.

“If we were to exclude the contribution from this recent acquisition, the group life solution would have recorded a growth of 11.2% mainly due to the positive dynamics seen with the affinity channel in Colombia and El Salvador.

“The workers’ compensation solution also showed a growth of 16.2%, with this uptrend in revenues generated by a greater number of affiliates.

“The pension insurance solution also provided a significant amount of growth thanks to new business obtained in El Salvador for the 2019 policy.

“Furthermore, this past quarter marked one year since the capital optimization strategy was first deployed with the healthcare insurance solution in Colombia. This consisted of matching premiums as posted on the income statement with the actual collections of such, for which the corresponding adjustments were made to both reserves and capital requirements to levels consistent with the company’s collection patterns, which in turn had a positive effect on the working capital invested in this solution.

“This new initiative, upon completing its first year of having been introduced, generated a 167.5% increase in written premiums, which in turn implied higher reserves to be set up which leveled off the growth in earned premiums to 27.3%,” according to Sura.

Written by November 15 2019 0

Medellin-based multinational supermarket giant Grupo Exito on November 14 posted a COP$11 billion (US$3.2 million) net income for third quarter (3Q) 2019 – not comparable to 3Q 2018 since its former Brazilian operations are now officially listed as a “discontinued operation.”

Following a September 12 decision by most Exito stockholders and its board, Grupo Exito sold its stock holdings in the “Grupo Pão de Açúcar” Brazil operation to its France-based Grupo Casino holding company.

Exito’s corporate-wide gross income in 3Q 2019 rose 7.5% year-on-year, to COP$3.6 trillion (US$1.05 billion), while recurring earnings before interest, taxes, depreciation and amortization (EBITDA) rose 11% year-on-year, to COP$275 billion (US$80 million), according to the company.

Colombia operations saw their best sales in three years, posting 5.1% year-on-year growth, while recurring EBITDA margin grew 12.8% in 3Q 2019 and 4% in the first nine months 2019.
As a result, Colombia generated a net profit of COP$11 billion (US$3.2 million) for Grupo Exito.

“The results in Colombia show the positive impact of the implementation of innovative strategies, both in the ‘Exito Wow’ and ‘Carulla Fresh Market’ [store formats] and the maturation of the ‘Surtimayorista’ format. In addition to e-commerce and home sales, these accounted for 76% of total sales growth in the quarter,” according to the company.

In its Uruguay division, Grupo Exito bragged that this operation “continues to be the most profitable of the organization with an EBITDA margin of 8.4% and growth of 17%.”

In Uruguay, sales grew 4.1% year-on-year, “mainly due to the fresh-market format that already represents 34.5% of total sales,” according to Exito.

As for Argentina, “in the middle of a very challenging macroeconomic context, the company’s figures show a good commercial performance with sales growth of 36.7% in local currency,” according to Exito.

The company’s real estate business in Argentina “continued to leverage the results with more than 170,000 square meters of leasable commercial area and 93.4% occupancy.”

Grupo Éxito ended 3Q 2019 with 651 food outlets: 535 in Colombia, 91 in Uruguay and 25 in Argentina, with a consolidated sales area of more than 1 million square meters.

“The result of Grupo Éxito is very positive in sales growth and consolidation of its operating profit,” said Carlos Mario Giraldo Moreno, President of Grupo Éxito. “In the midst of very competitive markets, this profitable growth responds fundamentally to innovation in formats, digital transformation, complementary businesses such as real estate, credit, insurance and travel.

“In Colombia, the 'Éxito Wow, 'Carulla FreshMarket' value formats, and the cash-and-carry format brand, 'Surtimayorista,' continue to grow in double digits, and the electronic and direct commerce channels already represent 4.4% of the total sales of the company in this country, ” added Giraldo.

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