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Written by March 28 2023 0

Medellin-based multinational electric power, utilities and telecom-internet giant EPM announced March 27 that its full-year 2022 net income declined 10% year-on-year, to COP$3 trillion (US$645 million).

The decline is explained by a COP$1 trillion (US$215 million) write-down in the value of its partial holding in the Tigo-UNE telecom/internet company, according to EPM.

As a result of that write-down, EPM – 100% owned by the city of Medellin—will cut its contribution to the city of Medellin’s 2023 finances by COP$330 billion (US$71 million), according to the company.

Excluding that Tigo-UNE write-down, Grupo EPM otherwise posted in 2022 a 26% profit gain year-on-year, hitting COP$4.1 trillion (US$881 million), according to the company.

Grupo EPM revenues likewise rose 28% year-on-year, to COP$32.2 trillion (US$6.9 billion), while earnings before interest, taxes, depreciation and amortization (EBITDA) rose 32%, to COP$9.8 trillion (US$2.1 billion), according to the company.

EPM owns and operates electric-power-generation and public utility operations in Colombia, Chile, El Salvador, Guatemala, Mexico and Panama.

Other financial highlights during 2022:

Investments in infrastructure projects totaled COP$4.8 trillion (US$1.03 billion). “Investments in the Hidroituango [hydroelectric project in Antioquia] and progress in the construction of the Tepuy Photovoltaic Solar Park stand out, a project that is in tune with the energy transition and that will provide 83 megawatts of non-conventional renewable energy to Colombia,” according to EPM.

“In the natural-gas business, the expansion and biogas projects at the San Fernando plant stood out. Likewise, investment was made in the expansion and modernization of wastewater treatment plants, guaranteeing the supply of water for the coming decades.”

As for its international subsidiaries, EPM invested in expansion project of a desalination plant in Chile, Advanced Measurement Infrastructure (AMI) in Guatemala; extensions and replacement of assets in the distribution system in El Salvador and the expansion of networks, replacement of assets and loss reduction programs in Panama.

Meanwhile, EPM’s TICSA subsidiary in México benefited from construction of treatment plants for the Don Julio tequila manufacturing plant in the state of Jalisco, along with water treatment plants for the city of León (Guanajuato state) and for Mexico City.

In Colombia, TICSA made progress in the construction of the “Tranvía” wastewater treatment plant in the municipality of Rionegro, near Medellin.

Meanwhile, to finance infrastructure projects, in December 2022 EPM signed its first “sustainable credit line” for US$700 million for various ventures.

During 2022, EPM contributed COP$1.8 trillion (US$387 million) to the city of Medellin, up 32% over 2021.

Hidroituango Cost Update

Meanwhile, EPM announced that it has updated the project cost of the 2.4-gigawatt Hidroituango hydroelectric project to COP$19.4 trillion (US$4.17 billion), up from a previous estimate of COP$17.6 trillion (US$3.78 billion).

“This change is due to the increase in direct investment and financial expenses and pre-operational costs, equivalent to COP$1.7 trillion [US$366 million],” according to the company.

The latest cost projection doesn’t include “possible variations in the value of the offers received as part of the of the new contracting process in which the company has been advancing to undertake the works for the completion of the second stage, which includes units 5 to 8,” the company cautioned.

As of February 28, 2023, EPM reported that Hidroituango construction is 90.68% complete, with total executed cost to date at COP$14.6 trillion (US$3.14 billion).

“In accordance with the evolution of the work fronts and the concentration of efforts of the company, generation units 3 and 4 are expected to come into operation before November 30, 2023, for compliance with the firm-energy obligations assigned in the reliability auctions in which it has participated in the project,” according to the company.

Written by March 17 2023 0

Medellin-based textiles and plastics-recycling giant Enka reported March 16 that its full-year 2022 net income dropped 58% year-on-year, to COP$24.6 billion (US$5.08 million).

Earnings before interest, taxes, depreciation and amortization (EBITDA) fell 29% year-on-year, to COP$54 billion (US$11 million).

The EBITDA decline was explained by “lower [sales] volume and difficulty of fully transferring higher material costs to sales prices, especially in the textile and industrial businesses,” according to Enka.

As for the net income decline, this came as a result of “lower operating income, the [Colombian peso versus U.S. dollar] exchange difference [for the domestic Colombia market] and higher financial expenses,” according to the company.

Gross revenues actually rose by 9% year-on-year, to COP$585.7 billion (US$121 million), from COP$534 billion (US$110 million) in 2021, “as a result of higher prices and international exchange rates [for export sales], which offset a lower sales volume,” according to Enka.

Despite the disappointing financial results, “Enka successfully completed its project for the new ‘EKO-PET’ [plastic bottle recycling] plant, complying with the estimated schedule and investment, which adds 24,000 tons of capacity and strengthens our leadership in the circular economy in Colombia,” according to the company.

“The year 2022 was a year of great challenges, especially due to the complex macroeconomic environment and disruptions in the supply of raw materials, mainly in nylon supply chain and electric power generation costs,” according to Enka.

“The company managed to offset some of this through supply diversification strategies, managing to standardize new suppliers and alternatives for raw materials for our nylon business and develop initiatives to use biomass to diversify our energy matrix.”

At year-end 2022, Enka’s total assets hit COP$808 billion (US$166.7 million), up COP$124 billion (US$25.6 million) from 2021.

The company credits those improvements to the new EKO-PET plant, working-capital hikes due to higher international prices, advanced purchases of raw materials to hedge the Russia-Ukraine conflict and a better tax situation.

Liabilities ended at COP$327 billion (US$67 million), up COP$106 billion (US$21.8 million) “due to the financing of higher inventories and financial disbursements for capex and inventories required for the new plastic-bottle recycling plant,” according to Enka.

“The index of net indebtedness ended at 3.5-times EBITDA, after having completed the investments in the new EKO-PET plant. With strategies implemented to diversify supplies, and realize sales from the new EKO-PET plant, we expect to reduce this indicator during 2023 in order to continue with the development of new growth projects,” the company added.

Sales abroad in 2022 rose 19% year-on-year, hitting US$60.7 million, representing 44% of total revenue. “Good behavior of the Brazilian markets and the market diversification strategy, especially in Europe, offset lower demand from North America, which showed some signs of slowdown in the second half of the year,” according to Enka.

“As a result, Brazil becomes the main export destination with 21% of sales, followed by North America with 16%,” the company added.

As for its “green” plastics-recycling products and markets, “the operating income of the green businesses grew by 27%, reaching COP$193 billion [US$39.8 million], or 33% of total sales, 86% of which correspond to sales in the local Colombian market, which reflects the high commitment of our customers with the environment,” according to Enka.

“The three recycling plants operated at maximum capacity in 2022, given the completion of the project for the new EKO-PET plant in the final quarter, whose technology has authorization from [Colombian sanitary standards regulator] Invima and the U.S. FDA [Food and Drug Administration], which allows access to both national and foreign markets.”

As for its “EKO-FIBRAS” textile line, “the development of new applications and markets for specialized sectors, such as geotextiles, automotive, cleaning and footwear, made possible an increase in the 72% in the consumption of post-consumer colored bottles, which have higher limitations for its recycling,” the company noted.
Meanwhile, the “EKO-Polyolefins” portfolio “was strengthened with the progress of approvals of our product with Dow Chemical, under its ‘Revo’ brand,” the company added.

Written by March 17 2023 0

Renault-Sofasa – for 53 years producing cars in the Medellin suburb of Envigado – announced March 16 a US$100 million expansion plan that will bring more-advanced technologies to its popular line of vehicles that already enjoy number-one market-share in Colombia.

Attending a special press event here were Colombia’s Minister of Commerce, Industry and Tourism Germán Umaña Mendoza and the Vice Minister of Finance Gonzalo Hernández. The company is eyeing the possibility of electric vehicle (EV) production here, having already achieved EV dominance in Europe.

“Our commitment is to generate real progress for the country, for our employees, for our suppliers and dealers and for our entire value chain, offering mobility solutions for thousands of Colombian families, as we have been doing for almost 54 years,” stated Ariel Montenegro, President and General Director of Renault-Sofasa.

Over its five decades of car assembly here, Renault-Sofasa boasts of producing more than 1.6 million vehicles, including 15 different models. Its current production lineup here includes Renault Sandero, Renault Logan, Renault Stepway and Renault Duster.

The company also imports and sells the Renault Kwid and Renault Zoe electric car for the Colombian market.

In 2022, Renault-Sofasa delivered 49,521 vehicles to the Colombian market, taking a 20.9% market share.

The company boasts of having 110 sales rooms in 52 Colombian cities, along with 75 mechanical workshops, 49 body and paint shops, 27 “Renault Minuto” quick service centers and -- for its electric vehicles -- 16 “E-Tech” workshops and 19 “E-Tech” sales rooms.

Written by March 16 2023 0

Medellin-based real estate developer Valores Simesa – owner of the “Ciudad del Rio” properties here on lands once occupied by a long-since-demolished iron foundry – announced March 15 a COP$778 million (US$160,000) net loss for full-year 2022, an improvement over the COP$4.56 billion (US$936,000) net loss in 2021.

Financial investments explain the big improvement, netting COP$6.9 billion (US$1.4 million) in 2022 versus COP$3.7 billion (US$759,000) in 2021.

The 2022 losses are “mainly explained by the lower value of [certain] properties located in Ciudad Del Río, partially offset by interest income derived from negotiations of the lots sold and the yields of the investment portfolio,” according to the company.

Valores Simesa also cited “low demand for non-residential real estate, an increase in construction costs above rental values, and the increase in builder loan-interest rates.”

Despite posting a net loss for the year, “2022 was a favorable year to continue consolidating the company’s strategy, which was affected in previous years by impact of the pandemic on the real estate sector,” the company added.

Meanwhile, Valores Simesa cites two promising real-estate projects in the works.

One is a US$23 million, multifamily rental-housing project from Hasta Capital, aiming to create about 300 residential units.

“The second project involves Conaltura, a developer with a long history that arrives for the first time in Ciudad Del Río with the construction of a housing tower for sale involving approximately 228 apartments. Both projects involve an attractive commercial first floor,” according to Valores.

“The agreed price for this lot was COP$34 billion [US$6.98 million], of which at the end of the year COP$15.28 billion [US$3.1 million) remains to be paid, to be collected in four semi-annual installments of COP$3.8 billion [US$781,000], according to the company.

Meanwhile, another project “currently being carried out with the municipality of Medellín could make three available lots of Valores Simesa more flexible -- allowing these properties to be in greater demand and in-tune with the trend towards the development of mixed-use projects that diversify the risks associated with vacancies of different segments and generate greater connectivity between population densities and the business centers of the cities,” the company added.

Written by March 09 2023 0

Medellin-based Coltejer – formerly a giant in Colombia’s multinational textile industry – on March 8 posted a COP$137 billion (US$28.8 million) net loss for full-year 2022, compared to a net loss of COP$121 billion (US$25.5 million) in 2021.

Sales likewise declined to a measly COP$3.1 billion (US$653,000) compared to COP$16.9 billion (US$3.56 million) in 2021.

Coltejer’s total income (including rental properties) fell to COP$40.37 billion (US$8.5 million) in 2022, versus $55 billion (US$11.6 million) in 2021.

Operating losses also worsened in 2022, at COP$80.3 billion (US$16.9 million), versus COP$76.8 billion (US$16 million) in 2021.

The company has shuttered all textile production since 2021, but continues to offer industrial properties for sale or lease in the Medellin suburb of Itaguí.

Meanwhile, the company announced that it is considering a proposed delisting of all its remaining shares traded on the Colombian Stock Exchange (BVC).

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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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