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Companies 498

Written by September 20 2022 0

The Medellin City Council on September 29 decided to reverse an earlier vote that would have approved the sale of city-owned utility EPM’s 50% stake in telecom-internet giant UNE to Millicom Spain, which holds the other 49.9% of shares.

Following an earlier provisional vote to approve the sale, on September 29 some Council members stated that they had subsequently lost faith in promises that the estimated COP$2.8 trillion (US$633 million) proceeds from the sale would be dedicated exclusively to “strategic investments.”

Instead, a last-minute change to the deal -- inserted by Medellin Mayor Daniel Quintero – stated that part of the funds would go toward paying EPM debt and part for other city projects, such as stream-maintenance. That broke the back of the tentative deal.

For more than 18 months, the long-expected deal had been held-up over concerns of misuse of UNE sale proceeds by Medellin’s politically embattled Mayor Quintero, who has been hit by numerous charges of corruption as well as illegal meddling in the recent election of President Gustavo Petro.

Under the earlier, tentative deal, an academic committee was supposed to oversee and verify that all UNE sale proceeds would indeed go into a strategic investment fund at EPM rather than being diverted to political projects of Mayor Quintero.

Earlier this year, UNE (popularly known as “Tigo”) posted a COP$572 billion (US$150.5 million) net loss for full-year 2021, more than twice the COP$212 billion (US$55.8 million) net loss in 2020.

Beside posting net losses in 2021 and 2020, the UNE-EPM venture also posted another net loss in 2018, while its 2019 net profit came-in at just COP$519 million (US$128,000).

Written by September 06 2022 0

Medellin-based multinational supermarket and dry-goods retailer Éxito and its principal Brazilian shareholder GPA simultaneously announced September 5 that GPA soon will offer 83% of its shares in Éxito to more than 50,000 current GPA shareholders.

The deal ultimately means that tens of thousands of investors in the U.S., Brazil and Colombia collectively would become Éxito’s biggest shareholders – that is, holding 53% of the total -- during the first half of 2023, according to the companies.

“The transaction is expected to consist of the segregation of GPA and Éxito through a capital reduction of GPA with the objective of distributing approximately 83% of the shares of Éxito currently held by GPA to its shareholders,” according to the companies.

“Therefore, following the closing of the transaction, GPA would retain a minority stake of approximately 13% in Éxito, with a potential for monetization in the future,” while France-based Groupe Casino would continue holding a 34% share via its GPA shareholdings, according to the companies.

“As a result of this project, the company's shareholding base would be substantially expanded, in such a way that the floating capital tradable on the stock markets would increase from 3% to 53%, approximately,” according to a separate Exito press release.

“Casino and GPA (Grupo Pão de Açúcar), would jointly maintain a shareholding of approximately 47%.

“Grupo Éxito will continue to strengthen its investment in Colombia and will continue executing its strategy of omnichannel, commercial expansion and innovation, and traffic monetization, fulfilling its higher purpose of nurturing ppportunities in Colombia,” the company added.

“The transaction will take place through the pro rata delivery to GPA’s shareholders of Éxito common shares -- including in the form of Level II Brazilian Depositary Receipts (“BDRs”) or Level 2 American Depositary Receipts (“ADRs”) -- both representing Éxito’s common shares, in the manner to be disclosed to the market in due course,” according to GPA.

“GPA’s Board of Directors considers that the transaction, which has the objective of enhancing the market value of the shares of GPA and Éxito separately, has the potential to unlock the value to be captured equally by all GPA’s shareholders.

“GPA’s securities will continue to trade in Brazil on the B3 S.A.– Brasil, Bolsa, Balcão (“B3” exchange) and in the United States on the New York Stock Exchange (“NYSE”).

“Éxito’s securities will continue to trade in Colombia, and Éxito will file the necessary documentation with the CVM [Comisión de Valores Mobiliarios of Brazil] and the U.S. Securities and Exchange Commission to in order to have the BDRs and ADRs listed for trading in Brazil and the United States, respectively, in accordance with high levels of corporate governance and regulation applicable in each of the markets,” according to the announcements.

Written by September 01 2022 0

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 August 31 posted a second quarter (2Q) 2022 net profit of COP$2.24 billion (US$501,000), while first-half (1H) net profits soared 136% year-on-year, to COP$13.437 billion (US$3 million).

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.

On two new fronts, Imsa now reports expansion into the U.S. and Canada for its food-additives lines.

Consolidated sales in 1H 2022 rose 36% year-on-year, to COP$340 billion (US$76 million), while 2Q 2022 gross margin rose 36% year-on-year, according to Imsa, which now trades on Colombia’s BVC stock exchange.

Improved profits this year came “despite the strong impact on raw material costs associated with restrictions in the supply chain worldwide,” according to Imsa.

Sales for 2Q 2022 at the company’s chemical business in Brazil rose 15% year-on-year, to COP$134 billion (US$30 million), “driven by the reactivation of the Brazilian market and the search for new business opportunities,” according to Imsa.

The “Addimentum” food-additives businesses in Mexico and Colombia saw 1H 2022 sales rise 28% year-on-year, to COP$42 billion (US$9.4 million). “This business continues to consolidate market share, mainly in North America, with current contracts and approvals in Mexico, the United States, and the development of new clients in Canada,” according to Imsa.

As for the “O-tek” industrial pipes-and-poles division in Argentina, Mexico and Colombia, this unit saw sales jump 84% year-on-year, to COP$127 billion (US$28.4 million).

O-tek is “increasing its market share in high-pressure applications in aqueducts, hydroelectric plants and industrial projects, with innovative products such as lock-joint technology, which gives access to a new market for large diameter pipes with greater pressure,” according to the company.

As for the MCM division --specializing in products for the home, vehicles and industry – sales are up 20% so far this year, to COP$40.7 billion (US$9.1 million), according to Imsa.

“Grupo Imsa has a solid capital and liquidity structure and a low level of indebtedness that allows it to support this growth. The Imsa Group holding reports that in the second quarter of 2022, it maintained financial indicators that reflect its solidity, without financial debt and its total liabilities only represent 3% of total assets, while this indicator as of December 2021 stood at 1.8%.

“On the other hand, its current assets of COP$172 billion [US$38.5 million] exceed its current liabilities by 11 times, maintaining a favorable liquidity situation.

“At a consolidated level, Grupo Imsa also maintains adequate levels of indebtedness and liquidity, with total liabilities representing 33% of its total assets, compared to 30% at the end of 2021. In turn, it maintains a current ratio that at the end of June stood at 2.0 times, while as of December 2021 this indicator stood at 2.1 times,” the company added.

Written by August 29 2022 0

Vancouver, Canada-based Antioquia Gold on August 26 announced a second quarter (2Q) 2022 net profit of CAD$474,000 (US$364,500), a big improvement over the CAD$2.6 million (US$2 million) net loss for 2Q 2021.

Revenues from the company’s sole asset – its Cisneros, Antioquia mining operations -- nearly doubled year-on-year, to CAD$30.5 million (US$23 million), while adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) likewise improved, to CAD$7.3 million (US$5.6 million), more than double the CAD$3.3 million (US$2.5 million) EBITDA in 2Q 2021.

Gold production at Cisneros soared to 13,489 ounces, up from 9,543 ounces in 2Q 2021, while average realized gold price rose to US$1,734/ounce, up from US$1,624/ounce in 2Q 2021, according to the company.

As for first half (1H) 2022 operating results, Antioquia gold reported production of 24,856 ounces of gold so far this year, while sales of 24,500 ounces of gold netted an average realized price of US$1,723 per ounce.

Cash costs so far this year have averaged US$1,275 per ounce of gold sold, up from US$1,187 in 2Q 2021, while all-in sustaining costs have averaged US$1,393 per ounce of gold sold, up from US$1,305 in 2Q 2021.

The year-on-year boost in revenues “reflects the increase in production along with an increase in the average realized gold price,” the company explained.

The Cisneros underground gold operation consists of two underground mines in the Guaico and Guayabito rural districts, a processing plant located outside Medellin, and “exploration and development of additional properties,” the company noted.

Written by August 18 2022 0

Medellin-based multinational construction giant Conconcreto announced August 17 that its second quarter (2Q) 2022 net income rose 14% year-on-year, to COP$47 billion (US$10.7 million).

Revenues jumped 67% year-on-year, to COP$528 billion (US$120 million), while earnings before interest, taxes, depreciation and amortization (EBITDA) rose 21%, to COP$79.5 billion (US$18 million).

The boost in revenues is explained “primarily by a greater execution of works, a greater contribution from investments, as well as for the positive impact of the UVR [Colombia mortgage interest rate] on the Pactia Capital Fund and the active debt position subject to [highway project] concessions,” according to the company

“Results were partially limited by an increase in expenses as a consequence of the [post-Covid] reactivation of the company, impacts of the Decree-560 [Colombia bankruptcy exit] process [which Conconcreto successfully exited on May 25, 2022], as well as higher financial cost,” the company added.

Conconcreto’s exit from bankruptcy came as a result of Colombia’s Comptroller-General finally absolving the company from any responsibility for a costly diversion-tunnel collapse at the US$5 billion “Hidroituango” hydroelectric project in Antioquia.

Meanwhile, Conconcreto and two project partners in the “Double Calzada Oriente” (DCO) highway project (linking Medellin to Rionegro) inked a deal this year with international financiers BlackRock and AC Capitales.

That financing deal “provides greater solidity to the project, as BlackRock “is one of the world’s largest asset managers and a leading provider of investment management, risk management and advisory services to institutional clients globally,” Conconcreto noted.

“For its part, AC Capitales is one of the most recognized and experienced asset investment firms in Peru,” the company added.

The DCO project carries an estimated capital cost of COP$960 billion (US$218 million), of which Conconcreto has a 25% interest

As for Conconcreto projects in the United States, the company reports a construction backlog totaling US$225.7 million, mainly for projects in the metro Miami, Florida area.

In Colombia, infrastructure backlog stands at COP$1.67 billion (US$379 million) “concentrated mainly in the Ruta 40 and DCO projects and the TransMilenio trunk lines on Avenida 68 and Soacha,” according to the company.

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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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