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Written by August 14 2019 0

Medellin-based multinational electric power and public utilities giant EPM announced August 14 that its first half (1H) 2019 net income rose by 29% year-on-year, to COP$1.3 trillion (US$377 million).

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 16%, to COP$2.9 trillion (US$841 million), while gross revenues increased by 12%, to COP$8.8 trillion (US$2.5 billion), according to the company.

The city of Medellin – the sole shareholder of EPM – got COP$703 billion (US$204 million) in profit transfers for 1H 2019. EPM supplies nearly 25% of the city’s annual budget.

So far this year, EPM Group invested COP$1.3 trillion (US$377 million) in infrastructure to improve service quality, according to the company. The company put another COP$455 billion (US$132 million) this year into the 2.4-gigawatt “Hidroituango” hydropower project in Antioquia, due for initial start-up in late 2021.

Of the income obtained in the first six months of this year, international subsidiaries contributed 36%, national energy subsidiaries 15% and water subsidiaries 2%.

“Having a wide, diversified portfolio of investments in several latitudes allows us to earn more to add to the quality of life of millions of people in the regions where we have a presence,” added EPM general manager Jorge Londoño de la Cuesta.

The year-on-year boost in EBITDA “is mainly explained by the increase in income greater than the increase in costs and expenses,” according to the company.

“The good performance of revenues is due, in part, to higher energy sales, both from EPM matrix [which includes water, sewage, trash and natural gas services] and from national and foreign subsidiaries,” the company added.

Financial indebtedness of the EPM Group and EPM matrix stood at 42% and 40%, respectively, compared to 40% and 36% presented in 2018. “The increase [in debt level] is due to loan disbursements to finance the general investment plan and the Hidroituango hydroelectric project,” according to EPM.

Total assets grew by 6% year-on-year, to COP$55.4 trillion (US$16 billion), while liabilities rose 9%, to COP$33 trillion (US$9.6 billion), according to the company.

Written by August 13 2019 0

Medellin-based multinational cement/concrete giant Cementos Argos announced August 12 that its second-quarter (2Q) 2019 net income hit COP$73 billion (US$21 million), from COP$29 billion (US$8.5 million) in 2Q 2018.

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 44% year-on-year, to COP$475 billion (US$140 million), according to the company.

As for first half (1H) 2019 results, “revenues increased 10.6%, driven mainly by higher cement volumes in the United States and the start of price recovery in Colombia,” according to Argos.

“Cement shipments were close to 8 million tons, 1.2% higher than in the first half of 2018, and concrete shipments were 5 million cubic meters, with a decrease of 2.5% due to the impact of heavy rains in some regions of the United States.”

“In the first half of 2019 we continued to strengthen our operation and our presence in the United States with the execution of the ‘BEST 2.0’ efficiency plan, which, together with better price dynamics that we began to see in Colombia, allowed us to compensate for the pressure we experienced in energy costs," said Juan Esteban Calle, president of Cementos Argos.

“The significant progress of our divestment plan in non-strategic assets allows us to continue to focus on improving the competitiveness of the company and innovating in products, services and solutions to accompany the growth of our customers,” he added.

In the USA, 1H 2019 revenues rose 3.5% year-on-year, to US$781 million, while EBITDA remained stable at US$108 million.

Cement shipments in 1H 2019 in the USA increased 6.9%, exceeding 3 million tons, while concrete shipments decreased 3.8%, mainly due to heavy rains in the south-central region.

In Colombia, 1H 2019 revenues rose 3.3% year-on-year, to COP$1.1 trillion (US$324 million), but EBITDA dipped 4%, to COP$186 billion (US$55 million) because of higher energy costs.

Colombian cement shipments totaled 2.4 million tons in 1H 2019, down 2.5%, but concrete shipments held steady, at 1.4 million cubic meters.

As for its Caribbean and Central American markets, Argos stated that “operations in the Dominican Republic and Haiti continue with a positive performance, compensating to some extent the challenging political environment that was evident during the period in Honduras and Panama.”

In Caribbean/Central American region, 1H 2019 revenues dipped 4.5% year-on-year, to US$286 million, while EBITDA fell 19.8% year-on-year, to US$79 million. Cement shipments dipped 1.5% year-on-year, to 2.5 million tons, while concrete shipments declined 3%, to 194,000 cubic meters, according to the company.

Despite the regional declines, “Argos maintains its favorable outlook in a region that advances important infrastructure and housing plans, which add to the progress in the reconstruction of Puerto Rico,” according to the company.

Written by August 13 2019 0

Medellin-based construction giant Constructora Conconcreto announced August 9 that its second quarter (2Q) 2019 earnings jumped 70% year-on-year, to COP$57 billion (US$16.8 million).

Earnings before interest, taxes, depreciation and amortization came-in at COP$105 billion (US$31 million), essentially flat year-on-year, while EBITDA margin was 25%.

Consolidated revenues hit COP$417 billion (US$123 million), down 9.5% year-on-year.

“The business segment that contributed most to the ordinary income was construction, at COP$312 billion (US$92 million)," according to Conconcreto.

The company also cut its consolidated financial liabilities by COP$120 billion (US$35 million) compared to year-end 2018 debt levels.

Among other 2Q 2019 highlights:

• “The CCC Ituango consortium met the objective of bringing the Hidroituango dam [in Antioquia] to 435 meters above sea level, its maximum height. This is one of the most important milestones for the safety of the communities downstream of the project. The top of the dam will be the road to the municipality of Ituango,” according to the company.

• “On June 12, we proudly received recognition for the ‘Contree’ project [in Medellin] as the best vertical housing project during the celebration of the LADI [Latinoamericanos de Desarrollo Inmobiliario] awards, a Latin American event that seeks to highlight innovation, development, architecture and marketing applied to the real estate industry.”

• Construction of the “Logika Siberia” warehouse portal gateway in Cundinamarca, employing Conconcreto’s novel large-format concrete “3D Printer” to build the portal building.

Written by August 09 2019 0

Medellin-based electric power giant Celsia reported August 8 that its second quarter (2Q) net income fell 56% year-on-year, to COP$43 billion (US$12.6 million), mainly because of financing costs for its purchase of Tolima departmental power company EPSA.

Another COP$19 billion (US$5.6 million) of the difference between 2Q 2019 versus 2Q 2018 profits was the one-time 2Q 2018 cancellation of foreign credits, according to the company.

The EPSA purchase involved issuance of ordinary bonds totaling COP$1.1 trillion (US$324 million) as well as contracted loans with national and international banks for COP$800 billion (US$235 million), according to Celsia.

“Additionally, on July 11, the first issue and private placement of EPSA shares since its establishment was completed, in which resources were obtained in excess of COP$450 billion (US$132 million), which will be used for early payment of short-term loans,” according to Celsia.

“The results of this [latest] quarter reflect, to a large extent, the profound strategic changes we have made in the last 18 months and, additionally, are greatly influenced by the recent acquisition of the distribution and commercialization operation in Tolima,” said Ricardo Sierra Fernández, Celsia director.

Consolidated 2Q 2019 revenues rose 11% year-on-year, to COP$913 billion (US$269 million), while earnings before interest, taxes, depreciation and amortization (EBITDA) rose 7%, to COP$287 billion (US$84.6 million), according to the company.

“Colombia represents 83% of the consolidated revenues and Central America 17%,” according to Celsia.

“Revenue from retail [power] sales was COP$338 billion (US$99 million), up 35%, also favored by higher revenues from Tolima’s assets (COP$78 billion/US$23 million),” according to the company.

“The operation of the assets acquired in Tolima contributed favorably,” the company added. “With the integration of Tolima, the company reaches nearly 1,135,000 customers, meeting our goal of exceeding 1 million customers by 2025 -- well in advance” of its earlier forecast.

“The priority in the [Tolima] department is to improve indexes in quality and reliability in the provision of power service, for which COP$600 billion [US$177 million] will be invested in the first five years of operation,” the company added.

During the latest quarter, Celsia also hit a total capacity of 100 megawatts of solar energy in Colombia and Central America. The company also exceeded its goal of 3 million trees planted in the “ReverdeC” program, designed to offset “global warming” emissions from fossil-fueled power production.

Written by August 09 2019 0

Medellin-based specialty textiles and fibers giant Enka announced August 8 that its second-quarter (2Q) 2019 profits came-in at COP$4.9 billion (US$1.4 million), a big improvement over the 2Q 2018 net loss of COP$999 million (US$294,000).

Earnings before interest, taxes, depreciation and amortization (EBITDA) likewise improved by 35% year-on-year, to COP$14 billion (US$4.1 million), “driven by increasing the collection of PET [polyethylene terephthalate] bottles [as an environmentally friendly feedstock for specialty fibers] and the increase in the Colombian peso to U.S. dollar exchange rate,” according to Enka.

So far in 2019, Enka’s exports to the U.S. market are up 46%, and up 300% over the last two years, with the U.S. now representing 12% of total company revenues.

Meanwhile, first-half (1H) 2019 corporate-wide sales are up 1.8% year-on-year, hitting COP$200 billion (US$59 million), while total exports to all countries hit US$29 million, now representing 46% of the company's revenues.

In the local Colombian market, revenues grew 5% year-on-year, “driven by a higher exchange rate, which offset the lower volume compared to 2Q 2018 (-2%),” according to Enka.

Total export revenues to all markets dipped slightly (by 1%), “mainly due to spot [one-time sales] business carried out in 2018 and lower dynamics of the Brazilian economy, which has been compensated with the higher exchange rate and greater growth in the North American market,” according to Enka.

The three main specialty lines of synthetic fibers, filaments and resins products collectively showed steady revenues year-on-year, at COP$62 billion (US$18 million), representing 31% of the company’s revenues in the period.

About 85% of these synthetic products go to the Colombian local market, with the remaining 15% exported mainly to Brazil.

“EKOPet” product (8,335 tonnes output) “remains stable and [production] continues to operate at maximum capacity, allocating 100% of the production to serve the local market,” according to Enka.

“EKOFibras” fibers (4,948 tonnes) volume fell 18% year-on-year “ mainly due to the decree of minimum import thresholds that favored 1Q 2018 and due to an increase in inventories in preparation for the start of the modernization project of this production line, which is expected to start operations in third-quarter 2019,” according to Enka.

“EKOPoliolefinas” polyolefins (250 tonnes) sales rose 70% in 2Q 2019 versus 1Q thanks to growing acceptance of this product in various markets.

“Some of the uses of our recycled resin are for baskets, packaging material and household products, among others. We have identified a great commitment of some brands to incorporate recycled material into their products as part of their sustainability strategies, which confirms the positive perspectives of this project,” according to Enka.

"Our goal is to develop the market for recycled polyolefins, in the same way as was done in PET. To achieve this, we have established alliances with world leaders in the industry, seeking to develop new products aimed at high value-added applications," the company added.

Textile and Industrial Businesses

Textile sales grew 2% year-on-year, reaching COP$137 billion (US$40 million), of which 39% came from the national market, while 61% corresponds to exports.

Industrial threads (5,981 tonnes) sales dipped 11%, “mainly due to a lower demand for canvas for tires in the Brazilian market. However, higher sales to the North American market, in products with greater added value, have allowed this effect to be mitigated,” according to Enka.

Textile filaments (5,219 tonnes) volume declined 5% “mainly due to the decree of minimum import thresholds that favored the sales of polyester filaments in 1Q 2018 and lower sales to Argentina.”

Business Outlook: More Recycling

“In order to continue strengthening the circular [plastics recycling] economy in Colombia, last May [2019], in coordination with Bavaria, The Coca-Cola Company, Coca-Cola FEMSA, PepsiCo, and Postobón, the ‘Movimiento RE’ [recycling] program was launched in Barranquilla, Cartagena and Santa Marta, which seeks to promote and strengthen the recycling of PET in Colombia, with the aim of increasing the PET collection rate in this region by 30%,” according to Enka.

“Our [recycled] fibers plant modernization project is already in its final stage and is expected to be operational in 2019-Q3. We are convinced that with this project the value proposition of our ‘green’ businesses will be further strengthened, offering the market a broader portfolio with products of higher specifications.

“Once in operation, the homologation processes of the current products will begin and then the new developments will begin. In addition, with this project the foundations are laid for future growth of this business, because with additional investments in some processes, the current production capacity could be doubled,” the company added.

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