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Companies 341

Written by November 08 2019 0

Medellin-based electric power transmission, highways concessions and telecom services giant ISA announced November 6 that its third quarter (3Q) net income dipped 1.7% year-on-year, to COP$406 billion (US$122 million).

Earnings before interest, taxes, depreciation and amortization (EBITDA) for 3Q 2019 also declined 10.7% year-on-year, to COP$1.24 trillion (US$371 million), according to the company.

On the other hand, nine-months 2019 net income is up 27%, to COP$1.2 trillion (US$360 million) versus nine-months 2018, while nine-months EBITDA is up 14% year-on-year, to COP$3.9 trillion (US$1.17 billion), according to the company.

“ISA Group formally entered the Colombian road business by signing a contract agreement for the purchase of 100% of the shares of Concesión Costera Cartagena Barranquilla, thereby reaching an important milestone of the ‘ISA 2030’ strategy and contributing to the company’s business diversification as well as the development of the country,” according to ISA.

“This fourth-generation (4G) concession spans 146 kilometers, connecting two important cities on the northern coast, and is part of the most important international trade and tourism corridor in northern Colombia,” the company added.

“With the completion of this transaction, ISA incorporates assets of approximately COP$2.2 trillion (US$660 million), financial debt of COP$1.4 trillion (US$420 million), and [projected] EBITDA of COP$231 billion (US$69 million) into its 2020 financial statements.”

Better financial results for nine-months 2019 “are mainly explained by the energy projects that have started operations, by the greater returns of [road] concessions, and by the good management of costs and expenses,” according to ISA.

“The company will keep moving towards the consolidation of its diversification strategy, seeking alternatives in new businesses that generate profit growth and working our way into the road business in Colombia, Peru, and Chile,” added ISA CEO Bernardo Vargas Gibsone.

First nine-months 2019 operating revenues closed at COP$5.9 trillion (US$1.77 billion), 15.4% higher than the first nine months of 2018.  As for 3Q 2019, revenues reached COP$2 trillion (US$600 million), up 1.4% year-on-year, according to the company.

As of September 2019, consolidated financial debt reached COP$18.6 trillion (US$5.58 billion), up 5.9%. The corporate net debt-to-EBITDA ratio stood at 2.72 times, while the EBITDA/financial indicator ratio closed at 6.17 times, according to the company.

Written by November 08 2019 0

Medellin-based multinational banking giant Bancolombia announced November 6 that its third quarter (3Q) 2019 net income rose 61.7% year-on-year, to COP $879 billion (US$263 million).

“Gross loans grew 11.7% when compared to 3Q 2018 and 3.4% during the [latest] quarter,” according to Bancolombia.

“The quarterly growth shows a moderate trend in the credit demand in Colombia. Peso-denominated loans grew 10.5% when compared to 3Q 2018,” according to the company.

Net interest income was COP$2.78 trillion (US$833 million), up 8.3% year-on-year. “This increase is mainly explained by the growth in the loan book [although] net interest income decreased by 3.7% during the quarter due to an adjustment in accrued interest associated to [certain] clients,” according to the company.

Loan provision charges in 3Q 2019 were COP$723 billion (US$217 million) while the coverage ratio for 90-day past due loans was 191%.

“Provision charges decreased by 28.3% when compared to 3Q 2018 and by 11.4% compared to 2Q 2019. New past due loans totaled COP$91 billion [US$27 million],” according to Bancolombia.

At September 30, 2019, Bancolombia’s assets totaled COP$236.8 trillion (US$70.9 billion), up 2.6% compared to 2Q 2019 and up 14.6% compared to 3Q 2018.

During the latest quarter, the Colombian peso (COP) depreciated 8.5% versus the U.S. dollar, while over the past 12 months, the COP fell 17% versus the dollar, the company noted.

“The increase in total assets during the quarter is largely explained by the growth in the loan book,” according to Bancolombia.

“In 3Q 2019, gross loans increased by 3.4% when compared to 2Q 2019. Peso-denominated loans grew 10.5% and the dollar-denominated loans (expressed in dollars) decreased by 2.5% when compared to 3Q 2018,” according to the company.

“As of September 30, 2019, the operations in Banco Agricola in El Salvador, Banistmo in Panama and BAM in Guatemala, represented 27% of total gross loans.

“Gross loans denominated in currencies other than COP -- originated by the operations in Central America, the offshore operation of Bancolombia Panama, Puerto Rico and the dollar-denominated loans in Colombia -- accounted for 34.8% and increased by 6.9% during 3Q 2019 [when expressed in COP], explained mainly by the depreciation of the COP against the dollar during the quarter,” according to Bancolombia.

During 3Q 2019, net fees and income from services totaled COP$781 billion (US$234 million), up 3.5% compared to 2Q 2019, and up 17.1% compared to 3Q 2018.

“The positive annual performance in fees is due to higher volumes of transactions and the good performance of credit and debit cards, trust services and bancassurance,” according to Bancolombia.

“Fees from credit and debit cards increased by 6.7% compared to 2Q 2019 and by 22.6% compared to 3Q 2018.

“Fees from asset management and trust services increased by 5.8% compared to 2Q 2019 and by 12% compared to 3Q 2018, due to an increase in the assets under management. Fees from our bancassurance business increased by 6.6% compared to 2Q 2019 and by 22.9% with respect to 3Q 2018,” according to the company.

Written by November 01 2019 0

Medellin-based textile giant Fabricato on October 31 reported a third quarter (3Q) 2019 net loss of COP$13 billion (US$3.8 million), worse than the COP$9 billion (US$2.67 million) net loss in 3Q 2018.

However, earnings before interest, taxes, depreciation and amortization (EBITDA) improved year-on-year, to COP$3 billion (US$891,000), versus COP$909 million (US$270,000) in 3Q 2018.

Sales also improved year-on-year, to COP$107 billion (US$32 million) in 3Q 2019 versus COP$96 billion (US$28 million) in 3Q 2018.

As for nine-months 2019 results, net loss to date stands at COP$39.8 billion (US$11.8 million), worse than the COP$28 billion (US$8.3 million) losses in nine-months 2018.

Despite the losses, Fabricato cited over-all business environment improvements in 3Q 2019 -- especially in retail clothing sales, up 4.9% year-on-year.

“There is an increase in demand for ready-made [clothing] products in Colombia, which in addition to the natural growth of the period is also explained by the volatility of the U.S. dollar [against the Colombian peso] and decrees 274 and 275 of the National Development Plan, which establish a tariff of 37.9 % for ready-made imported products [sold] at a price lower than US$20 per kilogram (as of November 2019), which makes importation less attractive,” according to the company.

“The increase in demand for Colombian ready-made products carries greater demand for textile products, which in turn demand more threads,” Fabricato added.

The 11.2% year-on-year increase in demand for Colombian textiles “is the result of good performance of the national market mainly in the fashion segment, but also the institutional segment has had a higher than expected level of demand,” according to the company.

“In exports, the main growth is Brazil, a developing market for our company since 2018 with an important potential in which we continue to focus resources for its consolidation.

“[G]rowth in sales in the higher value-added segments, as recognized brands of Colombia and abroad, the reduction of fixed costs, the efficiency in administrative and financial processes and the contribution to working capital by the advance of real estate business flows” have helped Fabricato boost sales and EBITDA, according to the company.

On the other hand, “there are still favorable conditions for importation (very low thresholds and tariffs), which is why many traditional textile marketers decided to import. Because [cheap imports] represent an attractive business -- given that the majority of its origin prices are extremely low (due to unfair practices at origin) -- other non-traditional marketers also dedicated themselves to importation,” Fabricato warned.

“As these products are oriented to the production of basic clothing, attributes such as quality and design remain in the background, but the truth is that they represent more than half of the market in some segments, such as denim, which is the fabric for pants jeans.”

Even so, “it is perceived at this time that the import of basic textile products does not show growth because these have already achieved a very high participation in the market.”

In addition, “currency volatility with an upward trend in the quarter -- although it greatly impacted production costs -- impacted imported products 100%, which allows us to believe in a partial recovery of the domestic products market in the coming months,” the company added.

Written by October 31 2019 0

Spain-based Cementos Molins and Colombia-based multinational construction-materials producer and retailer Corona announced October 30 the start-up of their US$380 million, 1.5-million-tons/year, 50-50 joint venture “Empresa Colombiana de Cementos” (Ecocementos) cement plant near Sonson, Antioquia, east of Medellin.

Commenting on the start-up, Cementos Molins spokesman Julio Rodríguez said that the new plant will help the company “focus on 2020 with renewed ambition.”

“The new plant incorporates the best-available technology, putting maximum priority on energy efficiency and environmental protection, with cement production under the ‘Alion’ brand name, a new product destined for the Colombian market,” according to the company.

The plant has enabled the creation of 120 direct jobs along with 180 indirect Jobs, according to the company.

The new plant also represents continued internationalization of Cementos Molins, which now operates 11 cement plants in Spain, Argentina, Colombia, Mexico, Uruguay, Bangladesh, Tunisia and Bolivia, according the company.

Simultaneous to the announcement of the plant start-up, Cementos Molins reported a 10% year-on-year rise in third quarter (3Q) 2019 net income, hitting €70 million (US$78 million).

Written by October 26 2019 0

Medellin-based multinational foods giant Grupo Nutresa on October 25 reported that third quarter (3Q) 2019 net profits grew 6.9% year-on-year, to COP$412 billion (US$121 million).

Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) likewise rose 18% year-on-year, to COP$992 billion (US$292 million), while margin on sales grew by 13.8%, according to the company.

Total sales for the third quarter grew 8.9%, to COP$7.2 trillion (US$2.1 billion), while sales in Colombia rose 6.4% year-on-year, to COP$4.5 trillion (US$1.3 billion), thanks to a 5.8% rise in sales volume and a modest 0.5% hike in prices.

International sales rose to COP$2.7 trillion (US$839 million), up 1.1% in dollar terms or up 13.5% in Colombian peso terms.

The 3Q 2019 results are now stated using the new IFRS16 international accounting terms, according to the company.

“Innovation of both products and experiences for our consumers continue to be an important driver of growth and differentiation for the company,” according to Nutresa, citing a 21.9% jump in this type of sales.

Consolidated gross profit came-in at COP$3.2 trillion (US$943 million), up 7.5% year-on-year, but gross margin fell by 0.6% “mainly due to an increase in the cost of imported commodities,” according to Nutresa.

“Separating the effect of the previously mentioned new IFRS16 accounting standard, Grupo Nutresa’s operating profit would have grown by 8.0% and EBITDA by 4.7%, with a margin of 12.2% on sales,” the company added.

“Net post-operative expenses, which amount to COP$141 billion [US$41.5 million], include the accounting of the expenses related to lease contracts, as well as the reduction in financial expenses due to lower interest rates.

Meanwhile, “for the first time in its history, Grupo Nutresa was ranked as the most sustainable food company in the DJSI World Index 2019,” the company boasted.

Nutresa won this recognition because of “excellent standards in corporate practices related to tax strategy, health and nutrition, materiality, human capital development, corporate citizenship and philanthropy, operational eco-efficiency, packaging, water-related risks, and environmental reporting,” 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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