Companies 514
Medellin-based multinational gold miner Mineros SA announced February 20 that its full-year 2022 net income fell 88% year-on-year, to COP$19 billion (US$3.8 million), from COP$$162 billion (US$32.6 million) in 2021.
“The net result was significantly impacted by COP$196 billion [US$39.5 million] of asset impairment expenses, mainly on the Gualcamayo mine property in Argentina due to higher exploration expenses and an increase in current and deferred taxes,” according to Mineros.
Corporate-wide revenues rose 21% year-on-year, to COP$39 billion (US$7.8 million), boosted by an increase in gold production along with a 7% devaluation of the Colombian peso versus the U.S. dollar, “partially offset due to lower coverage income,” the company added
Cash cost per ounce of gold sold dipped 5%, while all-in-sustaining-costs (AISC) per ounce of gold sold likewise declined 9% year-on year, according to the company.
Those declines are “explained by the greater number of ounces of gold sold, thanks to operating efficiencies at the Nechí [Antioquia] alluvial property in Colombia. and the Hemco property in Nicaragua and the reduction in sustaining capital expenditures, which were partially offset by the increase in cost of sales excluding depreciation and amortization,” according to the company.
For full-year 2022, Mineros boosted gold production 10% year-on-year, to 287,152 ounces. The Nechi alluvial operation by itself saw gold recoveries rise 26% year-on-year.
“The increase in production in 2022 over the prior year is a result of increased operating efficiencies, the approval of environmental permits that were delayed in 2021, and additional gold production from our artisanal mining formalization program,” according to Mineros.
In Nicaragua, total 2022 production rose 4%, to 132,520 ounces, while in Argentina, gold production at the Gualcamayo mine rose 1% year-on-year, to 62,247 ounces, according to the company.
Medellin-based multinational cement/concrete giant Cementos Argos – a division of Grupo Argos – announced February 21 that its full-year 2022 profits fell 59% year-on-year, to COP$215 billion (US$33 million), from COP$524 billion (US$115 million) in 2021.
Gross revenues rose 19%, to COP$11.7 trillion (US$2.37 billion), up 23% year-on-year, compared to COP$9.8 trillion (US$1.98 billion) in 2021.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 6.6% year-on-year, to COP$2.08 trillion (US$421 million), but adjusted EBITDA in U.S. dollars fell 6.2% year-on-year, to US$520 million in 2021.
Net profit from continuing operations dipped 14.4% year-on-year, to COP$403 billion (US$81.6 million), “mainly affected by the notable increase in financial expenses due to the increase in Interest rates,” according to Cementos Argos.
“On a consolidated basis, Argos shipped 16.2 million tons of cement, a slight decrease of 3.7% compared to 2021, mainly caused by effects on the industrial business in Central America and the Caribbean,” according to the company. On the other hand, concrete volumes rose 6.3%, to 7.5 million cubic meters, “highly leveraged by the good performance of the market in Colombia,” according to the company.
U.S. Operating Highlights
During 2022, U.S. cement shipments rose 4.4% year-on-year, to 6.1 million tons, while concrete shipments grew 1%, to 4.5 million cubic meters. Prices increased 16% in cement and 18% in concrete.
U.S. revenues rose 16.4%, to US$1.5 billion, but EBITDA dipped 4%, to US$256 million, “mainly due to significant increases in the variable costs of the operation as a result of the high inflation in energy prices,” according to Argos.
Colombia Highlights
In Colombia, cement volumes dipped 0.8% year-on-year, to 6 million tons, “as a result of the price recovery strategy in a context in which cement prices in Colombia continue significantly below the parity prices of imports,” according to Argos.
“Export volumes set a record at 1.2 million tons, with growth of 28.2%. Concrete volumes reached 2.7 million cubic meters, presenting a growth of 13.6%, driven by the construction of formal housing and the good dynamics of infrastructure projects. Local cement prices grew 19% and concrete prices increased 13%.”
As a result, Colombia operating income rose 11.8% year-on-year, to COP$2.7 trillion (US$546 million), while EBITDA rose 5.7%, to COP$605 billion (US$122 million), according to the company.
Central America, Caribbean and Trading
In Central America and Caribbean operations, cement shipments fell 18% year-on-year, to 4 million tons, but concrete shipments rose 42.5%, to 273,000 cubic meters.
“Prices increased an average of 14% in concrete and 29% in cement, due to the global dynamics of trade that led to the highest values of import parity in markets with high exposure to international supply,” according to Argos.
Central America and Caribbean region revenues rose 3.1% year-on-year, to US$541 million, while EBITDA dipped 8.1% year-on-year, to US$123 million.
“With higher price levels and more stable inflation, Cementos Argos expects to be able to capture the opportunities that arise in the Central America, Caribbean and trading regions in 2023,” the company added.
Colombia-based multinational cement/concrete producer Cemex LatAm Holdings (CLH) on February 13 posted a full-year 2022 net loss of US$185 million -- far worse than the US$28 million full-year net loss posted in 2021.
Despite the worsening losses, sales actually increased 4% year-on-year. On the other hand, operating earnings before interest, taxes, depreciation and amortization (EBITDA) declined 21% year-on-year, to US$131 million, according to the company.
Free cash flow also fell into the red, at a negative US$83 million for full-year 2022. “The decline on a year-over-year basis was mainly due to lower EBITDA, higher capex, working capital investment and taxes, as well as a negative effect from discontinued operations,” according to the company .
On the other hand, CLH “received an approximate total consideration of US$325 million related to the divestment of its aggregate majority ownership of Costa Rica and El Salvador operations during the third quarter of 2022. The proceeds of the divestments are not shown in the free cash flow lines.”
Corporate net debt declined by 41% year-on-year -- by a total of US$238 million -- mainly due to the divestment of Costa Rica and El Salvador operations, the company added.
As for fourth quarter (4Q) 2022 results, net loss worsened year-on-year, to US$115 million, compared with a loss of US$17 million in 4Q 2021.
Consolidated net sales during 4Q 2022 rose 10% year-on-year. “Higher prices and increased ready-mix volumes were the main drivers of the improvement,” according to CLH.
Cost of sales as a percentage of net sales increased by 5 percentage-points, from 63.6% in 4Q 2021 to 68.7% in 4Q 2022. “The increase was primarily due to higher variable costs, mainly in kiln fuel,” according to the company.
As for Colombia operations, "our domestic gray cement prices in local-currency terms improved by 11%, and our volumes increased by 2%, during the fourth quarter on a year-over-year basis,” the company explained.
“In the ready-mix business, our prices and volumes improved by 7% and 5%, respectively, during the fourth quarter on a year over year basis. Our volume growth during the quarter and the full year was supported by increased market demand in the formal sector, and the recent investments to increase our ready-mix footprint.”
As for Panama operations, “our volumes for domestic gray cement and ready-mix increased by 5% and 74%, respectively, during the fourth quarter on a year-over-year basis. Despite the improvement, domestic industry volumes in 2022 were still below those of 2019,” the company added.
As for its remaining operations in Guatemala and Nicaragua, “our domestic gray cement volumes declined by 7% during the fourth quarter on a year-over-year basis,” according to the company.
“In Guatemala, our cement volumes declined by 4% during the fourth quarter on a year-over-year basis. Our cement volumes declined due to a slowdown in the construction sector and challenging competitive dynamics.
“In Nicaragua, our cement volumes declined by 12% during the fourth quarter on a year-over-year basis. The decline was largely attributable to reduced activity in the construction sector and heavy rains,” the company added.
Corporate-wide, CLH foresees cement volume sales in 2023 essentially unchanged from 2022, although ready-mix volumes are likely to rise in the “high single digits” in Colombia, by more than 25% in Panama and by “mid-teens” hikes in its remaining Central America markets.
On a related front, sister company Cemex Spain recently proposed to acquire the outstanding shares of CLH, with closing expected later this year.
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).
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.
