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Written by October 27 2022 0

Medellin-based multinational foods giant Grupo Nutresa announced October 21 that its third quarter (3Q) 2022 net income rose 35% year-on-year, to COP$723 billion (US$150 million).

Sales likewise jumped 33% year-on-year, to COP$12.2 trillion (US$2.5 billion). Revenues in Colombia grew 31.5%, to COP$7.3 trillion (US$1.5 billion), accounting for 60.2% of Grupo Nutresa’s worldwide sales.

International sales likewise rose 35.5% year-on-year, to COP$4.8 trillion, (US$1.2 billion), while exports from Colombia totaled US$337 million, up 38.5%.

“Grupo Nutresa continues managing the impact of global inflation and the restrictions along the global supply chain through an adequate administration and hedging of commodities, as well as a disciplined cost and expense agenda,” according to the company.

“Consequently, the company reports COP$4.5 trillion [US$935 million] in gross profits, achieving a 19.6% growth rate over the period.”

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 25.8% year-on-year, with an EBITDA margin of 12.2%

Meanwhile, “financial expenses grew 63.8% mainly due to the increase in interest rates in the multiple geographies where Grupo Nutresa operates,” the company added.

Written by October 27 2022 0

Colombia-based Cemex LatAm Holdings (CLH) announced October 27 that its third quarter (3Q) 2022 net loss more than tripled year-on-year, to US$37 million, from a net loss of US$11 million in 3Q 2021.

Cemex blamed the poor results on impacts of declining operating income along with its divestment of operations in Costa Rica and El Salvador, finalized on August 31, 2022.

“As far as divestments are concerned, CLH continues to actively evaluate other additional divestment opportunities, which could even be much larger than those already completed in Costa Rica and El Salvador,” according to the company.

“Regarding investments, CLH continues to evaluate and implement strategic investment projects in its portfolio, such as the Maceo [Antioquia] project in Colombia, with which it seeks to strengthen or improve its network of assets in the region.”

Despite the setbacks in profits and operating income, consolidated net sales during 3Q 2022 actually increased by 10% year-on-year, “adjusting for currency fluctuations,” according to the company.

“Higher cement and ready-mix prices, as well as higher ready-mix volumes were the main drivers of the improvement.”

Cost of sales as a percentage of net sales increased by 7.8 percentage-points, from 59.8% in 3Q 2021 to 67.5% in 3Q 2022. “The increase was mainly due to higher variable costs, especially in furnace fuel,” according to CLH.

Earnings before interest, taxes, depreciation and amortization (EBITDA) fell 20% year-on-year, “mainly due to higher operating costs, despite higher sales,” according to CLH.

EBITDA margin in 3Q 2022 likewise dipped by 5.9 percentage points, compared to 3Q 2021.

Colombia Results

“In Colombia, our domestic gray cement prices improved by 12% in local currency terms, while our volumes decreased by 5%, during the third quarter compared to the same period of the previous year,” according to CLH.

“Our focus on pricing strategy resulted in our cement volumes underperforming the industry during the quarter, compared to the same period last year. On a sequential basis during the quarter, our cement prices improved by 2% in local currency terms and our volumes by 17%.

“Our ready-mix prices improved 5% in local currency terms and our volumes increased 10% during the quarter, compared to the same period last year.

“In the ready-mix business, our volume growth during the quarter and year to date was supported by increased market demand in the formal [construction] sector and our recent investments to expand our presence primarily in the Bogotá and Cali metropolitan areas,” the company added.

Panama Results

“In Panama, our domestic gray cement and ready-mix volumes increased by 10% and 66%, respectively, during the third quarter compared to the same period of the prior year. Volume growth was mainly driven by higher activity in the infrastructure sector, mainly in the third line of the Metro,” according to CLH.

Guatemala, Nicaragua Results

In the “Rest of CLH region” (now including Guatemala and Nicaragua, “our domestic gray cement volumes decreased by 1% during the third quarter compared to the same period last year. In Guatemala, our cement volumes increased 1% during the quarter compared to the same period last year. Our cement volumes remained relatively stable mainly due to heavy rains in July and August, as well as our pricing strategy.

“In Nicaragua, our cement volumes decreased 2% during the quarter compared to the same period last year. Volumes were affected by heavy rains and lower activity in the infrastructure and self-construction sectors,” the company added.

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.

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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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