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Written by November 13 2019 0

Medellin-based cement, electric power and highway/airport concessionaire Grupo Argos on November 13 reported a 26% year-on-year rise in third quarter (3Q) 2019 consolidated net income, to COP$516 billion (US$150 million).

Earnings before interest, taxes, depreciation and amortization (EBITDA) likewise rose 39% year-on-year, to COP$1.4 trillion (US$408 million), according to the company.

Gross revenues likewise jumped 44% year-on-year, to COP$5.2 trillion (US$1.5 billion), according to the company.

Consolidated results “show double-digit growth in all [business] lines,” according to Argos, which boasted that its Odinsa concessionaire subsidiary bought 53% of the new “Tunel de Oriente” road tunnel between Medellin and the international airport at Rionegro.

“In the energy business, thermal power assets in Zona Franca Celsia were disinvested, progress was made in the consolidation of the [electric power] distribution operation in Tolima and the largest investment platform in solar projects in Colombia was established with the alliance with Cubico Sustainable Investments,” Argos noted.

Its “Cementos Argos” cement/concrete subsidiary boosted deliveries by 36% year-on-year for the “fourth generation” (4G) highway projects in Colombia. That division also boosted sales volumes 10% in the USA, helping Cementos Argos realize a 13% income rise year-on-year, to COP$2.5 trillion (US$729 million), according to the company.

Corporate-wide consolidated cement volumes increased by 0.9% year-on-year, although concrete volumes dipped 1.1%.

“Cement volumes reflect a positive dynamic in the United States, as well as a reduction in Colombia and in the regional Caribbean and Central America, which continues to be impacted by the Panama market and the complex political situation in Honduras,” the company added.

As for its real-estate division, “cash flow for the [latest] quarter amounted to COP$32 billion [US$9.3 million], growing more than 2.8 times, reflecting the business concluded in previous periods,” according to Argos.

Real estate sales in 3Q 2019 totaled COP$24 billion (US$7 million), up sharply from COP$4 billion (US$1.1 million) in 3Q 2018.

Gross revenue rose 59% year-on-year, to COP$54 billion (US$15.7 million), which included “valuations, dividends and leases,” according to Argos. In addition, “we signed promises of sale for around COP$50 billion [US$14.6 million] that we hope to write at the end of this year or early 2020,” according to Argos.

In the real estate rental business, the “Pactia” real estate fund has been delivering effective yields of 6.84% since its incorporation date on January 20, 2017, the company added.

Written by November 10 2019 0

Medellin-based textiles and plastic-bottles recycling specialist Enka Colombia reported November 8 that its third quarter (3Q) 2019 net income hit COP$6.9 billion (US$2 million), up sharply from COP$1.8 billion (US$539,000) in 3Q 2018.

Earnings before interest, taxes, depreciation and amortization (EBITDA) likewise rose, to COP$26 billion (US$7.8 million), versus COP$19.8 billion (US$5.9 million ) in 3Q 2018, “favored by the devaluation of the [Colombian] peso” versus the U.S. dollar, according to Enka.

“Sales to the U.S. market [measured in Colombian pesos] increased participation to 13% of total sales, replacing less-profitable sales to other destinations,” according to Enka.

Meanwhile, collection and recycling of PET (polyethylene terephthalate) plastic bottles “reached historical highs, covering all the demands of our current recycling plants, which makes a new ‘EKO-PET’ plant viable, with a [required] investment of US$28 million,” according to the company.

The new plant -- which will be located in the current Enka facilities just north of Medellin -- enables “significant synergies in land, buildings, machinery already approved for the project and industrial services, which allow the investment to be significantly reduced,” according to the company.

“The new plant will have a capacity of 24,000 tons per year and is expected to enter into operation in 2022. With this investment Enka becomes one of the largest PET ‘bottle-to-bottle’ plants worldwide, reaching a total capacity of 42,000 tons of ‘EKO-PET’ per year.

“In addition, this new investment will allow Enka to double its collection levels, going to 63,500 tonnes per year of post-consumer bottles, which will significantly improve recycling rates in Colombia, offering great benefits for the environment and the recycling sector,” the company added.

In the latest quarter, total corporate sales rose 1% year-on-year, to COP$306 billion (US$91.6 million), “mainly due to the higher [COP to U.S. dollar] exchange rate for the period, which offset the lower sales volume. Exports totaled US$43 million, representing a 46% share of total sales, similar to the previous year,” according to Enka.

Meanwhile, net liabilities declined by COP$8 billion (US$2.4 million), to COP$202 billion (US$60 million), “mainly due to the decrease in the financing of letters of credit, which compensates the increase in debt for investment projects,” according to Enka.

“National revenues grew by 3%, driven by the increase in the TRM [tasa representativa del mercado, the number of pesos to the U.S. dollar as calculated by Colombia’s Banco de la Republica], which offset the 2% lower sales volume, compared to the situation of higher sales in 2018 during the implementation of the minimum import thresholds” on foreign textile imports.

Export revenues decreased by 2%, “mainly due to lower external sales of ‘EKO-Fibers,’” according to Enka.

However, “EKO-Fibers” sales to the North American market netted a 42% income boost and accounted for 13% of total “EKO-Fibers” sales, “compensating the lower demand in Brazil and replacing less profitable sales to other destinations,” according to Enka.

As for “EKO-PET” sales, which totaled 12,600 tonnes, this volume remained stable and enables Enka to produce this product at maximum capacity.

As for “EKO- Polyolefins” sales, volume rose 180%, to 542 tonnes, the company added.

In the conventional textile businesses, cumulative sales totaled COP$212 billion (US$63 million), accounting for 70% share of total revenues. Exports accounted for US$39.7 million of total textile sales.

As for industrial threads, sales dipped 7% year-on-year, to 9,352 tonnes, “mainly due to lower demand for tire tires in Brazil and Mexico. The increase in sales of special technical threads to the North American market has improved the profitability of this line, replacing more demanding destinations.,” according to Enka

As for textile filaments, sales declined 5%, to 8,031 tonnes, “mainly due to the situation of higher sales in 2018 due to the implementation of minimum import thresholds and lower sales to Argentina,” according to the company.

Written by November 09 2019 0

Medellin-based construction giants Construcciones El Condor and Constructora Conconcreto this month reported variable financial results for third quarter (3Q) 2019.

For Conconcreto, 3Q 2019 net income rose 45% year-on-year, to COP$72.8 billion (US$21.8 million).

Conconcreto attributed the boost in profits to “good results in construction projects and also execution of its plan for disinvestments.”

Total consolidated assets for Conconcreto hit COP$1.55 trillion (US$464 million) in the latest quarter, the highest in the history of the company.

El Condor Dips

Meanwhile, Construcciones El Condor saw its 3Q 2019 net income drop sharply to COP$8 billion (US$2.4 million ) versus COP$53 billion (US$16 million) in 3Q 2018.

Revenue from ordinary activities during 3Q 2019 was COP$224 billion (US$67 million), down 17% compared to 3Q 2018.
Earnings before interest, taxes, depreciation and amortization (EBITDA) were COP$47 billion (US$14 million), with EBITDA margin at 21%, “within the company's historical average.”

Operating profit fell 55% year-on-year, to COP$28.7 billion (US$8.6 million), explained by a non-recurring COP$31 billion (US$9 million) gain in 3Q 2018 from liquidation of an engineering contract for the Cesar-Guajira road concession, according to the company.

As for nine-months (January through September) 2019, El Condor saw revenues dip 5.7% year-on-year, to COP$637 billion (US$191 million). Nearly all of these revenues came from payments for construction services on the “Ruta al Mar” and “Pacifico 2” highway projects in Antioquia as well as the “Pacifico 3” project (partly in Antioquia).

Cumulative operating income for the nine months of January through September was COP$74 billion (US$22 million), resulting in an after-tax net loss of COP$5 billion (US$1.5 million).

However, this situation is seen improving as 2019 progresses, as payments for past construction services are starting to increase, according to El Condor.

“Total financial indebtedness composed of banks plus financial leasing, calculated on total assets, closed at 36%,” according to the company.

“The company continues making efforts aimed at reducing financial liabilities, managing the release of [financial] resources trapped in different projects. Specifically, in this quarter, COP$5.8 billion (US$1.7 million) of [payments for] the Ruta al Mar project was received and we are assured of approximately COP$44 billion [US$13 million] release [of payments to the company] for the next quarter.”

Written by November 08 2019 0

Medellin-based electric power giant Celsia announced November 7 that its third quarter (3Q) 2019 net income soared by 390% year-on-year, to COP$315.6 billion (US$94 million), thanks to an extraordinary US$420 million gain from the sale of its 447-megawatts "Free Zone" (Zona Franca) power plant in Cartagena, Colombia.

Earnings before interest, taxes, depreciation and amortization (EBITDA) also rose 24% year-on-year, to COP$320.5 billion (US$96 million), while 3Q revenues rose 16%, to COP$984 billion (US$294.5 million), according to the company, a division of Medellin conglomerate Grupo Argos.

Excluding net income from the sale of Zona Franca, the consolidated net profit for the latest quarter rose 3% year-on-year, to COP$66 billion (US$19.7 million), according to the company.

Besides its financial gains during 3Q 2019, Celsia also boosted its renewable energy projects and launched its power operations in Tolima, Colombia.

In the latest quarter, “there were transformational events such as the sale of the Zona Franca [free zone] Celsia thermal power plant for US$420 million; the award of 766 gigawatt hours/year in the renewable [power] auction of the national government; and the alliance with Cubico, one of the world leaders in renewable energy,” according to Celsia.

“The application of [financial] resources from the sale of the Free Zone allowed the consolidated debt/net-debt leverage indicator to be lowered to 3.0 times,” the company added.

The latest results “reflect a solid performance of our businesses, with defined growth projects, inspired by a long-term strategy to transform the customer experience and create value for our shareholders,” added Celsia general manager Ricardo Sierra.

For the first nine months of 2019, revenues hit COP$2.76 trillion (US$826 million), up 10% year-on-year. “Colombia revenues represent 83% of the consolidated revenues and Central America 17%,” according to Celsia, which excluded the Free Zone plant from the year-on-year comparisons.

“In Central America, revenues for the quarter were more than US$48 million, a decrease of 7.5% compared to the previous year, especially since 2019 has been a predominantly dry year in Panama, which has reduced [hydroelectric] plant generation,” according to the company.

So far this year, corporate nine-months net profit is up 70% year-on-year, to COP$412 billion (US$123 million), according to the company.

Excluding the financial gain from the sale of the Free Zone plant, the net gain in 2019 to date is COP$163 billion (US$48.8 million), according to the company.

As for its power distribution business, “revenues from the use and connection of networks exceeded COP$105 billion [US$31 million], growing by 52%, mainly from Tolima [acquisition] which contributed COP$15.7 billion [US$4.7 million] and the incorporation of ‘Plan5Caribe’ assets that added COP$19.88 billion [US$5.8 million],” according to Celsia.

Written by November 08 2019 0

Medellin-based avocado producer/exporter Cartama announced November 7 its first-ever exports of Hass avocados from its Pereira (Risaralda department) operations to Japan.

Cartama – founded in the year 2000 with its first plantations in Amagá, Antioquia – gradually has expanded Colombian operations to Caldas and Risaralda departments, including a packing plant in Pereira.

Three years ago, the company scored a big hit with UK-based supermarket chain Marks & Spencer, which awarded Cartama its “Growers Best Quality” award -- following which Cartama expanded Colombian production to 515 hectares to serve its growing export markets to Europe and North America.

Together with partner Mission Produce, Cartama is now penetrating Asian markets via first container shipments from Risaralda to the Pacific port of Buenaventura, then onward to Yokohama, Japan, according to the company.

The Japanese market for Hass avocados is constantly growing, hitting 74,097 tonnes in 2018, up 22% year-on-year, according to the company. For the Japan market, Colombia will compete with producers from México, Perú and others, according to the company.

Japan consumers currently demand 0.5 kilograms of Hass avocados per-person/year -- and with a population of 127 million, ample opportunities for Colombian export expansion are on the horizon, according to Cartama.

Chiyoda, Japan-based Farmind Corp. is the initial buyer of the Colombian exports, according to Cartama.

This first-ever Hass avocado container shipment from Colombia to Japan is the result of major private-sector and governmental initiatives, according to Cartama director Ricardo Uribe.

Colombia’s “Instituto Colombiano de Agricultura” (ICA) has been working with Hass producers seeking to expand exports, following recent successful initiatives in the USA and now Japan. China is next in line to receive Colombian avocado exports following rigorous efforts to meet sanitary requirements.

“We are making use of all post-harvest alternatives to guarantee optimal delivery of this fruit including application of substances to prevent disease, the use of ethylene filters within the shipping container [for ripening], temperature controls and [favorable] harvesting” techniques, Uribe added.

Besides ICA, other government agencies that have aided the breakthrough into the Japanese market include Colombian President Ivan Duque, trade-association Corpohass (Corporación de Productores y Exportadores de Aguacate Hass de Colombia), the Colombian Ministries of Agriculture, Commerce and Foreign Relations, and export-promotion agency Procolombia, Uribe added.

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