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Companies 234

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.

Written by October 25 2019 0

Colombia-based Cemex LatAm Holdings announced October 24 that its third-quarter (3Q) 2019 sales of grey cement grew year-on-year, but profits declined.

According to Cemex LatAm – which produces and markets concrete and cement in Colombia, Panama, Costa Rica, Nicaragua, El Salvador, and Guatemala – 3Q 2019 produced a corporate-wide net loss of US$4 million, compared to net profit of US$19 million in 3Q 2018.

Operating earnings before interest, taxes, depreciation and amortization (EBITDA) in Colombia fell to US$20 million, down 25% year-on-year in U.S.-dollar terms or 12% lower in Colombian peso terms.

Net sales in Colombia year-over-year declined by 6% in U.S.-dollar terms but increased by 8% in Colombia peso terms, hitting US$127 million.

In Panama, operating EBITDA declined by 18% year-on-year, to US$14 million, while net sales fell 22% year-on-year, to US$45 million.

In Costa Rica, operating EBITDA fell 58% to US$5 million, both in U.S. dollar and local-currency terms. Net sales fell 25%, to US$25 million.

In the rest of its territories, operating EBITDA fell by 15% in U.S.-dollar terms or by 13% in local-currency terms, to US$14 million during the quarter. Quarterly net sales dipped 9% year-on-year, to US$51 million.

“In Nicaragua, the socio-political crisis continues without resolution and continues to affect the local economy including demand for cement,” according to the company. “Most of the highway projects sponsored by the government are in final stages of construccion -- and no new projects are replacing the prior projects."

For Cemex LatAm, corporate-wide consolidated prices in local-currency terms for domestic gray cement and ready-mix concrete declined by 1% and 2% year-on-year, while prices for aggregates increased by 1%, according to the company.

Commenting on the results, Cemex LatAm CEO Jesus Gonzalez said: “We are encouraged by the positive trends in Colombian cement demand and by our cement volume and price performance in this country during the first nine months of the year. Nevertheless, this positive trend in sales was not strong enough to offset the increases in coal, electricity and distribution costs in Colombia, and the much weaker markets across Central America.

“Despite this challenging environment, we are pleased with our free cash flow generation and debt reduction during the first nine months of this year. Our free cash flow reached US$50 million in this period, an improvement of 43% on a year-over-year basis. We reduced our net debt by US$62 million, from US$827 million as of December to US$765 million as of September [2019]”.

Written by September 17 2019 0

EPM general manager Jorge Londoño de la Cuesta revealed in a September 17 press conference here in Medellin that insurer Mapfre just issued a letter of coverage worth trillions of Colombian pesos for damages at the under-construction, US$5 billion Hidroituango hydroelectric plant in Antioquia.

The exact amount of payment won’t be known for months, as a technical panel must now prepare a detailed, itemized report on the exact value of each area of the dam works and machinery damaged by a diversion tunnel collapse last year, Londoño explained.

While EPM has insurance coverages totaling about COP$8 trillion (about US$2.5 billion) for physical damages as well as US$628 million for lost power sales, EPM likely won’t be getting the maximum amount, as the damages (as roughly estimated to-date) probably will come-in at below that total, he estimated.

EPM expects that the first sales of power from Hidroituango will be in December 2021, rather than the initially planned start-up in December 2018 -- a date that was forcibly postponed by the April 2018 tunnel collapse.

So, until the company has an exact startup date -- and an exact market quote for Colombian power prices matching that start-up date -- it can’t yet quantify the value of the insurance coverages for lost and delayed Hidroituango power sales. But the payment likely will be less than the US$628 million policy-coverage maximum for lost power sales, he estimated.

“The positive response of the insurer to the efforts made by EPM to obtain the coverage for the incident was based on the investigations and findings advanced by the insurer autonomously, which concluded that the cause of the contingency is framed in the terms and conditions of the policy and therefore we will have coverage,” Londoño said.

“In this sense, once the value of the incident has been quantified, and taking into account the conditions and limits established in the insurance policy, the [insurance payment] resources will be reimbursed to EPM and will enter into the financial statements of the project.

“It is important to highlight that the insurer appointed a series of national and international experts including engineers, geologists and geo-technicians specialized in dams and underground works, as well as lawyers, among others, to review the technical information of the main fronts of project work including tunnels, caverns, dam and landfill. Likewise, they reviewed the designs, plans, technical specifications, construction processes, work logbooks, risk matrix and pre- and post-contingency studies.

“The work of this group of experts also included 12 visits to the project, multiple meetings and in-depth interviews with the EPM technical team, the main contractors and the board of experts,” he added.

The letter from Mapfre confirming insurance coverage for Hidroituango is a huge step forward, because “if we’d done something wrong, then they wouldn’t agree to pay us” for damages, he explained.

“The causes of the [tunnel collapse] are covered by this policy. This was an unpredictable accident, not negligence,” Londoño added.

“Now we’re entering the second phase, where the experts will adjust the amount of payment and determine when they pay. This involves a detailed inventory of all the damages and the value of each,” up to a maximum US$2.5 billion in insurance coverage for physical damages.

Medellin Mayor Federico Gutierrez added at the press conference that the insurance coverage announcement not only is good news for EPM but also for the city of Medellin, which gets about 25% of its annual revenue from the city-owned utility.

Chile Asset Sales

On a related financial front, EPM announced September 17 that it inked a US$138 million sale of its Chile wind-power unit to AES Gener SA and its Norgener Renovables SpA subsidiary, following a plan announced last year to sell “non-strategic” assets -- aiming to boost liquidity as a result of the Hidroituango project delay.

Combined with EPM’s continuing sale of its 10% stake in shares of Colombian power transmission giant ISA, its sale of Chile assets, its successful US$1.3 billion bond sale this year, and now the upcoming multi-trillion-peso Hidroituango insurance payment, EPM’s financial outlook has improved dramatically when compared to market worries in the aftermath of the Hidroituango tunnel collapse last year, Londoño added.

 

Written by August 24 2019 0

Medellin-based multinational paper products and personal-hygiene specialist Grupo Familia revealed in an August 20 filing with Colombia’s Superfinanciera corporate oversight agency that its first half (1H) 2019 net income rose to COP$126 billion (US$37 million), up from COP$98 billion (US$28 million) in 1H 2018.

Gross revenues also rose, to COP$1.28 trillion (US$374 million), from COP$1.14 trillion (US$333 million) in 1H 2018. Operating earnings likewise rose to COP$190 billion (US$55 million) versus COP$153 billion (US$45 million) in 1H 2018.

As for second quarter (2Q) 2019, gross revenues rose to COP$667 billion (US$195 million) versus COP$578 billion (US$169 million) in 2Q 2018, while operating earnings rose to COP$88 billion (US$25.7 million) versus COP$73 billion (US$21 million) in 2Q 2018.

Net income climbed to COP$56 billion (US$16 million) in 2Q 2019 versus COP$44 billion (US$13 million) in 2Q 2018, the filing shows.

Commenting on the results, Familia general manager Andrés Gómez Salazar cited “solid growth” in 2019 sales based in part on the launch of new products including a novel four-ply “Expert” toilet paper, “AcochaMax” kitchen towels, “Premium Touch” baby diapers and “Buenas Noches” feminine-hygiene napkins.

Grupo Familia markets its products in 20 Latin American/Caribbean countries and has its principal factories in Medellin and Rionegro, Antioquia; two other plants in Colombia; two more plants in Ecuador and single factories in Argentina and the Domincan Republic.

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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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