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Companies 341

Written by August 14 2019 0

Medellin-based highway construction giant Construcciones El Condor on August 14 posted a special COP$13 billion (US$3.7 million) net loss for second quarter (2Q) 2019, but expects to recoup this accounting loss by year-end.

“This loss is entirely associated with the result of the ‘Vías de las Américas’ [highway] concession, which will affect the company temporarily during this accounting period,” according to El Condor.

“The ‘Vías de las Américas’ concession corresponds to the third generation [3G] of highway concessions and was awarded in August 2010. The initial schedule for this project estimated its completion for 2016, but its execution period was extended due to the occurrence of various events involving responsibility over property and environmental issues, as well as different controversies around the application of the specifications and scope of the contract.

“However, the foregoing [complications] are expected to be finalized and a definitive reversal [of financial penalties] will be completed by the month of December 2019, with 98.5% progress already in execution and an 80.5% [financial penalty] reversal of the intervened [highway] sections.

“Throughout the execution of this project, the obligations of the different interested parties (client, funders, communities, suppliers, employees) have been fully complied with, although in order to achieve this it has been necessary to assume, on the part of the shareholders, the economic impact derived from the displacement in time of the interventions, the delays in the reversion and the multiple controversies that today are being solved via different mechanisms foreseen in the contract, from which in the future it is expected we will receive positive results that allow mitigating the negative impact observed today on our financial statements,” the company added.

A new joint venture between Medellin-based electric-power transmission and highways concessionaire giant ISA and El Condor – inked last December – is moving ahead, according to the companies. The alliance aims to develop new road concessions in the Colombian and Peruvian markets.

Meanwhile, the future pace of highway construction in Colombia will depend upon “financial closures and execution of other fourth-generation [4G] projects,” according to El Condor.

Revenue from ordinary activities during 2Q 2019 rose 1.9% year-on-year, to COP$413 billion (US$119 million), according to the company.

“These revenues were mainly composed of the provision of construction services in different projects [mainly in Antioquia], with the greatest contribution being concentrated in ‘Ruta al Mar’ (COP$166 billion/US$48 million), ‘Pacifico 2’ (COP$80 billion/US$23 million) and ‘Pacifico 3’ (COP$76 billion/US$22 million),” according to the company.

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 38% year-on-year, to COP$64 billion (US$18.5 million). However, the year-on-year quarters “are not comparable due to non-recurring expenses that affected the second quarter of 2018,” according to El Condor.

Before taxes, the company recorded a 2Q 2019 profit of COP$3.2 billion (US$925,000), “which, compared to operating income, is significantly affected by the accounting effect of the fall in value of the investment in the ‘Transversal of the Americas,’ which is in the stage of completion and closure,” according to El Condor.

As of June 2019, El Condor had a backlog of contracts worth COP$1.49 trillion (US$430 million), the company added.

Written by August 14 2019 0

Medellin-based Grupo Argos – holding company for electric power producer Celsia, cement maker Cementos Argos and highway/airports concessionaire Odinsa – on August 12 reported a 5.7% year-on-year dip in second-quarter (2Q) 2019 net income, at COP$219 billion (US$63 million).

However, 2Q 2019 earnings before interest, taxes, depreciation and amortization (EBITDA) rose 18% year-on-year, to COP$1.05 trillion (US$304 million), according to the company.

“Despite non-recurring charges that impact the figures for the [second] quarter, net income of the parent company grew 16% in the first half [1H 2019],” according to Grupo Argos.

For 1H 2019, Grupo Argos consolidated EBITDA hit COP$2.1 trillion (US$609 million), up 12% over 1H 2018. “This result has allowed the holding company, in a period of five years, to double EBITDA,” according to the group.

“The AAA [bond] rating of Fitch Ratings that Grupo Argos received for the first time in its history stands out,” the company added. “This is the highest note delivered by this entity in Colombia and demonstrates the confidence of the capital market in the strategy of the organization to achieve an increasingly efficient and profitable portfolio.

“Several [other] milestones that will positively impact the long term materialized in this period -- among others, the incorporation of [Tolima department] transmission and distribution assets in our energy subsidiary Celsia, for about COP$2 trillion [US$580 million], and financial optimization operations in our business of [highway/airport] concessions, which included bond issues for about COP$2.5 trillion [US$725 million],” stated Grupo Argos president Jorge Mario Velásquez.

“In addition, it is important to highlight two recent relevant facts: in energy, we have announced the signing of an agreement for the divestment of thermal [power generation] assets in Zona Franca Celsia, for US$420 million, which will allow for a cleaner and more balanced generation matrix, and whose resources will give greater flexibility and profitability on the capital invested in this business,” Velásquez added.

In the concession business, revenues dipped 8% year-on-year, “which is mainly explained by the decrease in income by equity method from Quiport, as a result of the decrease in the net profit of the concession after [reconfiguring] the debt in this asset to optimize the capital structure at the level of the portfolio of Odinsa. We also saw a decrease in construction activity, given the optimization of working capital in the ‘Farallones de Pacífico 2’ highway consortium.”

As for the group’s real-estate business, the “Pactia” commercial real estate joint venture [of which Argos has a 32% shareholding] “has had effective annual yields of 7.25% since its incorporation date on January 20, 2017,” according to the company.

Written by August 14 2019 0

Medellin-based multinational electric power and public utilities giant EPM announced August 14 that its first half (1H) 2019 net income rose by 29% year-on-year, to COP$1.3 trillion (US$377 million).

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 16%, to COP$2.9 trillion (US$841 million), while gross revenues increased by 12%, to COP$8.8 trillion (US$2.5 billion), according to the company.

The city of Medellin – the sole shareholder of EPM – got COP$703 billion (US$204 million) in profit transfers for 1H 2019. EPM supplies nearly 25% of the city’s annual budget.

So far this year, EPM Group invested COP$1.3 trillion (US$377 million) in infrastructure to improve service quality, according to the company. The company put another COP$455 billion (US$132 million) this year into the 2.4-gigawatt “Hidroituango” hydropower project in Antioquia, due for initial start-up in late 2021.

Of the income obtained in the first six months of this year, international subsidiaries contributed 36%, national energy subsidiaries 15% and water subsidiaries 2%.

“Having a wide, diversified portfolio of investments in several latitudes allows us to earn more to add to the quality of life of millions of people in the regions where we have a presence,” added EPM general manager Jorge Londoño de la Cuesta.

The year-on-year boost in EBITDA “is mainly explained by the increase in income greater than the increase in costs and expenses,” according to the company.

“The good performance of revenues is due, in part, to higher energy sales, both from EPM matrix [which includes water, sewage, trash and natural gas services] and from national and foreign subsidiaries,” the company added.

Financial indebtedness of the EPM Group and EPM matrix stood at 42% and 40%, respectively, compared to 40% and 36% presented in 2018. “The increase [in debt level] is due to loan disbursements to finance the general investment plan and the Hidroituango hydroelectric project,” according to EPM.

Total assets grew by 6% year-on-year, to COP$55.4 trillion (US$16 billion), while liabilities rose 9%, to COP$33 trillion (US$9.6 billion), according to the company.

Written by August 13 2019 0

Medellin-based multinational cement/concrete giant Cementos Argos announced August 12 that its second-quarter (2Q) 2019 net income hit COP$73 billion (US$21 million), from COP$29 billion (US$8.5 million) in 2Q 2018.

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 44% year-on-year, to COP$475 billion (US$140 million), according to the company.

As for first half (1H) 2019 results, “revenues increased 10.6%, driven mainly by higher cement volumes in the United States and the start of price recovery in Colombia,” according to Argos.

“Cement shipments were close to 8 million tons, 1.2% higher than in the first half of 2018, and concrete shipments were 5 million cubic meters, with a decrease of 2.5% due to the impact of heavy rains in some regions of the United States.”

“In the first half of 2019 we continued to strengthen our operation and our presence in the United States with the execution of the ‘BEST 2.0’ efficiency plan, which, together with better price dynamics that we began to see in Colombia, allowed us to compensate for the pressure we experienced in energy costs," said Juan Esteban Calle, president of Cementos Argos.

“The significant progress of our divestment plan in non-strategic assets allows us to continue to focus on improving the competitiveness of the company and innovating in products, services and solutions to accompany the growth of our customers,” he added.

In the USA, 1H 2019 revenues rose 3.5% year-on-year, to US$781 million, while EBITDA remained stable at US$108 million.

Cement shipments in 1H 2019 in the USA increased 6.9%, exceeding 3 million tons, while concrete shipments decreased 3.8%, mainly due to heavy rains in the south-central region.

In Colombia, 1H 2019 revenues rose 3.3% year-on-year, to COP$1.1 trillion (US$324 million), but EBITDA dipped 4%, to COP$186 billion (US$55 million) because of higher energy costs.

Colombian cement shipments totaled 2.4 million tons in 1H 2019, down 2.5%, but concrete shipments held steady, at 1.4 million cubic meters.

As for its Caribbean and Central American markets, Argos stated that “operations in the Dominican Republic and Haiti continue with a positive performance, compensating to some extent the challenging political environment that was evident during the period in Honduras and Panama.”

In Caribbean/Central American region, 1H 2019 revenues dipped 4.5% year-on-year, to US$286 million, while EBITDA fell 19.8% year-on-year, to US$79 million. Cement shipments dipped 1.5% year-on-year, to 2.5 million tons, while concrete shipments declined 3%, to 194,000 cubic meters, according to the company.

Despite the regional declines, “Argos maintains its favorable outlook in a region that advances important infrastructure and housing plans, which add to the progress in the reconstruction of Puerto Rico,” according to the company.

Written by August 13 2019 0

Medellin-based construction giant Constructora Conconcreto announced August 9 that its second quarter (2Q) 2019 earnings jumped 70% year-on-year, to COP$57 billion (US$16.8 million).

Earnings before interest, taxes, depreciation and amortization came-in at COP$105 billion (US$31 million), essentially flat year-on-year, while EBITDA margin was 25%.

Consolidated revenues hit COP$417 billion (US$123 million), down 9.5% year-on-year.

“The business segment that contributed most to the ordinary income was construction, at COP$312 billion (US$92 million)," according to Conconcreto.

The company also cut its consolidated financial liabilities by COP$120 billion (US$35 million) compared to year-end 2018 debt levels.

Among other 2Q 2019 highlights:

• “The CCC Ituango consortium met the objective of bringing the Hidroituango dam [in Antioquia] to 435 meters above sea level, its maximum height. This is one of the most important milestones for the safety of the communities downstream of the project. The top of the dam will be the road to the municipality of Ituango,” according to the company.

• “On June 12, we proudly received recognition for the ‘Contree’ project [in Medellin] as the best vertical housing project during the celebration of the LADI [Latinoamericanos de Desarrollo Inmobiliario] awards, a Latin American event that seeks to highlight innovation, development, architecture and marketing applied to the real estate industry.”

• Construction of the “Logika Siberia” warehouse portal gateway in Cundinamarca, employing Conconcreto’s novel large-format concrete “3D Printer” to build the portal building.

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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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