Companies 537
Medellin-based multinational gold mining giant Mineros SA announced August 10 that its second quarter (2Q) 2021 consolidated net profit rose to US$10.4 million, up from US$8.7 million in 2Q 2020.
Revenues likewise rose, to US$128.4 million, up from US$126.3 million in 2Q 2020. But earnings before interest, taxes, depreciation and amortization (EBITDA) dipped to US$41.8 million, from US$53.4 million in 2Q 2020.
“During the second quarter of 2021, the world price of gold was US$1,770 per ounce, an increase of 3.7% compared to the end of first quarter 2021 and 5% higher than the end of the second quarter of 2020,” according to Mineros.
“Despite the positive news of economic recovery worldwide, the price of gold remained at strong levels due to economic stimuli packages, low central bank interest rates and high inflation in the United States.
“At the beginning of the third quarter 2021, the gold price continues to be strong, while the main concerns focus on the behavior of the Delta variant [of Covid-19] and the monetary policy of large economies,” the company added.
For all of 2Q 2021, Mineros produced 67,403 ounces of gold, of which 19,738 ounces were from alluvial production in Colombia; 32,381 ounces from underground mining at Hemco-Nicaragua; and 15,284 ounces from open-pit mining at Gualcamayo-Argentina.
As for its core alluvial mining operations in Antioquia, Colombia, “on June 23, the Colombian environmental authority [ANLA] replied to an appeal filed by the company in April. A good part of previous [negative] decisions were reconsidered. In that sense, once the impact was analyzed, even when not all the requested areas [for alluvial mining] were granted, the company will be able to continue with its alluvial operation.
“In September and October, a new request for environmental permits will be submitted, seeking to give continuity to the alluvial operation in the mid and long term,” according to Mineros.
On another front, “on July 30, in Colombia, we launched the ‘Llanuras Aluviales’ project, a new alluvial production unit that uses lighter technology, with easier transportation and allows for process optimization,” according to Mineros.
“Llanuras will give access to smaller areas with lower average ore grades. With an investment of around US$18 million, Llanuras will generate new development and employment opportunities in the area, promoting technology and business innovation in the Bajo Cauca region [in Antioquia],” the company added..
Total gold production for 2Q 2021 “was 4% lower than in the second quarter of 2020, explained by a drop in production in Gualcamayo (Argentina), given the natural depletion of a sector of the open pit mine and the sale of Operadora Minera in Colombia in June of last year,” according to Mineros.
Total cash costs rose 24% and the all-in sustaining cost rose 41% “mainly explained by higher production costs in Argentina and by the cost of purchases of artisanal material in Nicaragua, in addition to the development of the open pit mine in Argentina which requires the movement of a large amount of sterile material,” according to Mineros.
Medellin-based textile and recycled plastics specialist Enka de Colombia announced August 13 that its first half (1H) 2021 net profits jumped to COP$29 billion (US$7.5 million), a reversal from a COP$4.4 billion (US$1.1 million) net loss in 1H 2020.
Earnings before interest, taxes, depreciation and amortization (EBITDA) came-in at an all-time historic high -- COP$37 billion/US$9.6 million -- “favored by the situation of high international [textile] prices, the devaluation of the Colombian peso and the recovery in sales of textiles, industrial fibers and our ‘EKO’ recycled fibers,” according to Enka.
Construction of Enka’s new PET (polyethylene terephthalate) “Bottle-to-Bottle” recycling plant, “which will double our installed capacity, is progressing smoothly with investments of COP$21.2 billion [US$5.5 million] and it is expected to start operations by the end of 2022,” according to the company.
“The national strike during the month of May mainly affected local sales in some regions of the country and generated disruptions in the supply chain.
“Proper management of this situation avoided the interruption in the supply of essential raw materials and guaranteed the continuous operation of the plant to meet the sales commitments of our local and foreign customers. However, an economic impact due to unemployment cost overruns of close to COP$2 billion [US$520,000] is calculated, the vast majority of which will be seen reflected in the third quarter of this year,” the company added.
Operating income for 1H 2021 ended at COP$241 billion (US$62.7 million), up 50% year-on-year, “mainly due to the recovery of sales after the closings due to Covid-19, higher international prices and the reactivation of sales of virgin PET as a local supply alternative for customers,” according to Enka.
“The company continues with a solid financial position, ending the quarter with cash available in excess of COP$68 billion (US$17.7 million), a negative net debt ratio of -0.3-times EBITDA, even after investing in construction of the new Bottle-to-Bottle PET recycling plant, with costs amounting to COP$21 billion (US$5.4 million).
“Total assets increased by COP$55.5 billion (US$14.4 million) compared to the previous year, reaching COP$667 billion (US$174 million), mainly due to an increase in working capital derived from the increase in sales and investments in fixed assets for projects.
“On the other hand, total liabilities increased by COP$32 billion (US$8.3 million), ending at COP$230.6 billion (US$60 million), mainly in the supplier category to finance higher inventory levels,” the company added.
Through June 2021, exports accounted for 44% of sales, including strong growth in sales to the NAFTA countries (United States, Mexico and Canada), which now account for 23% of all sales, “offsetting other markets such as Brazil that have had a slower rate of recovery,” according to Enka.
‘Green’ Businesses Grow
Accumulated revenues for Enka’s “Eko” line of recycled products grew 21% year-on-year, to COP$68.5 billion (US$17.8 million), accounting for 31% of total sales, “mainly due to the recovery of sales of ‘EKO-Fibers.’ Exports represent 11% of the income of this line of business,” according to the company.
“EKO-PET” sales were 8,608 tons, with plant operation at full capacity. “Prices have increased in 2021 due to temporary supply restrictions for virgin PET due to the international freight situation and the cold wave in Texas (USA) at the beginning of 2021,” according to Enka.
“EKO-Fibers” (5,160 tons) volume grew 25% (+1,022 tons), “mainly due to the recovery of local and Brazilian demand, affected in 2020 by Covid-19,” according to the company.
“EKO-Polyolefins” (815 tons) sales dipped by 22% “due to high inventories in 2020 generated at the start-up of the plant. This year sales are adjusted to the availability of by-products (caps and labels) from current recycling processes,” according to Enka.
“Eko-Red” bottle uptake “continues to recover after the impact of Covid-19. Unfortunately, the collection of bottles was affected by the national strike, which strongly affected recycling volumes in the south of the country and generated difficulties and logistical cost overruns in much of the national territory,” the company added.
Textile and Industrial Threads Businesses
Excluding the production of virgin PET, the operating income of these textile-business lines ended at COP$152 billion (US$39.5 million), “47% higher than the previous year, due to higher sales volume and higher international prices,” according to Enka.
Industrial Yarns (6,595 tons) volume increased 32% (+1,615 tons), “highlighting the growth in canvas (+1,106 tons, up 47%) due to the strategy of strengthening Enka's position as the strategic supplier for the main tire companies in the region.”
Technical Threads sales grew 19% (+510 tons), “mainly in the USA and Colombia, offsetting lower demand in Brazil and substituting for lower-profit, non-strategic businesses.”
Textile Filaments (4,038 tons) sales grew 22% (+737 tons) “as a result of the recovery of demand affected by Covid-19 and difficulties in importing Asian products, benefiting mainly the sales of Nylon Filaments. Continuous Polyester Filaments showed a slow recovery,” the company added.
Medellin-based highway construction giant Construcciones El Condor on August 13 reported a first half (1H) 2021 net loss of COP$7.67 billion (US$2 million) -- mainly a temporary accounting impact from presumed losses arising from its partial stake in the "Vías de las Américas" highway concession project, which is in bankruptcy.
“This is a non-recurring effect recognized at the end of March 2021, only as an accounting phenomenon, and does not generate an impact on cash and therefore it does not affect the financial situation of the company,” according to El Condor.
“Excluding this accounting effect, net profit [for 1H 2021] would be COP$4.69 billion [US$1.2 million],” according to the company.
As of June 2021, income from ordinary activities totaled COP$258 billion (US$67 million), down 25.6% compared to the same period in 2020.
“This result is associated with the completion period of the projects that were executed during previous years with significant billings [and] the suspension of some projects pending environmental and property decisions, as well as the Magdalena 2 project, which is in the beginning stage,” according to El Condor.
“Additionally, the National Strike that began at the end of April also affected the pace of the works for reasons of physical security of our collaborators in some areas and shortage of the main supplies in the projects,” the company added.
“During 2021, the company is finalizing the profitable execution of fourth-generation ‘4G’ superhighway contracts, and begins the execution of new contracts, among which the EPC [engineering, procurement and construction] contract of the Magdalena 2 Consortium and public works contracts awarded by [Colombia’s highway agency] Invias in March 2021.”
Operating margin through June 2021 was 2%, while earnings before interest, taxes, depreciation and amortization (EBITDA) hit COP$22.5 billion (US$5.8 million), equivalent to an EBITDA margin of 8.72%, down from 14.9% in 2020, according to El Condor.
As of June 2021, the company’s construction backlog -- defined as the balance of works contracted and to be executed -- stood at COP$1.869 trillion (US$486 million).
An additional COP$1.05 trillion (US$273 million) in “projected backlog” is expected from the upcoming Santana-Mocoa-Neiva highway construction project. As a result, total backlog would rise to COP$2.9 trillion (US$755 million), according to the company.
Toronto-based gold miner Gran Colombia Gold (GCG) announced August 12 that its second quarter (2Q) 2021 net income climbed to US$29.8 million, a reversal from a US$18.6 million net loss in 2Q 2020.
The reversal “reflects a $9.2 million improvement in income from operations and a gain on financial instruments of $1.5 million in the second quarter of 2021 compared with a loss on financial instruments of $35.4 million in the second quarter of 2020,” according to GCC.
As for first half (1H) 2021, net income soared to US$148.1 million compared with $5.7 million in 1H 2020.
The 1H 2021 gains reflect both operational improvements as well as a “$56.9 million gain on loss of control of Aris Gold, a $44.3 million gain on financial instruments (compared with a $18.9 million loss on financial instruments in the frst half last year) and the $8.9 million gain on sale of the Zancudo Project,” according to GCC.
“Gran Colombia has completed a major step forward in its strategy to grow through diversification, completing an acquisition on June 4, 2021 of all the shares of Gold X Mining Corp. that it did not already own, and then closing a $300 million offering on August 9, 2021 of 6.875% Senior Unsecured Notes due 2026 to fund the development of the Toroparu Project in Guyana, to prepay the remaining $18 million balance of its Gold Notes and for general corporate purposes,” the company added.
“The company added a 27% equity interest in Denarius Silver Corp. to its portfolio in the first half of 2021, giving it exposure to the Lomero-Poyatos polymetallic deposit located in Spain, in close proximity to the Matsa JV project in the Iberian Pyrite Belt, and to the Guia Antigua and Zancudo Projects in Colombia.
“In February 2021, Gran Colombia also successfully brought its spin out of the Marmato [Colombia] Mining Assets to a conclusion, one in which the company has a continuing equity ownership of 44% in Aris Gold Corporation. The Marmato operating and financial results are only consolidated up to February 4, 2021 and thereafter the company equity accounts for its investment in Aris.”
GCC's gold production from its core Segovia, Antioquia operations totaled 52,198 ounces in the 2Q 2021, up from with 44,377 ounces in 2Q 2020. Total gold production from Segovia in 1H 2021 amounted to 101,256 ounces, compared with 94,723 ounces in 1H 2020.
“The company remains on track with its annual production guidance of 200,000 to 220,000 ounces of gold from Segovia in 2021,” GCC added.
Consolidated revenue in 2Q 2021 rose to $96.4 million, from $77 million in 2Q 2020, while 1H 2021 revenues rose to $198.3 million, up from $178.1 million in 1H 2020.
“The year-over-year increase in revenue largely reflects an increase in the company’s realized gold price, which averaged US$1,805 per ounce sold in the first half of 2021 compared with an average of $1,622 per ounce sold in the first half last year,” according to GCC.
“At the Segovia operations, total cash costs averaged $767 per ounce in the second quarter of 2021, compared with $654 per ounce in the second quarter of 2020, bringing the average for the first half of 2021 to $796 per ounce compared with $625 per ounce in the first half last year.
“The year-over-year increase in Segovia’s total cash cost per ounce in the second quarter and first half of 2021 reflect an increase in contractor and artisanal mining payment rates (which had not changed since 2017) implemented in the third quarter of 2020 in response to the current gold market conditions; higher spot gold prices which increased production taxes on a per ounce basis; and additional costs to maintain the necessary Covid-19 protocols required to protect the health and safety of Segovia’s workers and the local communities,” GCC added.
Medellin-based multinational cement, electric power and airport/highways concessionaire Grupo Argos announced August 12 that its second quarter (2Q) consolidated net income soared 534% year-on-year, to COP$392 billion (US$102 million).
Revenues rose 20% year-on-year, to COP$4 trillion (US$1.04 billion), while earnings before interest, taxes, depreciation and amortization (EBITDA) rose 46%, to COP$1.3 trillion (US$338 million).
First-half (1H) 2021 net income likewise soared 561%, to COP$583 billion (US$152 million), according to the company, which produces cement/concrete (Cementos Argos), electric power (Celsia) and operates airport/highway concessions (Odinsa).
By segment, the Argos cement group produced COP$257 billion (US$67 million) in net income for 2Q 2021, while the electric power segment netted COP$198 billion (US$51 million).
Portfolio investments produced another COP$112 billion (US$29 million) in 2Q 2021 net income, while real estate investments netted COP$39 billion (US$10 million).
The only money-losing segment for 2Q 2021 was in highway/airport concessions, which suffered a net los of COP$13 billion (US$3.4 million) as the Covid-19 pandemic continued to hurt airline traffic and highway vehicle movement through toll booths.
“Increased revenues from the sales of goods and services during 2Q 2021 can mainly be explained by growth in all business lines, including contributions from Cementos Argos (up COP$347 billion) and the growth in [revenue, but not profit in] the concessions business (+COP$180 billion),” according to the company.
“Increased costs and expenses for the period (+17% year-on-year) is due to increased variable costs from greater sales volumes during the period. This 17% increase is less than the 20% increase in revenue, which translates into a higher contribution margin, evincing the company’s operating leverage.
“Higher sales levels resulted in increased EBITDA, which closed out the quarter at COP$1.3 trillion [US$338 million] and the year-to-date at COP$2.3 trillion [US$598 million]. Even eliminating the effect of the divestment in the Dallas concrete operations, equal to COP$174 billion [US$45 million] in EBITDA, operating results grew compared to 2020 and 2019,” the company added.
