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Written by May 12 2020 0

Medellin-based supermarket giant Grupo Éxito announced May 12 that its first-quarter (1Q) 2020 operating income jumped 12% year-on-year to COP$4.05 trillion (US$1.04 billion), not including peso/dollar exchange rate effects.

Recurring earnings before interest, taxes, depreciation and amortization (EBITDA) rose 4% year-on-year, to COP$262.8 billion (US$67.7 million) with an EBITDA margin of 6.5%.

Net profits also rose to COP$22 billion (US$5.67 million), up from a COP$13.6 billion (US$3.5 million) net loss in 1Q 2019 – but not comparable because of the sale of Brazil operations last year.

“Since the beginning of the Covid-19 health emergency, Grupo Éxito has made investments and activities framed in three areas: care and protection of employees and clients, preservation of employment and the promotion of solidarity to build [Colombia] together, as a way of strengthen the sustainability of the company in the medium and long term,” according to Éxito.

“We have also promoted sales on virtual channels and home deliveries with great dynamism -- trends that are reinforced in the [quarantined] market," the company added.

Colombia sales rose 10.4% year-on-year, to COP$3 trillion (US$773 million), while “sales excluding the Covid-19 effect grew by 6.3%,” according to the company.

“The result in Colombia was mainly leveraged by the positive results of the innovative formats and the omnichannel strategy that together contributed more than 50% to sales growth in the first quarter of the year, isolating the impact of Covid-19.

“Electronic commerce channels and direct home delivery in Colombia had an important performance and represented 5.2% of the company’s total sales, compared to 4.5% at the end of 2019, growing by 44.6%.

“Commercial efforts focused on expanding logistics and technological capacity to meet the growth of virtual channels and home deliveries, which increased the number of shipments by 36%,” the company added.

“Innovative formats such as ‘Éxito Wow,’ whose sales grew by 14.6% in the first quarter -- more than twice what the rest of the brand’s stores grew -- already represent 17.8% of total sales. Carulla ‘FreshMarket’ saw an increase of 24.7%, 11 percentage points above the rest of the stores, and represented 26.7% of the brand’s sales.

“Finally, sales at the ‘Surtimayorista’ cash- and-carry format stores grew by 13.3% and represent 4% of Grupo Éxito’s totals in Colombia,” according to the company.

Coronavirus Initiatives

During 1Q 2020, Exito installed thousands of acrylic shields in supermarkets and at its wholesale warehouses to avoid cross-infections between customers, checkout clerks, truck drivers, home-delivery transporters and others.

The company also installed “deep disinfection with manual spray equipment in 524 warehouses,” provided 1,300 thermometers at all stores for taking temperatures of employees, provided basic hygiene kits for employees including gloves, face masks, acrylic glasses and safe hydration, and installed antibacterial gel dispensers and disinfection processes for all supermarket carts and baskets.

The company also implemented a new “buy and collect” service at 366 wholesale warehouses “so that customers can make virtual or telephone market orders and receive merchandise at no [extra] cost,” with goods loaded directly into their vehicles.

The company also made advance payments totaling nearly COP$60 billion (US$15 million) to help some 867 small and medium-size vendors deal with liquidity issues during this crisis.

Besides producing more than 20 million cloth face masks in 50 of its private-label workshops, the company also relocated some 270 of its nearly 40,000 employees from “areas of the company that have restrictions to operate” to other stores.

In addition, Exito subsidized more than 600,000 bags of 12 basic food items – sold at cost -- to poorer customers, while donating another COP$5.3 billion (US$1.37 million) of free foods for the Fundación Éxito early-childhood protection program.

Uruguay, Argentina Results

In Uruguay, Éxito saw a 12.8% growth in sales in local currency, “driven by better performance in the summer season, the omnichannel strategy and the ‘fresh market’ model, which represented 43.5% of total sales,” according to Éxito.

In Argentina, sales rose 48.7% in local currency terms while EBITDA soared to COP$4.9 billion (US$1.26 million), up from COP$1.5 billion (US$387,000) in 1Q 2019.

Written by May 11 2020 0

Medellin-based banking giant Bancolombia announced May 11 that 634 of its 684 branches nationwide are now open -- all with Covid-19-avoidance biosafety protocols, with many locations operating from 9:00 am at 4:00 pm daily, but closed Saturdays.

“The curfew decrees and other measures adopted in municipalities and localities of the country will be respected,” according to Bancolombia.

“We will continue with the policy of not allowing more than 50 people to enter a branch at one time” and “the use of face masks is mandatory,” according to the company, Colombia’s biggest bank.

“In all the branches that will be opened, we have installed acrylic shields in the cashier and advisory areas in order to create physical distance between employees and customers.

“We will deliver customer service [queuing] cards up to 15 minutes before the closure of each branch in order to be able to comply with biosafety standards and protocols. We reinforce all hygiene measures and cleaning cycles inside the offices.

“From this date [May 11] we will activate 80% of our commercial team, which has all the protection measures already mentioned. The remaining 20% of the human team of branches will continue in preventive isolation, including people at high risk, such as adults over 60, pregnant women and lactating mothers,” the company added.

“Bogotá will open from 9:00 a.m. to 4:00 p.m. continuously, and a pilot program with these same hours is already operating in Medellín at 23 of the 90 offices in the metropolitan area, in order to test the volume of traffic of employees and customers at times of greater concentration and mobility.”

However, Bancolombia has eliminated Saturday and extended-hours services -- at least for now, the company added.


Written by May 11 2020 0

Colombia-born Avianca -- Latin America’s oldest airline – on May 10 filed for Chapter 11 bankruptcy in U.S. federal court because of the Coronavirus shutdown.

Its majority shareholders today are U.S.-based United Airlines and Kingsland Holdings. For the filing, the company cited US$10 billion in liabilities along with inability to generate income to cover continuing expenses.

“We did this to protect our business while continuing to face the effects of the Covid-19 pandemic, as well as to comprehensively manage our debt and other commitments,” according to Avianca’s official press statement.

“We hope to return to heaven and help you visit, more safely, the people and places they love. Avianca will return to the skies and continue to fly once the travel restrictions generated by Covid-19 are gradually lifted.

“Avianca has submitted requests to maintain its [customer loyalty] client programs throughout this process, so clients can trust to continue organizing trips and flying with Avianca in the same way that they always have.

“Likewise, customers can use the tickets, vouchers and gift vouchers purchased before Avianca started this process. Additionally, they will continue to earn miles when they fly with the airline, and may continue to redeem the miles earned through ‘LifeMiles’ to purchase tickets with Avianca during this process.

“Avianca also hopes to continue issuing ticket refunds and honor travel bonuses and payments or credits associated with baggage or service claims in accordance with its customary policies.

“Subject to government policy, we hope to continue to allow multiple changes, with no penalties or fees for fare differences for previously issued and/or new tickets purchased as long as the original and changed flight is until October 31, 2020. All customers who have booked or are going to buy flights during this period can be sure that they can trust Avianca.

“Tickets purchased through ‘LifeMiles’ mile redemption will continue to be free of penalties until October 31, 2020,” the company added.

Avianca earlier this month was forced to cancel promotion of unauthorized flights inside Colombia because the Colombian government has banned all air travel through at least May 30.

Written by May 08 2020 0

The Viva Malls subsidiary of Medellin-based Grupo Exito announced May 7 the launch of “Viva Online” (see: https://www.exito.com/viva-online) so that quarantine-bound customers can order dozens of commercial products -- and then either pick them up at designated, virus-free mall sites or else have them safely home-delivered.

“Viva Online will offer shopping experiences with more than 50 brands, as well as virtual entertainment activities for all tastes,” according to a press bulletin from Grupo Exito.

“With the new service, Viva will make life easier for its clients, bringing them the brands and preferred products to their homes under the most rigorous biosecurity measures.

“Additionally, we have brand implemented the ‘Buy and Collect’ model in 12 of our shopping centers in the country. Through this service, orders are delivered directly to the customer’s means of transport [cars] and to specific areas designated for this purpose,” according to the company.

“We transcend the physical spaces of the shopping malls and we enable a virtual space that mixes the shopping experience, with differential and exciting activities for our clients,” said Juan Lucas Vega Palacio, Grupo Exito real estate vice president.

“In addition, we put Viva online at the service of other brands of entrepreneurs and small companies that are not necessarily in the shopping centers and that do not have e-commerce platforms, which will allow them to become visible and offer their products directly to end customers,” he added.

With the “Domicilios Viva” home-delivery service, some 100 brands can now reach the customers’ place of residence, according to the company.

“People place their orders through the WhatsApp line 3052232795 and the products are delivered to the place of choice, with multiple payment alternatives,” according to Grupo Exito.

“This new service, which has a coverage of three kilometers around each shopping center, is already operating in Viva Envigado and Viva Palmas [both in the Envigado suburbs of Medellin] and soon it will be implemented in seven more shopping centers in the country including Viva Laureles in Medellín; Viva La Ceja in eastern Antioquia; San Pedro in Neiva, Viva Barranquilla, Viva Tunja, Viva Villavicencio and Viva Wajiira in Riohacha,” according to the company.

ANDI Connects 25,000 Grocery Stores to Online Supplies

On a related front, Colombia’s biggest national industrial/commercial trade association ANDI announced May 8 a new wholesale online order-and-delivery alliance with Grupo Meiko’s “SúperVecino” neighborhood grocery-supply network.

The SúperVecino network (see: https://supervecino.grupomeiko.co/) enables thousands of local neighborhood grocery stores to order online and then receive deliveries directly, thus avoiding making trips to crowded (and hence potentially infectious) grocery wholesale supply centers in Medellin and other large cities.

“This initiative aims to offer an alternative in such a way that shopkeepers avoid going to the supply centers, reducing the risks of contagion and being able to continue their businesses and guarantee the income of their families. At the same time, the model supports rural producers and supply centers with the purchase of their foods,” according to ANDI.

“Since the beginning of the restriction of economic activity, we have been working on various alternatives to give continuity to some productive and commercial activities, while avoiding health threats. In addition to this [grocery wholesale] model, we are working with other ANDI sectoral commercial chambers on the implementation of [online order-and-delivery] of other products,” added ANDI President Bruce MacMaster.

The new system “supports the entire supply chain from producers who find a new sales channel on the platforms, to shopkeepers who can order online, choose the supplier and sustain their businesses without putting themselves at risk,” ANDI added.

Written by May 07 2020 0

EPM general manager Álvaro Guillermo Rendón López confirmed in a televised May 7 address that the company continues to aim for a December 2021 startup of its US$5 billion, 2.4-gigawatt Hidroituango hydroelectric plant in Antioquia.

In his address, Rendón revealed that the Hidroituango project is now 77.8% complete, with COP$11 trillion (US$2.8 billion) already invested so far.

The first power turbines at Hidroituango would begin to generate electricity in December 2021 -- provided that Colombia’s environmental licensing agency (Agencia Nacional de Licencias Ambientales, ANLA) gives timely approval, Rendón said.

Following that, EPM would start-up additional turbines every three or four months in 2022 and beyond, until the full 2.4-gigawatts output capacity is reached – again, assuming timely ANLA approvals.

Meanwhile, EPM’s recent acquisition of the “CaribeMar” power network in the Atlantic coast region will be ready for complete takeover and operational startup in September 2020, he said.

“In the period 2020 to 2023, we seek to modernize the organization and improve relations with our customers and users through continuous improvement in service, information technologies and the development of ‘smart’ cities,” Rendón said in his address covering highlights of EPM’s first 100 days of operations so far this year.

The acquisition of CaribeMar – adding 1.5 million more power customers in Bolívar, Cesar, Córdoba and Sucre departments -- will increase EPM’s national distribution/commercialization market share to 35%, he noted. That makes EPM the biggest electric power player in all Colombia.

So far in 2020, EPM has completed 96% of its scheduled infrastructure projects (totaling COP$465 billion/US$118 million) to date, including entry-into-operation of new electrical infrastructure projects in Urabá and Medellín, plus upgrades at power plants, he said.

Meanwhile, over the next four years, EPM plans to invest another COP$7 trillion (US$1.8 billion) in infrastructure -- and simultaneously find innovative ways to overcome potential effects of the Coronavirus crisis, he said.

Currently, EPM serves nearly 20 million people with power, water, sewage treatment, natural gas and waste management utilities through 44 subsidiary companies in six Latin American countries: Colombia, Mexico, El Salvador, Guatemala, Panama and Chile, Rendón noted.

“In 2019 we invested COP$3.2 trillion [US$816 million] in infrastructure and operating assets and distributed COP$10.4 trillion [US$2.65 billion] in value to stakeholders, which translates into more social investment, job creation and quality of life for more people,” Rendón said.

“The financial results obtained in 2019 allow transfers to the municipality of Medellín of COP$1.5 trillion [US$383 million] during 2020 -- a year where the city faces effects caused by the Coronavirus pandemic,” he added.

In 2019, the EPM Group reported progress in  universalization of public utility services in its Colombia markets, reaching 96.43% of its market-area homes with electric power; 85.84% with natural gas; 95.75% with potable water supply; 93.5% for wastewater removal; and 99.28% for solid waste disposal, he said.

Meanwhile, EPM continues to lead all Colombia -- and even much of the developing world -- with innovative programs to bring affordable public services to poorer people, Rendón noted.

“With innovative social solutions, the business group enabled access to energy and water under the ‘prepaid’ modality, for those who due to their income conditions find it difficult to access these services,” according to the first-100-days 2020 report.

“In 2019, 26,747 families began to enjoy prepaid energy in the EPM, CENS and ESSA companies, with a total of 317,618 clients and users since 2007. Last year, in the ‘Agua Prepago’ program, we added 2,834 new clients and users in Valle de Aburrá [metro Medellin], for a consolidated total of 25,211 clients and users since 2015.

“With ‘pay as you can’ [installments] program, in 2019 we had 40,297 new clients and users in EPM, CENS and ESSA divisions. Since 2014, when the program was launched, the beneficiaries have amounted to 209,437,” the company added.

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