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Written by April 04 2020 0

Medellin-based electric power generation giant Isagen revealed in an April 2 filing with Colombia’s Superfinanciera corporate oversight agency that its full-year 2019 net income rose 9% year-on-year, to COP$495 billion (US$123 million).

However, fourth-quarter (4Q) 2019 net income dropped 62% year-on-year, to COP$144 billion (US$35.8 million), as lower rainfall in Colombia led to a 23% net decline in hydropower output.

Isagen is the third-largest power generator in Colombia at 3.03 gigawatts (GW) capacity -- 90% of which is hydroelectric power.

Full-year earnings before interest, taxes, depreciation and amortization (EBITDA) rose 28% year-on-year, to COP$1.9 trillion (US$472 million), while gross revenues rose 20%, to COP$3.2 trillion (US$795 million), according to Isagen.

During 2019, energy demand on Colombia’s national power grid (Sistema Interconectado Nacional, SIN) was up 4% year-on-year. However, accumulated generation by Isagen for full-year 2019 dipped 8% year-on-year.

During 4Q 2019, hydropower contributions to the SIN were only 77% of the historical average, although for full-year 2019, hydropower accounted for 88% of the Colombian total -- still down from 2018 because of lower total rainfall.

During 2019, the average power price received by generators to the national grid was COP$229 (US$0.057) per kilowatt-hour (kWh), 98% higher than the average price recorded in 2018.

Isagen credited its over-all improvement in 2019 financial results to “higher energy sales revenue in contracts as a result of better prices” as well as sales to the national grid “largely due to the fact that since March [2019], the [820-MW] Sogamoso power plant [in Santander] started to provide power” to the national grid.

Aside from the Sogamoso plant, Isagen’s other power plants include the 1.24-GW “San Carlos” hydropower plant in Antioquia; the 396-MW “Miel 1” hydropower plant in Caldas; the 300-MW “Termocentro” thermal power plant in Santander; the 170-MW “Jaguas” hydroelectric power plant in Antioquia; the 80-MW “Amoyá” hydroelectric plant in Tolima and the 26-MW “Calderas” hydroelectric plant in Antioquia.

Isagen’s majority shareholder is BRE Colombia Hydro Investments Ltd, a division of Toronto-based Brookfield Asset Management. BRE’s strategic focus is on “development of a portfolio of renewable energies that take advantage of sources such as water, wind and sunlight,” according to the company.

Written by March 31 2020 0

Medellin-based nationwide telecom/internet/cable-TV giant UNE-EPM revealed March 31 that its full-year 2019 after-tax profits rose to a relatively modest COP$519 million (US$128,000) -- up from a substantial COP$65 billion (US$16 million) net loss in 2018.

The profits improvement is explained mainly by the sale of cell-phone towers along with more favorable results from affiliate Colombia Móvil, which operates under the “Tigo” trade name, according to UNE-EPM.

Earnings before interest, taxes, depreciation and amortization (EBITDA) also improved in 2019, to COP$1.6 trillion (US$394 million), versus COP$1.4 trillion (US$345 million) in 2018.

Revenues in 2019 climbed to COP$4.9 trillion (US$1.2 billion), up from COP$4.8 billion (US$1.1 billion) in 2018.

Highlights of 2019 included Colombia Movil winning a 10-MHz spectrum-use permit for a 10-year term, as well as potential gains from another spectrum auction in December. “Obtaining 40-MHz in the 700-MHz band will expand coverage to thousands of users and improve mobile data service,” according to the company.

The Colombia Móvil division saw revenues rise 4.2% year-on-year, to COP$2.24 trillion (US$552 million), while the division’s EBITDA hit COP$655 billion (US$161 million) and profits rose to COP$27 billion (US$6.6 million), according to the company.

Meanwhile, the Edatel subsidiary (telecom in rural areas) saw revenues rise to COP$210 billion (US$51.7 million), with EBITDA at $82 billion (US$20 million) and profits of COP$19 billion (US$4.6 million).

The “OSI” and “CTC” subsidiaries meanwhile generated EBITDA of COP$10 billion (US$2.4 million) and profits of COP$4 billion (US$986,000), according to the company.

Fiber-optic broadband coverage -- enabling 50-megabytes per second connections -- grew by almost 6%, “allowing us to reach more homes with internet, broadband, television and telephone services on this technology,” according to the company.

As a result, “in 2019 our subscriber base grew close to 7% on the internet, 6% on digital television and 2% on landlines; achieving an increase higher than 3% in new clients,” according to the company.

Mobile/Cell-Phone Business

“The prepaid [cell-phone service] market had little change in supply, where we continue to be competitive incorporating unlimited voice to all operators,” according to UNE-EPM.

“Prepaid had revenue growth of more than 1% versus 2018, leveraged mainly due to increased package sales. Additionally, the 4G prepaid user base LTE increased 42% versus 2018, both by new users and by penetration of existing users at the base.

“In postpaid we continue with our plans based on simplicity, which consist of three plans with unlimited minutes and messages and data to always be connected [and] where included, accessories to improve the user experience such as music, equipment insurance and preferential service.

“In addition, we make alliances with main banks in the country to offer cell-phone financing at a 0% interest rate. Also, we continue with differential offers on phones such as ‘2x1,’ so that our customers can access the latest generation phones in 4G.

“Thanks to this, in 2019 our base of customers increased by about 10% and the empowerment of more LTE sites supported the increase in our postpaid mobile data users by more than 18%,” according to the company.

Written by March 31 2020 0

Medellin-based multinational paper- and personal-hygiene products manufacturer Grupo Familia on March 30 revealed that its full-year 2019 net income rose 20.2% year-on-year, to COP$247 billion (US$61 million).

Sales rose 10.9%, to COP$2.65 trillion (US$654 million), with foreign sales (up 13%) accounting for COP$1.3 trillion (US$321 million) of the total. Colombia sales rose 8.8%, to COP$1.36 trillion (US$356 million).

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 14%, to COP$428 billion (US$105 million), while patrimony rose 8.9%, to COP$1.66 trillion (US$409 million).

At year-end 2019, Familia had 5,271 employees, nine distribution centers in four countries, commercial operations in 13 countries and exports from Colombia to seven nations.

“In Latin America and the Caribbean -- the region in which we operate -- 2019 brought new social and political challenges that seek social transformation. This phenomenon presented an unusual intensity in some countries,” the company noted in its annual report.

“Argentina faced a change of government that increased investor uncertainty, and also went through a new currency crisis that triggered a sharp devaluation -- all accompanied by an increase in inflation (over 50%) and a decrease in GDP.

“Ecuador presented a contraction of the economy by 0.9%, compared to the growth of 2018 that was 1.4%. The government’s proposal to eliminate fuel subsidies sparked social protests that led to lower consumer confidence, which translated into lower spending.

“The Dominican Republic maintained a good performance at the end of the year with a growth of 4.9% of GDP, boosted by private consumption, stimuli in monetary policy and improvements in the relationship with the United States, its main trading partner. The country had controlled inflation that allowed demand to be stimulated.

“Peru grew its GDP by 2.3%, a lower figure than the previous year after facing global economic uncertainty and lower prices for basic products. Low interest rates are expected to promote growth during 2020.

“Puerto Rico presented a noticeable improvement in 2019, after overcoming the consequences caused by the 2018 hurricanes. GDP grew close to 3.7%, while inflation held steady at less-than 1%. The plan to stimulate the economy through reconstruction, the growth of the United States economy and an improvement in the tourism sector contributed to the result.

“Chile closed the year with GDP growth close to 2%, after having a good 2018 that closed at 4%. This decrease was the result of social protests, in addition to a lower level of raw material prices and the depreciation of the peso.

“Bolivia had a GDP growth of 3.3%, less than the 4.2% it reached in 2018. From a political perspective, President Evo Morales resigned after 14 years in power, due to protests stemming from allegations of fraud in the elections.

“Colombia presented economic growth of over 3%, despite the complex regional environment. Tax reform, dynamic household consumption, public spending accompanied by infrastructure developments, and improved foreign investment were the main factors.

“The [Colombian peso to U.S. dollar] exchange rate registered an increase of 11% with an average in 2019 of COP$3,281 to the dollar, compared to COP$2,956 in 2018. However, at the end of 2019 it remained stable at COP$3,277, compared to the COP$3,249 at the end of 2018.
Inflation for the year was 3.8% and was within the target set by Banco de la República (between 2% and 4%),” the company added.

Written by March 31 2020 0

Toronto-based Gran Colombia Gold – Colombia’s biggest gold miner, principally in Antioquia – on March 30 reported a full-year 2019 net loss of US$131 million, far worse than the US$3.4 million net loss in 2018 -- all because of a one-time accounting write-down.

The loss was the result of an after-tax charge of US$153.6 million “associated with the company’s exploration and evaluation assets in Zona Alta and Echandia at the Marmato project” in Colombia, according to Gran Colombia.

Fourth-quarter (4Q) 2019 net loss was US$148.8 million compared with net income of US$8 million in 4Q 2018, all because of the Marmato write-down.

However, if excluding the Marmato write-down, then adjusted net income for 4Q 2019 actually rose to US$17.1 million, up from $14.5 million in 4Q 2018.

For full-year 2019, adjusted net income rose to US$60.5 million, up from US$42.5 million in 2018.

“The year-over-year increase in 2019’s adjusted net income largely reflects the positive impact of Segovia [Antioquia] production growth, the increase in realized gold prices and the reduction in total cash costs per ounce sold on income from operations in 2019, net of an associated increase in income tax expense,” according to the company.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose to US$146 million for full-year 2019, up from US$102 million in 2018, while 4Q 2019 adjusted EBITDA rose to US$40 million, from US$23 million in 4Q 2018, according to the company.

Commenting on the results, Gran Colombia Gold executive chairman Serafino Iacono stated: “We had a very solid year in 2019 with record production and new highs for revenue, adjusted EBITDA, free cash flow and adjusted earnings that helped us to significantly strengthen our balance sheet."

Gold production in 4Q 2019 rose 18% year-on-year, to 65,237 ounces, while total annual production for 2019 rose 10% year-on-year, to 239,991 ounces -- both all-time records.

Revenues in 4Q 2019 rose 30% year-on-year, to US$88.5 million, “getting a boost from the 21% increase in spot gold prices. For 2019, production growth, the higher spot gold and silver prices and the reduction in refining charges all combined to increase annual revenue to $326.5 million, up 22% over last year,” the company added.

Total cash costs per ounce averaged US$685 per ounce in 4Q 2019 compared to US$698 per ounce in 4Q 2018, “reflecting a reduction in Segovia’s total cash cost to $607 per ounce in 4Q 2019 from $623 per ounce in 4Q of last year. In 2019, the company’s total cash costs decreased to $661 per ounce from $680 per ounce in 2018,” Gran Colombia added.

Written by March 31 2020 0

Medellin-based textile giant Fabricato on March 30 announced that its full-year 2019 financial results improved 68% year-on-year -- but still produced red ink.

The net loss for 2019 was COP$10 billion (US$2.47 million), a big improvement over the 2018 net loss of COP$31.7 billion (US$7.8 million), according to the company.

Gross revenues rose 3.8%, to COP$342 billion (US$84 million), while earnings before interest, taxes, depreciation and amortization (EBITDA) soared to COP$4.4 billion (US$1.08 million), up from a paltry COP$90 million (US$22,000)  in 2018.

EBITDA margin for 2019 was 1.3%, up from zero in 2018, according to the company.

In Colombia, retail sales of ready-made products rose 6.6% year-on-year, the company noted.

“In 2019, in relation to the business environment for the textile and clothing sector, the most relevant issue corresponds to the issuance of the decree derived from articles 274 and 275 of the National Development Plan, through which the thresholds and tariffs were raised for the import of ready-made products,” according to Fabricato.

“The aforementioned decree was published in August and became effective in November and, as a consequence, the reactivation of demand during the second semester of Colombian clothing was perceived, partially replacing the import of ready-made products.

“Likewise, the volatility of the Colombian peso in relation to the dollar was relevant, whose impact in general terms favors domestic producers, since in this situation, imports may present greater exposure and risk.

“Unfavorable points within the business environment are the informality of the sector, credit restriction by the financial sector and the lack of definition on thresholds and tariffs by the executive branch [of the national government] for textile and clothing products.

“This last point is explained because the [import tariff] decree issued in August was sued by the [national government] among others, for considering it unconstitutional. Said demand was accepted by the Constitutional Court, which considered the decree to be unenforceable.

“At the date of publication of this report, there is an expectation that the executive branch will publish a new decree that covers the entire textile and clothing production chain,” the company added.

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