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Companies 240

Written by August 15 2019 0

Toronto, Canada-based Gran Colombia Gold (GCC) – operator of Colombia’s largest underground gold-mine in Antioquia – on August 14 reported second quarter (2Q) 2019 adjusted net income of US$14 million, up from US$8.2 million in 2Q 2018.

Meanwhile, for the first half (1H) 2019, adjusted net income rose to US$27 million, up from US$18.1 million in 1H 2018.

“Improved earnings in the second quarter and first half of 2019 compared with the corresponding periods last year continued to reflect the significant contribution of Segovia [Antioquia] operating performance in 2019 on revenues, total cash costs per ounce, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) and income from operations,” according to GCC.

“With the recent run up in gold prices, well above the average for the first half of this year, our second half earnings, cash flows and cash balance are poised to benefit from our leverage to gold prices,” added GCC CEO Lombardo Paredes.

“We’ve continued to improve our liquidity in the second quarter, bolstering our mid-year cash position to US$51.3 million, including the net proceeds of the convertible debentures financing completed in April.

“The recently announced high-grade results from our drilling program at Segovia in the first half of 2019, and the work we are doing to identify and prioritize step out and brownfield drilling targets, increase our confidence in the potential to add mineral reserves and extend mine life at our flagship operation.”

GCC raised its annual gold production guidance for 2019 to a range of between 225,000 and 240,000 ounces. Total gold production of 57,882 ounces in the second quarter of 2019, up 9% over the second quarter last year brought the total for the first half of 2019 to 118,483 ounces, up 12% over the first half last year.

“With another 18,166 ounces produced in July, the company’s trailing 12-months’ gold production at the end of July 2019 now stands at 229,776 ounces, up 5% over 2018’s annual production,” according to GCC.

“Despite a 1% year-over-year decline in spot gold prices to an average of $1,307 per ounce in the first half of 2019, the company reported a $6 per ounce improvement in realized gold prices to an average of $1,296 per ounce in the first half this year.

“This was the result of lower charges in a new refining contract that the company entered into in January 2019 with an international refinery, saving approximately $20 per ounce sold compared with its previous arrangement.

“With the ‘London P.M. Fix’ gold price ranging from a low of $1,390 per ounce to a high of $1,506 per ounce thus far in the third quarter, the company expects to see a significant increase in revenue and operating cash flow in the second half of 2019 compared with the first half of 2019 if spot gold prices remain at the current level.”

Total cash costs per ounce came-in at $655 per ounce in 2Q 2019, down from $696 per ounce in the 2Q 2018, bringing the average for the first half of 2019 to $638 per ounce, down from $683 per ounce in the first half last year.

Adjusted EBITDA rose 25% year-on-year to US$33.2 million, bringing the total for the first half of 2019 to $68.5 million, up 27% over the first half last year.

Written by August 15 2019 0

Medellin-based multinational retail giant Grupo Exito on August 14 reported a COP$18 billion (US$5.2 million) net loss for second quarter (2Q) 2019, down from a COP$114 billion (US$33million) net profit in 2Q 2018.

Recurring earnings before interest, taxes, depreciation and amortization (EBITDA) were flat year-on-year, at COP$868 billion (US$252 million).

Meanwhile, operating revenue (measured in Colombian pesos) rose 12.3%, to COP$14.5 trillion (US$4.2 billion).

Revenue growth was strongest in Brazil (up 11.2%) and in Colombia (up 3.3%) thanks to the “multichannel” strategy, which combines conventional store sales with growing on-line (internet) and home-delivery sales.

Colombia sales so far this year have benefitted from a 47% jump year-on-year in internet and home-delivery sales, totaling 1.7 million shipments in first-half 2019, representing 4.7 % of total sales of Grupo Éxito Colombia, according to the company.

“The positive results of the organization in Colombia were also leveraged on [store] innovation, with the Éxito ‘Wow,’ Carulla ‘FreshMarket’ and ‘Surtimayorista’ value formats, which grew double-digit sales,” according to the company.

Meanwhile in Brazil, the Grupo Pão de Açúcar (GPA) division “continued to report outstanding figures, due to the consistent growth of the ‘Assaí’ wholesale model and the digital transformation actions,” according to Exito.

As for Uruguay operations, this division “had a solid growth in profitability.”

As for Argentina operations, this division “achieved positive EBIDTA margins amid a challenging macroeconomic context,” according to Exito.

“The joint work between the four countries where the company has a presence continues to focus on digital transformation initiatives and synergies of best commercial practices and joint purchases,” according to Exito.

Grupo Éxito ended the second quarter of 2019 with 1,510 food outlets: 531 in Colombia, 864 in Brazil, 91 in Uruguay and 24 in Argentina, with a consolidated sales area of more than 2.8 million square meters.

Written by August 15 2019 0

Medellin-based insurance giant Grupo Sura announced August 14 that its second quarter (2Q) 2019 net income jumped 37.4% year-on-year, to COP$951 billion (US$276 million).

“An improved performance on the part of its investment portfolios along with higher revenues obtained from its associates via the equity method were key factors in achieving this level of results,” according to Sura.

“On a consolidated level, operating revenues stood at COP$10.5 trillion [US$3.05 billion] for a growth of 13.3%, this driven by higher levels of investment income (+50.1%) revenues obtained from associates via the equity method (+48.0%) and higher revenues from services rendered (+21.9%).

“On the other hand, operating expense came to COP$9.0 trillion [US$2.6 billion] for a 11.7% increase, which is lower than that recorded for operating revenues. Here, lower adjustments to reserves compensated for higher costs of services rendered for our healthcare business as well as higher broker commissions and other expenses.

“Consequently, operating earnings came to COP$1.5 trillion [US$436 million], for a growth of 23.7%.”

Sura’s “Asset Management” division net income jumped 48% year-on-year, to COP$430 billion (US$125 million).

Meanwhile, the “Suramericana” insurance division “continues to post significant growth rates with written premiums rising by 12.3% and revenues from services rendered increasing by another 21.9%,” according to Sura.

“The reduction in the retained claims rate is worth noting -- this including net level reserves -- as well as higher investment income that rose by 15.1%. However, in spite of these good growth dynamics, year-to-date net income at the end of 2Q 2019 reached COP$173 billion [US$50 million] for a decline of 33%, this due to certain specific circumstances that are not comparable with 2018, such as:

“- Life insurance segment: an increase in expense related to the latest tax reform which taxed with value-added tax (nondeductible) the commissions paid on sales of life insurance policies.

“- Property and casualty insurance segment: showing higher reinsurance costs in Chile and the inflation adjustment expense in Argentina that began to be accounted for in October 2018.
“- Healthcare segment: the current situation of the public healthcare system in Colombia produced a considerable reduction in the net earnings of the mandatory healthcare business (EPS),” according to the company.

Grupo Sura profits during 2Q 2019 also benefited from its partial holdings in Medellin-based banking giant Bancolombia and Medellin-based foods multinational Grupo Nutresa, “along with lower interest expense and the positive [Colombian peso to U.S. dollar] exchange rate effect corresponding to hedging arrangements as well as exchange differences on the Group’s indebtedness,” according to the company.

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.

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