Companies 537
Medellin-based gold miner Mineros SA announced March 16 that its full-year 2017 net profits in Colombia rose 16% year-on-year, to COP$114.7 billion (US$40 million).
Earnings before interest, taxes, depreciation and amortization (EBITDA) in Colombia hit COP$187.9 billion (US$65.8 million), or 48% of sales.
Corporate-wide, consolidated net income rose 32% year-on-year, to COP$117 billion (US$41 million), while consolidated EBITDA rose 17%, to COP$283 billion (US$99 million).
Total gold output rose 8.7% year-on-year, to 208,054 ounces, while average sale price rose 4.1%, to US$1,250/ounce.
Commenting on the results, Mineros noted that world gold prices at year-end 2017 hit US$1,302 per ounce, up 13% year-on-year; average 2017 gold prices were US$1,257.
Relatively strong gold prices came in reaction to falling values of the U.S. dollar along with international political troubles, including threats of war between the USA and North Korea, the company noted.
Meanwhile, world gold production last year reached a new record of 3,268.7 tons, “marginally higher than that observed in 2016 (3,263 tons),” Mineros noted.
“From the point of view of demand, the global manufacture of jewelry increased by 4% to 2,135.5 tons,” according to Mineros.
“This is the first annual increase in this item since 2013, when the demand for gold for investment fell 23%, passing from 1,595.5 tons in 2016 to 1,231.9 tons in 2017.
“Central banks continued to increase their gold reserves for the eighth consecutive year, but at a slower pace than the one observed the previous year, buying 371.4 tons compared to the 389.8 tons purchased in 2016.
“The demand for gold for the technology industry and for dentistry increased 3% compared to that observed in 2016, going from 323.4 to 332.8 tons. These changes generated a net reduction in demand close to 7%, going from 4,378.20 tons in 2016 to 4,071.7 tons in 2017,” Mineros noted.
In Colombia, Mineros SA’s mainly alluvial gold production remained flat year-on-year, at 89,709 ounces. Underground gold production in Colombia fell 14% year-on-year, to 13,664 ounces.
In Nicaragua, production at its Hemco subsidiary rose 22% year-on-year, to 104,681 ounces of gold equivalent, according to the company. Mineros added that in 2018, the company will concentrate greenfield exploration mainly in Nicaragua.
Socially Responsible Mining
Meanwhile, Mineros continues to support environmentally and socially responsible mining in Colombia – in part by eliminating toxic mercury from is mainly alluvial operations, in contrast to criminal and reckless mining practiced by others.
Among Mineros social-environmental projects in 2017:
1.A “business strengthening” program, which last year provided financial credits and consulting to 25 entrepreneurial companies, “aimed at developing skills that not only help them to be better entrepreneurs but also better citizens.”
2. Apicultural production project: This program – supported in part by the U.S. Agency for International Development’s “Legal Gold” program -- continues to grow, with 100 families associated to the ASAPIBAS (Association of Beekeepers of the Lower Cauca and Southern Bolivar) cooperative in 20 villages near El Bagre, Nechí, Zaragoza, Anorí and Caucasia, Antioquia. These cooperatives produced 13 tons of honey last year, netting close to COP$271 million (US$95,000) in supplemental income.
These families also recently founded three laboratories for the production of bee-biological nuclei, “in order to continue growing and populating their apicultural units. Also, 120 new hectares were reforested in order to increase the floral supply available, while also serving as an environmental contribution for the region, rehabilitating areas [wrecked] by informal mining,” the company added.
3. Business and human rights project with the United Nations: “We continue supporting the Office of the United Nations High Commissioner for Human Rights in actions for the construction of peace and citizen coexistence” in mining areas, Mineros noted.
This project “supported the training of 50 members of the Committees of Coexistence of El Bagre that participate in the formulation of development programs with a territorial approach, while six education and recreation campaigns were carried out to generate bonds of trust, confidence and coexistence in neighborhoods of El Bagre and Zaragoza.”
4. Mining legalization: In 2017, Mineros provided technical-assistance loans to the informal miner group EMIJOM (Empresa de Mineros de Jobo Medio-Emijom) "for the improvement of ore beneficiation processes, in order to increase gold recovery and avoid the use of mercury."
5. Wetlands program: During 2017, Mineros helped clean 14 hectares of water and water-supply access pipes in natural marshes, working jointly with the communities of Sabalito Sinaí, Guamo-Guachí, El Pital, San Pedro and La Esperanza.
“In the same way, the community of Puerto Gaitán worked on cleaning the waters of the La Esperanza swamp,” with Mineros payments for this project generating extra income for local workers while also boosting environmental protection, the company added.
6. Conservation of river turtles: “In 2017, communities from the municipalities of Nechí, Zaragoza, Caucasia and El Bagre participated in nine conservation-center operations, achieving the release of 1,300 individuals of this species,” according to Mineros.
7. Fish farming and repopulation program: “Fulfilling the environmental management plan, during 2017 the repopulation of the Bocachico species was continued -- considered of great importance in the diet of the riverside populations and also because Bocachico is classified as an endangered species. With the participation of the fishing communities of Nechí and the National Authority of Aquaculture and Fisheries (AUNAP), we introduced 500,000 Bocachico fingerlings in strategic wetlands including La Taburetera, El Sapo, Corrales and La Esperanza,” according to Mineros.
8. Reforestation program: “In 2017, we planted about 120,000 trees of different native species on 60.5 hectares of land left behind after the alluvial operation (involving hydraulic landfills),” the company noted.
9. Agroforestry plots: This program added 48 more plots in 2017, “all built in the recovery zones left by the [alluvial] production units. In agroforestry systems, there are about 750 hectares [of reforested plots], where honey is produced, along with yam, yucca, banana, corn, rice, fruit and vegetables in home gardens. These activities are complemented with artisanal fishing, poultry, pigs, rams and cattle,” according to Mineros.
10. Rubber plantations: As of 2017, “the population of rubber trees planted amounted to 450,000 trees in about 1,000 hectares. Of these, the first 28,000 trees entered latex production,” the company added.
Medellin-based recycled plastics textile manufacturing specialist Enka Colombia announced March 15 that its full-year 2017 net profit fell to COP$1.7 billion (US$595,000), down from COP$10.6 billion (US$3.7 million) in 2016.
Colombia’s weak economy in 2017 combined with a 25% drop in domestic demand for textiles hurt Enka sales and profits -- but growing exports helped to compensate for domestic declines, according to the company.
Operating revenues rose 10% year-on-year, to COP$357 billion (US$125 million), once excluding the negative impact of sales terminations in economically wrecked “socialist” Venezuela.
Exports (excluding Venezuela) now account for 48% of Enka sales, up from 41% in 2016, according to the company. Sales to Brazil rose 29% year-on-year, while sales of filament for the fisheries industries in Perú, Chile and Spain also rose, according to the company.
México and the USA also boosted purchases of certain Enka fibers for production of tires and specialty clothing, the company added.
Following US$100 million invested in high technology, Enka is now the leading recycler of PET (polyethylene terephthalate) plastic from plastic bottles -- turning this waste material into novel textiles for clothing as well as specialty filament for tire manufacture.
“Our company is totally immersed in the global economy, taking raw materials from Asia, Europe and the Americas and then transforming and distributing products to clients in 19 countries,” according to Enka.
Today, 51% of its products are made from recycled plastics. But this is about to grow thanks to further investments in machinery that will convert not just plastic bottles but also plastic caps and labels into textile material, according to Enka.
This new process will start-up in second-half 2018, producing a recycled resin of “excellent quality and contributing to the sustainability of the plastic sector in Colombia,” according to the company.
Enka now has two PET recycling plants with capacity to process 34,000 tonnes per year; its national recovery system also is capable of collecting and reprocessing more than 1 billion PET bottles every year, according to the company.
Growing environmental consciousness around the world is helping to boost this business, further spurred by Organization for Economic Cooperation and Development (OECD) initiatives that have been embraced by the Colombian government.
Thanks to advanced technology investments, product innovations and productivity gains, “we have developed a wide portfolio of differentiated products that meet the needs of the most profitable market niches, thus reducing our exposure to Asian commodity producers,” according to Enka.
Novel textile materials generated COP$246 billion (US$86 million) in sales last year, up 4% year-on-year, accounting for 69% of total sales.
Meanwhile, Enka’s virgin PET sales would have been even greater in 2017 except for the situation in Venezuela, the company added.
Industrial thread 2017 sales grew 8% by volume and 18% by revenues year-on-year, with 85% of those sales going to export markets.
While filament sales were hurt by the plunge in Colombian textile production, filament sales to Brazil and Argentina helped compensate. As a result, filament sales showed net drop of 2% year-on-year, while Colombia sales dropped from 22% of sales in 2016 to just 15% of sales in 2017.
Thanks to investments in “EkoPET” technology, industrial thread modernization and self-generation of electric power, Enka added that it has boosted earnings before interest, taxes, depreciation and amortization (EBITDA) by 80% over the past eight years.
For 2017, EBITA came-in at COP$23 billion (US$8 million), up 4.7% year-on-year when excluding Venezuela..
Gains in cash-flow also cut financial debt, so that by year-end 2017, Enka’s debt ratio fell to 1.6-times EBITDA, according to the company.
Private real estate development fund Pactia – administered by Medellin-based Fiduciaria Bancolombia – on March 14 announced that full-year 2017 net income jumped 41.8% year-on-year, hitting COP$132 billion (US$46 million).
Gross income also rose 25% year-on-year, to COP$224 billion (US$78.7 million), while earnings before interest, taxes, depreciation and amortization (EBITDA) hit COP$107 billion (US$37.6 million), according to the company.
Year-on-year results aren’t fully comparable as 2017 was the first full year in operation of Pactia’s “Fondo de Capital Privado” (private capital fund), the company noted.
Pactia has real-estate investments in Colombia, Panama and the U.S.
During 2017, Pactia expanded its U.S. market holdings, taking a 45% stake in a portfolio of 14 commercial properties in Virginia, in which it invested COP$115 billion (US$40 million). Pactia also bought a commercial lot in Miami for a future mixed-use building project, according to the company.
As for 2018 plans, Pactia aims to invest an estimated COP$400 billion (US$140 million) this year in new projects, according to the company.
“We closed the year [2017] with very good results and we have the satisfaction of achieving our strategic goal of internationalization and diversification of our real-estate portfolio,” added Pactia president Nicolas Jaramillo.
Among Pactia’s recent flagship projects: the “Gran Plaza” commercial center in Bogota and another “Gran Plaza” in Bosa, Colombia.
The company added that it has obtained licenses to develop a new distribution center for Colgate Palmolive in Valle del Cauca (near Cali), as well as a new Hilton Hotel adjacent to the Corferias convention center in Bogota.
Estimated value of the current backlog of pending projects now totals COP$1 trillion (US$351 million), which when completed would yield another 281,000 square meters of leased space, according to the company.
U.S.-based global power tools, appliances and security-systems manufacturer Stanley Black & Decker just decided to make Medellin its new Americas-region financial services unit for commercial customers -- creating 200 new jobs here over the next 12 months.
According to Medellin’s business-development agency (Agencia de Cooperación e Inversión de Medellín y el Área Metropolitana, ACI), Stanley Black & Decker (SBD) now has some 50,000 global employees with annual sales now topping US$12 billion.
According to ACI, the company chose Medellin for the new financial-services offices “because of its solid business environment and its capacity to provide high-quality commercial services,” as well as the joint recruitment-and-collaboration efforts of ACI, Medellin’s high-tech “Ruta N” commercial landing space and Colombia’s “Procolombia” investment promotion agency.
SBD financial director Jamie Ritter added that “Medellin is a growing city, focused upon innovation and with a great quantity of talent, making it an attractive location for Stanley Black & Decker to develop a world-class center tied to strategic growth initiatives.”
Medellin-based construction giants Conconcreto and Construcciones El Condor separately reported in late February that fourth-quarter (4Q) net earnings dipped slightly in 2017 versus 2016.
For Conconcreto, net income fell 14.9% year-on-year in 4Q 2017 versus 4Q 2016, to COP$78 billion (US$27 million), while earnings before interest, taxes, depreciation and amortization (EBITDA) fell 6.6% year-on-year, to COP$220 billion (US$77 million).
Explaining the dip in profits, Conconcreto cited “evidence of the lower dynamism of the [Colombian] economy and therefore of the [construction] sector, reflected in the decrease in volume of construction and lower margins of the projects,” as well as “lower profits of the road concessions and associated companies.”
Among Conconcreto’s 2017 highlights: Continuing build-out of the 2.4-gigawatt “Hidroituango” hydroelectric plant in Antioquia – due for intial start-up in late 2018 -- as well as several road, tunnel and bridge works around Colombia, according to the company.
As for two big potential projects still in the planning stage: the proposed “Darien International” ocean-freight port at Necocli, Antioquia, in which Conconcreto has a contract covering all the civil works, as well as a proposed, four-lane divided road connecting the existing Las Palmas highway east of Medellin to the El Tablazo neighborhood near Medellin’s international airport in Rionegro.
El Condor Results
As for Construcciones El Condor, this company saw its 4Q 2017 net profits dip slightly year-on-year, to COP$185 billion (US$64 million), versus COP$186 billion (US$65 million) in 4Q 2016.
Operating income rose by 66.9% year-on-year, to COP$603 billion (US$210 million), while construction EBITDA rose 58%, to COP$119 billion (US$41 million).
Among 2017 highlights: El Condor saw financial close on the “Ruta al Mar” highway concession totaling COP$1.47 trillion (US$511 million) through a syndicate of local banks and international finance.
The company also finalized an engineering, procurement and construction (EPC) contract between El Condor and “Concesion Ruta al Mar SAS.”
As for the “Pacifico 2” highway project in Antioquia, the company achieved certain compliance milestones enabling the first payment of credit on the project.
Meanwhile, at year-end 2017, El Condor had a project and investment portfolio with a combined book value of COP$802 billion (US$280 million), the company noted.
Among the projects in the portfolio:
1.Concesión La Pintada S.A.S. in Antioquia (21.15% share), where construction has begun on a new bridge over the Rio Cauca. The “La Pintada” project had advanced by 29% at year-end, with capex to-date totaling COP$275 billion (US$96 million).
2. Concesión Pacífico Tres S.A.S. in Antioquia and Caldas, in which El Condor has a 48% stake. All licenses and permits have been approved, and the project had advanced 36% by year-end, with a to-date capex of COP$308 billion (US$107 million)
3. Concesión Aburrá Norte S.A.S. (Hatovial S.A.S.) in Antioquia, now 100% built, with El Condor having a 21.1% stake. Capex totaled COP$1.3 trillion (US$454 million).
4. Concesion Vias del Nus SAS, in Antioquia, where El Condor has a 21.15% stake. This project recently won regulatory approvals for the crucial “Tunel de la Quiebra” highway tunnels that will smooth freight transport between Medellin and northern Colombian ports.
Capex invested: COP$15 billion (US$5.2 million), with project advance at 1.56%
5. Concesión Vías de Las Américas S.A.S., in northern Colombia (66.67% participation), with capex at COP$1.16 trillion (US$ 405million) and project advance at 89.3%
6. Concesión Túnel Aburrá Oriente S.A.S., linking Medellin eastward to the international airport at Rionegro through new tunnels (already 71% complete at year-end 2017). El Condor has a 12.5% stake, with COP$500 billion (US$174 million) capex.
