Companies 514
Medellin-based multinational electric-power transmission builder-operator, highways concessionaire and telecom services provider ISA – now 51% owned by Colombia’s mostly state-owned Ecopetrol oil company – on November 3 reported third quarter (3Q) 2021 net income of COP$121 billion (US$31.5 million), down 78% from 3Q 2020.
Despite the profit decline, ISA’s earnings before interest, taxes, depreciation and amortization (EBITDA) actually rose 5.8% year-on-year, to COP$1.86 trillion (US$486 million), while operating revenues likewise rose 7%, to COP$2.86 trillion (US$747 million), according to the company.
The rise in operating revenues “was mainly due to the entry-into-operation of energy transmission projects, the consolidation of Orazul Energy Group at the end of the third quarter of 2020, the Ruta Costera [Colombia highway concession] project as of the fourth quarter of 2020 and PBTE [Brazil power transmission] as of March 2021, in addition to the increase in construction activity of concessions in Brazil and Chile,” according to ISA.
“When deducting the impact of the costs associated with the reprofiling of ISA InterChile’s debt and the change in the income tax rate in Colombia, accumulated income would total COP$1.6 trillion [US$418 million], 4.8% higher with respect to the same period of the previous year,” according to the company.
“ISA’s natural hedging strategy, where each company seeks to incur debt in the same currency in which revenues are received, resulted in the effect of exchange rate variations on net income for the whole year to be -1.1%,” the company added..
Among 3Q 2021 highlights:
1. More electricity transmission projects entering into commercial operation, including the Nueva Pan de Azúcar-Polpaico Reactive Compensation in ISA InterChile; the IE Itaipura in ISA CTEEP in Brazil; the Triple A Connection in Transelca (Colombia) and “72 reinforcements to the existing network in ISA CTEEP in Brazil, which together contributed total annual revenues of US$30 million,” according to the company.
2. ISA InterChile issued its first structured green bond on July 26, totaling US$1.2 billion, at a 35-year term and a 4,5% coupon. “This allowed the re-profiling of the existing debt of the Cardones-Polpaico project, lowering the financial cost and increasing the average life of the loan, thereby achieving a better match with the life of the asset. This is a key project in Chile, under the government's program of decarbonization and mitigation of climate change impacts,” according to ISA.
3. Construction of 25 energy transmission projects and 257 reinforcements in Brazil. “These will contribute total annual revenues of US$382 million once they are in operation,” according to ISA.
4. Winning a crucial environmental license for the UPME07-2017 Sabanalarga-Bolívar 500-kV transmission project in Colombia, thereby clearing the way for construction to begin.
Medellin-based utilities giant EPM announced November 2 that its third quarter (3Q) 2021 net income hit COP$2.8 trillion (US$730 million), up sharply from COP$1.3 trillion (US$337 million) in 3Q 2020.
Earnings before interest, taxes, depreciation and amortization (EBITDA) jumped 28% year-on-year, to COP$5.5 trillion (US$1.4 billion), while EBITDA margin came-in at a healthy 30%, according to the company.
Meanwhile, 3Q 2021 revenues amounted to COP$18.2 trillion (US$4.7 billion) as the Colombian economy continues to recover from last year's Covid-19 depression.
As a result, “EPM maintains healthy and solid finances,” according to the company, 100% owned by the city of Medellin.
“The group's investments in infrastructure as of September were COP$2.7 trillion [US$704 million] of which COP$1 trillion [US$261 million] corresponds to the Hidroituango hydroelectric project.
“Through September, EPM has paid the municipality of Medellín COP$1.3 trillion [US$339 million] of the total COP$1.4 trillion [US$365 million] scheduled to be transferred during 2021."
Macroeconomic reactivation, relatively heavy rains in Colombia supporting its hydroelectric power output, lower operating costs and the lower impact of Covid-19 all boosted financial results, according to the company.
Net foreign-currency-exchange expense in 3Q 2021 was just COP$24 billion (US$6.3 million), 97% lower than the same period in 2020, “caused by the restatement of the debt in dollars associated with the accumulated devaluation of the Colombian peso of 11.72 % and a closing rate of COP$3,834.68 per US$1,” according to EPM.
On the other hand, accounts-receivable balances rose to COP$158 billion (US$41 million) and non-payment of utility bills rose to COP$159 billion (US$41.4 million), both resulting from the Covid-19 pandemic.
Despite those losses, Grupo EPM total assets rose 4% year-on-year, to COP$66.5 trillion (US$17.3 billion); liabilities rose 5%, to COP$38.5 trillion (US$10 billion), and shareholder equity rose 4%, to COP$28 trillion (US$7.3 billion), according to the company.
Financial debt for both EPM Group and its parent holding company was 41%. The Debt/EBITDA indicator for EPM Group closed at 3.74, better than the 4.41 ratio for 3Q 2020.
“Discounting the available cash reserve, the net debt/EBITDA indicator stood at 3.10 for the EPM Group and at 4.39 for the parent EPM,” the company added.
Medellin-based multinational banking giant Bancolombia announced November 2 that its third quarter (3Q) 2021 net income hit COP$943 billion (US$246 million), up 237% year-on-year.
Loan provision charges “decreased by 17.8% when compared to 2Q 2021 and by 69.4% when compared to 3Q 2020. This reduction is largely due to a better economic outlook in 2021, and to the fine-tuning in the provisioning models for the portfolio under credit reliefs,” according to the company.
As of September 30, 2021, Bancolombia's assets totaled COP$269 trillion (US$70 billion), up 1.6% year-on-year, “largely explained by the growth in the loan book,” according to the company.
“In 3Q 2021, gross loans grew 3.3% compared to 2Q 2021 and 5.8% compared to 3Q 2020. During the last 12 months, [Colombian] peso-denominated loans grew 7.5% and the dollar-denominated loans (expressed in US dollars) grew 4.2%.
“Gross loans denominated in currencies other than COP -- generated by operations in Central America, the international operation of Bancolombia Panamá, Puerto Rico and the US dollar-denominated loans in Colombia, accounted for 34.3% of the portfolio, and grew 4.2% in the quarter, when expressed in COP,” according to the company.
Meanwhile, “total reserves (provisions in the balance sheet) for loan losses decreased 0.9% during the quarter and totaled COP$16.69 trillion [US$4.3 billion] equivalent to 7.9% of the gross loans at the end of the quarter,” the company added.
At the end of 3Q 2021, Bancolombia's net investment portfolio totaled COP$26.8 trillion (US$6.98 billion), down 6.8% from the end of 2Q 2021 and 3.2% from the end of 3Q 2020.
“Bancolombia's consolidated solvency ratio under Basel III was 15.31% in 3Q 2021, while the basic capital ratio (Tier 1) was 11.76%. This leverage level is adequate considering the balance sheet risks and asset growth expectations,” the company added.
Net interest income totaled COP$2.9 trillion (US$756 million) in 3Q 2021, up 2.1% from 2Q 2021 and 4.9% above 3Q 2020.
“The total cost of funding extended its downward trend during 3Q 2021. Savings accounts and checking accounts continued to increase their share over the last 12 months. Savings accounts represented 36% in 3Q 2020, increasing to 42% of total funding by 3Q 2021.
“On the other hand, checking accounts represented 14% in 3Q 2020, rising to 16% of total funding in 3Q 2021. The annualized average weighted cost of deposits was 1.41% in 3Q 2021, falling 4 basis points compared to 2Q 2021 and 75 basis points compared to 3Q 2020,” the company added.
During 3Q 2021, net fees and income from services totaled COP$880 billion (US$229 million), up 9.1% compared to 2Q 2021, and up 15.2% compared to 3Q 2020, according to the company.
Loans overdue for more than 30 days totaled COP$9 trillion (US$2.3 billion) at the end of 3Q 2021, representing 4.4% of total gross loans, down from 4.6% in 2Q 2021
In the latest quarter, loan charge-offs totaled COP$854 billion (US$222 million). Coverage for loan losses was 167.2% at the end of 3Q 2021, down from 169.1% at the end of 2Q 2021.
“Provision charges (net of recoveries) totaled COP$514 billion [US$134 million] in 3Q 2021. The provision expense for the quarter is mostly related to the operation in Colombia.
“The gradual decrease [in bad-loan provisions] is associated with the macroeconomic impact and adjustments in the provisioning models relating to clients subject to credit reliefs, which jointly have caused a balance reduction from previous periods.
“Provisions as a percentage of the average gross loans were 1.0% annualized for 3Q 2021 and 2.2% for the last 12 months.
“Bancolombia maintains a strong balance sheet supported by an adequate level of loan loss reserves,” with allowances for loan principal totaling 7.4% of total loans at the end of 3Q 2021, “decreasing when compared to 2Q 2021,” the company added.
Medellin-based multinational foods giant Grupo Nutresa on October 29 reported a 17% year-on-year hike in third quarter (3Q) 2021 net profits, hitting COP$173 billion (US$46 million).
Operating income rose to COP$3.36 trillion (US$893 million), up from COP$2.85 trillion (US$757 million) in 3Q 2020.
Meanwhile, 3Q 2021 operating profit rose 8.4% year-on-year, to COP$867 billion (US$230 million), according to the company.
As for nine-months 2021 results (January through September), sales so far this year are up 11.7%, to COP$9.1 trillion (US$2.4 billion), while sales in Colombia are up 14.5% year-on-year, hitting COP$5.5 trillion (US$1.46 billion), according to the company.
Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) so far this year are up 5.4%, to COP$1.2 trillion (US$319 million), with a 12.9% margin on sales.
Net profit so far this year is up 14%, to COP$535 billion (US$142 million), according to the company.
International sales, up 7.7% year-on-year, hit COP$3.6 trillion (US$964 million), accounting for 39% of total sales.
Grupo Nutresa boasts of a direct corporate presence in 14 countries with 47 production plants, 45,861 employees and product sales in 78 countries on five continents.
Colombia-based Cemex LatAm Holdings – producer of cement, concrete and aggregates in six Latin American nations – on October 27 reported a third quarter (3Q) 2021 net loss of US$10.6 million, a big improvement over the US$110 million net loss in 3Q 2020.
Corporate-wide operating earnings before interest, taxes, depreciation and amortization (EBITDA) rose to US$56 million, up from US$50 million in 3Q 2020.
Net sales also improved year-on-year, to US$235 million, from US$209 million in 3Q 2020, once adjusting for foreign-currency fluctuations.
“Higher volumes in Costa Rica, Nicaragua, and Panama, as well as higher prices in Costa Rica and the ‘rest of CLH region’ [including Nicaragua, Guatemala, El Salvador], were the main drivers of the improvement,” according to the company.
In Colombia, “we estimate that our quarterly cement volumes slightly underperformed the industry on a year-over-year basis mainly due to our pricing strategy and competitive dynamics,” according to Cemex.
“In our ready-mix business [in Colombia], volumes improved 31% on a sequential basis, mainly due to a recovery in formal-sector activity and a base effect stemming from the protests that occurred mainly in May.
“We believe the outlook for cement volumes remains favorable [in Colombia], supported by record home sales, the resilience of the self-construction sector, the execution of the existing fourth-generation highway projects, as well as the rollout of new infrastructure programs,” the company added.
Colombia net sales for 3Q 2021 rose to US$117 million, versus US$115 million in 3Q 2020, but operating EBITDA dipped 5%, to US$27 million. Gray-cement prices in Colombia during 3Q 2021 fell 4% while aggregates dipped 1%, but ready-mix concrete prices stayed flat year-on-year.
