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Companies 513

Written by November 03 2021 0

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.

Written by November 03 2021 0

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.

Written by October 30 2021 0

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.

Written by October 28 2021 0

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.

Written by October 26 2021 0

Colombia’s National Environmental Licensing Authority (ANLA) announced October 25 that it has decided to shelve -- at least for now, pending further studies – AngloGold Ashanti’s proposed copper/gold mine in Jerico, Antioquia, even despite 75% favorability for the project among the citizens in-and-around Jerico.

“With the analysis of the information on file, which was collected in the field visits and the concepts of other entities, the ANLA technical team established that it is not possible to issue a substantive decision on the request for the environmental license of the mining project, so it has to be archived,” according to the official ANLA bulletin.

“The main technical considerations that led to the ordering of the [shelving of the project] file by the Authority are related to the definition of the area-of-influence, the characterization of the hydrogeological, hydrological, geotechnical and biotic components, considerations regarding the tailings deposit (residues from mining activity) and subsidence, among others.

“This evaluation process included professionals from different disciplines, experts in hydrogeology, hydrology, geotechnics, geochemistry, ecology, air quality and socioeconomic issues, among others.

“During this environmental procedure, more than 211 third parties have been recognized to date, guaranteeing citizen participation and access to information on the environmental licensing process to the communities surrounding the project during the evaluation process,” ANLA concluded.

AngloGold Ashanti Response

Reacting to the disappointing announcement, AngloGold Ashanti Colombia this morning issued the following press bulletin:

“AngloGold Ashanti Colombia specifies that, to date, the company has not received any official notification from the environmental authority regarding the evolution of the licensing process.

“To the extent that a [ANLA] press release does not constitute, in any way, legal notification of any administrative act, it is not possible to pronounce on a decision-to-archive, the details of which are unknown.

“It is relevant to specify that the [project shelving] file is one of three possible responses to an environmental license request, namely: approval, denial or archive-the-file. The file is a decision that implies that the authority considers that it is not possible to rule on the merits of the license application and allows space to resubmit the license application, once the alleged missing information is completed and submitted, to a new evaluation by the authority.

“At AngloGold Ashanti we have the peace of mind and pride of having a rigorous and exhaustive Environmental Impact Study, with analyses carried out with the accompaniment of more than 27 expert external consulting firms, for more than 14 years, in a judicious and open process of dialogue. with the communities and different stakeholders of the Quebradona project, as well as having given a timely and sufficient response to each and every one of the 174 requests for additional information that were requested by ANLA at the time.

“Proof of the above is that the Minera de Cobre Quebradona project already has all the other permits and licenses required to begin its execution, including the environmental subtraction permit granted by Corantioquia and the approval of the PTO [‘Programa de Trabajos y Obras’ (Works-and-Tasks Program)] by the Ministry of Mines of the Department. Likewise, the relationship of trust and approval by the community currently has a favorable level of close to 75%. The environmental license is the last step to be issued.

“We regret that the ANLA has exceeded all the time-lines as required under the law to pronounce itself and we insist that, once the ANLA notifies us in the terms established in the law, only at that moment will we proceed to analyze the details of the decision and the argumentation that for law must accompany it.

“AngloGold Ashanti ratifies its determined commitment to continue in the country and fulfill its purpose of converting mineral wealth into environmental, social and economic development for the southwest of Antioquia and for the country. Neither the authorities, nor the communities, nor the mining companies can allow Colombia to miss the opportunity to advance in a better use of its natural resource potential and include sustainable and responsible mining as an essential part of its exports,” the company concluded.

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Medellin Herald is a locally produced, English-language news and advisory service uniquely focused upon a more-mature audience of visitors, investors, conference and trade-show attendees, property buyers, expats, retirees, volunteers and nature lovers.

U.S. native Roberto Peckham, who founded Medellin Herald in 2015, has been residing in metro Medellin since 2005 and has traveled regularly and extensively throughout Colombia since 1981.

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