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Medellin-based multinational insurance giant Seguros Sura announced August 16 that while it’s partly vulnerable to EPM’s new US$2.6 billion “conciliation” lawsuit against Hidroituango contractors and insurers, its net exposure is “very low.”

“Seguros Sura is not the insurer of Hidroituango’s construction damage policy [actually, that policy is covered by Mapfre insurance]; it acts as reinsurer in a minority portion,” according to Sura.

“This reinsurance policy was not subscribed by Seguros Sura, but by RSA Colombia, which was subsequently received as part of the RSA operation that Suramericana acquired between 2015 and 2016 in six Latin American countries.

“The company was summoned to a preliminary settlement for two compliance policies taken out by two [Hidroituango construction] contractors and not directly by EPM, largely reinsured.

“Seguros Sura Colombia, from its general insurance company, is analyzing based on technical and legal criteria the request for prejudicial conciliation before the Office of the Attorney General [of Colombia], formulated by the Vice Presidency of Legal Affairs of Public Companies of Medellín (EPM), with a claim of COP$9.9 trillion (US$2.6 billion) against all those summoned.

“The [Sura] general insurance company is linked to this process by two compliance policies taken by two of the consortia, the controller and the supervisor of the work, also summoned by EPM to the conciliation.

“One of the policies has an insured value limit of about COP$22 billion (US$5.8 million) and the other has coverage of up to COP$38 billion (US$10 million).

“Both amounts are the maximum responsibility that would correspond to Seguros Sura and in a greater proportion they are reinsured, thus leaving a low exposure of what the company would have to assume directly in the event of this event,” according to the company.

“As we reported in 2018, Sura is not the insurer of the project, it is only reinsurer with a minority stake of 13%.

“This implies that the relationship in this case is not directly with EPM, but with the leading insurer, from whom we have received information as one of the reinsurers regarding the handling of the loss associated with the construction damage policy. In fact, the final exposure of Seguros Sura in this policy is very low, as it is also reinsured in a large proportion.

“In addition, as has become public knowledge, the insurance company of the damage policy [Mapfre] already made a first disbursement of US$150 million to EPM, in December 2019. Seguros Sura Colombia, from its general insurance company, has paid the corresponding proportion to its minority stake as a reinsurer.

“Finally, it should be noted that this minority stake was not subscribed by Seguros Sura either, but by Royal & Sun Alliance (RSA) Colombia, a company that subsequently became part of an operation acquired by Suramericana in six countries in the region between 2015 and 2016, widely known at the time,” the company added.


Medellin-based textiles and plastics recycling giant Enka Colombia on August 14 posted a COP$1.4 billion (US$369,000) net loss for second quarter (2Q) 2020, down from a COP$3.2 billion (US$843,000) net profit in 2Q 2019.

Gross revenues fell 40%, to COP$58 billion (US$15 million), versus COP$97 billion (US$25 million) in 2Q 2019, according to the company.

“After a very good start to the year [1Q 2020] -- where the company achieved volume growth of sales of 8% and EBITDA growth of 79% -- in 2Q Enka was faced with large challenges derived from the [Covid-19] pandemic,” according to the company.

The pandemic resulted in “partial cessation of operations, a sharp reduction in demand and the implementation of biosanitary controls for the safe reactivation of [production] activity.”

In response, “the company managed to act quickly by strengthening its liquidity and adjusting its cost and expense structure to the ‘new normal,’” according to the company

In the meantime, “we continue to advance in the projects of the new ‘EKO-PET’ [plastics recycling] plant and the divestment of non-operational real estate assets. Due to the effects of the pandemic, although progress has been made, the respective [sales] contracts have not yet been formalized.

“Although uncertainty about the recovery of the world economy still persists, we trust that the better dynamics of a large part of the businesses will allow an increase gradual demand, which will translate into an improvement in the company’s results.”

As for first half (1H) 2020, earnings before interest, taxes, depreciation and amortization (EBITDA) declined 20% year-on-year, to COP$11.5 billion (US$3 million), down from COP$14.3 billion (US$3.77 million) in 2Q 2019.

Operating income for 1H 2020 totaled COP$161 billion (US$42 million), down 20% year-on-year. Exports accounted for 44% of total sales (down from 46% in 1H 2019) “due to a greater contraction in the foreign market than in the national market,” according to Enka.

“While the devaluation of the Colombian peso is a positive factor for Enka’s income structure, its effects during this semester have been limited by lower sales in 2Q 2020 and by exchange hedges previously contracted. We hope that by the second semester, with the recovery of sales and better levels of exchange coverage, the devaluation will have a more favorable effect on operating results.”

Assets at end-June 2020 rose by COP$26 billion (US$6.8 million), to a total COP$606.6 billion (US$160 million), “ mainly due to a higher cash position to face eventual effects of the situation generated by Covid-19,” according to Enka.

“To date, these resources have not been used because it has been possible to free working capital through portfolio collection and normalization of inventories.

“Liabilities increased by COP$33 billion [US$8.7 million], mainly due to net disbursements of about COP$33 billion [US$8.7 million] and a difference in exchange rate, which compensated for less financing of suppliers for lower purchases. The net indebtedness ends at COP$36.5 billion [US$9.6 million] and a [debt-to-EBITDA] index of 1.1-x, improving over the result at the end of 2019, at 1.3-x EBITDA,” according to the company.

In Enka’s plastics recycling businesses, 1H 2020 revenues hit COP$56.8 billion (US$14.9 million), taking a 35% share of total corporate sales. Recycled plastic exports totaled US$1.6 million, equivalent to 10% of the business income.

“So far this year the uptake of post-consumer [plastic] bottles showed a 7% decrease compared to the first half of 2019, a lower reduction than in the beverage sector, which between January and May contracted by 16.4% compared to the same period of the year prior,” according to Enka.

“To strengthen recycling coverage on Colombia’s Atlantic Coast and mitigate the effects of Covid-19 on collection in this region of the country, in the second quarter [2020] our subsidiary ‘Eko-Red’ opened its own collection center in Barranquilla. With this opening, the company adds four collection centers -- located in the main cities of Colombia -- consolidating the largest post-consumer bottle collection network in the country.”

As for the company’s “EKO-PET” (8,717 tonnes sales) and “EKO-Polyolefins” (1,044 tonnes sales), “these lines have been the best performing during the crisis, managing to even increase sales volume by 5% and 318% respectively,” according to Enka.

“The increase in sales in ‘EKO- Polyolefins’ is the result of the consolidation of approvals in different markets, enabling transformation of all caps and labels of the bottles currently recycled by the company,” according to the company.

Meanwhile, the company’s “EKO-Fibras” (4,138 tonnes sales) 1H 2020volume decreased 16% compared to 1h 2019 due to the impact of Covid-19 “with a greater impact on the export market, mainly Brazil. However, we have begun to see a gradual recovery in demand,” according to Enka

As for textile and industrial sales, “revenues from these businesses ended at COP$103.6 billion (US$27 million), representing 65% of the company’s total sales. Exports reached US$17.6 million, representing 62% of the [textile-industrial] unit’s revenues, especially to Brazil and the United States,” according to Enka.

Textile filament sales “have been most affected during the pandemic -- both in Colombia and abroad -- because [sector] recovery is intimately related to the reopening of trade, which is still limited due to strict sanitary restrictions and lower consumption. As a result, at the close of first half 2020, sales volume decreased 37%” year-on year, according to Enka.

As for industrial threads (4,980 tonnes sales), volume decreased 17% so far this year mainly due to decline in demand for tire materials, according to Enka.


Medellin-based multinational insurance, pensions and investments giant Grupo Sura announced August 14 that its second quarter (2Q) 2020 net income fell 17.7%, to US$87 million, while first half (1H) net income dropped 74%, to US$66 million.

During 1H 2020, “despite the [Covid-19] pandemic, revenues totaled COP$10 trillion [US$2.72 billion, down 4% year-on-year], with expense rising by just 2% and operating income standing at COP$922 billion [US$250 million, down 39% year-on-year],” according to Sura.

While both 1H 2020 and 2Q 2020 earnings are down year-on-year, 2Q 2020 net results nevertheless “represent a recovery compared to the first quarter of this year, thanks to positive levels of earnings obtained during the second quarter,” according to Sura.

“Contributing factors included a growth in written premiums and revenues from services rendered on the part of Suramericana (specializing in insurance and risk management), as well as stable flows of commission and fee income on the part of Sura Asset Management (pensions, savings, investment and asset management sectors), in spite of the adverse effect on the region's job markets,” according to the company.

“The results for the first half of the year proved to be better than what we had initially projected in the light of this pandemic, thereby demonstrating the capacity of both Suramericana and Sura Asset Management to transform, adapt and remain resilient, having made a gradual recovery over recent months,” added Grupo Sura CEO Gonzalo Perez.

“Likewise, our insurance and pension fund management subsidiaries obtained higher returns on their proprietary investments, following the sharp falls sustained on the capital markets in March,” he added.

Cost controls and efficiencies adopted in the latest quarter helped to limit the higher cost to the company of health-care services for its Colombia clients during the Covid-19 pandemic, according to the company.

Sura’s partial stock holdings in profitable foods manufacturer Grupo Nutresa “helped with the overall result,” but its partial holdings in profits-challenged Bancolombia undercut Sura because of “higher [Bancolombia loss] provisions having to be set up that in turn affected the bank’s earnings, a prudent measure given the uncertainty prevailing with a possible impairment of [Bancolombia’s] loan portfolio” during the Covid-19 crisis, according to Sura .

The Suramericana insurance division saw 1H 2020 net income jump 68% year-on-year, to US$79 million, including a 10.5% rise in total revenues, to US$ 2.39 billion, “thanks to growth in the property & casualty (up 7.5%) and life (up 7%) insurance segments as well as health care services rendered (up 21.5%) in Colombia,” according to the company.

“Furthermore, higher returns were posted on the portfolios held by the insurance subsidiaries, particularly in Argentina,” the company added.

Meanwhile, the Sura Asset Management division saw its asset base grow 7.9% year-on-year, to US$131.6 billion. This division now has 20.9 million clients.

“In spite of the effects of the Coronavirus on the regional job markets, fee and commission income for the mandatory pension business only fell by 1.8% at the end of 2Q 2020, having risen by 14.2% in the case of voluntary pensions, thanks to optimum sales management and a greater tendency to save on the part of our clients throughout the region,” according to Sura.

In July 2020, Wall street bond rater S&P confirmed Suramericana’s “AAA” rating for its local debt along with its main subsidiary, Seguros Sura Colombia. Fitch Ratings likewise reaffirmed Grupo Sura its long-term and local AAA rating, with a stable outlook, the company added.


Toronto-based Gran Colombia Gold (GCC) – owner/operator of Antioquia’s biggest gold mine – on August 13 posted a US$18.6 million net loss for second quarter (2Q) 2020, down from a US$768,000 net profit in 2Q 2019.

As for first half (1H) 2020, net income stands at US$5.67 million, down from US$8.67 million in 1H 2019, according to the company.

“Non-cash fair value changes in financial instruments totaling US$35.4 million in the second quarter of 2020 -- largely driven by the company’s 70% share price improvement -- contributed to the net loss,” according to GCC.

“First- half 2020 net income was net of a US$16.7 million charge related to the Caldas Gold RTO transaction,” the company added.

“Caldas Gold is making progress in its action plans to build Colombia’s next major gold mine. On July 6, 2020, Caldas Gold announced the results of a preliminary feasibility study for its Marmato Project.

“On July 29, 2020, Caldas Gold completed a CA$50 million [US$38 million] private placement of special warrants, of which Gran Colombia acquired CA$20 million [US$15 million] to maintain its equity ownership above 50%,” the company added.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for 2Q 2020 rose 13% year-on-year, to US$37.6 million. For 1H 2020, adjusted EBITDA rose 29% year-on-year, to US$88 million, according to GCC.

“Our production level at Segovia has steadied the last three months and with the stronger gold prices so far in the third quarter [2020], our earnings and free cash flow in the second half of 2020 are shaping up nicely,” added GCC executive chairman Serafino Iacono.

Mining operations at Segovia (Antioquia) and Marmato (Caldas department) continued during 2Q 2020 “despite the challenges associated with the Covid-19 national quarantine,” according to the company.

Total gold production in 2Q 2020 fell to 48,228 ounces, from 57,882 ounces in 2Q 2019, “reflecting the initial adverse impact of the Covid-19 quarantine on Segovia’s workforce in the first half of April. Protocols implemented by the company facilitated increased availability of workers thereafter and production at Segovia returned to about 95% of normal,” according to GCC.

Gold production at Marmato in 2Q 2020 likewise was down 38% year-on-year “as the quarantine had a greater impact on worker availability throughout the quarter,” according to GCC.

For full-year 2020, GCC now estimates gold production in Colombia in a range between 218,000 and 226,000 ounces.

At US$77 million, 2Q 2020 gross revenues were “almost on par” with 2Q 2019 “as the 31% year-over-year improvement in spot gold prices increased the company’s realized gold price to an average of US$1,696 per ounce sold,” which compensated for the 24% drop in gold sales volumes.

For the first half of 2020, gross revenues on gold sales rose 15% year-on-year, to US$178 million, the company noted.

“Total cash costs per ounce averaged US$713 per ounce in 2Q 2020 compared with $655 per ounce in 2Q 2019, reflecting the Covid-19 impact on production, which increased fixed production costs on a per-ounce basis,” according to GCC.


Medellin-based cement, electric power and highway/airports concessionaire Grupo Argos on August 13 reported a second quarter (2Q) 2020 net income of COP$62 billion (US$16 million), down 72% year-on-year.

Earnings before interest, taxes, depreciation and amortization (EBITDA) dipped 15% year-on-year, to COP$890 billion (US$236 million), while gross revenues fell 14%, to COP$3.34 trillion (US$885 million), according to the company.

Both revenues and profits were hurt by the Covid-19 crisis, according to the company, whose divisions include Cementos Argos (cement/concrete), Celsia (electric power) and Odinsa (airport/highways concessions).

“At Grupo Argos we maintain full confidence and optimism in the future of [Colombia], and we are also more committed than ever to the process of rapid and safe reactivation that can generate an effective revitalization of the economy and help us overcome this situation,” said Argos president Jorge Mario Velasquez.

Cement and urban-development sectors were hit hard by economic slowdowns resulting from Covid-19 quarantines, while the concessions business (Odinsa) suffered “mainly from the closure of the El Dorado Airport” in Bogota as well as from declines in highway toll revenues during the lockdowns, the company noted.


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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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