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Medellin-based multinational foods giant Grupo Nutresa announced July 29 that its second quarter (2Q) 2022 net profit rose 53% year-on-year, to COP$214 billion (US$50 million).

Revenues also rose 36% year-on-year, to COP$4 trillion (US$935 million), according to the company.

So far this year, first-half (1H) net income is up 38%, at COP$515 billion (US$120 million), while 1H earnings before interest, taxes, depreciation and amortization (EBITDA) is up 27%, to COP$950 billion (US$222 million), with a 12.5% EBITDA margin, according to Nutresa.

“All of the geographies where the organization operates report double-digit growth rates,” according to Nutresa.

“Colombian sales amount to COP$4.6 trillion [US$1.07 billion], which represents 61.1% of the total sales, with a 32.5% growth rate.

“International sales totaled COP$3.0 trillion [US$701 million], with a 30.6% growth.

“In the middle of an inflationary and volatile global setting, Grupo Nutresa continues to manage the commodities increase through hedging and an optimal administration of its main raw materials.

“Operating expenses grew 14.4%, entailing efficiencies for the company and growing at a lower rate than sales. Consequently, the operating profit amounted to COP$729 billion [US$170 million], which represents a 34.7% growth compared to the corresponding term in 2021.

Meanwhile, financial expenses rose 47.9% year-on-year, “mainly due to the increase in the interest rates in the territories where Grupo Nutresa operates,” according to the company.

Cemex LatAm Reports Zero Profit for 2Q 2022

Thursday, 28 July 2022 13:51 Written by

Colombia-based Cemex LatAm announced July 28 that its second-quarter (2Q) 2022 operations produced zero profits, down from a modest US$16,000 net profit in 2Q 2021.

Consolidated net sales rose 11% year-on-year on a comparable basis for the ongoing operations once including foreign exchange fluctuations, according to the company. “Higher cement prices and ready-mix volumes were the main drivers of the improvement,” according to Cemex.

Corporate-wide cost-of-sales as a percentage of net sales increased by 7.8 percentage points (pp), from 60.2% in 2Q 2021 to 68% in 2Q 2022. “The increase was primarily due to higher variable costs, mainly in kiln fuel,” according to Cemex.

Operating expenses as a percentage of net sales declined by 2.7pp during the latest quarter, from 26% in 2Q 2021 to 23.4% in 2Q 2022.

Operating earnings before interest, taxes, depreciation and amortization (EBITDA) during the latest quarter declined by 20% on a comparable basis. “Thee decline was mainly due to higher operating costs, despite higher sales,” according to Cemex.

Operating EBITDA margin during 2Q 2022 decreased by 6.1pp year-on-year. “The positive effect from higher cement prices and ready-mix volumes was offset by higher variable costs and a negative product-mix effect,” according to the company.

“In Colombia, our domestic gray cement volumes declined by 6%, while our ready-mix volumes increased by 33%, during the second quarter on a year-over-year basis,” according to Cemex.

“Our cement and ready-mix prices improved by 8% and 2%, respectively, on a year-over-year basis in local-currency terms. The improvement in cement pricing was driven by our price increases in the distribution segment, implemented in December 2021 and April 2022.

“In the ready-mix business, our volume growth during the quarter was supported by increased market demand in the formal sector, and our recent investments to increase the ready-mix footprint mainly in the metro areas of Bogota and Cali,” the company added.

In Panama, domestic gray cement and ready-mix volumes increased by 6% and 25%, respectively, year-over-year. “Volume growth was driven primarily by increased activity in the infrastructure sector, mainly in the third line of the Metro. Despite the improvement, industry volumes are still below pre pandemic levels,” according to Cemex.

Panama cement prices “during the quarter improved by 1% on a sequential basis, stopping the downward trend observed since 2019. During the quarter, our cement plant exported more than 65,000 tons of cement and clinker to nearby markets with supply shortages.”

In the “Rest of Cemex LatAm” region including Guatemala and Nicaragua, “domestic gray cement and ready-mix volumes declined by 6% and 37%, respectively, year-over-year,” according to the company.

“In Guatemala, our domestic gray cement volumes declined by 12% on a year-over-year basis. Our cement volumes declined mainly due to heavy rains during May and June, as well as to our pricing strategy.

“In Nicaragua, our domestic gray cement volumes remained stable year-over-year. After several quarters of cement volume growth in the infrastructure sector, we observed a slight decline during the latest quarter,” the company added.

Medellin-based multinational supermarket and dry-goods retailer Grupo Exito announced July 27 that its second quarter (2Q) 2022 net income rose 22.7% year-on-year, to COP$62.2 billion (US$14.2 million).

Operating income likewise rose 27.6%, to COP$4.7 trillion (US$1.07 billion), while recurring earnings before interest, taxes, depreciation and amortization (EBITDA) rose 21%, to COP$371 billion (US$84.8 million).

Éxito credited “good commercial performance and operational efficiencies in the three countries [Colombia, Argentina and Uruguay] where it has a presence.”

“The strengthening of the omnichannel strategy in Colombia allowed e-commerce channels to grow their sales by 17%, orders by 36.2% (a total of 5.7 million dispatches) and reaching a share of 12.1% over the total sales of the country during the first half of the year.

“Innovative formats continue to be an important lever for differentiation and competitiveness. ‘Success Wow’ represented 30.2% of the brand's total sales and ‘Carulla FreshMarket’ 46.6%,” according to the company.

“The increase in traffic to shopping centers continued to contribute to the result of the real estate business. The occupancy rate of shopping centers reached 93.1% in Colombia and 88% in Argentina in the second quarter.

“The stable internal consumption of Uruguay was reflected in a growth in sales of 7.2% in local currency with an increase in recurring EBITDA of 23.4% measured in COP [Colombia pesos], as a result of greater productivity and strict control of expenses.

“The ‘Disco’ and ‘Devoto’ stores that operate under the ‘fresh market’ model participated with 50.5% of total sales, growing 5.8 percentage points more than the non-reformed stores.

“In Argentina, Grupo Libertad's sales in local currency grew by 78.7%, exceeding high inflation, benefiting from the economic reactivation and the positive performance of the real estate business,” the company added.

Toronto-based GCM Mining (formerly Gran Colombia Gold) – Antioquia’s biggest gold miner -- announced July 25 that it has just completed a 100% all-stock merger deal and as a result will now be renamed Aris Gold, with headquarters moved to Vancouver, British Columbia.

The GCM/Aris combination boasts of combined gold reserves of 3.8 million ounces and a resource base of 18.3 million ounces “measured and indicated” as per conventional mining standards, according to the company.

According to incoming Aris chairman Ian Telfer, “after Aris Gold became operator of the Soto Norte [Santander, Colombia] joint venture, joining forces with GCM became a logical next step.”

Outgoing GCM chairman Serafino Iacono commented that “this transaction further diversifies the company’s portfolio and reaffirms Colombia as an area of focus,” with expanded diversification projects in Guyana and in Canada.

The new CEO of Aris Gold -- Neil Woodyer – added that “we are building a gold mining business with scale, cash flow, a strong financial position with US$397 million of cash and US$260 million of additional committed funding, and a high-quality growth pipeline.”

The company simultaneously announced that former Colombia Minister of Justice and Vice-Minister of Mines and Energy Mónica de Greiff is now joining the Aris board of directors.

The Segovia operations in Antioquia – ongoing for more than 150 years -- produced 206,389 ounces of gold in 2021, the company noted.

Meanwhile, the Marmato mine in Caldas, Colombia, is undergoing a modernization program and is expected to produce some 175,000 ounces of gold per year, according to the company.

Elsewhere, the Toroparu project in Guyana is expected to have an average gold production of 225,000 ounces per year over the projected 24-year mine life, according to the company.

As for the Soto Norte joint-venture project in Colombia, Aris estimates average gold production of 450,000 ounces per year, of which 50% would go to Aris, according to the company.

In contrast to some wildly unsustainable economic schemes proposed by incoming Colombia President Gustavo Petro – like giving dead-end government jobs to 3 million unemployed people -- outgoing President Ivan Duque on July 21 here in Medellin outlined huge potential for sustainable jobs growth and wealth creation in the creative-industries sectors, also known as the “orange economy.”

Thanks to wisely targeted tax incentives, “today Colombia is the epicenter and the most attractive place in Latin America for more investment in the orange economy,” President Duque explained here.

At the “Forum of Art, Culture, Creativity and Technology,” Duque pointed out that companies in the creative-industries sectors here "do not pay income tax during the first five years,” as long as they meet certain targets for investment and jobs creation.

“Last year more than 300,000 companies were created and, according to Confecamaras, 40% of them were associated with the orange economy,” he said.

Colombia’s national trade-school program (SENA) “has more than 400,000 young people who have been trained through these certified programs, and SENA can reach an additional million in complementary programs,” he added.

“Today Colombia allows these enterprises to connect with more markets, with important regulations that allow more exports from Colombia, including creative services, and at a 40% tax discount,” he said.

Thanks to huge growth in the “orange economy,” creative industries here now account for a greater proportion of Gross Domestic Product (GDP) than even Colombia’s traditional coffee and mining industries, he said.

That’s why “we have to ensure that this sector has a continuing voice, stability, training and projection for the future,” he concluded.

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About Medellin Herald

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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