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Medellin-based multinational banking giant Bancolombia on February 21 reported a full-year 2019 net income of COP$3.1 trillion (US$917 million), up 17% year-on-year.

However, fourth quarter (4Q) 2019 net income dropped 46% compared to third quarter (3Q) 2019, to COP$878 billion (US$260 million), according to the company.

Gross loans in 4Q 2019 grew 4.9% when compared to 4Q 2018, while Colombian peso-denominated loans grew 8.7% when compared to 4Q 2018.

Net interest income was COP$2.84 trillion (US$840 million) for 4Q 2019, up 0.8% year-on-year, according to the company.

Annualized net interest margin for 4Q 2019 was 5.6%, up 10 basis points during the quarter but down 40 basis points when compared to 4Q 2018.

“Provision charges for the [latest] quarter were COP$1.13 trillion [US$334 million] and the coverage ratio for 90-day past due loans was 194.3%,” according to Bancolombia.

“Provision charges increased by 14.4% when compared to 4Q 2018 and by 56.3% compared to 3Q 2019. New past-due loans totaled COP$730 billion [US$216 million] for the [latest] quarter,” the company added.

“Operating expenses increased by 16.2% when compared to 4Q 2018 and 10.7% when compared to 3Q 2019. The increase in operating expenses was mainly explained by the depreciation of the peso versus the dollar over the last twelve months and higher expenses related to foreclosed assets,” according to the company.

As of December 31, 2019, Bancolombia’s assets totaled COP$236 trillion (US$69.8 billion), up 7.3% compared to 4Q 2018. “The increase in total assets during the year is largely explained by the growth in the loan book and cash,” according to the company.

Meanwhile, as of December 31, 2019, Bancolombia’s liabilities totaled COP$207.3 trillion (US$61.3 billion), down 0.3% from the end of 3Q 2019 but up 7.2% compared to 4Q 2018

“During the [latest] quarter, the COP appreciated 5.8% versus the U.S. dollar and over the past 12 months, it depreciated 0.8%. The average exchange rate for 4Q 2019 was 1.3% higher than the one in 3Q 2019 and 11% higher in 2019 when compared to 2018,” according to the company

“As of December 31, 2019, the operations in Banco Agricola in El Salvador, Banistmo in Panama and BAM in Guatemala, represented 26% of total gross loans.

“Gross loans denominated in currencies other than COP, originated by the operations in Central America, the offshore operation of Bancolombia Panama, Puerto Rico and the U.S. dollar-denominated loans in Colombia accounted for 32.8% [of all loans] and decreased by 6.8% during 4Q 2019 (when expressed in COP), explained mainly by the appreciation of the COP against the U.S. dollar during the quarter.

“Total reserves (allowances in the balance sheet) for loan losses increased by 2.9% during the quarter and totaled COP$10.9 trillion [US$ billion], equivalent to 6.0% of gross loans at the end of the quarter,” the company added.

“Deposits by customers totaled COP$157 trillion [US$46 billion] or 75.8% of liabilities at the end of 4Q 2019, increasing by 4.8% when compared to 3Q 2019 and by 10.6% over the last 12 months. The net loans-to-deposits ratio was 109% at the end of 4Q 2019 -- decreasing when compared to 115.6% at the end of 3Q 2019.

“Bancolombia’s funding strategy during the last months has been to reduce the average life and cost of time deposits and promote saving and checking accounts in the consumer segment in order to keep the funding cost at a minimum. The objective is to build and maintain ample liquidity and stable margins,” the company added.

“The deterioration of the loan portfolio (new past due loans including charge-offs) was COP$730 billion [US$216 million] in 4Q 2019. Provision charges (net of recoveries) totaled COP$1.1 trillion [US$325 million] in 4Q 2019, mainly explained by some deterioration in the corporate portfolio in Central America. Also, there was an expected deterioration in the consumer portfolio in line with the growth of this segment,” according to Bancolombia.

As of December 31, 2019, Bancolombia had 31,075 employees, 16,740 banking agents, 975 branch offices and 6,169 ATMs. The company also served more than 15 million customers, according Bancolombia.

Medellin-based multinational foods manufacturer Grupo Nutresa on February 21 reported a 5.2% year-on-year net income boost for full-year 2019, to COP$513 billion (US$152 million).

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 13.5% year-on-year, to COP$1.3 trillion (US$385 million), while sales jumped 10.5% to COP$9.9 trillion (US$2.9 billion).

For fourth-quarter (4Q) 2019, profits inched-up by 0.9% year-on-year, to COP$508 billion (US$150 million), while EBITDA rose 19.6%, to COP$1.1 trillion (US$325 million).

Full-year 2019 sales in Colombia grew 8.1% year-on-year, hitting COP$6.2 trillion (US$1.8 billion). Colombia sales were 62.3% of total global sales.

International sales increased by 14.5% in Colombian-peso terms, hitting COP$ 3.76 trillion (US$1.1 billion), or 3% higher year-on-year in U.S.-dollar terms.

“More than 80% of this [corporate-wide] growth is driven by higher volumes registered in all the business units of the group,” according to Nutresa.

“Gross profit for the period amounts to COP$4.4 trillion [US$1.3 billion], with a decrease in the gross margin of 0.8% compared to that of 2018, because of an increase in the cost of some raw materials and the [COP-to-U.S. dollar] exchange rate associated with several [operating units] during the year,” the company added.

As for non-operating revenue-and-costs impacts, Nutresa recorded a 22.2% increase in financial expenses “due to the recording of the liability obligation derived from the IFRS 16 accounting standard. The expenses corresponding to the group’s interest-on-debt decreased as a result of lower rates of financing,” the company added.

Medellin-based multinational cement/concrete producer Cementos Argos on February 21 reported US$37 million net income for full-year 2019, a 39% decline year-on year as measured in U.S. dollars.

Revenues were essentially flat at US$2.85 billion in 2019 versus US$2.84 billion in 2018, while earnings before interest, taxes, depreciation and amortization (EBITDA) rose 2.9% year-on-year, to US$535 million.

Fourth-quarter (4Q) 2019 net income fell 39% year-on-year, to US$48.8 million, but 4Q 2019 EBITDA rose 7.1% year-on-year, to US$479 million. Gross revenues rose 3.7%, to US$686 million.

“In the United States -- the company’s main market -- cement sales reached 6.3 million tons, with record growth of 9.5% or around 545,000 tons,” according to Argos. U.S. market revenues rose 7.8% year-on-year, to US$1.6 billion, while EBITDA rose 12%, to US$268 million.

Corporate-wide across all markets, Cementos Argos dispatched 16 million tons of cement (up 0.6% over 2018) and 10 million cubic meters of concrete (down 1.5%) in 2019.

“These volumes reflect a positive growth of the demand in the United States, the still-challenging market conditions in Honduras and Panama and the short-term effect of the strategy to recover prices in Colombia,” according to the company.

"In Colombia, a significant price recovery was achieved, supported by good growth in demand and growing acceptance of Argos' value proposition, both in the mass markets and industrial markets,” according to the company.

“Of the 34 countries in which the company sells, measured in U.S. dollars, Colombia has the lowest-priced cement,” which discourages imports competition, according to Argos.

Despite advantages in cement prices and value proposition, Colombia results were affected by “high inflation of fuel costs, which increased 7.14% in 2019, especially due to the increase in the internal price of coal during the first semester,” according to the company.

Argos also suffered a temporary decline in sales because of a landslide near its Rioclaro, Antioquia plant, which caused a 13-day closure of the Medellin-Bogotá highway.

As a result, Colombia cement volumes dipped 3% year-on-year and concrete sales fell 5.3%, according to the company.

Despite those setbacks, Colombia 2019 revenues nevertheless rose 3.8% year-on-year, to COP$2.3 trillion (US$677 million), while Colombia EBITDA rose 20% year-on-year, to COP$522 billion (US$153 million), according to the company.

“The Colombian market continues to show a positive growth trend,” according to Argos. “Important infrastructure, housing and commercial buildings projects continue to drive the development of the sector.”

On the other hand, in its Caribbean and Central America regional markets, Argos faced “significant challenges due to the short-term difficulties facing the economies of Honduras and Panama.” Nevertheless, Argos “managed to compensate to some extent the impact on the results with the growth of exports and the good performance of operations in the Dominican Republic and Haiti,” according to the company.

Even so, the Caribbean/Central America region “remains the most profitable for the company in terms of EBITDA margin and return on capital employed,” according to Argos.

Medellin-based electric power giant Celsia on February 20 announced that its full-year 2019 net income rose 72% year-on-year, to COP$603 billion (US$177 million),

Earnings before interest, taxes, depreciation and amortization (EBITDA) likewise rose year-on-year, to COP$1.26 trillion (US$370 million), while gross revenues increased 9%, to COP$3.7 trillion (US$1.08 billion), according to the company.

Fourth-quarter (4Q) net income also rose 77% year-on-year, to COP$191 billion (US$56 million), while EBITDA rose 20% and revenues climbed 7%.

Celsia credits the growth in revenues and profits in part to the sale of its former Free Zone thermal power plant and also the acquisition of electric power distribution and marketing operations in Tolima.

Other 2019 highlights included “creation of platforms for investment for the development of medium and large-sized solar projects,” build-out of more transmission assets, and “the beginning of the development of a thermal power project with the size appropriate to [maintaining power-output] balance,” paired with its intermittent renewable-power generation.

Colombia revenues accounted for 84% of the consolidated total, with Central America accounting for the other 16%.

“Income generation in Colombia during the [fourth] quarter totaled COP$210 billion [US$61.8 million] – up 29% -- excluding the effects of the [sale of the Free Zone power plant] in 2018,” according to Celsia.

Total power generation in the latest quarter was 1,037 gigawatt-hours (GWh), down 29% mainly because of the sale of the Free Zone power plant in 2018. “If we exclude Free Zone from that figure, the decrease is 7%, explained by lower hydropower generation,” according to Celsia.

The company closed 2019 with a debt of COP$3.8 trillion (US$1.12 billion), down COP$713 billion (US$210 million) compared to the third quarter of 2019. “We continue to reduce net debt/consolidated EBITDA,” according to Celsia. “At the end of 2019, the ratio was 2.71 times, lower than the 3.9 times recorded at the end of the first half of 2019.”

As for social-environmental initiatives, Celsia boasted that it planted 4.3 million trees around 30 municipalities of Valle del Cauca, plus two areas in Antioquia and one in Tolima, restoring more than 3,300 hectares through the “ReverdeC” program.

The company also invested in voluntary and compulsory social-impact-compensation programs including energy and water upgrades for various schools; road construction projects; and development of cultural, sports and health activities, according to the company.

Celsia is a division of Medellin-based power, cement and airport/highway concessionaire Grupo Argos.

Uber-Colombia announced February 20 that it’s relaunching computerized application-based alternative taxi services, which had been terminated February 1 because the Colombian government ruled that Uber had failed to comply with all legal requirements for such services.

According to the announcement (in Spanish, see: https://www.uber.com/es-SV/blog/uber-se-reinventa-por-colombia/) the newly revised service, “which is temporary, allows [customers] to reach [their] destination by renting a car with a driver. How? By accepting a contract through our application on each occasion and each product, with one additional click.

“In addition, you can customize the conditions of your experience with the [vehicle operator], such as deciding the route you want to follow or the music you want to listen to.

“We want to build an inclusive, flexible, friendly and accessible community for all ... It is our commitment to Colombia. #UberSeReinventaPorColombiaUber reinvents itself to operate again in Colombia and is already providing services.

“Starting at 8 a.m. today February 20, Uber restarted its operation in Colombia . . . We will also offer various services that include traditional and new media such as taxis, so that everyone has the opportunity to take advantage of technology to provide a better service.

“The new platform will offer five services to Colombians: By hours [PorHoras], which will allow people to rent a vehicle with a driver and pay for the time they use it; ‘UberYa,’ with which people can rent a vehicle with driver to move around the city in an agile and reliable way.

“Another of the services will be ‘Economy,’ by which you can rent vehicles with a driver that will include vehicles with not-so-recent models, which can be accessed at a lower price, and will not be available in all cities of Colombia.

“’Comfort’ will be the premium alternative with which you can rent more modern vehicles with driver; ‘Uber XL’ will be aimed at large groups and advise dividing the rental price among all to save,” according to the company.

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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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