Business 630
Grupo Orbis 1H 2022 Net Profit Dips Year-on-Year
Saturday, 13 August 2022 14:43 Written by Roberto Peckham
Medellin-based paints, chemicals and hardware multinational Grupo Orbis – now a division of Netherlands-based AkzoNobel – on August 12 reported a first-half (1H) 2022 net profit of COP$19.3 billion (US$4.6 million), down from COP$22.9 billion (US$5.5 million) in 1H 2021.
Gross income was basically flat year-on-year, at COP$897 billion (US$215 million), according to earlier-published company statistics from 2021.
The Pintuco paints division reported a 28% year-on-year growth in sales, at COP$556 billion (US$133 million), while earnings before interest, taxes, depreciation and amortization (EBITDA) rose 35%, to COP$53 billion (US$12.7 million).
The “Mundial” home-and-garden division saw sales rise 17%, to COP$89 billion (US$21 million), while EBITDA grew 13%, to COP$1.5 billion (US$360,000), according to the company.
Meanwhile, the “Andercol” (Colombia) and “Poliquim” (Ecuador) chemicals division saw peso-denominated sales rise 54% year-on-year, to COP$340 billion (US$81.6 million) thanks to price increases. However, “increases in the prices of raw materials have not been fully transferred to the market -- in order to maintain competitiveness of our products -- slightly affecting gross profit,” according to Orbis.
“A strict control of expenses allows a good operating performance, obtaining an EBITDA of COP$24.6 billion [US$5.9 million], 80% more than the previous year,” while chemicals-division net profits rose 21% year-on-year, to COP$12 billion, (US$2.88 million) the company added.
Grupo Sura 2Q 2022 Net Income Jumps 30.7% Year-on Year
Saturday, 13 August 2022 11:19 Written by Roberto Peckham
Medellin-based multinational insurance, health care and asset-management group Grupo Sura announced August 12 that its second quarter (2Q) 2022 net income rose 30.7% year-on-year, to COP$603 billion (US$145 million) – its best quarterly performance in seven years.
Total revenues likewise rose 23%, to COP$7.5 trillion (US$1.8 billion), an all-time quarterly record, according to the company.
“This growth in revenues was mainly due to a positive level of performance with the insurance business, which produced a growth in written premiums of COP$1.6 trillion [US$384 million], offset by a drop in fee and commission income, corresponding mainly to the mandatory pension business in Mexico, which fell by COP$38 billion [US$9.1 million], a decline of 4.7% compared to the same quarter last year,” according to Sura
“Investment income increased by COP$340.7 billion [US$81.8 million] compared to the second quarter last year, representing a growth of 84.5%. These results are largely accounted for by the positive levels of performance recorded by the Suramericana portfolios, where inflationary pressures and rising interest rates throughout the region continue to produce higher yields in the Chilean, Colombian and Brazilian portfolios,” the company added.
However, revenues from Sura AM’s legal reserves “continued to be affected by the losses in value sustained on different financial markets throughout the region,” the company added.
Revenues from Sura’s stock holdings in Bancolombia, Nutresa and Grupo Argos generated a 61% year-on-year gain in 2Q 2022, netting an extra COP$397 billion (US$95 million), according to the company.
Retained insurance claims rose 25% year-on-year, by COP$811 billion (US$195 million), according to the company.
“The claims rate continued to be affected by increased average costs corresponding to the [vehicle insurance claims] in the case of Suramericana as well as increases in the health care division due to a change in the mix, where the mandatory health care subsidiary (EPS) has a greater weighting, partially mitigated by a drop of COP$668 billion [US$160 million] in the claims relating to Covid compared to the second quarter last year,” according to the company.
While operating expenses rose 17.5% year-on-year, that was 5.5% lower than the increase in the company’s total revenues, according to Sura.
Grupo Argos 2Q Net Income Rises 5% Year-on-Year
Saturday, 13 August 2022 09:38 Written by Roberto Peckham
Medellin-based multinational cement, electric power, highways/airport concessionaire and real-estate giant Grupo Argos announced August 12 that its second quarter (2Q) consolidated net income rose 5% year-on-year, to COP$411 billion (US$98.7 million).
Revenues jumped 46% year-on-year, to COP$5.9 trillion (US$1.4 billion), while earnings before interest, taxes, depreciation and amortization (EBITDA) rose 7%, to COP$1.39 trillion (US$334 million).
The Cementos Argos division produced the highest revenues in the group, at COP$5.4 trillion (US$1.3 billion), followed by the Celsia electric power division (COP$2.5 trillion/US$600 million), the highway/airport concessions businesses (COP$921 billion/US$221 million) and finally the Pactia real estate joint venture (COP$159 billion/US$38 million).
“Increased revenue from financial activity during 2Q 2022 is mainly explained by good business performance and by non-recurring revenues for Grupo Argos from sales and contributions to the roadway division (FCP Odinsa Vías),” according to the company.
On the other hand, operating-cost-hikes pinched results, “especially in the cement business where the cost of fuel increased substantially,” the company added.
The new “FCP Odinsa Vias” 50-50 joint venture with Macquarie Asset Management is now operating major highway concessions in Colombia, including “Autopistas del Café,” “Malla Vial del Meta,” “Pacífico 2” and “Túnel Aburrá Oriente.”
The new joint-venture will continue projects including expansion of the existing “Túnel de Oriente” highway-tunnel project linking Medellin eastward to the Jose Maria Cordova (JMC) airport in Rionegro, Antioquia, as well as the “Perimetral de la Sabana” highway in Cundinamarca and the “Conexión Centro” highway in Colombia’s southwest coffee-growing region.
“Divestment of 50% of our share in the roadway concessions and the subsequent incorporation of ‘FCP Odinsa Vías’ give rise to certain accounting changes for Odinsa, which come into effect as of June [2022],” the company explained.
“These changes imply deconsolidation of the Autopistas del Café, Malla Vial del Meta, and Túnel Aburrá Oriente concessions and consortiums, which will now each have a single entry in Odinsa’s financial statements as a joint business under the equity method,” the company added.
Bancolombia 2Q 2022 Net Income Ticks-Up 2.7% Year-on-Year
Wednesday, 10 August 2022 14:00 Written by Roberto Peckham
Medellin-based multinational banking giant Bancolombia announced August 9 that its second quarter (2Q) 2022 net income rose 2.76% year-on-year, to COP$1.73 trillion (US$405 million).
Gross loans totaled COP$243 trillion (US$56.8 billion), up 19.4% year-on-year. “When excluding the foreign-exchange effect, the increase during the last twelve months was 15.3%,” according to the company.
Commercial loans grew 18.8% while consumer loans grew 23.5%, according to the company.
“Net interest income before provisions increased 16.6% and totaled COP$4.3 trillion [US$1 billion],” according to Bancolombia.
“Net interest margin expanded from 6.0% in 1Q 2022 to 6.7% in 2Q 2022. This performance is mainly driven by the loan portfolio growth of 9.3% in the latest quarter and loan portfolio repricing as an effect of the contractionary monetary policy in Colombia.”
Among the loan portfolios,”30-day past due loans stood at 3.86% and 90-day past due loans at 2.72%. Total provision charges, net for 2Q 2022, was COP$613 billion [US$143 million], which indicates a lower release compared to 1Q 2022 and higher provisions in the consumer and commercial portfolio in line with the growth of the loan book,” the company added.
“Basic solvency stood at 10.28% and the total consolidated solvency ratio was 12.93% for 2Q 2022, decreasing mainly because of the loan dynamism and the depreciation effect, but widely exceeding the minimum regulatory requirements.”
As for its digital banking segment, “Bancolombia shows a positive trend in line with 2021 results. As of June 2022, the bank has 7 million active digital customers in the retail app, as well as 19.3 million accounts in its financial inclusion platforms: 6.3 million users in ‘Bancolombia a la Mano’ and 13 million in ‘Nequi,’” the company explained.
“During the second quarter 2022, the Colombian peso depreciated 10.5% against the US dollar and has depreciated 10.7% in the last 12 months. The average exchange rate was 0.1% higher in 2Q 2022 versus 1Q 2022, and 7.9% higher in the last 12 months.
“During the last 12 months peso-denominated loans grew 16.9% and the dollar-denominated loans (expressed in US dollars) grew 12.4%,” the company added.
Operations at its “Banco Agricola” subsidiary in El Salvador, “Banistmo” in Panama and “BAM” in Guatemala represented 27.5% of total gross loans for 2Q 2022.
“Likewise, the 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 35.4% of the portfolio, up 16.2% (when expressed in COP) as well as 5.2% as expressed in US dollars,” the company added.
“During 2Q 2022, the loan portfolio at a consolidated level continues with good dynamism in all geographies. Growth in commercial and consumer markets are remarkable. Banco Agricola reported the highest quarterly growth (6.5% when measured in US dollars), mainly driven by the commercial portfolio, which grew 11.2% and reached 45.3% of the total loan portfolio.
“Consumer loans grew 3.6% in the quarter, but slightly declined to 40.4% in terms of loan book share compared to 1Q 2022. Banco Agricola is closely followed by the Colombian operation, which presents an increase of 6.4% in the loan portfolio for 2Q 2022, driven by commercial and consumer.
“Banco Agromercantil reports a stable performance across all loan portfolio segments for 2Q 2022, growing at 1.9% consolidated in US dollars. The consumer portfolio continues increasing its loan book share, reaching 16.8% for this quarter, in line with the good performance experienced in 2021.
“Banistmo grew 1.8% (measured in US dollars) in the loan book during the quarter, basically due to the positive dynamics of the commercial portfolio, which grew 3.6% for the quarter and continues to be the largest share in the credit portfolio,” the company added.
Cementos Argos 2Q Net Income Plummets 97% Year-on-Year
Tuesday, 09 August 2022 11:47 Written by Roberto Peckham
Medellin-based multinational cement/concrete giant Cementos Argos announced August 8 that its second quarter (2Q) 2022 net income fell 97% year-on-year, to COP$5 billion (US$1.15 million).
“Net income decreased due to non-recurring operations of asset sales that were reflected in the results of the second quarter of 2021,” according to the company.
However, revenues jumped to an all-time quarterly high of COP$2.8 trillion (US$648 million), up 15% year-on-year.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 2.6%, to COP$525 billion (US$121 million), according to the company.
“Ready-mix volumes were favored by solid sales dynamics, especially in the United States and Colombia,” according to the company. “Record revenues were mainly leveraged by the company's commercial strategy and by the higher volumes.”
The company also cited “stable operating results in an environment of high-cost inflation, thanks to the success of its commercial strategy in all geographies, the flexibility of its fuel matrix and the partial hedging of fuel prices.
As for its efforts to cut “global warming” emissions, “the company began a pilot test for the use of calcined clay in the United States and expects to reach production of 3 million tons of clay per year in all of its geographies by 2030, which translates into the production of green cement and concrete,” according to Argos.
Colombia Results
In Colombia, “strong market dynamics continued during the second quarter of the year were supported by the retail segment, residential construction and infrastructure projects,” according to Argos
As a result, Colombia revenues grew 27.1% year-on-year, to COP$678 billion (US$157 million), while adjusted EBITDA increased 12.7%, to COP$136 billion (US$31 million).
“Continuing with the positive performance, concrete sales rose 25.1% and reached 656,000 cubic meters, cement sales increased 13.3%, for a total of 1.5 million tons shipped. Housing sales and the start of residential projects continue to be a support of the market. In terms of infrastructure, projects such as the Bogotá Metro and 5G [fifth-generation highway construction] will bring significant demand in the coming years,” the company added.
USA Results
USA revenues rose 7.5% year-on-year, to US$416 million, while adjusted EBITDA “remained stable at US$75 million, achieved in part by the US$11 million in savings derived from the fuels hedging strategy.”
As for sales volumes, “the company experienced strong demand across most of its operations. Therefore, dispatches of ready-mix rose 6.4% and totaled 1.2 million cubic meters, as did cement dispatches, which also increased 6.4% and totaled 1.7 million tons,” according to Argos.
Caribbean and Central America (CCA) Region
For the CCA region, 2Q 2022 revenues were US$138 million, while adjusted EBITDA fell 18.8% year-on-year, at US$32 million, “affected by the combination of lower volumes in Honduras and Haiti and the already known inflationary pressures,” according to Argos.
“In this region, shipments of concrete were positive, increasing 58.9% and stood at 71,000 cubic meters. For its part, cement volumes reached 1 million tons, with an improvement in those of the local market with respect to the first quarter of the year, but a lower dynamic on the trading business, which resulted in a decrease in shipments of 30% cement. If this line is excluded, cement volumes fell 4.7%.”
