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Medellin-based multinational cement producer, electric power generator and airport/highways concessions giant Grupo Argos announced November 12 that its third quarter (3Q) 2020 profits plunged 85% year-on-year, to COP$77.8 billion (US$21 million).

Earnings before interest, taxes, depreciation and amortization (EBITDA) for 3Q 2020 likewise fell 39% year-on-year, to COP$857 billion (US$235 million). 

Company divisions include Cementos Argos, Celsia and Odinsa.

As for nine-months 2020, profits are down 83% year-on-year, to COP$166 billion (US$45 million), while nine-months 2020 EBITDA is down 25%, to COP$2.56 trillion (US$702 million), according to the company.

Consolidated revenues so far this year total COP$10.4 trillion (US$2.85 billion) “and grew 16% in September compared to April [2020] , the month most affected by the impacts of the pandemic,” according to Grupo Argos.

“The shock and austerity plan allowed it to achieve consolidated savings in operating expenses of more than COP$500 billion [US$137 million] at the end of the third quarter and to close with COP$1.6 trillion [US$439 million] in cash to face the challenges of the situation,” according to the company.

“During the [latest] quarter, there were non-recurring situations such as extraordinary contributions from the energy business to the Superintendency of Public Services and maintenance in the cement business that together amounted to more than COP$40 billion [US$10.9 million].

“It is also important to highlight that in third quarter of the previous year, Grupo Argos at a consolidated level recorded non-recurring income from the divestment of the Termoflores plant for COP$1.1 trillion (US$302 million),” the company added.

Colombia operations improved in 3Q 2020 versus 2Q 2020 “with the growth of 79% in the volume of cement shipped, the 18% increase in Celsia's power generation and 61% increase in vehicular traffic in Odinsa’s [airport/highway] concessions in the country,” according to Grupo Argos.

“Added to this performance is the robust liquidity position and the timely and solid financial management of the company, which have allowed it to maintain the confidence of the market and execute at the end of October a new transaction to exchange ordinary bonds for a total amount of COP$136 billion (US$37 million).

“This transaction was constituted as the first private debt exchange carried out in the country, representing a milestone in the Colombian capital market.

“So far this year, Grupo Empresarial Argos has issued debt for close to COP$600 billion (US$165 million) and expects to close the year adding debt totaling COP$1 trillion (US$274 million), remaining as one of the agents that enjoy the greatest confidence in the market and as a catalyst relevant to the country's economy,” the company added.

Medellin-based textile and plastics recycling giant Enka Colombia announced November 12 that its nine-months 2020 net profits have dropped by two-thirds, to COP$2.2 billion (US$604,000).

Earnings before interest, taxes, depreciation and amortization (EBITDA) dipped modestly, to COP$23.8 billion (US$6.5 million), from COP$26 billion (US$7.1 million) in nine-months 2019.

Gross revenues likewise have fallen sharply in this Covid-19 year, to COP$254 billion (US$70 million), from COP$306 billion (US$84 million) in nine-months 2019.

Meanwhile, Mexico-based Grupo Petrotemex revealed in a November 13 filing with Colombia’s Superfinanciera oversight agency that it is seeking to buy from 15% to 25% of the outstanding shares of Enka Colombia, assuming that Superfinanciera approves the proposed transaction.

While Enka has had a rough year this year because of the Covid-19 crisis, third quarter (3Q) volumes and EBITDA “show a strong recovery, with volumes similar to 3Q 2019 and an EBITDA higher by 4%,” according to the company.

The modest profit and EBITDA results this year “manage to offset a negative accounting effect due to [Colombia peso to U.S. dollar] exchange differences” that cost the company COP$6.8 billion (US$1.86 million) in the latest quarter.

“Strengthening of the operating cash flow made it possible to pay in advance all the short-term financial obligations contracted to face the [Covid-19] pandemic, reducing the debt ratio to 0.2-times EBITDA, lower than the end of 2019 (1.3-times),” according to Enka.

In 3Q 2020, “sales volume reached a level similar to that of the same period in 2019 (-1.0%), highlighting the good performance of green [recycled plastics] business sales, which offset the lower sales of filaments, while the industrial threads line reached similar levels,” according to the company.

EBITDA in 3Q 2020 “recovered from a practically balanced level in 2Q 2020” thanks to “recovery in volume, the highest exchange rate and the commercial, operational and administrative efforts to face the pandemic,” according to Enka.

“These results allow us to be optimistic about the recovery prospects for our markets, without losing sight of the risks associated with Covid-19 and the measures to contain it. We continue to closely monitor the recovery of beverage consumption, a fundamental factor to increase again the volumes of [plastic] bottle recycling in the country,” the feedstock for its “green” synthetic fibers.

To date, exports represent 44% of operating income, down from 46% last year. “Abroad, the North American market has been the one that has presented a better performance due to less restrictive measures on its economy,” according to Enka.

“For their part, Latin American markets, particularly Brazil and Argentina, although they took longer to reactivate, already show positive signs in demand and their recovery is expected to continue in the coming months.”

As for the Colombian domestic market, “we highlight the good performance in sales of ‘EKO-PET’ and ‘EKO-Polyolefins,’ despite the lower consumption due to Covid-19, which has partially offset the lower sales of textile filaments,” according to Enka.

Medellin-based multinational gold mining giant Mineros SA announced November 12 that its third quarter (3Q) 2020 net profit rose 25% year-on-year, to US$24.8 million.

Earnings before interest, taxes, depreciation and amortization (EBITDA) likewise rose 39% year-on-year, to US$51.9 million, while revenues rose 14%, to US$121 million, according to the company.

Costs also rose by 4% year-on-year, to US$78.5 million, “explained by higher cost of artisanal mining in Nicaragua,” according to the company.

Higher revenues came from the 28% jump in world gold prices, plus a US$1.1 million gain from an insurance claim in alluvial mining in Colombia.

As for nine-months 2020 results, net profit jumped 74% year-on-year, to US$50.2 million, while EBITDA jumped 54%, to US$146.8 million.

In Colombia, 3Q 2020 gold production rose 2.7% year-on-year, while EBITDA margin jumped 82% and cash flow more-than-tripled, according to the company.

Because Soma Gold took control of Mineros’ relatively higher-cost rock-mining operation in June, the remaining, lower-cost alluvial mining operation cut over-all costs of operations in Colombia, year-on-year, the company noted.\

In Nicaragua, production dipped 2.7% year-on-year, while costs rose 9%. In Argentina, gold production fell 30% year-on-year as the remaining gold deposit in an open-pit mine neared its end-of-life.

As for the full-year 2020 outlook, Mineros foresees corporate-wide gold production of 270,000 ounces. The company also aims to complete an economic analysis for the La Pepa mine in Chile, and continue in a joint-venture with Royal Road in Nicaragua and Colombia, the company added.

Toronto-based Gran Colombia Gold – whose principal mining operations are in Antioquia – announced November 11 that its third quarter (3Q) adjusted net income rose to U.S$29.5 million, up from US$16 million in 3Q 2019.

As for the first nine months of 2020, adjusted net income rose to US$68.2 million, from US$43 million in the first nine months of 2019.

“The year-over-year improvement in adjusted net income for the third quarter and first nine months of 2020 largely reflects the positive impact of higher gold prices in 2020, partially offset by the Covid-19 impact on gold sales volumes in the second quarter of 2020,” according to the company.

Gross revenues jumped 36% in 3Q 2020 versus 3Q 2019, to a new quarterly record of US$113.1 million “as the 30% year-over-year improvement in spot gold prices increased the company’s realized gold price to an average of $1,875 per ounce sold,” according to the company

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for 3Q 2020 jumped 51% year-on-year, to US$56.7 million, while nine-months adjusted EBITDA rose 36% year-on-year, to US$144.7 million, according to the company.

Gold production in 3q 2020 was 58,454 ounces, up 4% year-on-year and up 21% over 2Q 2020 when the Covid-19 crisis hit, the company noted.

As for the cash situation, “the company’s balance sheet remained solid with total cash of US$138.2 million at the end of September 2020, including $43.0 million in Caldas Gold, of which $34.7 million represents the net proceeds of Caldas Gold’s special warrant financing completed in the third quarter of 2020 that will be used as part of the funding for its Marmato Deep Zone (“MDZ”) project,” the company stated.

“The 53.5%-owned Caldas Gold continues to advance its plan to build Colombia’s next major gold mine. Following the release of its preliminary feasibility study for its Marmato Project in early July, Caldas Gold completed a CA$50 million [US$38 million] bought deal private placement of special warrants in late July, of which Gran Colombia acquired CA$20 million [US$15 million] to maintain its equity ownership above 50%,” the company added.

Orbis 3Q 2020 Net Income Rises 12% Year-on-Year

Wednesday, 11 November 2020 09:28 Written by

Medellin-based multinational paints, chemicals, piping and hardware giant Grupo Orbis announced November 10 that its third quarter (3Q) 2020 net income rose 12% year-on-year, to COP$14.6 billion (US$4 million), excluding the effect of the sale of a non-operating property in Central America.

Orbis brands include Pintuco paints, Andercol chemicals, O-tek piping and Mundial hardware supplies.

Earnings before interest, taxes, depreciation and amortization (EBITDA) were essentially flat year-on-year, at COP$88 billion (US$24 million), “thanks to the results in the plan of profitability in the midst of the challenges generated by the [Covid-19] pandemic,” according to the company.

Favorable returns “have made it possible to continue with the debt payment plan, which reaches an indicator of net financial debt-to-EBITDA of 1.7-times compared to 2.8-times as of September 2019,” according to Oribs.

“The chemical business has focused on implementing its profitability model, focused on topics such as innovation and entrepreneurship, product differentiation and modernization of the portfolio around sustainable chemistry.

“For its part, the hardware distribution unit has achieved a rapid recovery of its sales in a profitable way thanks to the strengthening of the link with its customers and suppliers, and the implementation of a new market-arrival model,” the company added.

Profitable mass-market product launches this year included a new line of antibacterial gels along with aerosol air and surface disinfectants that kill Covid-19, according to Orbis.

As for the Pintuco paints division, “results were [negatively] affected as it was the only business that had a total closure of its operations as a result of the pandemic, especially in April and May. However, in the third quarter of 2020 [Pintuco] presented a growth in sales of 4%,” despite relatively weakness in the broader market, according to the company.

“O-tek, for its part, although it has achieved an important geographic expansion developing projects in the southern cone [of South America] and positioning itself in the United States, it was affected by the suspension and postponement of infrastructure works” because of Coronavirus quarantine orders.

“For the last quarter of 2020, the Group will continue to focus on boosting sales and closing the accumulated gap of -7% in its commercial results compared to 2019, as it did in the third quarter, a period in which, even with the current conditions of uncertainty, achieved a growth of 4.4% compared to the previous year,” the company added.

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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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