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Emvarias – the sanitation-department subsidiary of Medellin-based utilities giant EPM – on April 3, 2019 announced that full-year 2018 earnings before interest, taxes, depreciation and amortization (EBITDA) rose 61% year-on-year, to COP$40 billion (US$12.7 million).

However, net income fell 41% year-on-year, to COP$4.49 billion (US$1.4 million), as interest income from its investment portfolio declined.

Debt level rose 1% year-on-year, to COP$247 billion (US$79 million), while asset values rose 25%, to COP$75.7 billion (US$24 million), according to the company, which finances its investments from internal cash flow.

Operating income rose 10.9% year-on-year, to COP$227 billion (US$72 million) “thanks to the expansion of coverage in the provision of services to the municipality of Medellín, complementary services such as washing of bridges, roads and public areas, and [recycling] intervention at critical waste points,” according to Emvarias.

During the year, repeated street, park, bridge and sidewalk cleanings covered a total length of 1.5 million kilometers, partly by the work of human sweepers and the remainder by street-cleaning machines, according to Emvarias.

Foreign visitors to Medellin are often quoted in news reports and blogs as being surprised at the relative cleanliness of the city (compared to Bogota and elsewhere) -- even though the Medellin metropolitan area now totals more than 3.5 million persons.

As for garbage collection, Emvarias covered 100% of Medellin via 511 daily routes, picking-up 662,041 tons of waste in Medellín alone, according to the company.

As for the “La Pradera” landfill operation in suburban Barbosa, Emvarias grew from serving 25 municipalities prior to 2018, to 37 municipalities last year, which put a total of 1.1 million tons of waste into the landfill.

“Of those 37 municipalities, Rionegro (2.85%), Envigado (6.7%), Bello (8.95%) and Sabaneta with its transfer station (14.82%) represent 33% of the total waste entered annually in the La Pradera landfill,” according to Emvarias.

Recycling programs successfully diverted 395.4 tons of usable waste away from the landfill, as various materials went back into the productive cycle, according to the company.

Meanwhile, the La Pradera landfill continues to collect and burn waste methane, hence reducing net greenhouse gases (GHG) emissions -- since methane is far a more potent GHG than the carbon dioxide (CO2) resulting from methane combustion.

The company also is a pioneer in all Colombia in collecting and decontaminating the liquid leachate from its La Pradera landfill.

“The leachate treatment plant installed in the La Pradera sanitary landfill is the only treatment system with biological reactors and ultrafiltration system (UF) in landfills in the country,” according to Emvarias.

“This technology guarantees a high percentage of removal in parameters, such as chemical oxygen demand (COD), biological oxygen demand (BOD), ammoniacal nitrogen and total suspended solids (SST), among others.”

During 2018, Emvarias launched construction of the second phase of the leachate treatment plant, boosting the daily biological treatment rate and enabling greater removal of organics, according to the company.

Emvarias currently has 130 garbage trucks, of which 65 employ engines burning compressed natural gas (CNG). The remainder burn regular diesel fuel.

While both types of engines produce air pollutants, the CNG engines reduce particulate matter and noise output compared to conventional diesel engines.


Cemex Maceo plant deal April 2019

Thursday, 11 July 2019 17:45 Written by

Cemex Colombia Partially Unblocks Stalled Maceo, Antioquia Cement Plant

Cemex Colombia revealed in an April 12, 2019 filing with Colombia’s Superfinanciera corporate oversight agency that it reached a deal with the national Procuraduría General (corporate/political disciplinary regulator) that would partially clear the way to start-up a US$420 million cement-manufacturing plant at Maceo, Antioquia.

The stalled plant has been tied-up in legal knots over allegations of improper land transfers to Cemex through a company allegedly involved in a fictitious auto-parts exporting and money-laundering scheme (see Medellin Herald 06/22/2018, 02/09/2018).

Last year, Colombia’s Attorney General (Fiscal General) brought criminal charges against Édgar Ramírez Martínez (former Cemex Colombia vice president of planning) and Camilo González Téllez (former Cemex Colombia vice president legal affairs) over the Maceo, Antioquia, cement-plant land-acquisition scandal.

The Attorney General also brought illegal-enrichment and money-laundering charges against Eugenio Correa Díaz, the legal representative of “C.I. Calizas SA,” which is alleged to have illegally sold land to Cemex for the Maceo plant.

The lands originally held by C.I. Calizas had been subject to another legal proceeding (“extinction de dominio”) over non-payment of Colombian taxes on allegedly phony exports of auto parts by former C.I. Calizas owner Jose Aldemar Moncada, who was assassinated two years ago.

According to the Attorney General, Ramirez, González and Correa “advanced negotiations to acquire several assets” of C.I. Calizas -- including lands that supposedly should have been in control of Colombia’s tax authorities because of the earlier tax-evasion charges against Moncada.

However, Cemex Colombia now reports that it just reached a “conciliatory agreement” with the Procuraduría General involving a “Special Assets Company” (SAE), CI Calizas y Minerales S.A. (CI Calizas), Cemex Colombia and its subsidiary Central de Mezclas S.A., “by means of which the signing of a mining operation contract, provision of manufacturing and dispatch services and leasing of real estate for cement production was endorsed.”

“This contract will allow Cemex Colombia to continue making use of the assets subject to the process of domain-extinction that include the rights derived from a mining concession and an environmental permit, including the land where the cement plant was built in the municipality of Maceo, along with and the assets of the Special Cement Zone of the Magdalena Medio SAS (ZOMAM), for a term of 21 years, extendable for an additional 10 years, provided that the extension of the mining concession is obtained,” according to Cemex Colombia.

Under the new contract, Cemex Colombia and Central de Mezclas would pay a rental lease and certain fees to CI Calizas and ZOMAN – but conditional on plant reopening.

“Cemex Colombia clarifies that the subscribed contract will continue in force regardless of the result of the process of extinction of ownership that currently falls on the assets of CI Calizas including ZOMAM, except that the competent criminal judge recognizes Cemex Colombia and its subsidiary having property rights for the assets in domain extinction, in which case the contract will be terminated in advance, given that Cemex Colombia and its subsidiary would be the owners of those assets and the contract to operate and administer them would no longer be required,” according to Cemex.

“The cement plant is expected to enter into operation when the requests and procedures that are being processed with the competent authorities are resolved in a positive manner, such as: (i) the partial removal of the cement plant from the ‘Integrated Canyon Management District’ of Rio Alicante; (ii) the modification of the environmental license that allows the production of at least 950,000 metric tons of cement per year; (iii) the modification of land use allowing industrial and mining use, and; (iv) the obtaining of the permits to complete the construction of several sections of the road to the cement plant,” according to Cemex Colombia.


TigoUne 2018 results March 2019

Thursday, 11 July 2019 17:41 Written by

Source: TigoUne

TigoUne: Full-Year 2018 EBITDA Grew 6% Year-on-Year, but Profits Withheld

Medellin-based telecom/internet/cable-TV giant TigoUne announced March 5, 2019 that its full-year 2018 earnings before interest, taxes, depreciation and amortization (EBITDA) rose 6% year-on-year, to COP$1.43 trillion (US$460 million), on revenues of COP$5 trillion (US$1.6 billion), described as “similar to 2017” revenues.

TigoUne – whose ownership is split 50-50 between Luxembourg-based telecom multinational Millicom and Medellin utility Grupo EPM-- didn’t disclose its net income for 2018. But it did reveal in a separate filing with Colombia’s Superfinanciera oversight agency that it plans to retain all 2018 profits rather than distribute any earnings to shareholders.

TigoUne also separately revealed that it plans to make a COP$1 trillion (US$322 million) bond offering in the Colombian stock market, but didn’t offer further details.

Other 2018 operating highlights cited by TigoUne were a total of COP$941 billion (US$303 million) invested in “digital highways that connected to more Colombians”: as well as having “revolutionized the mobile [cell-phone] market in Colombia by being the first operator to have ‘4.5-G’ zones and ‘value proposals’ so that users are always connected.”

“We consolidated [our offering] as the leading telecommunications company in innovation as the first [in Colombia] to perform testing of ‘5G’ networks and having the first ‘4.5G’ zones in the main cities of the country,” added TigoUne president Marcelo Cataldo.

The strong revenues “allowed the company to make a debt repayment of COP$183 billion [US$59 million], reducing our obligations and strengthening our financial situation)” as well as to “keep running an ambitious investment plan,” according to TigoUne.

“In the last four years, the company has invested close to COP$4 trillion (US$1.3 billion) to promote the development of the country.

“Investments in the fixed [telecom] network were reflected in the commercial launch in seven cities: Pasto, Tuluá, Tunja, Sogamoso, Funza, Mosquera and Fusagasugá. Likewise, we increased the network coverage in cities where we already have presence,” according to the company.

“In addition, TigoUne obtained [bond rating] certifications from the three most important risk rating agencies. Fitch Ratings confirmed the rating of the telecommunications company UNE EPM Telecomunicaciones S.A. as a stable perspective (AAA) at the local level, the highest rating a company can have.

“In turn, the credit rating agency highlighted the strength of the company and ratified its international rating "BBB" for the third consecutive year.

“For its part, the technical committee of BRC Standard & Poor’s also confirmed the highest local qualification of payment capacity 'AAA' to UNE EPM Telecomunicaciones S.A. and its subsidiary Colombia Móvil S.A. E.S.P., as well as to the three issues of outstanding bonds that it currently has in the market. To complete, in February 2019, the Moody's firm awarded TigoUne the Baa3 international rating,” the company added.


Sura 2018 results March 2019

Thursday, 11 July 2019 17:39 Written by

Sura Full-Year 2018 Profits Rise 7.6% Year-on-Year

Medellin-based insurance and financial services giant Grupo Sura announced March 1, 2019 that full-year 2018 net income (excluding divestments) rose 7.6% year-on-year to COP$1.4 trillion (US$475.7 million) while fourth-quarter (4Q) 2018 profits rose 28% year-on-year, hitting US$101.8 million.

The “Suramericana” insurance division saw 2018 profits rise 3.6% year-on-year, to COP$524.8 billion (US$ million), while the “Sura Asset Management” division (pensios, savings and investment) saw revenues grow 6.1% year-on-year in Colombia’s “mandatory” pension contributions and 10.7% in the “voluntary” pension sector.

“In comparable [year-on-year] terms, the revenues of Suramericana grew in all its segments: general (13.3%), life (15.8%) and health (21.1%),” according to the company

Revenues in 2018 were trimmed by the divestment of the life-insurance annuity operation in Chile and a decision to not participate in the bidding for a pension insurance scheme in Colombia.

“The operating growth of the main lines of business of Suramericana and Sura Asset Management in 2018, as well as the higher efficiencies, allowed us to offset part of the impact that the high volatility of the financial markets had on the returns of our own investments throughout the year,” added David Bojanini, President of Grupo Sura.

“Under these conditions, the total consolidated revenues of Grupo Sura were COP$19.2 trillion (US$6.5 billion) and decreased 0.8%, during a year marked by the high volatility of the capital markets, which affected income from portfolio returns of pension funds and insurers.

“In addition, the strategic decisions mentioned in the insurance business and the devaluation of local currencies influenced results. Total expenses decreased 0.4%, to COP$17.6 trillion (US$5.94 billion), due to lower loss ratios and reserve adjustments, as well as greater control of expenses.

“As a result, earnings before accounting effects increased 7.6% to COP$1.41 trillion (US$475.7 million) and the net profit was COP$1.34 trillion (US$454.4 million), 7.7% less than in 2017, which reflects the lower income from yields and the accounting effects associated with the mentioned divestments, which do not impact the cash flow,” he added.

In the Suramericana division, “the good operating result contrasts with the 7.3% decrease in investment income and lower non-operating income. If the latter are excluded, the growth in net income is 27.2%. In addition, the retained loss ratio went from 54.8% to 51.5%,” according to Sura.

“In the last year we made important progress in consolidating Seguros SURA in the region, highlighting that we met our income and profit budgets,” added Suramericana president Gonzalo Pérez.

“Also in 2018 we evolved our value offer, for example, with the introduction of individual and patrimonial life-insurance solutions in countries other than Colombia,” he added.

Meanwhile, Sura Asset Management grew its commission income by 6.6%, which totaled COP$2.1 trillion (US706.6 million). The assets under management (AUM) increased 2.8%, for a total value of COP$418.6 trillion (US$128.8 billion), covering 19.6 million customers, up 4.1% year-on-year.

The normalized operating profit of the Asset Management subsidiary grew 0.4%, contrasted with a net profit that decreased 39.7% year-on-year, explained by an accounting loss due to the divestment of life annuities in Chile and lower income from reserves, the company added.


Mineros SA 2018 results March 2019

Thursday, 11 July 2019 17:38 Written by

Socially Responsible Gold Miner Mineros SA Sees 2018 Profits Jump 33% Year-on-Year

Medellin-based multinational gold mining giant Mineros SA announced March 13, 2019 that its full-year 2018 net income rose 33% year-on-year to COP$156 billion (US$50 million), from COP$117 billion (US$37 million) in 2017.

Gross revenues and gold prices also rose a bit more than 1% year-on-year. But earnings before interest, taxes, depreciation and amortization (EBITDA) dipped 8.7%, to COP$260 billion (US$83 million), while EBITDA margin declined 9.7%, to 32.4%, according to the company.

The mainly alluvial-based gold mining operations in Colombia produced 97,921 ounces of gold-equivalent in 2018, down from 103,370 ounces in 2017, according to the company. Nicaragua gold production rose from 104,681 ounces in 2017 to 109,305 ounces in 2018.

As for fourth quarter (4Q) 2018, net income nearly tripled year-on-year, to COP$97 billion (US$31 million), thanks to a 15% hike in output, a favorable COP/U.S. dollar exchange rate and a 1.3% hike in world gold prices.

On a related front, the US$30 million acquisition of the Gualcamayo gold mining operation in Argentina last December netted Mineros an additional 2,791 ounces of gold, on top of its Nicaragua and Colombia production, the company added.

As for the 2019 outlook, Mineros projects that corporate-wide production should be in the range of 280,000 to 300,000 ounces of gold-equivalent. The company added that it foresees “high volatility” in world gold prices but an “upward tendency.”

USAID, Mineros Continue Boosting Social Projects

On another front, the U.S. Agency for International Development (USAID), the Colombian national government and Mineros this month will launch yet another project aiming to help poorer rural families in El Bagre, Nechi and Zaragoza (all in Antioquia) through a new “Women of Gold” (Mujeres de Oro) program.

According to USAID, the “Mujeres de Oro” program will help rural women with projects that boost their economic, social and cultural well-being.

Mineros has a long history of sponsoring numerous projects that benefit poorer rural families in its areas of operations (see Medellin Herald 09/21/2016, “USAID Projects Boost Ecological Mining, Honey Incomes for Antioquia Families”).

In addition, Mineros years ago banned the use of toxic mercury -- in sharp contrast to criminal and informal gold-mining operators.

What’s more, Mineros routinely restores any lands disturbed by its mining through various reforestation and wildlife conservation projects – unlike the criminal mining groups tied to guerrillas and “paramilitary” organizations that devastate tropical forests and wreck riverside habitats (see Medellin Herald 03/21/2017, “Mineros SA Boosting Environmental, Social Projects”).


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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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