Nutresa 2Q 2023 Net Profit Falls 34% Year-on-Year; Takeover Deal Nears Finalization

Medellin-based multinational foods manufacturer-marketer Grupo Nutresa announced July 28 that its second quarter (2Q) 2023 net profit fell 34.5% year-on-year, to COP$140 billion (US$35.7 million).

However, 2Q 2023 earnings before interest, taxes, depreciation and amortization (EBITDA) actually rose 11.8% year-on-year, to COP$539 billion (US$138 million), while operating revenues rose 18% year-on-year, to COP$4.27 trillion (US$1.09 billion).

As for first-half (1H) 2023 (January through June), consolidated net profit fell 4.9% year-on-year, to COP$478 billion (US$122 million).

Meanwhile, 1H 2023 sales grew 26.4% year-on-year, hitting COP$9.6 trillion (US$2.45 billion), while EBITDA is up 24.8%, to COP$1.19 trillion (US$304 million) according to the company.

Revenues in Colombia during 1H 2023 rose 19.7% year-on-year, to COP$5.6 trillion (US$1.43 billion), while 1H 2023 international sales rose 37%, to COP$4.0 trillion (US$1.02 billion), according to Nutresa.

Countries in Nutresa’s strategic regions — North and South America as well as Caribbean — reported double-digit sales growth rates, with new-production innovation sales representing 16.2% of the company’s total sales.

Gross profit for 1H 2023 rose 28.8%, to COP$3.7 trillion (US$945 million), “higher than the top-line growth,” according to Nutresa.

“This is the result of a consistent hedging strategy with a long-term vision, the moderation of the cost of several imported commodities, and the revaluation of local currencies against the U.S. dollar in some countries of the strategic region.

“Operating expenses grew 28%, mainly due to a larger marketing investment throughout the period intended to support the positioning and leadership of the brands in the markets. For its part, the operating profit amounted to COP$954 billion [US$243 million], representing a 30.9% growth compared to the corresponding [1H] term in 2022.

“In the context of financial expenses, Grupo Nutresa reports a 144.8% growth due to an increased debt to support its growth and higher cost of debt.”

Abu Dhabi/Gilinski Takeover Nearly Complete

On a parallel front, an investor group led by Cali, Colombia-based banker Jaime Gilinski and his financial partners — the royal family of the state of Abu Dhabi — have nearly completed what amounts to a multi-billion-dollar takeover of Grupo Nutresa.

This deal includes a complex stock-swap arrangement whereby Gilinski and his Abu Dhabi investors handed-back their previously acquired stock holdings in Medellin-based insurance giant Grupo Sura and Medellin-based multinational cement/concrete giant Grupo Argos in exchange for Argos and Sura giving back to Gilinski and Abu Dhabi their partial holdings in Grupo Nutresa.

The end result of this complex swap means that current Abu Dhabi royal-family holdings in several other multinational food giants — based in India, Indonesia and Egypt – now will be consolidated with Nutresa’s vast operations in the Americas, hence creating a global food-products colossus.