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Companies 148

Written by March 15 2019 0

Medellin-based multinational gold mining giant Mineros SA announced March 13 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. On the other hand, 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 in 2018, 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 warned that it foresees “high volatility” in world gold prices, but nevertheless sees 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, political 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 reckless, 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”).

Written by March 07 2019 0

Medellin-based multinational electric power transmission operator and highways concessionaire ISA announced March 7 that its full-year 2018 net income rose 6% year-on-year, to COP$1.5 trillion (US$483 million).

Revenues also rose 4% year-on-year, to COP$7.2 trillion (US$2.3 billion), while earnings before interest, taxes, depreciation and amortization (EBITDA) grew 8.4% year-on-year, to COP$4.8 trillion (US$1.54 billion).

EBITDA margin came-in at a fat 66.5%, or 73% if excluding construction activities during 2018. Return on equity likewise came-in at a favorable 12.8%.

ISA credits the profit gains to “entry into operation of new projects in Peru, Colombia and Chile; the update for inflation of the [power] tariff cycle, the recovery of taxes and [tax deductions from] fiscal losses in Brazil, and lower taxes for the application of the Financing Law in Colombia,” according to the company.

As for fourth quarter (4Q) 2018 profits, ISA netted COP$581 billion (US$187 million), up 116% over 4Q 2017, according to the company.

In ISA’s electric power transportation unit, 4Q 2018 revenues rose 17.8%, to COP$187 billion (US$60 million).

“The variation is explained in Colombia, by the remuneration of the new projects such as the San Antonio Substation (230 kiloVolts) and associated transmission lines; the Ituango-Medellin Substation (Katíos) and the Caribbean Coast reinforcement (500 kiloVots); the Caracolí Substation and associated lines, the charge for connection to the network of the El Bosque transformer project, the extensions of the Nueva Barranquilla substation and the Ternera substation,” according to ISA.

Entry-into-operation of several new transmission lines in Chile along with higher power tariffs in Brazil also boosted revenues, according to the company.

Also in Brasil, ISA’s “Companhia de Transmissão de Energia Elétrica Paulista” (CTEEP) subsidiary completed its first emission of “green bonds,” which will finance “energy infrastructure projects with environmental benefits,” according to ISA

ISA’s highway concessions revenues in Chile dipped slightly in 4Q 2018 because of higher maintenance costs and an adjustment in accounts receivable, according to the company.

During 2018, ISA and its subsidiaries invested a total of COP$2.4 trillion (US$772 million) in power transmission, highway concessions, telecommunications infrastructure and technological developments.

What’s more, for the period 2019 through 2023, the company now projects estimated capex investments of COP$10.575 trillion (US$3.46 billion).

ISA’s corporate-wide net assets totaled COP$44.9 trillion (US$14.4 billion), up 3.6% year-on-year. The increase in assets incorporated “entry into operation of new projects in the electric energy transport business in Colombia, Chile and Peru,” as well as the incorporation of assets, profits and revenues from its “TAESA” and “IENNE” power businesses in Brazil, according to the company.

Written by March 06 2019 0

Medellin-based telecom/internet/cable-TV giant TigoUne announced March 5 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 more Colombians” as well as investments that “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,” boasted 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 enabling "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.

Written by March 06 2019 0

Medellin-based textile giant Coltejer revealed in a March 5 filing with Colombia’s Superfinanciera oversight agency that it suffered a COP$29 billion (US$9.3 million) net loss for full-year 2018, 17% worse than the COP$24.7 billion (US$7.9 million) net loss in 2017.

Sales also dropped 15% year-on-year, to COP$144 billion (US$46 million), compared to COP$169 billion (US$54 million) in 2017.

Operating plus non-operating income combined dipped 17% year-on-year, to COP$176 billion (US$56.7 million), according to the company.

The net loss for 2018 is “basically owed to financing costs and reduced sales,” according to the company.

Meanwhile, fellow Medellin-based textile giant Fabricato revealed March 5 in a separate, one-sentence filing with Superfinanciera that its full-year 2018 net loss hit COP$31.75 billion (US$10.2 million), worse than the COP$6.4 billion (US$2.2 million) net loss in 2017. That filing failed to offer any other details.

Colombia’s textile manufacturers have been suffering severe losses in recent years in part because of massive below-cost contraband textile imports, mainly from Asia.

Textile Contraband ‘Czar’ Arrested

On a related front, Colombia’s Attorney General announced March 5 the arrest of Salim Ricardo Yamhure Daccaret of Imetex Ltda. and his alleged associate René Romero Sánchez on charges of illegal textile imports and money-laundering, totaling at least COP$177 billion (US$57 million) in avoided taxes and duties.

According to the Attorney General, Yamhure Daccaret allegedly evaded taxes and duties on imports of more than 19,000 tons of fabrics from Panama, Hong Kong and China, followed by the fictitious export of 12,000 tons of textiles.

“The raw material entered under the appearance of legality via Colombia by the ports of Cartagena, Barranquilla and Buenaventura,” according to the Attorney General.

“But this material wasn’t processed into products that were reported as exported. On the contrary, it was found that the merchandise remained in the country and, apparently, was sold at very low prices,” according to the Attorney General.

“Imetex Ltda. reported operations generating income totaling US$57 million, supposedly covered with tariff exemptions and [exclusions from] value-added tax. So, it is estimated that the fraudulent scheme generated losses to the state of at least US$57 million,” according to the Attorney General.

“In 2015, Imetex Ltda. was fined for COP$47 billion [US$15 million] for breach of tax commitments. Yamhure Daccaret in an attempt to divert the attention of the authorities, changed the name of the company registered it as Prointexco,” according to the Attorney General.

Written by March 01 2019 0

Medellin-based insurance and financial services giant Grupo Sura announced March 1 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$170 million), while the “Sura Asset Management” division (pensions, savings and investment) saw revenues grow 6.1% year-on-year in Colombia’s “mandatory” pension-contributions sector and 10.7% in the “voluntary” pensions 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 against participating in the bidding for another 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 Sura Asset Management subsidiary grew 0.4%, although net profit actually decreased 39.7% year-on-year because of an accounting loss due to the divestment of life annuities in Chile and lower income from reserves, the company added.

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