Corficolombiana is the largest Financial Corporation in Colombia, with investments in five strategic sectors of the economy: infrastructure, energy, gas, financial services, and hotels, creating and taking advantage of opportunities for improvement in growth prospects and boosting profitability.
A few days after the end of the third quarter, Corficolombiana announced the issuance of its first social bonds for a total amount of 500 billion Colombian Pesos. The issuance has the objective of financing the contributions of subordinated debt in Covipacífico and Covioriente.
Energy & Gas
Promigas is one of the strongest investments of Corficolombiana, with about 50% participation in the firm. In this quarter, the gas transporter and distributor reported better results, mainly driven by the economic recovery in Colombia.
In this quarter, the gross operating margin rose 18.8% in comparison to the same quarter last year. The recovery of gross profit is mainly explained by higher consumption of non-regulated industries, higher revenues in Promigas’s transportation business, and higher volumes transported in the non-regulated sector.
Regarding Calidda, the firm reported an increase in its gross profit essentially due to higher facilities and gas sales.
Infrastructure
In this quarter, the infrastructure revenues presented lower results, mainly due to the slowdown in the progress of the 4G concession works under construction. The concessions which had the worst result were Coviandina with an advance of 3.3% against 4.2% in 3Q20 and Covipacífico with an advance of 5.7% against 8.5%.
The net financial expense shows a higher interest expense given the 49% increase in the balance of financial obligations versus 3Q-20 to advance construction work, particularly Covipacífico and Covioriente, and a reduction in FX gains compared to 3Q-20 in Covioriente as in December 2020 the concessionaire hedged its dollar-denominated loan.
Net Profit in the sector is negative in the quarter as a result of an increase in income tax due to the change in the tax rate for companies from 30% to 35% for the coming years.
Hospitality
The hospitality sector is one of the most affected sectors around the world. In this quarter, it showed a slight recovery.
In the third quarter of the year, the hospitality sector continued improving its gross operating margin, returning to a positive EBITDA. The average occupancy of hotels in Colombia reached 59% in the last months of 3Q21. This occupancy is higher than the average occupancy of 2019, where stood at 51.2%. Hotels with an important holiday market continue to present the best occupancies, in some cases reaching historical maximum sales. Similarly, urban hotels with a non-holiday vocation during the third quarter showed an increase in sales of 64% compared to the immediately previous quarter, reflecting the reactivation also in this market.
Financial
Besides the treasury and investment banking business of Corficolombiana, this segment also includes its subsidiaries (Casa de Bolsa and Fiduciaria).
Consolidated
Regarding its consolidated results, the firm reported an advance of 2.5% against the same quarter last year. Apart from the infrastructure sector, all the sectors reported an improvement.
Consolidated EBITDA amounted to COP 1.1 trillion for a margin of 41.7%. On the other hand, net income experienced a reduction of 95.1% as a result of an increase in income tax due to the tax reform.
