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Grupo Sura 4Q13 Results: Good performance reflecting sound results of the conglomerate's investments

Quarterly Results: Grupo Sura - HOLD
Good performance reflecting sound results of the conglomerate's investments
Price: COP 33,180; Target Price: COP 44,680

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March 4, 2014 ( newswire) The Company released its financial results for 2013 showing sound results, largely boosted by dividend revenues (COP 385bn), equity method income (COP 437bn) and sale of investments (COP 99bn). Our estimates were below actual revenues due to the gain on investment sales; without this effect, our estimates would have been in line (+5% surprise). The solid performance of dividend and equity method revenues reflects the good operational results of the underlying investments, mainly SUAM and Suramericana S.A.

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Dividend income for the year was COP 385 bn, which during 4Q13 was positively affected by extraordinary dividend from Inversiones y Construcciones Estratégicas. This dividend was used to accumulate cash in order to use part of it to acquire shares in Bancolombia's equity issuance.

SUAM reported net income for USD 238.2 mn, which continues to be driven by increased commission revenue due to a healthy growth of Latin America's salary base (+15.3% average). During 4Q13, Grupo Sura finished the process in which its direct stake in Protección is now headed by SUAM (49.4%). Suramericana had consolidated revenues for COP 6.0tn, which were largely boosted by a 13.4% y/y in the Life Insurance subsidiary. Lastly, Bancolombia reported a 10.8% y/y decrease on 2013 net profits, attributable to losses from its trading portfolio and decreased NIM from lower rates and greater competition.

We maintain our T.P. and rating unchanged. Fundamentally, our view on Grupo Sura continues to be positive supported by optimistic growth prospects in the region.

For charts, tables and the full report, see the attached file.

Credicorp Capital

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