Daily Colombian Equities Bulletin and Fundamentals - May 6, 2014
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May 6, 2014 (www.investorideas.com newswire) The Colcap index closed at 1,650 points (-0.55%).Total turnover reached USD 64 mn. The best performers were Mineros (+2.94%), Exito (+2.13%) and Pf Cemargos (+0.76%). On the other hand, the worst performers were Fabricato (-5.17%), Cemex Latam (-3.79%) and Ecopetrol (-2.11%).
Bancolombia's 1Q14 financial results
1Q14's net total loans were COP 87.3 trillion, +26.9% YoY and +2.3% QoQ. The annual growth was explained, 16.5% by the contribution of Banistmo (formerly HSBC Panama) and 10.4% by the organic growth of the existing operation before the consolidation of Banistmo. 1Q14's net total loans came slightly below our estimates (-0.7% surprise).
Net interest income in the same period was COP 1,45 trillion, +3.58% YoY. 1Q14's NIM was 5.54%, 124bp below 1Q13's. However NIM, was 20bp above 4Q13. Net interest income was 0.3% above our estimates.
Total loans' quality indicator was 3.2% at the end of 1Q14, higher than 1Q13's (3.00%). This increase is explained by tighter regulations applied to Banistmo's loans past due.
Operating expenses showed a slow growth that surprised us positively. 1Q14's operating expenses totaled COP 1,17 trillion, decreasing 2.9% with respect to 4Q13 and increasing 7.4% with respect to 1Q13. 1Q14's efficiency indicator (ex-goodwill) was 54.2% 418bp below 4Q13's.
1Q14's Net income increased 3.2%YoY to COP 508 billion. The annualized Return on Equity (ROAE) was 12.0% for 1Q14, well below the 15.6% of 1Q13. 1Q14's net income was 8% above our estimates and 7% above the market's.
Finally, Bancolombia's capital adequacy ratio was 13.66%, 305 bp above the 10.61% for 4Q13 and 330 bp below the 16.96% at the end of 1Q13. The quarterly increase in the capital adequacy was due to the new capital, proceeds from the issuance of shares.
Overall, we consider 1Q14's results as slightly positive. The surprise came mainly from the operating expenses. Nonetheless, it is important to highlight, as we had mentioned before, that the benefits from Banistmo's transaction will not be reflected in the short term and Bancolombia's profitability indicators should remain low. We remember these statements consolidate Banistmo operations (HSBC Panama) since November of 2013, making the numbers not comparable with 1Q13.
Cemex Latam Holdings
CEMEX Latam Holdings announced today it has started the construction of a new cement grinding plant in Ciudad Sandino, Managua, that it's expected to increase its cement production capacity in Nicaragua by approximately 104%. The investment is approximately US$55 million and will be completed in two phases, reaching an estimated annual cement production capacity of 860,000 tons by 2017.
Cementos Argos's Board of Directors has authorized participation in the capital of a company incorporated in the Republic of Panama called Argos SEM S.A., which will be completely controlled by Cementos Argos S.A. The participation in the capital of Argos SEM S.A. seeks to centralize the control of some of the company's investments abroad, so that Argos SEM S.A. serves as a holding of such investments, and further, looks to facilitate the provision of administrative services and technical support required to Argos's other companies subordinated located outside of Colombia . The Board authorized the participation in the capital of Argos SEM S.A. to materialize through the contribution of 29,305 shares of Argos USA Corp., of 229,181,415,370 shares of Nuevos Cementos S.A.S. and of 26,500 shares of Ciments Guyanais S.A.S. It will be informed to the market once the above mentioned contribution is performed. Source: Superintendecia Financiera
The Asociacion Colombiana de Comercializadores de Energía (Colombian Energy Traders Association) believes that the rise in energy prices on the spot market in the last three weeks can't be explained only by a higher probability of "El Niño" phenomenon during the second half of the year. Therefore, they are asking the Minister of Mines and Energy to intervene immediately to prevent an further increase in costs. According to the association leader, in some regions the high prices of energy would be transmitted to the final user. Public Services' Superintendent has opened an investigation process by the increase in prices. Source: Portafolio
Oil production last month averaged 935,000 barrels per day, -7.5%YoY. Production was impacted by rebel attacks and community protests. Crude production sank to a 20-month low in April.
According to the Colombian National Administrative Deparment of Statics (DANE), the CPI had a monthly growth of 0.46% in January, above our estimates for this period (0.37%), and above the market estimations (0.32%). With this data, the 12-month period inflation stood at 2.72%.
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