Corficolombiana 4Q20: Non-Recurring Income in Promigas Drives Results

Undertweight – TP COP32,400 Corficolombiana’s 4Q20 results were positive, driven by a non-recurring income of COP276 bn in Promigas, as a result of the application of IFRS 15 for the construction of gas pipelines in Qauvii and Gasnorp (Peru), taking the consolidated EBITDA and net income to record increases of 46% and 57% YoY, respectively. Excluding this non-recurring effect, the EBITDA would have increased 17% YoY, while net income would have decreased 15%.

Regarding the direct business of the , the net treasury margin increased 255% compared to 4Q19, thanks to the realization strategy of available for sale portfolio in TES, new long-term investments with higher profitability, and lower funding cost.

During 4Q20, 50% of the amount of the SIC’s sanction to Corficolombiana and Episol was provisioned (COP44.7 bn).

By Business

Infrastructure: the gross margin fell 5.5% compared to 4Q19, due to a lower margin in Conpacifico (Pacifico 1 construction consortium) given higher costs for the transportation and disposal of material. On the other hand, the EBITDA remained practically stable (+0.4 YoY), driven by an exchange gain of COP159 bn in Covioriente, and on the other hand affected by the provision for COP16.9 bn corresponding to the 50% of the value of the sanction imposed by the SIC to Episol.

It is worth noting that the compensations agreed with the ANI due to the pandemic were not included in the 2020 financial statements.

Energy & gas: extraordinary results mainly due to the accounting effect of the application of IFRS 15 in the concessions in Peru, which generated revenues for COP276 bn. However, excluding this effect, EBITDA shows an increase of 40.7%, as a result of higher regasification and TRM.

Hospitality: results continue to recover, posting a positive EBITDA (-62.7% compared to 4Q19). Occupancy closed the year at 34.3% (18.5% in September and 6.4% in June) and the average daily rate returned to 1Q20 levels.

Agro: this sector continues with a very positive performance, with an EBITDA that doubled compared to 4Q19, thanks to the compliance in production and sale of the different crops. Corficolombaina´s 4Q20 financial results summary

COP mn 4Q20 4Q19 Var. % Real sector revenues 2,886,913 2,805,890 2.9% Real sector gross profit 1,461,439 1,092,508 33.8% EBITDA 1,406,419 964,583 45.8% Net income 602,064 383,640 56.9%

Gross margin 50.6% 38.9% 1,169 EBITDA margin 48.7% 34.4% 1,434 Net margin 20.9% 13.7% 718

EBITDA by sector 4Q20 4Q19 Var. % Energy and Gas 840,395 401,146 109.5% Infrastructure 547,916 545,718 0.4% Hospitality 6,128 16,420 -62.7% Agro 19,533 9,403 107.7% Financials (operating income) 6,184 -5,553 211.4%

Holding business 4Q20 4Q19 Var. % Treasury net margin 19,059 5,365 255.2% Fees revenues 2,495 6,305 -60.4% Total direct revenues 21,554 11,670 84.7% Interest expense – Investments funding 41,426 44,124 -6.1% SG&A 30,871 32,091 -3.8% Net income 603,031 378,016 59.5%

Source: Corficolombiana. Economic, Industry and Market Research Juan Pablo Espinosa Arango Chief Economist and Head of Economic, Industry and Market Research juespino@.com.co

Economic Research Industry Research Equity Research Arturo Yesid González Peña Jhon Fredy Escobar Posada Jairo Julián Agudelo Restrepo Quantitative Specialist Head of Agroindustry Research Head of Equity Research [email protected] [email protected] [email protected]

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