Valorem Presents Its First Quarter 2018 Results

Valorem Presents its First Quarter 2018 Results

Bogotá, May 8, 2018. Valorem S.A. (BVC:VALOREM) published its financial results as of March 31, 2018 under the Accounting and Financial Reporting Standards (AFRS) accepted in Colombia. Operating revenue had an improvement of 16.3% by the application of the equity (accounting) method1in the first quarter of the year, amounting to $30,187 million, against $25,960 million in 2017. This variation was boosted mainly by the Media and Entertainment segment and the investment in Gases del Caribe through PrimeOther. Net income of the financial period increased by 2%, going from $13,510 million in 2017 to $13,810 million in 2018.

By sectors, the Media and Entertainment segment represented an increase in revenue of 4.2% for Valorem, generating $29,072 million in the first quarter of 2018, against $27,892 million recorded in 2017. Revenues by the equity (accounting) method in Cine Colombia increased by 71.1% in the period ended March 31, 2018, going from $11,205 million in 2017 to $19,169 million in 2018. This is due to improved operating marginsfor lower expenses, lower interest rates on financial obligations and benefits of the Culture Law on the company’s income taxes. As of March 31, 2018, CaracolTelevisión Group recorded revenues by the equity (accounting) method of $12.904 million, against $16,687 million in the same months of the previous year. This variation is due to the fact that subsidiaries abroad reported a reduction in sales in the licensing of productions, and in 2017, CaracolTelevisión had higher revenue from productions such as El Paseo IV. It should be noted that Blue Radio had an increase in revenue of 35%, compared with the previous year. Losses generated by Comunican and InversionesCromos in the first quarter of the year were $3,000 million. However, due to the fact that as of March 31, 2017, the equity (accounting) method had been discontinued, revenue was not affected by this investment.

On the other hand, in the Logistics and Transportation segment, given the negotiation progress with DHL Supply Chain, a subsidiary of Deutsche Post DHL Group, to sell 100% of Valorem’s stake in Suppla Group, such company was not included in the equity (accounting) method. Ditransacaused a loss to Valorem by the application of the equity (accounting) method of $25 million in the first three months of 2018, compared with a loss of $177 million in the same period of 2017. The company’s improved results relate to a decrease in financial costs of 25%, as a result of efforts made to reduce debt levels.

The retailsegment recorded a loss by the application of the equity (accounting) method of $8,548 million for the fiscal quarter ended March 31, 2018, compared with the loss of $7,319 million in 2017. This is due to the fact that Koba Colombia (operator of D1 stores) continues its expansion plan and has opened more than 160 stores in the period between the first quarter of 2017 and the first quarter of 2018, which is reflected in an increase in sales of 25%.

For its part, the other businesses segment recorded revenues for Valorem by the application of the equity (accounting) method of $9,688 million in the first quarter of 2018, compared with $3,745 million in the same period of 2017. Refocosta’sResults are included here; this company recorded a loss of $52 million as of March 31, 2018, compared with the negative result of $491 million in the same months of 2017. Decreased losses are due to the fact that the company has concluded new service contracts that have allowed it to increase sales by 79%. Likewise, revenues by the application of the equity (accounting) method in Gases del Caribe are included in the segment through PrimeOther, which amounted to $11,436 million in the first quarter of 2018, compared with $6.140 million in the same period of 2017.

Carlos Arturo Londoño Gutiérrez, President of Valorem S.A., said: “The first quarter of 2018 generated positive results, improving both operating revenue and net income of the financial period. This fiscal quarter had as an important milestone for Valorem to move forward with the sale of its stake in Suppla Group to DHL Supply Chain, a subsidiary of Deutsche Post DHL Group. This demonstrates the consolidation of a world-class company.”

About Valorem. Valorem is a corporation listed on the Stock Exchange of Colombia, with the vision of creating sustainable value for all its stakeholders. Currently, it manages an investment portfolio that includes CaracolTelevisión, Cine Colombia, InversionesCromos, Comunican, Ditransa, Biofilm, Gases del Caribe, Koba, Refocostaand Canal Clima. For further information,visit our website at:

1 The equity (accounting) method is the measure that collects in the headquarters results, performance of subsidiaries, associates and joint ventures.