facebook
linkedin
twitter
About Us
  • BFSI
  • Energy
  • Infocom
  • Mining
  • Venture
  • Industry
  • Travel
  • Civic
  • Food, Health, Ag
  • Real Estate
  • Responsibility
  • Economy
  • Law & Justice
  • Interview
  • Analysis

Colombian Corporates Face Liquidity Challenges, with Deleveraging Not Expected Until 2018

Posted OnJuly 13, 2016
By :Jared Wade
Comment: Off
Tag: cash flow, fitch, Julian Robayo, leverage, liquidity

Colombian financial services companies are facing a treacherous environment with multiple headwinds that are hurting cash flow and leading to increased leverage, according to Fitch Ratings. A new report from the ratings agency says that cash from operations contracted more than 25% in 2015.

While lower dividends did relieve pressure somewhat in this area, the effect was not great enough to stave off average negative cash flow among Colombian corporates, says Fitch. As a result, positive free cash flow is not expected this year.

Facing such pressures, leverage has been on upward trend throughout 2016. Fitch figures credit market factors as having caused total debt/EBITDA and net debt/EBITDA to rise to 2.7 times and 2.3 times, respectively, in 2015. That was up from 2.2 times and 1.7 times in 2014. The pace continues this year, and the firm doesn’t expect deleveraging until 2018.

“There are many obstacles to liquidity for Colombian corporates,” said Julian Robayo, associate director at Fitch Ratings. “Some include adverse external trading conditions, inflationary pressures, higher debt service cost, volatile foreign exchange rates and a slowdown in consumption. Additionally, tax reform may hurt corporates, and return on investment.”

In addition, Fitch found that nearly half (43%) of corporates in Colombia face foreign exchange risk because they hold large amounts of debt in U.S. dollars or simply due to their cash flow exposure. Their exposure to refinancing risk, however, remains limited given the long-term nature of debt profiles and access to local bond markets through 2017.

DON'T MISS OUT: The only English-language Colombia news that's strictly business, markets, & investment!
Join global executives & investors by subscribing to our FREE weekly updates
I agree to have my personal information transferred to MailChimp ( more information ) DISCLAIMER: Protección de Datos Personales Artículo 15 de la Constitución Política de Colombia, ley 1581 de 2012 y decreto 1377 de 2013.
We will never spam you or share your email address ¡Nunca Jamás!

Share the news!

  • Facebook
  • Twitter
  • Print
  • Email
  • WhatsApp
  • LinkedIn
  • Skype

Related

Share your thoughts:

comments

Avatar
About the Author
Jared Wade is editor in chief of Finance Colombia. He is a Bogotá-based journalist with 15 years of experience covering topics including business, financial services, Latin America, and sports. Email him at jared.wade(at) financecolombia.com or follow him on Twitter at @Jared_Wade.
  • google-share
Previous Story

Coinapult Partners with Punto Pago to Make Bitcoin Purchases Possible from 300 Kiosks in Colombia

Next Story

Bancolombia Launches New App for Small Businesses

Related Posts

After 1 week, Alejandro Calderón Chatet will no longer be CEO of EPM.
0

EPM Governance Crisis Deepens: New CEO Alejandro Calderón Chatet Resigns, 1 Week After Being Appointed

Posted OnApril 12, 2021
, ByLoren Moss
mbia are the best. The best workers you can imagine, and they are grateful, loyal and they fight for the company,
0

Tecnoglass Pays Off All Outstanding 2022 Bonds A Year Early

Posted OnFebruary 23, 2021
, ByLoren Moss
Photo courtesy Whitehouse.gov
0

Fitch Expects A Biden – Harris Administration To Be Positive For Latin America

Posted OnJanuary 25, 2021
, ByLoren Moss




RECENT

POPULAR

COMMENTS

Tecnoglass window-making factory in Barranquilla, Colombia. (Photo credit: Liliana Padierna)

Tecnoglass To Hold Q1 2021 Earnings Call The Morning Of May 7

Posted On April 13, 2021

Etek Launches Identity & Access Management Service

Posted On April 13, 2021

GCA Airlines Files To Fly New Routes To Bucaramanga, Santa Marta, San Andrés & Pereira, Colombia

Posted On April 13, 2021
PharmaCielo horticultural worker harvests THC dominant and unique cultivar (CNW Group/PharmaCielo Ltd.)

Colombian Cannabis Cultivator PharmaCielo Closes $13.5 Million CAD Capital Raise

Posted On April 13, 2021
Photo from Twitter

Support for Colombian Fugitive Alex Saab Turns Out To Be Nigerian Troll Farm

Posted On April 13, 2021
Photo montage courtesy EPM

EPM’s Board of Directors Resign En Masse, Creating Crisis For Mayor Daniel Quintero

Posted On August 17, 2020

Court Blocks Colombia’s $370 Million USD Emergency Loan To Bankrupt Avianca Airlines

Posted On September 12, 2020

AVIANCA IS BANKRUPT

Posted On May 10, 2020

In Deepening Crisis At EPM, Labor Union Demands CEO Explain Private Gym, Luxury Office Remodel Despite Austerity Orders

Posted On August 25, 2020

Declan Ryan Says Viva Air Not Being Treated Fairly By Colombian Government: Exclusive Interview

Posted On September 3, 2020
Avatar

[…] 2020 — SINPRO, EPM’s largest...

Posted On April 12, 2021
Avatar

[…] Sky Airline each may operate 4...

Posted On April 6, 2021
Avatar

[…] didn’t know that; that...

Posted On April 6, 2021
Avatar

[…] during his mayoral campaign...

Posted On April 6, 2021
Avatar

[…] existing Viva aircraft are...

Posted On March 30, 2021

Watch This!

Book With Us

Consider Advertising With Us

Click here to visit Expat Group's English site

Subscribe Free

don't forget to include "http://"
* = required field
Your Background / Function








unsubscribe from list

RECENT

POPULAR

COMMENTS

Tecnoglass window-making factory in Barranquilla, Colombia. (Photo credit: Liliana Padierna)

Tecnoglass To Hold Q1 2021 Earnings Call The Morning Of May 7

Posted On April 13, 2021

Etek Launches Identity & Access Management Service

Posted On April 13, 2021

GCA Airlines Files To Fly New Routes To Bucaramanga, Santa Marta, San Andrés & Pereira, Colombia

Posted On April 13, 2021
Photo montage courtesy EPM

EPM’s Board of Directors Resign En Masse, Creating Crisis For Mayor Daniel Quintero

Posted On August 17, 2020

Court Blocks Colombia’s $370 Million USD Emergency Loan To Bankrupt Avianca Airlines

Posted On September 12, 2020
copa airlines

Copa Airlines Raising $350 Million USD War Chest Via Private Notes Offering

Posted On April 27, 2020
Avatar

[…] 2020 — SINPRO, EPM’s largest...

Posted On April 12, 2021
Avatar

[…] Sky Airline each may operate 4...

Posted On April 6, 2021
Avatar

[…] didn’t know that; that...

Posted On April 6, 2021

Watch This!

Contact Us (Click the image):

Book With Us

Pages

  • About Us
  • Colombia Events, Conferences, Festivals and Important Dates
  • Contact Us
  • main
  • Media Partnerships
  • Privacy Policy
  • Whatsapp test page
Copyright 2014-2020 Finance Colombia All Rights Reserved. We may earn commissions from qualifying purchases.
WhatsApp us
loadingCancel
Post was not sent - check your email addresses!
Email check failed, please try again
Sorry, your blog cannot share posts by email.