Colombia’s economic landscape is undergoing a profound transformation, driven not only by institutional shifts but by the indomitable spirit of its local entrepreneurs. The story of Julio Jiménez, founder of American Visa Hotel, serves as a powerful testament to the social mobility and resilience defining the country’s modern business narrative. From selling empanadas as a child to managing a diverse portfolio of hospitality and logistics assets, Jiménez embodies the grit that is reshaping the nation’s service sector.

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In this exclusive interview, Loren Moss of Finance Colombia sits down with Jiménez at his newest property, Destino. Their conversation covers a journey of hardship, recovery, and a radical commitment to social responsibility that challenges traditional corporate models. For the international investment community, Jiménez’s trajectory offers a window into the burgeoning mid-market hospitality segments that are being built on authentic local experience and a rigorous focus on consumer security.

This evolution is particularly evident in his recent move to professionalize the transportation industry at El Dorado International Airport. By integrating technology and hospitality standards into the taxi sector, Jiménez is working to eliminate the friction points that historically deter foreign business travelers. It is a narrative of redemption and professionalization that highlights why Colombia continues to maintain its competitive edge in the regional tourism market.

Finance Colombia: I’m here with Julio Jiménez, the founder of American Visa, and here we are in one of his American Visa hotels, ‘Destino.’ And it’s an interesting name that the company has but the most fascinating thing is your history. Tell me how you started in business. Very young, right?

Julio Jiménez: Yes, since I was 8 years old. I had a struggle, grieving when my father separated from my mother. Four brothers stayed practically in one room, in one bedroom. Five people: my mother, my four brothers; struggling a lot, because of the separation. And from there we started working, because since then I started doing business, since I was 8 years old.

Finance Colombia: Wow, and what was your first business?

Julio Jiménez: My first business was to tell the principal of the school where I studied that we didn’t have anything to eat, and she should let us sell some empanadas, we had empanadas for sale and I started selling empanadas in the Cooperative at the age of 8 years old.

Finance Colombia: And that was here in Bogotá?

Julio Jiménez: In Bogotá.

Finance Colombia: Okay, and after that you started to work at the airport, right?

Julio Jiménez: Well, the bad thing about the empanadas was that I stayed with the empanadas until I was 19 years old. I saw money; I didn’t study anymore. I wasn’t inclined to study, I left after 5th grade but I started selling empanadas at the age of 10, 12, 14 years old and I was able to develop my mind, because I had a stand of empanadas in a corner where I was serving 50 people at once.

Finance Colombia: Wow.

Julio Jiménez: Taxi drivers, regular people, would come to my empanadas stand where I had two soda cases, 300 empanadas, butter, dough and a lot of people talked to me at the same time and I didn’t write anything down. I had a mind where… I knew you ate beef, chicken, a Hawaiian and you ate, and you ate… So I talked to 50 people at once and I was able to develop my mind, a photographic memory, a unique memory. Math is adding and subtracting, just that: to add, subtract, divide and multiply, and I developed my mind. After being an empanadas vendor, at the age of 19, I got married. I started gambling, I got addicted to it. When as a child you see money, and you don’t have a guide, a guide on how to manage finances, how to save money well… Money has chased me all my life, the money, the business, but I’ve been a bad administrator. I fell into gambling since I was 12 years old. Problems with ludomania, addiction, ludomania is the game: casino, gambling.

Finance Colombia: Yes, yes.

Julio Jiménez: Only 3 years ago I recovered from gambling. But the issue here that I want to tell you about is that I had many struggles in my life: hardship, hardship and more hardship. But from hardship something good always comes out. The teachings of each mark, of each wound, of each blow. Then I became a taxi driver at 21 years old, and I drove taxis for 14 years. As a taxi driver, I understood and I knew that I was very good with numbers and with the auditory part, and so I had three radio phones in my taxi listening to where they asked for taxis.

Finance Colombia: Yes.

Julio Jiménez: One here, another here, and I went around all of Bogotá driving but also getting to know people and listening. I’ve been very good at listening. I’ve never read, now I’ve read the Bible, but I’ve never read. But I listened, I listened when people get upset, I listened when people have good energy, when people are positive, when they are negative. And all that I learned in my taxi. Until I saw the El Dorado airport. Because of the people I took to the airport. I’d get to the airport, they’d get off my taxi, but someone else would come and say, “Hey, take me to the hotel.” And the hotels I would take them to, 15 years ago… As a taxi driver, they asked me for hotels. I took them to hotels where they gave a commission to the taxi driver, a commission of, I don’t know, at that time it was 30,000 COP, it was 10 USD today. I’d get to the hotels, they gave me my commission, 2 or 3 a day. I wondered, “What do the people that stay at the airport do?” I dared to let go of my taxi, which was what I knew how to do. I know how to do 3 things in life: drive a taxi, sell empanadas and sell hotels. That’s my art, what I learned. I let go of my taxi and I started selling hotels at the airport. I went from a taxi driver, to getting out of it, asking for permission to a hotel at that time, 15 years ago, I said, “Give me a certificate and back me up so I can be at the airport with a sign-”

“When you dedicate yourself to serve, to help, to protect. That is the motto of the American Visa company.” — Julio Jiménez, Founder of American Visa Hotel.

Finance Colombia: ‘And I’ll get you customers.’

Julio Jiménez: Lorenzo you need a hotel, I have a hotel near the airport, I’ll take you, bring you back, give you food, the entire service. And I started, and like me there were already 200 people working in different shifts, it was a closed circle, that business has been there for 40 years, at the airport. It’s called informalism, being touts. Those that when you get off, “I have the Uber, I have the Uber.” In the whole world, even in China, there are airport touts. So I started selling hotels and it turns out that they are talking to the best speaker, because my God gave me a gift to know how to express myself, to know how to convince and I started selling hotels and I sold 15 rooms daily, when I started 15 years ago, and 15 rooms with 50 percent commissions…

Finance Colombia: That’s very profitable.

Julio Jiménez: Profitable, tempting, but there is also indiscipline, because 15 years ago I wasn’t very disciplined. I was still doing drugs, gambling, alcohol, women, treachery, learning. For me it was easy to earn 500 USD a day in commissions but it was also easy to spend them in one hour.

Finance Colombia: Easy come, easy go.

Julio Jiménez: Correct.

Finance Colombia: You still didn’t have discipline to save.

Julio Jiménez: No, I was paving the road, as I always say, I always had that hardship. The ludomania, addiction management, gambling management, emotions management. I was hospitalized for 4 months in a clinic 14 years ago for gambling management. I committed myself for 4 months in a clinic for addiction management because I got obsessed with gambling.

Finance Colombia: And how did you get over that eventually?

Julio Jiménez: Look, I spent 4 months with psychology, psychiatry in the clinic, here in Bogotá, my diagnosis wasn’t bipolar, it wasn’t schizophrenic but it was compulsive gambler, and that is the worst of all.

Finance Colombia: Addicted to dopamine.

Julio Jiménez: To dopamine, serotonin, endorphins. Everything, everything, everything, has to be like this. And the compulsive gambler risks everything, he does not lose, he plays everything. Unfortunately that was almost all of my life. Many pitfalls and many defeats, since very young the money came to my life and I didn’t know how to handle it, then I met the Lord when I met Jesus Christ… 3 years ago I fell to the feet of Jesus before the pandemic. 6 years ago I had a business opportunity, I left the airport when the pandemic came, I started with a small hotel of 12 rooms, the pandemic came and everything broke. When they reopen hotels, it takes me out of the airport. At the airport they did not want to see me because of a betrayal. I set up a business in the airport before the pandemic, a special transport business of white cars (formalized, legal transportation), and the people in the airport with whom I set up the business betrayed me, he remained because he was a lawyer and I had nothing. He ran things there, and they said, “Julio, don’t call us, we will call you.” They removed me from the airport. I went to the transport terminal.

Finance Colombia: In Salitre, yes.

Julio Jiménez: That’s where I worked as a tout. “Hotel, hotel!” It wasn’t the airport but it was a terminal. We start the travel agency American Visa Tours. It still exists. It is a long story, it would take two hours to tell it because it is already edited even for a book, they already made a script of how everything happened. Because the spiritual connection with God was very big because in the terminal when it was closed for the pandemic, the people were thrown outside. A group of foreigners, of Venezuelans, of Colombians, There was no transport, they’d get here and get tossed on the ground. I had a hotel with 12 empty rooms, so what did I do? I had three trucks like this, owed 8 months’ rent. But I wanted to start again.

During that learning lesson there were nights that I went out to hustle, I loaded people from Cúcuta, I arrived and I loaded people in the terminal, “Going to Cúcuta?” in my truck. I put 11 passengers and took them to Cúcuta. I did like 10 trips. And during that time while I offered that illegal transport to Cúcuta, because it had ended, they also asked me about hotels, so I packaged hotel and transport, so I could survive, but in that time I realized that people couldn’t pay. Not for the hotel, or transport, or food. Because they are like refugees, if it’s bad here, it’s worse in Venezuela. So what did we do, what did the Lord do through me? I have an empty hotel, I have a truck to take people, it’s raining, kids are getting wet, the grandparents, the pregnant women… Let’s help them. And on several occasions we opened the hotel doors, which was broke. And we gave them free nights and gifted them a chicken or something to eat.

There, my dear Lorenzo, Heaven’s doors opened, and American Visa started. With that act of faith, of love, I don’t know what happened, God simply made a blessing here because for the past 6 years American Visa, which was born in that hardship, has not stopped receiving blessings. Today we are a hotel chain with 8 hotels. A travel agency, three agencies we own, the restaurant chain the technology company. More than 7 companies.

Finance Colombia: These hotels are beautiful. I think it’s new, it’s like international class. We went, without knowing you, we went to eat in Camelia, your restaurant in route 40, yesterday. It’s good. I’m always here in Bogotá in an event in Corferias. I remember seeing your brand in front of the embassy because you have services, packages, everything included not only for holidays but people who come for business in the embassy, people who are in Corferias because everything here is close to Corferias. What is like, the market or what is the audience or the passengers you aim for? I’m not going to say strategy, but which travelers fit best with what you do?

Julio Jiménez: I learned as a taxi driver that a tourist requires a hotel. Requires a good restaurant and requires security. When the three things are given to a tourist, it turns into an ecosystem. Why not build the ecosystem? Transport, tourism accommodation, restaurants everything they need in one place. That’s what American Visa does. And everyone who arrives at the airport, well now with technology and social media and digital media many people are getting to know us. But my true business, where I started, it was airlines. When they lose a connecting flight, when they cancel a lot of flights, what they do is call American Visa. Because we have restaurants 24 hours, transport 24 hours and everything is ready to see you. From one to a thousand people a day.

Finance Colombia: It has happened to me many times in El Dorado, going back to Rionegro. It has happened to me.

Julio Jiménez: Now with this gigantic ecosystem, here we have over 500 rooms in Bogotá, not only for airlines but also to receive the international agencies that arrive in Bogotá. We receive them 24 hours, we have service in the airport 24 hours 365 days a year in which the first thing you do is to have kind face to greet you and take you to the hotel without cost because it is included in the package. We have a restaurant that works 24 hours so whenever you get there, you’ll find food. We have our agents, language, we have our employees who work here willing to give love.

Finance Colombia: And that is the last thing I wanted to talk to you about, that this moment is my first time to meet you but I have known… We are here recording the ANATO Vitrina Turística event, the most important tourism event in Colombia, and I met people from your American Visa team, and they all have a commitment that they show but apart from that I have heard stories or cases of employees with humble beginnings, a lady whose mother had cancer and she came to you for a loan, and you were like “It’s no trouble.” And when people talk well about you behind your back, that speaks volumes.

Julio Jiménez: Look, the social aspect, when God blesses us, I met the Lord 6 years ago, when we helped those people on the ground, when we gave them shelter and food. God opens the gates of Heaven and the door opens. That also opens my heart. I have a duty, for the 35 years that I spent gambling, to help, to serve and protect. Today my debt is not with the casino nor with their people but with the people who need help. God transformed all of my illness. Because I keep praying every day. I wake up at 3:30 AM to connect with the Lord and to plan my day and I go to bed at 10 or 11 PM planning what business we are going to do. If there is no business, there is no risk. When you fail, it is cowardice. But when you don’t fail you can know for certain that God has picked you up for good. He does not fail. You are the one who fails. If you don’t fail, there will be no failure.

Every business shines, every business prospers, if you put it in God’s hands. And how? With service. thinking that the person who you help, whether good or bad, a believer or not, is a human being, who needs an opportunity. And American Visa is dedicated today to opportunities it is the company of opportunities. We receive people who have been in jail, people who have made mistakes, those who do not know how to read, those who can’t write, those that have many titles and need to be trained because the ego is killing them. Because today the biggest disease in the world is the ego, and depression, anxiety, so here we are about receiving everyone, giving them a hug and finding the wound to heal the soul. When you heal the soul you connect with God.

Finance Colombia: And I believe that also when you come from humble beginnings, you know what’s it like to go hungry, it is different from someone who is born with a silver spoon in their mouth. It is different when you know what’s it like to ask for a chance. when you know how it is to sleep on the floor, like when you were helping them. And helping them without knowing what will happen later, and look at all of this. How many hotels do you have?

Julio Jiménez: Eight hotels. We own three buildings and rent five, we own the transport agencies, American Visa has absorbed the companies that today transport to the most important airport in Colombia, they are from American Visa, of the holding.

Finance Colombia: And that is important because, I’m sorry because I know it is part of your story, but the taxi drivers here in Bogotá have a bad reputation. I wouldn’t say I’m scared, but I look for white cars, because I don’t want to be scammed, to be overcharged because it’s Sunday, or because of a foreign accent, and I look for a reliable transport, reliable people. And if you offer that, how can a traveler get in touch with you? Do you have a website?

Julio Jiménez: Right now, we have just acquired the Taxi Imperial company, who manages the airport. Taxi Imperial.

Finance Colombia: I know them, yes.

Julio Jiménez: American Visa at this moment has strategies… today is February 26, 2026. I ask you that you count 6 months. Give me 6 months my dear Lorenzo, and in 6 months, I’m putting it on the record. What image is the yellow taxi going to have? In 6 months, with the help of our Lord, we plan to transform the yellow transport. You will find the cabins where you will receive a friendly attention, “Where are you going, sir?” I offer you the yellow taxi, or the special service. But the yellow taxi will come out with the predetermined rate so you will see how much the user will pay without surprises. You will have a video camera and audio, if you wish, for security, if you forget an object, if you forget a bag or anything. This project is designed in service of the user. And to improve the image of the taxi driver. But image is improved with proof. And proof will be difficult because it’s a union, I was a taxi driver for 14 years and I charged hard, we are used to charging hard. But if the people who were overcharged paid for a bad service, when you know how much you will pay, with a good service, you will use the service again.

Finance Colombia: I pay more to have no surprises, rather than look for cheap but in the end get surprises.

Julio Jiménez: No, look, I can’t go over the speed limit but I will drive you safely. I’m not going to put reggaeton music, “What music do you want to listen?” I’m going to give you a water bottle, show you the videos that we are going to put in the back, because we are going to have corporate videos about Colombian tourism. We’ll show the hotels, restaurants, travel agencies. Everything you can do in Colombia. We will be professional drivers. Not taxi drivers. Every taxi driver at the airport will be a commercial driver. Selling services, selling a safe package, we are not going to overcharge anymore, we are going to do things well. And that client, we will call them after drop off, Lorenzo is going to his house in Cedritos, in 10 minutes we will call him, “Mr. Lorenzo, how was Mr. Camilo?” “How did he treat you? Would you use the service again?” It’s a post-sale, what we plan to do. That’s why I’m saying, give us 6 months, and you’ll hear about what we did with the yellow taxi in the airport.

Finance Colombia: So in September we are going to do another interview to see how it’s going.

Julio Jiménez: Gladly, I’ll be there to give you the numbers and the statistics of how we did it.

Finance Colombia: Excellent, it’s been an honor. Look, it is impressive what you do here, thanks for your time I know you are very busy in ANATO, we are as well, but what you have done so far is very impressive, I want to see you continue with these successes.

Julio Jiménez: It is for God’s glory, for the inspiration of people to see that all dreams can be fulfilled by faith, by the name of the Lord and in the name of helping society, which is the most important thing because the last thing you think about is in the profit, it will come later. But when you dedicate yourself to serve, to help, to protect. That is the motto of the American Visa company.

Finance Colombia: Well, American Visa, thank you very much.

Julio Jiménez: Thank you Lorenzo, God be with you.

Colombia has modified the rules for bringing drones and their spare parts into the country for security reasons. The measure was established through Resolution 000242 of 2025 issued by the Dirección de Impuestos y Aduanas Nacionales (DIAN) and has been in effect since January 11, 2026.

The regulation was adopted “with the objective of preventing the illegal entry of unmanned aircraft systems (UAS/drones) and mitigating the risks associated with their misuse.” According to the DIAN in a press release, the provisions aim to “strengthen national security against the possible use of these devices in criminal activities, such as indiscriminate attacks against security forces and the civilian population.”

Under the directive, drones may enter the country through two mechanisms. The first is by submitting an Advance Import Declaration (Declaración Anticipada de Importaciones, by its Spanish name), which must be filed five calendar days before travel through the Customs Services (Servicio de Aduanas) section of the official DIAN website at www.dian.gov.co. The second option is to complete DIAN Form 530 upon arrival in the country.

In both cases, travelers must present the original purchase invoice, declare the intended use of the drone, and pay the corresponding import taxes, regardless of the price already paid for the equipment in the country of purchase. In some cases, DIAN may also request an inspection of the device.

The regulation establishes that drones or their parts may only enter the country if they comply with this standard import procedure.

Another key aspect of the resolution is that drones may only enter Colombia through two authorized entry points: the port of Cartagena and El Dorado International Airport in Bogotá. If a drone is brought into the country through any other location, customs authorities may seize it.

DIAN also clarified that travelers should “refrain from bringing this type of merchandise under the traveler import modality.” If they attempt to do so, customs authorities will require the change of modality so that the device can be processed through ordinary import procedures, provided that the arrival occurred through the authorized entry points. Entry through other locations is not permitted and could result in the seizure of the merchandise.

Additionally, the resolution states that drones cannot enter the country through postal shipments or express courier services, meaning international deliveries of these devices may be subject to confiscation.

Retail companies may continue selling drones in the Colombian market, provided they comply with import procedures and pay the applicable taxes. However, these requirements may lead to delays and additional costs for final consumers.

According to the magazine Cambio Colombia, the measure responds to the growing use of drones in criminal activities. These “recreational or productive technologies have begun appearing in high-risk scenarios such as illegal surveillance, the transport of explosives, criminal intelligence operations, and even attacks against security forces.”

Defense Minister, Major General (ret.) Pedro Arnulfo Sánchez Suárez, confirmed that 162 drone attacks against security forces were recorded in the country during the past year. According to the minister, the resolution will make it possible to “know exactly who is purchasing drones and what their intended purpose and use are. This will allow us to protect the population and prevent a tool designed for progress and development from being used to kill Colombians.”

In general terms, Resolution 000242 establishes three main rules for bringing drones into Colombia:

1. Mandatory advance declaration for importers, including travelers.
2. Restriction of entry to two authorized points: the port of Cartagena and El Dorado International Airport in Bogotá.
3. A total ban on postal or express courier shipments of drones.

Additionally, drones that weigh more than 250 grams or are used for professional activities must be registered with Aerocivil, Colombia’s civil aviation authority. Failure to register the device or operating it without authorization may result in fines.

Above photo: DJI drone courtesy DJI

The remodeling, which began on February 24, represented an investment of $500,000 USD and allowed the modernization of different areas such as the reception, rest, buffet, coworking area, showers, and the general furniture of the lounge. The spaces have been optimized through a distribution and separation of environments, while the lighting has been renewed to provide a warmer, more functional, and welcoming experience for travelers.

One of the main changes is the renovation of the buffet, which offers a completely new gastronomic proposal inspired by South American flavors, which is complemented by a careful selection of wines and spirits from the region. The lounge will continue to operate 24 hours a day, 7 days a week, with permanent availability for international travelers.

Access to the lounge is available for passengers traveling in premium business or premium economy cabins, as well as for members of the black signature, black, and platinum categories of the LATAM Pass program. Elite passengers flying in premium cabins with allied airlines such as Delta Air Lines, Iberia, and Aeromexico can also access it. Additionally, any VISA cardholder can access it and manage their access through the Visa Airport Companion application.

A global transformation

The renovation of the lounge in Bogotá is part of an ambitious transformation plan that LATAM is implementing in its main airports around the world. During 2025, new spaces will be added in Peru, Brazil, and the United States, aligned with the standard of the Santiago lounge, inaugurated in 2022. This new generation of halls is distinguished by modern, comfortable architecture and interiors with local identity, integrating cultural, gastronomic, and hospitality elements specific to each country.

Among the projects is the upcoming opening of the lounge at the Jorge Chávez airport in Lima, with an investment of $10.5 million USD, and the development of the new space at the Guarulhos airport (São Paulo), with an estimated investment of $18 million USD and scheduled to open in 2027. In the United States, LATAM is also planning to expand its lounge at Miami airport in the coming years.

These renovations by the LATAM Group are aimed at offering a premium experience, creating spaces designed for rest, comfort, and enjoyment in each destination.

Photo credit: LATAM Airlines.

The Ministry of Tourism of the Dominican Republic was present at the fair with an official stand, inaugurated in the presence of the Minister of Tourism, David Collado. During the inauguration, the minister highlighted the importance of the Colombian market and initiated a series of cultural and business activities that will strengthen relations with the country’s tourism sector. “With this participation in ANATO 2025, we reaffirm our commitment to promote the Dominican Republic as a key destination and strengthen our relationship with Colombian tourism, a strategic ally for the growth of the sector,” Collado said. The inauguration was also attended by the media, who highlighted the relevance of this event for the tourism industry.

As part of its strategy to strengthen the Colombian market, the Dominican Republic held a successful roadshow at the Sheraton Hotel in Bogotá, where it presented the latest developments in the destination. The event brought together travel agencies, representatives of the hotel sector, and renowned international public figures, who lived first-hand the experiences that the country offers its visitors. This roadshow, like other events organized during the fair, is consolidated as a key space for the generation of business, the strengthening of commercial relations, and the promotion of new opportunities in the tourism sector.

The Ministry of Tourism of the Dominican Republic was present at the fair with an official stand. Photo credit: LLYC.global.

Colombians’ interest in the Dominican Republic continues to rise. In 2023, 305,655 Colombian tourists visited the country, and in 2024, the figure grew to 335,819, evidencing a constantly growing demand. A key factor has been air connectivity, with more than 3,600 flights operated in 2024 between the two countries. Of these, 50% depart from El Dorado Airport in Bogotá, and more than 60% of passengers arrive directly in Punta Cana. Airlines such as Copa Airlines, Avianca, Arajet, Wingo, and Air Century have played a fundamental role in the consolidation of these routes.

In addition to Punta Cana, the Dominican Republic has diversified its tourism offerings, positioning new regions such as Costa del Ámbar, Miches, Samaná, and Santiago. These destinations offer a unique combination of nature, luxury, history, and culture, with paradisiacal landscapes, eco-adventures, and vibrant urban centers with a rich gastronomic tradition.

To strengthen its relationship with the tourism sector, the country has “DO Travel Rewards”, a loyalty program aimed at travel agents that has trained and connected more than 20,000 professionals around the world with the hotel industry, generating new opportunities and value offers for travelers. With its outstanding presence at ANATO 2025 and the support of the Ministry of Tourism, the Dominican Republic reaffirms its commitment to the Colombian market, consolidating strategic alliances and presenting its wide tourism offering to continue attracting more travelers in the coming years.

Headline Image Credit: LLYC.global.

Colombia offers a wide range of experiences, from sun-soaked Caribbean beaches to the lush Amazon rainforest, which could make it a tourism powerhouse in the region. Sadly, constraints related to infrastructure, safety, and global promotion stand in the way of achieving sustained growth.

Tourism in Colombia’s Economy

Tourism needs to be more than a leisure activity; it could become another economic engine for Colombia. It can become the sector that rapidly creates jobs, supports local businesses, and attracts foreign investment. According to Colombia’s Ministry of Commerce, Industry and Tourism (MinCIT), international tourism has generated billions in revenue in recent years, contributing to the country’s economy.

Growth of Tourism: A Statistical Perspective

The following tourist data illustrates the sector’s resilience and challenges:

Data Source: Ministry of Commerce, Industry and Tourism and ProColombia.

Colombia’s tourism sector remains underdeveloped compared to its regional peers. In 2019, the country welcomed 4.5 million international visitors, dwarfed by neighboring countries like Mexico and Brazil. The pandemic multiplied the challenges, causing a significant drop in 2020. The recovery has been remarkable in 2023, with a return to pre-pandemic levels. There is a need for more ambitious targets and plans to unlock tourism’s full potential.

Key Destinations and Their Untapped Potential

Colombia’s diverse landscapes and rich cultural heritage should make it a magnet for travelers. Iconic destinations include:

• Bogotá and Medellín — These urban centers blend tradition with modernity, offering world-class museums, innovative urban design, and dynamic nightlife. Still, issues like traffic congestion and urban sprawl need to be addressed.
• Cartagena — Known for its UNESCO-protected colonial architecture and vibrant Caribbean culture, Cartagena remains a favorite for history and beach enthusiasts alike. However, overcrowding and insufficient infrastructure have limited its growth.
• Eje Cafetero (Coffee Region) — While popular for its coffee culture, the region lacks comprehensive tourist facilities to cater to international visitors.
• The Amazon and Pacific Coast — The Amazon offers unique ecotourism opportunities, but accessibility remains a challenge. The Pacific Coast, known for whale watching, suffers from underdeveloped infrastructure.

These destinations have immense potential to drive tourism growth, but unlocking it requires targeted investments and sustained support of governmental policy.

While Colombia has made substantial progress in improving security, particularly in tourist-heavy areas, lingering perceptions of crime deter many potential visitors.

Infrastructure: A Major Hurdle

Bogotá City. Photo credit: Mano Chandra Dhas.

Colombia’s infrastructure lags behind the demands of a competitive tourism industry. Modern international airports in major cities, such as El Dorado in Bogotá, have improved global connectivity, but regional access remains a significant barrier.

• Transport Links — Many promising tourist destinations lack sufficient transport options, limiting their accessibility and growth potential. Upgrading regional airports, roads, and public transportation is crucial to the development of tourism.
• Hospitality Sector — High-quality accommodations and services are unevenly distributed across the country. Investments in luxury and eco-friendly lodgings can enhance Colombia’s appeal to affluent international tourists.

Safety Concerns and Their Impact

Safety remains a crucial factor in attracting international tourists. While Colombia has made substantial progress in improving security, particularly in tourist-heavy areas, lingering perceptions of crime deter many potential visitors.

Theft in public places continues to be a negative when potential tourists read about them. Increased police presence and specialized tourist police units have enhanced safety in key areas, but more efforts are needed to address rural and underdeveloped regions.

Emergency response systems and multilingual support remain underdeveloped, making it harder to reassure tourists.
Consistent and transparent communication about safety improvements is essential to change outdated perceptions.

Marketing Colombia: A Global Opportunity

Effective promotion is critical to attracting international tourists. While the Colombia Tourism Promotion Board has made strides in reshaping global perceptions, more robust and coordinated efforts are needed.

• Digital Marketing — Highlighting Colombia’s natural beauty, cultural richness, and warm hospitality through targeted campaigns can reach wider audiences.
• International Partnerships — Collaborating with global travel companies and participating in major tourism fairs in targeted markets will strengthen Colombia’s presence in competitive markets.
• Local Business Support — Training and resources for local entrepreneurs will ensure high-quality services and sustainable growth.

Tourism’s Economic Impact and Future Potential

Tourism’s influence extends beyond direct visitor spending. The sector stimulates job creation across various industries, from hospitality and transportation to artisanal crafts and cultural experiences. Local communities benefit from increased business opportunities, while the influx of foreign currency bolsters Colombia’s economic resilience.

Despite its contributions, tourism accounts for a smaller percentage of Colombia’s GDP. Colombia needs a long-term strategy emphasizing sustainable practices, diversified offerings, and inclusive growth. With a clear roadmap and consistent investments, the country will significantly increase its share of global tourism.

Headline image: Plaza Mayor Villa de Leyva. Photo credit: Mano Chandra Dhas.

Avianca’s claim was generated because, according to the Colombian carrier, LATAM sold air tickets from last October through March without authorized slots. In the documents supporting the claim, Avianca shows that LATAM offered 6,137 flights to and from El Dorado International Airport without securing a slot, meaning a permit to take off or landing, assigned by the Special Administrative Unit of Civil Aeronautics (Aerocivil).

After an investigation that concluded last month, SIC reviewed the submission and ordered LATAM to cease immediately the promotion and operation of flights to or from Bogotá at times that do not have an assigned slot or approval necessary for its commercialization. It ruled that the Chilean airline must also inform all users who relevant LATAM tickets for flights without the approval slot and, if applicable, refund the fare or offer them the flight schedule for which the company does indeed have an available slot.

“It is very striking that in its statements, the dominant operator in Latin America, LATAM, considers that it is anticompetitive that a judge requires compliance with the law,” said Avianca CEO Adrian Neuhauser in a statement.

The Colombian airline also stated that SIC’s decision is a “milestone in respecting the slots” process and prioritizes free competition and user protection in a sector that needs momentum and clear rules.

Santiago Álvarez, executive director of LATAM in Colombia, accepted the ruling and noted that the Chilean airline will adhere to all requirements throughout the upcoming high-travel season.

“The passengers of LATAM Airlines Colombia and the market in general can trust that we comply with aeronautical regulations, and the flights to and from Bogotá for the season that will operate from October 29 to March 30, 2024, have the slot required, and they will be operated normally,” he said in a statement.

The Role of Slots in the Colombia’s Congested Airports

Airport slots, according to the SIC definition, are authorizations assigned in accordance with the airport capacity — either restricted or limited — that are approved by Aerocivil to each airline in order to guarantee viable operation.

The government entity clearly establishes that any company that plans to operate to or from Colombian airports must have the necessary slot approvals for the flights they intend to operate. In this way, the marketing and sale of flights should only be carried out at the times that have been previously approved by Aerocivil.

Aerocivil established the slots for those airports with limited or insufficient infrastructure and high levels of congestion such as El Dorado. The allocation of slots, as a capacity management method for this so-called Level 3 distinction of airports, has the purpose of “increasing the benefits to the maximum for the greatest number of airport users,” which allows Aerocivl to “guarantee the viable operation of the airport” as well as “increase to the maximum the efficient use of airport infrastructure,” as stated in the Aeronautical Regulations of Colombia.

The Largest Airlines in Colombia Continue to Grow

Avianca and LATAM are the two dominant airlines in Colombia. Despite experiencing a decline in passengers between 2017 and 2022, per Valora Analitk, Avianca has not given up its leadership position compared to other airlines. The appearance on the market of other commercial air transport alternatives and the blows of the pandemic explain the fact why Avianca fell from transporting 12.7 million passengers in 2017 to just 7.0 million in 2022.

Despite the drop, the carrier did not fall out of the top spot, staying well ahead of the 4.9 million passengers LATAM transported in 2022 (compared to 4.4 million in 2017).

Both airlines gained even more market share this year after the market exit of low-cost carriers Viva Air and Ultra Air. Between January and March, Avianca and LATAM reportedly took 11% and 6.6% of the market share of those failed airlines, per La República.

This uptick gave Avianca nearly half the Colombian market, tracking at 48.8% in the first quarter, whereas LATAM rose to 27.4% market share.

(Photo credit: LATAM)

Gross profit for the third quarter of 2022 nearly doubled to $105.3 million, representing a 52.2% gross margin, compared to gross profit of $51.5 million, representing a 39.2% gross margin in the prior year quarter. The 1,300 basis point improvement in gross margin mainly reflected operating leverage on higher sales, favorable pricing dynamics, greater operating efficiencies related to automation and a favorable FX trend given the recent strengthening of the US Dollar. Being a company with Colombian operations, the precipitous fall in the peso creates significant cost advantages for exporters like Tecnoglass.

Selling, general and administrative expense (“SG&A”) was $35.2 million compared to $21.7 million in the prior year quarter, with the majority of the increase attributable to higher shipping expenses as a result of a higher sales volume and higher shipping rates. Additionally, the company incurred a one-time settlement expense related to a project contracted in 2016 that is now fully resolved. As a percent of total revenues, SG&A was 17.4% compared to 16.5% in the prior year quarter. Excluding the settlement, SG&A as a percent of total revenues improved by 180 basis points compared to the prior year quarter.

“The structural enhancements in our business, our diversified revenue mix, and our prudent working capital management have helped us generate 11 straight quarters of exceptional cash flow. Based on the Board’s confidence in our strategy and cash generation, we are pleased to announce today the authorization of a new $50 million share repurchase program as an additional avenue to build value in our Company. As we move forward, we believe our structural advantages and highly profitable growth strategy will allow us to continue generating exceptional cash flow as we look to deliver value for our shareholders,” said CEO José Manuel Daes.

Net income was $46.9 million, or $0.98 per diluted share, in the third quarter of 2022 compared to net income of $20.7 million, or $0.43 per diluted share, in the prior year quarter, including a non-cash foreign exchange transaction loss of $0.5 million in the third quarter of 2022 and a $0.2 million gain in the third quarter of 2021. These non-cash gains and losses are primarily related to the accounting re-measurement of U.S. Dollar denominated assets and liabilities against the Colombian Peso as functional currency.

Adjusted EBITDA more than doubled to $78.5 million, or 38.9% of total revenues, in the third quarter of 2022, compared to $38.5 million, or 29.2% of total revenues, in the prior year quarter. The improvement was driven by higher sales and a stronger gross margin. Adjusted EBITDA included a $0.9 million contribution from the  joint venture with Saint-Gobain, compared to $0.8 million in the prior year quarter.

Tecnoglass ended the third quarter of 2022 with total liquidity of approximately $255 million, including cash and cash equivalents of $84 million and availability under its committed revolving credit facilities of $170 million. Given the continued growth in adjusted EBITDA and strong cash generation, debt leverage continues to trend lower and now stands at 0.4 times net debt to LTM adjusted EBITDA, compared to 0.9 times in the prior year quarter.

“We are extremely pleased with our ability to produce another quarter of record results and above market growth. Our results reflect our ability to capitalize on strengthening commercial activity in attractive high growth markets in addition to capturing solid demand and share gains through the expansion of our single-family residential business. Our track record of successfully delivering high profile projects and maintaining superb lead times for our customers has earned us an increasing number of opportunities across the U.S., demonstrated by our expanding backlog of multifamily and commercial projects, up 21.1% year-over-year. We are also thrilled with the continued momentum across our business into the fourth quarter, which is reflected in our increased full year 2022 growth outlook. With our innovative product portfolio, strong industry relationships and structural competitive advantages, we believe we are on the path to continue growing faster than our end markets into 2023 and beyond,” said Chief Operating Officer Christian Daes.

During 2022, Tecnoglass initiated enhancements at its glass and aluminum facilities to increase production capacity and automate operations. Based on the timing of capital investments, it maintains its expectation to increase installed production capacity to an amount equivalent to over $800 million of annual sales by the end of 2022, followed by a further expansion of installed production capacity to an amount equivalent to approximately $950 million of annual sales by the end of the second quarter of 2023.

Also today, the Tecnoglass board of directors authorized Tecnoglass to buy back up to $50 million of its common share, at its own discretion, and in compliance with the “safe harbor” provisions of Rule 10b-18 under the Exchange Act. The program does not obligate Tecnoglass to acquire any particular amount of its common stock, has no set expiration date and may be suspended or discontinued at any time subject to applicable securities laws.

“Based on our exceptional third quarter performance and expectations for continued growth for our products through year-end, we are increasing our full year 2022 growth outlook for revenues and adjusted EBITDA¹. We now expect 2022 revenues to grow to a range of $680 million to $700 million and for adjusted EBITDA to increase to a range of $240 million to $255 million. This implies adjusted EBITDA growth of approximately 67% at the midpoint. We expect to further build upon our strong track record of strategic execution and leverage our vertically integrated business model, which positions us to drive another year of record results and cash flow in the full year 2022,” said CFO Santiago Giraldo.

The Parque 93 building, Bogotá

Fourth quarter total revenues increased 28.0% year-over-year to $131.8 million USD, with 142% growth in single-family residential revenues, while net income reached $19.8 million, or $0.41 per diluted shares. Adjusted net income was a record $24 million, or $0.50 per diluted share. The company said that gross margin improved 710 basis points YoY to 42.9%.

Fourth quarter EBITDA increased 65.7% YoY to a record $42.2 million, or $32% of revenues. Cash flow from operations was $23.8 million, and the cash dividend increased 136% to $0.065 per share. The Colombian company also announced an amendment to its senior secured revolving credit facility, expanding borrowing capacity from $50 million to $150 million, reducing its cost of capital and extending debt maturities to 2026.

The order backlog for Tecnoglass includes 20 of the 22 tallest skyscrapers currently under construction or planning to break ground in South Florida.

For the full year, single family residential revenues increased by 151% YoY, representing 36% of total revenues for the year. The line of business is relatively new for Tecnoglass, which built its reputation on large commercial and high-rise multifamily residential projects. Total revenues are up 32% YoY to a record $496.8 million for 2021.

Gross margin is also a record 40.8%, up 380 basis points, and full year net income is $68.4 million, or $1.43 per diluted share. Adjusted net income is $82.7 million, or $1.75 per diluted share. Cash flow from operations is also a record $117.3 million.

“We can make glass that protects from the weather, while letting you have a great view. People like that you can now be in harmony with the surroundings.” – José M. Daes. Above: Suburban Miami’s beachfront Regalia condo tower, featuring Tecnoglass materials.

The company’s backlog of orders expands 7.2% to a record $584.6 million, including supplying energy efficient windows to 20 of the 22 tallest buildings currently under permitting or construction in South Florida.

“We are thrilled to report another quarter and year of record results for Tecnoglass. Strong fourth quarter performance reflects the combined benefit of our focused execution, prior investments in automation and capacity enhancements, and our ability to capitalize on strong residential demand. We continue to produce outstanding results in our shorter cash cycle single-family residential business, which in addition to our prudent working capital management, helped us generate our 8th straight quarter of exceptional cash flow. As we move into 2022, our strong capital position and structural advantages leave us well situated to further extend our leadership in the architectural glass industry and drive improved returns for our all our stakeholders for this year and beyond,” said CEO José Manuel Daes.

For the full year 2021, cash provided by operating activities of $117.3 million improved by $45.5 million compared to the prior year, attributable to higher profitability, more efficient inventory and working capital management, and interest expense savings. The company used a portion of its cash flow to voluntarily prepay $30 million under its Syndicated Term Loan facility during the year. The company ended 2021 with total liquidity of approximately $250 million, including cash and cash equivalents of $85.0 million and availability under its committed revolving credit facilities of $163 million. Given the company’s continued growth in adjusted EBITDA and strong cash generation, debt leverage continues to trend lower and now stands at 0.8 times LTM net debt to adjusted EBITDA, compared to 1.6 times in the prior year.

Headline photo: Tecnoglass COO Christian Daes & Colombian President Ivan Duque

Christian Daes, Chief Operating Officer of Tecnoglass, added, “We are extremely pleased with our 2021 accomplishments and the momentum in our business that has continued into 2022. Our success reflects rapid advances in our single-family residential revenues, which expanded 151% year-over-year and represented more than a third of our full year revenues. As we continue to win new customers in the single-family residential market, we are also poised for success in our high rise and commercial work, with Tecnoglass already contracted to supply architectural glass to 20 of the 22 tallest towers under construction in South Florida, and other geographies also showing positive trends. Looking ahead, we remain dedicated to leveraging our vertically integrated structure and innovative product development to create additional shareholder value.”

Santiago Giraldo, Chief Financial Officer of Tecnoglass, stated, “We are pleased to introduce our full year 2022 outlook for revenues to grow to a range of $575 million to $600 million and for adjusted EBITDA to increase to a range of $170 million to $190 million. This implies adjusted EBITDA growth of approximately 20% at the midpoint. We believe our structural advantages, partial insulation from some inflationary pressures and faster lead times will continue to drive our record of strong cash flow generation in the full year 2022.”

Short Seller Claims Shown False

Tecnoglass includes a joint venture with Saint Gobain and subsidiaries ES Windows and Energia Solar.

As previously announced on December 17, 2021 a Special Committee of the Board of Directors engaged Covington & Burling LLP who in turn engaged a leading Big 4 accounting firm to make an assessment on the allegations made against the Company and its Directors on December 9, 2021. Although the review is still being finalized, as of today, the assessment from these firms, which included a forensic evaluation and e-discovery process, has indicated no evidence of fraud associated with related party transactions or accounting irregularities.

Total revenues for the first quarter of 2021 increased 27.0% to $110.9 million, compared to $87.3 million in the prior year quarter. U.S. revenues of $100.8 million, which represented 91% of total revenues, grew 27.9% compared to $78.8 million in the prior year quarter, driven by strong growth in residential activity, recovering commercial construction activity, and market share gains. Colombia revenue, a majority of which is represented by long-term contracts priced in Colombian Pesos but indexed to the U.S. Dollar, was $7.7 million, an increase of 18.4% compared to $6.5 million in the prior year quarter. Changes in foreign currency exchange rates had a negligible impact on Colombia and total revenues in the quarter.

Strong Demand Drove Single-Family Residential Revenues Up 71% Year-Over-Year, with 19% Growth in Commercial Revenues

“I am extremely proud of our outstanding performance so far in 2021 and I have never been more optimistic about the future for Tecnoglass. We delivered record first quarter results across nearly all of our key operating metrics including total revenues, gross profit, operating profit, adjusted EBITDA¹ and operating cash flow. This success was largely driven by the continued positive reception of our single-family residential products, allowing for additional market share gains.

Christian Daes & Jose Manuel Daes (R), founders of Tecnoglass 

Furthermore, our vertically integrated architectural glass platform and prior automation investments continue to deliver significant structural advantages amid tight labor and material availability impacting our industry. We are optimally positioned to efficiently control our supply chain, manufacture products with shorter lead times and best serve customers in what we expect to be a year of significant growth in demand. Moving forward, we remain confident in our ability to maintain our industry leading margins and gain additional share in the quarters ahead,” said José Manuel Daes, Chief Executive Officer of Tecnoglass.

Christian Daes, the Chief Operating Officer of Tecnoglass, also added:  “In the first quarter, we were thrilled to see the positive momentum continue in our business as we reported a sharp acceleration of growth. Encouraging trends in housing starts and de-urbanization combined with our efforts to expand our customer relationships are all supporting the growth of our single-family residential revenue, which increased over 70% year-over-year. Additionally, we are pleased to see our large-scale projects resuming activity, in line with improving fundamentals and the ABI index climbing higher into expansion territory for the second consecutive month in March. Looking ahead, our momentum has continued into April and May as new business wins and record levels of backlog leave us well positioned for further value creation.”

First Quarter 2021 Results

Gross profit for the first quarter of 2021 grew 48.4% to $45.1 million, representing a 40.7% gross margin, compared to gross profit of $30.4 million, representing a 34.9% gross margin in the prior year quarter. The 590-basis point improvement in gross margin mainly reflected a higher mix of revenue from manufacturing versus installation activity as Tecnoglass increased its mix of single family residential products and included a full quarter of greater operating efficiencies from prior automation initiatives. Selling, general and administrative expense (“SG&A”) was $19.8 million compared to $17.3 million in the prior year quarter, primarily attributable to higher variable expenses related to ground and marine transportation. As a percent of total revenues, SG&A was 17.8% compared to 19.8% in the prior year quarter, primarily due to higher sales and better operating leverage on personnel, professional fees and other fixed expenses.

Net income was $8.2 million, or $0.17 per diluted share, in the first quarter of 2021 compared to net loss of $18.8 million, or $0.40 loss per diluted share, in the prior year quarter, including an after-tax non-cash foreign exchange transaction cost of $0.05 million in the first quarter of 2021 and a $32.5 million loss in the first quarter of 2020. As previously disclosed, these non-cash gains and losses are related to the accounting re-measurement of U.S. Dollar denominated assets and liabilities against the Colombian Peso as functional currency. Additionally, during the quarter, Tecnoglass recorded a one-time $8.6 million call option payment and a $2.5 million non-cash extinguishment of debt charge related to the retirement of its senior notes.

Adjusted net income¹ was $16.8 million, or $0.35 per diluted share, in the first quarter of 2021 compared to adjusted net income of $4.5 million, or $0.10 per diluted share, in the prior year quarter. Adjusted net income¹, as reconciled in the table below, excludes the impact of non-cash foreign exchange transaction gains or losses and other non-core items, along with the tax impact of adjustments at statutory rates, to better reflect core financial performance.

Record Cash Flow From Operations of $29.0 Million, Marking 4 Straight Quarters of Exceptional Cash Generation and Supporting Further Leverage Reduction to 1.4x Net Debt to Adjusted EBITDA

Adjusted EBITDA¹, as reconciled in the table below, increased 64.8% to $33.5 million, or 30.2% of total revenues in the first quarter of 2021, compared to $20.3 million, or 23.3% of total revenues, in the prior year quarter. The improvement was driven by higher sales and a stronger gross margin. Adjusted EBITDA¹ in the first quarter 2021 included $0.8 million in contribution from the Company’s joint venture with Saint-Gobain, compared to $1.0 million in the prior year quarter.

Dividend

The Company declared a quarterly cash dividend of $0.0275 per share for the first quarter of 2021, which was paid on April 30, 2021 to shareholders of record as of the close of business on March 31, 2021.

Balance Sheet & Liquidity

The Company ended the first quarter of 2021 with cash and cash equivalents of $85.2 million compared to $36.8 million in the prior year quarter. Cash provided by operating activities of $29.0 million improved by $28.4 million compared to the prior year quarter, attributable to higher profitability as well as more efficient inventory and working capital management.

In the first quarter of 2021, the Company redeemed in full its $210 million unsecured senior notes, which bore interest at a rate of 8.2%, following the step down in redemption price at the end of January 2021. The $8.6 million call option was fully paid in January alongside with the redemption of the notes. Giving effect to the redemption of the senior notes, annualized savings on cash interest expense are expected to approximate $11 million annually. Interest expense in the first quarter 2021 declined by 38% year-over-year reflecting a partial quarter of lower borrowings costs following the redemption of the senior notes. On a pro forma basis giving effect to the pay down of the unsecured senior notes, the Company had total liquidity of approximately $145.2 million, including cash of $85.2 million and availability under its revolving credit facilities of $60 million.

Backlog Expands to a Record $552 Million, Up 1.1% Year-Over-Year

Subsequent to the end of the first quarter and based on Tecnoglass’ leverage ratio as of March 31, 2021, the interest rate spread on the Company’s $300 million Senior Secured Credit Facility decreased 50 basis points to a spread of 2.50% in April 2021. Given the Company’s continued growth in adjusted EBITDA¹ and strong cash generation, debt leverage continues to trend lower and now stands at 1.4x LTM net debt to adjusted EBITDA¹.

Full Year 2021 Outlook

Tecnoglass CFO Santiago Giraldo (Photo credit: Liliana Padierna)

Santiago Giraldo, Chief Financial Officer of Tecnoglass, stated, “We are increasing our full year outlook for 2021 total revenues and adjusted EBITDA¹ growth to reflect Tecnoglass’ exceptional start to 2021, including strong demand into April and May and solid share gains. We now expect full year 2021 total revenues to grow to a range of $420 million to $435 million, primarily driven by strengthening U.S. demand. In addition, we now anticipate full year adjusted EBITDA¹ to grow to a range of $115 million to $125 million, implying growth of approximately 23% at the midpoint, and margin expansion. Our vertically integrated business model is providing us with significant competitive advantages, including the ability to actively manage costs and provide exceptional delivery lead times which should allow us to deliver above market growth in the quarters ahead. As we look to the remainder of the year, we are preparing Tecnoglass to accommodate significant demand beyond our current outlook. We are firmly on track to deliver exceptional results and continue our record of strong cash flow generation for the full year 2021.”

¹Adjusted net income (loss) and Adjusted EBITDA in both periods are reconciled in the financial statements that can be viewed here.

Tecnoglass resumed full operations at its facilities on April 14, 2020 given its exempted designation as a supplier of critical products to essential business sectors such as infrastructure and construction. The company is committed to its talented workforce and at this time has retained all of its labor force, of which approximately 60% are contracted through staffing agencies that provide significant contractual flexibility. During the period that production was suspended, vacation days were used to retain eligible employees and the company used the time to implement broad safety measures before returning to normal operations.

Total revenues for the first quarter of 2020 were $87.3 million compared to $107.2 million in the prior year quarter. Revenues in January and February were comparable to the same period in the prior year despite five days of scheduled maintenance in January 2020, which did not occur in the prior year quarter. Changes in foreign currency exchange rates had an adverse impact of $0.8 million on Colombia and total revenues in the quarter. U.S. revenues were $78.8 million compared to $92.0 million in the prior year quarter.

The company declared a quarterly cash dividend of $0.0275 per share for the first quarter of 2020, which was paid on April 30, 2020 to shareholders of record as of the close of business on March 31, 2020.

“Our thoughts are with all those impacted by the COVID-19 pandemic. In this moment, our top priority is safeguarding our employees, customers, partners and the communities where we operate. All of our operations have been deemed vital and we continue to serve customers safely and responsibly. We were pleased to deliver our highest first quarter gross margin and Adjusted EBITDA margin since 2016, despite the pandemic’s temporary impact on our invoicing and business operations late in the quarter. Since our founding in 1984, we have successfully managed through difficult times, including growing and generating profits during the great recession of 2008. On our now larger and more vertically integrated platform, we are even better positioned to successfully navigate the current environment. We have a strong cash position and the capital resources to face the challenges ahead and situate our business for long-term success as we emerge from this volatile period, said CEO José Manuel Daes.

Gross profit for the first quarter of 2020 was $30.5 million, representing a 34.9% gross margin compared to gross profit of $31.9 million, representing a 29.8% gross margin in the prior year quarter. The improvement in gross margin mainly reflected lower raw material costs, a higher mix of revenue from manufacturing vs installation, and greater operating efficiencies from prior automation initiatives. Operating expenses were $17.3 million compared to $17.7 million in the prior year quarter. As a percent of total revenues, operating expenses were 19.8% compared to 16.5% in the prior year quarter, primarily due to lower sales.

“As the COVID-19 crisis continues, we are closely monitoring its impact on the broader macro-environment and tailoring our operations accordingly. Our existing commercial backlog remains strong and many projects are progressing in all markets where construction activity is permitted. That being said, we are also bracing for a slower year as some projects get delayed or temporarily put on hold. We have implemented business continuity measures across our vertically integrated operations to address safety, cost reductions and non-critical spend while protecting existing jobs to the extent possible. In light of the uncertain times ahead, we are focused on maintaining financial flexibility and generating cash flow. We believe that our lean cost structure and diversified geographic presence leave us well prepared to manage through this unprecedented environment,” commented COO Christian Daes.

Tecnoglass entered the pandemic with a strong financial position along with the flexibility required to support its global operations during this volatile period. As of March 31, 2020, Tecnoglass had cash of $36.8 million plus an additional $58 million of availability under its existing lines of credit, providing sufficient access to capital. In addition, the company has implemented strict cost controls, reduced operating expenses and limited all non-critical capital expenditures beyond the completion of initiatives started in 2019. The company anticipates that working capital will be a net benefit to cash flow for the full year 2020.

Net loss was $18.7 million, or $0.40 loss per diluted share in the first quarter of 2020 compared to a net income of $7.3 million, or $0.18 per diluted share in the prior year quarter, including an after-tax non-cash foreign exchange transaction loss of $22.1 million of in the first quarter 2020 and a $2.2 million gain in the first quarter 2019. As with previous periods, these gains and losses are related to the accounting re-measurement of U.S. Dollar denominated assets and liabilities against the Colombian Peso as functional currency. During the first quarter 2020, the Peso devaluated 23% against the U.S. Dollar. Adjusted net income¹ was $4.5 million, or $0.10 per diluted share compared to adjusted a net income of $5.9 million, or $0.14 per diluted share in the prior year quarter. Adjusted net income¹, as reconciled in the table below, excludes the impact of non-cash foreign exchange transaction gains or losses and other non-core items, along with the tax impact of adjustments at statutory rates, to better reflect core financial performance.

Most of Tecnoglass’ U.S. and Latin American customers remain operational with many construction projects typically considered by jurisdictions to be essential business activities. However, the company’s sales are dependent on nonresidential construction activity and housing starts. The company’s backlog has historically provided a high degree of visibility for commercial revenues over a twelve month period. The company’s prior outlook issued on March 2, 2020, before the COVID-19 pandemic, represented existing projects in backlog plus anticipated demand from the company’s continued expansion into the single-family residential end market. On the commercial side, net sales for the remainder of 2020 will be influenced by the timing, length or any delays of projects related to the pandemic. In residential, U.S. housing starts are expected to be unfavorably affected by the crisis.

Santiago Giraldo, Chief Financial Officer of Tecnoglass, concluded, “We entered this pandemic operating on a larger scale and with a better capital structure than at any point in our company’s history. As we move through the uncertain period ahead, we are focused on cost management, delivering strong cash flow and safely serving customers. As of May 1, 2020, our liquidity further improved to approximately $105 million, including cash of approximately $50 million, as a result of proactive measures to build cash. We will continue to monitor and adjust plans for our business that are aligned with our expectation to emerge as a stronger company when global market conditions begin to improve.”