Grupo de Inversiones Suramericana (GRUPOSURA) Q2 2023 earnings summary

Executive summary

• H1 revenue reached COP 19.11T, up 32.4% YoY, and operating profit was COP 2.59T, up 54.3%.

• H1 reported controlling net income was COP 823.2B, down 17%; excluding the COP 618.1B Nutresa-related deferred tax, controlling net income rose 46% to COP 1.4T.

• Financial-sector investments generated 84% of portfolio net income, up 42% YoY.

Financial highlights

• Q2 revenue was COP 9.54T, up 26.8%, and operating profit was COP 1.21T, up 32.5%.

• Q2 reported controlling net income was a COP 11.1B loss; excluding the Nutresa tax, pro forma controlling income was COP 607B, up 8.8%.

• H1 equity-method contribution was COP 1.1T; Q2 contribution was COP 508B, including COP 358B from Bancolombia, COP 92B from Grupo Argos and COP 48B from Grupo Nutresa.

• June 30 assets were COP 95.08T, liabilities COP 60.98T and parent shareholders’ equity COP 31.99T.

Outlook and guidance

• FY2023 EPS guidance was COP 2,400–2,700 including transaction effects, or COP 3,500–3,800 excluding the tax-recognition impact.

• Assuming the transaction closes in 2024, 2024 EPS is projected at COP 12,700–14,200 including non-recurring effects, or COP 5,400–6,000 normalized; 2025 EPS is forecast at COP 6,300–7,000, ~15% above the pre-transaction estimate.

• 2025 net profit is projected at COP 2.6–2.9T and adjusted ROE at 12%–13%; projections assume a 5% cash / 5% share exchange and debt financing.