Corporación Financiera Colombiana S A : Report 2Q-22

FINANCIAL

RESULTS

Second Quarter, 2022

FINANCIAL

RESULTS

Second Quarter, 2022

1.	Highlights....................................................................................	3
2.	Individual Financial Statements..................................................	4
3.	Consolidated Financial Statements............................................	6
4.	Appendix ..................................................................................	15

1. Highlights

1. On May 23rd, dividends of COP771,789.8 million were paid, of which COP96,481 million (12.5%) were paid in cash.

1. On August 9th, BRC Ratings - S&P Global affirmed the AAA long-term and BRC 1+ short- term debt ratings for Corficolombiana.

Energy & Gas

1. Promigas held the second version of its Investor Day in New York, where their leaders talked about the achievements, challenges and projects of the company and its subsidiaries.

1. Promigas signed an alliance with Sumitomo Corporation, one of Japan's leading business conglomerates, to explore and develop the hydrogen electric mobility market in Colombia and Peru.

Infrastructure

1. During the quarter, the last third of the Bogota - Villavicencio four lane highway was completed. This is one of the most modern 4G highways in the country and includes 32.9 kilometers of constructed works, 6 tunnels, 20 vehicular bridges, 7 pontoons, 6 pedestrian bridges and 18 intersections.

1. Covioriente's senior debt refinancing of USD550 million was obtained.

1. We participated in the bidding process for the Buga-Loboguerrero-Buenaventura highway.

Hospitality

1. As part of the sustainable strategy of Hoteles Estelar, initiatives are being carried out at a national level to meet the objectives for the mitigation of greenhouse gas (GHG) emissions.

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1. In June, a solar photovoltaic generation system was launched the Hotel Intercontinental de Cali. The sustainable energy project has 438 panels that generate more than 5% of the electricity consumed by the hotel, which means a reduction of 45.2 tons of carbon dioxide per year.

1. Hoteles Estelar is the first hotel group in Colombia and Latam to be certified as Friendly Biz, thanks to its good practices in diversity, equality, and inclusion.

Agroindustry

1. Fedepalma awarded recognition to Unipalma for all the work carried out by human resources to obtain the ISCC International Sustainability and Carbon Standard certification.

2. Individual Financial Statements

Financial Statements

	COP MM								YTD June			2Q-22 /		1H-22 /
		2Q-21		1Q-22	2Q-22
			2021		2022				2Q-21		1H-21
	Operating revenue	653,080	782,578	810,514			1,260,326	1,593,093	24.1%	26.4%
	Treasury net margin		31,418		30,870	32,558			54,889		63,429				3.6%		15.6%
	Treasury revenue	58,970	81,237	111,991			101,847		193,228		89.9%	89.7%
	Interests - Treasury funding		27,552		50,367	79,433			46,958		129,799				188.3%		176.4%
	Commissions revenue	1,402	2,083	9,534			2,741		11,617		580.0%	323.8%
	Dividends		-21		101,230	0			95,110		101,230				n.a.		6.4%
	GEB	0	91,257	0			84,603		91,257				n.a.	7.9%
	Others		-21		9,973	0			10,507		9,973				100.0%		-5.1%
	Equity method	620,281	648,395	768,422			1,107,586	1,416,817	23.9%	27.9%
	Energy & Gas		165,663		189,194	148,357			302,568		337,551				-10.4%		11.6%
	Infrastructure	467,315	439,396	604,645			829,003		1,044,041	29.4%	25.9%
	Hospitality		-6,586		4,685	4,320			-24,727		9,005				n.a.		n.a.
	Agroindustry	4,042	3,946	6,419			6,579		10,365		58.8%	57.5%
	Financial		-12,026		9,452	3,379			-9,590		12,831				n.a.		n.a.
	Others	1,873	1,723	1,302			3,753		3,025		-30.5%	-19.4%
	Interests - Equity investment funding		48,005		89,482	114,783			91,282		204,266				139.1%		123.8%
	Provisions, net	1	1	-2,639			-811		-2,638				n.a.	-225.3%
	Net financial income		605,074		693,095	698,370			1,169,855		1,391,465				15.4%		18.9%
	Administrative expenses	30,385	33,735	41,765			62,939		75,500		37.5%	20.0%
	Personnel expenses		13,703		16,024	16,554			27,952		32,578				20.8%		16.5%
	Commissions and fees	6,027	5,492	7,596			11,274		13,088		26.0%	16.1%
	General expenses		10,655		12,219	17,615			23,713		29,834				65.3%		25.8%
	Other revenue / Expenses	-31,165	-2,019	-3,918			-31,496		-5,937				n.a.		n.a.
	Income before taxes		543,524		657,341	652,687			1,075,420		1,310,028				20.1%		21.8%
	Income tax	17	6	-6			12		0		-135.3%	-100.0%
	Net income		543,507		657,335	652,693			1,075,408		1,310,028				20.1%		21.8%

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In 2Q-22, net income increased 20.1% compared to the same period of the previous year, continuing the dynamics of the first quarter, which shows the strength of our investment portfolio, as well as the management of the treasury business.

In the second quarter of the year, the Equity Method (EM) presented a year-over-year (YoY) increase of 23.9% mainly explained by the infrastructure business due to the positive impact on the 4G concession highway projects of the recent increase in inflation and the higher USDCOP exchange rate. This offset the lower contribution of Promigas, which, despite the growth in operating figures, its net result was affected by financial expenses due to the higher debt balance and the increase in interest rates, and by the higher income tax resulting from the increase in the tax rate in Colombia. On the other hand, the 2Q-22 results consolidate the recovery of the hospitality sector, as well as a good performance of the agroindustry and financial sectors. Despite the higher interest expense corresponding to the funding of the investment portfolio, net financial income grew 15.4% compared to 2Q-21.

As for Treasury income, we continued with the strategy of maintaining a portfolio of TES, mainly indexed to UVR, and given that inflation remained at high levels, we had positive carry from the accrual of such securities. Likewise, trading in legal currency continued to give favorable results, taking advantage of market volatility. However, rate increases have affected the valuation of the Available-for-Sale securities portfolio that affect OCI (Other Comprehensive Income).

Net income for 2Q-22 was COP652,693 million, with an annualized ROAA and ROAE of 9.1% and 18.5% respectively. In the first half of the year, net income reached COP1.3 trillion, 21.8% higher than a year ago.

Ratios	2Q-21	1Q-22	2Q-22
Net financial income / Operating revenue	92.6%	88.6%	86.2%
Administrative expenses / Net financial income	5.0%	4.9%	6.0%
ROAE	22.5%	17.9%	18.5%
ROAA	11.6%	8.8%	9.1%
Note: ROAA and ROAE ratios are calculated as separate income for the last twelve months over average assets
and equity.

Financial Position Statement

	COP MM		2Q-21		1Q-22		2Q-22				2Q-22 /		2Q-22 /
							2Q-21		1Q-22
	Assets		20,422,815		21,437,818		22,266,564				9.0%		3.9%
	Cash + Interbank funds	1,825,829	2,272,974	2,122,078	16.2%	-6.6%
	Cash		1,024,204		1,223,852		1,530,926			49.5%		25.1%
	Interbank funds	801,625	1,049,122	591,152	-26.3%	-43.7%
	Investments		18,031,691		18,347,126		19,485,066			8.1%		6.2%
	Subsidiaries & Asociated companies	12,323,517	13,270,432	14,161,671	14.9%	6.7%
	Energy & Gas		2,292,564		2,440,159		2,638,264			15.1%		8.1%
	Infrastructure	9,127,748	9,898,967	10,584,340	16.0%	6.9%
	Hospitality		290,206		299,402		302,955			4.4%		1.2%

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