UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15b-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of July 2023
Commission File Number 001-35991
AENZA S.A.A.
(Exact name of registrant as specified in its charter)
N/A
(Translation of registrant’s name into English)
Republic of Peru
(Jurisdiction of incorporation or organization)
Av. Petit Thouars 4957
Miraflores
Lima 34, Peru
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
July 31, 2023
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
AENZA S.A.A.
By: | /s/ FERNANDO RODRIGO BARRON | |
Name: | Fernando Rodrigo Barron | |
Title: | VP of Corporate Finance and Business Development | |
Date: | July 31, 2023 |
AENZA S.A.A. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2023
(Free translation from the original in Spanish)
AENZA S.A.A. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2023 AND FOR THE THREE AND SIX-MONTHS PERIODS THEN ENDED
S/ | = | Peruvian Sol |
US$ | = | United States dollar |
Interim Condensed Consolidated Statement of Financial Position
As of December 31, 2022 and June 30, 2023 (unaudited)
As of | As of | |||||||||||
December 31, | June 30, | |||||||||||
In thousands of soles | Note | 2022 | 2023 | |||||||||
Assets | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | 9 | 917,554 | 891,225 | |||||||||
Trade accounts receivable, net | 10 | 1,078,582 | 1,050,273 | |||||||||
Accounts receivable from related parties | 11 | 27,745 | 46,892 | |||||||||
Other accounts receivable, net | 12 | 393,195 | 387,309 | |||||||||
Inventories, net | 13 | 346,783 | 388,581 | |||||||||
Prepaid expenses | 28,098 | 40,541 | ||||||||||
Total current assets | 2,791,957 | 2,804,821 | ||||||||||
Non-current assets | ||||||||||||
Trade accounts receivable, net | 10 | 723,869 | 749,900 | |||||||||
Accounts receivable from related parties | 11 | 542,392 | 555,107 | |||||||||
Other accounts receivable, net | 12 | 285,730 | 310,519 | |||||||||
Inventories, net | 13 | 65,553 | 70,139 | |||||||||
Prepaid expenses | 17,293 | 23,551 | ||||||||||
Investments in associates and joint ventures | 14 | 14,916 | 12,920 | |||||||||
Investment property, net | 15 | 61,924 | 59,997 | |||||||||
Property, plant and equipment, net | 15 | 284,465 | 280,588 | |||||||||
Right-of-use assets, net | 15 | 50,207 | 44,360 | |||||||||
Intangible assets, net | 15 | 787,336 | 803,057 | |||||||||
Deferred tax asset | 22 | 295,638 | 291,380 | |||||||||
Total non-current assets | 3,129,323 | 3,201,518 | ||||||||||
Total assets | 5,921,280 | 6,006,339 | ||||||||||
Liabilities | ||||||||||||
Current liabilities | ||||||||||||
Borrowings | 16 | 574,262 | 570,230 | |||||||||
Bonds | 17 | 77,100 | 82,141 | |||||||||
Trade accounts payable | 18 | 1,027,256 | 1,019,080 | |||||||||
Accounts payable to related parties | 11 | 53,488 | 50,861 | |||||||||
Current income tax | 69,652 | 33,773 | ||||||||||
Other accounts payable | 19 | 705,442 | 888,409 | |||||||||
Other provisions | 20 | 132,926 | 123,737 | |||||||||
Total current liabilities | 2,640,126 | 2,768,231 | ||||||||||
Non-current liabilities | ||||||||||||
Borrowings | 16 | 305,631 | 339,551 | |||||||||
Bonds | 17 | 792,813 | 764,956 | |||||||||
Trade accounts payable | 18 | 9,757 | 8,985 | |||||||||
Accounts payable to related parties | 11 | 27,293 | 27,917 | |||||||||
Other accounts payable | 19 | 102,319 | 82,163 | |||||||||
Other provisions | 20 | 569,027 | 568,107 | |||||||||
Deferred tax liability | 22 | 128,308 | 149,376 | |||||||||
Total non-current liabilities | 1,935,148 | 1,941,055 | ||||||||||
Total liabilities | 4,575,274 | 4,709,286 | ||||||||||
Equity | 21 | |||||||||||
Capital | 1,196,980 | 1,196,980 | ||||||||||
Legal reserve | 132,011 | 132,011 | ||||||||||
Voluntary reserve | 29,974 | 29,974 | ||||||||||
Share Premium | 1,142,092 | 1,142,092 | ||||||||||
Other reserves | (97,191 | ) | (87,974 | ) | ||||||||
Retained earnings | (1,342,362 | ) | (1,364,924 | ) | ||||||||
Equity attributable to controlling interest in the Company | 1,061,504 | 1,048,159 | ||||||||||
Non-controlling interest | 29 | 284,502 | 248,894 | |||||||||
Total equity | 1,346,006 | 1,297,053 | ||||||||||
Total liabilities and equity | 5,921,280 | 6,006,339 |
The notes on pages 6 to 53 are an integral part of these interim condensed consolidated financial statements.
- 1 -
Interim Condensed Consolidated Statement of Profit or Loss
For the three and six-month period ended June 30, 2022 and June 30, 2023 (unaudited)
For the three | For the six | |||||||||||||||||
month period ended June 30, | month period ended June 30, | |||||||||||||||||
In thousands of soles | Note | 2022 | 2023 | 2022 | 2023 | |||||||||||||
Revenue | ||||||||||||||||||
Revenue from construction activities | 704,393 | 589,395 | 1,248,633 | 1,038,038 | ||||||||||||||
Revenue from services provided | 253,532 | 259,763 | 496,492 | 516,343 | ||||||||||||||
Revenue from real estate and sale of goods | 169,746 | 187,763 | 302,472 | 332,678 | ||||||||||||||
Total revenue from ordinary activities arising from contracts with customers | 23 | 1,127,671 | 1,036,921 | 2,047,597 | 1,887,059 | |||||||||||||
Cost | ||||||||||||||||||
Cost of construction activities | (589,827 | ) | (561,255 | ) | (1,185,680 | ) | (1,019,147 | ) | ||||||||||
Cost of services provided | (195,524 | ) | (201,509 | ) | (372,359 | ) | (399,933 | ) | ||||||||||
Cost of real estate and sale of goods | (121,538 | ) | (139,871 | ) | (223,983 | ) | (252,771 | ) | ||||||||||
Cost of sales and services | 24 | (906,889 | ) | (902,635 | ) | (1,782,022 | ) | (1,671,851 | ) | |||||||||
Gross profit | 220,782 | 134,286 | 265,575 | 215,208 | ||||||||||||||
Administrative expenses | 24 | (53,881 | ) | (57,060 | ) | (95,609 | ) | (102,923 | ) | |||||||||
Other income and expenses, net | 25 | 3,706 | 568 | (3,424 | ) | 1,001 | ||||||||||||
Operating profit | 170,607 | 77,794 | 166,542 | 113,286 | ||||||||||||||
Financial expenses | 26.A | (35,143 | ) | (44,625 | ) | (76,790 | ) | (86,437 | ) | |||||||||
Financial income | 26.A | 4,306 | 8,132 | 8,612 | 26,164 | |||||||||||||
Interests for present value of financial asset or liability | 26.B | (28,670 | ) | 6,357 | (68,265 | ) | 20,163 | |||||||||||
Share of the profit or loss of associates and joint ventures accounted for using the equity method | 14 | 1,494 | 792 | 1,069 | 1,656 | |||||||||||||
Profit before income tax | 112,594 | 48,450 | 31,168 | 74,832 | ||||||||||||||
Income tax expense | 27 | (24,123 | ) | (40,032 | ) | (21,168 | ) | (72,413 | ) | |||||||||
Profit for the period | 88,471 | 8,418 | 10,000 | 2,419 | ||||||||||||||
Profit (loss) attributable to: | ||||||||||||||||||
Controlling interest in the Company | 72,631 | (5,174 | ) | (15,213 | ) | (22,562 | ) | |||||||||||
Non-controlling interest | 15,840 | 13,592 | 25,213 | 24,981 | ||||||||||||||
88,471 | 8,418 | 10,000 | 2,419 | |||||||||||||||
Profit (loss) per share attributable to controlling interest in the Company during the period | 31 | 0.074 | (0.004 | ) | (0.015 | ) | (0.019 | ) | ||||||||||
Diluted profit (loss) per share attributable to controlling interest in the Company during the periodo | 31 | 0.060 | (0.004 | ) | (0.013 | ) | (0.019 | ) |
The notes on pages 6 to 53 are an integral part of these interim condensed consolidated financial statements.
- 2 -
Interim Condensed Consolidated Statement of Other Comprehensive Income
For the three-month and six-month period ended June 30, 2022 and June 30, 2023 (unaudited)
For the three | For the six | |||||||||||||||
month period ended June 30, | month period ended June 30, | |||||||||||||||
In thousands of soles | 2022 | 2023 | 2022 | 2023 | ||||||||||||
Profit for the period | 88,471 | 8,418 | 10,000 | 2,419 | ||||||||||||
Other comprehensive income: | ||||||||||||||||
Items that may be subsequently reclassified to profit or loss | ||||||||||||||||
Cash flow hedge, net of tax | 163 | - | 163 | - | ||||||||||||
Foreign currency translation adjustment, net of tax | (5,184 | ) | 9,001 | (9,773 | ) | 9,173 | ||||||||||
Exchange difference from net investment in a foreign operation, net of tax | (631 | ) | (243 | ) | (670 | ) | 79 | |||||||||
Other comprehensive income for the period, net of tax | (5,652 | ) | 8,758 | (10,280 | ) | 9,252 | ||||||||||
Total comprehensive income for the period | 82,819 | 17,176 | (280 | ) | 11,671 | |||||||||||
Comprehensive income attributable to: | ||||||||||||||||
Controlling interest in the Company | 67,322 | 2,693 | (25,369 | ) | (13,345 | ) | ||||||||||
Non-controlling interest | 15,497 | 14,483 | 25,089 | 25,016 | ||||||||||||
82,819 | 17,176 | (280 | ) | 11,671 |
The notes on pages 6 to 53 are an integral part of these interim condensed consolidated financial statements.
- 3 -
Interim Condensed Consolidated Statement of Changes in Equity
For the three and six-month period ended June 30, 2022 and June 30, 2023 (unaudited)
In thousands of soles | Note | Number of shares in thousands | Capital | Legal reserve | Voluntary reserve | Share premium | Other reserves | Retained earnings | Total | Non-controlling interest | Total | |||||||||||||||||||||||||||||||||
Balances as of January 1, 2022 | 871,918 | 871,918 | 132,011 | 29,974 | 1,131,574 | (68,629 | ) | (893,803 | ) | 1,203,045 | 252,965 | 1,456,010 | ||||||||||||||||||||||||||||||||
(Loss) profit for the period | - | - | - | - | - | - | (15,213 | ) | (15,213 | ) | 25,213 | 10,000 | ||||||||||||||||||||||||||||||||
Cash flow hedge, net of tax | - | - | - | - | - | 163 | - | 163 | - | 163 | ||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | - | - | - | - | - | (9,653 | ) | - | (9,653 | ) | (120 | ) | (9,773 | ) | ||||||||||||||||||||||||||||||
Exchange difference from net investment in a foreign operation | - | - | - | - | - | (666 | ) | - | (666 | ) | (4 | ) | (670 | ) | ||||||||||||||||||||||||||||||
Comprehensive income of the period | - | - | - | - | - | (10,156 | ) | (15,213 | ) | (25,369 | ) | 25,089 | (280 | ) | ||||||||||||||||||||||||||||||
Transactions with shareholders: | ||||||||||||||||||||||||||||||||||||||||||||
Dividend distribution | 25 | - | - | - | - | - | - | - | - | (2,310 | ) | (2,310 | ) | |||||||||||||||||||||||||||||||
Acquisition of (profit distribution to) non-controlling interests, net | - | - | - | - | - | - | - | - | (22,835 | ) | (22,835 | ) | ||||||||||||||||||||||||||||||||
Capital increase | 325,062 | 325,062 | - | - | 10,518 | - | - | 335,580 | - | 335,580 | ||||||||||||||||||||||||||||||||||
Total transactions with shareholders | 325,062 | 325,062 | - | - | 10,518 | - | - | 335,580 | (25,145 | ) | 310,435 | |||||||||||||||||||||||||||||||||
Balances as of June 30, 2022 | 1,196,980 | 1,196,980 | 132,011 | 29,974 | 1,142,092 | (78,785 | ) | (909,016 | ) | 1,513,256 | 252,909 | 1,766,165 | ||||||||||||||||||||||||||||||||
Balances as of January 1, 2023 | 1,196,980 | 1,196,980 | 132,011 | 29,974 | 1,142,092 | (97,191 | ) | (1,342,362 | ) | 1,061,504 | 284,502 | 1,346,006 | ||||||||||||||||||||||||||||||||
(Loss) profit for the period | - | - | - | - | - | - | (22,562 | ) | (22,562 | ) | 24,981 | 2,419 | ||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | - | - | - | - | - | 9,138 | - | 9,138 | 35 | 9,173 | ||||||||||||||||||||||||||||||||||
Exchange difference from net investment in a foreign operation | - | - | - | - | - | 79 | - | 79 | - | 79 | ||||||||||||||||||||||||||||||||||
Comprehensive income of the period | - | - | - | - | - | 9,217 | (22,562 | ) | (13,345 | ) | 25,016 | 11,671 | ||||||||||||||||||||||||||||||||
Transactions with shareholders: | ||||||||||||||||||||||||||||||||||||||||||||
Dividend distribution | 25 | - | - | - | - | - | - | - | - | (50,735 | ) | (50,735 | ) | |||||||||||||||||||||||||||||||
Acquisition of (profit distribution to) non-controlling interests, net | - | - | - | - | - | - | - | - | (9,889 | ) | (9,889 | ) | ||||||||||||||||||||||||||||||||
Total transactions with shareholders | - | - | - | - | - | - | - | - | (60,624 | ) | (60,624 | ) | ||||||||||||||||||||||||||||||||
Balances as of June 30, 2023 | 1,196,980 | 1,196,980 | 132,011 | 29,974 | 1,142,092 | (87,974 | ) | (1,364,924 | ) | 1,048,159 | 248,894 | 1,297,053 |
The notes on pages 6 to 53 are an integral part of these interim condensed consolidated financial statements.
- 4 -
Interim Condensed Consolidated Statement of Cash Flows
For the three and six-month period ended June 30, 2022 and June 30, 2023 (unaudited)
For the three | For the six | |||||||||||||||||
month period ended June 30, | month period ended June 30, | |||||||||||||||||
In thousands of soles | Note | 2022 | 2023 | 2022 | 2023 | |||||||||||||
Operating activities | ||||||||||||||||||
Profit before income tax | 112,594 | 48,450 | 31,168 | 74,832 | ||||||||||||||
Adjustments to profit not affecting cash flows from operating activities: | ||||||||||||||||||
Depreciation | 15 | 18,288 | 17,442 | 37,183 | 35,378 | |||||||||||||
Amortization of intangible assets | 15 | 23,378 | 39,775 | 47,737 | 75,061 | |||||||||||||
Impairment (reversal) of inventories | 37 | (385 | ) | 99 | - | |||||||||||||
Impairment of accounts receivable and other accounts receivable | - | 2,180 | 46 | 2,180 | ||||||||||||||
Debt condonation | - | 2,342 | - | (192 | ) | |||||||||||||
Impairment of property, plant and equipment | (236 | ) | 1,309 | (236 | ) | 1,318 | ||||||||||||
Impairment of intangible assets | 1,256 | - | 661 | - | ||||||||||||||
Other provisions | 10,012 | 3,067 | 21,412 | 9,122 | ||||||||||||||
Renegotiation of liability for acquisition of non-controlling Morelco | 3,706 | - | 3,706 | - | ||||||||||||||
Financial expense,net | 76,987 | 16,564 | 69,456 | 46,797 | ||||||||||||||
Share of the profit and loss of associates and joint ventures accounted for using the equity method | 14. A and B | (1,494 | ) | (792 | ) | (1,069 | ) | (1,656 | ) | |||||||||
Reversal of provisions | (2,856 | ) | (1,255 | ) | (3,632 | ) | (4,726 | ) | ||||||||||
Disposal (reversal) of assets | 39 | (723 | ) | 6 | (1,258 | ) | ||||||||||||
Profit on sale of property, plant and equipment | (675 | ) | 1,301 | (638 | ) | 881 | ||||||||||||
Loss on remeasurement of accounts receivable and accounts payable | 36,412 | (7,781 | ) | 70,203 | (20,322 | ) | ||||||||||||
Net variations in assets and liabilities: | ||||||||||||||||||
Trade accounts receivable | (210,927 | ) | (34,412 | ) | (27,833 | ) | 1,720 | |||||||||||
Other accounts receivable | (91,445 | ) | 7,825 | (76,722 | ) | (16,060 | ) | |||||||||||
Other accounts receivable from related parties | (25,249 | ) | 16,090 | 16,476 | (7,313 | ) | ||||||||||||
Inventories | 31,112 | (1,538 | ) | 9,883 | (46,094 | ) | ||||||||||||
Prepaid expenses and other assets | 8,737 | 11,292 | (4,456 | ) | (15,690 | ) | ||||||||||||
Trade accounts payable | 11,239 | 16,370 | (61,416 | ) | (8,799 | ) | ||||||||||||
Other accounts payable | 3,364 | 86,817 | (30,067 | ) | 147,163 | |||||||||||||
Other accounts payable to related parties | 17,576 | (25,772 | ) | (2,500 | ) | (5,615 | ) | |||||||||||
Other provisions | (29,569 | ) | (1,734 | ) | (29,997 | ) | (4,960 | ) | ||||||||||
Interest paid | (24,084 | ) | (38,120 | ) | (62,711 | ) | (79,532 | ) | ||||||||||
Payments for purchases of intangible assets - Concessions | 908 | - | - | - | ||||||||||||||
Income tax paid | (42,633 | ) | (26,771 | ) | (76,332 | ) | (88,474 | ) | ||||||||||
Net cash (applied to) provided by operating activities | (73,523 | ) | 131,541 | (69,573 | ) | 93,761 | ||||||||||||
Investing activities | ||||||||||||||||||
Proceeds from sale of property, plant and equipment | 849 | - | 4,879 | 1,043 | ||||||||||||||
Interest received | 3,192 | 7,047 | 3,934 | 13,782 | ||||||||||||||
Dividends received | - | 3,652 | - | 3,652 | ||||||||||||||
Acquisition of investment property | (11 | ) | - | (11 | ) | (2 | ) | |||||||||||
Acquisition of intangible assets | (30,801 | ) | (37,572 | ) | (44,289 | ) | (85,374 | ) | ||||||||||
Acquisition of property, plant and equipment | (16,621 | ) | (10,282 | ) | (23,312 | ) | (22,311 | ) | ||||||||||
Net cash applied to investing activities | (43,392 | ) | (37,155 | ) | (58,799 | ) | (89,210 | ) | ||||||||||
Financing activities | ||||||||||||||||||
Borrowing received | 456,432 | 40,926 | 464,050 | 171,066 | ||||||||||||||
Amortization of borrowings received | (107,504 | ) | (35,969 | ) | (161,946 | ) | (104,793 | ) | ||||||||||
Amortization of bonds issued | (12,796 | ) | (16,051 | ) | (26,837 | ) | (33,845 | ) | ||||||||||
Payment for debt transaction costs | (11,914 | ) | 1,819 | (13,732 | ) | (17 | ) | |||||||||||
Dividends paid to non-controlling interest | (5,825 | ) | (22,256 | ) | (9,055 | ) | (47,044 | ) | ||||||||||
Cash received (return of contributions) from non-controlling shareholders | (20,502 | ) | (673 | ) | (22,835 | ) | (9,889 | ) | ||||||||||
Net cash provided by (applied to) financing activities | 297,891 | (32,204 | ) | 229,645 | (24,522 | ) | ||||||||||||
Net increase (net decrease) in cash | 180,976 | 62,182 | 101,273 | (19,971 | ) | |||||||||||||
Exchange difference | 42,232 | 3,463 | 8,994 | (6,358 | ) | |||||||||||||
Cash and cash equivalents at the beginning of the period | 844,237 | 825,580 | 957,178 | 917,554 | ||||||||||||||
Cash and cash equivalents at the end of the period | 9 | 1,067,445 | 891,225 | 1,067,445 | 891,225 | |||||||||||||
Non-cash transactions: | ||||||||||||||||||
Capitalization of interests | (354 | ) | 162 | 498 | 290 | |||||||||||||
Acquisition of right-of-use assets | (788 | ) | 6,304 | 7,988 | 7,988 | |||||||||||||
Capitalization of convertible bonds | 21 | - | - | 335,580 | - |
The notes on pages 6 to 53 are an integral part of these interim condensed consolidated financial statements.
- 5 -
Notes to the Interim Condensed Consolidated Financial Statements
As of June 30, 2023 and 2022 and December 31, 2022
1. | General Information |
A. Incorporation and operations
AENZA S.A.A. (hereinafter the “Company” or “AENZA”) is the parent Company of the AENZA Corporation, which comprise the Company and its subsidiaries (hereinafter, the “Corporation”) and is mainly engaged in holding investments in its subsidiaries. Additionally, the Company provides services of strategic and functional advice and office leases space to the Corporation companies. The Company registered office is at Av. Petit Thouars N° 4957, Miraflores, Lima.
The Corporation is a conglomerate of companies with operations including different business activities, the most significant are engineering and construction, energy, infrastructure (public concession ownership and operation) and real estate businesses. See details of operating segments in Note 7.
B. Authorization for Financial Statements Issuance
The interim condensed consolidated financial statements for the period ended June 30, 2023 have been prepared and issued with authorization of Management and approved by the Board of Directors on July 31, 2023.
The consolidated financial statements for the year ended December 31, 2022 were prepared and issued with the authorization of Management and approved by the Board of Directors on May 15, 2023 and were approved by the General Shareholders’ Meeting on June 12, 2023.
C. Compliance with laws and regulations
The Company is involved in a series of criminal investigations conducted by the Public Ministry of Peru and administrative proceedings conducted by the National Institute for the Defense of Competition and Protection of Intellectual Property (INDECOPI, for its Spanish Acronym) based on events that occurred between years 2003 and 2016. Such situations led to significant changes in the Company’s corporate governance structure, the opening of independent investigations and the adoption of measures to address and clarify these situations.
Criminal investigations derived from projects developed in partnership with companies of the Odebrecht Group
In connection with the Lava Jato case, the Company participated as a minority partner in six infrastructure projects with Odebrecht Group, directly or through its subsidiaries, in entities or consortia. The resulting contingency from these proceedings has been determined in the Plea Agreement (“the Agreement”) signed with the Public Prosecutor’s Office and Attorney General’s Office and includes the following projects: IIRSA Sur Tranches 2 and 3, IIRSA Norte, the Electric Train Construction Project (Tranches 1 and 2) and Gasoducto Sur Peruano S.A. (GSP).
Criminal investigations in relation to the Construction Club case
Cumbra Peru S.A. has been included, along with other construction companies, in the criminal investigation that the Public Ministry has been carrying out for the alleged crime of corruption of officials in relation to the so-called ‘Construction Club’. The resulting contingency from these proceedings has been determined in the Agreement with the Public Prosecutor’s Office and the Attorney General’s Office.
Moreover, at the end of February 2020, the Public Ministry requested Unna Transporte S.A.C., be included in such criminal investigation. That request was approved in October 2021. Just like other executives of other construction companies, former officers of the Corporation have been included in these criminal investigations.
The Company’s Management cannot guarantee the finding nor rule out the possibility of authorities or third parties finding additional adverse evidence not currently known with respect to other projects executed during the period under investigation. If applicable, these new facts could be included in the Agreement entered into with the Public Prosecutor’s Office and the Attorney General’s Office.
Final Plea Agreement and Benefits
On May 21, 2021, the Company entered into an Agreement with the Special Team of Peruvian prosecutors who are committed to full dedication to the knowledge of investigations related to corruption offenses of officials and related personnel, in which the company Odebrecht and others would have incurred (the “Prosecutor’s Office”) and with the ad hoc Public Prosecutor’s Office for investigations and processes related to crimes corruption of officials, money laundering and related activities allegedly committed by the Odebrecht company and others (the “Attorney General’s Office”).
- 6 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
As of June 30, 2023 and 2022 and December 31, 2022
On September 15, 2022, the Agreement was entered into between the Public Prosecutor’s Office, the Attorney General’s Office and the Company, whereby AENZA accepted they were utilized by certain former executives to commit illicit acts in a series of periods until 2016, and committed to pay a civil penalty to the Peruvian State of S/ 333.3 million and US$ 40.7 million, totalling S/481.3 million as of June 30, 2023, calculated according to the formulae established by Law 30737.
According to the Agreement, payment shall be made within twelve (12) years at a legal interest rate in soles and dollars (3.8% and 1.7% annual interest as of June 30, 2023, respectively). The Company also undertakes to establish a series of guarantees after the approval (by which the judge verify that the agreement are in accordance with Law) of the Agreement, composed of i) a trust agreement that includes shares issued by a subsidiary of the Company, ii) mortgage on a property owned by the Company, and iii) a guarantee account with funds equivalent to the annual installment for the following year. Among other conditions, the Agreement includes a restriction for AENZA S.A.A. and subsidiaries Cumbra Peru S.A. and Unna Transporte S.A.C. to participate in public infrastructure and construction, and road maintenance contracts for two (2) years from the approval of the Agreement. The other member companies of the Corporation are not subject to any impediment or prohibition to contract with the Peruvian Government. As of June 30, 2023, the Company recognized in its financial statements the total liabilities associated to the Agreement for S/481.3 million (As of December 31, 2022, the balance was S/488.9 million) (see Note 20.a).
As of June 30, 2023, and as of the reporting date of the interim condensed consolidated financial statements, in the opinion of the Company’s Management and legal advisors, the civil compensation covers the total contingency to which the Company is exposed to as a result of the investigations revealed since 2017. Nevertheless, the Agreement enforceability is subject to court approval and its terms and conditions are subject to confidentiality provisions.
Investigations and administrative process initiated by INDECOPI in relation to the Construction Club case
On July 11, 2017, the INDECOPI initiated an investigation against several Peruvian construction companies (including Cumbra Peru S.A.), about the existence of an alleged cartel called the Construction Club.
On February 11, 2020, the subsidiary Cumbra Peru S.A. was notified by the Technical Secretariat (the ���TS”) of the Free Competition Defense Commission of INDECOPI with the resolution that begins a sanctioning administrative procedure involving a total of 35 companies and 28 natural persons, for alleged anticompetitive conduct in the market of Public Works.
On November 17, 2021, the Commission imposed a fine of approximately S/67 million against Cumbra Peru S.A., which is currently being challenged and is pending of resolution by the final administrative instance within the INDECOPI Court. As of June 30, 2023, Cumbra Peru S.A. maintains an estimated provision amounting to S/56.4 million (S/ 52.4 as of December 31, 2022).
Investigations and administrative process initiated by INDECOPI in relation to the labor recruitment market
On February 7, 2022, Cumbra Peru S.A. and Unna Transporte S.A.C. were notified with Resolution 038-2021/DLC-INDECOPI, by means of which the National Directorate of Research and Promotion of Free Competition of INDECOPI decided to initiate an administrative sanctioning procedure regarding the alleged horizontal collusive practice in the modality of concerted sharing of suppliers in the market of hiring workers in the construction sector at national level from 2011 to 2017.
On April 7, 2022, Cumbra Peru S.A. and Unna Transporte S.A.C. proposed a cease-and-desist agreement for the early termination of the sanctioning administrative procedure, where they (i) accepted the alleged conduct, (ii) committed to comply with a free competition rules compliance program during years 2022, 2023, and 2024, and (iii) committed to paying a compensation amounting to S/ 2.7 million in two installments (the first one within 60 days after the notification of the Resolution approving the cessation undertaking and the second one within 12 months). By means of Resolution 054-2022/CLC-INDECOPI dated August 19, 2022, the INDECOPI approved the proposed cease-and-desist agreement and concluded the sanctioning procedure. As of June 30, 2023, the Company maintains a provision amounting to S/1.4 million.
- 7 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
As of June 30, 2023 and 2022 and December 31, 2022
2. | Basis of preparation |
The interim condensed consolidated financial statements for the period ended June 30, 2023 have been prepared in accordance with IAS 34 “Interim Financial Reporting”. The interim condensed consolidated financial statements provide comparative information regarding prior year; however, they do not include all the information and disclosures required in the consolidated financial statements, so they must be read together with the annual consolidated financial statements, which have been prepared in accordance with International Standards of Financial Information (hereinafter “IFRS”). The interim condensed consolidated financial statements are presented in thousands of Peruvian Soles, unless otherwise stated.
Management continues to have a reasonable expectation that the Corporation has adequate resources to continue in operation for a reasonable period of time and that the going concern basis of accounting remains appropriate. Management believes that there are no material uncertainties that may cause significant doubt about this assumption, and that there is a reasonable expectation that the Corporation has adequate resources to continue operations for the expected future, and not less than 12 months from the end of the reporting period.
A. Immaterial corrections of previously reported balances as of June 30, 2022
In connection with the preparation of its consolidated financial statements, the Corporation identified an error in the interpretation and application of the accounting treatment of revenue and cost recognition arising from contracts with customers in the engineering and construction segment in prior periods. Management of the Corporation has evaluated and concluded that the correction of this error has resulted in non-material adjustment to the net income previously reported in the interim condensed consolidated financial statements as of June 30, 2022. It should be noted that the aforementioned adjustments had no impact on total cash flows from operating, investing or financing activities. A reconciliation between the previously reported amounts and the revised amounts as of June 30, 2022, and for the period then ended is presented below:
Interim Condensed Consolidated Statement of Financial Position:
As of June 30, 2022 | |||||||||||||
In thousands of soles | Reported | Adjustment | Revised | ||||||||||
ASSETS | |||||||||||||
Current assets | |||||||||||||
Trade accounts receivables, net | 672,380 | 176,726 | (a) | 849,106 | |||||||||
Work in progress, net | 180,916 | (180,916 | ) | (b) | - | ||||||||
Other accounts receivable | 385,088 | 13,508 | (a) | 398,596 | |||||||||
Other current assets | 1,624,873 | - | 1,624,873 | ||||||||||
Total current assets | 2,863,257 | 9,318 | 2,872,575 | ||||||||||
Non-current assets | |||||||||||||
Deferred tax asset | 303,510 | (7,274 | ) | (c) | 296,236 | ||||||||
Other non-current assets | 2,796,526 | - | 2,796,526 | ||||||||||
Total non-current assets | 3,100,036 | (7,274 | ) | 3,092,762 | |||||||||
Total assets | 5,963,293 | 2,044 | 5,965,337 | ||||||||||
LIABILITIES AND EQUITY | |||||||||||||
Current liabilities | |||||||||||||
Trade accounts payable | 860,151 | (10,559 | ) | (b) | 849,592 | ||||||||
Current income tax | 23,594 | (1,555 | ) | (c) | 22,039 | ||||||||
Other provisions | 132,019 | 5,296 | (b) | 137,315 | |||||||||
Other current liabilities | 1,048,626 | - | 1,048,626 | ||||||||||
Total current liabilities | 2,064,390 | (6,818 | ) | 2,057,572 | |||||||||
Non-current liabilities | |||||||||||||
Deferred tax liability | 109,839 | (150 | ) | (c) | 109,689 | ||||||||
Other non-current liabilities | 2,031,911 | - | 2,031,911 | ||||||||||
Total non-current liabilities | 2,141,750 | (150 | ) | 2,141,600 | |||||||||
Total liabilities | 4,206,140 | (6,968 | ) | 4,199,172 | |||||||||
Equity | |||||||||||||
Equity attributable to controlling interest in the Company | 1,503,828 | 9,428 | 1,513,256 | ||||||||||
Non-controlling interest | 253,325 | (416 | ) | 252,909 | |||||||||
Total equity | 1,757,153 | 9,012 | 1,766,165 | ||||||||||
Total liabilities and equity | 5,963,293 | 2,044 | 5,965,337 |
- 8 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
As of June 30, 2023 and 2022 and December 31, 2022
Interim Condensed Consolidated statements of profit or loss:
For the six | |||||||||||||
month period ended June 30, 2022 | |||||||||||||
In thousands of soles | Reported | Adjustment | Revised | ||||||||||
Revenue from construction activities | 1,300,050 | (51,417 | ) | (a) | 1,248,633 | ||||||||
Revenue from services provided | 496,492 | - | 496,492 | ||||||||||
Revenue from real estate and sale of goods | 302,472 | - | 302,472 | ||||||||||
2,099,014 | (51,417 | ) | 2,047,597 | ||||||||||
Cost of construction activities | (1,265,910 | ) | 80,230 | (b) | (1,185,680 | ) | |||||||
Cost of services provided | (388,071 | ) | 15,712 | (b) | (372,359 | ) | |||||||
Cost of real estate and sale of goods | (223,983 | ) | - | (223,983 | ) | ||||||||
(1,877,964 | ) | 95,942 | (1,782,022 | ) | |||||||||
Gross profit | 221,050 | 44,525 | 265,575 | ||||||||||
Administrative expenses | (69,775 | ) | (25,834 | ) | (95,609 | ) | |||||||
Other income and expenses | 2,383 | (5,807 | ) | (3,424 | ) | ||||||||
Operating profit | 153,658 | 12,884 | 166,542 | ||||||||||
Financial expenses | (147,105 | ) | - | (147,105 | ) | ||||||||
Financial income | 10,150 | - | 10,150 | ||||||||||
Share of the profit or loss of associates and joint ventures accounted for using the equity method | 1,069 | - | 1,069 | ||||||||||
Profit before income tax | 17,772 | 12,884 | 30,656 | ||||||||||
Income tax expense | (17,592 | ) | (3,576 | ) | (c) | (21,168 | ) | ||||||
Profit for the period | 180 | 9,308 | 9,488 | ||||||||||
(Loss) profit attributable to: | |||||||||||||
Controlling interest in the Company | (24,767 | ) | 9,554 | (15,213 | ) | ||||||||
Non-controlling interest | 24,947 | 266 | 25,213 | ||||||||||
180 | 9,820 | 10,000 | |||||||||||
Loss per share attributable to controlling interest | |||||||||||||
in the Company during the period | (0.023 | ) | 0.008 | (0.015 | ) | ||||||||
Total comprehensive income for the period | |||||||||||||
Comprehensive income attributable to: | |||||||||||||
Controlling interest in the Company | (31,568 | ) | 6,199 | (25,369 | ) | ||||||||
Non-controlling interest | 25,020 | 69 | 25,089 | ||||||||||
(6,548 | ) | 6,268 | (280 | ) |
Segment information by geographic area:
For the six | ||||||||||||
month period ended June 30, 2022 | ||||||||||||
In thousands of soles | Reported | Adjustment | Revised | |||||||||
Revenue | ||||||||||||
Peru | 1,594,271 | 8,307 | 1,602,578 | |||||||||
Chile | 457,614 | (59,564 | ) | 398,050 | ||||||||
Colombia | 47,129 | (160 | ) | 46,969 | ||||||||
2,099,014 | (51,417 | ) | 2,047,597 |
- 9 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
As of June 30, 2023 and 2022 and December 31, 2022
As a result of this process, the balances in the interim condensed consolidated statement of cash flows were revised as follows:
For the six | |||||||||||||
month period ended June 30, 2022 | |||||||||||||
In thousands of soles | Reported | Adjustment | Revised | ||||||||||
Operating activities | |||||||||||||
Profit before income tax | 17,772 | 13,396 | (a, b) | 31,168 | |||||||||
Adjustments to profit not affecting cash flows from | |||||||||||||
operating activities: | |||||||||||||
Other adjustments | 244,934 | - | 244,934 | ||||||||||
Net variations in assets and liabilities: | |||||||||||||
Trade accounts receivable and working in progress | 32,688 | (60,521 | ) | (a, b) | (27,833 | ) | |||||||
Other accounts receivable | (65,438 | ) | (11,284 | ) | (a) | (76,722 | ) | ||||||
Trade accounts payable | (118,798 | ) | 57,382 | (b) | (61,416 | ) | |||||||
Other accounts payable | (26,514 | ) | (3,553 | ) | (b) | (30,067 | ) | ||||||
Other provisions | (34,577 | ) | 4,580 | (b) | (29,997 | ) | |||||||
Other variations | (119,640 | ) | - | (119,640 | ) | ||||||||
Net cash provided by operating activities | (69,573 | ) | - | (69,573 | ) | ||||||||
Investing activities | |||||||||||||
Net cash applied to investing activities | (58,799 | ) | - | (58,799 | ) | ||||||||
Financing activities | |||||||||||||
Net cash applied to financing activities | 229,645 | - | 229,645 | ||||||||||
Net increase in cash | 101,273 | - | 101,273 | ||||||||||
Exchange difference | 8,994 | - | 8,994 | ||||||||||
Cash and cash equivalents at the beginning of the period | 957,178 | - | 957,178 | ||||||||||
Cash and cash equivalents at the end of the period | 1,067,445 | - | 1,067,445 | ||||||||||
NON-CASH TRANSACTIONS: | |||||||||||||
Capitalization of convertible bonds | 335,580 | - | 335,580 | ||||||||||
Acquisition of right-of-use assets | 8,618 | - | 8,618 | ||||||||||
Capitalization of interests | 498 | - | 498 |
(a) Revenue from engineering and construction contracts is recognized over time as the Corporation fulfills its obligations, as there is a continuous transfer of control of the deliverable to the customer and revenue is recognized using the percentage-of-completion method for each contract through the date of the consolidated financial statements.
Revenue from additional work resulting from a modification or instruction received from the customer to make a change in the scope of work, price, or both will result in an increase in contract revenue which is also recognized using the percentage-of-completion method when the Corporation concludes that it is highly probable that there will not be a significant reversal of such revenue. Before the immaterial correction, the Corporation recognized a lower proportion of this additional revenue at the date of the consolidated financial statements depending on the status or stage in the process of obtaining formal, written approval for the additional work. After the immaterial correction, the Corporation recognized additional revenue based on the percentage of completion of the additional work, as long as the Corporation can conclude from its dealings with its clients that it is highly probable that there will not be a significant reversal of such revenue.
(b) Before the immaterial correction, the Corporation presented the net position of construction contracts as either an asset or a liability. The contract was considered an asset when the gross margin earned at the measurement date was less than the Corporation’s estimated gross margin at contract completion. This asset was presented as “Work in progress”. If the gross margin obtained was greater than the estimated gross margin at completion, it was presented as a liability under “Accounts payable - Provision for estimated contract costs” by stage of completion, both with an effect on the cost of construction activities account.
In order to correct the immaterial error, the Corporation reversed the balances of the work in progress account from assets and the provision for construction contract costs from liabilities, recognized the costs incurred in the consolidated statement of profit or loss.
(c) Corresponds to the recognition of the tax effects related to the adjustments described in (a) and (b) above.
- 10 -
AENZA S.A.A. and Subsidiaries |
Notes to the Interim Condensed Consolidated Financial Statements |
As of June 30, 2023 and 2022 and December 31, 2022 |
3. | Summary of Significant Accounting Policies |
The accounting policies used in the preparation of these interim condensed consolidated financial statements are consistent with those applied in the preparation of the consolidated financial statements as of December 31, 2022.
Standards, amendments, and interpretation adopted by the Corporation
Standards, amendments and interpretation that have entered in force as of January 1, 2023, have not had impact on the interim condensed consolidated financial statements as of June 30, 2023, and for this reason they have not been disclosed. The Corporation has not adopted in advance any amendment and modification that are not yet effective.
4. | Financial Risk Management |
The Corporation’s Management is responsible for managing financial risks. The corporation Management manages the general administration of financial risks such risks include currency risk, price risk, fair-value and cash-flow interest rate risks, credit risk, the use of derivative and non-derivative financial instruments, and investment of liquidity surplus, as well as financial risks; all of which are regularly supervised and monitored.
A. | Financial risk factors |
The Corporation’s activities expose it to a variety of financial risks: market risks (including currency risk, price risk, fair-value and cash-flow interest rate risks), credit risk, and liquidity risk.
The Corporation’s general program for risk management is mainly focused on financial market unpredictability and seeks to minimize potential adverse effects on the Corporation’s financial performance.
a) | Market risks |
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices. Market prices involve four types of risk: interest rate risk, exchange rate risk, commodity price risk and other price risks. Financial instruments affected by market risk include bank deposits, trade accounts receivable, other accounts receivable, other financial liabilities, bonds, trade accounts payable, other accounts payable and accounts receivable from and payable to related parties.
i) | Currency risk |
Foreign exchange risk is the risk that the fair value of future cash flows of a financial instrument will be reduced by adverse fluctuations in exchange rates. Management is responsible for identifying, measuring, controlling and reporting the exposure to foreign exchange risk.
The Corporation is exposed to foreign exchange risk arising from local transactions in foreign currencies and from its foreign operations. As of December 31, 2022 and as of June 30, 2023, this exposure is focused mainly on fluctuations of the U.S. dollar, Chilean peso, and Colombian peso. The Corporation’s management monitors this risk by analyzing the country’s macroeconomic variables.
- 11 -
AENZA S.A.A. and Subsidiaries |
Notes to the Interim Condensed Consolidated Financial Statements |
As of June 30, 2023 and 2022 and December 31, 2022 |
The balances of financial assets and liabilities denominated in foreign currencies correspond to balances in U.S. Dollars, Chilean pesos and Colombian pesos, which are stated exchange rate published on that date, according to the currency type:
As of December 31, | As of June 30, | |||||||||||||||
2022 | 2023 | |||||||||||||||
suppley | demand | suppley | demand | |||||||||||||
U.S. Dollars (a) | 3.808 | 3.820 | 3.624 | 3.633 | ||||||||||||
Chilean Peso (b) | 0.004449 | 0.004463 | 0.004521 | 0.004532 | ||||||||||||
Colombian Peso (c) | 0.000792 | 0.000794 | 0.000865 | 0.000867 |
(a) | U.S. Dolar as published by the Superintendencia de Bancos, Seguros y Administradoras de Fondos de Pensiones (hereinafter “SBS”). |
(b) | Chilean peso as published by the Banco Central de Chile. |
(c) | Colombian peso as published by Banco de la Republica de Colombia. |
The consolidated statement of financial position includes the following:
As of | As of | |||||||
December 31, | June 30, | |||||||
In thousands of US dollars | 2022 | 2023 | ||||||
Assets | ||||||||
Cash and cash equivalents | 58,280 | 69,934 | ||||||
Trade accounts receivable, net | 124,593 | 169,612 | ||||||
Accounts receivable from related parties | 276,048 | 361,342 | ||||||
Other accounts receivable | 75,536 | 87,606 | ||||||
534,457 | 688,494 | |||||||
Liabilities | ||||||||
Borrowings | (215,076 | ) | (241,969 | ) | ||||
Bonds | (5,569 | ) | (5,064 | ) | ||||
Trade accounts payable | (119,104 | ) | (124,976 | ) | ||||
Accounts payable to related parties | (133,745 | ) | (149,624 | ) | ||||
Other accounts payable | (88,012 | ) | (32,692 | ) | ||||
Other provisions | (42,241 | ) | (42,113 | ) | ||||
(603,747 | ) | (596,438 | ) |
The Corporation assumes foreign exchange risk because it does not use derivative financial instruments to mitigate exchange rate fluctuations.
For the periods ended June 30, 2022 and 2023, the Corporation’s exchange gains and losses for the exposure of U.S. Dollar, the Chilean peso and the Colombian peso against the Peruvian Sol was (Note 26.A):
For the three | For the six | |||||||||||||||
month period ended June 30, | month period ended June 30, | |||||||||||||||
In thousands of soles | 2022 | 2023 | 2022 | 2023 | ||||||||||||
Gain | 103,374 | 86,197 | 292,896 | 140,690 | ||||||||||||
Loss | (102,224 | ) | (85,114 | ) | (288,593 | ) | (128,311 | ) | ||||||||
1,150 | 1,083 | 4,303 | 12,379 |
- 12 -
AENZA S.A.A. and Subsidiaries |
Notes to the Interim Condensed Consolidated Financial Statements |
As of June 30, 2023 and 2022 and December 31, 2022 |
The consolidated statement of changes in equity comprises a foreign currency translation adjustment originated by its subsidiaries. The consolidated statement of financial position includes the following assets and liabilities in its currency (in thousands):
As of December 31, | As of June 30, | |||||||||||||||
2022 | 2023 | |||||||||||||||
Assets | Liabilities | Assets | Liabilities | |||||||||||||
Chilean Peso | 60,684,971 | 81,864,810 | 62,696,750 | 75,404,887 | ||||||||||||
Colombian Peso | 96,944,436 | 59,114,296 | 130,216,785 | 161,614,150 |
The Corporation’s foreign currency translation adjustment for the six-month period ended June 30, 2023 was positive by S/9.2 million (negative by S/9.8 million for the same period in 2022).
ii) | Price risk |
The Corporation is exposed to the risk of hydrocarbon price fluctuations which impacts on the selling price of the products that it commercializes, which are significantly affected by changes in global economic conditions, resource availability, and the cycles of related industries. Management considers reasonable these possible fluctuations in the hydrocarbons prices, based in the Corporation´s economic market environment.
iii) | Fair-value and cash flow interest rate risk |
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates.
The Corporation’s interest rate risk arises mainly from its long-term borrowings. Variable rate long-term financial liabilities expose the Corporation to cash-flow interest rate risk. Fixed-rate financial liabilities expose the Corporation to fair-value interest rate risk.
The Corporation assumes the interest rate risk, due to they do not use financial derivative instruments for mitigate variations in the interest rate risk.
b) | Credit risk |
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or commercial contract, resulting in a financial loss.
Credit risk for the Corporation arises from its operating activities due to credit exposure to customers and from its financial activities, including deposits with banks and financial institutions, foreign exchange transactions, and other financial instruments. The maximum exposure to credit risk for the consolidated financial statements as of December 31, 2022 and as of June 30, 2023 is represented by the sum of cash and cash equivalents (Note 9), trade accounts receivable (Note 10), accounts receivable from related parties (Note 11) and other accounts receivable (Note 12).
Customer credit risk is managed by Management subject to the Corporation’s established policies, procedures and control related to customer credit risk management. The credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined based on this assessment. The maximum credit risk exposure at the reporting date is the carrying value of each class of financial assets disclosed in Note 10.
- 13 -
AENZA S.A.A. and Subsidiaries |
Notes to the Interim Condensed Consolidated Financial Statements |
As of June 30, 2023 and 2022 and December 31, 2022 |
The Corporation assesses the concentration of risk with respect to trade accounts receivable as low risk because sales are not concentrated in small customer groups and no customers account for 10% or more of the Corporation’s revenues.
Management monitors the credit risk of other receivables on an ongoing basis and assesses those receivables that show evidence of impairment to determine the required allowance for doubtful accounts.
Concerning loans to related parties, the Corporation has measures in place to ensure the recovery of these loans through the controls maintained by Corporate Finance Management and the performance evaluation conducted by the Board of Directors (Note 11).
Management does not expect the Corporation to incur in losses arisen from the performance of these counterparties, except for the ones already recorded at the consolidated financial statements.
c) | Liquidity risk |
Prudent liquidity risk management implies holding enough cash and cash equivalent, and financing available through a proper number of credit sources, and the ability to close positions in the market. Historically, the Corporation’s cash flows from operations have enabled it to meet its obligations. The Corporation has implemented various actions to reduce its exposure to liquidity risk and has developed a Financial Plan based on several steps, which were designed with a commitment to compliance within a reasonable period of time. The Financial Plan is intended to meet the various obligations at the Company and Corporation entities levels.
The Corporate Finance Office monitors the cash flow projections made on liquidity requirements of the Corporation to ensure it exists sufficient cash to meet operational needs so that the Corporation does not breach borrowing limits or covenants, where applicable, on any of its borrowing facilities. Less significant financing transactions are controlled by the Finance Management of each subsidiary.
Such forecasting takes into consideration the Corporation’s debt financing plans, covenant compliance, compliance with ratio targets in the statement of financial position and, if applicable, with external regulatory or legal requirements.
As of June 30, 2023, the Company has significant current payment obligations arising from the Plea Agreement (Note 1.C) and the Bridge Loan (Note 16.A.i). For this purpose, Management is developing a financial plan with the aim of covering the short-term part of these obligations.
Cash surplus on the amounts required for the administration of working capital are invested in checking accounts that generate interest and time deposits, selecting instruments with appropriate maturities or sufficient liquidity.
The table below analyzes the Corporation’s financial liabilities grouped according to the remaining period from the date of the statement of financial position to the date of maturity. The amounts disclosed in the table below are the contractual undiscounted cash flows, which include interest to be accrued according to the established schedule.
- 14 -
AENZA S.A.A. and Subsidiaries |
Notes to the Interim Condensed Consolidated Financial Statements |
As of June 30, 2023 and 2022 and December 31, 2022 |
Contractual cash flows | ||||||||||||||||||||||||
Carrying | Less than | 1-2 | 2-5 | More than | ||||||||||||||||||||
In thousands of soles | amount | 1 year | years | years | 5 years | Total | ||||||||||||||||||
As of December 31, 2022 | ||||||||||||||||||||||||
Other financial liabilities (except for finance leases and lease liability for right-of-use asset) | 819,973 | 599,310 | 71,732 | 216,392 | - | 887,434 | ||||||||||||||||||
Finance leases | 835 | 873 | - | - | - | 873 | ||||||||||||||||||
Lease liability for right-of-use asset | 59,085 | 19,075 | 31,705 | 23,386 | 113 | 74,279 | ||||||||||||||||||
Bonds | 869,913 | 141,246 | 185,114 | 419,969 | 707,800 | 1,454,129 | ||||||||||||||||||
Trade accounts payables (except non-financial liabilities) | 1,037,013 | 1,027,256 | 9,757 | - | - | 1,037,013 | ||||||||||||||||||
Accounts payables to related parties | 80,781 | 53,488 | 25,420 | 697 | 1,176 | 80,781 | ||||||||||||||||||
Other accounts payables and other provisions (except non-financial liabilities) | 712,071 | 186,326 | 64,307 | 89,868 | 470,129 | 810,630 | ||||||||||||||||||
3,579,671 | 2,027,574 | 388,035 | 750,312 | 1,179,218 | 4,345,139 |
Contractual cash flows | ||||||||||||||||||||||||
Carrying | Less than | 1-2 | 2-5 | More than | ||||||||||||||||||||
In thousands of soles | amount | 1 year | years | years | 5 years | Total | ||||||||||||||||||
As of June 30, 2023 | ||||||||||||||||||||||||
Other financial liabilities (except for finance leases and lease liability for right-of-use asset) | 861,494 | 597,560 | 171,783 | 189,562 | - | 958,905 | ||||||||||||||||||
Lease liability for right-of-use asset | 48,287 | 18,835 | 68,495 | 862 | 81 | 88,273 | ||||||||||||||||||
Bonds | 847,097 | 144,176 | 181,227 | 386,127 | 687,234 | 1,398,764 | ||||||||||||||||||
Trade accounts payables (except non-financial liabilities) | 1,028,065 | 1,019,080 | 8,985 | - | - | 1,028,065 | ||||||||||||||||||
Accounts payables to related parties | 78,778 | 50,861 | 26,233 | 678 | 1,006 | 78,778 | ||||||||||||||||||
Other accounts payables and other provisions (except non-financial liabilities) | 696,351 | 172,653 | 70,830 | 100,107 | 479,823 | 823,413 | ||||||||||||||||||
3,560,072 | 2,003,165 | 527,553 | 677,336 | 1,168,144 | 4,376,198 |
B. | Capital management |
The Corporation’s objective in managing capital is to safeguard its ability to continue operations as a going concern basis in order to generate returns to its shareholders, benefits to stakeholders and keep an optimal capital structure to reduce capital cost. Since 2017, due to the situation of the Corporation, Management has monitored deviations that might cause the non-compliance of covenants and may renegotiation of liabilities (Note 16.a). In special situations and events, the Corporation identifies potential deviations, requirements and establishes a plan.
The Corporation may adjust the amount of dividends payable to shareholders, return capital to shareholders, issue new shares or sell assets to reduce its debt to maintain or adjust the capital structure.
The Corporation monitors its capital based on the leverage ratio. This ratio is calculated as net debt divided by the sum of net debt plus equity. The net debt corresponds to the total financial liabilities (including current and non-current indebtedness) adding the provision for civil compensation less cash and cash equivalents.
- 15 -
AENZA S.A.A. and Subsidiaries |
Notes to the Interim Condensed Consolidated Financial Statements |
As of June 30, 2023 and 2022 and December 31, 2022 |
As of December 31, 2022 and as of June 30, 2023, the leverage ratio is as follows:
As of | As of | |||||||||
December 31, | June 30, | |||||||||
In thousands of soles | Note | 2022 | 2023 | |||||||
Total borrowing, bonds and civil compensation (*) | 16 and 17 | 2,238,699 | 2,238,156 | |||||||
Less: Cash and cash equivalents | 9 | (917,554 | ) | (891,225 | ) | |||||
Net debt (a) | 1,321,145 | 1,346,931 | ||||||||
Total equity (b) | 1,346,006 | 1,297,053 | ||||||||
Total net debt plus equity (a) + (b) | 2,667,151 | 2,643,984 | ||||||||
Gearing ratio | 0.50 | 0.51 |
(*) | The provision for civil compensation is included in other provisions (Note 20). |
During the periods ended December 31, 2022 and as of June 30, 2023, there were no changes in the objectives, policies or processes related to capital management.
5. | Critical Accounting Estimates and Judgments |
Estimates and judgments used are continuously evaluated and are based on historical experience among other factors, including expectations of future events that are believed to be reasonable under current circumstances.
In preparing these interim condensed consolidated financial statements, the significant judgements made by management in applying Corporation’s accounting policies and the key sources of uncertainty were the same as those that applied to the consolidated financial statements for the year ended December 31, 2022.
6. | Seasonality of Operations |
The Corporation does not present seasonality in the operations of any of its subsidiaries; and develop its business during the normal course of the period.
7. | Operating Segments |
Operating segments are reported consistently with the internal reports that are reviewed by Corporation’s, chief decision-maker; that is the Executive Committee, which is led by the Chief Executive Officer. This Committee acts as the highest authority in making operational decisions, responsible for allocating resources and evaluating the performance of each operating segment.
As set forth under IFRS 8, reportable segments by significance of income are: ‘engineering and construction’, ‘energy’ and ‘infrastructure’. However, Management has voluntarily decided to report on all its operating segments.
The Corporation has identified four reportable segments. These operating segments are components of an enterprise for which separate financial information is available and periodically evaluated by the Corporate Governance Board to decide how to allocate resources and assess performance.
Corporation’s operating segments are assessed by the activities of the following business units: (i) engineering and construction, (ii) energy, (iii) infrastructure, and (iv) real estate.
The operations of Corporation in each reportable segment are as follows:
(a) | Engineering and construction: This segment includes traditional engineering services such as architectural planning, structural, civil and design engineering for advanced specialties including process design, simulation, and environmental services, as well as construction at three divisions: i) civil works, such as the construction of hydroelectric power stations and other large infrastructure facilities; (ii) electromechanical construction, such as concentrator plants, oil and natural gas pipelines, and electric transmission lines; iii) building construction, such as offices, residential buildings, hotels, and affordable housing projects, shopping centers, and industrial facilities. |
- 16 -
AENZA S.A.A. and Subsidiaries |
Notes to the Interim Condensed Consolidated Financial Statements |
As of June 30, 2023 and 2022 and December 31, 2022 |
(b) | Energy: This segment includes oil exploration, exploitation, production, treatment, and trade in four oil deposits, separation and trade of natural gas and its byproducts at the gas processing plant, as well as the construction and assembly of oil facilities or those linked to the oil and gas industry. It also includes storage and dispatch of fuel and oil byproducts. |
(c) | Infrastructure: The Corporation has long-term concessions or similar contractual arrangements in Peru for three highways with tolls, Lima Metro, a sewage treatment plant in Lima, and operation and maintenance services for infrastructure assets. |
(d) | Real Estate: The Corporation mainly develops and sells properties for low- and middle-resource sectors, which are experiencing a significant increase in available income, as well as luxury properties to a lesser degree. It also develops commercial spaces and offices. |
The CODM uses the Adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) as the primary relevant measure to understand the Corporation’s operating performance and allocate resources and its operating segments.
Adjusted EBITDA is not a measurement of results based on International Financial Reporting Standards. The Corporation’s definition related to adjusted EBITDA may not be comparable to similar performance measures and disclosures from other entities.
The adjusted EBITDA is reconciled to profit as follows:
For the three | For the six | |||||||||||||||
month period ended June 30, | month period ended June 30, | |||||||||||||||
In thousands of soles | 2022 | 2023 | 2022 | 2023 | ||||||||||||
Net profit | 88,471 | 8,418 | 10,000 | 2,419 | ||||||||||||
Financial income and expenses | 31,860 | 36,493 | 68,178 | 60,273 | ||||||||||||
Interests for present value of financial asset or liability | 27,647 | (6,357 | ) | 68,265 | (20,163 | ) | ||||||||||
Income tax | 24,123 | 40,032 | 21,168 | 72,413 | ||||||||||||
Depreciation and amortization | 41,666 | 57,217 | 84,920 | 110,439 | ||||||||||||
Adjusted EBITDA | 213,767 | 135,803 | 252,531 | 225,381 |
The adjusted EBITDA per segment is as follows:
For the three | For the six | |||||||||||||||
month period ended June 30, | month period ended June 30, | |||||||||||||||
In thousands of soles | 2022 | 2023 | 2022 | 2023 | ||||||||||||
Engineering and construction | 103,148 | 162 | 22,539 | (29,381 | ) | |||||||||||
Energy | 39,027 | 44,996 | 82,428 | 100,841 | ||||||||||||
Infrastructure | 59,677 | 62,243 | 129,549 | 118,714 | ||||||||||||
Real estate | 17,665 | 29,097 | 21,247 | 31,145 | ||||||||||||
Parent company operations | 98,793 | (3,719 | ) | 50,827 | (143 | ) | ||||||||||
Intercompany eliminations | (104,543 | ) | 3,024 | (54,059 | ) | 4,205 | ||||||||||
213,767 | 135,803 | 252,531 | 225,381 |
Inter-segmental sales transactions are entered into prices similar to those that would have been agreed with unrelated third parties. Revenues from external customers reported are measured in a consistent manner under the basis for preparation of the consolidated financial statements. Sales of goods are related to real estate segment. Revenues from services are related to other segments.
Corporation sales and receivables are not concentrated on a few customers. There is no external customer that represents 10% or more of Corporation’s revenue.
- 17 -
AENZA S.A.A. and Subsidiaries |
Notes to the Interim Condensed Consolidated Financial Statements |
As of June 30, 2023 and 2022 and December 31, 2022 |
Operating segments financial position | ||||||||||||||||||||||||||||||||||||
Engineering | Infrastructure | Parent | ||||||||||||||||||||||||||||||||||
In thousands of soles | And construction | Energy | Toll roads | Transportation | Water treatment | Real estate | Company operations | Eliminations | Consolidated | |||||||||||||||||||||||||||
As of December 31, 2022 | ||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||
Cash and cash equivalent | 209,737 | 104,553 | 130,213 | 171,747 | 2,910 | 111,487 | 186,907 | - | 917,554 | |||||||||||||||||||||||||||
Trade accounts receivables, net | 697,512 | 80,245 | 34,183 | 118,867 | 898 | 146,316 | 561 | - | 1,078,582 | |||||||||||||||||||||||||||
Accounts receivable from related parties | 86,146 | 68 | 51,523 | 4,455 | 52 | 378 | 115,736 | (230,613 | ) | 27,745 | ||||||||||||||||||||||||||
Other accounts receivable | 298,784 | 39,921 | 28,902 | 15,229 | 30 | 5,380 | 7,294 | (2,345 | ) | 393,195 | ||||||||||||||||||||||||||
Inventories, net | 41,933 | 29,935 | 9,655 | 39,780 | - | 227,067 | - | (1,587 | ) | 346,783 | ||||||||||||||||||||||||||
Prepaid expenses | 10,945 | 2,055 | 5,496 | 369 | 160 | 448 | 8,625 | - | 28,098 | |||||||||||||||||||||||||||
Total current assets | 1,345,057 | 256,777 | 259,972 | 350,447 | 4,050 | 491,076 | 319,123 | (234,545 | ) | 2,791,957 | ||||||||||||||||||||||||||
Long-term trade accounts receivable, net | 2,806 | - | 16,215 | 699,487 | 1,392 | 3,969 | - | - | 723,869 | |||||||||||||||||||||||||||
Long-term accounts receivable from related parties | 299,268 | - | 15,858 | 42 | 14,015 | - | 602,004 | (388,795 | ) | 542,392 | ||||||||||||||||||||||||||
Prepaid expenses | - | 826 | 14,549 | 1,731 | 632 | - | 65 | (510 | ) | 17,293 | ||||||||||||||||||||||||||
Other long-term accounts receivable | 101,366 | 89,782 | - | - | 7,346 | 55,347 | 31,889 | - | 285,730 | |||||||||||||||||||||||||||
Inventories, net | - | - | - | - | - | 65,553 | - | - | 65,553 | |||||||||||||||||||||||||||
Investments in associates and joint ventures | 975 | 12,049 | - | - | - | 2,752 | 1,509,790 | (1,510,650 | ) | 14,916 | ||||||||||||||||||||||||||
Investment property, net | - | - | - | 1,507 | - | 19,823 | 40,594 | - | 61,924 | |||||||||||||||||||||||||||
Property, plant and equipment, net | 102,822 | 176,596 | 6,193 | 848 | 150 | 7,531 | 1,286 | (10,961 | ) | 284,465 | ||||||||||||||||||||||||||
Intangible assets, net | 131,431 | 363,066 | 274,597 | 238 | - | 615 | 13,414 | 3,975 | 787,336 | |||||||||||||||||||||||||||
Right-of-use assets, net | 8,745 | 12,795 | 7,106 | 23 | 143 | 2,580 | 38,485 | (19,670 | ) | 50,207 | ||||||||||||||||||||||||||
Deferred income tax asset | 175,702 | 4,572 | 26,787 | - | 415 | 23,781 | 59,316 | 5,065 | 295,638 | |||||||||||||||||||||||||||
Total non-current assets | 823,115 | 659,686 | 361,305 | 703,876 | 24,093 | 181,951 | 2,296,843 | (1,921,546 | ) | 3,129,323 | ||||||||||||||||||||||||||
Total assets | 2,168,172 | 916,463 | 621,277 | 1,054,323 | 28,143 | 673,027 | 2,615,966 | (2,156,091 | ) | 5,921,280 | ||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||
Borrowings | 19,191 | 38,612 | 3,844 | 17 | 6 | 43,118 | 480,735 | (11,261 | ) | 574,262 | ||||||||||||||||||||||||||
Bonds | 4,554 | - | 41,343 | 31,203 | - | - | - | - | 77,100 | |||||||||||||||||||||||||||
Trade accounts payable | 740,142 | 124,259 | 52,916 | 52,292 | 223 | 35,939 | 16,950 | 4,535 | 1,027,256 | |||||||||||||||||||||||||||
Accounts payable to related parties | 297,505 | 2,734 | 46,257 | 22,421 | 296 | 12,227 | 20,291 | (348,243 | ) | 53,488 | ||||||||||||||||||||||||||
Current income tax | 12,495 | 247 | 8,609 | 2,433 | 104 | 45,092 | 672 | - | 69,652 | |||||||||||||||||||||||||||
Other accounts payable | 490,494 | 19,724 | 49,187 | 9,146 | 1,298 | 115,661 | 24,837 | (4,905 | ) | 705,442 | ||||||||||||||||||||||||||
Provisions | 81,288 | 20,535 | 1,722 | 1,197 | - | 540 | 27,644 | - | 132,926 | |||||||||||||||||||||||||||
Total current liabilities | 1,645,669 | 206,111 | 203,878 | 118,709 | 1,927 | 252,577 | 571,129 | (359,874 | ) | 2,640,126 | ||||||||||||||||||||||||||
Borrowings | 6,480 | 100,597 | 3,462 | - | 138 | 10,852 | 192,435 | (8,333 | ) | 305,631 | ||||||||||||||||||||||||||
Long-term bonds | 16,719 | - | 177,341 | 598,753 | - | - | - | - | 792,813 | |||||||||||||||||||||||||||
Long-term trade accounts payable | - | - | - | 9,757 | - | - | - | - | 9,757 | |||||||||||||||||||||||||||
Other long-term accounts payable | 94,261 | - | 2,243 | 189 | 2,932 | - | 2,694 | - | 102,319 | |||||||||||||||||||||||||||
Long-term accounts payable to related parties | 7,886 | 57,300 | 1,176 | 27,294 | 21,663 | - | 189,451 | (277,477 | ) | 27,293 | ||||||||||||||||||||||||||
Provisions | 11,453 | 49,701 | 11,463 | 4,947 | - | - | 491,463 | - | 569,027 | |||||||||||||||||||||||||||
Deferred income tax liability | 16,670 | 53,242 | - | 58,396 | - | - | - | - | 128,308 | |||||||||||||||||||||||||||
Total non-current liabilities | 153,469 | 260,840 | 195,685 | 699,336 | 24,733 | 10,852 | 876,043 | (285,810 | ) | 1,935,148 | ||||||||||||||||||||||||||
Total liabilities | 1,799,138 | 466,951 | 399,563 | 818,045 | 26,660 | 263,429 | 1,447,172 | (645,684 | ) | 4,575,274 | ||||||||||||||||||||||||||
Equity attributable to controlling interest in the Company | 363,404 | 417,970 | 166,678 | 177,208 | 1,483 | 278,501 | 1,165,811 | (1,509,551 | ) | 1,061,504 | ||||||||||||||||||||||||||
Non-controlling interest | 5,630 | 31,542 | 55,036 | 59,070 | - | 131,097 | 2,983 | (856 | ) | 284,502 | ||||||||||||||||||||||||||
Total liabilities and equity | 2,168,172 | 916,463 | 621,277 | 1,054,323 | 28,143 | 673,027 | 2,615,966 | (2,156,091 | ) | 5,921,280 |
- 18 -
AENZA S.A.A. and Subsidiaries |
Notes to the Interim Condensed Consolidated Financial Statements |
As of June 30, 2023 and 2022 and December 31, 2022 |
Operating segments financial position | ||||||||||||||||||||||||||||||||||||
Engineering | Infrastructure | Parent | ||||||||||||||||||||||||||||||||||
In thousands of soles | and construction | Energy | Toll roads | Transportation | Water treatment | Real estate | Company operations | Eliminations | Consolidated | |||||||||||||||||||||||||||
As of June 30, 2023 | ||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||
Cash and cash equivalent | 178,129 | 41,559 | 145,450 | 119,755 | 2,280 | 217,029 | 187,023 | - | 891,225 | |||||||||||||||||||||||||||
Trade accounts receivables, net | 801,390 | 72,268 | 29,319 | 122,857 | 1,401 | 21,982 | 1,056 | - | 1,050,273 | |||||||||||||||||||||||||||
Accounts receivable from related parties | 86,338 | 103 | 44,601 | 3,594 | 344 | 500 | 306,453 | (395,041 | ) | 46,892 | ||||||||||||||||||||||||||
Other accounts receivable | 312,167 | 31,902 | 17,887 | 15,168 | 356 | 4,995 | 7,179 | (2,345 | ) | 387,309 | ||||||||||||||||||||||||||
Inventories, net | 52,907 | 41,610 | 9,383 | 44,645 | - | 241,679 | - | (1,643 | ) | 388,581 | ||||||||||||||||||||||||||
Prepaid expenses | 19,622 | 4,051 | 7,077 | 1,007 | 80 | 158 | 8,544 | 2 | 40,541 | |||||||||||||||||||||||||||
Total current assets | 1,450,553 | 191,493 | 253,717 | 307,026 | 4,461 | 486,343 | 510,255 | (399,027 | ) | 2,804,821 | ||||||||||||||||||||||||||
Long-term trade accounts receivable, net | 815 | - | 16,832 | 727,076 | 1,339 | 3,838 | - | - | 749,900 | |||||||||||||||||||||||||||
Long-term accounts receivable from related parties | 314,604 | - | 16,486 | 42 | 14,015 | - | 443,817 | (233,857 | ) | 555,107 | ||||||||||||||||||||||||||
Prepaid expenses | - | 480 | 21,308 | 1,667 | 606 | - | - | (510 | ) | 23,551 | ||||||||||||||||||||||||||
Other long-term accounts receivable | 94,793 | 84,792 | - | - | 7,346 | 56,702 | 66,886 | - | 310,519 | |||||||||||||||||||||||||||
Inventories, net | - | - | - | - | - | 70,139 | - | - | 70,139 | |||||||||||||||||||||||||||
Investments in associates and joint ventures | 976 | 10,700 | - | - | - | 2,103 | 1,446,099 | (1,446,958 | ) | 12,920 | ||||||||||||||||||||||||||
Investment property, net | - | - | - | 1,467 | - | 18,918 | 39,612 | - | 59,997 | |||||||||||||||||||||||||||
Property, plant and equipment, net | 96,587 | 180,892 | 5,580 | 827 | 229 | 6,361 | 1,073 | (10,961 | ) | 280,588 | ||||||||||||||||||||||||||
Intangible assets, net | 137,792 | 399,645 | 248,319 | 187 | - | 575 | 13,091 | 3,448 | 803,057 | |||||||||||||||||||||||||||
Right-of-use assets, net | 6,845 | 9,545 | 5,019 | 4 | 139 | 1,941 | 35,663 | (14,796 | ) | 44,360 | ||||||||||||||||||||||||||
Deferred income tax asset | 180,623 | 5,123 | 26,729 | - | 447 | 21,147 | 52,208 | 5,103 | 291,380 | |||||||||||||||||||||||||||
Total non-current assets | 833,035 | 691,177 | 340,273 | 731,270 | 24,121 | 181,724 | 2,098,449 | (1,698,531 | ) | 3,201,518 | ||||||||||||||||||||||||||
Total assets | 2,283,588 | 882,670 | 593,990 | 1,038,296 | 28,582 | 668,067 | 2,608,704 | (2,097,558 | ) | 6,006,339 | ||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||
Borrowings | 15,966 | 34,536 | 15,787 | 4 | 6 | 14,445 | 502,387 | (12,901 | ) | 570,230 | ||||||||||||||||||||||||||
Bonds | 6,030 | - | 45,010 | 31,101 | - | - | - | - | 82,141 | |||||||||||||||||||||||||||
Trade accounts payable | 824,346 | 84,910 | 43,565 | 27,332 | 147 | 24,913 | 12,837 | 1,030 | 1,019,080 | |||||||||||||||||||||||||||
Accounts payable to related parties | 301,300 | 57,136 | 27,990 | 33,005 | 10 | 11,147 | 9,582 | (389,309 | ) | 50,861 | ||||||||||||||||||||||||||
Current income tax | 8,932 | 2,136 | 1,436 | 6,959 | 79 | 13,509 | 722 | - | 33,773 | |||||||||||||||||||||||||||
Other accounts payable | 606,427 | 23,066 | 72,218 | 9,742 | 1,425 | 152,161 | 28,275 | (4,905 | ) | 888,409 | ||||||||||||||||||||||||||
Provisions | 80,244 | 16,850 | 1,218 | 933 | - | 385 | 24,107 | - | 123,737 | |||||||||||||||||||||||||||
Total current liabilities | 1,843,245 | 218,634 | 207,224 | 109,076 | 1,667 | 216,560 | 577,910 | (406,085 | ) | 2,768,231 | ||||||||||||||||||||||||||
Borrowings | 3,688 | 96,796 | 1,927 | - | 135 | 71,813 | 169,629 | (4,437 | ) | 339,551 | ||||||||||||||||||||||||||
Long-term bonds | 12,367 | - | 154,328 | 598,261 | - | - | - | - | 764,956 | |||||||||||||||||||||||||||
Long-term trade accounts payable | - | - | - | 8,985 | - | - | - | - | 8,985 | |||||||||||||||||||||||||||
Other long-term accounts payable | 75,078 | - | 1,371 | 144 | 2,874 | - | 2,696 | - | 82,163 | |||||||||||||||||||||||||||
Long-term accounts payable to related parties | 8,007 | - | 1,006 | 27,916 | 23,146 | - | 210,259 | (242,417 | ) | 27,917 | ||||||||||||||||||||||||||
Provisions | 11,333 | 53,850 | 11,750 | 3,656 | - | - | 487,518 | - | 568,107 | |||||||||||||||||||||||||||
Deferred income tax liability | 29,713 | 57,030 | 63 | 62,570 | - | - | - | - | 149,376 | |||||||||||||||||||||||||||
Total non-current liabilities | 140,186 | 207,676 | 170,445 | 701,532 | 26,155 | 71,813 | 870,102 | (246,854 | ) | 1,941,055 | ||||||||||||||||||||||||||
Total liabilities | 1,983,431 | 426,310 | 377,669 | 810,608 | 27,822 | 288,373 | 1,448,012 | (652,939 | ) | 4,709,286 | ||||||||||||||||||||||||||
Equity attributable to controlling interest in the Company | 295,078 | 423,640 | 160,001 | 170,767 | 759 | 284,002 | 1,157,666 | (1,443,754 | ) | 1,048,159 | ||||||||||||||||||||||||||
Non-controlling interest | 5,079 | 32,720 | 56,320 | 56,921 | 1 | 95,692 | 3,026 | (865 | ) | 248,894 | ||||||||||||||||||||||||||
Total liabilities and equity | 2,283,588 | 882,670 | 593,990 | 1,038,296 | 28,582 | 668,067 | 2,608,704 | (2,097,558 | ) | 6,006,339 |
- 19 -
AENZA S.A.A. and Subsidiaries |
Notes to the Interim Condensed Consolidated Financial Statements |
As of June 30, 2023 and 2022 and December 31, 2022 |
Operating segment performance Segment Reporting | ||||||||||||||||||||||||||||||||||||
Engineering | Infrastructure | Parent | ||||||||||||||||||||||||||||||||||
In thousands of soles | and construction | Energy | Toll roads | Transportation | Water treatment | Real estate | Company operations | Elimination | Consolidated | |||||||||||||||||||||||||||
For the three month period ended June 30, 2022 | ||||||||||||||||||||||||||||||||||||
Revenue | 757,564 | 153,233 | 121,362 | 95,510 | 1,044 | 54,912 | 17,113 | (73,067 | ) | 1,127,671 | ||||||||||||||||||||||||||
Gross profit (loss) | 120,210 | 25,079 | 21,923 | 32,014 | 588 | 17,636 | (8,913 | ) | 12,245 | 220,782 | ||||||||||||||||||||||||||
Administrative expenses | (29,379 | ) | (3,710 | ) | (4,031 | ) | (2,311 | ) | (175 | ) | (3,333 | ) | 87 | (11,029 | ) | (53,881 | ) | |||||||||||||||||||
Other income and expenses, net | 3,348 | 909 | (3,028 | ) | (363 | ) | - | 1,045 | 3,339 | (1,544 | ) | 3,706 | ||||||||||||||||||||||||
Operating profit (loss) | 94,179 | 22,278 | 14,864 | 29,340 | 413 | 15,348 | (5,487 | ) | (328 | ) | 170,607 | |||||||||||||||||||||||||
Financial expenses | (12,426 | ) | (3,840 | ) | (5,239 | ) | (1,667 | ) | (24 | ) | (1,704 | ) | (36,656 | ) | 26,413 | (35,143 | ) | |||||||||||||||||||
Financial income | (485 | ) | 115 | 322 | (43 | ) | 42 | 360 | 31,778 | (27,783 | ) | 4,306 | ||||||||||||||||||||||||
Interests for present value of financial asset or liability | (3,250 | ) | 141 | 118 | - | - | 251 | (26,901 | ) | 971 | (28,670 | ) | ||||||||||||||||||||||||
Share of profit or loss in associates and joint ventures | 1,834 | 750 | - | - | - | 712 | 53,556 | (55,358 | ) | 1,494 | ||||||||||||||||||||||||||
Profit (loss) before income tax | 79,852 | 19,444 | 10,065 | 27,630 | 431 | 14,967 | 16,290 | (56,085 | ) | 112,594 | ||||||||||||||||||||||||||
Income tax | (9,531 | ) | (6,415 | ) | (1,683 | ) | (8,655 | ) | (160 | ) | (4,580 | ) | 6,906 | (5 | ) | (24,123 | ) | |||||||||||||||||||
Profit (loss) for the period | 70,321 | 13,029 | 8,382 | 18,975 | 271 | 10,387 | 23,196 | (56,090 | ) | 88,471 | ||||||||||||||||||||||||||
Profit (loss) from attributable to: | ||||||||||||||||||||||||||||||||||||
Owners of the Company | 69,535 | 11,274 | 6,051 | 14,231 | 271 | 2,374 | 23,211 | (54,316 | ) | 72,631 | ||||||||||||||||||||||||||
Non-controlling interest | 786 | 1,755 | 2,331 | 4,744 | - | 8,013 | (15 | ) | (1,774 | ) | 15,840 | |||||||||||||||||||||||||
70,321 | 13,029 | 8,382 | 18,975 | 271 | 10,387 | 23,196 | (56,090 | ) | 88,471 |
- 20 -
AENZA S.A.A. and Subsidiaries |
Notes to the Interim Condensed Consolidated Financial Statements |
December 31, 2022 and June 30, 2023 |
Operating segment performance Segment Reporting | ||||||||||||||||||||||||||||||||||||
Engineering | Infrastructure | Parent | ||||||||||||||||||||||||||||||||||
In thousands of soles | and construction | Energy | Toll roads | Transportation | Water treatment | Real estate | Company operations | Elimination | Consolidated | |||||||||||||||||||||||||||
For the three month period ended June 30, 2023 | ||||||||||||||||||||||||||||||||||||
Revenue | 639,939 | 146,116 | 125,212 | 102,570 | 1,216 | 76,598 | 23,591 | (78,321 | ) | 1,036,921 | ||||||||||||||||||||||||||
Gross profit (loss) | 26,508 | 13,495 | 23,298 | 30,576 | 721 | 31,767 | 4,551 | 3,370 | 134,286 | |||||||||||||||||||||||||||
Administrative expenses | (31,037 | ) | (3,533 | ) | (4,632 | ) | (2,851 | ) | (231 | ) | (5,116 | ) | (7,819 | ) | (1,841 | ) | (57,060 | ) | ||||||||||||||||||
Other income and expenses, net | (427 | ) | 471 | 36 | (124 | ) | (41 | ) | 808 | 234 | (389 | ) | 568 | |||||||||||||||||||||||
Operating (loss) profit | (4,956 | ) | 10,433 | 18,702 | 27,601 | 449 | 27,459 | (3,034 | ) | 1,140 | 77,794 | |||||||||||||||||||||||||
Financial expenses | (17,979 | ) | (4,661 | ) | (9,334 | ) | (1,828 | ) | (111 | ) | (2,705 | ) | (19,077 | ) | 11,070 | (44,625 | ) | |||||||||||||||||||
Financial income | (3,990 | ) | 3,125 | 1,885 | 2,822 | 170 | 2,383 | 13,395 | (11,658 | ) | 8,132 | |||||||||||||||||||||||||
Interests for present value of financial asset or liability | 280 | (575 | ) | (588 | ) | - | - | 1,897 | 5,343 | - | 6,357 | |||||||||||||||||||||||||
Share of profit or loss in associates and joint ventures | - | 718 | - | - | - | 73 | (4,138 | ) | 4,139 | 792 | ||||||||||||||||||||||||||
(Loss) profit before income tax | (26,645 | ) | 9,040 | 10,665 | 28,595 | 508 | 29,107 | (7,511 | ) | 4,691 | 48,450 | |||||||||||||||||||||||||
Income tax | (1,532 | ) | (2,521 | ) | (4,880 | ) | (8,969 | ) | (156 | ) | (16,715 | ) | (5,261 | ) | 2 | (40,032 | ) | |||||||||||||||||||
(Loss) profit for the period | (28,177 | ) | 6,519 | 5,785 | 19,626 | 352 | 12,392 | (12,772 | ) | 4,693 | 8,418 | |||||||||||||||||||||||||
(Loss) profit from attributable to: | ||||||||||||||||||||||||||||||||||||
Owners of the Company | (27,419 | ) | 5,154 | 3,591 | 14,719 | 352 | 6,585 | (12,805 | ) | 4,649 | (5,174 | ) | ||||||||||||||||||||||||
Non-controlling interest | (758 | ) | 1,365 | 2,194 | 4,907 | - | 5,807 | 33 | 44 | 13,592 | ||||||||||||||||||||||||||
(28,177 | ) | 6,519 | 5,785 | 19,626 | 352 | 12,392 | (12,772 | ) | 4,693 | 8,418 | ||||||||||||||||||||||||||
- 21 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
Operating segment performance
Segment Reporting
Engineering | Infrastructure | Parent | ||||||||||||||||||||||||||||||||||
In thousands of soles | and construction | Energy | Toll roads | Transportation | Water treatment | Real estate | Company operations | Elimination | Consolidated | |||||||||||||||||||||||||||
For the six month period ended June 30, 2022 | ||||||||||||||||||||||||||||||||||||
Revenue | 1,337,572 | 292,889 | 245,463 | 197,189 | 2,138 | 84,415 | 34,063 | (146,132 | ) | 2,047,597 | ||||||||||||||||||||||||||
Gross profit (loss) | 66,195 | 53,153 | 44,522 | 70,329 | 1,162 | 22,642 | 7,930 | (358 | ) | 265,575 | ||||||||||||||||||||||||||
Administrative expenses | (53,426 | ) | (6,867 | ) | (7,697 | ) | (5,141 | ) | (371 | ) | (6,481 | ) | (18,167 | ) | 2,541 | (95,609 | ) | |||||||||||||||||||
Other income and expenses, net | (6,307 | ) | 1,359 | (3,002 | ) | (305 | ) | - | 1,069 | 2,987 | 775 | (3,424 | ) | |||||||||||||||||||||||
Operating profit (loss) | 6,462 | 47,645 | 33,823 | 64,883 | 791 | 17,230 | (7,250 | ) | 2,958 | 166,542 | ||||||||||||||||||||||||||
Financial expenses | (30,766 | ) | (8,890 | ) | (12,003 | ) | (3,406 | ) | (50 | ) | (5,719 | ) | (28,950 | ) | 12,994 | (76,790 | ) | |||||||||||||||||||
Financial income | 1,770 | 246 | 1,173 | 1,130 | 59 | 530 | 19,905 | (16,201 | ) | 8,612 | ||||||||||||||||||||||||||
Interests for present value of financial asset or liability | (5,315 | ) | 939 | (1,515 | ) | - | - | 726 | (61,727 | ) | (1,373 | ) | (68,265 | ) | ||||||||||||||||||||||
Share of profit or loss in associates and joint ventures | 1,222 | 1,522 | - | - | - | 712 | 51,225 | (53,612 | ) | 1,069 | ||||||||||||||||||||||||||
(Loss) profit before income tax | (26,627 | ) | 41,462 | 21,478 | 62,607 | 800 | 13,479 | (26,797 | ) | (55,234 | ) | 31,168 | ||||||||||||||||||||||||
Income tax | 4,754 | (12,758 | ) | (5,369 | ) | (19,432 | ) | (295 | ) | (4,123 | ) | 16,086 | (31 | ) | (21,168 | ) | ||||||||||||||||||||
(Loss) profit for the period | (21,873 | ) | 28,704 | 16,109 | 43,175 | 505 | 9,356 | (10,711 | ) | (55,265 | ) | 10,000 | ||||||||||||||||||||||||
(Loss) profit from attributable to: | ||||||||||||||||||||||||||||||||||||
Owners of the Company | (20,386 | ) | 25,297 | 10,346 | 32,381 | 505 | 1,554 | (10,731 | ) | (54,179 | ) | (15,213 | ) | |||||||||||||||||||||||
Non-controlling interest | (1,487 | ) | 3,407 | 5,763 | 10,794 | - | 7,802 | 20 | (1,086 | ) | 25,213 | |||||||||||||||||||||||||
(21,873 | ) | 28,704 | 16,109 | 43,175 | 505 | 9,356 | (10,711 | ) | (55,265 | ) | 10,000 |
- 22 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
Operating segment performance
Segment Reporting
Engineering | Infrastructure | Parent | ||||||||||||||||||||||||||||||||||
In thousands of soles | and construction | Energy | Toll roads | Transportation | Water treatment | Real estate | Company operations | Elimination | Consolidated | |||||||||||||||||||||||||||
For the six month period ended June 30, 2023 | ||||||||||||||||||||||||||||||||||||
Revenue | 1,138,684 | 310,992 | 258,600 | 204,678 | 2,479 | 94,373 | 48,780 | (171,527 | ) | 1,887,059 | ||||||||||||||||||||||||||
Gross profit (loss) | 19,417 | 43,201 | 39,613 | 61,993 | 1,483 | 35,417 | 10,498 | 3,586 | 215,208 | |||||||||||||||||||||||||||
Administrative expenses | (54,262 | ) | (7,945 | ) | (9,788 | ) | (5,648 | ) | (471 | ) | (9,027 | ) | (14,455 | ) | (1,327 | ) | (102,923 | ) | ||||||||||||||||||
Other income and expenses, net | (4,956 | ) | 639 | 409 | 51 | (41 | ) | 1,588 | 4,032 | (721 | ) | 1,001 | ||||||||||||||||||||||||
Operating (loss) profit | (39,801 | ) | 35,895 | 30,234 | 56,396 | 971 | 27,978 | 75 | 1,538 | 113,286 | ||||||||||||||||||||||||||
Financial expenses | (29,546 | ) | (10,608 | ) | (15,559 | ) | (3,628 | ) | (219 | ) | (5,940 | ) | (43,793 | ) | 22,856 | (86,437 | ) | |||||||||||||||||||
Financial income | 974 | 5,247 | 3,293 | 4,293 | 330 | 4,296 | 29,837 | (22,106 | ) | 26,164 | ||||||||||||||||||||||||||
Interests for present value of financial asset or liability | 1,632 | (437 | ) | (1,602 | ) | - | - | 3,153 | 17,417 | - | 20,163 | |||||||||||||||||||||||||
Share of profit or loss in associates and joint ventures | (1 | ) | 1,585 | - | - | - | 73 | (7,016 | ) | 7,015 | 1,656 | |||||||||||||||||||||||||
(Loss) profit before income tax | (66,742 | ) | 31,682 | 16,366 | 57,061 | 1,082 | 29,560 | (3,480 | ) | 9,303 | 74,832 | |||||||||||||||||||||||||
Income tax | (11,739 | ) | (9,724 | ) | (6,235 | ) | (17,651 | ) | (323 | ) | (16,856 | ) | (9,895 | ) | 10 | (72,413 | ) | |||||||||||||||||||
(Loss) profit for the period | (78,481 | ) | 21,958 | 10,131 | 39,410 | 759 | 12,704 | (13,375 | ) | 9,313 | 2,419 | |||||||||||||||||||||||||
(Loss) profit from attributable to: | ||||||||||||||||||||||||||||||||||||
Owners of the Company | (77,881 | ) | 18,621 | 5,178 | 29,557 | 759 | 5,501 | (13,420 | ) | 9,123 | (22,562 | ) | ||||||||||||||||||||||||
Non-controlling interest | (600 | ) | 3,337 | 4,953 | 9,853 | - | 7,203 | 45 | 190 | 24,981 | ||||||||||||||||||||||||||
(78,481 | ) | 21,958 | 10,131 | 39,410 | 759 | 12,704 | (13,375 | ) | 9,313 | 2,419 |
- 23 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
8. | Financial Instruments |
Financial assets related to concession contracts are presented in the consolidated statement of financial position as “short-term trade accounts receivable” and “long-term trade accounts receivable”.
The classification of financial assets and liabilities by category is as follows:
As of | As of | |||||||
December 31, | June 30, | |||||||
In thousands of soles | 2022 | 2023 | ||||||
Financial assets according to the consolidated statement of financial position | ||||||||
Loans and accounts receivable at amortized cost: | ||||||||
- Cash and cash equivalents | 917,554 | 891,225 | ||||||
- Trade accounts receivable and other accounts receivable (excluding non-financial assets) (i) | 1,452,606 | 1,391,184 | ||||||
- Financial assets related to concession agreements (ii) | 861,190 | 888,595 | ||||||
- Accounts receivable from related parties | 570,137 | 601,999 | ||||||
3,801,487 | 3,773,003 | |||||||
As of | As of | |||||||
December 31, | June 30, | |||||||
In thousands of soles | 2022 | 2023 | ||||||
Financial liabilities according to the consolidated statement of financial position | ||||||||
Other financial liabilities at amortized cost: | ||||||||
- Other financial liabilities | 819,973 | 861,494 | ||||||
- Finance leases | 835 | - | ||||||
- Lease liability for right-of-use asset | 59,085 | 48,287 | ||||||
- Bonds | 869,913 | 847,097 | ||||||
- Trade and other accounts payable (excluding non-financial liabilities) (iii) | 1,207,739 | 1,186,695 | ||||||
- Accounts payable to related parties | 80,781 | 78,778 | ||||||
3,038,326 | 3,022,351 | |||||||
Other financial liabilities: | ||||||||
- Other provisions (iv) | 541,345 | 537,721 |
(i) | The following non-financial assets are excluded: advances to suppliers for S/84.2 million and tax receivable for S/134 million (S/53.7 million and S/141.9 million, respectively, as of December 31, 2022). |
(ii) | It’s included in the trade accounts receivable item. |
(iii) | The following non-financial liabilities are excluded: advances received from customers for S/471.2 million, taxes payable for S/208.5 million, salaries and other personnel payable for S/130.3 million and others for S/1.9 million (S/365.7 million, S/165.8 million, S/99.2 million and S/6.2 million, respectively, as of December 31, 2022). |
(iv) | Includes civil compensation to Peruvian Government S/481.3 million and administrative process INDECOPI for S/56.4 million (S/488.9 million and S/52.5 million, respectively, as of December 31, 2022). |
- 24 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
9. | Cash and Cash Equivalents |
This account comprises:
As of | As of | |||||||
December 31, | June 30, | |||||||
In thousands of soles | 2022 | 2023 | ||||||
Cash on hand | 727 | 1,874 | ||||||
Remittances in-transit | 2,955 | 1,625 | ||||||
Bank accounts | ||||||||
Current accounts | 363,134 | 275,889 | ||||||
Banco de la Nacion | 19,280 | 8,968 | ||||||
Time deposits (a) | 114,994 | 252,052 | ||||||
497,408 | 536,909 | |||||||
Trust account - specific use founds | ||||||||
Operational funds | 229,165 | 196,004 | ||||||
Consortium funds | 114,050 | 81,092 | ||||||
Reserve funds (b) | 71,966 | 72,471 | ||||||
Guarantee funds | 1,283 | 1,250 | ||||||
416,464 | 350,817 | |||||||
Total Cash and Cash equivalents | 917,554 | 891,225 |
Current accounts are denominated in local and foreign currency, deposited in local and foreign banks with a high credit rating and are freely available. These accounts earn interest at market rates.
The Corporation maintains unrestricted trust accounts in local and foreign banks for the management of funds for specific uses that are classified as: i) operating funds and consortium funds for the exclusive management of project cash flows; and ii) reserve and guarantee funds for the payment of bonds issued and other obligations of the Corporation.
(a) | Time deposits have maturities lower than ninety (90) days and may be renewed upon maturity. As of June 30, 2023, these deposits bear interest that fluctuates between 0.9% and 7.69% (between 0.26% and 7.4%, as of December 31, 2022). |
(b) | The trust accounts with reserve funds for the payment of bonds issued and other obligations of the Corporation are as follows. |
As of | As of | |||||||
December 31, | June 30, | |||||||
In thousands of soles | 2022 | 2023 | ||||||
Tren Urbano de Lima S.A. | 49,397 | 49,513 | ||||||
Red Vial 5 S.A. | 22,569 | 22,958 | ||||||
71,966 | 72,471 |
Cash and cash equivalents do not represent a significant credit or interest rate risk; therefore, their carrying amounts approximate their fair value.
- 25 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
10. | Trade Accounts Receivable, net |
This caption comprises the following:
Total | Current | Non-current | ||||||||||||||||||||||
As of | As of | As of | As of | As of | As of | |||||||||||||||||||
December 31, | June 30, | December 31, | June 30, | December 31, | June 30, | |||||||||||||||||||
In thousands of soles | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | ||||||||||||||||||
Receivables (a) | 894,571 | 887,656 | 366,007 | 339,401 | 528,564 | 548,255 | ||||||||||||||||||
Unbilled receivables - Subsidiaries (b) | 584,217 | 583,783 | 584,217 | 583,783 | - | - | ||||||||||||||||||
Unbilled receivables - Concessions (c) | 323,663 | 328,734 | 128,358 | 127,089 | 195,305 | 201,645 | ||||||||||||||||||
1,802,451 | 1,800,173 | 1,078,582 | 1,050,273 | 723,869 | 749,900 |
As of December 31, 2022 and June 30, 2023, trade accounts receivable are denominated in local and foreign currency, have current maturities, do not accrue interest and do not have specific guarantees. The fair value of current accounts receivable is similar to their carrying value because their average collection period is less than sixty (60) days.
The balance of accounts receivable corresponds to:
As of | As of | |||||||
December 31, | June 30, | |||||||
In thousands of soles | 2022 | 2023 | ||||||
Tren Urbano de Lima S.A. | 818,354 | 849,933 | ||||||
Cumbra Peru S.A. | 647,113 | 760,444 | ||||||
Viva Negocio Inmobiliario S.A. (i) | 150,285 | 25,820 | ||||||
Unna Energia S.A. | 80,245 | 72,268 | ||||||
Cumbra Ingenieria S.A. | 53,205 | 41,761 | ||||||
Red Vial 5 S.A. | 24,072 | 17,492 | ||||||
Carretera Andina del Sur S.A.C. | 13,035 | 12,850 | ||||||
Unna Transporte S.A.C. | 9,852 | 10,229 | ||||||
Carretera Sierra Piura S.A.C. | 3,439 | 5,580 | ||||||
Concesionaria La Chira S.A. | 2,290 | 2,740 | ||||||
Others | 561 | 1,056 | ||||||
1,802,451 | 1,800,173 |
i) | As of December 31, 2022 invoices receivable mainly corresponds to the sale of a land to SEDAPAL by Inmobiliaria Almote 2 S.A.C. (located in the district of Lurin, province of Lima, with an area of 209.59 hectares for S/140 million which would be payable in 7 installments, being the last one in August 2023. As of June 30, 2023, collections has been made according to the schedule stipulated in the contract. |
(a) | As of June 30, 2023, invoices receivable are recognized net of impairment for S/45.1 million, and at current value for S/0.2 million (S/44.7 million for impairment and S/0.7 million at current value, as of December 31, 2022). |
The aging analysis of trade receivables is as follows:
As of | As of | |||||||
December 31, | June 30, | |||||||
In thousands of soles | 2022 | 2023 | ||||||
Current | 853,531 | 868,481 | ||||||
Past due up to 30 days | 29,078 | 3,212 | ||||||
Past due from 31 days up to 90 days | 2,049 | 2,953 | ||||||
Past due from 91 days up to 120 days | 1,437 | 5,074 | ||||||
Past due from 121 days up to 360 days | 4,100 | 2,931 | ||||||
Past due over 360 days | 4,376 | 5,005 | ||||||
894,571 | 887,656 |
- 26 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
As of June 30, 2023, the amount of due debts over three hundred and sixty (360) days mainly includes invoices receivable from subsidiaries: Unna Transporte S.A.C. for S/3.1 million, Cumbra Peru S.A. for S/1.6 million, and Cumbra Ingenieria S.A. for S/0.3 million (Cumbra Peru S.A. for S/3.4 million and Cumbra Ingenieria S.A. for S/0.9 million as of December 31, 2022). As of December 31, 2022 and June 30, 2023, Management performed the assessment of credit risk exposure on trade accounts receivable.
(b) | Contract Assets by the subsidiaries correspond to documents related to estimates for services provided that were not invoiced, valuations under preparation or approval pending. These rights are recognized net of impairment for S/3.8 million and discounted at current value for S/1.6 million (S/3.8 million for impairment, and S/2.8 million at current value, as of December 31, 2022). The following is a breakdown by subsidiary: |
As of | As of | |||||||
December 31, | June 30, | |||||||
In thousands of soles | 2022 | 2023 | ||||||
Cumbra Peru S.A. | 533,389 | 538,692 | ||||||
Cumbra Ingenieria S.A. | 38,922 | 34,505 | ||||||
Unna Transporte S.A.C. | 6,192 | 7,117 | ||||||
Unna Energia S.A. | 5,617 | 3,252 | ||||||
Others | 97 | 217 | ||||||
584,217 | 583,783 |
(c) | Contract Assets for Concessions correspond to future collections to the Grantor according to the terms of the concession agreement, as detailed below: |
As of | As of | |||||||
December 31, | June 30, | |||||||
In thousands of soles | 2022 | 2023 | ||||||
Tren Urbano de Lima S.A. | 281,487 | 290,685 | ||||||
Red Vial 5 S.A. | 24,072 | 17,492 | ||||||
Carretera Andina del Sur S.A.C. | 12,796 | 12,723 | ||||||
Carretera Sierra Piura S.A.C. | 3,018 | 5,580 | ||||||
Concesionaria La Chira S.A. | 2,290 | 2,254 | ||||||
323,663 | 328,734 |
Management, after evaluating the balances receivable at the date of the interim condensed consolidated financial statements, considers that, except for the accounts receivable provisioned, there are no accounts at risk of uncollectibility.
In the opinion of Corporate Management, the expected credit loss and allowance for trade receivables adequately cover the risk of uncollectibility as of December 31, 2022 and June 30, 2023.
11. | Transactions with Related Parties |
A. | Transactions with related parties |
Major transactions for the period ended June 30, 2022 and 2023 between the Company and its related parties are summarized as follows:
For the three | For the Six | |||||||||||||||
month period ended June 30 | month period ended June 30 | |||||||||||||||
In thousands of soles | 2022 | 2023 | 2022 | 2023 | ||||||||||||
Revenue from sales of goods and services: | ||||||||||||||||
- Joint operations | 12,492 | 21,987 | 22,613 | 28,362 | ||||||||||||
12,492 | 21,987 | 22,613 | 28,362 |
Transactions among related parties are made based on current price lists and according to the terms and conditions similar to those agreed with third parties.
- 27 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
B. | Balances with Related parties |
Balances breakdown were the following:
As of December 31, 2022 | As of June 30, 2023 | |||||||||||||||
In thousands of soles | Receivable | Payable | Receivable | Payable | ||||||||||||
Current portion: | ||||||||||||||||
Joint operations | ||||||||||||||||
Consorcio Inti Punku | 4,030 | 3,104 | 23,412 | 98 | ||||||||||||
Consorcio Rio Mantaro | - | 12,247 | - | 6,960 | ||||||||||||
Consorcio Constructor Chavimochic | - | 9,421 | - | 9,358 | ||||||||||||
Consorcio Rio Urubamba | 9,606 | - | 9,369 | - | ||||||||||||
Consorcio Manperan | 603 | 4,064 | 2,325 | 761 | ||||||||||||
Consorcio TNT Vial y Vives - DSD Chile Ltda | 8,664 | 3,153 | - | 3,120 | ||||||||||||
Consorcio Peruano de Conservacion | 752 | 2,629 | 798 | 2,770 | ||||||||||||
Consorcio Vial Quinua | - | 1,945 | - | 1,944 | ||||||||||||
Consorcio GyM Conciviles | - | 1,426 | - | 3,584 | ||||||||||||
Terminales del Peru | 88 | 600 | 124 | 600 | ||||||||||||
Consorcio GyM-Stracon | - | 160 | - | 72 | ||||||||||||
Consorcio Norte Pachacutec | 57 | 246 | 121 | 91 | ||||||||||||
Consorcio Italo Peruano | 1,524 | - | 1,569 | - | ||||||||||||
Consorcio Ermitaño | 547 | - | 532 | - | ||||||||||||
Others | 1,874 | 1,139 | 8,642 | 548 | ||||||||||||
27,745 | 40,134 | 46,892 | 29,906 | |||||||||||||
Other related parties | ||||||||||||||||
Ferrovias S.A. | - | 13,354 | - | 20,955 | ||||||||||||
- | 13,354 | - | 20,955 | |||||||||||||
Current portion | 27,745 | 53,488 | 46,892 | 50,861 | ||||||||||||
Non-current portion | ||||||||||||||||
Gasoducto Sur Peruano S.A. (Note 14.i) | 542,392 | - | 554,855 | - | ||||||||||||
Ferrovias S.A. | - | 15,054 | - | 12,512 | ||||||||||||
Ferrovias Participaciones S.A. | - | 12,239 | - | 15,405 | ||||||||||||
Others | - | - | 252 | - | ||||||||||||
Non-current | 542,392 | 27,293 | 555,107 | 27,917 |
As of December 31, 2022 and June 30, 2023 accounts receivable and payable are mainly of current maturity which have no specific guarantees. These balances do not generate interest considering their maturity in short term.
The Corporation conducts its operations with related companies under the same conditions as those with third parties; consequently, there are no differences in pricing policies or in the basis for tax settlement; with respect to payment terms, these do not differ from policies granted to third parties.
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AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
12. | Other Accounts Receivable |
This caption comprises the following:
Total | Current | Non-current | ||||||||||||||||||||||
As of | As of | As of | As of | As of | As of | |||||||||||||||||||
December 31, | June 30, | December 31, | June 30, | December 31, | June 30, | |||||||||||||||||||
In thousands of soles | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | ||||||||||||||||||
Guarantee deposits | 194,885 | 191,394 | 110,507 | 111,163 | 84,378 | 80,231 | ||||||||||||||||||
Credits from public institutions and recoverable taxes | 141,891 | 134,035 | 102,689 | 94,627 | 39,202 | 39,408 | ||||||||||||||||||
Petroleos del Peru S.A.- Petroperu S.A. | 105,073 | 101,914 | 15,291 | 17,122 | 89,782 | 84,792 | ||||||||||||||||||
Claims to third parties | 66,886 | 69,443 | 23,065 | 25,418 | 43,821 | 44,025 | ||||||||||||||||||
Advances to suppliers | 53,657 | 84,187 | 53,657 | 84,187 | - | - | ||||||||||||||||||
Restricted funds | 52,014 | 57,781 | 44,668 | 50,435 | 7,346 | 7,346 | ||||||||||||||||||
Inversiones Majes S.A. | 21,081 | 20,245 | - | - | 21,081 | 20,245 | ||||||||||||||||||
Accounts receivable from personnel | 2,359 | 2,183 | 2,359 | 2,183 | - | - | ||||||||||||||||||
Cumbra Peru S.A. - Refinery Talara (a) | 36,266 | - | 36,266 | - | - | - | ||||||||||||||||||
Ministerio de Desarrollo Agrario y Riego - MIDAGRI (b) | - | 34,354 | - | - | - | 34,354 | ||||||||||||||||||
Others | 4,813 | 2,292 | 4,693 | 2,174 | 120 | 118 | ||||||||||||||||||
678,925 | 697,828 | 393,195 | 387,309 | 285,730 | 310,519 |
a) | Cumbra Peru S.A. - Talara Refinery |
As of December 2022, Cumbra Peru S.A. had a lawsuit pending against Tecnicas Reunidas de Talara S.A.C. (TRT) for approximately US$ 78 million as compensation for damages suffered as a result of various contractual breaches. In turn, TRT filed a counterclaim for approximately US$ 81 million alleging that Cumbra Peru S.A. had breached the subcontract entered into between the two companies. On the other hand, on December 28, 2020, TRT executed two letters of guarantee issued by Banco Santander, the first for US$ 16 million for Fidelity Performance and the second letter of guarantee for US$ 7.7 million for advance payment of work, despite the fact that the obligations guaranteed by the letter of guarantee were being litigated in the process described in this paragraph.
In December 2022, the Company signed an agreement with TRT, in order to solve claims of both parties. As a result of this agreement, the Company impaired account receivables rights for US$ 29.6 million equivalent to S/113 million. In addition, the Company would receive payments for outstanding invoices in the amount of US$ 10.3 million (equivalent to S/36.3 million). As of January 31, 2023, the Company received full payment of the outstanding invoices.
b) | Concesionaria Chavimochic – Ministerio de Desarrollo Agrario y Riego |
The balance corresponds to the claim to the Ministry of Agrarian Development and Irrigation (“MIDAGRI”) for US$9.5 million equivalent to S/34.3 million for the execution of the total amount of the Performance Bond, derived from the arbitration process followed against the Regional Government of La Libertad and MIDAGRI for the early termination of the Concession Contract due to breach of contract by the Grantor (Note 14.i).
The fair value of the other short-term accounts receivable is similar to their book value due to their short-term maturity. The non-current portion corresponds mainly to non-financial assets such as claims to third parties and tax credits. Other non-current accounts receivable maintain maturities that vary between 2 and 5 years.
The maximum exposure to credit risk as of the reporting date is the carrying amount of each class of other accounts receivable mentioned.
- 29 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
13. | Inventories, Net |
This caption comprises the following:
As of | As of | |||||||
December 31, | June 30, | |||||||
In thousands of soles | 2022 | 2023 | ||||||
Land | 114,111 | 116,820 | ||||||
Work in progress - Real estate | 131,090 | 157,058 | ||||||
Finished properties | 47,643 | 37,043 | ||||||
Construction materials | 42,475 | 52,151 | ||||||
Merchandise and supplies | 83,512 | 101,373 | ||||||
418,831 | 464,445 | |||||||
Allowance for inventory write-downs | (6,495 | ) | (5,725 | ) | ||||
412,336 | 458,720 | |||||||
Current | 346,783 | 388,581 | ||||||
Non-current | 65,553 | 70,139 |
As of June 30, 2023, the non-current portion of inventories includes S/70.14 million corresponding to land for real estate projects to be executed in the long term (S/56.56million located in the district of San Isidro in Lima and S/13.58 million located in the district of Barranco in Lima) As of December 31, 2022, the non-current portion of inventories includes S/ 65.6 million corresponding to land for real estate projects to be executed in the long term (S/ 52 million located in the district of San Isidro in Lima and S/ 13.5 million located in the district of Barranco in Lima).
Management has analyzed the inventories and has determined that there are no major indications of impairment.
14. | Investments in Associates and Joint Ventures |
This caption comprises the following:
As of | As of | |||||||
December 31, | June 30, | |||||||
In thousands of soles | 2022 | 2023 | ||||||
Associates | 2,753 | 2,103 | ||||||
Joint ventures | 12,163 | 10,817 | ||||||
14,916 | 12,920 |
Movement of our investments in associates for the periods ended June 30, 2022, and 2023 is as follows:
As of | As of | |||||||
June 30, | June 30, | |||||||
In thousands of soles | 2022 | 2023 | ||||||
Balance as of January 1 | 31,173 | 14,916 | ||||||
Equity interest in results | 1,069 | 1,656 | ||||||
Dividends received | (2,937 | ) | (3,652 | ) | ||||
Conversion adjustment | (63 | ) | - | |||||
Balance as of June 30 | 29,242 | 12,920 |
- 30 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
The most relevant associates are described below:
i. | Gasoducto Sur Peruano S.A |
In November 2015, the Corporation acquired a 20% interest in Gasoducto Sur Peruano S.A. and obtained a 29% interest in Consorcio Constructor Ductos del Sur (hereinafter “CCDS”) through its subsidiary Cumbra Peru S.A.
On July 22, 2014, GSP signed a concession agreement with the Peruvian Government to build, operate, and maintain a pipeline transportation system of natural gas to meet the demand of cities in the south of Peru (hereinafter the “Concession Agreement”). Additionally, GSP signed an engineering, procurement and construction agreement with CCDS.
The Corporation made an investment of US$ 242.5 million (equivalent to S/811 million) and had to assume 20% of the performance bond established in the concession agreement for US$ 262.5 million and 21.49% of the guarantee for a bridge loan of US$ 600 million.
Early termination of the Concession Agreement
On January 24, 2017 the Peruvian Ministry of Energy and Mines (hereinafter “MEM”) notified the early termination of the Concession Agreement under Clause 6.7 for the failure of the concessionaire to accredit the financial closure within the contractual term, proceeding with the immediate execution of the entirety of the faithful performance guarantee.
The situation described in the previous paragraph caused Management to recognize the impairment between 2016 and 2019 of its total investment (US$242.5 million), and required the register of the account receivable resulting from the execution of the counter-guarantees granted by AENZA in favor of the entity issuing the guarantees: for US$ 52.5 million corresponding to the performance bond and US$ 129 million corresponding to the corporate guarantee on the bridge loan granted to GSP. According to the Concession Agreement, the guarantees were paid on behalf of GSP, therefore, AENZA recognized the right to collect from GSP for US$181.5 million, which were recorded in 2016 as accounts receivable from related parties. Likewise, Cumbra Peru recognized the value of accounts receivable from CCDS for US$73.5 million and lost profits for US$10 million, which correspond to receivables from GSP. (Note 11) for the balance of the account receivable from GSP.
On October 11, 2017, the agreement deed for the delivery of the assets of the south Peruvian gas pipeline concession between GSP and MEM was signed. The assets include the works, equipment, facilities and engineering studies provided for the execution of the project.
Upon termination of the Concession Agreement, and in accordance with the provisions of clause 20 thereof, the Peruvian Government had the obligation to hire an internationally recognized auditing firm to calculate the Net Book Value (hereinafter “NBV”) of the concession assets, and to call up to three auctions on GSP’s assets. However, to date, the Peruvian State continues to fail to comply with these contractual obligations. The amount of the VCN was calculated at US$2,602 million by an independent auditing firm hired by GSP as of December 31, 2016, this figure was subsequently adjusted to US$2,110 million as a result of variations in the balances related to the works carried out by the consortium, which in turn is reported in its audited financial statements as of December 31, 2017.
Collection Actions of AENZA S.A.A.
On December 21, 2018, the Company asked the Peruvian Government for direct treatment and requested the payment of NBV in favor of GSP. On October 18, 2019, the Company filed with CIADI an arbitration request. On December 27, 2019 the Company withdrew the arbitration in compliance with a preliminary plea agreement signed with the Attorney General´s Office and Ad-hoc Peruvian Public Prosecutor’s Office on the same date (Note 1). Withdrawing the arbitration before CIADI does not involve the loss of collection rights of the Company against GSP and does not restrict, limit, or impede GSP from asserting its rights against the Peruvian Government.
The Company and its internal and external legal advisors consider that the payment owed by the Government to GSP for the NBV are not within the withholding scope under Law 30737 that ensures the immediate payment of civil compensation in favor of the Peruvian Government in cases of corruption and related crimes, since this payment does not include any profit margin and/or not correspond to the sale of assets related to the project, but to a reimbursement for the investment made by the Concessionaire.
Bankruptcy of GSP
On December 4, 2017, GSP started a bankruptcy proceeding before the INDECOPI. The Company maintains receivable recognized by INDECOPI of US$0.4 million and US$169.3 million, the latter held under trust in favor of the creditors of the Company. In addition, it has indirectly recognized claims of US$11.8 million. On the other hand, the debt of Cumbra Peru S.A. is recognized in INDECOPI indirectly through the Constructor Ductos del Sur of US$88.7 million. As of the date of this report, GSP is under liquidation and AENZA S.A.A. chairs the Board of Creditors.
- 31 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
On April 11, 2023, the Liquidation Agreement was approved, which defines the framework for the liquidator’s actions. The Liquidation Agreement includes the granting of powers to the liquidator with respect to representation, administrative, contractual and other relevant powers that allow him to comply with the obligations for which he was appointed, as well as the actions he is allowed to take in order to recover GSP’s assets and in accordance with the mechanisms set forth in the General Law of the Insolvency System.
On April 13, 2023, and under the powers granted to him by the Liquidation Agreement, the Liquidator requested the MEM to initiate the Direct Treatment procedure stipulated in the Concession Agreement.
Amounts recognized in the interim condensed consolidated financial statements (note 11).
As of June 30, 2023, the net value of the account receivable from GSP is approximately US$153.1 million, equivalent to S/554.8 million (US$142.4 million equivalent to S/542.4 million at December 31, 2022), which comprises the recognition in the following entities of the Corporation: i) AENZA S.A.A. holds US$68.2 million (equivalent to S/247.2 million) discounted to present value net of impairment and the effect of the exchange difference (US$63.9 million equivalent to S/243.2 million at December 31, 2022) and; ii) Cumbra Peru S.A. holds US$84.9 million (equivalent to S/307.6 million) discounted to present value, net of the effect of the exchange difference (US$78.5 million equivalent to S/299.2 million at December 31, 2022).
The Company’s management maintains the recovery estimate in 8 years, applying a discount rate of 4.98% (recovery term of 8 years with a discount rate of 5.42% as of June 30, 2022). These estimates generated during 2023 a gain from present value effect of approximately S/17.4 million (S/37.3 million, loss from present value as of June 30, 2022) which has been recognized in the consolidated statement of profit or loss under the caption “Gain (loss) from present value of financial assets or liabilities ” (Note 26.B).
Based on management’s assessment and in conjunction with the opinion of the internal legal department and external legal counsel, the estimate of recoverability, impairment allowances and the net recognized value of the account receivable from GSP as of December 31, 2022 and as of June 30, 2023 is reasonable and sufficient as of the reporting date of the Corporation’s consolidated financial statements.
ii. | Concesionaria Chavimochic S.A.C. |
In May 2014, Concesionaria Chavimochic S.A.C. (hereinafter the “Concessionaire”), in which AENZA has 26.5% of interest, signed an agreement with the Peruvian Government (hereinafter the “Concession Agreement”) for the design, construction, operation, and maintenance of major hydraulic works of Chavimochic Project (hereinafter the “Project”). The construction of the work started in 2015 with a concession term of twenty-five (25) years and a total investment of about US$ 647 million.
According to the Concession Agreement, the works of the third stage of the Project were structured in two phases. To date, the works of the first phase (Palo Redondo Dam) are 70% in progress. However, at the beginning of 2017, the procedure for early termination of the Concession Agreement was initiated due to the breach of contract by the Grantor, and all activities were suspended in December 2017. Due to the fact that no agreement was made, the Concessionaire initiated an arbitration process before the Comision de las Naciones Unidas para el Derecho Mercantil Internacional (CNUDMI).
On October 4, 2022, the Arbitration Court notified the parties with the award, which provided for the early termination of the Concession Agreement and ordered, among other things, that the Grantor pay the Concessionaire the amount of US$ 25.3 million as a consequence of its failure to provide the Project Control Delivery, and the execution of 70% of the Performance Bond or the payment of US$25 million for the Concessionaire’s failure to obtain evidence of financial closing.
Despite the requests for exclusion and integration of the award filed by the Concessionaire, the Court did not issue a decision within the deadline, and the award was consented to. As of December 31, 2022, an impairment of its total investment amounting to S/ 14.5 million was recorded.
In February 2023, the Grantor partially executed the Concessionaire’s performance bond, where AENZA was required to assume a total of US$7.5 million. Likewise, in May 2023, the Grantor requested the execution of the balance of the Concessionaire’s performance bond, where AENZA is responsible for US$2 million. The Concessionaire is currently coordinating the necessary legal actions for the full execution of the award so that the Grantor complies with the obligations arising therefrom. Likewise, the Concessionaire will initiate legal actions against the Grantor for what it considers an arbitrary execution of the balance of the performance bond without the arbitration court having granted the possibility of executing the bond for a higher amount and without a breach of contract having been attributed to the Concessionaire that would justify such execution (Note 12.b).
- 32 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
15. | Investments Property, Property, Plant and Equipment, Intangible Assets and Right-of-Use Assets |
The movement in investment property, property, plant and equipment, intangible assets and right-of-use assets accounts for the period ended June 30, 2022 and 2023, are as follows:
Property, | ||||||||||||||||
Investment | plant and | Right-of-use | Intangibles | |||||||||||||
property | equipment | assets | assets | |||||||||||||
In thousands of soles | (a) | (a) | (a) | (b) | ||||||||||||
Cost | ||||||||||||||||
Balance at January 1, 2022 | 87,222 | 1,261,098 | 98,391 | 1,472,506 | ||||||||||||
Additions | 11 | 23,335 | 8,618 | 44,289 | ||||||||||||
Sale of assets | - | (16,505 | ) | - | - | |||||||||||
Disposals | - | (4,983 | ) | 296 | (634 | ) | ||||||||||
Transfers | - | (845 | ) | - | 385 | |||||||||||
Translations adjustments | - | (18,305 | ) | (303 | ) | (15,059 | ) | |||||||||
Balance at June 30, 2022 | 87,233 | 1,243,795 | 107,002 | 1,501,487 | ||||||||||||
Balance at January 1, 2023 | 99,557 | 1,234,208 | 119,495 | 1,586,462 | ||||||||||||
Additions | 2 | 22,311 | 2,669 | 85,374 | ||||||||||||
Sale of assets | - | (13,052 | ) | - | - | |||||||||||
Disposals | - | (5,620 | ) | (875 | ) | (5,572 | ) | |||||||||
Reclassifications | - | (1,725 | ) | - | - | |||||||||||
Transfers | - | - | - | (24,863 | ) | |||||||||||
Translations adjustments | 1 | 4,740 | 150 | 6,429 | ||||||||||||
Balance at June 30, 2023 | 99,560 | 1,240,862 | 121,439 | 1,647,830 | ||||||||||||
Accumulated depreciation and impairment | ||||||||||||||||
Balance at January 1, 2022 | (24,211 | ) | (957,928 | ) | (50,674 | ) | (729,115 | ) | ||||||||
Depreciation / amortization | (2,040 | ) | (26,421 | ) | (8,722 | ) | (47,737 | ) | ||||||||
Sale of assets | - | 12,852 | - | - | ||||||||||||
Disposals | - | 4,674 | - | 628 | ||||||||||||
Transfers | - | 649 | - | (271 | ) | |||||||||||
Impairment | - | - | - | (661 | ) | |||||||||||
Translations adjustments | - | 11,725 | 294 | 4,063 | ||||||||||||
Balance at June 30, 2022 | (26,251 | ) | (954,449 | ) | (59,102 | ) | (773,093 | ) | ||||||||
Balance at January 1, 2023 | (37,633 | ) | (949,743 | ) | (69,288 | ) | (799,126 | ) | ||||||||
Depreciation / amortization | (1,929 | ) | (24,851 | ) | (8,598 | ) | (75,061 | ) | ||||||||
Sale of assets | - | 11,128 | - | - | ||||||||||||
Disposals | - | 4,615 | 875 | 5,450 | ||||||||||||
Reclassifications | - | 1,725 | - | - | ||||||||||||
Transfers | - | - | - | 24,859 | ||||||||||||
Impairment | - | (313 | ) | - | - | |||||||||||
Translations adjustments | (1 | ) | (2,835 | ) | (68 | ) | (895 | ) | ||||||||
Balance at June 30, 2023 | (39,563 | ) | (960,274 | ) | (77,079 | ) | (844,773 | ) | ||||||||
Carrying amounts | ||||||||||||||||
At January 1, 2022 | 63,011 | 303,170 | 47,717 | 743,391 | ||||||||||||
At June 30, 2022 | 60,982 | 289,346 | 47,900 | 728,394 | ||||||||||||
At January 1, 2023 | 61,924 | 284,465 | 50,207 | 787,336 | ||||||||||||
At June 30, 2023 | 59,997 | 280,588 | 44,360 | 803,057 |
(a) | Investment property, property, plant and equipment and right-of-use assets |
As of June 30, 2023, additions to property, plant and equipment correspond mainly to the energy segment, for machinery, replacement units, work in progress, facilities other equipment furniture and fixtures for a total of S/19.6 million. Also, additions in the engineering and construction segment, for other equipment, machinery, furniture and fixtures, and buildings for S/1.9 million; and additions in the real estate and infrastructure segments for S/0.8 million (as of June 30, 2022, additions mainly correspond to energy segment, due to work in progress, machinery, replacement units and buildings in S/6.9 million, S/5.7 million, S/2 million and S/1.4 million, respectively. Likewise, additions in the engineering and construction segment of machinery and other equipment in S/2.7 million and S/1.2 million, respectively).
- 33 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
As of June 30, 2023, the addition of right-of-use assets corresponds to the price adjustment to the Company’s real estate lease agreement for S/2.4 million; (as of December 31, 2022, it mainly corresponds to lease agreements for the acquisition of miscellaneous equipment and vehicles in the energy segment for S/8.3 million).
For the period ended June 30, 2022 and 2023, depreciation of property, plant and equipment, investment property and right-of-use assets is presented in the interim condensed consolidated statement of income as follows:
In thousands of soles | 2022 | 2023 | ||||||
Cost of sale of goods and services (Note 24) | 29,589 | 27,488 | ||||||
Administrative expenses (Note 24) | 7,594 | 7,890 | ||||||
Total depreciation | 37,183 | 35,378 | ||||||
(-) Depreciation related to investment property | (2,040 | ) | (1,929 | ) | ||||
(-) Depreciation related to right-of-use assets | (8,722 | ) | (8,598 | ) | ||||
Total depreciation of property, plant and equipment | 26,421 | 24,851 |
(b) | Intangible assets |
As of June 30, 2023, the additions correspond mainly to the energy segment for investments for the preparation of wells and other assets for a total of S/81.4 million, and in the engineering and construction segment for investments in software for S/2.1 million (as of June 30, 2022, additions mainly correspond to investments in the preparation of wells in energy segment for S/34.2 million, software development of engineering and construction segment for S/5 million; and, concessions and licenses corresponding to the infrastructure segment for S/2.5 million).
For the period ended June 30, 2022 and 2023, the breakdown of intangible amortization included in the consolidated statement of income is as follows:
In thousands of soles | 2022 | 2023 | ||||||
Cost of sale of goods and services (Note 24) | 46,428 | 73,083 | ||||||
Administrative expenses (Note 24) | 1,309 | 1,978 | ||||||
Total amortization | 47,737 | 75,061 |
Goodwill
Management reviews businesses results based on the type of economic activity developed. The cash-generating units are distributed in the following segments:
As of | As of | |||||||
December 31, | June 30, | |||||||
In thousands of soles | 2022 | 2023 | ||||||
Engineering and construction | 28,741 | 31,571 | ||||||
Electromechanical | 20,736 | 20,736 | ||||||
49,477 | 52,307 |
16. | Borrowings |
This caption comprises the following:
Total | Current | Non-current | ||||||||||||||||||||||
As of | As of | As of | As of | As of | As of | |||||||||||||||||||
December 31, | June 30, | December 31, | June 30, | December 31, | June 30, | |||||||||||||||||||
In thousands of soles | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | ||||||||||||||||||
Bank loans | 651,825 | 691,728 | 548,372 | 527,360 | 103,453 | 164,368 | ||||||||||||||||||
Other financial entities | 168,148 | 169,766 | 12,176 | 31,752 | 155,972 | 138,014 | ||||||||||||||||||
Lease liability for right-of-use asset | 59,085 | 48,287 | 12,879 | 11,118 | 46,206 | 37,169 | ||||||||||||||||||
Finance leases | 835 | - | 835 | - | - | - | ||||||||||||||||||
879,893 | 909,781 | 574,262 | 570,230 | 305,631 | 339,551 |
- 34 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
A. | Bank loans |
As of December 31, 2022 and as of June 30, 2023, this item comprises bank loans in local and foreign currencies for working capital purposes. These obligations accrue fixed interest rates which fluctuate between 6% and 23.7% in 2023 (between 6% and 11.4% in 2022).
As of | As of | |||||||||||||
Date of | December 31, | June 30, | ||||||||||||
In thousands of soles | Interest rate | maturity | 2022 | 2023 | ||||||||||
AENZA S.A.A. (i) | Term SOFR 3M + de 6.26% a 8.51% | 2023 | 463,773 | 475,737 | ||||||||||
Unna Energia S.A.(ii) | 6.04% / 7.68% | 2027 | 126,064 | 121,920 | ||||||||||
Viva Negocio Inmobiliario S.A.C. (iii) | 7.84% / 12.50% | 2032 | 51,314 | 84,371 | ||||||||||
Morelco S.A.S. (iv) | 17.61% / 23.65% | 2024 | 10,674 | 9,700 | ||||||||||
651,825 | 691,728 |
i) | AENZA S.A.A. Bridge Loan Agreement |
On March 17, 2022, the Company entered into a bridge loan agreement for up to US$ 120 million, with a group of financial institutions comprised by Banco BTG Pactual S.A. - Cayman Branch, Banco Santander Peru S.A., HSBC Mexico, S.A., Institucion de Banca Multiple, Grupo Financiero HSBC, and Natixis, New York Branch. The financing will be repaid over a period of eighteen (18) months, in quarterly interest installments and is secured, subject to the fulfillment of certain precedent conditions, by a flow trust (first lien), a pledge over the shares in Unna Energia S.A. (first lien), and a trust on the shares of Viva Negocio Inmobiliario S.A.C. (second lien). On April 5, 2022, the Company received a bridge loan for up to US$120 million. The loan bears interest at the following interest rates: (i) for the first and second installments, Term SOFR + 6.26%; (ii) for the third and fourth installments, Term SOFR + 6.76%; (iii) for the fifth installment, Term SOFR + 7.51%; and (iv) for the sixth installment, Term SOFR + 7.51%. As of June 30, 2023, the total amount payable is US$ 120 million, equivalent to S/446.8 million, which includes principal of S/435.9 million, plus interest and net deferred charges of S/10.8 million (as of December 31, 2022, the total amount payable was US$ 120 million, equivalent to S/463.8 million, which included principal of S/458.4 million, plus interest and net deferred charges of S/ 5.4 million). The Corporation is currently evaluating financing alternatives that allow it to cover its short-term obligations.
As of December 31, 2022 and as of June 30, 2023, the Company has complied with the covenants established in the loan agreement.
ii) | Unna Energia S.A. Loan |
Terminales del Peru (hereinafter “TP”), a joint operation of the subsidiary Unna Energia S.A., has a medium-term loan agreement with Banco de Credito del Peru S.A. (hereinafter BCP) to finance investments arising from the operation agreement of North and Center terminals for 2015 to 2019 period, available up to December 31, 2022 with a maximum exposure limit of US$ 80 million. This funding is repaid within eight (8) years. In 2022 additional disbursements amounting to US$ 8.5 million (equivalent to S/ 32.7 million) were requested for additional investments.
In addition, in November 2019, TP signed a loan agreement to finance the additional investments from 2019 to 2023 for a credit line of US$ 46 million with BCP. This agreement includes an assignee as interest holder, so BD Capital (BDC) acquired 50% of the BCP contractual position through the signature of an accession agreement.
As of June 30, 2023, the amount recorded for loans equivalent to 50% of interest owned by the subsidiary Unna Energia S.A. amounts to S/121.9 million, principal net of interest and deferred charges (S/126.1 million, as of December 31, 2022).
As of December 31, 2022 and as of June 30, 2023, TP is in compliance with the covenants established in the loan agreement.
- 35 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
iii) | Viva Negocio Inmobiliario S.A.C. Loan |
The balance includes the following:
As of | As of | |||||||||||||||
Date of | December 31, | June 30, | ||||||||||||||
In thousands of soles | Interest rate | maturity | 2022 | 2023 | ||||||||||||
Banco Interamericano de Desarrollo | 7.84% | 2032 | - | 72,155 | ||||||||||||
Banco de Credito del Peru S.A. | 12.50% | 2023 | 36,562 | 8,084 | ||||||||||||
Banco BBVA Peru S.A. | 7.94% / 10.90% | 2024 | 2,116 | 4,132 | ||||||||||||
Banco Interamericano de Finanzas S.A. | 11.35% | 2024 | 12,636 | - | ||||||||||||
51,314 | 84,371 |
In December 2022, Viva Negocio Inmobiliario S.A.C. signed a loan agreement with the Banco Interamericano de Desarrollo, for the purpose of building social housing. The loan was fully disbursed in January 2023, for US$20 million (equivalent to S/72.2 million as of June 30, 2023), for ten (10) years and with two (2) years grace period for principal amortization.
AS of June 30, 2023, , the total debt with Banco Intercamericano de Finanzas for S/12.6 million was paid in full and the debt with Banco de Credito del Peru was partially repaid for S/27.6 million.
iv) | Morelco S.A.S. Loan |
The balance includes the following:
As of | As of | |||||||||||||||||
Date of | Currency | December 31, | June 30, | |||||||||||||||
In thousands of soles | Interest rate | maturity | Type | 2022 | 2023 | |||||||||||||
Bancolombia S.A. | 17.61% / 23.65% | 2024 | COP | 6,344 | 9,700 | |||||||||||||
Banco de Bogota | 10.39% | 2023 | COP | 4,330 | - | |||||||||||||
10,674 | 9,700 |
B. | Other financial entities |
The balance is mainly composed of the monetization of Red Vial 5 S.A. dividends, operation carried out on May 29, 2018, for the subscription of an investment contract between the Company and Inversiones Concesion Vial S.A.C. (“BCI Peru”) - whith the intervention of Fondo de Inversiones BCI NV (“Fondo BCI”) and BCI Management Administradora General de Fondos S.A. (“BCI” Asset Management”) - to monetize future dividends from Red Vial 5 S.A. to the Company. With the signing of this agreement, the Company obligated itself to indirectly transfer its economic rights over 48.8% of the share capital of Red Vial 5 S.A. by transferring its class B shares (equivalent to 48.8% of the capital of Red Vial S.A.) to a vehicle specially constituted for such purposes named Inversiones en Autopistas S.A. The amount of the transaction was US$42.3 million (equivalent to S/138 million) and was completed on June 11, 2018.
Likewise, it has been agreed that the Company will have purchase options on 48.8% of Red Vial 5 S.A.’s economic rights that BCI Peru will maintain through its participation in Inversiones en Autopistas S.A. These options will be subject to certain conditions such as the expiration of different terms, recovery of the investment made with the funds of the BCI Fund (according to different economic calculations) and/or that a change of control occurs.
As of June 30, 2023, the balance to be paid amounted to US$42.5 million, equivalent to S/154.4 million (as of December 31, 2022, balance was US$42.6 million, equivalent to S/162.8 million) and includes the effect of the fair value of S/0.3 million (as of December 31, 2022, S/16.6 million).
- 36 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
C. | Fair value of borrowings |
The carrying amount and fair value of borrowings are detailed as follows:
Carrying amount | Fair value | |||||||||||||||
As of | As of | As of | As of | |||||||||||||
December 31, | June 30, | December 31, | June 30, | |||||||||||||
In thousands of soles | 2022 | 2023 | 2022 | 2023 | ||||||||||||
Bank loans | 651,825 | 691,728 | 638,620 | 626,837 | ||||||||||||
Other financial entities | 168,148 | 169,766 | 168,148 | 170,330 | ||||||||||||
Lease liability for right-of-use asset | 59,085 | 48,287 | 53,394 | 48,602 | ||||||||||||
Finance leases | 835 | - | 776 | - | ||||||||||||
879,893 | 909,781 | 860,938 | 845,769 |
As of June 30, 2023, the fair value is based on cash flows discounted using debt rates between 4.7% and 23.7% (between 4.7% and 17.6% as of December 31, 2022) and are included as Level 2 in the level of measurement.
17. | Bonds |
This caption comprised the following:
Total | Current | Non-current | ||||||||||||||||||||||
As of | As of | As of | As of | As of | As of | |||||||||||||||||||
December 31, | June 30, | December 31, | June 30, | December 31, | June 30, | |||||||||||||||||||
In thousands of soles | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | ||||||||||||||||||
Tren Urbano de Lima S.A. (a) | 629,956 | 629,362 | 31,203 | 31,101 | 598,753 | 598,261 | ||||||||||||||||||
Red Vial 5 S.A. (b) | 218,684 | 199,338 | 41,343 | 45,010 | 177,341 | 154,328 | ||||||||||||||||||
Cumbra Peru S.A. (c) | 21,273 | 18,397 | 4,554 | 6,030 | 16,719 | 12,367 | ||||||||||||||||||
869,913 | 847,097 | 77,100 | 82,141 | 792,813 | 764,956 |
(a) | Tren Urbano de Lima S.A. |
During February 2015, the subsidiary Tren Urbano de Lima S.A. issue corporate bonds under Regulation S of the United States of America. The issuance was made in VAC soles (adjusted for the Constant Update Value) for an amount of S/629 million. The bonds have a maturity ended in November 2039 and accrue an annual effective interest rate of 4.75% (plus the VAC adjustment.
As of June 30, 2023, an accumulated amortization amounting to S/139.7 million has been made (S/126.8 million as of December 31, 2022).
As of June 30, 2023, the balance includes VAC adjustments and interest payable for S/134.8 million (S/126.5 million as of December 31, 2022).
The account movement of such corporate bonds for the periods ended June 30, 2022 and 2023 is as follows:
In thousands of soles | 2022 | 2023 | ||||||
Balance at January, 1 | 626,697 | 629,956 | ||||||
Amortization | (9,699 | ) | (12,860 | ) | ||||
Accrued interest | 26,397 | 28,739 | ||||||
Interest paid | (15,663 | ) | (16,473 | ) | ||||
Balance at June, 30 | 627,732 | 629,362 |
As of December 31, 2022, and as of June 30, 2023, Tren Urbano de Lima S.A. has complied with the corresponding covenants.
- 37 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
As of June 30, 2023, the fair value amounts to S/629.2 million (S/630.7 million, as of December 31, 2022), this is based on discounted cash flows using an annual effective interest rate of 4.53% (cash flows using an annual effective interest rate of 5.9% as of December 31, 2022) and corresponds to level 2 of the fair value hierarchy.
(b) | Red Vial 5 S.A. |
Between 2015 and 2016, the subsidiary Red Vial 5 S.A. issued the First Corporate Bond Program on the Lima Stock Exchange for a total S/365 million. The bonds mature in January 2027 and bear interest at a rate of 8.38%.
The capital raised was used to finance the construction of the second phase of Red Vial No.5 and the financing of VAT arising from a project-related expenses.
The account movement for the periods ended June 30, 2022, and 2023 is as follows:
In thousands of soles | 2022 | 2023 | ||||||
Balance at January, 1 | 251,933 | 218,684 | ||||||
Amortization | (15,225 | ) | (19,134 | ) | ||||
Accrued interest | 10,145 | 8,639 | ||||||
Interest paid | (10,283 | ) | (8,851 | ) | ||||
Balance at June, 30 | 236,570 | 199,338 |
As of December 31, 2022, and as of June 30, 2023, Red Vial 5 S.A. has complied with the covenants.
As of June 30, 2023, the fair value amounts to S/204 million (as of December 31, 2022, S/224.8 million), is based on discounted cash flows using an annual effective interest rate 8.1% as of December 31, 2022 and as of June 30, 2023 and is within level 2 of the fair value hierarchy.
(c) | Cumbra Peru S.A. |
At the beginning of 2020, the subsidiary Cumbra Peru S.A. prepared the First Private Bond Program, up to a maximum amount of US$8 million.
In the first quarter of the year 2020, bonds issued amounts to US$7.8 million (equivalent to S/25.9 million) under the debt swap modality, related to its outstanding trade accounts.
The bonds mature in December 2027 and bear an annual effective interest rate of 8.5%, payment is semi-annual. As of June 30, 2023, the balance includes accrued interest payable for US$0.2 million, equivalent to S/0.7 million (US$0.2 million, equivalent to S/0.8 million, as of December 31, 2022).
The account movement for the periods ended June 30, 2022, and 2023 is as follows:
In thousands of soles | 2022 | 2023 | ||||||
Balance at January, 1 | 26,282 | 21,273 | ||||||
Amortization | (1,913 | ) | (1,851 | ) | ||||
Exchange difference | (1,014 | ) | (940 | ) | ||||
Accrued interest | 948 | 780 | ||||||
Interest paid | (1,057 | ) | (865 | ) | ||||
Balance at June, 30 | 23,246 | 18,397 |
As of June 30, 2023, the fair value amounts to S/17.2 million (S/19.7 million as of December 31, 2022), is based on discounted cash flows using a rate of 12.6% (11.4% as of December 31, 2022) and is within level 2 of the fair value hierarchy.
- 38 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
(d) | AENZA S.A.A. |
On August 13, 2021, AENZA S.A.A. issued bonds convertible (hereinafter, the “Bonds”) into common shares with voting rights. The total amount of the issue was US$89.9 million, issuing 89,970 bonds, each with a nominal value of US$ 1,000.
Pursuant to the terms and conditions of the convertible bonds, issued, these may be converted into shares as of the sixth months from the date of issuance, according to the following procedure: 1) the conversion day was the last business day of each month; 2) the conversion may be totally or partially; 3) the conversion notice must be sent to the Bondholders’ Representative no later than 5 business days prior to the conversion date; and 4) the conversion price would be the minimum between (i) US$0.33 (Zero and 33/100 United States Dollars) per Share, and (ii) 80% of the average price of the transactions occurring thirty (30) days prior to the Conversion Date, weighted by the volume of each transaction. The conversion will be made by dividing the current nominal value of each bond by the conversion price.
The Corporation converted entirely all the bonds into common shares in two tranches, first on February 28, 2022, and the second on March 31, 2022 for 11,000 and 78,970 bonds, respectively (See Note 21); due the conversion, the debt was fully paid as of March 31, 2022.
18. | Trade Accounts Payable |
This item comprises:
Total | Current | Non-current | ||||||||||||||||||||||
As of | As of | As of | As of | As of | As of | |||||||||||||||||||
December 31, | June 30, | December 31, | June 30, | December 31, | June 30, | |||||||||||||||||||
In thousands of soles | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | ||||||||||||||||||
Invoices payable | 523,175 | 463,087 | 513,418 | 454,102 | 9,757 | 8,985 | ||||||||||||||||||
Unbilled goods and services received | 508,448 | 558,690 | 508,448 | 558,690 | - | - | ||||||||||||||||||
Notes payable | 5,390 | 6,288 | 5,390 | 6,288 | - | - | ||||||||||||||||||
1,037,013 | 1,028,065 | 1,027,256 | 1,019,080 | 9,757 | 8,985 |
As of June 30, 2023, unbilled goods and services received amounting to S/474 million for the engineering and construction segment, S/37.6 million for the infrastructure segment, S/22 million for the energy segment, S/16.4 million for the real estate segment and S/8.6 million for operations of the parent company (S/390.2 million, S/47.6 million, S/37 million, S/20.9 million and S/12.8 million, respectively, as of December 31, 2022).
19. | Other Accounts Payable |
This caption is comprised by the following:
Total | Current | Non-current | ||||||||||||||||||||||
As of | As of | As of | As of | As of | As of | |||||||||||||||||||
December 31, | June 30, | December 31, | June 30, | December 31, | June 30, | |||||||||||||||||||
In thousands of soles | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | ||||||||||||||||||
Advances received from customers (a) | 365,730 | 471,162 | 350,194 | 463,649 | 15,536 | 7,513 | ||||||||||||||||||
Taxes payable (b) | 165,831 | 214,629 | 137,819 | 204,098 | 28,012 | 10,531 | ||||||||||||||||||
Salaries and other payable to personnel | 99,225 | 130,338 | 99,225 | 130,338 | - | - | ||||||||||||||||||
Arbitration payable | 73,348 | 65,879 | 34,560 | 23,444 | 38,788 | 42,435 | ||||||||||||||||||
Accounts payable Consorcio Ductos del Sur (c) | 25,652 | 25,806 | 12,921 | 11,063 | 12,731 | 14,743 | ||||||||||||||||||
Guarantee deposits | 18,552 | 18,111 | 18,552 | 18,111 | - | - | ||||||||||||||||||
Share purchase agreement - Inversiones Sur | 15,280 | 14,532 | 15,280 | 14,532 | - | - | ||||||||||||||||||
Acquisition of additional non-controlling interest - Vial y Vives DSD | 9,344 | 7,647 | 9,344 | 7,647 | - | - | ||||||||||||||||||
Royalties payable | 9,303 | 7,227 | 9,303 | 7,227 | - | - | ||||||||||||||||||
Other accounts payable | 25,496 | 15,241 | 18,244 | 8,300 | 7,252 | �� | 6,941 | |||||||||||||||||
807,761 | 970,572 | 705,442 | 888,409 | 102,319 | 82,163 |
- 39 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
(a) | Advances received from customers correspond mainly to projects of the Engineering and Construction and Real Estate segments and are discounted from the invoicing made, as established in the contracts. |
Total | Current | Non-current | ||||||||||||||||||||||
As of | As of | As of | As of | As of | As of | |||||||||||||||||||
December 31, | June 30, | December 31, | June 30, | December 31, | June 30, | |||||||||||||||||||
In thousands of soles | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | ||||||||||||||||||
Viva Negocio Inmobiliario S.A.C. - Real estate projects | 85,741 | 124,254 | 85,741 | 124,254 | - | - | ||||||||||||||||||
Cumbra Peru S.A. - Jorge Chávez Airport | 88,114 | 101,015 | 88,114 | 93,647 | - | 7,368 | ||||||||||||||||||
Vial y Vives - DSD S.A. - Quebrada Blanca Project | 91,107 | 71,799 | 91,107 | 71,799 | - | - | ||||||||||||||||||
Cumbra Peru S.A. - San Gabriel - Buenaventura Project | 33,206 | 30,929 | 18,743 | 30,929 | 14,463 | - | ||||||||||||||||||
Proyecto Especial de Infraestructura de Transporte Nacional | 33,879 | 51,944 | 32,995 | 51,799 | 884 | 145 | ||||||||||||||||||
Cumbra Peru S.A. - Concentrator Plant and Quellaveco Tunnel | 5,984 | - | 5,984 | - | - | - | ||||||||||||||||||
Vial y Vives - DSD S.A. - Minera Spence | 12,536 | 5,256 | 12,536 | 5,256 | - | - | ||||||||||||||||||
Vial y Vives - DSD S.A. - Refineria ENAP | 9,472 | 8,721 | 9,472 | 8,721 | - | - | ||||||||||||||||||
Vial y Vives - DSD S.A. - Modernization and expansion - Arauco Plant | 1,531 | 2,045 | 1,531 | 2,045 | - | - | ||||||||||||||||||
Cumbra Ingenieria S.A. - Mina Gold Fields La Cima S.A. Project | 1,986 | 12,383 | 1,986 | 12,383 | - | - | ||||||||||||||||||
Morelco SAS - Santa Mónica Project | - | 62,020 | - | 62,020 | - | - | ||||||||||||||||||
Otros | 2,174 | 796 | 1,985 | 796 | 189 | - | ||||||||||||||||||
365,730 | 471,162 | 350,194 | 463,649 | 15,536 | 7,513 |
The main variation corresponds to: i) Increase in Viva Negocio Inmobiliario S.A.C. for S/38.5 million in Los parques de Comas. ii) Increase in Morelco S.A.S. for S/62 million corresponding to Santa Monica project.
(b) | The main variation in taxes payable corresponds to the increase in Vial y Vives-DSD S.A. for S/ 22 million that corresponds to the payment agreement with the Tesoreria General de la Republica de Chile, increase in VAT S/11 million (Cumbra Peru S.A. for S/7 million and Unna Energia S/4 million) and the increase in other taxes for S/ 15 million (Cumbra Peru S.A. for S/11 million and Aenza Servicios Corporativos S.A.C. for S/4 million). |
(c) | Other accounts payable of Consorcio Constructor Ductos del Sur correspond to payment obligations to suppliers and main subcontractors for S/25.8 million (S/25.6 million as of December 31, 2022), by the subsidiary Cumbra Peru S.A. as a consequence of the termination of the operations of Gasoducto Sur Peruano S.A. (Note 14.i). |
The fair value of current accounts is approximate to their book value due to short-term maturities. The non-current part mainly includes non-financial liabilities such as advances received from customers; the remaining balance is not significant in the financial statements.
20. | Other Provisions |
This item comprises:
Total | Current | Non-current | ||||||||||||||||||||||
As of | As of | As of | As of | As of | As of | |||||||||||||||||||
December 31, | June 30, | December 31, | June 30, | December 31, | June 30, | |||||||||||||||||||
In thousands of soles | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | ||||||||||||||||||
Legal claims (a) | 580,215 | 573,766 | 87,947 | 91,152 | 492,268 | 482,614 | ||||||||||||||||||
Tax claims (b) | 53,578 | 48,248 | 33,128 | 24,264 | 20,450 | 23,984 | ||||||||||||||||||
Provision for well closure (c) | 68,160 | 69,830 | 11,851 | 8,321 | 56,309 | 61,509 | ||||||||||||||||||
701,953 | 691,844 | 132,926 | 123,737 | 569,027 | 568,107 |
- 40 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
(a) | Legal contingencies are comprised by the following: |
Civil compensation to Peruvian Government
Corresponds to the legal contingency estimated by management for exposure of the Company to a probable compensation in relation to their participation as minority partners in certain entities that developed infrastructure projects in Peru with companies belonging to the Odebrecht group and projects related to “Club de la Construccion”. As indicated in Note 1-C) on September 15, 2022, the collaboration and benefits agreement is signed, through which AENZA recognizes it was utilized by certain former executives to commit illicit acts until 2016, and commits to pay a civil penalty to the Peruvian State of S/481.3 million. The civil penalty will be made within a term of 12 years, under a legal interest rate in Soles and US Dollars 3.8% and 1.7%, respectively; in addition, the Company compromise to establish a package of guarantees after the court approval i) a trust that includes shares issued by a subsidiary of AENZA; ii) a mortgage on a real state asset and iii) guaranty account with funds equivalent to the annual fees corresponding to the following year. Among other conditions, the Agreement includes a restriction for Aenza and the subsidiaries Cumbra Peru S.A., and Unna Transporte S.A.C. to participate in public construction and road maintenance contracts with the Peruvian State for two (2) years, counted from court’s approval. As of June 30, 2023, the balance of the Agreement remains at S/333.3 million and US$40.7 million, totalling S/481.3 million approximately (as of December 31, 2022, the balance was S/488.9 million).
Administrative process INDECOPI
i) | On March 9, 2021, Cumbra Peru S.A. was notified with a Final instruction Report prepared by the Technical Secretary of the National Institute of Competence, Protection and Intellectual Property - INDECOPI (by its acronym in Spanish and INDECOPI hereinafter) in relation to the administrative sanction process against 33 construction companies and other 26 of their executives for allegedly arranging a coordination system to illegally distribute several contract tenders conducted by Provias Nacional and other govenmental entities. On November 15, 2021 INDECOPI’s – Free Competence Defense Commission, through Resolution N°080-021-CLC-INDECOPI, ruled in favor to sanction the companies and their executives, included Cumbra Peru S.A. On December 9, 2021, Cumbra Peru S.A. filed an appeal against such ruling, suspending its application including the payment of imposed fines and compliance of corrective measures dictated. As of June 30, 2023, the Company maintains a provision that was recognized amounting to S/56.4 million (S/52.4 million as of December 31, 2022). |
ii) | On February 7, 2022, Cumbra Peru S.A. and Unna Transporte S.A.C. were notified by INDECOPI, issued on Resolution 038-2021/CLC-INDECOPI, through which initiate a sanctioning administrative procedure for the alleged execution of a horizontal collusive practice in the form of concerted distribution of suppliers in the contracting market of construction workers industry across nation-wide, during the period comprehended between years 2011 to 2017. |
On April 7, 2022, Cumbra Peru S.A. and Unna Transporte S.A.C. submitted a proposal for a cease and desist agreement for the early termination of the administrative sanctioning procedure, in which (i) they acknowledged the alleged conduct, (ii) they committed to maintain in the years 2022, 2023 and 2024 a program of compliance with free competition rules, and (iii) they agreed to pay a compensation amounting to S/2.7 million in two installments (one after 60 days and the second after 12 months). By Resolution No. 054-2022/CLC-INDECOPI dated August 19, 2022, the Commission for the Defense of Free Competition of INDECOPI approved the proposed cease and desist commitment and concluded the sanctioning procedure. As of June 30, 2023 and December 31, 2022, the Company has recorded a provision amounting to S/1.4 million.
Shareholder class action lawsuits in the Eastern District Court of New York, United States of America
During the first quarter of 2017 two collective demands were filed against the Company, and certain former employees in the Eastern District of New York attending Securities Act legislation. On July 2, 2020, the Company signed the definitive settlement agreement with plaintiffs’ counsel, whereby the parties agree to terminate the collective demand subject to Court’s approval and payment of the settlement amount by the Company. The amount settled for the termination of the class action is equivalent to US$20 million. On September 14, 2021, the settlement agreement was approved by the Eastern District Court of New York. During 2020, a payment of US$0.3 million (equivalent to S/1.1 million) and US$5 million was made and covered by the Company and by the professional liability assurance policy in accordance with the agreement signed with the insurer, respectively. The term of the agreement stablishes that the remaining US$14.7 million, plus 5% annual effective interest rate and 8% after June 30, 2021, must be paid by the Company before September 30, 2021.
- 41 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
On June 30, 2021, a first amendment to the agreement was signed, in which is stablished a payment of US$0.6 million (equivalent to S/2.2 million), amortization of the outstanding balance on September 30, 2021, and an annual effective interest rate of 8%. On October 1, 2021, the second amendment to the agreement was signed, whereby US$5.5 million (equivalent to S/22.7 million) was paid plus accrued interest of US$0.9 million (equivalent to S/3.6 million), established as a new expiration date June 30, 2022, plus accrued interest per year at an annual effective interest rate of 9% was set.
As of December 31, 2021, the Company maintains a provision of US$8.6 million, equivalent to S/34.4 million, plus interests. This provision of S/33.3 million was full paid on April 8, 2022.
(b) | Tax contingencies: |
(i) | Claim processes at the Superintendencia Nacional de Aduanas y de Administración Tributaria - SUNAT (Peruvian Customs and Tax Authorities) for S/18.4 million corresponding to AENZA S.A.A. for year 2016 income tax amounting to S/15.9 million and Cumbra Ingenieria S.A. for year 2015 income tax amounting to S/2.5 million. |
(ii) | Claims at The Judiciary for S/9.7 million in AENZA S.A.A. for income tax and sales tax for the years 1998 through 2011. |
(iii) | Appeal process at the Tax Court for S/14.7 million corresponding to: Cumbra Ingenieria S.A. for years 2013, 2014 and 2016 income tax amounting to S/6.7 million, AENZA S.A. for years 2014 and 2015 income tax amounting to S/4.8 million, Cumbra Peru S.A. for year 2012 income tax amounting to S/ 2.1 million, and Consorcio Constructor Chavimochic for year 2016 income tax amounting to S/ 1.1 million |
(iv) | Non-contentious proceedings for S/5.4 million related to Cumbra Ingenieria S.A. for S/5.3 million and Carretera Andina del Sur S.A. for S/0.1 million. |
(c) | Provision for closure corresponds mainly to: |
i) | As of December 31, 2022 and as of June 30, 2023, the provisions for well closure of the subsidiary Unna Energia S.A. are S/56.7 million and S/56.5 million, respectively; and a provision for contractual compliance with Perupetro S.A. for S/3.2 million and S/3.3 million, respectively; and |
ii) | Provision for costs associated of the subsidiary Red Vial 5 S.A., related to the closing of the concession contract and the process of claiming the tariff guarantee for toll suspension for S/7.1 million (as of December 31, 2022, S/5.6 million). |
- 42 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
The account movement for the period ended June 30, 2022 and 2023 are as follows:
Provision | ||||||||||||||||
Legal | Tax | for well | ||||||||||||||
In thousands of soles | claims | claims | closure | Total | ||||||||||||
As of January 1, 2022 | 364,385 | 37,466 | 82,475 | 484,326 | ||||||||||||
Additions | 15,783 | 2,731 | 2,950 | 21,464 | ||||||||||||
Present value | 19,727 | - | (1,330 | ) | 18,397 | |||||||||||
Reversals of provisions | (3,471 | ) | - | - | (3,471 | ) | ||||||||||
Reclasification | 2,701 | (213 | ) | - | 2,488 | |||||||||||
Payments | (34,362 | ) | - | (215 | ) | (34,577 | ) | |||||||||
Translation adjustments / Exchange difference | (7,797 | ) | - | (1,075 | ) | (8,872 | ) | |||||||||
As of June 30, 2022 | 356,966 | 39,984 | 82,805 | 479,755 | ||||||||||||
As of January 1, 2023 | 580,215 | 53,578 | 68,160 | 701,953 | ||||||||||||
Additions | 8,397 | 503 | 222 | 9,122 | ||||||||||||
Present value | 564 | - | 3,240 | 3,804 | ||||||||||||
Reversals of provisions | (2,541 | ) | (1,637 | ) | (548 | ) | (4,726 | ) | ||||||||
Reclasification | (6 | ) | (4,196 | ) | - | (4,202 | ) | |||||||||
Payments | (4,922 | ) | - | (38 | ) | (4,960 | ) | |||||||||
Translation adjustments / Exchange difference | (7,941 | ) | - | (1,206 | ) | (9,147 | ) | |||||||||
As of June 30, 2023 | 573,766 | 48,248 | 69,830 | 691,844 |
21. | Capital |
On February 28, 2022, according with terms and conditions of the convertible bond, the holders of 11,000 Convertible Bonds, each with a nominal value of US$1,000 each and for a principal amount equivalent to US$11 million, communicated the decision to execute their conversion rights. As consequence, the Company issued 37,801,073 new common shares, with a nominal value of S/1.00 each, with voting rights, and they are fully subscribed and paid. Therefore, the Company increased commitments capital stock from S/871,917,855 to S/ 909,718,928.
Additionally, on March 31, 2022, holders of 78,970 convertible bonds, each with a nominal value of US$1,000 each and for a principal amount equivalent to US$78.9 million, communicated their decision to execute their conversion rights. As consequence the Company converted the bonds, as well as paid the accrued interest to the bondholders who have exercised their conversion rights. The Company issued 287,261,051 new common shares. Therefore, the capital stock of the Company has increased from S/909,718,928 to S/1,196,979,979. After this last operation, the convertible bonds have been fully paid (see, Note 17-d).
On December 1, 2022, the capital increases were registered and the statutes were amended, confirming that the Company's capital was S/1,196,979,979, the par value of the shares was S/1.00 each, fully subscribed and paid and with voting rights.
As of June 30, 2023, a total of 129,508,605 shares are represented in ADSs, equivalent to 8,633,907 ADSs at a ratio of 15 shares per ADS.
As of December 31, 2022, the total capital stock of the Company corresponds a total of 130,025,625 shares represented in ADS, equivalent to 8,668,375 ADSs at a rate of 15 shares per ADS.
22. | Deferred Income Tax |
The changes in deferred income taxes are as follows:
As of | As of | |||||||
June 30, | June 30, | |||||||
In thousands of soles | 2022 | 2023 | ||||||
Opening balance | 177,939 | 167,330 | ||||||
Debit (credit) to income statement (Note 27) | 21,832 | (25,110 | ) | |||||
Reclassification | (4,399 | ) | - | |||||
Other movements | (8,825 | ) | (216 | ) | ||||
Total | 186,547 | 142,004 |
- 43 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
23. | Revenue from Contracts with Customers |
The corporation's income is derived principally from the following:
For the three | For the six | |||||||||||||||
month period ended June 30, | month period ended June 30, | |||||||||||||||
In thousands of soles | 2022 | 2023 | 2022 | 2023 | ||||||||||||
Construction activities | 704,393 | 589,395 | 1,248,633 | 1,038,038 | ||||||||||||
Services rendered | 253,532 | 259,763 | 496,492 | 516,343 | ||||||||||||
Sale of real estate and goods | 169,746 | 187,763 | 302,472 | 332,678 | ||||||||||||
Revenue from contracts with customers | 1,127,671 | 1,036,921 | 2,047,597 | 1,887,059 |
- 44 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
A. Revenues from contracts with customers are mainly broken down by the following periods:
For the six month period ended June 30, | Engineering and construction | Energy | Infrastructure | Real estate | Parent Company operations | Total | ||||||||||||||||||||||||||||||||||||||||||
In thousands of soles | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | ||||||||||||||||||||||||||||||||||||
Primary geographical markets | ||||||||||||||||||||||||||||||||||||||||||||||||
Peru | 882,117 | 588,342 | 292,889 | 310,992 | 334,836 | 340,904 | 84,415 | 94,196 | 8,321 | 11,695 | 1,602,578 | 1,346,129 | ||||||||||||||||||||||||||||||||||||
Chile | 398,050 | 349,546 | - | - | - | - | - | - | - | - | 398,050 | 349,546 | ||||||||||||||||||||||||||||||||||||
Colombia | 46,969 | 191,384 | - | - | - | - | - | - | - | - | 46,969 | 191,384 | ||||||||||||||||||||||||||||||||||||
1,327,136 | 1,129,272 | 292,889 | 310,992 | 334,836 | 340,904 | 84,415 | 94,196 | 8,321 | 11,695 | 2,047,597 | 1,887,059 | |||||||||||||||||||||||||||||||||||||
Major products/ service lines | ||||||||||||||||||||||||||||||||||||||||||||||||
Construction activities | 1,248,633 | 1,038,038 | - | - | - | - | - | - | - | - | 1,248,633 | 1,038,038 | ||||||||||||||||||||||||||||||||||||
Engineering services | 78,503 | 91,234 | - | - | - | - | - | - | - | - | 78,503 | 91,234 | ||||||||||||||||||||||||||||||||||||
Oil and gas extraction, storage and dispatching services | - | - | 71,089 | 70,253 | - | - | - | - | - | - | 71,089 | 70,253 | ||||||||||||||||||||||||||||||||||||
Transportation services | - | - | - | - | 196,403 | 203,606 | - | - | - | - | 196,403 | 203,606 | ||||||||||||||||||||||||||||||||||||
Road concession services | - | - | - | - | 136,295 | 134,819 | - | - | - | - | 136,295 | 134,819 | ||||||||||||||||||||||||||||||||||||
Water treatment service | - | - | - | - | 2,138 | 2,479 | - | - | - | - | 2,138 | 2,479 | ||||||||||||||||||||||||||||||||||||
Property rental | - | - | - | - | - | - | 3,743 | 2,257 | - | - | 3,743 | 2,257 | ||||||||||||||||||||||||||||||||||||
Parent company services and others | - | - | - | - | - | - | - | - | 8,321 | 11,695 | 8,321 | 11,695 | ||||||||||||||||||||||||||||||||||||
Sale of real estate and lots | - | - | - | - | - | - | 80,672 | 91,939 | - | - | 80,672 | 91,939 | ||||||||||||||||||||||||||||||||||||
Sale of oil and gas | - | - | 221,800 | 240,739 | - | - | - | - | - | - | 221,800 | 240,739 | ||||||||||||||||||||||||||||||||||||
1,327,136 | 1,129,272 | 292,889 | 310,992 | 334,836 | 340,904 | 84,415 | 94,196 | 8,321 | 11,695 | 2,047,597 | 1,887,059 | |||||||||||||||||||||||||||||||||||||
Timing of revenue recognition | ||||||||||||||||||||||||||||||||||||||||||||||||
Transferred at a point in time | - | - | 292,889 | 310,992 | - | - | 84,415 | 94,196 | 8,321 | 11,695 | 385,625 | 416,883 | ||||||||||||||||||||||||||||||||||||
Transferred over time | 1,327,136 | 1,129,272 | - | - | 334,836 | 340,904 | - | - | - | - | 1,661,972 | 1,470,176 | ||||||||||||||||||||||||||||||||||||
1,327,136 | 1,129,272 | 292,889 | 310,992 | 334,836 | 340,904 | 84,415 | 94,196 | 8,321 | 11,695 | 2,047,597 | 1,887,059 | |||||||||||||||||||||||||||||||||||||
Revenue from contracts with customers | 1,327,136 | 1,129,272 | 292,889 | 310,992 | 334,836 | 340,904 | 84,415 | 94,196 | 8,321 | 11,695 | 2,047,597 | 1,887,059 |
- 45 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
For the three month period ended June 30, | Engineering and construction | Energy | Infrastructure | Real estate | Parent Company operations | Total | ||||||||||||||||||||||||||||||||||||||||||
In thousands of soles | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | ||||||||||||||||||||||||||||||||||||
Primary geographical markets | ||||||||||||||||||||||||||||||||||||||||||||||||
Peru | 518,368 | 356,264 | 153,233 | 146,116 | 166,561 | 170,855 | 54,912 | 76,546 | 4,916 | 6,193 | 897,990 | 755,974 | ||||||||||||||||||||||||||||||||||||
Chile | 202,089 | 184,075 | - | - | - | - | - | - | - | - | 202,089 | 184,075 | ||||||||||||||||||||||||||||||||||||
Colombia | 27,592 | 96,872 | - | - | - | - | - | - | - | - | 27,592 | 96,872 | ||||||||||||||||||||||||||||||||||||
748,049 | 637,211 | 153,233 | 146,116 | 166,561 | 170,855 | 54,912 | 76,546 | 4,916 | 6,193 | 1,127,671 | 1,036,921 | |||||||||||||||||||||||||||||||||||||
Major products/ service lines | ||||||||||||||||||||||||||||||||||||||||||||||||
Construction activities | 704,393 | 589,395 | - | - | - | - | - | - | - | - | 704,393 | 589,395 | ||||||||||||||||||||||||||||||||||||
Engineering services | 43,656 | 47,816 | - | - | - | - | - | - | - | - | 43,656 | 47,816 | ||||||||||||||||||||||||||||||||||||
Oil and gas extraction, storage and dispatching services | - | - | 36,399 | 33,754 | - | - | - | - | - | - | 36,399 | 33,754 | ||||||||||||||||||||||||||||||||||||
Transportation services | - | - | - | - | 95,117 | 102,035 | - | - | - | - | 95,117 | 102,035 | ||||||||||||||||||||||||||||||||||||
Road concession services | - | - | - | - | 70,400 | 67,604 | - | - | - | - | 70,400 | 67,604 | ||||||||||||||||||||||||||||||||||||
Water treatment service | - | - | - | - | 1,044 | 1,216 | - | - | - | - | 1,044 | 1,216 | ||||||||||||||||||||||||||||||||||||
Property rental | - | - | - | - | - | - | 2,000 | 1,145 | - | - | 2,000 | 1,145 | ||||||||||||||||||||||||||||||||||||
Parent company services and others | - | - | - | - | - | - | - | - | 4,916 | 6,193 | 4,916 | 6,193 | ||||||||||||||||||||||||||||||||||||
Sale of real estate and lots | - | - | - | - | - | - | 52,912 | 75,401 | - | - | 52,912 | 75,401 | ||||||||||||||||||||||||||||||||||||
Sale of oil and gas | - | - | 116,834 | 112,362 | - | - | - | - | - | - | 116,834 | 112,362 | ||||||||||||||||||||||||||||||||||||
748,049 | 637,211 | 153,233 | 146,116 | 166,561 | 170,855 | 54,912 | 76,546 | 4,916 | 6,193 | 1,127,671 | 1,036,921 | |||||||||||||||||||||||||||||||||||||
Timing of revenue recognition | ||||||||||||||||||||||||||||||||||||||||||||||||
Transferred at a point in time | - | - | 153,233 | 146,116 | - | - | 54,912 | 76,546 | 4,916 | 6,193 | 213,061 | 228,855 | ||||||||||||||||||||||||||||||||||||
Transferred over time | 748,049 | 637,211 | - | - | 166,561 | 170,855 | - | - | - | - | 914,610 | 808,066 | ||||||||||||||||||||||||||||||||||||
748,049 | 637,211 | 153,233 | 146,116 | 166,561 | 170,855 | 54,912 | 76,546 | 4,916 | 6,193 | 1,127,671 | 1,036,921 | |||||||||||||||||||||||||||||||||||||
Revenue from contracts with customers | 748,049 | 637,211 | 153,233 | 146,116 | 166,561 | 170,855 | 54,912 | 76,546 | 4,916 | 6,193 | 1,127,671 | 1,036,921 |
B. | Balances of contract assets and liabilities is primarily comprised of: |
As of | As of | |||||||||||
December 31, | June 30, | |||||||||||
In thousands of soles | Note | 2022 | 2023 | |||||||||
Receivables | 10.a | 894,571 | 887,656 | |||||||||
Unbilled receivables | 10.b and c | 907,880 | 912,517 | |||||||||
Guarantee deposits | 12 | 161,948 | 191,394 | |||||||||
Advances received from customers | 19.a | (365,730 | ) | (471,162 | ) |
Contract assets primarily relate to rights to consideration for work performed, but not billed at the reporting date. Contract liabilities relate primarily to advance consideration received from customers for which revenue is recognized over time.
- 46 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
The following is a detail of the movement of contract liabilities:
For the three | For the six | |||||||||||||||
month period ended June 30, | month period ended June 30, | |||||||||||||||
In thousands of soles | 2022 | 2023 | 2022 | 2023 | ||||||||||||
Initial balance | - | - | 322,680 | 365,730 | ||||||||||||
Advances received from customers | 286,932 | 210,071 | 341,017 | 313,863 | ||||||||||||
Compensation of customer advances | (219,280 | ) | (117,366 | ) | (311,555 | ) | (208,431 | ) | ||||||||
Final balance | 67,652 | 92,705 | 352,142 | 471,162 |
Revenue from contract liabilities recognized as of June 30, 2023 is S/208.4 million (S/726.4 million as of June 30, 2022).
24. | Expenses by Nature |
For the periods ended June 30, 2022, and 2023, this caption comprises the following:
For the three | For the six | |||||||||||||||||||||||||||
month period ended June 30 | month period ended June 30 | |||||||||||||||||||||||||||
Cost | Cost | |||||||||||||||||||||||||||
of goods | Administrative | of goods | Administrative | |||||||||||||||||||||||||
In thousands of soles | Note | and services | expenses | Total | and services | expenses | Total | |||||||||||||||||||||
2022 | ||||||||||||||||||||||||||||
Salaries, wages and fringe benefits | 320,154 | 34,137 | 354,291 | 675,293 | 60,376 | 735,669 | ||||||||||||||||||||||
Services provided by third-parties | 309,652 | 14,133 | 323,785 | 575,502 | 21,420 | 596,922 | ||||||||||||||||||||||
Purchase of goods | 156,414 | (248 | ) | 156,166 | 287,776 | - | 287,776 | |||||||||||||||||||||
Other management charges | 79,533 | 1,518 | 81,051 | 162,173 | 4,558 | 166,731 | ||||||||||||||||||||||
Depreciation | 15.a | 14,949 | 3,339 | 18,288 | 29,589 | 7,594 | 37,183 | |||||||||||||||||||||
Amortization | 15.b | 22,707 | 671 | 23,378 | 46,428 | 1,309 | 47,737 | |||||||||||||||||||||
Impairment of accounts receivable | 134 | 24 | 158 | 180 | 24 | 204 | ||||||||||||||||||||||
Taxes | 3,356 | 307 | 3,663 | 4,992 | 328 | 5,320 | ||||||||||||||||||||||
Impairment of inventory | (10 | ) | - | (10 | ) | 89 | - | 89 | ||||||||||||||||||||
906,889 | 53,881 | 960,770 | 1,782,022 | 95,609 | 1,877,631 |
Cost | Cost | |||||||||||||||||||||||||||
of goods | Administrative | of goods | Administrative | |||||||||||||||||||||||||
In thousands of soles | Note | and services | expenses | Total | and services | expenses | Total | |||||||||||||||||||||
2023 | ||||||||||||||||||||||||||||
Salaries, wages and fringe benefits | 251,801 | 31,917 | 283,718 | 507,878 | 61,080 | 568,958 | ||||||||||||||||||||||
Services provided by third-parties | 348,308 | 16,839 | 365,147 | 606,853 | 26,274 | 633,127 | ||||||||||||||||||||||
Purchase of goods | 149,318 | - | 149,318 | 259,661 | - | 259,661 | ||||||||||||||||||||||
Other management charges | 93,963 | 1,622 | 95,585 | 183,967 | 4,414 | 188,381 | ||||||||||||||||||||||
Depreciation | 15.a | 12,811 | 4,631 | 17,442 | 27,488 | 7,890 | 35,378 | |||||||||||||||||||||
Amortization | 15.b | 38,787 | 988 | 39,775 | 73,083 | 1,978 | 75,061 | |||||||||||||||||||||
Impairment of accounts receivable | 1,289 | 891 | 2,180 | 1,289 | 891 | 2,180 | ||||||||||||||||||||||
Taxes | 6,358 | 172 | 6,530 | 11,632 | 396 | 12,028 | ||||||||||||||||||||||
902,635 | 57,060 | 959,695 | 1,671,851 | 102,923 | 1,774,774 |
- 47 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
25. | Other Income and Expenses, Net |
For the periods ended June 30, 2022, and 2023, this item comprises:
For the three | For the six | |||||||||||||||
month period ended June 30, | month period ended June 30, | |||||||||||||||
In thousands of soles | 2022 | 2023 | 2022 | 2023 | ||||||||||||
Other income: | ||||||||||||||||
Insurance compensation | 41 | 316 | 46 | 2,978 | ||||||||||||
Recovery of provisions and impairments | 1,395 | 557 | 1,473 | 1,900 | ||||||||||||
Sale of assets | 849 | 2,957 | 4,879 | 4,000 | ||||||||||||
Change in contract of the call option | 3,706 | - | 3,706 | - | ||||||||||||
Penalty income | 535 | 167 | 750 | 326 | ||||||||||||
Supplier debt forgiveness | 5,053 | 13 | 5,053 | 158 | ||||||||||||
Others | 2,227 | 1,619 | 2,708 | 2,757 | ||||||||||||
13,806 | 5,629 | 18,615 | 12,119 |
2022 | 2023 | 2022 | 2023 | |||||||||||||
Other expenses: | ||||||||||||||||
Administrative sanctions and legal processes | 6,104 | 1,999 | 13,381 | 6,847 | ||||||||||||
Net cost of fixed assets disposal | 215 | 1,515 | 4,197 | 2,138 | ||||||||||||
Asset impairment | 661 | 16 | 661 | 16 | ||||||||||||
Disposal of property, plant and equipment | 833 | 378 | 934 | 580 | ||||||||||||
Renegotiation of contract with suppliers | 1,841 | - | 1,841 | - | ||||||||||||
Others | 446 | 1,153 | 1,025 | 1,537 | ||||||||||||
10,100 | 5,061 | 22,039 | 11,118 | |||||||||||||
Other income and expenses, net | 3,706 | 568 | (3,424 | ) | 1,001 |
26. | Financial Income and Expenses |
A. | Financial Income and Expenses |
For the periods ended June 30, 2022 and 2023, this caption comprises the following:
For the three | For the six | |||||||||||||||
month period ended June 30, | month period ended June 30, | |||||||||||||||
In thousands of soles | 2022 | 2023 | 2022 | 2023 | ||||||||||||
Financial income: | ||||||||||||||||
Interest on short-term bank deposits | 2,824 | 6,768 | 3,334 | 13,187 | ||||||||||||
Exchange difference gain, net (Note 4.A.a.i) | 1,150 | 1,083 | 4,303 | 12,379 | ||||||||||||
Others | 332 | 281 | 975 | 598 | ||||||||||||
4,306 | 8,132 | 8,612 | 26,164 | |||||||||||||
Financial expenses: | ||||||||||||||||
Interest expense on: | ||||||||||||||||
- Bank loans (a) | 16,343 | 23,337 | 25,064 | 44,708 | ||||||||||||
- Bonds (b) | 5,496 | 4,628 | 24,335 | 9,417 | ||||||||||||
- Loans from third parties | 2,370 | 1,988 | 5,321 | 4,819 | ||||||||||||
- Financial lease right-of-use | 1,008 | 1,168 | 1,944 | �� | 2,476 | |||||||||||
- Financial lease | 134 | 1 | 287 | 9 | ||||||||||||
Commissions and collaterals | 4,442 | 4,143 | 10,265 | 8,925 | ||||||||||||
Interests from Tax Administration | 3,834 | 7,417 | 7,222 | 10,483 | ||||||||||||
Other financial expenses | 1,516 | 1,943 | 2,352 | 5,600 | ||||||||||||
35,143 | 44,625 | 76,790 | 86,437 |
a) | The increase in interest compared to the same period of the previous year corresponds to the Bridge Loan acquired in April 2022, for US$120 million, with a quarterly average effective rate of 1.75% and 2.99% for the three-month period ended June 30, 2022 and for the six-month period ended June 30, 2023, respectively. |
b) | For the six months period ended June 30, 2022, includes the interest corresponding to the AENZA bonds for US$89.9 million, which were converted into shares during the first quarter of 2022 (Note 17.d). |
- 48 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
B. | Gain (loss) from present value of financial assets or liabilities |
For the periods ended June 30, 2022 and 2023, this caption comprises the following:
For the three | For the six | |||||||||||||||
month period ended June 30, | month period ended June 30, | |||||||||||||||
In thousands of soles | 2022 | 2023 | 2022 | 2023 | ||||||||||||
Profit for present value of financial asset or liability | 1,290 | 6,910 | 3,085 | 24,549 | ||||||||||||
Loss for present value of financial asset or liability | (29,960 | ) | (553 | ) | (71,350 | ) | (4,386 | ) | ||||||||
(28,670 | ) | 6,357 | (68,265 | ) | 20,163 |
For the six months ended June 30, 2023, there was a net increase compared to the same period of the previous year, mainly due to:
(i) | Gain from the adjustment in the present value of the account receivable from Gasoducto Sur Peruano S.A. for S/18 million due to the decrease in the discount rate applied from 5.86% to 4.98% (loss of S/37.3 million due to the increase in the rate from 2.73% to 5.42% as of June 30, 2022). |
(ii) | Present value of the Civil Redress to the Peruvian State with a discount rate applied from 0.86% to 1.41% as of June 30, 2022, impacting the Company for S/18.5 million, Unna Transporte S.A.C. for S/1.4 million and Cumbra Peru S.A.C. for S/1.4 million. |
27. | Income Tax |
A. IR expense shown in the consolidated statement of income comprises:
For the three | For the six | |||||||||||||||
month period ended June 30, | month period ended June 30, | |||||||||||||||
In thousands of soles | 2022 | 2023 | 2022 | 2023 | ||||||||||||
Current income tax | 21,073 | 11,289 | 43,000 | 47,303 | ||||||||||||
Deferred income tax | 3,050 | 28,743 | (21,832 | ) | 25,110 | |||||||||||
Income tax expense | 24,123 | 40,032 | 21,168 | 72,413 |
B. The Corporation's income tax differs from the notional amount that would result from applying the Corporation's weighted average corporate income tax rate to consolidated pretax income as follows:
For the three | For the six | |||||||||||||||
month period ended June 30, | month period ended June 30, | |||||||||||||||
In thousands of soles | 2022 | 2023 | 2022 | 2023 | ||||||||||||
Loss before income tax | 112,594 | 48,450 | 31,168 | 74,832 | ||||||||||||
Income tax by applying local applicable tax | ||||||||||||||||
rates on profit generated in the respective countries | 26,121 | 15,057 | 8,743 | 23,297 | ||||||||||||
Tax effect on: | ||||||||||||||||
- Non-deductible expenses | 15,087 | 6,328 | 4,490 | 8,435 | ||||||||||||
- Unrecognized deferred income tax asset | (16,889 | ) | 12,386 | 7,149 | 31,397 | |||||||||||
- Equity method (profit) loss | (440 | ) | (234 | ) | (315 | ) | (489 | ) | ||||||||
- Provision of tax contingencies | 442 | 4,724 | 442 | 4,724 | ||||||||||||
- Change in prior years estimations | (198 | ) | 1,771 | 659 | 5,049 | |||||||||||
Income tax | 24,123 | 40,032 | 21,168 | 72,413 |
- 49 -
AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
December 31, 2022 and June 30, 2023
28. | Contingencies, Commitments and Guarantees |
Under Management’s opinion and of its legal advisors, provisions recognized mainly for civil lawsuits, labor disputes, tax claims, contentious and administrative processes are sufficient to cover the results of these probable contingencies (Note 20), and the balance of possible contingencies is S/397.1 million (S/390.1 million as of December 31, 2022).
a) | Tax contingencies |
The Company considers that the maximum exposure for tax contingencies of the Corporate amounts to S/319.6 million (S/311 million as of December 31, 2022), according to the following details:
i) | Appeal process at Tax Court totaling S/271.8 million: |
(i) | AENZA S.A.A.’s income tax return for years 2013, 2014, and 2015 amounting to S/ 122.4 million; | |
(ii) | Cumbra Peru S.A.’s income tax return for years 2012, 2014 and 2016 amounting to S/110.4 million; | |
(iii) | Consorcio Constructor Ductos del Sur’s income tax return for year 2014 amounting to S/14.8 million; | |
(iv) | Cumbra Ingenieria S.A.’s income tax return for years 2013, 2014 and 2016 amounting to S/12.5 million; | |
(v) | Consorcio Constructor Chavimochic’s income tax return for years 2014, 2015, and 2016 amounting to S/9.3 million; | |
(vi) | Viva Negocio Inmobiliario S.A.’s income tax return for year 2009 amounting to S/ 1.6 million; and | |
(vii) | Unna Transporte S.A.’s income tax and sales tax returns for year 2015 amounting to S/ 0.8 million. |
ii) | Claim process at SUNAT totaling S/47.8 million: AENZA S.A.A.’s income tax returns for year 2016 for S/33.8 million; Cumbra Ingeniería S.A.’s income tax returns for year 2015 for S/8.3 million; and Viva Negocio Inmobiliario S.A.C.’s income tax return for year 2020 for S/5.7 million. |
In the opinion of the Corporation's management, as of June 30, 2023, all claims will be favorable considering their characteristics and the assessment of its legal advisors.
b) | Other contingencies |
As of June 30, 2023 the Company considers that the maximum exposure for other contingencies of the corporate amounts to S/77.5 million (S/79.1 million as of December 31, 2022), as detailed:
i) | Civil lawsuits, mainly related to indemnities for damages, contract terminations, and obligations to pay a sum of money totaling S/13.1 million (S/26.9 million at the end of 2022), mainly related to Cumbra Peru S.A. for S/3.1 million, Morelco S.A.S. for S/3 million, Unna Transporte S.A.C. for S/2.4 million, Ecologia y Tecnologia Ambiental S.A. for S/2 million, Cumbra Ingenieria S.A. for S/1.8 million, Red Vial 5 S.A. for S/ 0.6 million and Viva Negocio Inmobiliario S.A. for S/ 0.2 million (Cumbra Peru S.A. for S/ 20.1 million, Cumbra Ingenieria S.A. for S/ 3.8 million, Unna Transporte S.A.C. for S/ 1.9 million, Red Vial 5 S.A. for S/ 0.6 million, Viva Negocio Inmobiliario S.A. for S/ 0.3 million, and Morelco S.A.S. for S/ 0.2 million). |
ii) | Labor proceedings amounting to S/27.2 million (S/22.2 million in 2022), mailyn reltated to Morelco S.A.S. for S/24 million, Unna Energia S.A. for S/ 1.6 million, Unna Transporte S.A.C. for S/ 1.3 million and Cumbra Peru S.A. for S/ 0.3 million (in 2022, Morelco S.A.S. for S/19 million, Unna Energia S.A. for S/1.6 million, Unna Transporte S.A.C. for S/1.3 million and Cumbra Peru S.A. for S/0.3 million). |
iii) | Contentious-administrative proceedings for S/25 million (S/15.3 million in 2022), mailny related to Unna Energia S.A. for S/22.3 million and Morelco S.A.S. for S/2.7 million (in 2022, Unna Energia S.A. for S/12.8 million and Morelco S.A.S. for S/2.5 million). |
iv) | Administrative proceedings for S/9.5 million (S/14.7 million in 2022), mainly related to Tren Urbano de Lima S.A. for S/5.1 million, AENZA S.A.A. for S/3.5 million, Cumbra Peru S.A. for S/0.5 million, and Viva Negocio Inmobiliario S.A. for S/0.4 million (in 2022, Cumbra Peru S.A. for S/6 million, Tren Urbano de Lima S.A. for S/4.8 million, AENZA S.A.A. for S/3.5 million and Viva Negocio Inmobiliario S.A.C. for S/0.4 million). |
c) | Letters bonds and guarantees |
As of June 30, 2023, the Corporation maintains guarantees and letters of credit in force in several financial entities guaranteeing operations for US$546.6 million (US$574.6 million, as of December 31, 2022).
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AENZA S.A.A. and Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2022 and June 30, 2023
29. | Non-Controlling Interests |
The following table summarizes information regarding each of the Corporation's subsidiaries that have significant noncontrolling interests, prior to any intragroup elimination. any intragroup elimination.
At June 30, 2022 | VIVA Negocio inmobiliario S.A. and subsidiaries | Red Vial 5 S.A. | Tren Urbano de Lima S.A. | Cumbra Ingenieria S.A. and subsidiaries | Unna Energia S.A. | Cumbra Peru S.A. and subsidiaries | Promotora Larcomar S.A. | Other individually immaterial subsidiaries | Intra-group eliminations | Total | ||||||||||||||||||||||||||||||
In thousands of soles | ||||||||||||||||||||||||||||||||||||||||
Percentage of non-controlling interest | 43.78 | % | 33.00 | % | 25.00 | % | 10.59 | % | 5.00 | % | 0.61 | % | 53.45 | % | ||||||||||||||||||||||||||
Current assets | 490,258 | 97,603 | 343,745 | 140,434 | 315,589 | 1,187,132 | 301 | |||||||||||||||||||||||||||||||||
Non-current assets | 109,506 | 350,954 | 675,538 | 12,477 | 543,895 | 1,009,808 | 13,368 | |||||||||||||||||||||||||||||||||
Current liabilities | (221,001 | ) | (63,709 | ) | (113,998 | ) | (120,737 | ) | (165,046 | ) | (1,558,104 | ) | (304 | ) | ||||||||||||||||||||||||||
Non-current liabilities | (28,651 | ) | (205,619 | ) | (695,082 | ) | - | (257,864 | ) | (160,108 | ) | (7,756 | ) | |||||||||||||||||||||||||||
Net assets | 350,112 | 179,229 | 210,203 | 32,174 | 436,574 | 478,728 | 5,609 | |||||||||||||||||||||||||||||||||
Net assets atributable to non-controlling interest | 100,142 | 59,146 | 52,551 | 3,402 | 32,625 | 8,069 | 2,998 | (137 | ) | (5,887 | ) | 252,909 | ||||||||||||||||||||||||||||
Revenues | 84,415 | 106,018 | 197,189 | 86,434 | 292,889 | 1,251,138 | - | |||||||||||||||||||||||||||||||||
Profit of the period | 9,356 | 17,868 | 43,175 | (9,505 | ) | 28,704 | (12,368 | ) | - | |||||||||||||||||||||||||||||||
Other comprehensive income | - | - | - | 12 | - | (7,722 | ) | - | (2,570 | ) | - | (10,280 | ) | |||||||||||||||||||||||||||
Total comprehensive income for the period | 9,356 | 17,868 | 43,175 | (9,493 | ) | 28,704 | (20,090 | ) | - | |||||||||||||||||||||||||||||||
Profit of the year, allocated to non-controlling interest | 7,802 | 5,896 | 10,794 | (1,026 | ) | 3,407 | (461 | ) | 17 | (130 | ) | (1,086 | ) | 25,213 | ||||||||||||||||||||||||||
Other comprehensive income, allocated to non-controlling interest | - | - | - | 1 | - | (125 | ) | - | - | - | (124 | ) |
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AENZA S.A.A. and Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2022 and June 30, 2023
At June 30, 2023 | VIVA Negocio inmobiliario S.A. and subsidiaries | Red Vial 5 S.A. | Tren Urbano de Lima S.A. | Cumbra Ingenieria S.A. and subsidiaries | Unna Energia S.A. | Cumbra Peru S.A. and subsidiaries | Promotora Larcomar S.A. | Other individually immaterial subsidiaries | Intra-group eliminations | Total | ||||||||||||||||||||||||||||||
In thousands of soles | ||||||||||||||||||||||||||||||||||||||||
Percentage of non-controlling interest | 0.46 | % | 33.00 | % | 25.00 | % | 10.59 | % | 5.00 | % | 0.61 | % | 53.45 | % | ||||||||||||||||||||||||||
Current assets | 486,343 | 91,235 | 307,026 | 132,723 | 191,493 | 1,317,830 | 299 | |||||||||||||||||||||||||||||||||
Non-current assets | 181,724 | 301,350 | 731,270 | 9,140 | 691,177 | 840,114 | 13,368 | |||||||||||||||||||||||||||||||||
Current liabilities | (216,560 | ) | (59,547 | ) | (109,076 | ) | (108,965 | ) | (218,634 | ) | (1,750,499 | ) | (51 | ) | ||||||||||||||||||||||||||
Non-current liabilities | (71,813 | ) | (162,374 | ) | (701,532 | ) | (1,298 | ) | (207,676 | ) | (138,888 | ) | (7,729 | ) | ||||||||||||||||||||||||||
Net assets | 379,694 | 170,664 | 227,688 | 31,600 | 456,360 | 268,557 | 5,887 | |||||||||||||||||||||||||||||||||
Net assets atributable to non-controlling interest | 95,692 | 56,319 | 56,922 | 3,341 | 32,720 | 878 | 3,147 | (115 | ) | 31 | 248,935 | |||||||||||||||||||||||||||||
Revenues | 94,373 | 102,279 | 204,678 | 99,187 | 310,992 | 1,039,497 | - | |||||||||||||||||||||||||||||||||
Profit of the period | 12,704 | 15,585 | 39,410 | 27 | 21,958 | (78,508 | ) | 58 | ||||||||||||||||||||||||||||||||
Other comprehensive income | - | - | - | (26 | ) | - | (4,246 | ) | - | (1,165 | ) | - | (5,437 | ) | ||||||||||||||||||||||||||
Total comprehensive income for the period | 12,704 | 15,585 | 39,410 | 1 | 21,958 | (82,754 | ) | 58 | ||||||||||||||||||||||||||||||||
Profit (loss) of the period, allocated to non-controlling interest | 7,203 | 5,143 | 9,853 | 11 | 3,337 | (611 | ) | 31 | (176 | ) | 190 | 24,981 | ||||||||||||||||||||||||||||
Other comprehensive income, allocated to non-controlling interest | - | - | - | (5 | ) | - | 40 | - | - | - | 35 |
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AENZA S.A.A. and Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2022 and June 30, 2023
30. | Dividends |
In compliance with certain covenants applicable as of to this date produced by agreements subscribed by the corporation, the Company will not pay, except for transactions with non-controlling interests. Certain of our debt or other contractual obligations may restrict our ability to pay dividends in the future. Additionally, the Collaboration and Benefits Agreement does not allow the distribution of dividends until 40% of the total amount of the committed civil penalty described in Note 1.C has been paid.
For the period ended June 30, 2023, the Corporation’s subsidiaries have paid dividends to its non-controlling interests of S/50.7 million (for year ended on December 31, 2022, the subsidiaries paid S/2.3 million).
31. | Loss per Share |
The basic loss per common share has been calculated by dividing the loss of the period attributable to the Corporate’s common shareholders by the weighted average of the number of common shares outstanding during that period.
For the periods ended June 30, 2022 and 2023, the basic loss per common share is as follows:
For the three | For the six | ||||||||||||||||||
month period ended June 30, | month period ended June 30, | ||||||||||||||||||
In thousands of soles | 2022 | 2023 | 2022 | 2023 | |||||||||||||||
Profit (loss) attributable to owners of the Company during the period | 72,631 | (5,174 | ) | (15,213 | ) | (22,562 | ) | ||||||||||||
Weighted average number of shares in issue at S/1.00 each, at June 30, | (*) | 1,041,821,096 | 1,196,979,979 | 1,041,821,096 | 1,196,979,979 | ||||||||||||||
Basic profit (loss) per share (in S/) | (**) | 0.074 | (0.004 | ) | (0.015 | ) | (0.019 | ) | |||||||||||
Weighted average number of shares (diluted) in issue at S/1.00 each, at June 30, | 1,196,979,979 | 1,196,979,979 | 1,196,979,979 | 1,196,979,979 | |||||||||||||||
Diluted profit (loss) per share (in S/) | 0.060 | (0.004 | ) | (0.013 | ) | (0.019 | ) |
(*) | The weight average of the shares in 2022, considers the bond capitalization effect in common shares issued, performed in two tranches (February 28th and March 31st of 2022), disclosed in note 21 (weight: 59 days with 284,216,317 shares, 31 days with 155,808,214 shares and 91 days with 601,796,564 shares). |
(**) | The Corporation does not have common shares with dilutive effects as of June 30, 2022 and 2023. |
32. | Events after the date of the interim condensed financial statement |
Between June 30, 2023 and the date of approval of the interim condensed consolidated financial statements, there have been no subsequent events that may affect the reasonableness of the financial statements issued.
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