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
November 2008
Date of Report (Date of Earliest Event Reported)
__________________________
Embotelladora Andina S.A.
(Exact name of registrant as specified in its charter)
Andina Bottling Company, Inc.
(Translation of Registrant´s name into English)
Avda. El Golf 40, Piso 4
Las Condes
Santiago, Chile
(Address of principal executive office)
__________________________
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 ___X___ Form 40-F _______
Indicate by check mark if the Registrant is submitting this Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1):
Yes _______ No ___X____
Indicate by check mark if the Registrant is submitting this Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7):
Yes _______ No ___X____
Indicate by check mark whether the registrant by furnishing the information contained in this Form 6-K is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934
Yes _______ No ___X____
1
CONSOLIDATED FINANCIAL STATEMENTS
As of September 30, 2008
(Free translation of original in Spanish)
CONTENTS
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
Ch$
-
Chilean pesos
ThCh$
-
Thousands of Chilean pesos
US$
-
United States dollars
ThUS$
-
Thousands of United States dollars
R$
-
Brazilian Reais
ThR$
-
Thousands of Brazilian Reais
AR$
-
Argentine pesos
ThAR$
-
Thousands of Argentine pesos
UF
-
Unidades de Fomento (Chilean government inflation-indexed monetary units)
2
Consolidated Balance Sheets
(Figures in ThCh$ of September 30, 2008)
| For the period ended | |
ASSETS | September 30, | |
| 2008 | 2007 |
CURRENT ASSETS | ThCh$ | ThCh$ |
Cash | 14,173,432 | 31,991,147 |
Time deposits | 53,009,344 | 13,316,938 |
Marketable securities (net) | 40,178,973 | 48,679,235 |
Trade accounts receivable (net) | 31,247,610 | 29,913,974 |
Notes receivable (net) | 9,319,085 | 9,560,890 |
Other receivables (net) | 14,661,227 | 9,301,532 |
Notes and accounts receivable from related companies | 1,725,894 | 671,041 |
Inventories (net) | 28,052,543 | 26,330,946 |
Recoverable taxes | 4,597,810 | 4,060,819 |
Prepaid expenses | 2,976,022 | 2,339,933 |
Deferred income taxes | 5,133,258 | 772,420 |
Other current assets | 7,640,701 | 37,598,844 |
TOTAL CURRENT ASSETS | 212,715,899 | 214,537,719 |
|
|
|
PROPERTY, PLANT & EQUIPMENT |
|
|
Land | 19,085,275 | 18,149,585 |
Buildings & improvements | 114,101,626 | 103,155,511 |
Machinery and equipment | 267,217,189 | 244,796,465 |
Other property, plant & equipment | 255,023,582 | 238,697,146 |
Technical reappraisal of property, plant & equipment | 2,361,205 | 2,361,860 |
Depreciation | (453,574,103) | (436,093,658) |
TOTAL PROPERTY, PLANT & EQUIPMENT | 204,214,774 | 171,066,909 |
|
|
|
OTHER ASSETS |
|
|
Investments in related companies | 25,554,418 | 22,558,465 |
Investments in other companies | 126,627 | 62,939 |
Goodwill | 58,308,725 | 65,784,575 |
Long-term receivables | 20,102 | 42,358 |
Long-term notes and accounts receivable from related companies | 46,142 | 39,540 |
Intangibles | 1,455,261 | 445,993 |
Amortization | (169,464) | (282,226) |
Others | 24,532,525 | 43,621,074 |
TOTAL OTHER ASSETS | 109,874,336 | 132,272,718 |
TOTAL ASSETS | 526,805,009 | 517,877,346 |
The accompanying Notes 1 to 35 are an integral part of these consolidated financial statements.
3
Consolidated Balance Sheets
(Figures in ThCh$ of September 30, 2008)
| For the period ended | |
| September 30, | |
LIABILITIES AND SHAREHOLDERS' EQUITY | 2008 | 2007 |
| ThCh$ | ThCh$ |
Short-term bank liabilities | 10,684,271 | 9,401,622 |
Current portion of long-term bank liabilities | 123,077 | 230,052 |
Current portion of bonds payable | 1,656,078 | 15,770,983 |
Dividends payable | 5,793,196 | 6,332,891 |
Accounts payable | 46,623,380 | 41,633,020 |
Other creditors | 4,734,355 | 4,367,059 |
Notes and accounts payable to related companies | 9,626,255 | 9,096,460 |
Provisions | 3,782,640 | 3,812,046 |
Withholdings | 17,174,704 | 15,239,961 |
Income taxes payable | 2,728,360 | 3,506,404 |
Unearned income | 29,626 | 568,945 |
Other current liabilities | 4,470,897 | 6,118,933 |
TOTAL CURRENT LIABILITIES | 107,426,839 | 116,078,376 |
|
|
|
|
|
|
Long-term bank liabilities | 612,758 | 833,537 |
Bonds payable | 77,656,858 | 79,796,660 |
Other creditors | 59,827 | 108,948 |
Long-term notes and accounts payable to related companies | 3,311,487 | 3,818,376 |
Provisions | 16,072,428 | 18,375,053 |
Deferred income taxes | 14,449,262 | 9,749,018 |
Other long-term liabilities | 12,219,706 | 11,410,655 |
TOTAL LONG-TERM LIABILITIES | 124,382,326 | 124,092,247 |
Minority interest | 1,328,682 | 1,364,421 |
|
|
|
Paid-in capital | 217,013,513 | 220,852,672 |
Reserve capital revalued | 14,973,932 | 11,263,486 |
Other reserves | (5,170,057) | (9,535,324) |
Accumulated earnings | 22,738,700 | 11,958,890 |
Net income for the period | 55,488,278 | 54,213,431 |
Interim dividends | (11,377,204) | (12,410,853) |
TOTAL SHAREHOLDERS’ EQUITY | 293,667,162 | 276,342,302 |
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY | 526,805,009 | 517,877,346 |
The accompanying Notes 1 to 35 are an integral part of these consolidated financial statements.
4
Consolidated Statements of Income
(Figures in ThCh$ of September 30, 2008)
| For the period ended | |
| September 30, | |
| 2008 | 2007 |
| ThCh$ | ThCh$ |
|
|
|
Net sales | 249,753,175 | 208,543,933 |
Cost of sales | 560,752,663 | 483,356,908 |
Gross margin | (310,999,488) | (274,812,975) |
Administrative and selling expenses | (161,785,252) | (129,277,244) |
OPERATING INCOME | 87,967,923 | 79,266,689 |
|
|
|
|
|
|
Financial income | 9,396,683 | 17,150,723 |
Equity in earnings of equity investments | 670,223 | 711,577 |
Other non-operating income | 5,868,407 | 6,589,024 |
Equity in losses of equity investments | (5,985) | (409,906) |
Amortization of goodwill | (4,959,328) | (5,106,535) |
Financial expenses | (19,837,505) | (10,948,239) |
Other non-operating expenses | (11,043,501) | (6,375,314) |
Price level restatement | (1,803,927) | 418,513 |
Foreign exchange gains | 5,038,450 | (9,886,042) |
NON OPERATING INCOME AND EXPENSE | (16,676,483) | (7,856,199) |
|
|
|
Income before income taxes and extraordinary items | 71,291,440 | 71,410,490 |
Income tax expense | (15,849,030) | (17,164,068) |
Income before minority interest | 55,442,410 | 54,246,422 |
Minority interest | 45,868 | (32,991) |
NET INCOME FOR THE PERIOD | 55,488,278 | 54,213,431 |
The accompanying Notes 1 to 35 are an integral part of these consolidated financial statements.
5
Consolidated Statements of Cash Flow
(Figures in ThCh$ of September 30, 2008)
| For the period ended | |
| September 30, | |
| 2008 | 2007 |
| ThCh$ | ThCh$ |
|
|
|
Collection of trade receivables | 818,566,116 | 676,958,698 |
Financial income received | 27,669,392 | 10,312,157 |
Dividend & other distributions received | 1,822,000 | 4,281,368 |
Other income received | 69,112 | 60,169 |
Payments to suppliers and personnel | (597,501,968) | (478,907,512) |
Interest paid | (22,609,690) | (8,584,505) |
Income taxes paid | (21,357,241) | (16,010,502) |
Other expenses | 0 | (1,476) |
VAT and other tax payments | (113,209,069) | (87,034,219) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 93,448,652 | 101,074,178 |
|
|
|
|
|
|
Borrowings | 67,940,395 | 26,697,840 |
Dividend distribution | (66,844,482) | (77,945,804) |
Loan payments | (62,000,671) | (19,934,711) |
Bond payments | (6,786,301) | (24,788,319) |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | (67,691,059) | (95,970,994) |
|
|
|
Proceeds from sales of property, plant and equipment | 431,319 | 628,940 |
Proceeds from sales of other investments | 1,041,670 | 84,986,407 |
Other investment income | 86,238 | 0 |
Additions to property, plant & equipment | (46,634,769) | (43,643,836) |
Investments in financial instruments | (17,716,074) | (196,109) |
Other investment disbursements | (1,251,648) | 0 |
NET CASH PROVIDED BY (USED IN) INVESTMENT ACTIVITIES | (64,043,264) | 41,775,402 |
|
|
|
TOTAL NET CASH FOR THE PERIOD | (38,285,671) | 46,878,586 |
Effect of inflation on cash and cash equivalents | (530,123) | 72,944 |
Net (decrease) increase in cash and cash equivalents | (38,815,794) | 46,951,530 |
Cash and cash equivalents at beginning of period | 130,919,971 | 45,884,927 |
Cash and cash equivalents at end of period | 92,104,177 | 92,836,457 |
The accompanying Notes 1 to 35 are an integral part of these consolidated financial statements.
6
Reconciliation between Net Income and Net Cash Flows
Provided by Operating Activities
(Figures in ThCh$ of September 30, 2008)
| For the period ended | |
| September 30, | |
| 2008 | 2007 |
| ThCh$ | ThCh$ |
|
|
|
Net Income | 55,488,278 | 54,213,431 |
Income on sale of assets: | (140,169) | 141,893 |
Loss (Gain) on sale of property, plant and equipment | (129,908) | 161,060 |
Gain on sale of other assets | (10,261) | (19,167) |
|
|
|
Adjustments to net income that do not represent movements of cash | 35,755,452 | 38,737,695 |
Depreciation | 26,462,630 | 23,925,640 |
Amortization of intangibles | 220,286 | 207,638 |
Write-offs and provisions | 830,471 | 901,867 |
Equity in earnings of equity investments | (670,223) | (711,577) |
Equity in losses of equity investments | 5,985 | 409,906 |
Amortization of goodwill | 4,959,328 | 5,106,535 |
Price level restatement | 1,803,927 | (418,513) |
Foreign exchange gains, net | (5,038,450) | 9,886,042 |
Other credits to income that do not represent cash flows | 0 | (1,828,382) |
Other charges to income that do not represent cash flows | 7,181,498 | 1,258,539 |
|
|
|
Changes in operating assets | 34,796,269 | 1,321,625 |
(Increase) decrease in trade accounts receivable | 30,785,099 | 21,884,595 |
(Increase) decrease in inventories | 1,173,431 | (2,335,228) |
(Increase) decrease in other assets | 2,837,739 | (18,227,742) |
|
|
|
Changes in operating liabilities | (32,405,310) | 6,626,543 |
Increase (decrease) in accounts payable related to operating income | (33,711,246) | (14,446,882) |
Increase (decrease) in interest payable | 23,270,876 | 9,114,247 |
Increase (decrease) in income taxes payable | (17,251,682) | 10,056,274 |
Increase (decrease) in other accounts payable related to non-operating income | (2,440,303) | 4,035,546 |
Increase (decrease) in valued added tax and other similar items | (2,272,955) | (2,132,642) |
|
|
|
Minority interest | (45,868) | 32,991 |
|
|
|
NET CASH PROVIDED BY OPERATING ACTIVITIES | 93,448,652 | 101,074,178 |
The accompanying Notes 1 to 35 are an integral part of these consolidated financial statements.
7
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of September 30, 2008 and 2007 (figures in ThCh$ of September 30, 2008)
Note 1 - Incorporation in the Securities Register
Embotelladora Andina S.A. was incorporated in the Securities Register under No. 00124 and, in conformity with Law 18,046 is subject to the supervision of the Chilean Superintendence of Securities and Insurance Companies (the “SVS”).
Note 2 - Summary of Significant Accounting Principles
a)
Accounting period
The consolidated financial statements cover the period January 1 to September 30, 2008 and are compared to the same period in 2007.
b)
Basis of preparation
The consolidated financial statements have been prepared in conformity with generally accepted accounting principles issued by the Chilean Institute of Accountants, as well as rules and regulations of the SVS. In the event of discrepancy, the SVS regulations will prevail.
c)
Basis of presentation
For comparison purposes, the figures in the prior-year financial statements have been restated by 9.3% according to CPI and minor reclassifications have been made.
d)
Basis of consolidation
The accompanying financial statements include assets, liabilities, income and cash flows of the Parent Company and its subsidiaries. The equity and income accounts of the Parent Company and its subsidiaries have been combined, eliminating investments and current accounts between consolidated companies, transactions between them and the unrealized income from inter-company transactions.
In addition, for proper presentation of consolidated net income, the participation in income by minority shareholders is shown in the consolidated statements of income under Minority interest.
Holding percentages
The subsidiaries included in the consolidated financial statements and Andina’s direct and indirect holding percentages are as follows:
Company Name | Ownership Interest | |||
| 2008 | 2007 | ||
| Direct | Indirect | Total | Total |
Abisa Corp S.A. | - | 99.99 | 99.99 | 99.99 |
Andina Bottling Investments S.A. | 99.90 | 0.09 | 99.99 | 99.99 |
Andina Inversiones Societarias S.A. | 99.99 | - | 99.99 | 99.99 |
Andina Bottling Investments Dos S.A. | 99.90 | 0.09 | 99.99 | 99.99 |
Embotelladora del Atlántico S.A. | - | 99.98 | 99.98 | 99.98 |
Rio de Janeiro Refrescos Ltda. | - | 99.99 | 99.99 | 99.99 |
Servicios Multivending Ltda. | 99.90 | 0.09 | 99.99 | 99.99 |
Transportes Andina Refrescos Ltda. | 99.90 | 0.09 | 99.99 | 99.99 |
Vital S.A. | - | 99.99 | 99.99 | 99.99 |
RJR Investments Corp S.A. | - | 99.99 | 99.99 | 99.99 |
Vital Aguas S.A. | 56.50 | - | 56.50 | 56.50 |
e)
Price-level restatement
The financial statements have been restated to reflect the effect of price-level changes on the purchasing power of the Chilean peso during the respective periods. Restatements have been determined on the basis of the percentage variation of
8
the official Chilean Consumer Price Index, “CPI”, issued by the Chilean National Institute of Statistics, which amounted to 6.9% for the period December 1, 2007 to August 31, 2008 (5.1% for the same period of the previous year).
f)
Currency translation
Balances in foreign currency are considered as non-monetary items and are translated at the exchange rate prevailing at year-end. Regarding balances subject to restatement, these have been restated by the corresponding restatement index or by the agreed upon rate.
Assets and liabilities in foreign currency and Unidades de Fomento have been translated into local currency at the following end of period exchange rates:
|
| 2008 | 2007 |
|
| Ch$ | Ch$ |
Unidades de Fomento | (UF) | 20,988.34 | 19,178.94 |
United States dollars | (US$) | 551.31 | 511.23 |
Argentine pesos | (AR$) | 175.86 | 162.30 |
Brazilian Real | (R$) | 288.00 | 278.01 |
Euro | (€$) | 775.51 | 729.29 |
g)
Marketable securities
Marketable securities include investments in mutual funds and investment fund shares, valued at the redemption value for each year end.
Investments in bonds are valued at the lesser of restated cost plus accrued interest and market value.
h)
Inventories
The cost of raw materials includes all disbursements made in the acquisition process and deemed necessary for them to be readily available for use. The costs of finished products include all manufacturing costs. Raw materials and finished products are valued at the average weighted cost.
Provisions are made for obsolescence on the basis of turnover of raw materials and finished products.
The stated values of inventories do not exceed their estimated net realizable value.
i)
Allowance for doubtful accounts
The allowance for doubtful accounts consists of a general provision determined on the basis of the aging of accounts receivable and on a case-by-case analysis where collection is doubtful. In the opinion of the Company’s management, the allowances are reasonable and the net balances are recoverable.
j)
Property, plant and equipment
For companies incorporated in Chile, Property, Plant and Equipment is carried at acquisition value plus price-level restatements. For companies incorporated abroad it has been restated in terms of the variation of the U.S. dollar according to the details described in Note 2m.
Technical reappraisal of property, plant and equipment, authorized by the SVS on December 31, 1979, is shown at restated value under the heading “Technical reappraisal of property, plant and equipment”.
Fixed assets to be disposed of for sale are valued at the lower of the net realizable value and book value. Unrealized losses are reflected in the consolidated statement of income under Other non-operating expenses.
k)
Depreciation
Depreciation of property, plant and equipment is determined by the straight-line method based on the estimated useful lives of the valued assets.
9
l)
Containers
Inventories of containers, bottles and plastic containers at plants, warehouses, and with third parties are stated at cost plus price-level restatements and are included in Other property, plant and equipment. Broken or damaged containers at plants and warehouses are expensed in each accounting period.
m)
Investments in related companies
Investments in shares or rights in companies in which the Company has a significant holding in the investee are accounted for using the equity method. The Company’s proportionate share of net income and losses of related companies is recognized in the consolidated statements of income, after eliminating any unrealized profits or losses from transactions between related companies.
Investments in foreign companies are valued in conformity with Technical Bulletin No. 64 issued by the Chilean Institute of Accountants. The United States (“US”) dollar is the currency used to control investments and to translate financial statements of foreign companies. Assets and liabilities from these investments are translated into Chilean pesos at year end exchange rate, except that non-monetary assets and liabilities and shareholders’ equity are first expressed at their equivalent value in historical US dollars. Income and expense items are first translated into US dollars at the average exchange rate during the month.
n)
Intangibles
Intangibles include franchise rights and licenses that are amortized over the terms of the contracts, not in excess of 20 years.
o)
Goodwill
Goodwill represents the difference between purchase cost of the shares acquired and the proportional equity value of investment on the purchase date. These differences are amortized based on the expected period of return of the investment, estimated at 20 years.
p)
Bonds payable
Bonds payable includes the placement of Yankee Bonds on the US markets and placement of bonds in UF in Chile, which are carried at the issue rate. The difference in valuation as compared to the effective placement rate is recorded as a deferred asset. This asset is amortized using the straight-line method over the term of the respective obligations, under Financial Expenses.
q)
Income taxes and deferred income taxes
The companies have recognized its current tax obligations in conformity with current legislation. The effects of deferred income taxes arising from temporary differences between the basis of assets and liabilities for tax and financial statement purposes are recorded on the basis of the enacted tax rate that will be in effect at the estimated date of reversal, in conformity with Technical Bulletin No. 60 issued by the Chilean Institute of Accountants. The effects of deferred income taxes existing at the time of the enforcement of the aforesaid Bulletin, i.e. January 1, 2000, and not previously recognized, are recorded as gain or loss according to their estimated reversal period.
r)
Staff severance indemnities
The Company has recorded a liability for long-term service indemnities in accordance with the collective agreements entered into with its employees. The provision is stated at present value of the projected cost of the benefit, which is discounted at a 7.0% annual rate and a capitalization period using the staff’s expected length of service to their retirement date.
Since the year 2005, the Company maintains a withholding plan for some officers. A liability is recorded according to the guidelines of this plan. The plan entitles certain officers of the Company to receive a fixed payment in cash at a predetermined date once he has fulfilled years of service.
s)
Deposits for containers
Corresponds to the liabilities constituted by cash guarantees received from clients for lending bottles to them.
10
For those loans for placement subsequent to January 31, 2001, an expiration date of five years as from the invoice date was established. In the event the client has not returned all or a portion of the containers and/or cases, the Company may, without delay, enforce the guarantee, in whole or in part, in cash and record that effect in operating income of the Company.
This liability is presented under Other long-term liabilities, considering that the number of new containers in circulation in the market during the year is historically greater than the number of containers returned by clients during the same period.
t)
Revenue recognition
Given the nature of its operations, the Company records revenue based on the physical delivery of finished products to its clients, based on the realization principle and in accordance with Technical Bulletin No. 70 issued by the Chilean Institute of Accountants.
u)
Derivative contracts
Derivative contracts include instruments used to hedge the risk of exposure to exchange rate differences as follows:
Derivative instruments used to hedge existing items on the balance sheet are recorded at their fair values. Unrealized losses are recognized as a charge to income and gains are deferred and included under Other liabilities (current or long-term). Hedge ineffectiveness is recognized in the income statement.
Derivative instruments used to hedge forecasted transactions are recorded at their market values and the changes in their values are accounted for as unrealized gains or losses. Upon contract expiration, the deferred gains and losses are recorded in the income statements.
v)
Computer software
Corresponds to computer packages currently in use that have a future economic benefit, and are amortized over a period equal to their useful life.
w)
Research and development costs
Costs incurred by the Company in research and development are immaterial given the nature of the business and the strong support from The Coca-Cola Company to its bottlers.
x)
Consolidated statement of cash flows
For purposes of preparation of the statement of cash flows, in accordance with Technical Bulletin N°50 of the Chilean Institute of Accountants and circular N°1,501 of the Superintendencia de Valores y Seguros (Chilean Securities and Exchange Commission)the Company has considered cash equivalent to be investments in fixed-income, mutual funds, time deposits and operations with sale-back agreements maturing within 90 days.
Cash flows from operating activities include all business-related cash flows as well as interest paid, financial income and, in general, all cash flows not defined as from financial or investment activities. The operating concept used for this statement is broader than that in the statement of income.
Note 3 - Accounting Changes
There are no changes in the application of generally accepted accounting principles in Chile in relation to the previous year that could significantly affect the comparability of these financial statements.
11
Note 4 - Marketable Securities
| Accounting value for the period |
|
|
|
| |
| ended September 30, |
|
|
|
| |
| 2008 | 2007 |
|
|
|
|
Type of Instrument | ThCh$ | ThCh$ |
|
|
|
|
Bonds | - | 1,150,526 |
|
|
|
|
Mutual funds | 7,806,198 | 3,029,419 |
|
|
|
|
Investment funds | 32,359,204 | 44,499,290 |
|
|
|
|
Promissory notes | 13,571 | - |
|
|
|
|
Total marketable securities | 40,178,973 | 48,679,235 |
|
|
|
|
|
|
|
|
|
|
|
| Accounting value for the period ended September 30, 2007 |
|
|
|
|
|
Mutual funds: | September 30, |
|
|
|
|
|
Institution | ThCh$ |
|
|
|
|
|
Fondo Mutuo CELFINCAPITAL | 3,664,064 |
|
|
|
|
|
Fondo Mutuo Banchile | 1,492,894 |
|
|
|
|
|
Fondo Mutuo Cruz del Sur Liquidez | 1,221,711 |
|
|
|
|
|
Fondo Mutuo BCI Express | 1,000,575 |
|
|
|
|
|
Fondo Mutuo B.SCOTIABANK Valoriza | 270,813 |
|
|
|
|
|
Fondo Mutuo RBC | 156,141 |
|
|
|
|
|
|
|
|
|
|
|
|
Balance mutual funds | 7,806,198 |
|
|
|
|
|
|
|
|
|
|
|
|
Investment funds: |
|
|
|
|
|
|
Institution | ThCh$ |
|
|
|
|
|
DWS Institutional USD Money Plus | 18,228,585 |
|
|
|
|
|
Citi Institutional Liquid Reserves Limited - USA | 14,130,619 |
|
|
|
|
|
Balance investment funds | 32,359,204 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Date | Par | Accounting Value | Market | ||
Fixed Income Instruments: | Purchase | Maturity | Value | Amount | Rate | Value |
Issuer |
|
| ThCh$ | ThCh$ |
| ThCh$ |
ILUSTRE MUNICPALIDAD DE MAIPÚ | 28-Aug-08 | 28-Aug-23 | 13,571 | 13,571 | 3.44% | 13,571 |
12
Note 5 – Short and Long-Term Receivables
Almost all of said accounts correspond to the soft drinks category. The balance of other accounts receivable mainly corresponds to prepayment to our sugar suppliers.
|
| CURRENT |
|
|
|
| LONG TERM | ||
| Up to 90 days | More than 90 days up to 1 year | Subtotal | Total current (net) |
|
| |||
| 2008 | 2007 | 2008 | 2007 | 2008 | 2008 | 2007 | 2008 | 2007 |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Trade receivables | 31,486,587 | 29,019,644 | 757,937 | 894,330 | 32,244,524 | 31,247,610 | 29,913,974 | 0 | 0 |
Allowance for doubtful accounts |
|
|
|
| (996,914) |
|
|
|
|
Notes receivable | 9,272,477 | 9,030,132 | 568,780 | 530,758 | 9,841,257 | 9,319,085 | 9,560,890 | 0 | 0 |
Allowance for doubtful accounts |
|
|
|
| (522,172) |
|
|
|
|
Other receivables | 14,030,988 | 8,528,056 | 776,176 | 773,476 | 14,807,164 | 14,661,227 | 9,301,532 | 20,102 | 42,358 |
Allowance for doubtful accounts |
|
|
|
| (145,937) |
|
|
|
|
|
|
|
|
| Total long term receivables | 20,102 | 42,358 |
13
Note 6 - Balances and Transactions with Related Companies
Receivable and payable balances with related companies correspond to the following concepts:
1) Notes and accounts receivable.
Embonor S.A.: Sale of products
Embotelladora Coca-Cola Polar S.A.: Sale of products
Coca-Cola de Chile S.A.: Advertising agreements.
Company | Short Term | Long Term | ||
| 2008 | 2007 | 2008 | 2007 |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
EMBONOR S.A. | 1,137,750 | 350,146 | - | - |
COCA-COLA DE CHILE S. A. | - | - | 46,142 | 39,540 |
EMBOTELLADORA COCA-COLA POLAR S.A. | 588,144 | 320,895 | - | - |
Total | 1,725,894 | 671,041 | 46,142 | 39,540 |
2) Notes and accounts payable:
Coca-Cola de Chile S.A.: Concentrate purchases
Recofarma Indústrias do Amazonas Ltda.: Concentrate purchases
Envases CMF S.A.: Raw material purchases
Servicios y Productos para Bebidas Refrescantes S.R.L.: Concentrate purchases
Envases Central S.A.: Net balance corresponds to raw materials and finished products transactions.
Envases del Pacífico S.A.: Raw material purchases
Cican S.A.: Net balance corresponds to raw materials and finished products transactions.
Embonor S.A. and Embotelladora Coca-Cola Polar S.A.: Corresponds to unearned income due to commitments of sale of products of Vital S.A. to those companies, which will be realized in accordance with future deliveries.
Company | Short Term | Long Term | ||
| 2008 | 2007 | 2008 | 2007 |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
COCA-COLA DE CHILE S.A. | 3,028,545 | 663,125 | - | - |
SERVICIOS Y PRODUCTOS PARA BEBIDAS REFRESCANTES S.R.L. | 2,423,861 | 1,676,883 | - | - |
RECOFARMA INDUSTRIAS DO AMAZONAS LTDA. | 1,855,861 | 3,169,408 | - | - |
ENVASES CMF S. A. | 1,485,550 | 2,605,930 | - | - |
ENVASES CENTRAL S. A. | 765,360 | 613,736 | - | - |
ENVASES DEL PACIFICO S. A. | 67,078 | 68,943 | - | - |
CICAN S.A. | - | 298,435 | - | - |
CENTRALLI REFRIGERANTE S.A. | - | - | 139,297 | 113,618 |
EMBONOR S.A. | - | - | 2,520,581 | 2,948,458 |
EMBOTELLADORA COCA-COLA POLAR S.A. | - | - | 651,609 | 756,300 |
Total | 9,626,255 | 9,096,460 | 3,311,487 | 3,818,376 |
14
3) Transactions with related companies
The following table includes transactions with related companies that exceed ThCh$200,000.
Company | Relation | Transaction | 30-sep-08 | 30-sep-07 | ||
|
|
| Amount | Effect on income (charge) credit | Amount | Effect on income (charge) credit |
|
|
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
ENVASES CENTRAL S.A. | Equity Investee | Finished product purchase | 11,225,938 | - | 12,652,142 | - |
- | - | Sales of raw materials and supplies | 1,235,304 | 123,469 | 1,285,912 | 77,181 |
COCA-COLA DE CHILE S.A. | Shareholder | Concentrate purchases | 39,745,551 | - | 36,004,157 | - |
- | - | Payment of advertising participation | 839,116 | -839,116 | 3,294,337 | -3,294,337 |
- | - | Sales of advertisement | 1,243,050 | - | 1,244,665 | - |
- | - | Water source rental | 1,416,696 | -1,416,696 | 1,292,107 | -1,292,107 |
- | - | Other sales | - | - | 354,633 | - |
RECOFARMA INDUSTRIAS DO AMAZONAS LTDA. | Shareholder related | Concentrate purchases | 48,607,285 | - | 42,575,152 | - |
- | - | Reimbursements and other purchases | 1,094,343 | 1,094,343 | 404,677 | 404,677 |
- | - | Payment of advertising participation | 4,851,680 | -4,861,680 | 2,663,814 | -2,663,814 |
ENVASES CMF S.A. | Equity Investee | Container purchases | 10,606,399 | - | 12,164,440 | - |
- | - | Finished product sale | - | - | 135,152 | - |
- | - | Dividend payment | 2,652,500 | - | 3,433,113 | - |
SERVICIOS Y PRODUCTOS PARA BEBIDAS REFRESCANTES S.R.L. | Shareholder | Concentrate purchases | 22,868,904 | - | 20,769,495 | - |
ENVASES DEL PACIFICO S.A. | Director in common | Purchase of raw materials | 283,840 | - | 147,777 | - |
EMBONOR S.A. | Shareholder related | Product purchase | 144,508 | - | - | - |
- | - | Sale of products | 143,384 | - | 4,280,196 | 931,985 |
- | - | Product purchase | - | - | 266,484 | - |
- | - | Sale of products | 6,549,492 | 1,320,628 | 2,154,834 | 396,290 |
EMBOTELLADORA COCA-COLA POLAR S.A. | Shareholder related | Product purchase | 41,789 | - | - | - |
- | - | Sale of products | 3,641,234 | 528,501 | 3,960,132 | 724,570 |
CICAN S.A. | Equity Investee | Finished product purchase | - | - | 1,377,027 | - |
- | - | Sales of raw materials | - | - | 198,973 | 33,032 |
IANSAGRO S.A. | Director in common | Sugar purchases | 12,961,632 | - | 12,760,361 | - |
VENDOMATICA S.A. | Director related company | Sale of finished products | 1,038,089 | 311,426 | 1,116,485 | 334,945 |
BBVA ADMINISTRADORA GENERAL DE FONDOS | Director related company | Investment in mutual funds | 11,401,000 | - | 48,650,393 | - |
BBVA ADMINISTRADORA GENERAL DE FONDOS S.A. | Director related company | Redemption of mutual funds | 11,401,000 | - | 50,651,195 | - |
4) Other transactions
Within the normal course of business, in 2006 the Company entered into a future supply agreement with Iansagro S.A. for the purchase of sugar. This agreement will expire in January 2009.
15
Note 7 – Inventories
| 30-sep-08 | 30-sep-07 | ||||
| Gross Value | Obsolescence provision | Net value | Gross Value | Obsolescence provision | Net value |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
|
|
|
|
|
|
|
Finished products | 13,429,828 | (171,813) | 13,258,015 | 12,520,687 | (206,547) | 12,314,140 |
Raw materials | 11,540,264 | (420,394) | 11,119,870 | 12,512,885 | (454,715) | 12,058,170 |
Products in process | 2,228,140 | 0 | 2,228,140 | 1,468,621 | 0 | 1,468,621 |
Raw materials in transit | 1,446,518 | 0 | 1,446,518 | 515,582 | (25,567) | 490,015 |
Total | 28,644,750 | (592,207) | 28,052,543 | 27,017,775 | (686,829) | 26,330,946 |
Note 8 - Deferred Taxes and Income Taxes
a)
At period end 2008 and 2007, the Company did no present taxable profit or non-taxable profit funds.
Short-term and long-term assets and liabilities must be netted out to compose the general balance sheet on deferred taxes.
b) The following table contains information on deferred taxes:
| 30-sep-08 | 30-sep-07 | ||||||
| Assets | Liabilities | Assets | Liabilities | ||||
| Short term | Long term | Short term | Long term | Short term | Long term | Short term | Long term |
Temporary differences | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Allowance for doubtful accounts | 287,411 | 5,731 | - | - | 327,568 | 46,619 | - | - |
Vacation provision | 187,621 | - | - | - | 174,701 | - | - | - |
Production expenses | 12,908 | - | - | - | - | - | - | - |
Depreciation of property, plant & equipment | - | - | 167,601 | 6,746,505 | - | - | 117,365 | 3,951,937 |
Severance indemnities | 53,737 | - | 20,073 | 172,237 | - | - | 32,854 | 216,358 |
Others | 1,541,276 | 365,508 | - | 74,345 | 1,253,285 | 847,055 | - | - |
Provision for assets write off | 110,407 | 1,188,988 | - | - | 388,247 | 791,141 | - | - |
Provision for labor and commercial lawsuits | - | 1,918,443 | - | - | - | 1,371,257 | - | - |
Tax loss carry-forwards | 3,127,601 | - | - | - | 3,524,655 | 3,204,124 | - | - |
Guarantee deposits | - | - | - | - | - | - | - | 1,093,000 |
Local bond issue expenses | - | - | 29 | 144,192 | - | - | - | 162,250 |
Contingency allowance | - | 371,596 | - | - | - | 252,423 | - | - |
Accrued interests abroad | - | - | - | - | - | - | 4,745,817 | - |
Exchange rate difference | - | - | - | 12,889,755 | - | - | - | 13,129,086 |
Complementary accounts, net of amortization | - | - | - | (1,727,506) | - | - | - | (2,290,994) |
Total | 5,320,961 | 3,850,266 | 187,703 | 18,299,528 | 5,668,456 | 6,512,619 | 4,896,036 | 16,261,637 |
16
c) The following table contains information on income taxes at each period-end.
| 30-sep-08 | 30-sep-07 |
| ThCh$ | ThCh$ |
Current tax expense (tax allowance) | (14,834,552) | (12,603,901) |
Tax expense adjustment (previous period) | 1,450,395 | 415,747 |
Deferred income tax expense/effect over assets or liabilities | (1,065,369) | (3,174,656) |
Amortization of deferred income tax asset and liability complementary accounts | (298,858) | (685,741) |
Other charges or credits | (1,100,646) | (1,115,517) |
Total | (15,849,030) | (17,164,068) |
Note 9 - Other Current Assets
| 30-sep-08 | 30-sep-07 |
| ThCh$ | ThCh$ |
Supplies | 5,116,873 | 4,506,849 |
Securities purchased under agreements to resell | 1,595,000 | - |
Cross currency swap effects | - | 31,934,331 |
Short term bonds discount | 196,993 | 202,246 |
Accrued interest on long-term bonds | - | 124,812 |
Wachovia Investment Fund (restricted) | - | 132,248 |
Others | 731,835 | 698,358 |
Total | 7,640,701 | 37,598,844 |
Note 10 – Securities purchased under agreements to resell.
Dates | Counterparty | Currency | Subscription value | Rate | Final amount | Type of instrument | Market value | |
Beginning | Ending |
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
30-Sep-08 | 2-Oct-08 | Banchile Corredores de Bolsa S.A. | Ch$ | 520,936 | 0.90% | 521,249 | Ch$ Time deposits Banco de Chile | 520,936 |
30-Sep-08 | 2-Oct-08 | Banchile Corredores de Bolsa S.A. | Ch$ | 521,443 | 0.90% | 521,756 | Ch$ Time deposits Banco de Chile | 521,443 |
30-Sep-08 | 2-Oct-08 | Banchile Corredores de Bolsa S.A. | Ch$ | 521,433 | 0.90% | 521,746 | Ch$ Time deposits Banco de Chile | 521,433 |
30-Sep-08 | 2-Oct-08 | Banchile Corredores de Bolsa S.A. | UF | 2,607 | 0.90% | 2,609 | Mortgage Notes Banco Santander | 2,607 |
30-Sep-08 | 2-Oct-08 | Banchile Corredores de Bolsa S.A. | UF | 5,751 | 0.90% | 5,754 | Mortgage Notes Banco Santander | 5,751 |
30-Sep-08 | 2-Oct-08 | Banchile Corredores de Bolsa S.A. | UF | 16,905 | 0.90% | 16,915 | Mortgage Notes Banco Santander | 16,905 |
30-Sep-08 | 2-Oct-08 | Banchile Corredores de Bolsa S.A. | UF | 5,925 | 0.90% | 5,928 | Mortgage Notes Banco Santander | 5,925 |
17
Note 11 - Property, Plant and Equipment
Property, plant and equipment consist principally of land, buildings, improvements and machinery. Machinery and equipment included production lines and supporting equipment; sugar processing and liquefaction equipment; transportation machinery; and computer equipment. The Company has purchased insurance to cover its fixed assets and inventories. These assets are geographically distributed as follows:
Chile
:
Santiago, Puente Alto, Maipú, Renca, Rancagua, San Antonio and Rengo
Argentina
:
Buenos Aires, Mendoza, Cordoba, and Rosario
Brazil
:
Rio de Janeiro, Niteroi, Campos, Cabo Frío, Nova Iguaçu, Espírito Santo and Vitoria.
a) Main components of property, plant and equipment |
|
|
|
|
| |
| Balances at September 30, 2008 | Balances at September 30, 2007 | ||||
| Assets | Accumulated depreciation | Net, property, plant and equipment | Assets | Accumulated depreciation | Net, property, plant and equipment |
| ||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Land | 19,085,275 | - | 19,085,275 | 18,149,585 | - | 18,149,585 |
Buildings and improvements | 114,101,626 | (42,488,724) | 71,612,902 | 103,155,511 | (38,963,398) | 64,192,113 |
Machinery and equipment | 267,217,189 | (205,737,852) | 61,479,337 | 244,796,465 | (193,331,771) | 51,464,694 |
Other property, plant and equipment | 255,023,582 | (204,628,571) | 50,395,011 | 238,697,146 | (203,081,305) | 35,615,841 |
Technical reappraisal of property, plant & equipment | 2,361,205 | (718,956) | 1,642,249 | 2,361,860 | (717,184) | 1,644,676 |
Total | 657,788,877 | (453,574,103) | 204,214,774 | 607,160,567 | (436,093,658) | 171,066,909 |
b) Other property, plant and equipment |
|
|
| 30-sep-08 | 30-sep-07 |
| ThCh$ | ThCh$ |
Containers | 148,789,408 | 138,869,645 |
Refrigerating equipment, promotional items and other minor assets | 61,965,274 | 62,146,726 |
Furniture and tools | 9,087,709 | 8,487,710 |
Other | 35,181,191 | 29,193,065 |
Total other property, plant and equipment | 255,023,582 | 238,697,146 |
c) Technical reappraisal of property, plant and equipment |
|
|
|
| ||
|
|
|
|
|
|
|
| Balances at September 30, 2008 | Balances at September 30, 2007 | ||||
| Assets | Accumulated depreciation | Net, property, plant and equipment | Assets | Accumulated depreciation | Net, property, plant and equipment |
| ||||||
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Land | 1,576,539 | - | 1,576,539 | 1,577,414 | - | 1,577,414 |
Buildings and improvements | 220,715 | (163,144) | 57,571 | 220,837 | (158,316) | 62,521 |
Machinery and equipment | 563,951 | (555,812) | 8,139 | 563,609 | (558,868) | 4,741 |
Total | 2,361,205 | (718,956) | 1,642,249 | 2,361,860 | (717,184) | 1,644,676 |
d) Depreciation for the period
Depreciation charges for the period amounted to ThCh$26,462,630 (ThCh$23,925,640 in 2007) of which ThCh$20,072,468 (ThCh$17,739,245 in 2007) are included under Operating Costs and ThCh$6,390,162 (ThCh$6,186,395 in 2007) under Sales and Administrative Expenses in the income statement.
18
Note 12 - Investment in Related Companies
1.
Investments in related companies and the corresponding direct shareholding in equity, as well as the recognition of unrealized income at year end of the respective years are shown in the table attached.
Company | Country | Functional Currency | N° of Shares | Ownership Interest | Equity of companies | Income (loss) | Accrued income | Partic. in net income (loss) | Unrealized income (loss) | Accounting value of investment | |||||||
2008 | 2007 | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | ||||
|
|
|
| % | % | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
ENVASES CMF S.A. | CHILE | Ch$ | 28,000 | 50.00% | 50.00% | 36,998,009 | 38,974,222 | 2,191,411 | 2,683,475 | 314,861 | 641,412 | 18,499,005 | 19,487,111 | 1,065,051 | 1,149,222 | 17,433,954 | 18,337,889 |
HOLDFAB PARTIC. LTDA. | BRAZIL | US$ | 1,283,158,339 | 14.73% | 0.00% | 31,683,897 | - | 2,329,752 | - | 343,217 | - | 4,667,640 | - | - | - | 4,667,640 | - |
ENVASES CENTRAL S.A. | CHILE | Ch$ | 1,499,398 | 49.91% | 49.91% | 5,175,644 | 4,785,344 | 53,030 | (329,961) | 12,145 | (168,886) | 2,583,164 | 2,388,366 | 258,319 | 258,463 | 2,324,845 | 2,129,903 |
KAIK PARTIPACOES | BRAZIL | US$ | 16,098,919 | 11.32% | 11.32% | 9,964,743 | 10,160,567 | (52,874) | 619,851 | (5,985) | 70,165 | 1,127,979 | 1,150,145 | - | - | 1,127,979 | 1,150,145 |
CICAN S.A. | ARGENTINA | US$ | - | - | 15.00% | - | 6,187,681 | - | (15,856) | - | (241,020) | - | 940,528 | - | - | - | 940,528 |
Total |
|
|
|
|
|
|
|
|
|
|
| 26,877,788 | 23,966,150 | 1,323,370 | 1,407,685 | 25,554,418 | 22,558,465 |
19
The main changes occurred in the reported periods are described below:
In June, 2008 Embotelladora Andina S.A. acquired a 48% ownership interest in Embotelladoras del Sur S.A. for ThCh$753,582. Subsequent to the acquisition Embotelladora Andina S.A. made a ThCh$386,400 capital contribution to Embotelladoras del Sur S.A
The amounts disbursed by Embotelladora Andina S.A. in the acquisition of and loan to Embotelladoras del Sur S.A., have been recorded as an intangible since the final purpose is not that of acquiring the company but that of acquiring the rights of distribution of products of the water segment that were previously marketed by Embotelladoras del Sur S.A.
On October 4, 2007, our subsidiary Rio de Janeiro Refrescos Ltda, acquired a 14.732% ownership interest in Holdfab Participações Ltda., for an amount of ThR$12,831.63. In turn, Holdfab Participações Ltda. holds a 50% ownership interest in Amarantina Participações S.A.
Centralli Refrigerantes S.A. records a negative equity, which has been provisioned accordingly.
The investment in Kaik Participações Ltda. (Brazil) where Embotelladora Andina S.A. holds an indirect ownership of 11.32% has been accounted for under the equity method, since the Company has a significant influence through one of its directors, who participates in the process of setting policies, operating and financial decision-making in accordance with the ownership structure which is exclusive owned by the Coca-Cola bottlers in Brazil
The investment in Envases Central S.A. is presented with a 48% reduction (the percentage share on the date of transaction) of the earnings generated during the sale to Envases Central during December 1996 for property located in Renca, because this transaction represents unrealized income for Embotelladora Andina S.A. The amount of the reduction is reflected in the following chart. This transaction will be realized once the property is transferred to a third party different from the group.
The investment in Envases CMF S.A. is presented with a 50% reduction of the earnings generated during the sale of machinery and equipment of our subsidiary Envases Multipack S.A. which took place in June, 2001, and will be recorded under Results during the remaining useful life period of the goods sold to Envases CMF S.A.
Unrealized income corresponds to transactions between subsidiaries and/or the parent company that have been deducted or added to the category of the originating asset with the following effect on income of the subsidiaries:
Envases CMF S.A. (purchase of property, plant and equipment): ThCh$ -1,065,051 in 2008 (ThCh$ -1,149,222 in 2007)
Envases Central S.A. (purchase of finished products): ThCh$ -14,322 in 2008 (ThCh$ -4,303 in 2007)
2.
No liabilities have been designated as hedging instruments for investments abroad.
3.
Income likely to be remitted by subsidiaries abroad amounts to US$257 million.
Note 13 - Goodwill and Negative Goodwill
Company | 30-sep-08 | 30-sep-07 | ||
Amortization during the period | Goodwill balance | Amortization during the period | Goodwill balance | |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
RIO DE JANEIRO REFRESCOS LTDA. | 2,793,063 | 36,601,117 | 2,829,338 | 40,855,599 |
EMBOTELLADORA DEL ATLÁNTICO S.A. | 2,166,265 | 21,707,608 | 2,195,595 | 24,928,976 |
VITAL S. A. | - | - | 81,602 | - |
Total | 4,959,328 | 58,308,725 | 5,106,535 | 65,784,575 |
20
Note 14 - Other Long Term Assets
| 30-sep-08 | 30-sep-07 |
Bonds: | ThCh$ | ThCh$ |
Celulosa Arauco S.A. | - | 1,674,312 |
Compañía Manufacturera de Papeles y Cartones S.A. | - | 7,636,406 |
Teléfonos de México S.A. | - | 1,118,682 |
Codelco S.A. | - | 2,601,456 |
Raytheon Company | - | 2,213,984 |
International Paper Company | - | 2,184,709 |
Judicial deposits (Brazil) | 8,609,493 | 7,355,742 |
Transfer fiscal credits (Brazil) | 5,340,205 | 5,839,291 |
Prepaid expenses | 3,666,371 | 2,986,572 |
Bond issuance and placement expenses | 2,873,871 | 3,174,368 |
Spare parts | 2,597,970 | 3,068,843 |
Non operating assets | 1,387,378 | 562,371 |
Cross currency swaps | - | 3,141,977 |
Others | 57,237 | 62,361 |
Total | 24,532,525 | 43,621,074 |
21
Note 15 - Short-Term and Long-Term Bank Liabilities
a) SHORT TERM BANK LIABILITIES |
|
|
|
|
| |
|
|
|
|
|
|
|
| Currency or indexation adjustment |
|
| |||
Bank or Financial Institution | Other foreign currencies | Indexed Ch$ | TOTAL | |||
| 2008 | 2007 | 2008 | 2007 | 2008 | 2007 |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
BANCO NVO SANTA FE | 1,861,059 | - | - | - | 1,861,059 | - |
BANCO BBVA FRANCES | 5,215,536 | - | - | - | 5,215,536 | - |
BANCO BILBAO VIZCAYA ARGENTARIA | - | - | 37,343 | - | 37,343 | - |
BANCO BBVA | - | - | - | 2,745,616 | - | 2,745,616 |
BANCO GALICIA | 3,570,333 | 6,655,576 | - | - | 3,570,333 | 6,655,576 |
BANCO SANTANDER | - | - | - | 430 | - | 430 |
Total | 10,646,928 | 6,655,576 | 37,343 | 2,746,046 | 10,684,271 | 9,401,622 |
Principal due | 10,329,941 | 6,655,576 | 37,343 | 2,745,616 | 10,367,284 | 9,401,192 |
|
|
|
|
|
|
|
Annual average interest rate | 17.64% | 13.47% |
|
|
|
|
Foreign currency liabilities | 99.65% |
|
|
|
|
|
Local currency liabilities | 0.35% |
|
|
|
|
|
b) LONG TERM BANK LIABILITIES (short term portion) |
|
| ||
|
| |||
| Currency or indexation adjustment | |||
Bank or Financial Institution | Other foreign currencies | TOTAL | ||
| 2008 | 2007 | 2008 | 2007 |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
BANCO ALFA | 121,159 | 128,097 | 121,159 | 128,097 |
BANCO SANTANDER | - | 94,232 | - | 94,232 |
BANCO BOSTON | - | 5,865 | - | 5,865 |
BANCO VOTORANTIM | 1,918 | 1,858 | 1,918 | 1,858 |
Total | 123,077 | 230,052 | 123,077 | 230,052 |
Principal due | 123,077 | 230,052 | 123,077 | 230,052 |
|
|
|
|
|
Annual average interest rate | 11.89% | 15.66% |
|
|
|
|
|
|
|
Foreign currency liabilities | 100.00% |
|
|
|
Note 16 - Long-Term Bank Liabilities
| Currency | Years to maturity | Total long | Annual average interest rate | Total long | ||
Bank or Financial Institution | or indexation adjustment | More than 1 up to 2 | More than 2 up to 3 | More than 3 up to 5 | term at period end 2008 | term at period end 2007 | |
|
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
| ThCh$ |
BANCO VOTORANTIM | Other currencies | 231,312 | 118,828 | 59,841 | 409,981 | 9.40% | 494,575 |
BANCO ALFA | Other currencies | 121,279 | 81,498 | - | 202,777 | 10.80% | 338,962 |
TOTAL |
| 352,591 | 200,326 | 59,841 | 612,758 |
| 833,537 |
Foreign currency liabilities | 100% |
|
|
|
|
|
|
22
Note 17 – Long and Short-Term Bonds Payable (Promissory Notes and Bonds)
1.
Current risk rating of bonds is as follows:
BONDS ISSUED IN THE US MARKET
A
:
Rating according to Fitch Ratings Ltd.
BBB+
:
Rating according to Standard & Poor’s
BONDS ISSUED IN THE LOCAL MARKET
AA+
:
Rating according to Fitch Chile Clasificadora de Riesgo Ltda.
AA
:
Rating according to Feller Rate Clasificadora de Riesgo Ltda.
2.
Bond repurchases.
During 2000, 2001, 2002, 2007 and 2008, Embotelladora Andina S.A. repurchased bonds issued in the U.S. market through its subsidiary, Abisa Corp S.A. for a total amount of US$200 million, which are presented deducting the long term liability from the bonds payable account.
3.
Bonds issued by the subsidiary Rio de Janeiro Refrescos Ltda. (RJR).
The subsidiary RJR has liabilities corresponding to an issuance of bonds for US$75 million maturing in December 2012 and semiannual interest payments. At period end, all such bonds are wholly-owned by the subsidiary Abisa Corp. Consequently, the effects of such transactions have been eliminated from these consolidated financial statements, both in the balance sheet and in the consolidated statement of income.
The following table contains more information on Bonds Payable:
Instrument subscription or ID N° | Series | Current nominal value | Currency | Interest rate | Maturity date | Term | Par value | Placement in Chile or abroad | ||
Interest paid | Amortization period | 2008 | 2007 | |||||||
Current portion of bonds payable |
|
|
|
|
|
|
| ThCh$ | ThCh$ |
|
Register 254 SVS June 13, 2001 capital and interest | A | - | UF | 6.20% | Jun. 1, 2008 | Semiannual | jun-08 | - | 14,116,933 | Chile |
Register 254 SVS June 13, 2001 capital and interest | B | 3,700,000 | UF | 6.50% | Jun. 1, 2026 | Semiannual | dic-09 | 1,656,078 | 1,654,050 | Chile |
Total current maturities |
|
|
|
|
|
|
| 1,656,078 | 15,770,983 |
|
Long term portion of bonds payable |
|
|
|
|
|
|
|
|
|
|
Yankee bonds | B | - | US$ Exchange rate | 7.625% | Oct. 1, 2027 | Semiannual | oct-27 | - | 2,235,098 | Abroad |
Register 254 SVS June 13, 2001 | B | 3,700,000 | UF | 6.50% | Jun. 1, 2026 | Semiannual | dic-09 | 77,656,858 | 77,561,562 | Chile |
Total long term |
|
|
|
|
|
|
| 77,656,858 | 79,796,660 |
|
Note 18 - Provisions and Write-Offs
| Short term | Long term | ||
Provisions | ||||
| 2008 | 2007 | 2008 | 2007 |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ |
|
|
|
|
|
Taxation on banking transactions and social contributions (Brazil) | 3,078,641 | 2,988,005 | 6,590,170 | 9,097,821 |
Staff severance indemnities | 699,274 | 771,949 | 6,947,162 | 6,696,989 |
Contingencies | 4,725 | 52,092 | 2,535,096 | 2,580,243 |
TOTAL | 3,782,640 | 3,812,046 | 16,072,428 | 18,375,053 |
23
Note 19 - Staff Severance Indemnities
| 30-sep-08 | 30-sep-07 |
Staff Severance Indemnities | ThCh$ | ThCh$ |
Beginning balance | 7,133,867 | 6,807,169 |
Provision for the period | 1,485,330 | 787,960 |
Payments | (972,761) | (126,191) |
Ending balance | 7,646,436 | 7,468,938 |
Note 20 - Minority Interest
| 30-sep-08 | 30-sep-07 |
LIABILITIES | ThCh$ | ThCh$ |
Vital Aguas S. A. | 1,319,559 | 1,354,644 |
Embotelladora del Atlántico S. A. | 9,104 | 9,730 |
Andina Inversiones Societarias S.A. | 19 | 47 |
| 1,328,682 | 1,364,421 |
|
|
|
| 30-sep-08 | 30-sep-07 |
INCOME STATEMENT | ThCh$ | ThCh$ |
Vital Aguas S. A. | 46,702 | (32,595) |
Embotelladora del Atlántico S. A. | (832) | (391) |
Andina Inversiones Societarias S.A. | (2) | (5) |
| 45,868 | (32,991) |
24
Note 21 - Changes in Shareholders’ Equity
The activity in Shareholders’ Equity, Dividend Distribution and Other Reserves is detailed in the following tables:
| September 30,2008 |
| September 30,2007 | ||||||||||
| Paid in Capital | Reserve Capital Revalued | Other Reserves | Accumulated Income | Interim Dividends | Net Income |
| Paid in Capital | Reserve Capital Revalued | Other Reserves | Accumulated Income | Interim Dividends | Net Income |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
Beginning balance | 217,013,513 | - | (11,443,442) | 11,171,454 | (17,194,331) | 81,601,944 |
| 202,060,999 | - | 1,750,275 | 10,005,036 | (13,438,065) | 74,355,094 |
Distribution of prior year income | - | - | - | 64,407,613 | 17,194,331 | (81,601,944) |
| - | - | - | 60,917,029 | 13,438,065 | (74,355,094) |
Final dividend prior year | - | - | - | (7,667,367) | - | - |
| - | - | - | (8,876,966) | - | - |
Translation adjustment reserve | - | - | 7,062,983 | - | - | - |
| - | - | (10,563,532) | - | - | - |
Extraordinary dividend charge to accumulated income | - | - | - | (50,387,956) | - | - |
| - | - | - | (52,040,412) | - | - |
Capital revalued | - | 14,973,932 | (789,598) | 5,214,956 | - | - |
| - | 10,305,111 | 89,264 | 936,658 | (178,816) | - |
Income for the period | - | - | - | - | - | 55,488,278 |
| - | - | - | - | - | 49,600,577 |
Interim dividends | - | - | - | - | (11,377,204) | - |
| - | - | - | - | (11,176,036) | - |
Ending balance | 217,013,513 | 14,973,932 | (5,170,057) | 22,738,700 | (11,377,204) | 55,488,278 |
| 202,060,999 | 10,305,111 | (8,723,993) | 10,941,345 | (11,354,852) | 49,600,577 |
Price level restated balances |
|
|
|
|
|
|
| 220,852,672 | 11,263,486 | (9,535,324) | 11,958,890 | (12,410,853) | 54,213,431 |
Number of shares |
|
| |
Series | Subscribed shares | Paid in shares | Number of shares with voting rights |
A | 380,137,271 | 380,137,271 | 380,137,271 |
B | 380,137,271 | 380,137,271 | 380,137,271 |
Capital |
|
|
Series | Subscribed capital | Paid in capital |
| ThCh$ | ThCh$ |
A | 108,506,757 | 108,506,757 |
B | 108,506,756 | 108,506,756 |
25
Other Reserves |
|
|
|
|
|
|
|
|
|
Balance of Other Reserves is composed as follows: |
|
|
|
|
|
|
| 2008 | 2007 |
|
|
| ThCh$ | ThCh$ |
|
|
|
|
|
Reserve for cumulative translation adjustments(1) |
|
| (6,328,550) | (10,694,449) |
Reserve for technical reappraisal of property, plant and equipment |
| 71,930 | 72,221 | |
Other |
|
| 1,086,563 | 1,086,904 |
Total |
|
| (5,170,057) | (9,535,324) |
|
|
|
|
|
(1)The Reserve for cumulative translation adjustments was established in accordance with Technical Bulletin No. 64 issued by the Chilean Institute of Accountants and regulations specified under Circular letter No. 5,294 from the SVS. | ||||
|
|
|
|
|
| ||||
The activity in the Reserve for cumulative translation adjustments was as follows: | |||||||||
|
| Foreign Exchange rate generated during the period | Reserve release / realized(*) |
| |||||
| Balance | Balance | |||||||
Company | 01-ene-08 | Investment | Liabilities | 30-sep-08 | |||||
| ThCh$ | ThCh$ | ThCh$ |
| ThCh$ | ||||
Rio de Janeiro Refrescos Ltda. | (8,097,464) | 1,033,230 | - | 2,694,455 | (4,369,779) | ||||
Embotelladora del Atlántico S. A. | (5,294,054) | 1,059,797 | - | 2,275,486 | (1,958,771) | ||||
Total | (13,391,518) | 2,093,027 | - | 4,969,941 | (6,328,550) | ||||
|
|
|
|
|
| ||||
|
|
|
|
|
| ||||
(*) Reserve realized resulted from dividends paid by our subsidiary Rio de Janeiro Refrescos Ltda. and by the capital decrease and dividend distribution of our subsidiary Embotelladora del Atlántico S.A. | |||||||||
26
Note 22 - Other Non-Operating Income and Expenses
Other non-operating income during the period was as follows: | 2008 | 2007 |
| ThCh$ | ThCh$ |
Reverse provision | 5,128,437 | 0 |
Recovery of prior year taxes | 0 | 4,535,298 |
Earnings on sale of property, plant & equipment | 129,908 | 0 |
Other income | 610,062 | 225,344 |
Sub-total | 5,868,407 | 4,760,642 |
Translation of financial statements(1) | 0 | 1,828,382 |
Total | 5,868,407 | 6,589,024 |
|
|
|
Other non-operating expenses during the period was as follows: |
| |
Conversion adjustment reserve realized(2) | (4,969,941) | (1,258,539) |
Bank taxes(3) | (1,673,455) | (2,398,723) |
Provision for labor and commercial lawsuits | (604,781) | (427,055) |
Obsolescence and write-offs of property, plant and equipment | (4,453) | (662,460) |
Provision loss of investment in Centralli | (81,250) | (59,964) |
Loss on sale of property, plant and equipment | 0 | (161,060) |
Others | (1,498,064) | (1,407,513) |
Sub-total | (8,831,944) | (6,375,314) |
Translation of financial statements(1) | (2,211,557) |
|
Total | (11,043,501) | (6,375,314) |
|
|
|
(1)This refers to the effects of the translation of the financial statements corresponding to investment in foreign companies (translation of local currency to US dollars), in accordance with Technical Bulletin N°64 issued by the Chilean Institute of Accountants, which are presented as Other Non Operating Income and/or expenses accordingly.
(2)This refers to the release of conversion adjustment reserves due to dividend payments carried out at our subsidiary Rio de Janeiro Refrescos Ltda. and the remittance of capital and dividend distribution by Embotelladora del Atlántico S.A. during the 2008 and 2007 period, respectively.
(3)This refers to taxes charged in the normal course of business due to banking accounts movements in our foreign subsidiaries and are not related to obtaining financial resources.
27
Note 23 - Price-Level Restatement
| Adjustment index | September 30,2008 | September 30,2007 |
Assets - (charges)/credits |
| ThCh$ | ThCh$ |
Inventories | CPI | 9,495 | (56,368) |
Property, plant and equipment | CPI | 7,061,422 | 4,546,675 |
Investments in related companies | CPI | 8,774,249 | 8,394,785 |
Cash, Time Deposits, Marketable Securities | UF | 1,117,380 | 563,644 |
Cash, Time Deposits, Marketable Securities | CPI | 2,821,867 | - |
Sales notes receivable | CPI | - | 225 |
Short term accounts receivable from related companies | CPI | 2,108,118 | 2,215,152 |
Short term accounts receivable from related companies | UF | 484,646 | - |
Recoverable taxes | CPI | 44,571 | (67,606) |
Other current assets | UF | 112,518 | 756,069 |
Other current assets | CPI | 249,744 | 80,276 |
Other long term assets | CPI | 148,230 | 3,331,142 |
Cost and expense accounts | CPI | 6,844,701 | 4,742,440 |
Total (charges) credits |
| 29,776,941 | 24,506,434 |
|
|
|
|
Liabilities - (charges)/credits |
|
|
|
Shareholders’ equity | CPI | (16,328,467) | (12,189,374) |
Short and long term bonds payable | UF | (5,016,148) | (3,993,830) |
Short and long term bonds payable | CPI | (188,106) | (1,070,628) |
Other current liabilities | UF | (238,118) | (103,562) |
Other current liabilities | CPI | (556,844) | (451,721) |
Other long term liabilities | CPI | (311,280) | (210,110) |
Income accounts |
| (8,941,905) | (6,068,696) |
Total (charges) credits |
| (31,580,868) | (24,087,921) |
Price-level restatement (loss ) gain |
| (1,803,927) | 418,513 |
28
Note 24 - Foreign Exchange Gains/Losses
| Currency | 30-sep-08 | 30-sep-07 |
Assets - (charges)/credits |
| ThCh$ | ThCh$ |
Cash | US$ | (237,765) | (85,923) |
Time deposits | US$ | 859,087 | (2,026) |
Marketable securities (net) | US$ | 2,490,636 | (1,997,898) |
Trade accounts receivable | US$ | 457 | 35 |
Other debtors (net) | US$ | 44,811 | (4,007) |
Accounts receivable related companies | US$ | 1,787,297 | (5,279,320) |
Inventories (net) | US$ | (11,921) | (338) |
Other current assets | US$ | 724,687 | 171,349 |
Recoverable taxes | US$ | 117 | - |
Prepaid expenses | US$ | 210 | - |
Property, plant and equipment | US$ | 210 | - |
Others | US$ | (63,602) | (4,509,294) |
Total (charges)/credits |
| 5,594,224 | (11,707,422) |
|
|
|
|
Liabilities - (Charges) / credits |
|
|
|
Bonds payable | US$ | - | 125,750 |
Accounts payable | US$ | (96,318) | 53,706 |
Accounts payable related companies | US$ | 613,762 | - |
Provisions | US$ | (510,422) | 10,371 |
Prepaid income | US$ | 2,417 | 9,616 |
Other current liabilities | US$ | (569,705) | (268,918) |
Bonds payable long term | US$ | - | 1,890,855 |
Other creditors | US$ | 4,492 | - |
Total (charges) credits |
| (555,774) | 1,821,380 |
Foreign exchange gain (loss) on income |
| 5,038,450 | (9,886,042) |
Note 25 - Share and Debt Security Issue and Placement Expenses
Bond issue and placement expenses are presented under Other current assets and Other long-term assets and are amortized on a straight-line basis over the term of the debt issued. Amortization is presented as financial expenses.
Bonds issued in the US market:
Debt issue costs and discounts have all been amortized, as a result of the repurchase of Bonds reported in note 17.
Bonds issued in the local market:
Debt issue costs and interest rate differences net of amortization as of the end of the period amounted to ThCh$3,226,880 and ThCh$3,561,120 in 2007. Disbursements for risk rating reports, legal and financial advisory services, printing and placement fees are included as Debt issue costs.
Amortization for the period 2008 amounted to ThCh$219,103 and ThCh$245,348 in 2007.
29
Note 26 - Consolidated Statement of Cash Flows
For the projection of future cash flows, there are no transactions and events to consider which have not been revealed in these financial statements and accompanying notes.
The following table presents an itemization of the movement of assets and liabilities not affecting the cash flow in the period, but compromising future cash flows.
| 30-Sep-08 | Maturity date | 30-Sep-07 | Maturity date |
| ThCh$ | ThCh$ | ||
Expected cash outflow |
|
|
|
|
Expenses |
|
|
|
|
Dividend payment | (5,588,018) | 23-Dec-08 | (6,107,704) | 24-Oct-07 |
Addition to property, plant and equipment | (1,726,558) | 30-Nov-08 | (2,648,210) | 30-Nov-07 |
Addition to property, plant and equipment | (13,526) | 30-Dec-08 | (13,413) | 30-Dec-07 |
Addition to property, plant and equipment | (52,369) | 30-Oct-08 | (250,017) | 23-Oct-07 |
Total expenses | (7,380,471) |
| (9,019,344) |
|
|
|
|
|
|
Expected cash inflow |
|
|
|
|
Income |
|
|
|
|
Sale of property, plant and equipment | 14,451 | 31-Oct-08 | 4,505 | 31-Oct-07 |
Total income | 14,451 |
| 4,505 |
|
|
|
|
|
|
Total net | (7,366,020) |
| (9,014,839) |
|
30
Note 27 - Derivative Contracts
Derivative contracts at September 30, 2008 were as follows:
|
|
|
|
|
| Hedged item or Transaction |
| Assets / Liabilities | Effect on income | |||
Derivative | Contract | Value | Maturity period | Specific Item | Position Purchase / Sale | Concept | Amount | Hedged Item Value | Item | Amount | Realized | Unrealized |
|
| ThCh$ |
|
|
|
| ThCh$ | ThCh$ |
| ThCh$ | ThCh$ | ThCh$ |
FR | CCPE | 39,774,534 | 4th Quarter 2008 | US$ Exchange Rate | S | Foreign currency financial investment | 39,774,534 | 41,781,336 |
| - | (2,006,802) | - |
FR | CCTE | 23,990,393 | 4th Quarter 2008 | US$ Exchange Rate | P | Suppliers foreign currency | 24,146,931 | - | Other current assets and liabilities | 819,104 | (44,077) | 863,181 |
FR | CCTE | 3,495,461 | 4th Quarter 2008 | US$ Exchange Rate | S | Suppliers foreign currency | 3,484,279 | - | Other current assets and liabilities | 323,509 | - | (323,509) |
FR | CCTE | 5,853,714 | 1st Quarter 2009 | US$ Exchange Rate | P | Suppliers foreign currency | 5,756,468 | - | Other current assets and liabilities | 206,825 | - | 206,825 |
31
Note 28 - Contingencies and Restrictions
a.
Litigation and other legal actions:
There are various judicial actions and other out-of-court claims pending against the Company incidental to its business and operations. Management believes, based on the opinion of its legal counsel, that these proceedings may result in losses or gains that may have a material effect on the Company’s financial position or result of operations.
Current lawsuits and other legal actions are described below.
1)
Embotelladora del Atlántico S.A. faces labor and other lawsuits. Accounting provisions to back any probable loss contingency stemming from these lawsuits, amounts to ThCh$1,434,734 (ThCh$1,527,622 in 2007). In accordance with its legal counsel’s opinion, the Company deems improbable that unstipulated contingencies may affect the results or equity of the Company.
2)
Rio de Janeiro Refrescos Ltda. faces labor, tax and other lawsuits. Accounting provisions to back any probable loss contingency arising from these lawsuits, amounts to ThCh$1,100,362 (ThCh$1,052,621 in 2007). In accordance with its legal counsel’s opinion, the Company deems improbable that unstipulated contingencies may affect the results or equity of the Company.
3)
Embotelladora Andina S.A. faces, labor, tax, commercial and other lawsuits. Accounting provisions to back any probable loss contingency stemming from these lawsuits, amounts to ThCh$4,725 (ThCh$52,092 in 2007). In accordance with its legal counsel’s opinion, the Company deems improbable that contingencies without provisions may affect the results or equity of the Company.
b.
Restrictions
The bond issue and placement on the US market for US$ 200 million is subject to certain restrictions against preventive attachments, sale and leaseback transactions, sale of assets, subsidiary debt and certain conditions in the event of a merger or consolidation.
The bond issue and placement in the Chilean market for UF 3,700,000 is subject to the following restrictions:
Leverage ratio, defined as the total financial debt/shareholder’s equity plus minority interest should be less than 1.20 times.
Financial debt shall be deemed Consolidated Finance Liabilities which include: (i) short-term bank liabilities, (ii) short-term portion of long-term bank liabilities, (iii) short-term bonds payable-promissory notes, (iv) short-term portion of bonds payable, (v) long-term bank liabilities, and (vi) long-term bonds payable. Consolidated equity means Total equity plus Minority Interest.
Consolidated assets are to be free of any pledge, mortgage or other encumbrance for an amount equal to at least 1.30 times the consolidated liabilities that are not guaranteed by the investee.
Andina must retain and, in no way, lose, sell, assign or dispose of to a third party the geographical zone denominated “Región Metropolitana”, as a franchised territory in Chile by The Coca-Cola Company for the preparation, production, sale and distribution of the products and brands in accordance with the respective Bottling agreement, renewable from time to time.
Andina shall not lose, sell, assign or dispose of to a third party any other territory in Brazil or Argentina that is currently franchised to Andina by The Coca-Cola Company for the preparation, production, sale and distribution of the products and brands of the franchisor, as long as the referred territory represents more than forty percent of the Company’s Consolidated Operating Cash Flows.
32
c.
Direct guarantees
Guarantees at September 30, 2008 are presented on the following table:
|
|
|
|
|
| Balances pending at end of period |
|
| |
Guarantee creditor | Debtor |
| Type of guaranty | Assets involved |
| Guaranty release | |||
| Name | Relation |
| Type | Accounting Value | 2008 | 2007 | 2009 | 2011 |
|
|
|
|
| ThCh$ | ThCh$ | ThCh$ | ThCh$ | ThCh$ |
ESTADO RIO DE JANEIRO | RIO DE JANEIRO REFRESCOS LTDA. | Subsidiary | Mortgage | Real estate | 12,416,173 | 11,695,356 | 11,289,788 | - | - |
PODER JUDICIARIO | RIO DE JANEIRO REFRESCOS LTDA. | Subsidiary | Judicial Deposit | Judicial deposit | 11,242,668 | - | - | - | - |
AGA S.A. | EMBOTELLADORA ANDINA S.A. | Parent company | Guaranty receipt | Guaranty Receipt | - | 165,741 | 172,757 | - | 165,741 |
MUNICIPALIDAD DE SANTIAGO | EMBOTELLADORA ANDINA S.A. | Parent company | Guaranty receipt | Guaranty Receipt | - | 11,744 | 11,399 | 11,744 | - |
ESCUELA MILITAR | EMBOTELLADORA ANDINA S.A. | Parent company | Guaranty receipt | Guaranty Receipt | - | 2,014 | - | 2,019 | - |
MUNICIPALIDAD DE MAIPU | EMBOTELLADORA ANDINA S.A. | Parent company | Guaranty receipt | Guaranty Receipt | - | 105,005 | - | - | - |
ADUANA DE EZEIZA | EMBOTELLADORA DEL ATLANTICO S.A. | Subsidiary | Guaranty insurance | Temporary export of molds | 10,200 | - | - | - | - |
Note 29 - Guarantees from Third Parties
Guarantees from Third Parties at September 30, 2008 were as follows:
Guarantor | Relationship | Type of Guarantee | Amount | Currency | Transaction |
|
|
|
|
|
|
RUSEEL W. COFFIN | Subsidiary | Letter of credit | 50,536,137 | US$ | Purchase of Nitvitgov Refrigerantes S.A. |
CONFAB | Subsidiary | Mortgage | 31,440,547 | US$ | Purchase of Rio de Janeiro Refrescos Ltda. |
CLIENTES DIVERSOS | Subsidiary | Deposits | 3,190,509 | US$ | Guaranty over containers |
SOC. COM. CHAMPFER | Subsidiary | Mortgage | 1,626,338 | US$ | Distributor credit |
MAC COKE DIST. BEB. | Subsidiary | Mortgage | 1,062,088 | US$ | Distributor credit |
FRANCISCANA DIST. | Subsidiary | Mortgage | 799,303 | US$ | Distributor credit |
DIST REAL COLA | Subsidiary | Mortgage | 771,930 | US$ | Distributor credit |
ZULEMAR COMERCIO DE BEBIDAS | Subsidiary | Mortgage | 643,275 | US$ | Distributor credit |
AGA S.A. | Parent Company | Receipt | 600,000 | US$ | Supplier agreement |
MOTTA DISTRIBUIDORA DE BEBIDAS | Subsidiary | Mortgage | 410,601 | US$ | Distributor credit |
AGUIAR DIST. DE BEBIDAS | Subsidiary | Mortgage | 405,126 | US$ | Distributor credit |
33
Note 30 - Local and Foreign Currency
Assets at each period end were composed of local and foreign currencies as follows:
| Currency | 30-sep-08 | 30-sep-07 |
|
| ThCh$ | ThCh$ |
Current Assets |
|
|
|
Cash | Non-indexed Ch$ | 2,436,983 | 4,275,177 |
- | US$ | 4,369,790 | 4,466,596 |
- | $AR | 1,233,003 | 1,084,758 |
- | $R | 6,133,656 | 22,164,616 |
Time Deposits | US$ | 17,389,922 | 20,819 |
- | Non-indexed Ch$ | 35,587,196 | 13,131,366 |
- | $R | 32,226 | 164,753 |
Marketable Securities (Net) | Non-indexed Ch$ | 7,855,121 | 3,541,979 |
- | US$ | 32,165,093 | 45,413,915 |
- | $R | 158,759 | (298,704) |
- | $AR | - | 22,045 |
Trade Accounts Receivable (Net) | Non-indexed Ch$ | 14,642,180 | 13,765,913 |
- | US$ | 715,632 | 664,905 |
- | $AR | 2,698,140 | 2,132,847 |
- | $R | 13,191,658 | 13,350,309 |
Notes Receivable | Non-indexed Ch$ | 6,807,755 | 6,517,841 |
- | $AR | 677,886 | 400,435 |
- | $R | 1,833,444 | 2,642,614 |
Other Debtors (Net) | Non-indexed Ch$ | 3,603,900 | 2,560,637 |
- | US$ | 86,288 | 122,119 |
- | $AR | 3,933,662 | 579,032 |
- | $R | 7,037,377 | 6,039,744 |
Notes Receivable Related Companies | Non-indexed Ch$ | 1,725,894 | 671,041 |
Inventories (Net) | Indexed Ch$ | 8,344,332 | 6,960,058 |
- | US$ | 2,372,132 | 1,836,308 |
- | $AR | 7,238,743 | 6,732,187 |
- | $R | 10,097,336 | 10,802,393 |
Recoverable Taxes | Indexed Ch$ | 1,701,324 | 2,550,606 |
- | Non-indexed Ch$ | 2,336,345 | - |
- | $AR | 349,343 | 1,313,559 |
- | $R | 210,798 | 196,654 |
Prepaid Expenses | Non-indexed Ch$ | 1,598,421 | 1,395,838 |
- | Indexed Ch$ | - | 35,383 |
- | US$ | 61,358 | 58,949 |
- | $AR | 271,101 | 226,758 |
- | $R | 1,045,142 | 623,005 |
Deferred Taxes | Indexed Ch$ | 693,019 | 772,420 |
- | $AR | 385,950 | - |
- | $R | 4,054,289 | - |
Other Current Assets | Non-indexed Ch$ | 3,654,288 | 127,649 |
- | Indexed Ch$ | - | 1,174,395 |
- | US$ | 564,172 | 32,671,728 |
- | $AR | 983,214 | 994,960 |
- | $R | 2,439,027 | 2,630,112 |
Property, Plant and Equipment |
|
|
|
Property, Plant and Equipment | Indexed Ch$ | 97,312,859 | 84,679,566 |
- | US$ | 106,901,915 | 86,387,343 |
Other Assets |
|
|
|
Investments in Related Companies | Indexed Ch$ | 19,758,798 | 20,467,792 |
- | US$ | - | 940,528 |
- | $R | 5,795,620 | 1,150,145 |
Investments in Other Companies | US$ | 77,759 | 14,044 |
- | Indexed Ch$ | 48,868 | 48,895 |
Goodwill | Indexed Ch$ | - | 1,200,426 |
- | US$ | 58,308,725 | 64,584,149 |
Long Term Debtors | $AR | 10,947 | 20,620 |
- | Non-indexed Ch$ | 9,155 | 21,738 |
- | $R | - | - |
Notes Receivable Related Companies | Indexed Ch$ | 46,142 | 39,540 |
- | $AR | - | - |
Intangibles | US$ | 315,280 | 445,993 |
- | Non-indexed Ch$ | 1,139,981 | - |
Amortization | US$ | (169,464) | (282,226) |
Others | Non-indexed Ch$ | 2,431,002 | 2,219,951 |
- | Indexed Ch$ | 2,025,685 | 3,201,530 |
- | US$ | 11,545 | 20,555,943 |
- | $AR | 3,319,282 | 2,374,598 |
- | $R | 16,745,011 | 15,269,052 |
Total Assets | Non-indexed Ch$ | 83,828,221 | 48,229,130 |
| US$ | 223,170,147 | 257,901,113 |
| $AR | 21,101,271 | 15,881,799 |
| $R | 68,774,343 | 74,734,693 |
| Indexed Ch$ | 129,931,027 | 121,130,611 |
34
Note 30 - Local and Foreign Currency (continuation)
Current liabilities for the period ended September 30, 2008 and 2007, denominated in local and foreign currencies were as follows:
|
| Up to 90 days |
| 90 days to 1 year | |||||
|
| 30-sep-08 | 30-sep-07 | 30-sep-08 | 30-sep-07 | ||||
| Currency | Amount | Annual average interest rate | Amount | Annual average interest rate | Amount | Annual average interest rate | Amount | Annual average interest rate |
Short term bank liabilities | Non-indexed Ch$ | 37,342 |
| 2,746,046 |
| - |
| - |
|
- | $AR | 5,156,728 | 11.55% | 6,655,576 | 11.55% | 5,490,201 | 17.93% | - |
|
Long term bank liabilities | $R | - |
| - |
| 123,077 | 11.89% | 230,052 | 13.47% |
Long term bonds payable | Indexed Ch$ | - | - | 8,853,331 | 6.20% | 1,656,078 | 6.50% | 6,917,652 | 6.20% |
Dividends payable | Indexed Ch$ | 5,787,210 |
| 6,327,993 |
| - |
| - |
|
- | $AR | 5,986 |
| 4,898 |
| - |
| - |
|
Accounts payable | Non-indexed Ch$ | 24,962,942 |
| 18,590,199 |
| - |
| - |
|
- | US$ | 2,347,533 |
| 3,532,957 |
| - |
| - |
|
- | $AR | 11,351,304 |
| 6,558,541 |
| 100,001 |
| - |
|
- | $R | 7,792,811 |
| 12,922,660 |
| 50,000 |
| - |
|
- | EURO | 18,789 |
| 28,663 |
| - |
| - |
|
Other creditors | $AR | 168,013 |
| 151,000 |
| 54,128 |
| 40,633 |
|
- | $R | 4,413,430 |
| 3,894,513 |
| - |
| - |
|
- | US$ | 98,784 |
| 280,913 |
| - |
| - |
|
Notes and accounts payable related companies | Non-indexed Ch$ | 5,346,532 |
| 3,951,734 |
| - |
| - |
|
- | US$ | - |
| 298,435 |
| - |
| - |
|
- | $AR | 2,423,861 |
| 1,676,883 |
| - |
| - |
|
- | $R | 1,855,862 |
| 3,169,408 |
| - |
| - |
|
Provisions | Non-indexed Ch$ | 703,999 |
| 824,041 |
| - |
| - |
|
- | $R | - |
| - |
| 3,078,641 |
| 2,988,005 |
|
Withholdings | Non-indexed Ch$ | 7,558,941 |
| 1,211,652 |
| - |
| - |
|
- | Indexed Ch$ | - |
| 5,067,222 |
| - |
| - |
|
- | $AR | 5,875,075 |
| 4,888,350 |
| - |
| - |
|
- | $R | - |
| - |
| 3,740,688 |
| 4,072,737 |
|
Income tax provision | Indexed Ch$ | 403,568 |
| 1,335,635 |
| - |
| - |
|
- | $AR | 1,134,313 |
| - |
| - |
| 1,124,464 |
|
- | $R | - |
| - |
| 1,190,479 |
| 1,046,305 |
|
Unearned income | Non-indexed Ch$ | 29,626 |
| 568,945 |
| - |
| - |
|
Deferred taxes | Indexed Ch$ | - |
| - |
| - |
| - |
|
- | $AR | - |
| - |
| - |
| - |
|
Other current liabilities | Non-indexed Ch$ | 2,464,095 |
| 6,118,933 |
| - |
| - |
|
- | US$ | 2,006,802 |
| - |
| - |
| - |
|
Total current liabilities | Non-indexed Ch$ | 41,103,477 |
| 34,011,550 |
| - |
| - |
|
| US$ | 4,453,119 |
| 4,112,305 |
| - |
| - |
|
| $AR | 26,115,280 |
| 19,935,248 |
| 5,644,330 |
| 1,165,097 |
|
| $R | 14,062,103 |
| 19,986,581 |
| 8,182,885 |
| 8,337,099 |
|
| Indexed Ch$ | 6,190,778 |
| 21,584,181 |
| 1,656,078 |
| 6,917,652 |
|
| EURO | 18,789 |
| 28,663 |
| - |
| - |
|
35
Note 30 - Local and Foreign Currency (continuation)
Long term liabilities at September 30, 2008 were composed of local and foreign currencies as follows:
| Currency | 1 to 3 years | 3 to 5 years | 5 to 10 years | Over 10 years | ||||
|
| Amount | Annual average interest rate | Amount | Annual average interest rate | Amount | Annual average interest rate | Amount | Annual average interest rate |
|
| ThCh$ |
| ThCh$ |
| ThCh$ |
| ThCh$ |
|
Long term bank liabilities | $R | 612,758 | 9.86% | - |
| - |
| - |
|
Long term bonds payable | Indexed Ch$ | 9,136,101 | 6.50% | 9,136,101 | 6.50% | 22,840,252 | 6.50% | 36,544,404 | 6.50% |
Other creditors | $AR | 59,827 |
| - |
| - |
| - |
|
Notes and accounts payable related companies | Non-indexed Ch$ | 3,172,190 |
| - |
| - |
| - |
|
- | Other currencies | - |
| 139,297 |
| - |
| - |
|
Provisions | Non-indexed Ch$ | 835,589 |
| - |
| - |
| - |
|
- | $AR | 1,434,734 |
| - |
| - |
| - |
|
. | $R | 7,690,532 |
| - |
| - |
| - |
|
- | Indexed Ch$ | - |
| - |
| - |
| 6,111,573 |
|
Deferred taxes | Non-indexed Ch$ | 699,529 |
| - |
| - |
| 477,535 |
|
- | $AR | - |
| 665,286 |
| - |
| - |
|
- | $R | 12,606,912 |
| - |
| - |
| - |
|
Other liabilities | Non-indexed Ch$ | - |
| - |
| 4,820,681 |
| - |
|
- | $AR | - |
| 300,095 |
| 2,700,854 |
| - |
|
- | $R | 4,398,076 |
| - |
| - |
| - |
|
Total long term liabilities | $R | 25,308,278 |
| - |
| - |
| - |
|
| Indexed Ch$ | 9,136,101 |
| 9,136,101 |
| 22,840,252 |
| 42,655,977 |
|
| $AR | 1,494,561 |
| 965,381 |
| 2,700,854 |
| - |
|
| Non-indexed Ch$ | 4,707,308 |
| - |
| 4,820,681 |
| 477,535 |
|
| Other currencies | - |
| 139,297 |
| - |
| - |
|
Long term liabilities at September 30, 2007 were composed of local and foreign currencies as follows:
| Currency | 1 to 3 years | 3 to 5 years | 5 to 10 years | Over 10 years | ||||
| Amount | Annual average interest rate | Amount | Annual average interest rate | Amount | Annual average interest rate | Amount | Annual average interest rate | |
|
| ThCh$ | % | ThCh$ | % | ThCh$ | % | ThCh$ | % |
Long term bank liabilities | $R | 833,537 | 10.19% | - |
| - |
| - |
|
Long term bonds payable | Indexed Ch$ | 4,562,444 | 6.45% | 9,124,889 | 6.50% | 22,812,221 | 6.50% | 41,062,009 | 6.50% |
- | US$ | - |
| - |
| - |
| 2,235,097 | 7.63% |
Other creditors | $AR | 77,462 |
| - |
| - |
| - |
|
- | $R | - |
| 31,486 |
| - |
| - |
|
Notes and accounts payable related companies | Non-Indexed Ch$ | 3,704,758 |
| - |
| - |
| - |
|
- | $R | 113,618 |
| - |
| - |
| - |
|
Provisions | Non-Indexed Ch$ | 810,016 |
| - |
| - |
| - |
|
- | Indexed Ch$ | - |
| - |
| - |
| 5,886,973 |
|
- | $AR | 1,527,622 |
| - |
| - |
| - |
|
- | $R | 10,150,442 |
| - |
| - |
| - |
|
Deferred taxes | Indexed Ch$ | 1,822,564 |
| - |
| - |
| - |
|
- | $AR | - |
| 709,132 |
| - |
| - |
|
- | $R | 7,217,322 |
| - |
| - |
| - |
|
Other liabilities | Non-Indexed Ch$ | - |
| - |
| 5,736,936 |
| - |
|
- | $AR | - |
| 235,304 |
| 2,117,729 |
| - |
|
- | $R | 3,320,686 |
| - |
| - |
| - |
|
Total long term liabilities | $R | 21,635,605 |
| 31,486 |
| - |
| - |
|
| Indexed Ch$ | 6,385,008 |
| 9,124,889 |
| 22,812,221 |
| 46,948,982 |
|
| US$ | - |
| - |
| - |
| 2,235,097 |
|
| $AR | 1,605,084 |
| 944,436 |
| 2,117,729 |
| - |
|
| Non-Indexed Ch$ | 4,514,774 |
| - |
| 5,736,936 |
| - |
|
36
Note 31 – Penalties
The Company has not been subject to penalties by the SVS or any other administrative authority.
Note 32 - Subsequent Events
No subsequent events have taken pace since September 30, 2008 until the date of filing of these financial statements.
Note 33 – Companies subject to special regulations
The Company and its subsidiaries are not subject to special regulations.
Note 34 – Environment
The Company has disbursed ThCh$2,294,263 to improve its industrial process, industrial waste metering equipment, laboratory analyses, environmental impact consultancy and other studies. Future commitments, which are all short-term and for the same concepts, amount to ThCh$215,771.
Note 35 – Time deposits
The Company and its subsidiaries have invested in time deposits that are valued at the restated cost plus accrued interests as of the closing date of these financial statements, according to the following table:
Time Deposits |
|
|
|
|
|
|
|
|
|
|
|
| 30-Sep-08 | 30-Sep-07 |
Institution | Currency | Rate | ThCh$ | ThCh$ |
Banco Santander | UF | 2.42% | 14,579,091 | - |
Royal Bank of Canada | US$ | 2.73079% | 11,876,237 | - |
Banco BBVA | UF | 2.90% | 8,018,945 | - |
Banco del Estado | US$ | 3.78% | 5,513,679 | - |
Banco Chile | UF | 2.00% | 5,478,248 | - |
Banco Chile | UF | 0.70% | 3,232,748 | - |
Banco Chile | UF | 3.40% | 2,244,768 | - |
Banco Chile | UF | 1.20% | 2,033,396 | - |
Banco Votorantim | R$ | 13.87% | 32,232 | 104,551 |
Banco Santander | Ch$ | 0.53% | - | 59,087 |
Banco Santander | Ch$ | 0.54% | - | 13,072,280 |
Banco Pactual | R$ | 13.75% | - | 60,560 |
Banco BBVA Francés | AR$ | 11.00% | - | 20,460 |
Total |
|
| 53,009,344 | 13,316,938 |
37
I.
Analysis of Results for the Third Quarter and Nine Months ended September 30, 2008
All figures are expressed under Chilean GAAP and in constant Chilean pesos as of September 2008, therefore all variations are in real terms over a 9.3% annual inflation (September 2007 through September 2008.)
Highlights
·
Operating Income reached Ch$27,346 million during the Third Quarter of 2008, a 5.5% increase in real terms compared to the same period of the previous year. Operating Margin was 14.7%.
·
Consolidated Sales Volume for the Third Quarter amounted to 104.6 million unit cases, an increase of 5.7% during the quarter.
·
Third Quarter EBITDA totaled Ch$36,302 million, a 6.6% increase in real terms compared to the Third Quarter of 2007. EBITDA Margin was 19.6%.
·
Net Income for the Third Quarter of 2008 reached Ch$17,032 million, 6.8% higher than the figure recorded in the Third Quarter of 2007.
·
Consolidated Operating Income reached Ch$87,968 million during the period ended September 30, 2008, 11.0% higher in real terms than the figure recorded as of September 30, 2007. Operating Margin was 15.7%.
·
Consolidated Sales Volume for the period ended September 30, 2008 totaled 322.5 million unit cases, an increase of 4.5% compared to 2007.
·
Consolidated EBITDA for the period ended September 30, 2008 amounted to Ch$114,431 million, an increase of 10.9% in real terms. EBITDA Margin was 20.4%.
·
Net Income for the First Nine Months of 2008 reached Ch$55,488 million, 2.4% higher in real terms than the figure reported for the First Nine Months of 2007.
Comments from the Chief Executive Officer, Mr. Jaime Garcia R.
“Undoubtedly, this year has been a complex one, marked by inflationary scenarios and financial turbulence. Nevertheless, as of the third quarter we increased our consolidated volumes by 4.5%, where the categories of juices and waters stand out with a 20% growth rate, and we also increased our consolidated cash generation in real terms by 11%. We are convinced that Andina has great strengths to face the current world-wide confidence crisis, to name a few: a privileged liquidity position and our strong competitive position in a sector of non-durable goods, which along with the impeccable point of sale execution allows us to view the future with confidence.“
CONSOLIDATED SUMMARY
Nine Months ended September 30, 2008 vs. Nine Months ended September 30, 2007
During the First Nine Months of 2008, the Company’s results were due to growth in volume, increases in prices slightly lower than local inflation and the complex macroeconomic environment. The average 15.6% and 8.3% appreciation of the Brazilianreal and Chileanpeso, respectively has had a positive impact over our dollar-denominated cost and the translation of figures for those cash flows generated in Brazil. The Argentinepeso remained stable on average.
Consolidated Sales Volume amounted to 322.5 million unit cases, an increase of 4.5%. Soft Drinks increased 3.2%, while the other categories of, Juices, Waters and Beer together increased by 18.3%, driven by several launchings during the period.
Net Sales amounted to Ch$560,753 million, 16.0% higher than 2007 in real terms. Resulting from higher volumes, price adjustments in the three countries where we operate and in the case of Brazil, a favorable exchange rate upon translation of figures.
Cost of Sales per unit case increased 8.3% compared to the First Nine Months of 2007, mainly due to: (i) higher concentrate costs in our Brazilian and Argentine franchises due to price increases and in Chile given the new bottler incidence agreement; (ii) increased labor costs in the three franchises at a different level; (iii) increased prices for PET resin in the
38
three countries, and (iv) increased price of sugar in Argentina. All of which was partially offset by the appreciation of the Brazilianreal and Chileanpeso, thus decreasing the costs of U.S. dollar-denominated raw materials, and the lower price of sugar in Chile and Brazil resulting from negotiations with suppliers.
On the other hand, SG&A expenses increased 25.5% as a result of higher volumes and increased freight fees, which rose due to higher labor costs and fuel prices as well as road blockages in Argentina due the agricultural workers’ strike. In addition these expenses were impacted by the effect upon translation of figures of our Brazilian operation, and increased advertising investments in our Argentine operation.
Consolidated Operating Income amounted to Ch$87,968 million, an 11.0% increase in real terms compared to the First Nine Months of 2007. Operating Margin was 15.7%, a decrease of 70 basis points.
Consolidated EBITDA amounted to Ch$114,431 million, an increase of 10.9% in real terms. EBITDA Margin was 20.4%.
Third Quarter 2008 vs. Third Quarter 2007
Consolidated Sales Volume for the Third Quarter of 2008 reached 104.6 million unit cases, a 5.7% increase compared to the same period of the previous year. Soft drinks increased 5.3% and the “other categories” increased 9.7%, driven by new launchings.
Net Sales amounted to Ch$185,661 million, representing a 15.3% improvement in real terms compared to the Third Quarter of 2007, mainly due to increased volumes, price adjustments and a favorable exchange rate upon translation of figures in the case of Brazil.
Cost of Sales per unit case increased 10.0%, mainly explained by the previously-mentioned circumstances during the First Nine Months of 2008.
SG&A expenses increased 19.2%, as a result of increased volumes, higher freight fees and the increase in advertising investments due to launchings during the quarter, in addition to the effect upon translation of figures of our Brazilian operation.
Consolidated Operating Income amounted to Ch$27,346 million, a 5.5% increase in real terms compared to the Third Quarter of 2007. Operating Margin was 14.7%.
Finally, Consolidated EBITDA amounted to Ch$36,302 million, increasing by 6.6% in real terms compared to the same period of the previous year. EBITDA Margin was 19.6%.
SUMMARY BY COUNTRY
CHILE
Nine Months ended September 30, 2008 vs. Nine Months ended September 30, 2007
During the First Nine Months of 2008, Sales Volume amounted to 111.6 million unit cases a significant 6.6% growth compared to the First Nine Months of 2007. This growth was a result of increased soft drink volumes (+3.9%) as well as an increase in the Juices and Waters segment (+19.1%). In addition to the volume contributed by the water brandBenedictino, launched in February, and by the energy drinkBURN, launched in May, the company launched during September,Fanta Zero, seeking to modernize the brand and capitalize theZero trend, andNestea Green Tea, increasing the iced-tea portfolio.
Net Sales amounted to Ch$191,227 million, a 4.6% improvement in real terms compared to the previous year, as a result of higher volumes and offset by a 1.9% decrease in real terms of the average income per unit case.
39
Cost of Sales per unit case decreased 1.2%. This lower cost is mainly explained by the lower costs of sugar and by the positive effect of the 8.3% average revaluation during the period over al U.S. dollar-denominated raw materials. These factors were partially offset by increased concentrate costs (resulting from price increases and a higher incidence), cost of PET resin and increased labor costs.
SG&A expenses increased 11.0% due to increased volumes, higher freight fees and labor costs associated to sales.
Operating Income was 3.8% lower in real terms than the figure reported in the same period of 2007, amounting to Ch$38,098 million. Operating Margin was 19.9%.
EBITDA amounted to Ch$49,634 million, remaining stable in real terms compared to 2007. EBITDA Margin was 26.0%.
Third Quarter 2008 vs. Third Quarter 2007
During the Third Quarter of 2008 Sales Volume amounted to 35.8 million unit cases, a 5.7% growth compared to the same period of the previous year, where “other categories” were a strong growth driver recording a 13.2% increase.
Net Sales amounted to Ch$60,837 million, reflecting a growth of 4.6%, with a real average income per unit case 1.0% lower than that of 2007.
Cost of Sales per unit case decreased 2.6%. This lower cost is mainly explained by the previously-mentioned circumstances during the First Nine Months of 2008.
SG&A expenses increased 10.2%, due to the reasons previously–mentioned.
Operating Income amounted to Ch$11,371 million, a 3.2% increase in real terms compared to the Third Quarter of 2007. Operating Margin was 18.7%.
EBITDA amounted to Ch$15,148 million, a 4.7% increase in real terms regarding the EBITDA figure recorded during the same period of the previous year. EBITDA Margin was 24.9%.
BRAZIL
For the Third quarter and Nine Months of 2008 the appreciation of the Brazilian real to the Chilean peso had a positive impact over income and a negative impact over costs and expenses due to figure translation.
Nine Months ended September 30, 2008 vs. Nine Months ended September 30, 2007
Sales Volume amounted to 124.3 million unit cases, a slight increase compared to the 123.9 million unit cases recorded as of September 30, 2007, strongly affected by the contraction in consumer demand and weather conditions in the territories within our franchise.
Net Sales reached Ch$247,425 million, increasing 19.4% in real terms compared to the previous year. This increase was as a result of price adjustments and the favorable exchange rate upon the translation of figures.
Cost of Sales per unit case increased 12.9%, mainly due to: (i) higher concentrate costs due to price increases; (ii) increased prices for PET resin; (iii) increased aluminum costs (sales volume for cans represented 14% of total sales volume); (iv) higher depreciation, and (v) effect upon the translation of figures (with a negative impact over costs). All of these factors were partially offset by a decrease in sugar prices and the positive effect of the appreciation of the Brazilianrealover US dollar denominated raw material costs.
Higher freight fees and labor costs, and particularly the effect upon translation of figures led to a 29.7% increase of SG&A expenses.
40
Operating Income increased 21.4%, amounting to Ch$38,926 million. Operating Margin was 15.7%, an improvement of 20 basis points.
EBITDA amounted to Ch$48,236 million, an increase of 19.4% in real terms, with an EBITDA Margin of 19.5%, in line compared to the same period of the previous year.
Third Quarter 2008 vs. Third Quarter 2007
Sales Volume for the Third Quarter of 2008 amounted to 40.5 million unit cases, representing a 1.8% increase compared to the Third Quarter of 2007. This low volume growth reflects the slow recovery of consumer demand after a consumer pattern shift towards durable goods, less available wages in low income families (as a result of inflation) and lower temperatures than those recorded during the same period last year.
Net Sales reached Ch$82,081 million, representing an increase of 13.6%. This growth is explained by price adjustments during the period, and a favorable exchange rate upon translating figures into US dollars.
Cost of Sales per unit case increased 16.7% mainly explained by the previously mentioned circumstances for the First Nine Months.
SG&A’s increased 12.8% due to increased freight fees, labor costs and the effect upon translation of figures.
Operating Income reached Ch$12,638 million, remaining stable in real terms and Operating Margin was 15.4%.
Finally, EBITDA amounted to Ch$15,960 million, an increase of 2.0% in real terms compared to the Third Quarter of 2007. EBITDA Margin was 19.5%.
ARGENTINA
Nine Months ended September 30, 2008 vs. Nine Months ended September 30, 2007
Sales Volume reached 86.6 million unit cases, an 8.2% improvement compared to the Sales Volume reported in 2007, driven by the increase in salaries and private consumption observed during the period.
Net Sales reached Ch$124,247 million, representing an increase of 29.6% in real terms. This improvement is explained by higher volumes and significant price adjustments that took place during the period.
Cost of Sales per unit case increased 15.9%, mainly explained by increased costs of concentrate (as a result of price increases), sugar and PET resin and higher labor costs.
SG&A expenses increased 37.0% mainly due to higher salaries, and increased freight fees (due to labor costs, fuel prices and the agricultural strike that increased our distribution costs) and advertising investments.
Operating Income amounted to Ch$12,614 million, a significant 35.5% increase. Operating Margin was 10.1%, 40 basis points higher than 2007.
EBITDA reached Ch$18,231 million, an increase of 23.2% in real terms compared to the same period of 2007. EBITDA Margin was 14.7%.
Third Quarter 2008 vs. Third Quarter 2007
Sales Volume for the Third Quarter of 2008 increased 11.7% reaching 28.3 million unit cases. In addition to the previously mentioned circumstances, this increase was driven by launches of Cepita Light and Cepita 100% Orange Juice during the month of August.
41
Net Sales reached Ch$43,982 million, representing an increase of 39.6% in real terms compared to the Third Quarter of 2007. This improvement is explained by the significant increase in volumes and prices during the period.
Cost of Sales per unit case increased 21.3% and SG&A’s increased 46.3%, explained by the same arguments given for the First Nine Months analysis.
Operating Income amounted to Ch$3,943 million, a 46.0% increase in real terms compared to the same period of 2007. Operating Margin was 9.0%, an increase of 40 basis points compared to the Third Quarter of 2007.
Finally, EBITDA reached Ch$5,801 million, an increase of 29.3%. EBITDA Margin was 13.2%
NON-OPERATING RESULTS
First Nine Months ended September 30, 2008 vs. First Nine Months ended September 30, 2007
Non-Operating Results totaled a loss of (Ch$16,676) million, which compares negatively to a lower accumulated loss of (Ch$7,856) million recorded during 2007. This increased loss in the non-operating result line is best explained by: (i) a negative effect explained by the reversal of conversion adjustment reserve realized, due to repatriations from our subsidiaries in Argentina and Brazil; (ii) a negative effect upon price level restatement due to higher CPI; and (iii) a negative effect upon translation of the financial statements of our subsidiary in Brazil which affects net monetary assets.
Finally, net income amounted to Ch$55,488 million, an increase of 2.4% in real terms compared to the figure recorded as of September 30, 2007.
ANALYSIS OF THE BALANCE SHEET
As of September 30, 2008, the Company’s financial assets amounted to Ch$108,957 million. These represent cash, investments in mutual funds and time deposits. 81.8% of total financial investments are denominated in Chileanpesos, 11.4% in U.S.dollars, 5.7% in Brazilianreais and 1.1% in Argentinepesos.
On the other hand, the Company’s total debt was Ch$92,740 million, with an average annual rate of 6.5% on Chileanpeso-denominated debt. The Chileanpeso-denominated debt represents 87.8% of total debt.
As a result, the Company holds a positive net cash position of Ch$16,217 million.
42
II.
Main Indicators
The main indicators contained in the table reflect for both periods the solid financial position and profitability of Embotelladora Andina S.A.
Main Indicators | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INDICATORS | Unit | sep-08 | Dec-2007 | sep-07 | Variance | |
LIQUIDITY |
|
|
|
|
| |
| Current Ratio | Times | 1.98 | 1.92 | 1.85 | 0.13 |
| Acid Tests | Times | 1.72 | 1.72 | 1.62 | 0.10 |
| Working Capital | MCh$ | 36,727 | 29,296 | 47,676 | -10,949 |
ACTIVITY |
|
|
|
|
| |
| Investments | MCh$ | 46,635 | 59,890 | 43,644 | 2,991 |
| Inventory turnover | Times | 10.87 | 13.60 | 10.49 | 0.38 |
| Days of inventory on hand | Days | 33.13 | 26.46 | 34.32 | -1.20 |
INDEBTEDNESS |
|
|
|
|
| |
| Debt to equity ratio | % | 79.39% | 92.22% | 87.40% | -8.02% |
| Short-term liabilities to total liabilities | % | 46.08% | 53.48% | 48.06% | -1.98% |
| Long-term liabilities to total liabilities | % | 53.92% | 46.52% | 51.94% | 1.98% |
| Interest charges coverage ratio | Times | 32.64 | 60.47 | 32.03 | 0.61 |
PROFITABILITY |
|
|
|
|
| |
| Return over equity | % | 19.01% | 28.32% | 18.32% | 0.69% |
| Return over total assets | % | 10.23% | 14.94% | 9.75% | 0.48% |
| Return over operating assets | % | 19.48% | 32.80% | 19.81% | -0.33% |
| Operating income | MCh$ | 87,968 | 123,463 | 79,267 | 8,701 |
| Operating margin | % | 15.69% | 18.14% | 16.40% | -0.71% |
| EBITDA (1) | MCh$ | 104,966 | 159,218 | 102,744 | 2,223 |
| EBITDA margin | % | 18.72% | 22.93% | 21.26% | -2.54% |
| Dividends payout ratio - Series A shares | % | 7.33% | 7.16% | 6.48% | 0.85% |
| Dividends payout ratio - Series B shares | % | 7.00% | 7.33% | 6.56% | 0.44% |
1Earnings before income taxes, interests, depreciation, amortization and extraordinary items.
Liquidity indicators improved due to (i) the sale of long term corporate bond portfolio which were reinvested in marketable securities and short term time deposits, and (ii) the maturity of Series A Yankee bonds in October of 2007 in the amount of US$32 million that as of September 2007 was classified as short term. All of which was partially offset by an increase in short term indebtedness of our subsidiary in Argentina.
Indicators of indebtedness reflect a decrease mainly due to the maturity of the previously mentioned Yankee Bond and the repurchase of US$2 million remaining of the Series B Yankee Bond. During the period net financial expenses amounted to Ch$2,253 million and earnings before interests and taxes amounted to Ch$73,544 million, achieving an interest coverage of 32.64 times.
At the closing of the period ended September 30, 2008, operating profitability indicators were affected by the reasons explained in paragraph I.
43
III.
Analysis of Book Values and Present Value of Assets
With respect to the Company’s main assets the following should be noted:
Given the high rotation of the items that compose working capital, book values of current assets are considered to represent market values.
Fixed asset values in the Chilean companies are presented at restated acquisition cost. In the foreign companies, fixed assets are valued in accordance with Technical Bulletin N° 64 issued by the Chilean Institute of Accountants (controlled in historical dollars).
Depreciation is estimated over the restated value of assets along with the remaining useful economic life of each asset.
All fixed assets that are considered available for sale are held at their respective market values.
Investments in shares, in situations where the Company has a significant influence on the issuing company, are presented following the equity method. The Company’s participation in the results of the issuing company for each year has been recognized on an accrual basis, and unrealized results on transactions between related companies have been eliminated.
In summary, assets are valued in accordance with generally accepted accounting standards in Chile and the instructions provided by the Chilean Securities Commission, as shown in Note 2 of the Financial Statements.
IV.
Analysis of the Main Components of Cash Flow
| Jun-2008 | Jun-2007 | Variation MCh$ | Variation % |
MCh$ | MCh$ | |||
Operating | 93,449 | 101,074 | (7,625) | -8% |
Financing | (67,691) | (95,971) | 28,280 | 29% |
Investment | (64,043) | 41,775 | (105,818) | 253% |
Net cash flow for the Period | (38,285) | 46,878 | (85,163) | 182% |
The Company generated negative net cash flow of MCh$38,285 during the quarter, analyzed as follows:
Operating activities generated a positive cash flow of MCh$93,449 representing a negative variation of MCh$7,625 mainly explained by higher income tax payments and other withholding taxes.
Financing activities generated a negative cash flow of MCh$67,691; with a positive variation of MCh$28,280 regarding the previous year, mainly due to lower bond payments in accordance to the pre-established maturity dates.
Investment activities generated a negative cash flow of MCh$64,043 with a negative variation of MCh$105,818 regarding the previous year, mainly because during the 2007 income was collected from the sale of financial investments which did not occur during 2008 and additionally during this period financial investments are made as a result of collections from Cross Currency Swaps which did not occur during 2007.
V.
Analysis Of Market Risk
Interest Rate Risk
As of September 30, 2008 and 2007, the Company held 100% of its debt obligations at fixed-rates. Consequently, the risk fluctuation of market interest rates regarding the Company’s cash flow remains low.
44
Foreign Currency Risk
Income generated by the Company is linked to the currencies of the markets in which it operates. For the period the breakdown for each is the following:
Chilean peso:
34%
Brazilian real:
44%
Argentine peso:
22%
Since the Company’s sales are not linked to the United States dollar, the policy adopted for managing foreign exchange risk, this is the mismatch between assets and liabilities denominated in a given currency, has been to maintain financial investments in dollar-denominated instruments, for an amount at least equivalent to the dollar-denominated liabilities.
Additionally, it is Company policy to maintain foreign currency hedge agreements to lessen the effects of exchange risk in cash expenditures expressed in US dollars which mainly correspond to payment to suppliers for raw materials.
Accounting exposure of foreign subsidiaries (Brazil and Argentina) for the difference between monetary assets and liabilities, those denominated in local currency, and therefore, exposed to risks upon translation to the US dollar, are only covered when it is foreseen that it will result in significant negative differences and when the associated cost of said coverage is deemed reasonable by management.
Commodity Risks
The Company faces the risk of price changes in the international markets for sugar, aluminum and PET resin, all of which are necessary raw materials for preparing beverages, and that altogether represent between 30% and 35% of our operating costs. In order to minimize and/or stabilize such risk, supply contracts and advanced purchases are negotiated when market conditions are favorable. Likewise commodity coverage instruments have also been utilized.
Material Events
During the period between January 1, 2008 and September 30, 2008, the following material events were filed:
1.- New Bottler Agreement with Coca-Cola
Embotelladora Andina S.A. signed a new Bottler Agreement for its Chilean operations for a term of 5 years beginning January 1, 2008.
The new agreement, called NEWBA, does not significantly differ from the agreement previously signed by Andina´s bottlers in the other countries where it has operations.
2.- Regular Shareholders’ Meeting Resolutions
The following was resolved at the Regular General Shareholders’ Meeting of Embotelladora Andina S.A., held yesterday, April 15, 2008 (hereinafter the “Meeting”), among other matters:
1.
The distribution of the following amounts asFinal Dividend N° 160, on account of the fiscal year ending December 31, 2007:
·
Ch$9.130 (nine pesos and one hundred and thirty cents) per Series A shares; and
·
Ch$10.043 (ten pesos and forty three cents) per Series B shares.
This dividend will be available to shareholders beginningApril 24, 2008. Regarding payment of this dividend, the Shareholders’ Registry will close on April 18, 2008.
2.
The distribution of anAdditionalDividend N° 161 on account of retained earnings:
45
·
Ch$60.00 (sixty pesos) per Series A shares; and
·
Ch$66.00 (sixty six pesos) per Series B shares.
This dividend will be available to shareholders beginningMay 14, 2008. Regarding payment of this
dividend, the Shareholders Registry will close on May 8, 2008.
3.- Board Appointments and Committees
The following resolutions were adopted at the Regular Board of Directors Meeting held April 22, 2008:
1.
Mr. Arturo Majlis Albala was appointed newVice-Chairman of the Board of the Company.
2.
TheExecutive Committee was elected, comprised of regular directorsJosé Antonio Garcés Silva, Arturo Majlis Albala, Gonzalo Said HandalandSalvador Said Somavía.
This Committee is also comprised, by virtue of office, by Mr.Juan Claro González, Chairman of the Board, and Mr.Jaime García Rioseco, Chief Executive Officer of the Company.
3.
Also elected was theDirector’s Committee in accordance with Article 50-bis of Chilean Corporate Law, comprised of the regular directorsJuan Claro González, Salvador Said SomaviaandHeriberto Urzúa Sánchez. Mr. Claro will continue to be the Chairman of this Committee.
4.
Additionally,Juan Claro González, Salvador Said Somavía andHeriberto Urzúa Sánchez were appointed members of theU.S. Sarbanes-Oxley Audit Committee. Mr. Claro will continue to be the Chairman of this Committee.
4.- Acquisition or Sale of Assets or Shares
On June 3, 2008 Embotelladora Andina S.A. together with Coca-Cola Embonor S.A. and Coca-Cola Polar S.A. (hereinafter the “Bottlers”) acquired 100% of the shares of Embotelladoras del Sur S.A. by means of a Stock Purchase Agreement among the Bottlers, Malterías Unidas S.A. and Mr. Eduardo Chadwick Claro. Of the total percentage, Embotelladora Andina S.A. acquired 48% of the shares of Embotelladoras del Sur S.A. for a total of Ch$753,581,576. Simultaneous to the Purchase Agreement, the Bottlers entered into a Shareholders’ Agreement in order to regulate their participation in Embotelladoras del Sur S.A.
5.- Changes in Management Corporate Legal and Communications Officer
Embotelladora Andina S.A. announced that Mr. Pedro Pellegrini, Corporate Legal and Communications Manager, will leave his position as of July 31, 2008, after 13 years of outstanding performance at the Company. Mr. Pellegrini's decision was internally communicated some months ago and is based on his interest in dedicating himself to private practice and corporate advisor roles and in this sense Mr. Pellegrini will continue as an external advisor of Andina. The name of the new Corporate Legal Officer will be timely informed.
46
Dividends Distributed during the period ended September 30, 2008
This document may contain forward-looking statements reflecting Embotelladora Andina SA’s good faith expectations and are based upon currently available data; however, actual results are subject to numerous uncertainties, many of which are beyond the control of the Company and any one or more of which could materially impact actual performance. Among the factors that can cause performance to differ materially are: political and economic conditions on consumer spending, pricing pressure resulting from competitive discounting by other bottlers, climatic conditions in the Southern Cone, and other risk factors applicable from time to time and listed in Andina’s periodic reports filed with relevant regulatory institutions.
47
Embotelladora Andina S.A.
Third Quarter Results for the period ended September 30, Chilean GAAP
(In million constant 09/30/08 Chilean Pesos, except per share)
| 30/09/2008 | 30/09/2007 |
| ||||||
| Chilean Operations | Brazilian Operations | Argentine Operations | Total (2) | Chilean Operations | Brazilian Operations | Argentine Operations | Total (2) | % Ch. |
VOLUME TOTAL BEVERAGES (Million UC) | 35.8 | 40.5 | 28.3 | 104.6 | 33.9 | 39.8 | 25.3 | 99.0 | 5.7% |
Soft Drink | 29.0 | 38.1 | 27.8 | 94.9 | 27.9 | 37.3 | 24.9 | 90.1 | 5.3% |
Mineral Water | 2.8 | 0.5 | 0.2 | 3.6 | 2.5 | 0.7 | 0.3 | 3.4 | 5.0% |
Juices | 4.0 | 1.0 | 0.3 | 5.3 | 3.6 | 0.8 | 0.1 | 4.5 | 16.2% |
Beer | NA | 0.9 | NA | 0.9 | NA | 1.0 | NA | 1.0 | -4.4% |
|
|
|
|
|
|
|
|
|
|
NET SALES | 60,837 | 82,021 | 43,982 | 185,661 | 58,154 | 72,187 | 31,507 | 161,063 | 15.3% |
COST OF SALES | (34,910) | (45,998) | (26,514) | (106,244) | (33,922) | (38,711) | (19,564) | (91,411) | 16.2% |
GROSS PROFIT | 25,927 | 36,023 | 17,467 | 79,418 | 24,232 | 33,477 | 11,943 | 69,652 | 14.0% |
Gross Margin | 42.6% | 43.9% | 39.7% | 42.8% | 41.7% | 46.4% | 37.9% | 43.2% |
|
SELLING AND ADMINISTRATIVE EXPENSES | (14,556) | (23,385) | (13,525) | (51,466) | (13,209) | (20,726) | (9,243) | (43,178) | 19.2% |
CORPORATE EXPENSES (4) | 0 | 0 | 0 | (606) | 0 | 0 | 0 | (545) | 11.2% |
OPERATING INCOME | 11,371 | 12,638 | 3,943 | 27,346 | 11,022 | 12,751 | 2,700 | 25,929 | 5.5% |
Operating Margin | 18.7% | 15.4% | 9.0% | 14.7% | 19.0% | 17.7% | 8.6% | 16.1% |
|
EBITDA (1) | 15,148 | 15,960 | 5,801 | 36,302 | 14,462 | 15,649 | 4,488 | 34,054 | 6.6% |
Ebitda Margin | 24.9% | 19.5% | 13.2% | 19.6% | 24.9% | 21.7% | 14.2% | 21.1% |
|
NON OPERATIONAL RESULTS |
|
|
|
|
|
|
|
|
|
FINANCIAL EXPENSE/INCOME (Net) |
|
|
| (3,591) |
|
|
| 4,707 | -176.3% |
RESULTS FROM AFFILIATED |
|
|
| 316 |
|
|
| 75 | -318.9% |
AMORTIZATION OF GOODWILL |
|
|
| (1,653) |
|
|
| (1,672) | -1.1% |
OTHER INCOME/(EXPENSE) |
|
|
| (1,227) |
|
|
| (1,408) | -12.8% |
PRICE LEVEL RESTATEMENT (3) |
|
|
| (641) |
|
|
| (4,846) | -86.8% |
NON-OPERATING RESULTS |
|
|
| (6,797) |
|
|
| (3,144) | 116.2% |
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME TAXES; AMORTIZATION OF |
|
|
|
|
|
|
|
|
|
NEGATIVE GOODWILL AND MINORITY INTEREST |
|
|
| 20,549 |
|
|
| 22,785 | -9.8% |
|
|
|
|
|
|
|
|
|
|
INCOME TAXES |
|
|
| (3,554) |
|
|
| (6,853) | -48.1% |
MINORITY INTEREST |
|
|
| 37 |
|
|
| 11 | NA |
AMORTIZATION OF NEGATIVE GOODWILL |
|
|
| 0 |
|
|
| 0 | NA |
NET INCOME |
|
|
| 17,032 |
|
|
| 15,943 | 6.8% |
Net Margin |
|
|
| 9.2% |
|
|
| 9.9% |
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE SHARES OUTSTANDING |
|
|
| 760.3 |
|
|
| 760.3 |
|
EARNINGS PER SHARE |
|
|
| 22.4 |
|
|
| 21.0 |
|
EARNINGS PER ADS |
|
|
| 134.4 |
|
|
| 125.8 | 6.8% |
|
|
|
|
|
|
|
|
|
|
(1) EBITDA: Operating Income + Depreciation
(2) Total may be different from the addition of the three countries because of intercountry eliminations
(3) Includes: Monetary Correction + Conversion Effect to Balance Sheet + Income Statement Accounts + Exchange rate gains & losses.
(4) Corporate expenses partially reclassified to the operations.
48
Embotelladora Andina S.A.
Third Quarter Results for the period ended September 30, Chilean GAAP
(In million nominal US$, except per share)
| Exch. Rate : | $ 551.31 |
|
|
| Exch. Rate : | $ 511.23 |
|
|
|
|
|
|
|
|
|
|
|
|
| 30/09/2008 | 30/09/2007 |
| ||||||
| Chilean Operations | Brazilian Operations | Argentine Operations | Total (2) | Chilean Operations | Brazilian Operations | Argentine Operations | Total (2) | % Ch. |
VOLUME TOTAL BEVERAGES (Million UC) | 35.8 | 40.5 | 28.3 | 104.6 | 33.9 | 39.8 | 25.3 | 99.0 | 5.7% |
Soft Drink | 29.0 | 38.1 | 27.8 | 94.9 | 27.9 | 37.3 | 24.9 | 90.1 | 5.3% |
Mineral Water | 2.8 | 0.5 | 0.2 | 3.6 | 2.5 | 0.7 | 0.3 | 3.4 | 5.0% |
Juices | 4.0 | 1.0 | 0.3 | 5.3 | 3.6 | 0.8 | 0.1 | 4.5 | 16.2% |
Beer | NA | 0.9 | NA | 0.9 | NA | 1.0 | NA | 1.0 | -4.4% |
|
|
|
|
|
|
|
|
|
|
NET SALES | 110.3 | 148.8 | 79.8 | 336.8 | 104.1 | 129.2 | 56.4 | 288.2 | 16.8% |
COST OF SALES | (63.3) | (83.4) | (48.1) | (192.7) | (60.7) | (69.3) | (35.0) | (163.6) | 17.8% |
GROSS PROFIT | 47.0 | 65.3 | 31.7 | 144.1 | 43.4 | 59.9 | 21.4 | 124.7 | 15.6% |
Gross Margin | 42.6% | 43.9% | 39.7% | 42.8% | 41.7% | 46.4% | 37.9% | 43.2% |
|
SELLING AND ADMINISTRATIVE EXPENSES | (26.4) | (42.4) | (24.5) | (93.4) | (23.6) | (37.1) | (16.5) | (77.3) | 20.8% |
CORPORATE EXPENSES (4) | 0.0 | 0.0 | 0.0 | (1.1) | 0.0 | 0.0 | 0.0 | (1.0) | 12.7% |
OPERATING INCOME | 20.6 | 22.9 | 7.2 | 49.6 | 19.7 | 22.8 | 4.8 | 46.4 | 6.9% |
Operating Margin | 18.7% | 15.4% | 9.0% | 14.7% | 19.0% | 17.7% | 8.6% | 16.1% |
|
EBITDA (1) | 27.5 | 28.9 | 10.5 | 65.8 | 25.9 | 28.0 | 8.0 | 60.9 | 8.0% |
Ebitda Margin | 24.9% | 19.5% | 13.2% | 19.6% | 24.9% | 21.7% | 14.2% | 21.1% |
|
NON OPERATIONAL RESULTS |
|
|
|
|
|
|
|
|
|
FINANCIAL EXPENSE/INCOME (Net) |
|
|
| (6.5) |
|
|
| 8.4 | -177.3% |
RESULTS FROM AFFILIATED |
|
|
| 0.6 |
|
|
| 0.1 | -324.6% |
AMORTIZATION OF GOODWILL |
|
|
| (3.0) |
|
|
| (3.0) | 0.2% |
OTHER INCOME/(EXPENSE) |
|
|
| (2.2) |
|
|
| (2.5) | -11.7% |
PRICE LEVEL RESTATEMENT (3) |
|
|
| (1.2) |
|
|
| (8.7) | -86.6% |
NON-OPERATING RESULTS |
|
|
| (12.3) |
|
|
| (5.6) | 119.1% |
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME TAXES; AMORTIZATION OF |
|
|
|
|
|
|
|
|
|
NEGATIVE GOODWILL AND MINORITY INTEREST |
|
|
| 37.3 |
|
|
| 40.8 | -8.6% |
|
|
|
|
|
|
|
|
|
|
INCOME TAXES |
|
|
| (6.4) |
|
|
| (12.3) | -47.4% |
MINORITY INTEREST |
|
|
| 0.1 |
|
|
| 0.0 | NA |
AMORTIZATION OF NEGATIVE GOODWILL |
|
|
| 0.0 |
|
|
| 0.0 | NA |
NET INCOME |
|
|
| 30.9 |
|
|
| 28.5 | 8.3% |
Net Margin |
|
|
| 9.2% |
|
|
| 9.9% |
|
WEIGHTED AVERAGE SHARES OUTSTANDING |
|
|
| 760.3 |
|
|
| 760.3 |
|
EARNINGS PER SHARE |
|
|
| 0.04 |
|
|
| 0.04 |
|
EARNINGS PER ADS |
|
|
| 0.24 |
|
|
| 0.23 | 8.3% |
(1) EBITDA: Operating Income + Depreciation
(2) Total may be different from the addition of the three countries because of intercountry eliminations
(3) Includes: Monetary Correction + Conversion Effect to Balance Sheet + Income Statement Accounts + Exchange rate gains & losses.
(4) Corporate expenses partially reclassified to the operations.
49
Embotelladora Andina S.A.
Nine Months Results for the period ended September 30, Chilean GAAP
(In million constant 09/30/08 Chilean Pesos, except per share)
| 30/09/2008 | 30/09/2007 |
| ||||||
| Chilean Operations | Brazilian Operations | Argentine Operations | Total (2) | Chilean Operations | Brazilian Operations | Argentine Operations | Total (2) | % Ch. |
VOLUME TOTAL BEVERAGES (Million UC) | 111.6 | 124.3 | 86.6 | 322.5 | 104.7 | 123.9 | 80.1 | 308.7 | 4.5% |
Soft Drink | 89.6 | 116.4 | 85.3 | 291.3 | 86.2 | 117.1 | 79.0 | 282.3 | 3.2% |
Mineral Water | 10.6 | 2.0 | 0.8 | 13.5 | 8.5 | 1.7 | 0.8 | 10.9 | 23.6% |
Juices | 11.3 | 2.8 | 0.5 | 14.6 | 10.0 | 2.3 | 0.3 | 12.5 | 16.3% |
Beer | NA | 3.1 | NA | 3.1 | NA | 2.9 | NA | 2.9 | 7.3% |
|
|
|
|
|
|
|
|
|
|
NET SALES | 191,227 | 247,425 | 124,427 | 560,753 | 182,798 | 207,270 | 96,002 | 483,357 | 16.0% |
COST OF SALES | (109,383) | (129,155) | (74,788) | (310,999) | (103,803) | (114,050) | (59,673) | (274,813) | 13.2% |
GROSS PROFIT | 81,844 | 118,270 | 49,639 | 249,753 | 78,995 | 93,220 | 36,329 | 208,544 | 19.8% |
Gross Margin | 42.8% | 47.8% | 39.9% | 44.5% | 43.2% | 45.0% | 37.8% | 43.1% |
|
SELLING AND ADMINISTRATIVE EXPENSES | (43,746) | (79,344) | (37,025) | (160,115) | (39,407) | (61,163) | (27,019) | (127,589) | 25.5% |
CORPORATE EXPENSES (4) | 0 | 0 | 0 | (1,670) | 0 | 0 | 0 | (1,688) | -1.1% |
OPERATING INCOME | 38,098 | 38,926 | 12,614 | 87,968 | 39,588 | 32,057 | 9,310 | 79,267 | 11.0% |
Operating Margin | 19.9% | 15.7% | 10.1% | 15.7% | 21.7% | 15.5% | 9.7% | 16.4% |
|
EBITDA (1) | 49,634 | 48,236 | 18,231 | 114,431 | 49,690 | 40,387 | 14,803 | 103,192 | 10.9% |
Ebitda Margin | 26.0% | 19.5% | 14.7% | 20.4% | 27.2% | 19.5% | 15.4% | 21.3% |
|
NON OPERATIONAL RESULTS |
|
|
|
|
|
|
|
|
|
FINANCIAL EXPENSE/INCOME (Net) |
|
|
| (10,441) |
|
|
| 6,202 | -268.3% |
RESULTS FROM AFFILIATED |
|
|
| 664 |
|
|
| 302 | 120.2% |
AMORTIZATION OF GOODWILL |
|
|
| (4,959) |
|
|
| (5,107) | -2.9% |
OTHER INCOME/(EXPENSE) |
|
|
| (2,964) |
|
|
| (1,757) | 68.7% |
PRICE LEVEL RESTATEMENT (3) |
|
|
| 1,023 |
|
|
| (7,497) | 113.6% |
NON-OPERATING RESULTS |
|
|
| (16,676) |
|
|
| (7,856) | 112.3% |
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME TAXES; AMORTIZATION OF NEGATIVE GOODWILL AND MINORITY INTEREST |
|
|
| 71,291 |
|
|
| 71,410 | -0.2% |
|
|
|
|
|
|
|
|
|
|
INCOME TAXES |
|
|
| (15,849) |
|
|
| (17,164) | -7.7% |
MINORITY INTEREST |
|
|
| 46 |
|
|
| (33) | NA |
AMORTIZATION OF NEGATIVE |
|
|
| 0 |
|
|
| 0 | NA |
NET INCOME |
|
|
| 55,488 |
|
|
| 54,213 | 2.4% |
Net Margin |
|
|
| 9.9% |
|
|
| 11.2% |
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE SHARES OUTSTANDING |
|
|
| 760.3 |
|
|
| 760.3 |
|
EARNINGS PER SHARE |
|
|
| 73.0 |
|
|
| 71.3 |
|
EARNINGS PER ADS |
|
|
| 437.9 |
|
|
| 427.8 | 2.4% |
|
|
|
|
|
|
|
|
|
|
(1) EBITDA: Operating Income + Depreciation
(2) Total may be different from the addition of the three countries because of intercountry eliminations
(3) Includes: Monetary Correction + Conversion Effect to Balance Sheet + Income Statement Accounts + Exchange rate gains & losses.
(4) Corporate expenses partially reclassified to the operations.
50
Embotelladora Andina S.A.
Nine Months Results for the period ended September 30, Chilean GAAP
(In million nominal US$, except per share)
| Exch. Rate : | $ 551.31 |
|
|
| Exch. Rate : | $ 511.23 |
|
|
|
|
|
|
|
|
|
|
|
|
| 30/09/2008 | 30/09/2007 |
| ||||||
| Chilean Operations | Brazilian Operations | Argentine Operations | Total (2) | Chilean Operations | Brazilian Operations | Argentine Operations | Total (2) | % Ch. |
VOLUME TOTAL BEVERAGES (Million UC) | 111.6 | 124.3 | 86.6 | 322.5 | 104.7 | 123.9 | 80.1 | 308.7 | 4.5% |
Soft Drink | 89.6 | 116.4 | 85.3 | 291.3 | 86.2 | 117.1 | 79.0 | 282.3 | 3.2% |
Mineral Water | 10.6 | 2.0 | 0.8 | 13.5 | 8.5 | 1.7 | 0.8 | 10.9 | 23.6% |
Juices | 11.3 | 2.8 | 0.5 | 14.6 | 10.0 | 2.3 | 0.3 | 12.5 | 16.3% |
Beer | NA | 3.1 | NA | 3.1 | NA | 2.9 | NA | 2.9 | 7.3% |
|
|
|
|
|
|
|
|
|
|
NET SALES | 346.9 | 448.8 | 225.7 | 1,017.1 | 327.1 | 370.9 | 171.8 | 865.0 | 17.6% |
COST OF SALES | (198.4) | (234.3) | (135.7) | (564.1) | (185.8) | (204.1) | (106.8) | (491.8) | 14.7% |
GROSS PROFIT | 148.5 | 214.5 | 90.0 | 453.0 | 141.4 | 166.8 | 65.0 | 373.2 | 21.4% |
Gross Margin | 42.8% | 47.8% | 39.9% | 44.5% | 43.2% | 45.0% | 37.8% | 43.1% |
|
SELLING AND ADMINISTRATIVE EXPENSES | (79.3) | (143.9) | (67.2) | (290.4) | (70.5) | (109.5) | (48.4) | (228.3) | 27.2% |
CORPORATE EXPENSES (4) | 0.0 | 0.0 | 0.0 | (3.0) | 0.0 | 0.0 | 0.0 | (3.0) | 0.3% |
OPERATING INCOME | 69.1 | 70.6 | 22.9 | 159.6 | 70.8 | 57.4 | 16.7 | 141.9 | 12.5% |
Operating Margin | 19.9% | 15.7% | 10.1% | 15.7% | 21.7% | 15.5% | 9.7% | 16.4% |
|
EBITDA (1) | 90.0 | 87.5 | 33.1 | 207.6 | 88.9 | 72.3 | 26.5 | 184.7 | 12.4% |
Ebitda Margin | 26.0% | 19.5% | 14.7% | 20.4% | 27.2% | 19.5% | 15.4% | 21.3% |
|
NON OPERATIONAL RESULTS |
|
|
|
|
|
|
|
|
|
FINANCIAL EXPENSE/INCOME (Net) |
|
|
| (18.9) |
|
|
| 11.1 | -270.6% |
RESULTS FROM AFFILIATED |
|
|
| 1.2 |
|
|
| 0.5 | 123.2% |
AMORTIZATION OF GOODWILL |
|
|
| (9.0) |
|
|
| (9.1) | -1.6% |
OTHER INCOME/(EXPENSE) |
|
|
| (5.4) |
|
|
| (3.1) | 71.0% |
PRICE LEVEL RESTATEMENT (3) |
|
|
| 1.9 |
|
|
| (13.4) | 113.8% |
NON-OPERATING RESULTS |
|
|
| (30.2) |
|
|
| (14.1) | 115.1% |
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME TAXES; AMORTIZATION OF NEGATIVE GOODWILL AND MINORITY INTEREST |
|
|
| 129.3 |
|
|
| 127.8 | 1.2% |
|
|
|
|
|
|
|
|
|
|
INCOME TAXES |
|
|
| (28.7) |
|
|
| (30.7) | -6.4% |
MINORITY INTEREST |
|
|
| 0.1 |
|
|
| (0.1) | NA |
AMORTIZATION OF NEGATIVE GOODWILL |
|
|
| 0.0 |
|
|
| 0.0 | NA |
NET INCOME |
|
|
| 100.6 |
|
|
| 97.0 | 3.7% |
Net Margin |
|
|
| 9.9% |
|
|
| 11.2% |
|
WEIGHTED AVERAGE SHARES OUTSTANDING |
|
|
| 760.3 |
|
|
| 760.3 |
|
EARNINGS PER SHARE |
|
|
| 0.13 |
|
|
| 0.13 |
|
EARNINGS PER ADS |
|
|
| 0.79 |
|
|
| 0.77 | 3.7% |
(1) : Operating Income + Depreciation
(2) Total may be different from the addition of the three countries because of intercountry eliminations
(3) Includes: Monetary Correction + Conversion Effect to Balance Sheet + Income Statement Accounts + Exchange rate gains & losses.
(4) Corporate expenses partially reclassified to the operations.
51
Embotelladora Andina S.A.
Consolidated Balance Sheet
(In million of constant 09/30/08 Chilean Pesos)
ASSETS | 30/09/2008 | 30/09/2007 | %Ch |
| LIABILITIES & SHAREHOLDERS' EQUITY | 30/09/2008 | 30/09/2007 | %Ch |
|
|
|
|
|
|
|
|
|
Cash + Time deposits + market. Securit. | 107,362 | 93,987 | 14.2% |
| Short term bank liabilities | 10,684 | 9,402 | 13.6% |
Account receivables (net) | 56,954 | 49,447 | 15.2% |
| Current portion of long term bank liabilities | 123 | 230 | 0.0% |
Inventories | 28,053 | 26,331 | 6.5% |
| Current portion of bonds payable | 1,656 | 15,771 | -89.5% |
Other current assets | 20,348 | 44,772 | -54.6% |
| Trade accounts payable and notes payable | 66,777 | 61,429 | 8.7% |
Total Current Assets | 212,716 | 214,538 | -0.8% |
| Other liabilities | 28,186 | 29,247 | -3.6% |
|
|
|
|
| Total Current Liabilities | 107,427 | 116,079 | -7.5% |
Property, plant and equipment | 657,789 | 607,161 | 8.3% |
|
|
|
|
|
Depreciation | (453,574) | (436,094) | 4.0% |
| Long term bank liabilities | 613 | 834 | -26.5% |
Total Property, Plant, and Equipment | 204,215 | 171,067 | 19.4% |
| Bonds payable | 77,657 | 79,797 | -2.7% |
|
|
|
|
| Other long term liabilities | 46,113 | 43,462 | 6.1% |
Investment in related companies | 25,554 | 22,558 | 13.3% |
| Total Long Term Liabilities | 124,382 | 124,092 | 0.2% |
Investment in other companies | 127 | 63 | 101.2% |
|
|
|
|
|
Goodwill | 58,309 | 65,785 | -11.4% |
| Minority interest | 1,329 | 1,364 | -2.6% |
Other long term assets | 25,885 | 43,867 | -41.0% |
|
|
|
|
|
Total Other Assets | 109,874 | 132,273 | -16.9% |
| Stockholders' Equity | 293,667 | 276,342 | 6.3% |
|
|
|
|
|
|
|
|
|
TOTAL ASSETS | 526,805 | 517,878 | 1.7% |
| TOTAL LIABILITIES & SHAREHOLDERS' EQUITY | 526,805 | 517,878 | 1.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Highlights |
| |||||||
(In million of constant 09/30/08 Chilean Pesos) |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADDITIONS TO FIXED ASSETS | 30/09/2008 | 30/09/2007 |
|
| DEBT RATIOS | 30/09/2008 | 30/09/2007 |
|
|
|
|
|
|
|
|
|
|
Chile | 18,862 | 28,033 |
|
| Financial Debt / Total Capitalization | 0.24 | 0.28 |
|
Brazil | 23,752 | 11,657 |
|
| Financial Debt / EBITDA L12M | 0.55 | 0.75 |
|
Argentina | 4,021 | 3,954 |
|
| EBITDA L12M / Interest Expense (net) L12M | 23.61 | 13.69 |
|
| 46,635 | 43,644 |
|
| L12M: Last twelve months |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* As of September 30, 2008, the Company registered a positive net cash position of US$ 29 million. Total debt amounted to US$ 169 million. |
|
|
| |||||
Total Cash amounted to US$ 198 million. |
|
|
|
|
|
|
|
|
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|
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|
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|
|
52
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, in the city of Santiago, Chile.
EMBOTELLADORA ANDINA S.A.
By:/s/ Osvaldo Garay
Name: Osvaldo Garay
Title: Chief Financial Officer
Santiago, November 13, 2008
53