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
August 2019
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. Miraflores 9153
Renca
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 o
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 o 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 o 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 o No x
Consolidated Interim Financial Statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Santiago, Chile
As of June 30, 2019, and December 31, 2018
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Interim Financial Statements
As of June 30, 2019 (unaudited) and December 31, 2018
Report of the Independent Auditor
(Translation of the report originally issued in Spanish)
To
Shareholders and Directors
Embotelladora Andina S.A.
We have reviewed the accompanying interim consolidated financial statements of Embotelladora Andina S.A. and Subsidiaries, which comprise the interim consolidated statement of financial position as of June 30, 2019, and the interim consolidated comprehensive income statement for the six and three month periods ended June 30, 2019 and 2018, the interim consolidated statements of changes in equity and cash flows for the six month periods then ended and the related notes to the interim consolidated financial statements.
Management’s Responsibility for the Interim Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the interim consolidated financial statements in conformity with IAS 34 “Interim Financial Reporting” of the International Financial Reporting Standards (IFRS). This includes the design, implementation and maintainenance of sufficient internal control that provides the basis for the preparation and fair presentation of interim consolidated financial statements in accordance with the applicable financial reporting preparation and presentation framework.
Auditor’s Responsibility
Our responsibility is to perform a review in accordance with Generally Accepted Auditing Standards in Chile applicable to interim financial statement reviews. An interim financial statement review involves performing analytical procedures and making inquiries of the persons in charge of accounting and financial matters. The review is substantially less broad in scope than an audit to the financial statements in accordance with Generally Accepted Auditing Standards in Chile for the purpose of expressing an opinion on the financial statements. Therefore, we express no such opinion.
Conclusion
On the basis of our review, we are not aware of any material modifications that should be made to the interim consolidated financial statements referred to above for it to be in conformity with IAS 34 “Interim Financial Reporting” of the International Financial Reporting Standards (IFRS).
Other matters
On February 28, 2019 we issued an unqualified opinion on the consolidated financial statements as of December 31, 2018 and 2017 of Embotelladora Andina S.A and Subsidiaries, which includes the statement of financial position as of December 31, 2018 as presented in the accompanying consolidated interim financial statements, and corresponding notes.
Tatiana Ramos S. | EY Audit SpA. |
|
|
Santiago, July 30, 2019 |
|
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Interim Financial Statements
1 | |
|
|
3 | |
|
|
4 | |
|
|
5 | |
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|
6 | |
|
|
Notes to the Consolidated Interim Financial Statements (unaudited) | 7 |
Consolidated Interim Statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
As of June 30, 2019, and December 31, 2018
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Interim Statements of Financial Position
|
| NOTE |
| 06.30.2019 |
| 12.31.2018 |
|
|
|
|
| (unaudited) |
| CLP (000’s) |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| 4 |
| 117,450,341 |
| 137,538,613 |
|
Other financial assets |
| 5 |
| — |
| 683,567 |
|
Other non-financial assets |
| 6.1 |
| 16,904,319 |
| 5,948,923 |
|
Trade and other accounts receivable, net |
| 7 |
| 122,174,667 |
| 174,113,323 |
|
Accounts receivable from related companies |
| 12.1 |
| 7,240,512 |
| 9,450,263 |
|
Inventory |
| 8 |
| 155,701,481 |
| 151,319,709 |
|
Current tax assets |
| 9 |
| 5,858,023 |
| 2,532,056 |
|
Total Current Assets |
|
|
| 425,329,343 |
| 481,586,454 |
|
|
|
|
|
|
|
|
|
Non-Current Assets: |
|
|
|
|
|
|
|
Other financial assets |
| 5 |
| 96,518,349 |
| 97,362,295 |
|
Other non-financial assets |
| 6.2 |
| 33,350,240 |
| 34,977,264 |
|
Trade and other receivables |
| 7 |
| 189,511 |
| 1,270,697 |
|
Accounts receivable from related parties |
| 12.1 |
| 122,506 |
| 74,340 |
|
Investments accounted for under the equity method |
| 14 |
| 101,187,696 |
| 102,410,945 |
|
Intangible assets other than goodwill |
| 15 |
| 655,962,412 |
| 668,822,553 |
|
Goodwill |
| 16 |
| 117,733,476 |
| 117,229,173 |
|
Property, plant and equipment |
| 11.1 |
| 714,339,943 |
| 710,770,968 |
|
Deferred tax assets |
| 10 |
| 1,618,274 |
| — |
|
Total Non-Current Assets |
|
|
| 1,721,022,407 |
| 1,732,918,235 |
|
|
|
|
|
|
|
|
|
Total Assets |
|
|
| 2,146,351,750 |
| 2,214,504,689 |
|
The accompanying notes 1 to 32 form an integral part of these Consolidated Financial Statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Interim Statements of Financial Position
|
| NOTE |
| 06.30.2019 |
| 12.31.2018 |
|
|
|
|
| (unaudited) |
| CLP (000’s) |
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
Other financial liabilities |
| 17 |
| 60,322,732 |
| 56,114,977 |
|
Trade and other accounts payable |
| 18 |
| 173,269,063 |
| 238,109,847 |
|
Accounts payable to related parties |
| 12.2 |
| 44,088,670 |
| 45,827,859 |
|
Provisions |
| 19 |
| 2,033,033 |
| 3,485,613 |
|
Income taxes payable |
| 9 |
| 2,078,402 |
| 9,338,612 |
|
Employee benefits current provisions |
| 13 |
| 25,749,718 |
| 33,210,979 |
|
Other non-financial liabilities |
| 20 |
| 31,643,175 |
| 33,774,214 |
|
Total Current Liabilities |
|
|
| 339,184,793 |
| 419,862,101 |
|
|
|
|
|
|
|
|
|
Other financial liabilities |
| 17 |
| 719,660,254 |
| 716,563,778 |
|
Trade and other payables |
| 18 |
| 791,700 |
| 735,665 |
|
Provisions |
| 19 |
| 51,881,214 |
| 58,966,913 |
|
Deferred income tax liabilities |
| 10.2 |
| 147,528,637 |
| 145,245,948 |
|
Employee benefits non-current provisions |
| 13 |
| 13,469,147 |
| 9,415,541 |
|
Other non-financial liabilities, non-current |
|
|
| 167,682 |
| — |
|
Non-Current Liabilities: |
|
|
| 933,498,634 |
| 930,927,845 |
|
|
|
|
|
|
|
|
|
Equity: |
| 20 |
|
|
|
|
|
Issued capital |
|
|
| 270,737,574 |
| 270,737,574 |
|
Retained earnings |
|
|
| 509,581,413 |
| 462,221,463 |
|
Other reserves |
|
|
| 73,896,103 |
| 110,854,089 |
|
Equity attributable to equity holders of the parent |
|
|
| 854,215,090 |
| 843,813,126 |
|
Non-controlling interests |
|
|
| 19,453,233 |
| 19,901,617 |
|
Total Equity |
|
|
| 873,668,323 |
| 863,714,743 |
|
Total Liabilities and Equity |
|
|
| 2,146,351,750 |
| 2,214,504,689 |
|
The accompanying notes 1 to 32 form an integral part of these Consolidated Financial Statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Interim Statements of Income by Function
For the periods ended June 30, 2019 and 2018
|
|
|
| 01.01.2019 |
| 01.01.2018 |
| 04.01.2019 |
| 04.01.2018 |
|
|
| NOTE |
| 06.30.2019 |
| 06.30.2018 |
| 06.30.2019 |
| 06.30.2018 |
|
|
|
|
| (unaudited) |
| (unaudited) |
| (unaudited) |
| (unaudited) |
|
Net sales |
|
|
| 840,180,450 |
| 817,504,239 |
| 379,717,932 |
| 363,485,018 |
|
Cost of sales |
| 25 |
| (496,674,197 | ) | (471,433,525 | ) | (228,330,444 | ) | (215,499,328 | ) |
Gross Profit |
|
|
| 343,506,253 |
| 346,070,714 |
| 151,387,488 |
| 147,985,690 |
|
Other income |
| 26 |
| 263,560 |
| 237,141 |
| 178,597 |
| 155,673 |
|
Distribution expenses |
| 25 |
| (80,186,199 | ) | (79,623,760 | ) | (36,613,404 | ) | (35,797,299 | ) |
Administrative expenses |
| 25 |
| (158,566,505 | ) | (160,120,728 | ) | (79,625,359 | ) | (78,234,627 | ) |
Other expenses |
| 27 |
| (1,975,892 | ) | (8,791,015 | ) | 490,898 |
| (3,388,562 | ) |
Other (loss) gains |
| 29 |
| — |
| (1,693,257 | ) | — |
| (896,659 | ) |
Financial income |
| 28 |
| 2,910,856 |
| 2,119,138 |
| 1,489,405 |
| 1,107,834 |
|
Financial expenses |
| 28 |
| (22,319,856 | ) | (22,025,288 | ) | (11,046,152 | ) | (10,810,241 | ) |
Share of profit (loss) of investments in associates and joint ventures accounted for using the equity method |
| 14.3 |
| 7,885 |
| 783,534 |
| (608,547 | ) | (163,135 | ) |
Foreign exchange differences |
|
|
| (724,633 | ) | 1,049,520 |
| 319,037 |
| 1,028,915 |
|
Income by indexation units |
|
|
| (3,183,062 | ) | (1,374,481 | ) | (3,110,161 | ) | (102,999 | ) |
Net income before income taxes |
|
|
| 79,732,407 |
| 76,631,518 |
| 22,861,802 |
| 20,884,590 |
|
Income tax expense |
| 10.1 |
| (17,750,421 | ) | (28,637,977 | ) | (7,829,534 | ) | (12,272,842 | ) |
Net income |
|
|
| 61,981,986 |
| 47,993,541 |
| 15,032,268 |
| 8,611,748 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to |
|
|
|
|
|
|
|
|
|
|
|
Owners of the controller |
|
|
| 61,618,029 |
| 47,561,768 |
| 15,199,739 |
| 8,786,505 |
|
Non-controlling interests |
|
|
| 363,957 |
| 431,773 |
| (167,471 | ) | (174,757 | ) |
Net income |
|
|
| 61,981,986 |
| 47,993,541 |
| 15,032,268 |
| 8,611,748 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per Share, basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
Earnings per Series A Share |
| 21.5 |
| 62.0 |
| 47.85 |
| 15.98 |
| 6.51 |
|
Earnings per Series B Share |
| 21.5 |
| 68.2 |
| 52.64 |
| 17.58 |
| 7.16 |
|
The accompanying notes 1 to 32 form an integral part of these Consolidated Financial Statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Interim Statements of Comprehensive Income
For the periods ended June 30, 2019 and 2018
|
| 01.01.2019 |
| 01.01.2018 |
| 04.01.2019 |
| 04.01.2018 |
|
|
| 06.30.2019 |
| 30.06.2018 |
| 06.30.2019 |
| 06.30.2018 |
|
|
| (unaudited) |
| (unaudited) |
| (unaudited) |
| (unaudited) |
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Comprehensive Income: |
| 61,981,986 |
| 47,993,541 |
| 15,032,268 |
| 8,611,748 |
|
|
|
|
|
|
|
|
|
|
|
Components of other comprehensive income that will not be reclassified to net income for the period, before taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actuarial losses from defined benefit plans |
| — |
| (37,314 | ) | — |
| (29,236 | ) |
|
|
|
|
|
|
|
|
|
|
Components of other comprehensive income that will be reclassified to net income for the period, before taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (losses) from exchange rate translation differences |
| (48,822,177 | ) | (67,423,926 | ) | 8,501,378 |
| (29,448,317 | ) |
|
|
|
|
|
|
|
|
|
|
Gain (losses) from cash flow hedges |
| 1,134,306 |
| (9,112,683 | ) | (620,728 | ) | 6,666,012 |
|
|
|
|
|
|
|
|
|
|
|
Income tax related to components of other comprehensive income that will not be reclassified to net income for the period |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit related to defined benefit plans |
| — |
| 10,075 |
| — |
| 7,892 |
|
|
|
|
|
|
|
|
|
|
|
Income tax related to components of other comprehensive income that will be reclassified to net income for the period |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax related to exchange rate translation differences |
| 10,857,577 |
| 22,814,096 |
| (479,310 | ) | 1,879,018 |
|
|
|
|
|
|
|
|
|
|
|
Income tax related to cash flow hedges |
| (453,628 | ) | 2,886,418 |
| 385,918 |
| (2,225,128 | ) |
Other comprehensive income, total |
| (37,283,922 | ) | (50,863,336 | ) | (7,787,258 | ) | (23,149,759 | ) |
Total comprehensive income |
| 24,698,064 | ) | (2,869,793 | ) | 22,819,526 |
| (14,538,011 | ) |
|
|
|
|
|
|
|
|
|
|
Total comprehensive income attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity holders of the parent |
| 25,024,000 |
| (2,425,147 | ) | 23,483,460 |
| (14,585,770 | ) |
Non-controlling interests |
| (325,936 | ) | (444,646 | ) | (663,934 | ) | 47,759 |
|
Total comprehensive income |
| 24,698,064 |
| (2,869,793 | ) | 22,819,526 |
| (14,538,011 | ) |
The accompanying notes 1 to 32 form an integral part of these Consolidated Financial Statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Interim Statements of Changes in Equity
As of June 30, 2019 and 2018 (unaudited)
|
|
|
| Other reserves |
|
|
|
|
|
|
|
|
| ||||||||
|
| Issued capital |
| Reserves for |
| Cash flow hedge |
| Actuarial gains |
| Other |
| Total other |
| Retained |
| Controlling |
| Non- |
| Total Equity |
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
Opening balance as of 01/01/2019 |
| 270,737,574 |
| (306,674,528 | ) | (13,668,932 | ) | (1,954,077 | ) | 433,151,626 |
| 110,854,089 |
| 462,221,463 |
| 843,813,126 |
| 19,901,617 |
| 863,714,743 |
|
Changes in Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings |
| — |
| — |
| — |
| — |
| — |
| — |
| 61,618,029 |
| 61,618,029 |
| 363,957 |
| 61,981,986 |
|
Other comprehensive income |
| — |
| (37,632,712 | ) | 674,726 |
| — |
| — |
| (36,957,986 | ) | — |
| (36,957,986 | ) | (325,936 | ) | (37,283,922 | ) |
Comprehensive income |
| — |
| (37,632,712 | ) | 674,726 |
| — |
| — |
| (36,957,986 | ) | 61,618,029 |
| 24,660,043 |
| 38,021 |
| 24,698,064 |
|
Dividends |
| — |
| — |
| — |
| — |
| — |
| — |
| (42,737,646 | ) | (42,737,646 | ) | (486,405 | ) | (43,224,051 | ) |
Increase (decrease) from other changes |
| — |
| — |
| — |
| — |
| — |
| — |
| 28,479,567 |
| 28,479,567 |
| — |
| 28,479,567 |
|
Total changes in equity |
| — |
| (37,632,712 | ) | 674,726 |
| — |
| — |
| (36,957,986 | ) | 47,359,950 |
| 10,401,964 |
| (448,384 | ) | 9,953,580 |
|
Ending balance as of 06/30/2019 |
| 270,737,574 |
| (344,307,240 | ) | (12,994,206 | ) | (1,954,077 | ) | 436,415,009 |
| 73,896,103 |
| 509,581,413 |
| 854,215,090 |
| 19,453,233 |
| 873,668,323 |
|
|
|
|
| Other reserves |
|
|
|
|
|
|
|
|
| ||||||||
|
| Issued capital |
| Reserves for |
| Cash flow hedge |
| Actuarial gains |
| Other |
| Total other |
| Retained |
| Controlling |
| Non- |
| Total Equity |
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
Opening balance as of 01/01/2018 |
| 270,737,574 |
| (237,077,572 | ) | (3,094,671 | ) | (1,915,587 | ) | 427,137,058 |
| 185,049,228 |
| 335,523,254 |
| 791,310,056 |
| 21,923,293 |
| 813,233,349 |
|
Changes in accounting policies |
|
|
|
|
|
|
|
|
|
|
|
|
| 79,499,736 |
| 79,499,736 |
|
|
| 79,499,736 |
|
Restated opening balance |
| 270,737,574 |
| (237,077,572 | ) | (3,094,671 | ) | (1,915,587 | ) | 427,137,058 |
| 185,049,228 |
| 415,022,990 |
| 870,809,792 |
| 21,923,293 |
| 892,733,085 |
|
Changes in Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings |
| — |
| — |
| — |
| — |
| — |
| — |
| 47,561,768 |
| 47,561,768 |
| 431,773 |
| 47,993,541 |
|
Other comprehensive income |
| — |
| (44,219,851 | ) | (6,171,836 | ) | (27,001 | ) | — |
| (50,418,688 | ) | — |
| (50,418,688 | ) | (444,646 | ) | (50,863,334 | ) |
Comprehensive income |
| — |
| (44,219,851 | ) | (6,171,836 | ) | (27,001 | ) | — |
| (50,418,688 | ) | 47,561,768 |
| (2,856,920 | ) | (12,873 | ) | (2,869,793 | ) |
Dividends |
| — |
| — |
| — |
| — |
| — |
| — |
| (42,737,646 | ) | (42,737,646 | ) | (1,793,799 | ) | (44,531,445 | ) |
Increase (decrease) from other changes |
| — |
| — |
| — |
| — |
|
|
| — |
| 18,741,460 |
| 18,741,460 |
| — |
| 18,741,460 |
|
Total changes in equity |
| — |
| (44,219,851 | ) | (6,171,836 | ) | (27,001 | ) | — |
| (50,418,688 | ) | 23,565,582 |
| (26,853,106 | ) | (1,806,672 | ) | (28,659,778 | ) |
Ending balance as of 06/30/2018 |
| 270,737,574 |
| (281,297,423 | ) | (9,266,507 | ) | (1,942,588 | ) | 427,137,058 |
| 134,630,540 |
| 438,588,572 |
| 843,956,686 |
| 20,116,621 |
| 864,073,307 |
|
The accompanying notes 1 to 32 form an integral part of these Consolidated Financial Statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Consolidated Interim Statements of Direct Cash Flows
As of June 30, 2019 and 2018
|
|
|
| 01.01.2019 |
| 01.01.2018 |
|
|
| NOTE |
| 06.30.2019 |
| 06.30.2018 |
|
|
|
|
| (unaudited) |
| (unaudited) |
|
|
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Cash flows provided by (used in) Operating Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows provided by Operating Activities |
|
|
|
|
|
|
|
Receipts from the sale of goods and the rendering of services (including taxes) |
|
|
| 1.271.549.665 |
| 1,048,352,436 |
|
Payments for Operating Activities |
|
|
|
|
|
|
|
Payments to suppliers for goods and services (including taxes) |
|
|
| (883,431,125 | ) | (676,143,545 | ) |
Payments to and on behalf of employees |
|
|
| (104,793,892 | ) | (103,180,143 | ) |
Other payments for operating activities (value-added taxes on purchases, sales and others) |
|
|
| (153,423,164 | ) | (142,531,513 | ) |
Interest payments |
|
|
| (20,797,233 | ) | (22,834,529 | ) |
Interest received |
|
|
| 1,496,854 |
| 1,847,083 |
|
Income tax payments |
|
|
| (19,838,714 | ) | (13,861,423 | ) |
Other cash movements (tax on bank debits Argentina and others) |
|
|
| (2,028,355 | ) | (3,425,974 | ) |
Cash flows provided by (used in) Operating Activities |
|
|
| 88,734,036 |
| 88,222,392 |
|
|
|
|
|
|
|
|
|
Cash flows provided by (used in) Investing Activities |
|
|
|
|
|
|
|
Contributions made in associates |
| 14.2 |
| — |
| (1,500,000 | ) |
Dividends received |
|
|
| 240,804 |
|
|
|
Proceeds from sale of Property, plant and equipment |
|
|
| 1,989 |
| 147,031 |
|
Purchase of Property, plant and equipment |
|
|
| (57,250,050 | ) | (56,993,193 | ) |
Purchase of intangible assets |
|
|
| (426,949 | ) | — |
|
Proceeds from other long-term assets (redemption of term deposits over 90 days) |
|
|
| — |
| 13,883,132 |
|
Payments on forward, term, option and financial exchange agreements |
|
|
| 117,814 |
| 122,955 |
|
Net cash flows used in Investing Activities |
|
|
| (57,316,392 | ) | (44,339,175 | ) |
|
|
|
|
|
|
|
|
Cash Flows generated from (used in) Financing Activities |
|
|
|
|
|
|
|
Proceeds from short-term loans obtained |
|
|
| 1,494,143 |
| 22,575,209 |
|
Loan payments |
|
|
| (1,093,885 | ) | (34,835,638 | ) |
Lease liability payments |
|
|
| (1,228,976 | ) | (1,613,440 | ) |
Dividend payments by the reporting entity |
|
|
| (42,737,646 | ) | (43,699,278 | ) |
Other inflows (outflows) of cash (Placement and payment of public obligations) |
|
|
| (6,686,473 | ) | (6,339,409 | ) |
Net cash flows (used in) generated by Financing Activities |
|
|
| (50,252,837 | ) | (63,912,556 | ) |
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents before exchange differences |
|
|
| (18,835,193 | ) | (20,029,339 | ) |
Effects of exchange differences on cash and cash equivalents |
|
|
| (136,948 | ) | (853,934 | ) |
Effects of inflation on cash and cash equivalents |
|
|
| (1,116,131 | ) | (5,703,105 | ) |
Net decrease in cash and cash equivalents |
|
|
| (20,088,272 | ) | (26,586,377 | ) |
Cash and cash equivalents — beginning of period |
|
|
| 137,538,613 |
| 136,242,116 |
|
Cash and cash equivalents - end of period |
| 4 |
| 117,450,341 |
| 109,655,739 |
|
The accompanying notes 1 to 32 form an integral part of these Consolidated Financial Statements
EMBOTELLADORA ANDINA S.A. AND SUBSIDIARIES
Notes to the Interim Consolidated Financial Statements
1 - CORPORATE INFORMATION
Embotelladora Andina S.A. RUT (Chilean Tax Id. N°) 91.144.000-8 (hereinafter “Andina,” and together with its subsidiaries, the “Company”) is an open stock corporation, whose corporate address and principal offices are located at Miraflores 9153, borough of Renca, Santiago, Chile. The Company is registered under No. 00124 of the Securities Registry and is regulated by Chile’s Financial Market Commission (hereinafter “CMF”) and pursuant to Chile’s Law 18,046 is subject to the supervision of this entity. It is also registered with the U.S. Securities and Exchange Commission (hereinafter “SEC”) and its stock is traded on the New York Stock Exchange since 1994.
The principal activities of Embotelladora Andina S.A. are to manufacture, bottle, commercialize and/or distribute Coca-Cola products and brands registered by The Coca-Cola Company (“TCCC”). The Company has operations and is licensed by The Coca-Cola Company in its territories Chile, Brazil, Argentina and Paraguay. In Chile, the geographic areas in which the Company has distribution franchises are the Metropolitan Region II Region of Antofagasta, III Region of Atacama, IV Region of Coquimbo, the Province of San Antonio, V Region of Valparaiso, the province of Cachapoal, VI Region del Libertador General Bernardo O’Higgins, XI Region de Aysén del General Carlos Ibáñez del Campo; and XII Region of Magallanes and Chilean Antartic.. In Brazil, its territories include the city of Rio de Janeiro and the central and northern parts of the state of Rio de Janeiro, the city of Vitória and the whole state of Espirito Santo and the city of Ribeirão Preto and part of the state of Sao Paulo and Minas Gerais. In Argentina, the territories include Mendoza, Córdoba, San Luis, Entre Ríos, Santa Fe, Rosario, Santa Cruz, Neuquén, El Chubut, Tierra del Fuego, Río Negro, La Pampa and the western zone of the Province of Buenos Aires. In Paraguay, the franchised territory covers the whole country. While some of the licenses for the territories in Chile are in the renewal process, others expire in October 2023. In Argentina they expire in 2022; in Brazil they expire in 2022 and in Paraguay they expire in 2020.
Said licenses are renewable upon the request of the licensee and at the sole discretion of The Coca-Cola Company. The licenses currently in the renewal process are expected to be renewed under similar conditions on the date of expiration.
As of the date of these interim consolidated financial statements, regarding Andina’s principal shareholders, the Controlling Group holds 55.72% of the outstanding shares with voting rights, corresponding to the Series A shares. The Controlling Group is composed of the Chadwick Claro, Garcés Silva, Hurtado Berger, Said Handal and Said Somavía families, who control the Company in equal parts.
These Interim Financial Statements reflect the consolidated financial position of Embotelladora Andina S.A. and its subsidiaries, which were approved by the Board of Directors on July 30, 2019.
2 - BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS AND APPLICATION OF ACCOUNTING CRITERIA
2.1 Accounting principles and basis of preparation
The Company’s Consolidated Interim Financial Statements for the periods ended June 30, 2019and December 31, 2018, have been prepared in accordance with International Accounting Standard No. 34 (IAS 34) included in the International Financial Reporting Standards (hereinafter “IFRS”) issued by the International Accounting Standards Board (hereinafter “IASB”).
These consolidated interim financial statements have been prepared following the going concern principle by applying the historical cost method, with the exception, according to IFRS, of those assets and liabilities that are recorded at fair value.
These Interim Consolidated Statements reflect the consolidated financial position of Embotelladora Andina S.A. and its Subsidiaries as of June 30, 2019 and December 31, 2018 and the results of operations for the periods between January 1 and June 30, 2019 and 2018 and April 1 and June 30, 2019 and 2018, together with the statements of changes in equity and cash flows for the periods between January 1 and June 30, 2019 and 2018.
These Interim Consolidated Financial Statements have been prepared based on the accounting records maintained by the Parent Company and by the other entities that are part of the Company and are presented in thousands of Chilean pesos (unless expressly stated) as this is the functional and presentation currency of the Company. Foreign operations are included in accordance with the accounting policies established in Notes 2.5.
2.2 Subsidiaries and consolidation
Subsidiary entities are those companies directly or indirectly controlled by Embotelladora Andina. Control is obtained when the Company has power over the investee, when it has exposure or is entitled to variable returns from its involvement in the investee and when it has the ability to use its power to influence the amount of investor returns. They include assets and liabilities, results of operations, and cash flows for the periods reported. Income or losses from subsidiaries acquired or sold are included in the Consolidated Financial Statements from the effective date of acquisition through the effective date of disposal, as applicable.
The acquisition method is used to account for the acquisition of subsidiaries. The consideration transferred for the acquisition of the subsidiary is the fair value of assets transferred, equity securities issued, liabilities incurred or assumed on the date that control is obtained. Identifiable assets acquired, and identifiable liabilities and contingencies assumed in a business combination are accounted for initially at their fair values at the acquisition date. Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling interest over the net identifiable assets acquired and liabilities assumed. If the consideration is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the income statement.
Intercompany transactions, balances and unrealized gains on transactions between Group entities are eliminated. Unrealized losses are also eliminated. When necessary, the accounting policies of the subsidiaries are modified to ensure uniformity with the policies adopted by the Group.
The interest of non-controlling shareholders is presented in the consolidated statement of changes in equity and the consolidated statement of income by function under “Non-Controlling Interest” and “Earnings attributable to non-controlling interests”, respectively.
The consolidated financial statements include all assets, liabilities, income, expenses, and cash flows of the Company and its subsidiaries after eliminating balances and transaction among the Group’s entities, the subsidiary companies included in the consolidation are the following:
|
|
|
| Ownership interest |
| ||||||||||
|
|
|
| 06.30.2019 |
| 12.31.2018 |
| ||||||||
Taxpayer ID |
| Name of the Company |
| Direct |
| Indirect |
| Total |
| Direct |
| Indirect |
| Total |
|
59.144.140-K |
| Abisa Corp S.A. |
| — |
| 99.99 |
| 99.99 |
| — |
| 99.99 |
| 99.99 |
|
Foreign |
| Aconcagua Investing Ltda. |
| 0.71 |
| 99.28 |
| 99.99 |
| 0.71 |
| 99.28 |
| 99.99 |
|
96.842.970-1 |
| Andina Bottling Investments S.A. |
| 99.90 |
| 0.09 |
| 99.99 |
| 99.90 |
| 0.09 |
| 99.99 |
|
96.972.760-9 |
| Andina Bottling Investments Dos S.A. |
| 99.90 |
| 0.09 |
| 99.99 |
| 99.90 |
| 0.09 |
| 99.99 |
|
Foreign |
| Andina Empaques Argentina S.A. |
| — |
| 99.98 |
| 99.98 |
| — |
| 99.98 |
| 99.98 |
|
96.836.750-1 |
| Andina Inversiones Societarias S.A. |
| 99.98 |
| 0.01 |
| 99.99 |
| 99.98 |
| 0.01 |
| 99.99 |
|
76.070.406-7 |
| Embotelladora Andina Chile S.A. |
| 99.99 |
| — |
| 99.99 |
| 99.99 |
| — |
| 99.99 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| 0.92 |
| 99.07 |
| 99.99 |
| 0.92 |
| 99.07 |
| 99.99 |
|
96.705.990-0 |
| Envases Central S.A. |
| 59.27 |
| — |
| 59.27 |
| 59.27 |
| — |
| 59.27 |
|
96.971.280-6 |
| Inversiones Los Andes Ltda. |
| 99.99 |
| — |
| 99.99 |
| 99.99 |
| — |
| 99.99 |
|
Foreign |
| Paraguay Refrescos S.A. |
| 0.08 |
| 97.75 |
| 97.83 |
| 0.08 |
| 97.75 |
| 97.83 |
|
76.276.604-3 |
| Red de Transportes Comerciales Ltda. |
| 99.90 |
| 0.09 |
| 99.99 |
| 99.90 |
| 0.09 |
| 99.99 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| — |
| 99.99 |
| 99.99 |
| — |
| 99.99 |
| 99.99 |
|
78.536.950-5 |
| Servicios Multivending Ltda. |
| 99.90 |
| 0.09 |
| 99.99 |
| 99.90 |
| 0.09 |
| 99.99 |
|
78.861.790-9 |
| Transportes Andina Refrescos Ltda. |
| 99.90 |
| 0.09 |
| 99.99 |
| 99.90 |
| 0.09 |
| 99.99 |
|
96.928.520-7 |
| Transportes Polar S.A. |
| 99.99 |
| — |
| 99.99 |
| 99.99 |
| — |
| 99.99 |
|
76.389.720-6 |
| Vital Aguas S.A. |
| 66.50 |
| — |
| 66.50 |
| 66.50 |
| — |
| 66.50 |
|
93.899.000-k |
| Vital Jugos S.A. |
| 15.00 |
| 50.00 |
| 65.00 |
| 15.00 |
| 50.00 |
| 65.00 |
|
2.3 Investments in associates and joint ventures
Ownership interest held by the Group in joint ventures and associates are recorded following the equity method. According to the equity method, the investment in an associate or joint venture is initially recorded at cost. As of the date of acquisition, the investment in the statement of financial position is recorded by the proportion of its total assets, which represents the Group’s participation in its capital, once adjusted, where appropriate, the effect of the transactions made with the Group, plus capital gains that have been generated in the acquisition of the company.
Dividends received from these companies are recorded by reducing the value of the investment and the results obtained by them, which correspond to the Group according to its ownership, are recorded under the item “Participation in profit (loss) of associates accounted for by the equity method.”
2.3.1 Investments in Associates
Associates are all entities over which the Group exercises significant influence but does not have control, significant influence is the power to intervene in the financial and operating policy decisions of the associate, without having control or joint control over it. The results of these associates are accounted for using the equity method. Accounting policies of the associates are changed, where necessary, to ensure conformity with the policies adopted by the Company and unrealized gains are eliminated.
2.3.2 Joint arrangements
Joint arrangements are those entities in which the Group exercises control through an agreement with other shareholders and jointly with them, that is, when decisions on their relevant activities require the unanimous consent of the parties that share control.
Depending on the rights and obligations of the parties, joint arrangements are classified as:
· Joint venture: agreement whereby the parties exercising joint control are entitled to the net assets of the entity. Joint ventures are integrated into the consolidated financial statements by the equity method, as described above.
· Joint operation: agreement whereby the parties exercising joint control are entitled to the assets and obligations with respect to the liabilities related to the agreement. Joint operations are consolidated by proportionally integrating the assets and liabilities affected by said operation.
To determine the type of joint agreement that derives from a contractual agreement, Group Management evaluates the structure and legal form of the agreement, the terms agreed by the parties, as well as other relevant factors and circumstances.
Embotelladora Andina does not have joint ventures that qualify as a joint operation business.
2.4 Financial reporting by operating segment
“IFRS 8 Operating Segments” requires that entities disclose information on the results of operating segments. In general, this is information that Management and the Board of Directors use internally to assess performance of segments and allocate resources to them. Therefore, the following operating segments have been determined based on geographic location:
· Operation in Chile
· Operation in Brazil
· Operation in Argentina
· Operation in Paraguay
2.5 Functional currency and presentation currency
2.5.1 Functional currency
Items included in the financial statements of each of the entities in the Company are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The functional currency of each of the Operations is the following:
Company |
| Functional currency |
|
|
|
Embotelladora del Atlántico |
| Argentine Peso (ARS) |
Embotelladora Andina |
| Chilean Peso (CLP) |
Paraguay Refrescos |
| Paraguayan Guaraní (PYG) |
Rio de Janeiro Refrescos |
| Brazil Real (BRL) |
Foreign currency transactions are translated into the functional currency using the foreign exchange rates prevailing on the dates of the transactions. Losses and gains in foreign currency resulting from the liquidation of these transactions and the translation at the closing exchange rate of monetary assets and liabilities denominated in foreign currency are recognized in the income statements under foreign exchange rate differences, except when they correspond to cash flow hedges; in which case they are presented in the statement of comprehensive income.
Functional currency in hyperinflationary economies
Beginning July 2018, Argentina’s economy is considered as hyperinflationary, according to the criteria established in the International Accounting Standard No. 29 “Financial information in hyperinflationary economies” (IAS 29). This determination was carried out on the basis of a series of qualitative and quantitative criteria, including an accumulated inflation rate of more than 100% for three years. In accordance with IAS 29, the financial statements of companies in which Embotelladora Andina S.A. participates in Argentina have been retrospectively restated by applying a general price index to the historical cost, in order to reflect the changes in the purchasing power of the Argentine peso, as of the closing date of these financial statements.
Non-monetary assets and liabilities were restated since February 2003, the last date an inflation adjustment was applied for accounting purposes in Argentina. In this context, it should be mentioned that the Group made its transition to IFRS on January 1, 2004, applying the attributed cost exemption for Property, plant and equipment.
For consolidation purposes in Embotelladora Andina S.A. and as a result of the adoption of IAS 29, the results and financial situation of our subsidiaries in Argentina were converted to the closing exchange rate (ARS/CLP) as December 31, 2018, in accordance with IAS 21 “Effects of foreign currency exchange rate variations”, when dealing with a hyperinflationary economy. Previously, the results of the Argentinean subsidiaries were converted at the average exchange rate of the period, as is the case for the conversion of the results of the rest of the subsidiaries operating in other countries whose economies are not considered hyperinflationary.
Whereas the functional and presentation currency of Embotelladora Andina S.A. does not correspond to that of a hyperinflationary economy, according to the guidelines set out in IAS 29, the re-expression of periods is not required in the consolidated financial statements of the Group.
Inflation for the periods January to June 2019 and January to December 2018 amounted to 12.2% and 47.6%, respectively. The first-time adoption of IAS 29 in 2018 resulted in a positive adjustment in the accumulated consolidated results of Embotelladora Andina S.A., for CLP 79,499,736 thousand (net of deferred taxes) as of January 1, 2018.
The Interim Consolidated Financial Statements as of June 30, 2018 have been restated for comparative purposes.
2.5.2 Presentation currency
The presentation currency is the Chilean peso, which is the functional currency of the parent company, for such purposes, the financial statements of subsidiaries are translated from the functional currency to the presentation currency as indicated below:
a. Translation of financial statements whose functional currency does not correspond to hyperinflationary economies (Brazil and Paraguay)
Financial statements measured as indicated are translated to the presentation currency as follows:
· The statement of financial position is translated to the closing exchange rate at the financial statement date and the income statement is translated at the average monthly exchange rates, the differences that result are recognized in equity under other comprehensive income.
· Cash flow income statement are also translated at average exchange rates for each transaction.
· When an account receivable from related companies is designated as hedge investment, translation differences are recorded under comprehensive income, net of deferred taxes. On disposal of the investment, such translation differences are recognized in the income statement as part of the gain or loss on the disposal of the investment.
b. Translation of financial statements whose functional currency corresponds to hyperinflationary economies (Argentina)
Financial statements measured in their functional currency, with inflation adjustments since they correspond to a hyperinflationary economy, are translated to the presentation currency as follows:
· The statement of financial position sheet is translated at the closing exchange rate at the financial statements date;
· The income statement is translated at the closing exchange rate at the financial statements date
· When an account receivable from related companies is designated as hedge investment, translation differences are recorded under comprehensive income, net of deferred taxes. On disposal of the investment, such translation differences are recognized in the income statement as part of the gain or loss on the disposal of the investment.
c. Comparative figures
The financial information as of June 30 and December 31, 2018, related to entities in Argentina, were restated as of June 30, 2018 in order to present comparatively adjusted figures according to the criteria defined in IAS 29.
2.5.3 Exchange rates and value of the Unidad de Fomento (UF)
Exchange rates and UF values in effect at the end of each period are as follows:
|
| Exchange rate to the Chilean Peso |
| ||||||||||
Date |
| USD |
| BRL |
| ARS |
| UF |
| PGY |
| EUR |
|
06.30.2019 |
| 679.15 |
| 177.22 |
| 15.99 |
| 27,903.30 |
| 0.110 |
| 772.11 |
|
12.31.2018 |
| 694.77 |
| 179.30 |
| 18.43 |
| 27,565.79 |
| 0.117 |
| 794.75 |
|
30.06.2018 |
| 651.21 |
| 168.89 |
| 22.57 |
| 27,158.77 |
| 0.114 |
| 760.32 |
|
2.6 Property, plant, and equipment
The elements of Property, plant and equipment, are valued for their acquisition cost, net of their corresponding accumulated depreciation, and of the impairment losses they have experienced.
The cost of the items of Property, plant and equipment include in addition to the price paid for the acquisition: i) the financial expenses accrued during the construction period that are directly attributable to the acquisition, construction or production of qualified assets, which are those that require a substantial period of time before being ready for use, such as production facilities. The Group defines a substantial period as one that exceeds twelve months. The interest rate used is that corresponding to specific financing or, if it does not exist, the weighted average financing rate of the Company making the investment; and ii) personnel expenses directly related to the construction in progress.
Construction in progress is transferred to operating assets after the end of the trial period when they are available for use, from which moment depreciation begins.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset only when it is probable that future economic benefits associated with the items of Property, plant and equipment will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. Repairs and maintenance are charged to the income statement in the reporting period in which they are incurred.
Land is not depreciated since it has an indefinite useful life. Depreciation on other assets is calculated using the straight-line method to allocate their cost or revalued amounts to their residual values over their estimated useful lives.
The estimated useful lives by asset category are:
Assets |
| Range in years |
Buildings |
| 30-50 |
Plant and equipment |
| 10-20 |
Warehouse installations and accessories |
| 10-30 |
Furniture and supplies |
| 4-5 |
Motor vehicles |
| 5-7 |
Other Property, plant and equipment |
| 3-8 |
Bottles and containers |
| 2-8 |
The residual value and useful lives of Property, plant and equipment are reviewed and adjusted at the end of each financial statement-reporting period, if appropriate.
When the value of an asset is greater than its estimated recoverable amount, the value is written down immediately to its recoverable amount.
Gains and losses on disposals of property, plant, and equipment are calculated by comparing the proceeds to the carrying amount and are charged to other expenses by function or other gains, as appropriate in the statement of comprehensive income.
If there are items available for sale and comply with the conditions of IFRS 5 “Non-current assets held for sale and discontinued operations” are separated from Property, plant and equipment and are presented within current assets at the lower value between the book value and its fair value less selling costs.
2.7 Intangible assets and Goodwill
2.7.1 Goodwill
Goodwill represents the excess of the consideration transferred over the Company’s interest in the net fair value of the net identifiable assets of the subsidiary and the fair value of the non-controlling interest in the subsidiary on the acquisition date. Since goodwill is an intangible asset with indefinite useful life, it is recognized separately and tested annually for impairment. Goodwill is carried at cost less accumulated impairment losses.
Gains and losses on the sale of an entity include the carrying amount of goodwill related to that entity.
Goodwill is assigned to each cash generating unit (CGU) or group of cash-generating units, from where it is expected to benefit from the synergies arising from the business combination. Such CGUs or groups of CGUs represent the lowest level in the organization at which goodwill is monitored for internal management purposes.
2.7.2 Distribution rights
Distribution rights are contractual rights to produce and/or distribute products under the Coca-Cola brand and other brands in certain territories in Argentina, Brazil, Chile and Paraguay that were acquired during Business Combination. Distribution rights are born from the process of valuation at fair value of the assets and liabilities of companies acquired in business combinations. Distribution rights have an indefinite useful life and are not amortized, (as they are permanently renewed by The Coca-Cola Company) and therefore are subject to impairment tests on an annual basis.
2.7.3 Software
Carrying amounts correspond to internal and external software development costs, which are capitalized once the recognition criteria in IAS 38, Intangible Assets, have been met. Their accounting recognition is initially realized for their acquisition or production cost and, subsequently, they are valued at their net cost of their corresponding accumulated amortization and of the impairment losses that, if applicable, they have experienced. The aforementioned software is amortized within four years.
2.8 Impairment of non-financial assets
Assets that have an indefinite useful life, such as intangibles related to distribution rights and goodwill, are not amortized and are tested annually for impairment or more frequently if events or changes in circumstances indicate a potential impairment. Assets that are subject to amortization are tested for impairment whenever there is an event or change in circumstances indicating that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the carrying value of the asset exceeds its recoverable amount. The recoverable amount is the greater of an asset’s fair value less costs to sell or its value in use.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units - CGU).
Regardless of what was stated in the previous paragraph, in the case of CGUs to which capital gains or intangible assets have been assigned with an indefinite useful life, the analysis of their recoverability is carried out systematically at the end of each fiscal year. These indications may include new legal provisions, change in the economic environment that affects business performance indicators, competition movements, or the disposal of an important part of a CGU.
Management reviews business performance based on geographic segments. Goodwill is monitored at the operating segment level that includes the different cash generating units in operations in Chile, Brazil, Argentina and Paraguay. The impairment of distribution rights is monitored geographically in the CGU or group of cash generating units, which correspond to specific territories for which Coca-Cola distribution rights have been acquired. These cash generating units or groups of cash generating units are composed of the following segments:
· Operation in Chile (excluding the Metropolitan Region, Rancagua Province and San Antonio Province);
· Operation in Argentina (North and South region);
· Operation in Brazil (State of Rio de Janeiro and Espirito Santo, Ipiranga territories, investment in the Sorocaba associate and investment in the Leão Alimentos S.A. associate);
· Operation in Paraguay
To check if goodwill has suffered a loss due to impairment of value, the Company compares the book value thereof with its recoverable value, and recognizes an impairment loss, for the excess of the asset’s carrying amount over its recoverable amount. To determine the recoverable values of the CGU, management considers the discounted cash flow method as the most appropriate.
The main assumptions used in the annual test are:
a) Discount rate
The discount rate applied in the annual test carried out in December 2018 was estimated using the CAPM (Capital Asset Pricing Model) methodology, which allows estimating a discount rate according to the level of risk of the CGU in the country where it operates. A nominal discount rate before tax is used according to the following table:
|
| Discount rates 2018 |
|
Argentina |
| 17.1 | % |
Chile |
| 7.2 | % |
Brazil |
| 9.6 | % |
Paraguay |
| 9.1 | % |
Management carries out the process of annual goodwill impairment assessments as of December 31 of each year for each CGU.
No impairment indicators have been identified during the 2019 period.
b) Other assumptions
The financial projections to determine the net present value of the future cash flows of the CGUs are modeled based on the main historical variables and the respective budgets approved by the CGU. In this regard, a conservative growth rate is used, which reaches 3% for the carbonated beverage category and up to 7% for less developed categories such as juices and waters. Beyond the fifth year of projection, growth perpetuity rates are established per operation ranging from 1% to 2.5% depending on the degree of maturity of the consumption of the products in each operation. In this sense, the variables with greatest sensitivity in these projections are the discount rates applied in the determination of the net present value of projected cash flows, growth perpetuities and EBITDA margins considered in each CGU.
In order to sensitize the impairment test, variations were made to the main variables used in the model. Ranges used for each of the modified variables are:
· Discount Rate: Increase / Decrease of up to 100 bps as a value in the rate at which future cash flows are discounted to bring them to present value
· Perpetuity: Increase / Decrease of up to 75 bps in the rate to calculate the perpetual growth of future cash flows
· EBITDA margin: Increase / Decrease of 100bps of EBITDA margin of operations, which is applied per year for the projected periods, that is, for the years 2020-2024
2.9 Financial assets
Pursuant to IFRS 9 “Financial Instruments”, except for certain trade accounts receivable, the Group initially measures a financial asset at its fair value plus transaction costs, in the case of a financial asset that is not at fair value, reflecting changes in P&L.
According to IFRS 9, financial assets are subsequently measured at (i) fair value with changes in P&L (FVPL), (ii) amortized cost or (iii) fair value through other comprehensive income (FVOCI). The classification is based on two criteria: (a) the Group’s business model for the purpose of managing financial assets to obtain contractual cash flows; and (b) if the contractual cash flows of financial instruments represent “solely payments of principal and interest” on the outstanding principal amount (the “SPPI criterion”).
The classification and measurement of the Group’s financial assets are as follows:
· Financial asset at amortized cost for financial instruments that are maintained within a business model with the objective of maintaining the financial assets to collect contractual cash flows that meet the SPPI criterion. This category includes the Group’s trade and other accounts receivable.
· Financial assets measured at fair value with changes in other comprehensive income (FVOCI), with gains or losses recognized in P&L at the time of liquidation. Financial assets in this category correspond to the Group’s instruments that meet the SPPI criterion and are kept within a business model both to collect cash flows and to sell.
Other financial assets are classified and subsequently measures as follows:
· Equity instruments at fair value with changes in other comprehensive income (FVOCI) without recognizing earnings or losses in P&L at the time of liquidation. This category only includes equity instruments that the Group intends to keep in the foreseeable future and that the Group has irrevocably chosen to classify in this category in the initial recognition or transition.
· Financial assets at fair value with changes in P&L (FVPL) include derivative instruments and equity instruments quoted that the Group had not irrevocably chosen to classify at FVOCI in the initial recognition or transition. This category also includes debt instruments whose cash flow characteristics do not comply with the SPPI criterion or are not kept within a business model whose objective is to recognize contractual cash flows or sale.
The Group’s financial liabilities accounting, to a large extent continues to be same as the one set forth in IAS 39. Similar to the requirements of IAS 39, IFRS 9 requires that assets for contingent services be treated as financial instruments measured at fair value, with changes in fair value recognized in P&L.
Pursuant to IFRS 9, implicit derivatives are no longer separated from a principal financial asset. Financial assets, however, are classified according to contractual terms and the Group’s business model.
2.10 Derivatives financial instruments and hedging activities
The Company and its subsidiaries use derivative financial instruments to mitigate risks relating to changes in foreign currency and exchange rates associated with raw materials, and loan obligations.
Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. The method of recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.
2.10.1 Derivative financial instruments designated as cash flow hedges
At the inception of the transaction, the group documents the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedging transactions. The group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in the consolidated income statement within “other gains (losses)”.
Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss (for example, when foreign currency denominated financial liabilities are translated into their functional currencies). The gain or loss relating to the effective portion of cross currency swaps hedging the effects of changes in foreign exchange rates are recognized in the consolidated income statement within “foreign exchange differences.” When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognized when the forecast transaction is ultimately recognized in the consolidated income statement.
2.10.2 Derivative financial instruments not designated for hedging
The fair value of derivative financial instruments that do not qualify for hedge accounting pursuant to IFRS are immediately recognized in the consolidated income statement under “Other income and losses”. The fair value of these derivatives is recorded under “other current financial assets” or “other current financial liabilities” in the statement of financial position.”
The Company does not use hedge accounting for its foreign investments.
The Company also evaluates the existence of derivatives implicitly in contracts and financial instruments as stipulated by IFRS 9 and classifies them pursuant to their contractual terms and the business model of the group. As of June 30, 2019 and December 31, 2018 , the Company had no implicit derivatives.
Fair value hierarchy
The fair value of an asset or liability is defined as the price that would be received for selling an asset or paid to transfer a liability, in an orderly transaction between market participants on the measurement date.
The Company maintains assets related to foreign currency derivative contracts which were classified as Other current and non-current financial assets and Other current and non-current financial liabilities, respectively, and are accounted at fair value within the statement of financial position. The Company uses the following hierarchy to determine and disclose the fair value of financial instruments with assessment techniques:
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included in Level 1 that are observable for the assets and liabilities, either directly (that is, as prices) or indirectly (that is, derived from prices).
Level 3: Inputs for the assets or liabilities that are not based on observable market data information.
During the reporting periods there were no transfers of items between fair value measurement categories. All of which were valued during the period using Level 2.
2.11 Inventories
Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted average cost method. The cost of finished goods and work in progress includes raw materials, direct labor, other direct costs and manufacturing overhead (based on operating capacity) to bring the goods to marketable condition, but it excludes interest expense. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. Spare parts and production materials are stated at the lower of cost or net realizable value.
Estimates are also made for obsolescence of raw materials and finished products based on turnover and age of the related goods.
2.12 Trade receivables
Trade accounts receivables and other accounts receivable are recognized initially at fair value and subsequently measured at amortized cost less provision for impairment, given their short-term nature.
A provision for impairment is made applying a value impairment model based on expected credit losses for the following 12 months. The Group applies a simplified focus for trade receivables, thereby impairment is always recorded referring to expected losses during the whole life of the asset
The carrying amount of the asset is reduced by the provision amount and the loss is recognized in administrative expenses in the consolidated income statement by function.
2.13 Cash and cash equivalents
Cash and cash equivalents include cash on hand, bank balances, time deposits and other short-term highly liquid and low risk of change in value investments and mutual funds with original short-term maturities equal to or less than three months.
2.14 Other financial liabilities
Resources obtained from financial institutions as well as the issuance of debt securities are initially recognized at fair value, net of costs incurred during the transaction. Then, liabilities are valued by accruing interests in order to equal the current value with the future value of liabilities payable, using the effective interest rate method.
General and specific borrowing costs directly attributable to the acquisition, construction or production of qualified assets, considered as those that require a substantial period of time in order to get ready for their forecasted use or sale, are added to the cost of those assets until the period in which the assets are substantially ready to be used or sold.
2.15 Income tax
The Company and its subsidiaries in Chile account for income tax according to the net taxable income calculated based on the rules in the Income Tax Law. Subsidiaries in other countries account for income taxes according to the tax regulations of the country in which they operate.
Deferred income taxes are calculated using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Consolidated Financial Statements, using the tax rates that have been enacted or substantively enacted on the balance sheet date and are expected to apply when the deferred income tax asset is realized, or the deferred income tax liability is settled.
Deferred income tax assets are recognized only to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilized.
The Company does not recognize deferred income taxes for temporary differences from investments in subsidiaries in which the Company can control the timing of the reversal of the temporary differences and it is probable that they will not be reversed in the near future.
2.16 Employee benefits
The Company records a liability regarding indemnities for years of service that will be paid to employees in accordance with individual and collective agreements subscribed with employees, which is recorded at actuarial value in accordance with IAS 19 “Employee Benefits”.
Results from updated of actuarial variables are recorded within other comprehensive income in accordance with IAS 19.
Additionally, the Company has retention plans for some officers, which have a provision pursuant to the guidelines of each plan. These plans grant the right to certain officers to receive a cash payment on a certain date once they have fulfilled with the required years of service.
The Company and its subsidiaries have recorded a provision to account for the cost of vacations and other employee benefits on an accrual basis. These liabilities are recorded under current non-financial liabilities.
2.17 Provisions
Provisions for litigation and other contingencies are recognized when the Company has a present legal or constructive obligation as a result of past event, it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation.
2.18 Leases
IFRS 16, “Leases” is effective for periods beginning on or after January 1, 2019, establishing a new recognition accounting model regarding leases. For first-adoption purposes and according to IFRS 16, the amended prospective method was chosen.
In accordance with IFRS 16 “Leases” Embotelladora Andina S.A. analyzes the economic background of the agreement, to determine if a contract is, or contains, a lease, evaluating whether the agreement transfers the right to control the use of an identified asset for a period of time in exchange for a consideration. Control is considered to exist if the client has i) the right to obtain substantially all the economic benefits from the use of an identified asset; and ii) the right to direct the use of the asset.
The Company when operating as a lessee, at the beginning of the lease (on the date the underlying asset is available for use) records an asset for the right-of-use in the statement of financial position (under Property, plant and equipment) and a lease liability (under Other financial liabilities). This asset is initially recognized at cost, which includes: i) value of the initial measurement of the lease liability; ii) lease payments made up to the start date less lease incentives received; iii) the initial direct costs incurred; and iv) the estimation of costs for dismantling or restoration. Subsequently, the right-of-use asset is measured at cost, adjusted by any new measurement of the lease liability, less accumulated depreciation and accumulated losses due to impairment of value. The right-of-use asset is depreciated in the same terms as the rest of similar depreciable assets, if there is reasonable certainty that the lessee will acquire ownership of the asset at the end of the lease. If such certainty does not exist, the asset depreciates at the shortest period between the useful life of the asset or the lease term.
On the other hand, the lease liability is initially measured at the present value of the lease payments, discounted at the incremental loan rate of the Company, if the interest rate implicit in the lease could not be easily determined. Lease payments included in the measurement of the liability include: i) fixed payments, less any lease incentive receivable; ii) variable lease payments; iii) residual value guarantees; iv) exercise price of a purchase option; and v) penalties for lease termination.
The lease liability is increased to reflect the accumulation of interest and is reduced by the lease payments made. In addition, the carrying amount of the liability is measured again if there is a modification in the terms of the lease (changes in the term, in the amount of payments or in the evaluation of an option to buy or change in the amounts to be paid). Interest expense is recognized as an expense and is distributed among the periods that constitute the lease period, so that a constant interest rate is obtained in each year on the outstanding balance of the lease liability.
Short-term leases, equal to or less than one year, or lease of low-value assets are excepted from the application of the recognition criteria described above, recording the payments associated with the lease as an expense in a linear manner throughout the lease term. The Company does not act as lessor.
2.19 Deposits for returnable containers
This liability comprises cash collateral, or deposit, received from customers for bottles and other returnable containers made available to them.
This liability pertains to the deposit amount that is reimbursed when the customer or distributor returns the bottles and containers in good condition, together with the original invoice. The liability is estimated based on the number of bottles given to clients and distributors, the estimated number of bottles in circulation, and a historical average weighted value per bottle or containers. Deposits for returnable containers are presented as a current liability in other financial liabilities because the Company does not have legal rights to defer settlement for a period in excess of one year. However, the Company does not anticipate any material cash settlements for such amounts during the upcoming year.
2.20 Revenue recognition
The Company recognizes revenue when control over a good or service is transferred to the client. Control refers to the ability of the client to direct the use and obtain substantially all the benefits of the goods and services exchanged. Revenue is measured based on the consideration to which it is expected to be entitled for such transfer of control, excluding amounts collected on behalf of third parties.
Management has defined the following indicators for revenue recognition, applying the five-step model established by IFRS 15 “Revenue from contracts with customers”: 1) Identification of the contract with the customer; 2) Identification of performance obligations; 3) Determination of the transaction price; 4) Assignment of the transaction price; and 5) Recognition of revenue.
All the above conditions are met at the time the products are delivered to the customer. Net sales reflect the units delivered at list price, net of promotions, discounts and taxes.
The revenue recognition criteria of the good provided by Embotelladora Andina corresponds to a single performance obligation that transfers the product to be received to the customer.
2.21 Contributions of The Coca-Cola Company
The Company receives certain discretionary contributions from The Coca-Cola Company (TCCC) mainly related to the financing of advertising and promotional programs for its products in the territories where the Company has distribution licenses. The contribution received from TCCC are recognized in net income after the conditions agreed with TCCC in order to become a creditor to such incentive have been fulfilled, they are recorded as a reduction in the marketing expenses included in the Administration Expenses account. Given its discretionary nature, the portion of contributions received in one period does not imply it will be repeated in the following period.
2.22 Dividend payments
Dividend distribution to Company shareholders is recorded as a liability in the Company’s Consolidated Financial Statements, considering the 30% minimum dividend of the period’s earnings established by Chilean Corporate Law, unless otherwise agreed in the respective meeting, by the unanimity of the issued shares.
Interim and final dividends are recorded at the time of their approval by the competent body, which in the first case is normally the Board of Directors of the Company, while in the second case it is the responsibility of General Shareholders’ Meeting.
2.23 Critical accounting estimates and judgments
The Company makes estimates and judgments concerning the future. Actual results may differ from previously estimated amounts.
In preparing the consolidated financial statements, the Company has used certain judgments and estimates made to quantify some of the assets, liabilities, income, expenses and commitments.
Following is an explanation of the estimates and judgments that might have a material impact on future financial statements.
2.23.1 Impairment of goodwill and intangible assets with indefinite useful lives
The Company tests annually whether goodwill and intangible assets with indefinite useful life (such as distribution rights) have suffered any impairment. The recoverable amounts of cash generating units are generating units are determined based on value in use calculations. The key variables used in the calculations include sales volumes and prices, discount rates, marketing expenses and other economic factors including inflation. The estimation of these variables requires a use of estimates and judgments as they are subject to inherent uncertainties; however, the assumptions are consistent with the Company’s internal planning end past results. Therefore, management evaluates, and updates estimates according to the conditions affecting the variables. If these assets are considered to have been impaired, they will be written off at their estimated fair value or future recovery value according to the discounted cash flows analysis. Discounted cash flows in the Company’s cash generating units in Chile, Brazil, Argentina and Paraguay generated a higher value than the carrying values of the respective net assets, including goodwill of the Brazilian, Argentinian and Paraguayan subsidiaries.
2.23.2 Fair Value of Assets and Liabilities
IFRS requires in certain cases that assets and liabilities be recorded at their fair value. Fair value is the price that would be received for selling an asset or paid to transfer a liability in a transaction ordered between market participants at the date of measurement.
The basis for measuring assets and liabilities at fair value are their current prices in an active market. For those that are not traded in an active market, the Company determines fair value based on the best information available by using valuation techniques.
In the case of the valuation of intangibles recognized as a result of acquisitions from business combinations, the Company estimates the fair value based on the “multi-period excess earning method”, which involves the estimation of future cash flows generated by the intangible assets, adjusted by cash flows that do not come from these, but from other assets. The Company also applies estimations over the period during which the intangible assets will generate cash flows, cash flows from other assets, and a discount rate.
Other assets acquired, and liabilities assumed in a business combination are carried at fair value using valuation methods that are considered appropriate under the circumstances. Assumptions include the depreciated cost of recovery and recent transaction values for comparable assets, among others. These valuation techniques require certain inputs to be estimated, including the estimation of future cash flows.
2.23.3 Allowances for doubtful accounts
The Company evaluates the collectability of trade receivables using several factors. When the Company becomes aware of a specific inability of a customer to fulfill its financial commitments, a specific provision for doubtful accounts is estimated and recorded, which reduces the recognized receivable to the amount that the Company estimates to be able to collect. In addition to specific provisions, allowances for doubtful accounts are also determined based on the restated valued of expected credit losses pursuant to IFRS 9.
2.23.4 Useful life, residual value and impairment of property, plant, and equipment
Property, plant, and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful life of those assets. Changes in circumstances, such as technological advances, changes to the Company’s business model, or changes in its capital strategy might modify the effective useful lives as compared to our estimates. Whenever the Company determines that the useful life of Property, plant and equipment might be shortened, it depreciates the excess between the net book value and the estimated recoverable amount according to the revised remaining useful life. Factors such as changes in the planned usage of manufacturing equipment, dispensers, transportation equipment and computer software could make the useful lives of assets shorter. The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of any of those assets may not be recovered. The estimate of future cash flows is based, among other factors, on certain assumptions about the expected operating profits in the future. The Company’s estimation of discounted cash flows may differ from actual cash flows because of, among other reasons, technological changes, economic conditions, changes in the business model, or changes in operating profit. If the sum of the projected discounted cash flows (excluding interest) is less than the carrying amount of the asset, the asset shall be written-off to its estimated recoverable value.
2.23.5 Liabilities for deposits of returnable container
The Company records a liability for deposits received in exchange for bottles and containers provided to its customers and distributors. This liability represents the amount of deposits that must be reimbursed if the customer or distributor returns the bottles and containers in good condition, together with the original invoice. This liability is estimated based on the number of bottles given on loan to customers and distributors, estimates of bottles in circulation and the weighted average historical cost per bottle or container. Management uses professional judgment in order to estimate this liability, including the number of bottles in circulation, the amount of deposit that must be reimbursed and the timing of disbursements.
2.24.1 New Standards, Interpretations and Amendments for annual periods beginning on or after January 1, 2019.
Standards and interpretations, as well as the improvements and amendments to IFRS, which have been issued, effective at the date of these financial statements, are detailed below.
The Company has applied these rules concluding that they will not significantly affect the financial statements.
|
| Standards, Interpretations, Amendments |
| Mandatory |
IFRS 16 |
| Leases |
| January 1, 2019 |
IFRIC 23 |
| Uncertainty over Income Tax Treatments |
| January 1, 2019 |
IFRS 16 “Leases”
IFRS 16 replaces IAS17 “Leases”, IFRIC 4 “Determining Whether an Arrangement Contains a Lease”, SIC-15 “Operating Leases Incentives” and SIC-27 “ Evaluating the Substance of Transactions in the Legal Form of a Lease.” The standard establishes the principles for the recognition, measurement, presentation and disclosure of leases and requires that lessees consider most leases in a single balance sheet model.
The lessor’s accounting under IFRS 16 remains substantially unchanged from IAS 17. Lessors will continue to classify leases as operating or financial leases using principles similar to those in IAS 17.
IFRIC 23 “Uncertainty over Income Tax Treatments”
The Interpretation addresses the accounting of income taxes when tax treatments imply uncertainty that affects the application of IAS 12 “Income taxes”. It does not apply to taxes or encumbrances that are outside the scope of IAS 12, nor does it specifically include requirements related to interests and penalties associated with uncertain tax treatments. The Interpretation specifically addresses the following:
· If an entity considers the treatment of uncertain tax positions separately
· The assumptions that an entity makes about the assessment of tax treatments by tax authorities
· How an entity determines fiscal gain (tax loss), tax bases, unused tax losses, unused tax credits and tax rates.
· How an entity considers changes in facts and circumstances.
This interpretation began its effective application as of January 1, 2019. The application of IFRIC 23 has not generated impacts on the consolidated financial statements of Embotelladora Andina and its subsidiaries.
Amendments to IFRS that have been issued effective as of the date of these financial statements, are detailed below.
|
| Amendments |
| Application date |
IFRS 3 |
| Business combinations - interests previously held in a joint operation |
| January 1, 2019 |
IFRS 9 |
| Financial instruments - payments with negative compensation |
| January 1, 2019 |
IFRS 11 |
| Joint agreements - interests previously held in a joint operation |
| January 1, 2019 |
IAS 12 |
| Income taxes - tax consequences of payments related to financial instruments classified as equity |
| January 1, 2019 |
IAS 23 |
| Loan costs - eligible loan costs to be capitalized |
| January 1, 2019 |
IAS 28 |
| Investments in associates - long-term investments in associates or joint ventures |
| January 1, 2019 |
IAS 19 |
| Employee benefits - amendment, reduction or liquidation of the plan |
| January 1, 2019 |
Company Management will evaluate the impact of the amendments listed above, once such transactions are carried out.
2.24.2 New Accounting Standards, Interpretations and Amendments with effective application for annual periods beginning on or after January 1, 2020.
Standards and interpretations, as well as IFRS amendments, which have been issued, but have still not become effective as of the date of these financial statements are set forth below. The Company has not made an early adoption of these standards.
|
| Standards and Interpretations |
| Mandatory |
Conceptual Framework |
| Revised Conceptual Framework |
| January 1, 2020 |
IFRS 17 |
| Insurance Contracts |
| January 1, 2021 |
Revised Conceptual Framework
The IASB issued a Revised Conceptual Framework in March 2018, incorporating some new concepts, providing updated definitions and recognition criterion for assets and liabilities and clarifying some important concepts. Changes in the Conceptual Framework may affect the application of IFRS when no standard applies to a given transaction or event. The Revised Conceptual Framework becomes effective for periods ending on or after January 1, 2020.
IFRS 17 Insurance Contracts
In May 2017, the IASB issued IFRS 17 Insurance Contracts, a new comprehensive accounting standard for insurance contracts that covers recognition, measurement, presentation and disclosure. The new rule applies to all types of insurance contracts, regardless of the type of entity that issues them, being effective for periods beginning on or after January 1, 2021, with required comparative figures, early application is allowed, provided that the entity also applies IFRS 9 and IFRS 15.
3 - FINANCIAL REPORTING BY SEGMENT
The Company provides financial information by segments according to IFRS 8 “Operating Segments,” which establishes standards for reporting by operating segment and related disclosures for products and services, and geographic areas.
The Company’s Board of Directors and Management measures and assesses performance of operating segments based on the operating income of each of the countries where there are Coca-Cola franchises.
The operating segments are determined based on the presentation of internal reports to the Company´s chief strategic decision-maker. The chief operating decision-maker has been identified as the Company´s Board of Directors who makes the Company’s strategic decisions.
The following operating segments have been determined for strategic decision making based on geographic location:
· Operation in Chile
· Operation in Brazil
· Operation in Argentina
· Operation in Paraguay
The four operating segments conduct their businesses through the production and sale of soft drinks and other beverages, as well as packaging materials.
Expenses and revenue associated with the Corporate Officer were assigned to the operation in Chile in the soft drinks segment because Chile is the country that manages and pays the corporate expenses, which would also be substantially incurred, regardless of the existence of subsidiaries abroad.
Total revenues by segment include sales to unrelated customers and inter-segments, as indicated in the consolidated statement of income of the Company.
A summary of the Company’s operating segments in accordance to IFRS is as follows:
For the period ended June 30, 2019 |
| Chile |
| Argentina |
| Brazil |
| Paraguay |
| Intercompany |
| Consolidated |
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
Net sales |
| 289,633,297 |
| 193,174,594 |
| 286,698,840 |
| 71,895,957 |
| (1,222,238 | ) | 840,180,450 |
|
Cost of sales |
| (175,119,020 | ) | (104,786,160 | ) | (176,233,594 | ) | (41,757,661 | ) | 1,222,238 |
| (496,674,197 | ) |
Distribution expenses |
| (29,077,603 | ) | (26,211,429 | ) | (20,816,556 | ) | (4,080,611 | ) | — |
| (80,186,199 | ) |
Administrative expenses |
| (59,155,568 | ) | (42,672,920 | ) | (45,679,738 | ) | (11,058,279 | ) | — |
| (158,566,505 | ) |
Finance income |
| 793,006 |
| 587,921 |
| 1,398,903 |
| 131,026 |
| — |
| 2,910,856 |
|
Finance expense |
| (6,474,998 | ) | (120,040 | ) | (15,724,818 | ) | — |
|
|
| (22,319,856 | ) |
Interest expense, net* |
| (5,681,992 | ) | 467,881 |
| (14,325,915 | ) | 131,026 |
| — |
| (19,409,000 | ) |
Share of the entity in income of associates |
| (518,389 | ) | — |
| 526,274 |
| — |
| — |
| 7,885 |
|
Income tax expense |
| (5,514,532 | ) | (1,418,417 | ) | (8,018,269 | ) | (2,799,203 | ) | — |
| (17,750,421 | ) |
Other income (loss) |
| (4,816,832 | ) | (1,094,507 | ) | 415,274 |
| (123,962 | ) | — |
| (5,620,027 | ) |
Net income of the segment reported |
| 9,749,361 |
| 17,459,042 |
| 22,566,316 |
| 12,207,267 |
| — |
| 61,981,986 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
| 23,010,728 |
| 11,980,571 |
| 14,307,664 |
| 4,596,277 |
| — |
| 53,895,240 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
| 184,053,952 |
| 69,172,630 |
| 141,324,277 |
| 30,778,484 |
| — |
| 425,329,343 |
|
Non-current assets |
| 657,776,765 |
| 169,111,054 |
| 663,545,990 |
| 230,588,598 |
| — |
| 1,721,022,407 |
|
Segment assets, total |
| 840,212,443 |
| 238,283,684 |
| 804,870,267 |
| 261,367,082 |
| — |
| 2,144,733,476 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amount in associates and joint ventures accounted for using the equity method, total |
| 49,237,481 |
|
|
| 51,950,215 |
| — |
| — |
| 101,187,696 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
| 151,073,828 |
| 54,513,494 |
| 105,841,776 |
| 27,755,695 |
| — |
| 339,184,793 |
|
Non-current liabilities |
| 487,601,264 |
| 15,703,003 |
| 414,967,231 |
| 15,227,136 |
| — |
| 933,498,634 |
|
Segment liabilities, total |
| 638,675,092 |
| 70,216,497 |
| 520,809,007 |
| 42,982,831 |
| — |
| 1,272,683,427 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows provided by in Operating Activities |
| 42,910,504 |
| 14,380,529 |
| 26,701,745 |
| 5,741,258 |
| — |
| 88,734,036 |
|
Cash flows (used in) provided by Investing Activities |
| (30,432,470 | ) | (12,843,664 | ) | (8,031,659 | ) | (6,008,599 | ) | — |
| (57,316,392 | ) |
Cash flows (used in) provided by Financing Activities |
| (45,522,143 | ) | (264,641 | ) | (4,338,417 | ) | (127,636 | ) | — |
| (50,253,550 | ) |
(*) Financial expenses associated with external financing for the acquisition of companies, including capital contributions are presented in this item.
For the period ended June 30, 2018 |
| Chile |
| Argentina |
| Brazil |
| Paraguay |
| Intercompany |
| Consolidated total |
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
Net sales |
| 273,939,944 |
| 203,690,122 |
| 267,958,454 |
| 72,684,876 |
| (769,157 | ) | 817,504,239 |
|
Cost of sales |
| (161,736,659 | ) | (106,018,242 | ) | (162,324,309 | ) | (42,123,473 | ) | 769,157 |
| (471,433,526 | ) |
Distribution expenses |
| (26,738,727 | ) | (30,040,547 | ) | (19,035,746 | ) | (3,808,740 | ) | — |
| (79,623,760 | ) |
Administrative expenses |
| (58,087,871 | ) | (45,261,036 | ) | (45,909,611 | ) | (10,862,210 | ) | — |
| (160,120,728 | ) |
Finance income |
| 1,233,837 |
| (329,042 | ) | 1,098,458 |
| 115,885 |
| — |
| 2,119,138 |
|
Finance expense* |
| (7,899,110 | ) | 997,125 |
| (15,123,303 | ) | 0 |
| — |
| (22,025,288 | ) |
Interest expense, net |
| (6,665,273 | ) | 668,083 |
| (14,024,845 | ) | 115,885 |
| — |
| (19,906,150 | ) |
Share of the entity in income of associates accounted for using the equity method |
| 351,780 |
| 0 |
| 431,752 |
| 0 |
| — |
| 783,532 |
|
Income tax expense |
| (10,998,657 | ) | (10,316,610 | ) | (4,616,651 | ) | (2,706,059 | ) | — |
| (28,637,977 | ) |
Other income (loss) |
| (5,144,042 | ) | 330,515 |
| (6,169,916 | ) | 411,354 |
| — |
| (10,572,089 | ) |
Net income of the segment reported |
| 4,920,495 |
| 13,052,285 |
| 16,309,128 |
| 13,711,633 |
| — |
| 47,993,541 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
| 20,681,203 |
| 9,818,832 |
| 13,128,075 |
| 4,700,712 |
| — |
| 48,328,822 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
| 187,679,962 |
| 70,828,742 |
| 107,578,298 |
| 34,753,814 |
| — |
| 400,840,816 |
|
Non-current assets |
| 631,764,648 |
| 148,515,647 |
| 627,219,623 |
| 240,470,431 |
| — |
| 1,647,970,349 |
|
Segment assets, total |
| 819,444,610 |
| 219,344,389 |
| 734,797,921 |
| 275,224,245 |
| — |
| 2,048,811,165 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amount in associates and joint ventures accounted for using the equity method, total |
| 35,940,672 |
| — |
| 48,641,932 |
| — |
| — |
| 84,582,604 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Disbursements of non-monetary segment assets, |
| 22,012,676 |
| 11,273,960 |
| 20,208,772 |
| 3,497,785 |
| — |
| 56,993,193 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
| 134,236,475 |
| 64,699,970 |
| 99,551,058 |
| 25,632,592 |
| — |
| 324,120,095 |
|
Non-current liabilities |
| 466,183,096 |
| 15,055,022 |
| 393,100,377 |
| 15,586,339 |
| — |
| 889,924,834 |
|
Segment liabilities, total |
| 600,419,571 |
| 79,754,992 |
| 492,651,435 |
| 41,218,931 |
| — |
| 1,214,044,929 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows provided by Operating Activities |
| 27,249,052 |
| 14,424,612 |
| 27,075,891 |
| 19,472,837 |
| — |
| 88,222,392 |
|
Cash flows (used in) provided by Investing Activities |
| (7,859,719 | ) | (12,772,900 | ) | (20,208,771 | ) | (3,497,785 | ) | — |
| (44,339,175 | ) |
Cash flows (used in) provided by Financing Activities |
| (51,136,632 | ) | (9,651,055 | ) | (3,000,015 | ) | (124,854 | ) | — |
| (63,912,556 | ) |
(*) Financial expenses associated with external financing for the acquisition of companies, including capital contributions among others, are presented in this item.
4 - CASH AND CASH EQUIVALENTS
Cash and cash equivalents as of June 30, 2019 and December 31, 2018 are detailed as follows:
By item |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Cash |
| 349,184 |
| 2,907,276 |
|
Bank balances |
| 34,818,774 |
| 46,425,927 |
|
Time deposits |
| 2,014,239 |
| 1,500,315 |
|
Other fixed rate instruments |
| 80,268,144 |
| 86,705,095 |
|
Total cash and cash equivalents |
| 117,450,341 |
| 137,538,613 |
|
Time deposits expire in less than three months from their acquisition date and accrue market interest for this type of short-term investment. Other fixed-income instruments mainly correspond to purchase transactions with the resale of debt instruments with a maturity of less than 90 days, from the date of investment. There are no restrictions for significant amounts available to cash.
By currency |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
USD |
| 14,174,350 |
| 5,917,041 |
|
EUR |
| 9,622 |
| 51,401 |
|
ARS |
| 10,777,198 |
| 6,726,906 |
|
CLP |
| 50,195,498 |
| 86,121,695 |
|
PGY |
| — |
| 10,680,600 |
|
BRL |
| 42,293,673 |
| 28,040,970 |
|
Cash and cash equivalents |
| 117,450,341 |
| 137,538,613 |
|
5 - OTHER CURRENT AND NON-CURRENT FINANCIAL ASSETS
The composition of other financial assets as of June 30, 2019 and 2018, is as follows:
|
| Balance |
| ||||||
|
| Current |
| Non-current |
| ||||
Other financial assets |
| 06.30.2019 |
| 12.31.2018 |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
Financial assets measured at amortized cost (1) |
|
|
| 14,040 |
| — |
| — |
|
Financial assets at fair value (2) |
|
|
| 669,527 |
| 85,597,714 |
| 87,446,662 |
|
Financial assets measured at amortized cost (3) |
| — |
| — |
| 11,232,553 |
| 13,475,279 |
|
Increase (decrease) in foreign currency exchange (4) |
| — |
| — |
| (311,919 | ) | (3,559,646 | ) |
Total |
| — |
| 683,567 |
| 96,518,349 |
| 97,362,295 |
|
(1) Financial instruments held by the Company other than cash and cash equivalents. They consist of time deposits with short-term maturities (more than 90 days), restricted mutual funds and derivative contracts.
(2) See detail in Note 22
(3) Correspond to the rights in the Argentinean company Alimentos de Soya S.A., which are framed in the purchase of the “Ades” brand managed by The Coca-Cola Company at the end of 2016.
(4) Includes the effects of adopting IAS 29
6 — OTHER CURRENT AND NON-CURRENT NON-FINANCIAL ASSETS
The composition of other non-financial assets as of June 30, 2019 and 2018, is as follows:
|
| Balance |
| ||||||
|
| Current |
| Non-current |
| ||||
Other non-financial assets |
| 06.30.2019 |
| 12.31.2018 |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP |
| CLP |
| CLP |
| CLP |
|
Prepaid expenses |
| 15,846,610 |
| 4,967,255 |
| 535,955 |
| 810,662 |
|
Tax credit remainder |
| 146,659 |
| 18,022 |
| 223,142 |
| 13,322,720 |
|
Guaranty deposit (customs) |
| 2,299 |
| 3,013 |
| — |
| — |
|
Deposit in courts |
| — |
| — |
| 17,669,006 |
| 18,590,597 |
|
Others (1) |
| 908,751 |
| 960,633 |
| 14,922,137 |
| 2,253,285 |
|
Total |
| 16,904,319 |
| 5,948,923 |
| 33,350,240 |
| 34,977,264 |
|
(1) Other non-current non-financial assets are mainly composed of non-current tax credits
7 — TRADE AND OTHER RECEIVABLES
The composition of trade and other receivables is detailed as follows:
|
| Balance |
| ||||||
|
| Current |
| Non-current |
| ||||
Trade debtors and other accounts receivable, Gross |
| 06.30.2019 |
| 12.31.2018 |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP |
| CLP |
| CLP |
| CLP |
|
Trade debtors |
| 101,137,126 |
| 150,933,965 |
| 54,401 |
| 66,510 |
|
Other debtors |
| 24,390,713 |
| 19,552,539 |
| 133,804 |
| 1,204,187 |
|
Other accounts receivable |
| 2,840,383 |
| 9,925,027 |
| 1,306 |
| — |
|
Total |
| 128,368,222 |
| 180,411,531 |
| 189,511 |
| 1,270,697 |
|
|
| Balance |
| ||||||
|
| Current |
| Non-current |
| ||||
Trade debtors and other accounts receivable, Net |
| 06.30.2019 |
| 12.31.2018 |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP |
| CLP |
| CLP |
| CLP |
|
Trade debtors |
| 98,075,796 |
| 147,728,216 |
| 54,401 |
| 66,510 |
|
Other debtors |
| 21,561,219 |
| 16,722,240 |
| 133,804 |
| 1,204,187 |
|
Other accounts receivable |
| 2,537,652 |
| 9,662,867 |
| 1,306 |
| — |
|
Total |
| 122,174,667 |
| 174,113,323 |
| 189,511 |
| 1,270,697 |
|
The stratification of the portfolio of current and non-current trade debtors is as follows:
|
| Balance |
| ||
Current trade debtors without impairment impact |
| 06.30.2019 |
| 12.31.2018 |
|
Less than one month |
| 94,263,552 |
| 144,172,500 |
|
Between one and three months |
| 2,289,530 |
| 2,066,514 |
|
Between three and six months |
| 1,049,136 |
| 601,042 |
|
Between six and eight months |
| 666,245 |
| 851,009 |
|
Older than eight months |
| 2,923,064 |
| 3,309,410 |
|
Total |
| 101,191,527 |
| 151,000,475 |
|
The Company has an approximate number of 276,000 clients, which may have balances in the different sections of the stratification. The number of clients is distributed geographically with 65,400 in Chile, 89,200 in Brazil, 64,400 in Argentina and 57,000 in Paraguay.
|
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Debtors for current credit operations |
| 101,137,126 |
| 150,933,965 |
|
Non-current credit operations |
| 54,401 |
| 66,510 |
|
Total |
| 101,191,527 |
| 151,000,475 |
|
The movement in the allowance for doubtful accounts is presented below:
|
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Opening balance |
| 6,298,208 |
| 6,494,113 |
|
Bad debt expense |
| 353,571 |
| 1,629,761 |
|
Provision application |
| (332,468 | ) | (1,257,591 | ) |
Change due to foreign exchange differences |
| (125,755 | ) | (568,075 | ) |
Movement |
| (104,652 | ) | (195,905 | ) |
Ending balance |
| 6,193,556 |
| 6,298,208 |
|
8 — INVENTORIES
The composition of inventories is detailed as follows:
Details |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Raw materials (1) |
| 98,737,597 |
| 86,102,495 |
|
Finished goods |
| 34,510,312 |
| 37,213,848 |
|
Spare parts and supplies |
| 20,262,391 |
| 28,777,180 |
|
Work in progress |
| 514,633 |
| 780,324 |
|
Other inventories |
| 4,538,942 |
| 1,049,165 |
|
Obsolescence provision (2) |
| (2,862,394 | ) | (2,603,303 | ) |
Total |
| 155,701,481 |
| 151,319,709 |
|
The cost of inventory recognized as cost of sales as of June 30, 2019 and 2018, is CLP 496,674,197 thousand and CLP 471,433,525 thousand, respectively
(1) Approximately 80% is composed of concentrate and sweeteners used in the preparation of beverages, as well as caps and PET supplies used in the packaging of the product.
(2) The obsolescence provision is related mainly with the obsolescence of spare parts classified as inventories and to a lesser extent to finished products and raw materials. The general standard is to provision all those multi-functional spare parts without utility in rotation in the last four years prior to the technical analysis technical to adjust the provision. In the case of raw materials and finished products, the obsolescence provision is determined according to maturity.
9 - TAX ASSETS AND LIABILITIES
Current assets as of June 30, 2019 and December 31, 2018 are as follows:
Tax assets |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Tax credits (1) |
| 5,858,023 |
| 2,532,056 |
|
Total |
| 5,858,023 |
| 2,532,056 |
|
(1) Tax credits correspond to income tax credits on training expenses, purchase of Property, plant and equipment, and donations.
The composition of current tax payable as of June 30, 2019 and December 31, 2018, are detailed as follows:
Tax liabilities |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Income tax expense |
| 2,078,402 |
| 9,338,612 |
|
Total |
| 2,078,402 |
| 9,338,612 |
|
10 - INCOME TAX EXPENSE AND DEFERRED TAXES
10.1 Income tax expense
The current and deferred income tax expenses are detailed as follows:
Details |
| 06.30.2019 |
| 06.30.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Current income tax expense |
| 17,402,081 |
| 26,246,772 |
|
Current tax adjustment previous period |
| 195,747 |
| 286,066 |
|
Withholding tax expense foreign subsidiaries |
| 1,661,607 |
| 1,773,175 |
|
Other current tax expense (income) |
| (209,530 | ) | 38,235 |
|
Current income tax expense |
| 19,049,905 |
| 28,344,248 |
|
Income (expense) for the creation and reversal of current tax difference |
| (1,299,484 | ) | 293,729 |
|
Expense (income) for deferred taxes |
| (1,299,484 | ) | 293,729 |
|
Total income tax expense |
| 17,750,421 |
| 28,637,977 |
|
The distribution of national and foreign tax expenditure is as follows:
Income taxes |
| 06.30.2019 |
| 06.30.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Current taxes |
|
|
|
|
|
Foreign |
| (10,937,042 | ) | (18,085,103 | ) |
National |
| (8,112,863 | ) | (10,259,145 | ) |
Current tax expense |
| (19,049,905 | ) | (28,344,248 | ) |
Deferred taxes |
|
|
|
|
|
Foreign |
| (1,298,846 | ) | 445,783 |
|
National |
| 2,598,330 |
| (739,512 | ) |
Deferred tax expense |
| 1,299,484 |
| (293,729 | ) |
Income tax expense |
| (17,750,421 | ) | (28,637,977 | ) |
The reconciliation of the tax expense using the statutory rate with the tax expense using the effective rate is as follows:
Reconciliation of effective rate |
| 06.30.2019 |
| 06.30.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Net income before taxes |
| 79,732,407 |
| 76,631,518 |
|
Tax expense at legal rate (27.0%) |
| (21,527,750 | ) | (20,690,510 | ) |
Effect of a different tax rate in other jurisdictions |
| (233,863 | ) | 789,353 |
|
Permanent differences: |
|
|
|
|
|
Non-taxable revenues |
| 4,042,581 |
| 4,641,825 |
|
Non-deductible expenses |
| (869,676 | ) | (4,559,816 | ) |
Foreign subsidiaries tax withholding expense and other legal tax debits and credits |
| 838,288 |
| (8,818,829 | ) |
Adjustments to tax expense |
| 4,011,192 |
| (8,736,820 | ) |
Tax expense at effective rate |
| (17,750,421 | ) | (28,637,977 | ) |
Effective rate |
| 22.3 | % | 37.4 | % |
The applicable income tax rates in each of the jurisdictions where the Company operates are the following:
|
| Rate |
| ||
Country |
| 2019 |
| 2018 |
|
Chile |
| 27.0 | % | 27.0 | % |
Brazil |
| 34.0 | % | 34.0 | % |
Argentina |
| 30.0 | % | 30.0 | % |
Paraguay |
| 10.0 | % | 10.0 | % |
10.2 Deferred income taxes
The net cumulative balances of temporary differences that give rise to deferred tax assets and liabilities are detailed as follows:
|
| 06.30.2019 |
| 12.31.2018 |
| ||||
Temporary differences |
| Assets |
| Liabilities |
| Assets |
| Liabilities |
|
|
| CLP |
| CLP |
| CLP |
| CLP |
|
Property, plant and equipment |
| 6,146,488 |
| 55,486,144 |
| 5,420,447 |
| 46,181,359 |
|
Obsolescence provision |
| 1,803,699 |
| — |
| 910,076 |
| 112,359 |
|
Employee benefits |
| 2,670,170 |
| 24,709 |
| 5,169,161 |
| 131,829 |
|
Post-employment benefits |
| 63,280 |
| 758,735 |
| 90,941 |
| 1,014,354 |
|
Tax loss carried-forwards (1) |
| 10,986,264 |
| — |
| 9,137,392 |
| — |
|
Tax Goodwill Brazil |
| 14,208,001 |
| — |
| 18,836,838 |
| — |
|
Contingency provision |
| 22,660,916 |
| — |
| 26,796,262 |
| — |
|
Foreign exchange differences (2) |
| — |
| — |
| 13,083,953 |
| — |
|
Allowance for doubtful accounts |
| 1,308,144 |
| — |
| 1,262,977 |
| — |
|
Coca-Cola incentives (Argentina) |
| 20,235 |
| — |
| 352,061 |
| — |
|
Assets and liabilities for placement of bonds |
| — |
| 1,251,673 |
| — |
| 1,327,727 |
|
Lease liabilities |
| 2,436,080 |
| 0 |
| 1,328,320 |
| — |
|
Inventories |
| 346,479 |
| 0 |
| 347,470 |
| — |
|
Distribution rights |
| — |
| 159,098,626 |
| — |
| 173,273,994 |
|
Others |
| 8,059,767 |
| — |
| 0 |
| 5,940,224 |
|
Subtotal |
| 70,709,523 |
| 216,619,887 |
| 82,735,898 |
| 227,981,846 |
|
Total liabilities net |
| 1,618,274 |
| 147,528,637 |
| — |
| 145,245,948 |
|
(1) Tax losses mainly associated with the subsidiary Embotelladora Andina Chile S.A. In Chile tax losses have no expiration date
(2) Corresponds to differed taxes for exchange rate differences generated on the translation of debt expressed in foreign currency in the subsidiary Rio de Janeiro Refrescos Ltda. and which for tax purposes are recognized in Brazil when incurred..
The movement in deferred income tax accounts is as follows:
Movement |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Opening Balance |
| 145,245,948 |
| 121,991,585 |
|
Increase (decrease) in deferred tax |
| (415,875 | ) | 11,303,016 |
|
Increase (decrease) due to foreign currency translation(*) |
| 1,080,290 |
| 11,951,347 |
|
Total movements |
| 664,415 |
| 23,254,363 |
|
Ending balance |
| 145,910,363 |
| 145,245,948 |
|
(*) Includes IAS 29 effect, due to inflation in Argentina
11 - PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are detailed below at the end of each period:
Property, plant and equipment, gross |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Construction in progress |
| 24,238,371 |
| 26,048,670 |
|
Land |
| 100,177,443 |
| 100,479,196 |
|
Buildings |
| 293,871,087 |
| 371,279,937 |
|
Plant and equipment |
| 543,104,896 |
| 623,568,795 |
|
Information technology equipment |
| 23,094,737 |
| 22,752,205 |
|
Fixed installations and accessories |
| 45,639,151 |
| 43,717,907 |
|
Vehicles |
| 46,884,153 |
| 53,682,179 |
|
Leasehold improvements |
| 2,477,215 |
| 144,914 |
|
Rights of use (1) |
| 38,227,208 |
| — |
|
Other properties, plant and equipment (2) |
| 445,396,972 |
| 438,350,022 |
|
Total Property, plant and raw equipment, gross |
| 1,563,111,233 |
| 1,680,023,825 |
|
Accumulated depreciation of |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Buildings |
| (82,558,635 | ) | (157,119,586 | ) |
Plant and equipment |
| (363,730,721 | ) | (416,164,810 | ) |
Information technology equipment |
| (17,931,663 | ) | (17,567,484 | ) |
Fixed installations and accessories |
| (24,855,630 | ) | (22,660,738 | ) |
Vehicles |
| (28,768,323 | ) | (31,883,578 | ) |
Leasehold improvements |
| (688,605 | ) | (112,737 | ) |
Rights of use |
| (4,138,740 | ) | — |
|
Other properties, plant and equipment (2) |
| (326,098,973 | ) | (323,743,924 | ) |
Total accumulated depreciation |
| (848,771,290 | ) | (969,252,857 | ) |
|
|
|
|
|
|
Total Property, plant and raw equipment, net |
| 714,339,943 |
| 710,770,968 |
|
(1) For adoption of IFRS 16. See details of underlying assets in Note 11.1
(2) The net balance of each of these categories is presented below:
Other Property, plant and equipment |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Bottles |
| 50,205,132 |
| 51,522,834 |
|
Marketing and promotional assets |
| 52,553,944 |
| 45,739,948 |
|
Other Property, plant and equipment |
| 16,538,923 |
| 17,343,316 |
|
Total |
| 119,297,999 |
| 114,606,098 |
|
11.1 Movements
Movements in Property, plant and equipment as of June 30, 2019 and December 31, 2018 are detailed as follows:
|
| Construction |
| Land |
| Buildings, net |
| Plant and |
| IT |
| Fixed |
| Vehicles, net |
| Leasehold |
| Others |
| Rights-of-use |
| Property, plant |
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
Opening balance at January 1, 2019 |
| 26,048,670 |
| 100,479,196 |
| 214,160,351 |
| 207,403,985 |
| 5,184,721 |
| 21,057,169 |
| 21,798,601 |
| 32,177 |
| 114,606,098 |
| — |
| 710,770,968 |
|
Additions |
| 14,699,680 |
| — |
| 148,339 |
| 4,804,013 |
| 395,328 |
| — |
| 179,024 |
| 1,309 |
| 20,856,853 |
| — |
| 41,084,546 |
|
Right-of use additions(3) |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| 19,874,668 |
| 19,874,668 |
|
Disposals |
| — |
| — |
| (2,410 | ) | (163,597 | ) | (977 | ) | — |
| (52,095 | ) | (155 | ) | (623,540 | ) | — |
| (853,982 | ) |
Transfers between items of Property, plant and equipment |
| (11,208 | ) | — |
| 1,535,288 |
| 2,810,608 |
| 614,935 |
| 791,840 |
| 2,072,550 |
| 30,241 |
| 7,741,202 |
| — |
| — |
|
Right-of-use transfers |
| (15,596,664 | ) | — |
| (68,074 | ) | (14,011,365 | ) | (23,712 | ) | — |
| (1,181,465 | ) | — |
| (2,521,084 | ) | 17,805,700 |
| — |
|
Depreciation expense |
| — |
| — |
| (3,806,726 | ) | (18,700,150 | ) | (945,200 | ) | (1,486,253 | ) | (2,661,809 | ) | (10,296 | ) | (21,095,043 | ) | — |
| (48,705,477 | ) |
Amortization (2) |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| (4,138,740 | ) | (4,138,740 | ) |
Increase (decrease) due to foreign currency translation differences |
| (1,168,312 | ) | (280,975 | ) | (183,875 | ) | (1,254,560 | ) | (81,461 | ) | 420,766 |
| (169,874 | ) | (11 | ) | (106,868 | ) | 530,287 |
| (2,294,883 | ) |
Other increase (decrease) (1) |
| 266,205 |
| (20,778 | ) | (470,441 | ) | (1,514,759 | ) | 19,440 |
| (1 | ) | (1,869,102 | ) | 1,735,345 |
| 440,381 |
| 16,553 |
| (1,397,157 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total movements |
| (1,810,299 | ) | (301,753 | ) | (2,847,899 | ) | (28,029,810 | ) | (21,647 | ) | (273,648 | ) | (3,682,771 | ) | 1,756,433 |
| 4,691,901 |
| 34,088,468 |
| 3,568,975 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance at June 30, 2019 |
| 24,238,371 |
| 100,177,443 |
| 211,312,452 |
| 179,374,175 |
| 5,163,074 |
| 20,783,521 |
| 18,115,830 |
| 1,788,610 |
| 119,297,999 |
| 34,088,468 |
| 714,339,943 |
|
(1) Mainly correspond to effects of adopting IAS 29 in Argentina.
(2) Of the total of CLP 4,138,740 thousand recorded as amortization for the current period, approximately CLP 2,949 million correspond to right-of-use amortization arising from the adoption of the IFRS, effective beginning on January 1, 2019. The remaining CLP 1,189 million correspond to depreciation (today amortization) of goods acquired under the financial lease method, which until December 31, 2018 were classified and valued pursuant to the accounting criteria of property, plant and equipment.
(3) For IFRS 16 adoption
|
| Construction |
| Land |
| Buildings, net |
| Plant and |
| IT |
| Fixed facilities |
| Vehicles, net |
| Leasehold |
| Other, |
| Property, plant |
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
Opening balance at January 1, 2018 |
| 84,118,716 |
| 96,990,155 |
| 162,385,848 |
| 155,833,080 |
| 4,627,325 |
| 19,589,877 |
| 29,263,265 |
| 7,415 |
| 106,934,818 |
| 659,750,499 |
|
Additions |
| 65,284,334 |
| — |
| 504,675 |
| 17,924,606 |
| 783,299 |
| 165,226 |
| 1,451,462 |
| 1,430 |
| 42,793,277 |
| 128,908,309 |
|
Disposals |
| — |
| (5,465 | ) | (209,713 | ) | (1,002,133 | ) | — |
| — |
| (203,036 | ) | — |
| (1,588,050 | ) | (3,008,397 | ) |
Transfers between items of Property, plant and equipment |
| (109,893,610 | ) | — |
| 45,032,440 |
| 54,460,571 |
| 622,222 |
| 1,481,081 |
| (2,218,354 | ) | 22,000 |
| 10,493,650 |
| — |
|
Depreciation expense |
| — |
| — |
| (7,001,828 | ) | (39,182,401 | ) | (1,830,295 | ) | (2,668,535 | ) | (5,201,263 | ) | (11,112 | ) | (41,727,195 | ) | (97,622,630 | ) |
Increase (decrease) due to foreign currency translation differences |
| (6,880,059 | ) | (4,615,830 | ) | (14,485,709 | ) | (17,048,903 | ) | (414,850 | ) | (4,048,135 | ) | (1,722,767 | ) | 169 |
| (16,954,922 | ) | (66,171,006 | ) |
Other increase (decrease) (1) |
| (6,580,711 | ) | 8,110,336 |
| 27,934,638 |
| 36,419,165 |
| 1,397,020 |
| 6,537,655 |
| 429,294 |
| 12,275 |
| 14,654,520 |
| 88,914,192 |
|
Total movements |
| (58,070,046 | ) | 3,489,041 |
| 51,774,503 |
| 51,570,905 |
| 557,396 |
| 1,467,292 |
| (7,464,664 | ) | 24,762 |
| 7,671,280 |
| 51,020,469 |
|
Ending balance at December 31, 2018 |
| 26,048,670 |
| 100,479,196 |
| 214,160,351 |
| 207,403,985 |
| 5,184,721 |
| 21,057,169 |
| 21,798,601 |
| 32,177 |
| 114,606,098 |
| 710,770,968 |
|
(1) Mainly correspond to property, plant & equipment write-offs.
Right-of-use is composed of as follows:
Rights of use |
| Gross asset |
| Depreciation |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Buildings |
| 2,209,647 |
| (461,331 | ) |
Plant and equipment |
| 30,855,364 |
| (2,781,522 | ) |
IT Equipment |
| 17,392 |
| (19,901 | ) |
Motor vehicles |
| 3,670,223 |
| (777,829 | ) |
Others |
| 1,474,582 |
| (98,157 | ) |
Total |
| 38,227,208 |
| 4,138,740 |
|
Interest expense for accumulated lease liabilities as of June 30, 2019 amounts to CLP 1,215,269 thousand.
12 - RELATED PARTIES
Balances and main transactions with related parties are detailed as follows:
12.1 Accounts receivable:
|
|
|
|
|
|
|
|
|
| 06.30.2019 |
| 12.31.2018 |
| ||||
Taxpayer ID |
| Company |
| Relationship |
| Country |
| Currency |
| Current |
| Non-current |
| Current |
| Non-current |
|
|
|
|
|
|
|
|
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
96.891.720-K |
| Embonor S.A. |
| Shareholder related |
| Chile |
| CLP |
| 3,241,279 |
| — |
| 4,344,082 |
| — |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| CLP |
| 17,579 |
| 122,506 |
| 2,175,934 |
| 74,340 |
|
Foreign |
| Coca-Cola de Argentina |
| Director related |
| Argentina |
| ARS |
| 789,665 |
| — |
| 1,684,357 |
| — |
|
Foreign |
| UBI 3 (Ades) |
| Shareholder related |
| Argentina |
| ARS |
| — |
| — |
| 455,823 |
| — |
|
Foreign |
| Alimentos de Soja S.A.U. |
| Shareholder related |
| Argentina |
| ARS |
| 405,169 |
| — |
| 371,712 |
| — |
|
96.517.210-2 |
| Embotelladora Iquique S.A. |
| Shareholder related |
| Chile |
| CLP |
| 190,442 |
| — |
| 228,387 |
| — |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| CLP |
| 588,283 |
| — |
| 161,460 |
| — |
|
96.919.980-7 |
| Cervecería Austral S.A. |
| Director related |
| Chile |
| USD |
| 31,969 |
| — |
| 26,557 |
| — |
|
77.755.610-K |
| Comercial Patagona Ltda. |
| Director related |
| Chile |
| CLP |
| 2,560 |
| — |
| 1,951 |
| — |
|
76.572.588-7 |
| Coca-Cola del Valle New Ventures S.A. |
| Associate |
| Chile |
| CLP |
| 1,973,566 |
| — |
| — |
| — |
|
Total |
|
|
|
|
|
|
|
|
| 7,240,512 |
| 122,506 |
| 9,450,263 |
| 74,340 |
|
12.2 Accounts payable:
|
|
|
|
|
|
|
|
|
| 06.30.2019 |
| 12.31.2018 |
| ||||
Taxpayer ID |
| Company |
| Relationship |
| Country |
| Currency |
| Current |
| Non-current |
| Current |
| Non-current |
|
|
|
|
|
|
|
|
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholder |
| Chile |
| CLP |
| 24,424,578 |
| — |
| 21,286,933 |
| — |
|
Foreign |
| Recofarma do Indústrias Amazonas Ltda. |
| Shareholder related |
| Brazil |
| BRL |
| 7,146,089 |
| — |
| 8,681,099 |
| — |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| CLP |
| 3,779,116 |
| — |
| 5,702,194 |
| — |
|
Foreign |
| Ser. y Prod. para Bebidas Refrescantes S.R.L. |
| Shareholder |
| Argentina |
| ARS |
| 5,111,140 |
| — |
| 5,479,714 |
| — |
|
Foreign |
| Leão Alimentos e Bebidas Ltda. |
| Associate |
| Brazil |
| BRL |
| 1,510,745 |
| — |
| 3,132,515 |
| — |
|
Foreign |
| Monster |
| Shareholder related |
| Brazil |
| BRL |
| 193,830 |
| — |
| 664,565 |
| — |
|
76.572.588-7 |
| Coca-Cola del Valle New Ventures S.A. |
| Associate |
| Chile |
| CLP |
| 858,610 |
| — |
| 649,046 |
| — |
|
89.996.200-1 |
| Envases del Pacífico S.A. |
| Director related |
| Chile |
| CLP |
| 10,481 |
| — |
| 139,468 |
| — |
|
96.891.720-K |
| Embonor S.A. |
| Shareholder related |
| Chile |
| CLP |
| — |
| — |
| 92,325 |
| — |
|
Foreign |
| Alimentos de Soja S.A.U. |
| Shareholder related |
| Argentina |
| ARS |
| 847,629 |
| — |
| — |
| — |
|
Foreign |
| Verde Campo |
| Shareholder related |
| Brazil |
| BRL |
| 176,516 |
| — |
| — |
| — |
|
Foreign |
| Coca-Cola Panama |
| Shareholder related |
| Panamá |
| USD |
| 29,936 |
| — |
| — |
| — |
|
Total |
|
|
|
|
|
|
|
|
| 44,088,670 |
| — |
| 45,827,859 |
| — |
|
12.3 Transactions:
Taxpayer ID |
| Company |
| Relationship |
| Country |
| Transaction description |
| Currency |
| Accumulated |
| Accumulated |
|
|
|
|
|
|
|
|
|
|
|
|
| CLP (000’s) |
| CLP (000’s) |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholders |
| Chile |
| Concentrate purchase |
| CLP |
| 63,777,733 |
| 71,170,250 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholders |
| Chile |
| Purchase of advertising services |
| CLP |
| 13,046,133 |
| 2,751,437 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholders |
| Chile |
| Water source lease |
| CLP |
| 2,598,339 |
| 2,875,479 |
|
96.714.870-9 |
| Coca-Cola de Chile S.A. |
| Shareholders |
| Chile |
| Sale of raw materials and others |
| CLP |
| 780,489 |
| 392,989 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Purchase of bottles |
| CLP |
| 7,066,035 |
| 7,985,433 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Purchase of raw materials |
| CLP |
| 10,240,109 |
| 6,272,441 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Purchase of caps |
| CLP |
| 115,513 |
| 402,792 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Purchase of services and others |
| CLP |
| 212,615 |
| 325,351 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Purchase of containers |
| CLP |
| 2,790,017 |
| 1,700,598 |
|
86.881.400-4 |
| Envases CMF S.A. |
| Associate |
| Chile |
| Sale of containers/raw materials |
| CLP |
| 2,724,574 |
| 1,782,865 |
|
96.891.720-K |
| Embonor S.A. |
| Shareholder related |
| Chile |
| Sale of finished products |
| CLP |
| 24,063,032 |
| 20,613,464 |
|
96.517.310-2 |
| Embotelladora Iquique S.A. |
| Shareholder related |
| Chile |
| Sale of finished products |
| CLP |
| 1,499,195 |
| 1,200,209 |
|
89.996.200-1 |
| Envases del Pacífico S.A. |
| Director related |
| Chile |
| Purchase of raw materials and materials |
| CLP |
| — |
| 759,871 |
|
94.627.000-8 |
| Parque Arauco S.A |
| Director related |
| Chile |
| Space lease |
| CLP |
| — |
| 91,685 |
|
Foreign |
| Recofarma do Indústrias Amazonas Ltda. |
| Shareholder related |
| Brazil |
| Concentrate purchase |
| BRL |
| 53,023,837 |
| 47,794,249 |
|
Foreign |
| Recofarma do Indústrias Amazonas Ltda. |
| Shareholder related |
| Brazil |
| Reimbursement and other purchases |
| BRL |
| 4,972,831 |
| 3,203,470 |
|
Foreign |
| Serv. y Prod. para Bebidas Refrescantes S.R.L. |
| Shareholder |
| Argentina |
| Concentrate purchase |
| ARS |
| 44,254,659 |
| 52,708,057 |
|
Foreign |
| Serv. y Prod. para Bebidas Refrescantes S.R.L. |
| Shareholder |
| Argentina |
| Advertising participation |
| ARS |
| 3,525,902 |
| 6,347,282 |
|
Foreign |
| Coca-Cola Peru |
| Shareholder related |
| Peru |
| Concentrate purchase and marketing recovery |
| USD |
| — |
| 519,973 |
|
Foreign |
| Sorocaba Refrescos S.A. |
| Associate |
| Brazil |
| Purchase of products |
| BRL |
| 490,101 |
| 367,747 |
|
Foreign |
| Leão Alimentos e Bebidas Ltda. |
| Associate |
| Brazil |
| Purchase of products |
| BRL |
| — |
| 146,116 |
|
76.572.588-7 |
| Coca-Cola Del Valle New Ventures SA |
| Shareholder in common |
| Chile |
| Sale of services and others |
| CLP |
| 1,947,606 |
| 382,589 |
|
Foreign |
| Alimentos de Soja S.A.U. |
| Shareholder related |
| Argentina |
| Payment of commissions and services |
| ARS |
| 698,713 |
| 101,490 |
|
Foreign |
| Alimentos de Soja S.A.U. |
| Shareholder related |
| Argentina |
| Purchase of products |
| ARS |
| 2,272,708 |
| — |
|
12.4 Salaries and benefits received by key management
Salaries and benefits paid to the Company’s key management personnel including directors and managers are detailed as follows:
Description |
| 06.30.2019 |
| 06.30.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Executive wages, salaries and benefits |
| 3,626,378 |
| 3,635,369 |
|
Director allowances |
| 748,000 |
| 739,123 |
|
Total |
| 4,374,378 |
| 4,374,492 |
|
13 — CURRENT AND NON-CURRENT EMPLOYEE BENEFITS
Employee benefits are detailed as follows:
Description |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Accrued vacation |
| 15,517,492 |
| 19,536,809 |
|
Participation in profits and bonuses |
| 14,432,226 |
| 13,674,170 |
|
Indemnities for years of service |
| 9,269,147 |
| 9,415,541 |
|
Total |
| 39,218,865 |
| 42,626,520 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Current |
| 25,749,718 |
| 33,210,979 |
|
Non-current |
| 13,469,147 |
| 9,415,541 |
|
Total |
| 39,218,865 |
| 42,626,520 |
|
13.1 Indemnities for years of service
The movements of employee benefits, valued pursuant to Note 2 are detailed as follows:
Movements |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Opening balance |
| 9,415,541 |
| 8,286,355 |
|
Service costs |
| 556,793 |
| 957,593 |
|
Interest costs |
| 148,504 |
| 565,167 |
|
Actuarial losses |
| 7,932 |
| 271,045 |
|
Benefits paid |
| (859,623 | ) | (664,619 | ) |
Total |
| 9,269,147 |
| 9,415,541 |
|
13.1.1 Assumptions
The actuarial assumptions used are detailed as follows:
Assumptions |
| 06.30.2019 |
| 12.31.2018 |
|
|
|
|
|
|
|
Discount rate |
| 2.7% |
| 2.7% |
|
Expected salary increase rate |
| 2.0% |
| 2.0% |
|
Turnover rate |
| 5.4% |
| 5.4% |
|
Mortality rate |
| RV-2014 |
| RV-2009 |
|
Retirement age of women |
| 60 years |
| 60 years |
|
Retirement age of men |
| 65 years |
| 65 years |
|
13.2 Personnel expenses
Personnel expenses included in the consolidated statement of income are as follows:
Description |
| 06.30.2019 |
| 06.30.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Wages and salaries |
| 93,032,594 |
| 95,328,073 |
|
Employee benefits |
| 25,943,028 |
| 23,022,830 |
|
Severance benefits |
| 3,426,116 |
| 3,066,863 |
|
Other personnel expenses |
| 7,478,967 |
| 7,150,386 |
|
Total |
| 129,880,705 |
| 128,568,152 |
|
13.3 Number of employees
Description |
| 06.30.2019 |
| 06.30.2018 |
|
Number of employees |
| 15,171 |
| 14,868 |
|
Average number of employees |
| 15,475 |
| 15,110 |
|
14 — INVESTMENTS IN ASSOCIATES ACCOUNTED FOR USING THE EQUITY METHOD
Investments in associates using equity method of accounting are detailed as follows:
|
|
|
|
|
| Functional |
| Investment value |
| Ownership interest |
| ||||
Taxpayer ID |
| Company |
| Country |
| Currency |
| 06.30.2019 |
| 12.31.2018 |
| 06.30.2019 |
| 12.31.2018 |
|
|
|
|
|
|
|
|
| CLP (000’s) |
| CLP (000’s) |
|
|
|
|
|
86.881.400-4 |
| Envases CMF S.A. (1) |
| Chile |
| CLP |
| 18,071,310 |
| 18,743,604 |
| 50.00 | % | 50.00 | % |
Foreign |
| Leão Alimentos e Bebidas Ltda. (2) |
| Brazil |
| BRL |
| 21,565,430 |
| 21,727,894 |
| 10.26 | % | 10.26 | % |
Foreign |
| Kaik Participações Ltda. (2) |
| Brazil |
| BRL |
| 1,232,510 |
| 1,228,256 |
| 11.32 | % | 11.32 | % |
Foreign |
| SRSA Participações Ltda. |
| Brazil |
| BRL |
| 62,787 |
| 94,706 |
| 40.00 | % | 40.00 | % |
Foreign |
| Sorocaba Refrescos S.A. |
| Brazil |
| BRL |
| 22,955,838 |
| 22,979,029 |
| 40.00 | % | 40.00 | % |
Foreign |
| Trop Frutas do Brasil Ltda. (2) |
| Brazil |
| BRL |
| 6,133,498 |
| 6,244,839 |
| 7.52 | % | 7.52 | % |
76.572.588.7 |
| Coca-Cola del Valle New Ventures S.A. |
| Chile |
| CLP |
| 31,166,323 |
| 31,392,617 |
| 35.00 | % | 35.00 | % |
Total |
|
|
|
|
|
|
| 101,187,696 |
| 102,410,945 |
|
|
|
|
|
(1) In Envases CMF S.A., regardless of the percentage of ownership interest, it was determined that no controlling interest was held, only a significant influence, given that there was not a majority vote of the Board of Directors to make strategic business decisions.
(2) In these companies, regardless of the percentage of ownership interest held, the Company has significant influence, given that it has a representative on each entity’s Board of Directors.
14.1 Movement
The movement of investments in other entities accounted for using the equity method is shown below:
Description |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Opening balance |
| 102,410,945 |
| 86,809,069 |
|
Other investment increases in associates (Capital contributions to Leão Alimentos e Bebidas Ltda. and Coca-Cola del Valle New Ventures S.A.) |
| — |
| 15,615,466 |
|
Dividends received |
| (630,885 | ) | (403,414 | ) |
Share in operating income |
| 484,321 |
| 2,194,144 |
|
Amortization unrealized income in associates |
| (476,518 | ) | 85,268 |
|
Increase (decrease) in foreign currency translation, investments in associates |
| (600,167 | ) | (1,889,588 | ) |
Ending balance |
| 101,187,696 |
| 102,410,945 |
|
The main movements are explained below:
· During 2018, Embotelladora Andina S.A. made a capital contribution in Coca-Cola del Valle New Ventures S.A. for CLP 15,615,466 thousand.
· During fiscal year 2018 Envases CMF S.A. distributed dividends, while as of June 30, 2019, only Sorocaba Refrescos S.A. has distributed dividends.
14.2 Reconciliation of share of profit in investments in associates:
Description |
| 06.30.2019 |
| 06.30.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Equity value on income of associates |
| 484,321 |
| 1,118,366 |
|
|
|
|
|
|
|
Unrealized earnings from product inventory acquired from associates and not sold at the end of the period, which is presented as a discount in the respective asset account (containers and / or inventory) |
| (519,069 | ) | (377,465 | ) |
Amortization goodwill in the sale of fixed assets of Envases CMF S.A. |
| 42,633 |
| 42,633 |
|
|
|
|
|
|
|
Income statement balance |
| 7,885 |
| 783,534 |
|
14.3 Summary financial information of associates:
The following table presents summarized information regarding the Company´s equity investees as of June 30, 2019:
|
| Envases |
| Sorocaba |
| Kaik |
| SRSA |
| Leão Alimentos |
| Trop Frutas do |
| Coca-Cola del Valle |
|
|
| CLP (000’s) |
| CLP |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
Total assets |
| 71,314,290 |
| 106,460,187 |
| 10,970,861 |
| 379,087 |
| 239,970,976 |
| 95,577,819 |
| 105,533,625 |
|
Total liabilities |
| 33,792,306 |
| 47,849,221 |
| 33 |
| 220,311 |
| 39,705,070 |
| 20,906,601 |
| 19,974,502 |
|
Total revenue |
| 27,654,284 |
| 30,339,013 |
| 110,666 |
| 155,195 |
| 64,078,835 |
| 20,049,468 |
| 14,701,402 |
|
Net income (loss) of associate |
| 368,683 |
| 1,483,870 |
| 110,666 |
| 155,195 |
| 698,671 |
| (896,172 | ) | 762,450 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reporting date |
| 06-30-2019 |
| 05-31-2019 |
| 05-31-2019 |
| 05-31-2019 |
| 05-31-2019 |
| 05-31-2019 |
| 05-31-2019 |
|
15 - INTANGIBLE ASSETS OTHER THAN GOODWILL
Intangible assets other than goodwill are detailed as follows:
|
| June 30, 2019 |
| December 31, 2018 |
| ||||||||
|
| Gross |
| Accumulated |
| Net |
| Gross |
| Accumulated |
| Net |
|
Description |
| Value |
| Amortization |
| Value |
| Value |
| Amortization |
| Value |
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
Distribution rights (1) |
| 649,157,032 |
| (419,706 | ) | 648,737,326 |
| 661,285,834 |
| (259,434 | ) | 661,026,400 |
|
Software |
| 31,811,264 |
| (25,016,374 | ) | 6,794,890 |
| 31,526,159 |
| (24,160,202 | ) | 7,365,957 |
|
Others |
| 724,287 |
| (294,091 | ) | 430,196 |
| 728,198 |
| (298,002 | ) | 430,196 |
|
Total |
| 681,692,583 |
| (25,730,171 | ) | 655,962,412 |
| 639,540,191 |
| 24,717,638 |
| 668,822,553 |
|
(1) Correspond to the contractual rights to produce and distribute Coca-Cola products in certain parts of Argentina, Brazil, Chile and Paraguay. Distribution rights result from the valuation process at fair value of the assets and liabilities of the companies acquired in business combinations. Production and distribution contracts are renewable for periods of 5 years with Coca-Cola. The nature of the business and renewals that Coca-Cola has permanently done on these rights, allow qualifying them as indefinite contracts. These production and distribution rights, and in conjunction with the assets that are part of the cash-generating units, are annually subjected to the impairment test. Such distribution rights are composed in the following manner and are not subject to amortization: except for the Monster rights that are amortized in the term of the agreement which is 4 years.
Distribution rights |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Chile (excluding Metropolitan Region, Rancagua and San Antonio) |
| 305,276,325 |
| 304,888,183 |
|
Brazil (Rio de Janeiro, Espirito Santo, Ribeirão Preto and investments in Sorocaba y Leão Alimentos e Bebidas Ltda.) |
| 178,994,181 |
| 181,583,404 |
|
Paraguay |
| 162,383,556 |
| 172,594,328 |
|
Argentina (North and South) |
| 2,083,264 |
| 1,960,485 |
|
Total |
| 648,737,326 |
| 661,026,400 |
|
The movement and balances of identifiable intangible assets are detailed as follows:
|
| 01-01-2019 to 06-30-2019 |
| 01-01-2018 to 12-31-2018 |
| ||||||||||||
|
| Distribution |
|
|
|
|
|
|
| Distribution |
|
|
|
|
|
|
|
Details |
| Rights |
| Others |
| Software |
| Total |
| Rights |
| Others |
| Software |
| Total |
|
|
| CLP (000’s) |
| CLP |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP |
| CLP |
| CLP (000’s) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance |
| 661,026,400 |
| 430,196 |
| 6,507,343 |
| 668,822,553 |
| 656,294,617 |
| 470,918 |
| 6,507,343 |
| 663,272,878 |
|
Additions |
| — |
| — |
| 468,054 |
| 468,054 |
| — |
| — |
| 3,718,038 |
| 3,718,038 |
|
Amortization |
| (65,329 | ) | — |
| (1,051,023 | ) | (1,116,352 | ) | (112,601 | ) | (40,722 | ) | (1,971,417 | ) | (2,124,740 | ) |
Other increases (decreases) (1) |
| (12,223,745 | ) | — |
| (11,902 | ) | (12,211,843 | ) | 4,844,384 |
| — |
| (888,007 | ) | (30,595,028 | ) |
Total |
| 648,737,326 |
| 430,196 |
| 7,066,228 |
| 653,032,048 |
| 661,026,400 |
| 430,196 |
| 7,365,957 |
| 668,822,553 |
|
(1) Mainly corresponds to restatement due to the effects of translation of distribution rights of foreign subsidiaries.
16 - GOODWILL
Movement in Goodwill as of June 30, 2019 and December 31, 2018 is detailed as follows:
Operating segment |
| 01.01.2019 |
| Additions/ |
| Foreign currency |
| 06.30.2019 |
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
Chilean operation |
| 8,503,023 |
| — |
| — |
| 8,503,023 |
|
Brazilian operation |
| 73,080,100 |
| — |
| (837,031 | ) | 72,243,069 |
|
Argentine operation |
| 28,318,129 |
| — |
| 1,772,118 |
| 30,090,247 |
|
Paraguayan operation |
| 7,327,921 |
| — |
| (430,784 | ) | 6,897,137 |
|
Total |
| 117,229,173 |
| — |
| 504,303 |
| 117,733,476 |
|
Operating segment |
| 01.01.2018 |
| Additions/ |
| Foreign currency |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
Chilean operation |
| 8,503,023 |
| — |
| — |
| 8,503,023 |
|
Brazilian operation |
| 73,509,080 |
| — |
| (428,980 | ) | 73,080,100 |
|
Argentine operation |
| 4,672,971 |
| — |
| 23,645,158 |
| 28,318,129 |
|
Paraguayan operation |
| 6,913,143 |
| — |
| 414,778 |
| 7,327,921 |
|
Total |
| 93,598,217 |
| — |
| 23,630,956 |
| 117,229,173 |
|
17 - OTHER CURRENT AND NON-CURRENT FINANCIAL LIABILITIES
Liabilities are detailed as follows:
|
| Balance |
| ||||||
|
| Current |
| Non-current |
| ||||
|
| 06.30.2019 |
| 12.31.2018 |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
|
|
|
|
|
|
|
|
|
|
Bank loans |
| 20,567,042 |
| 21,542,736 |
| 1,634,262 |
| 2,439,253 |
|
Bonds payable |
| 21,009,301 |
| 20,664,481 |
| 693,712,809 |
| 700,327,057 |
|
Deposits in guarantee |
| 12,340,826 |
| 12,242,464 |
| — |
| — |
|
Derivative contract obligations (see note 22) |
| 474,319 |
| 130,829 |
| — |
| — |
|
Leasing agreements |
| 5,931,244 |
| 1,534,467 |
| 24,313,183 |
| 13,797,468 |
|
Total |
| 60,322,732 |
| 56,114,977 |
| 719,660,254 |
| 716,563,778 |
|
The fair value of financial assets(1) and liabilities as of June 30, 2019 and December 31, 2018 is presented below:
Current |
| Book Value |
| Fair Value |
| Book Value |
| Fair Value |
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
Other financial assets (2) |
| — |
| — |
| 683,567 |
| 683,567 |
|
Bank loans (2) |
| 20,567,042 |
| 19,386,766 |
| 21,542,736 |
| 20,298,761 |
|
Bonds payable (1) |
| 21,099,301 |
| 24,779,282 |
| 20,664,481 |
| 22,318,939 |
|
Derivative contract obligations (2) (see note 22) |
| 474,319 |
| 474,319 |
| 130,829 |
| 130,829 |
|
Leasing agreements (1) |
| 5,931,244 |
| 5,931,244 |
| 1,534,467 |
| 1,534,467 |
|
Non-current |
| Book Value |
| Fair Value |
| Book Value |
| Fair Value |
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
Other financial assets (2) |
| 96,518,349 |
| 96,518,349 |
| 97,362,295 |
| 97,362,295 |
|
Bank loans (2) |
| 1,634,262 |
| 1,589,188 |
| 2,439,253 |
| 2,307,396 |
|
Bonds payable (1) |
| 693,712,809 |
| 816,643,206 |
| 700,327,057 |
| 755,694,265 |
|
Leasing agreements (2) |
| 24,313,183 |
| 13,797,468 |
| 13,797,468 |
| 13,797,468 |
|
(1) The fair value of bonds payable is classified as Level 2 of the fair value measurement hierarchies based on the prices quoted for the obligations of the Company.
(2) Fair values are based on discounted cash flows using market discount rates at the close of the six month and one year period and are classified as Level 2 of the fair value measurement hierarchies.
(1) Financial instruments such as: Cash and cash equivalents, Commercial debtors and other accounts receivable, Accounts receivable related entities, Deposits in Guarantee for packaging and Trade accounts payable and other accounts payable present a fair value that approximates their value in books, considering their nature and the duration of the obligation
17.1.1 Bank obligations, current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Maturity |
| Total |
| ||||
Indebted entity |
| Creditor entity |
|
|
| Type of |
| Effective |
| Nominal |
| Up to |
| 90 days to |
| at |
| At |
| ||||||||
Tax ID |
| Name |
| Country |
| Tax ID |
| Name |
| Country |
| Currency |
| Amortization |
| Rate |
| Rate |
| 90 days |
| 1 year |
| 06.30.2019 |
| 12.31.2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
96.705.990-0 |
| Envases Central S.A. |
| Chile |
| 97.006.000-6 |
| Banco BCI |
| Chile |
| UF |
| Semi-annually |
| 2.13 | % | 2.13 | % | — |
| 381,993 |
| 381,993 |
| 726,943 |
|
Foreign |
| Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco de la Nación Argentina |
| Argentina |
| ARS |
| Monthly |
| 20.00 | % | 20.00 | % | — |
| — |
| — |
| 1,071 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| BRL |
| Monthly |
| 6.63 | % | 6.63 | % | 11,119 |
| 31,927 |
| 43,046 |
| 171,415 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Santander |
| Brazil |
| BRL |
| Monthly |
| 7.15 | % | 7.15 | % | 11,130 |
| — |
| 11,130 |
| 277,517 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| BRL |
| Quarterly |
| 4.50 | % | 4.50 | % | 607,877 |
| 1,211,607 |
| 1,819,484 |
| 2,455,578 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Santander |
| Brazil |
| BRL |
| Quarterly |
| 6.24 | % | 6.24 | % | 10,336,401 |
| 7,974,988 |
| 18,311,389 |
| 17,910,212 |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 20,567,042 |
| 21,542,736 |
|
17.1.2 Bank obligations, non-current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Maturity |
| ||||||||||
Indebted |
| Creditor Entity |
|
|
| Type |
| Effective |
| Nominal |
| 1 year up to |
| More 2 years |
| More 3 years |
| More 4 years |
| More 5 |
| at |
| ||||||||
Tax ID |
| Name |
| Country |
| Tax ID |
| Name |
| Country |
| Currency |
| Amortization |
| Rate |
| Rate |
| 2 years |
| Up to 3 years |
| Up to 4 years |
| Up to 5 years |
| Years |
| 06.30.2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
96.705.990-0 |
| Envases Central S.A. |
| Chile |
| 97.006.000-6 |
| Banco BCI |
| Chile |
| UF |
| Semiannually |
| 2.13 | % | 2.13 | % | 1,447,496 |
| — |
| — |
| — |
| — |
| 1,447,496 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| BRL |
| Monthly |
| 6.63 | % | 6.63 | % | 42,570 |
| 42,570 |
| 42,570 |
| 59,056 |
| — |
| 186,766 |
|
TOTAL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,634,262 |
|
17.1.3 Bank obligations, non-current previous
Indebted Entity |
| Creditor Entity |
|
|
| Type |
| Effective |
| Nominal |
| 1 year up |
| More 2 |
| More 3 years |
| More 4 years |
| More 5 |
| at |
| ||||||||
Tax ID |
| Name |
| Country |
| Tax ID |
| Name |
| Country |
| Currency |
| Amortization |
| Rate |
| Rate |
| 2 years |
| years |
| Up to 4 years |
| Up to 5 years |
| Years |
| 12.31.2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP |
| CLP |
|
96.705.990-0 |
| Envases Central S.A. |
| Chile |
| 97.006.000-6 |
| Banco BCI |
| Chile |
| UF |
| Semiannually |
| 2.1 | % | 2.1 | % | 1,434,786 |
| — |
| — |
| — |
| — |
| 1,434,786 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| BRL |
| Monthly |
| 6.6 | % | 6.6 | % | 72,439 |
| 43,033 |
| 43,033 |
| 81,225 |
| — |
| 239,730 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Santander |
| Brazil |
| BRL |
| Monthly |
| 7.2 | % | 7.2 | % | 151,873 |
| — |
| — |
| — |
| — |
| 151,873 |
|
Foreign |
| Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Itaú |
| Brazil |
| BRL |
| Quarterly |
| 4.5 | % | 4.5 | % | 612,864 |
| — |
| — |
| — |
| — |
| 612,864 |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2,439,253 |
|
17.1.4 Current and non-current bank obligations “Restrictions”
Bank obligations are not subject to restrictions for the reported periods.
17.2.1 Bonds payable
During 2018, Andina carried out a debt restructuring process that consisted of a partial repurchase in the amount of USD 210 million of the 144A/RegS Senior Notes and refinancing it with the placement of Series F bonds in the local market in the amount of UF 5.7 million due 2039 and accruing an annual interest rate of 2.83%.
The costs corresponding to the repurchase of bonds, associated with premium payments, overpricing and proportional amortization of placement costs and discounts in bonds in original U.S. Dollars amounting to CLP (000’s)9,583,000, were recorded in results under the item financial costs.
|
| Current |
| Non-current |
| Total |
| ||||||
Composition of bonds payable |
| 06.30.2019 |
| 12.31.2018 |
| 06.30.2019 |
| 12.31.2018 |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
Bonds (face value) |
| 21,376,475 |
| 21,038,064 |
| 697,037,615 |
| 704,048,747 |
| 718,414,090 |
| 725,086,811 |
|
Expenses of bond issuance and discounts on placement |
| (367,174 | ) | (373,583 | ) | (3,324,806 | ) | (3,721,690 | ) | (3,691,980 | ) | (4,095,273 | ) |
Net balance presented in statement of financial position |
| 21,009,301 |
| 20,664,481 |
| 693,712,809 |
| 700,327,057 |
| 714,722,109 |
| 720,991,538 |
|
17.2.2 Current and non-current balances
Bonds payable correspond to bonds in UF issued by the parent company on the Chilean market and bonds in U.S. dollars issued by the Parent Company on the international market. A detail of these instruments is presented below:
|
|
|
| Current Nominal |
| Adjustment |
| Interest |
|
|
| Interest |
| Current |
| Non-current |
| ||||
Bonds |
| Series |
| amount |
| Unit |
| Rate |
| Final Maturity |
| payment |
| 06.30.2019 |
| 12.31.2018 |
| 06.30.2019 |
| 12.31.2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
CMF Registration N°254 06.13.2001 |
| B |
| 2,007,079 |
| UF |
| 6.5 | % | 06-01-2026 |
| Semi-annually |
| 6,856,484 |
| 6,598,389 |
| 49,433,084 |
| 52,132,023 |
|
CMF Registration N°641 08.23.2010 |
| C |
| 1,500,000 |
| UF |
| 4.0 | % | 08-15-2031 |
| Semi-annually |
| 618,237 |
| 614,152 |
| 41,854,950 |
| 41,348,685 |
|
CMF Registration N°759 08.20.2013 |
| C |
| 375,000 |
| UF |
| 3.5 | % | 08-16-2020 |
| Semi-annually |
| 7,110,221 |
| 7,069,487 |
| 3,487,913 |
| 6,891,448 |
|
CMF Registration N°760 08.20.2013 |
| D |
| 4,000,000 |
| UF |
| 3.8 | % | 08-16-2034 |
| Semi-annually |
| 1,555,360 |
| 1,545,334 |
| 111,613,200 |
| 110,263,160 |
|
CMF Registration N°760 04.02.2014 |
| E |
| 3,000,000 |
| UF |
| 3.75 | % | 03-01-2035 |
| Semi-annually |
| 1,022,633 |
| 1,027,009 |
| 83,709,908 |
| 82,697,378 |
|
CMF Registration N°912 10.10.2018 |
| F |
| 5,700,000 |
| UF |
| 2.83 | % | 09-25-2039 |
| Semi-annually |
| 1,165,715 |
| 1,013,805 |
| 159,048,810 |
| 157,125,003 |
|
Bonds USA |
| — |
| 575,000,000 |
| USD |
| 5.0 | % | 10-01-2023 |
| Semi-annually |
| 3,047,825 |
| 3,169,888 |
| 247,889,750 |
| 253,591,050 |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
| 21,376,475 |
| 21,038,064 |
| 697,037,615 |
| 704,048,747 |
|
Accrued interest included in the current portion of bonds:
Interest |
| 06.30.019 |
| 12.31.018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Accrued interest |
| 8,036,200 |
| 7,856,274 |
|
17.2.3 Non-current maturities
|
|
|
| Year of maturity |
| Total non- current |
| ||||||
|
| Series |
| more than 1 |
| more than 2 |
| more than |
| More than 5 |
| 06.30.2019 |
|
|
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP |
| CLP (000’s) |
| CLP (000’s) |
|
CMF Registration N°254 06.13.2001 |
| B |
| 6,786,808 |
| 7,222,018 |
| 7,691,447 |
| 27,732,811 |
| 49,433,084 |
|
CMF Registration N°641 08.23.2010 |
| C |
| — |
| 1,902,447 |
| 3,804,894 |
| 36,147,609 |
| 41,854,950 |
|
CMF Registration N°759 08.20.2013 |
| C |
| 3,487,913 |
| — |
| — |
| — |
| 10,184,538 |
|
CMF Registration N°760 08.20.2013 |
| D |
| — |
|
|
| — |
| 111,613,200 |
| 111,613,200 |
|
CMF Registration N°760 04.02.2014 |
| E |
| — |
| — |
| — |
| 83,709,908 |
| 83,709,908 |
|
Bonds USA |
| — |
| — |
| — |
| — |
| 159,048,810 |
| 159,048,810 |
|
Total |
|
|
| 10,274,721 |
| 9,124,465 |
| 11,496,341 |
| 666,142,088 |
| 697,037,615 |
|
17.2.4 Market rating
The bonds issued on the Chilean market had the following rating as of June 30, 2019:
AA | : | ICR Compañía Clasificadora de Riesgo Ltda. rating |
AA | : | Fitch Chile Clasificadora de Riesgo Limitada rating |
The rating of bonds issued on the international market as of June 30, 2019, is the following:
BBB | : | Standard&Poors Global Ratings |
BBB+ | : | Fitch Ratings Inc. |
17.2.5 Restrictions
17.2.5.1 Restrictions regarding bonds placed abroad.
Obligations with bonds placed abroad are not affected by financial restrictions for the periods reported
17.2.5.2 Restrictions regarding bonds placed in the local market.
For purposes of the calculation of the covenants, the amount of EBITDA that was agreed on each bond issue is included.
Restrictions on the issuance of bonds for a fixed amount registered under number 254.
· Maintain an indebtedness level where Consolidated Financial Liabilities to Consolidated Equity does not exceed 1.20 times. For these purposes Consolidated Financial Liabilities shall be regarded as Liabilities Receivables accruing interest, namely: (i) other current financial liabilities, plus (ii) other non-current financial liabilities, less (iii) asset balances of derivative financial instruments, taken to cover exchange rate or interest rate risks on financial liabilities under “Other Current Financial Assets” and “Other non-current Financial Assets” of the Issuer’s Consolidated Financial Statements. Consolidated Equity will be regarded as total equity including non-controlling interest.
As of June 30, June 30, 2019, indebtedness level is 0.79 times of Consolidated Equity.
· Maintain, and in no manner lose, sell, assign or transfer to a third party, the geographical area currently denominated as the “Metropolitan Region” (Región Metropolitana) as a territory in Chile in which we have been authorized by The Coca-Cola Company for the development, production, sale and distribution of products and brands of the licensor, in accordance to the respective bottler or license agreement, renewable from time to time.
· Not lose, sell, assign, or transfer to a third party any other territory of Argentina or Brazil, which as of this date is franchised by TCCC to the Company for the development, production, sale and distribution of products and brands of such licensor, as long as any of these territories account for more than 40% of the Issuer’s Adjusted Consolidated Operating Cash Flow.
· Maintain consolidated assets free of any pledge, mortgage or other encumbrances for an amount at least equal to 1.3 times of the issuer’s unsecured consolidated liabilities.
Unsecured consolidated liabilities payable shall be regarded as the total liabilities, obligations and debts of the issuer that are not secured by real guarantees on goods and assets of the latter, voluntarily and conventionally constituted by the issuer less the asset balances of derivative financial instruments, taken to cover exchange rate or interest rate risks on financial liabilities under “Other Current Financial Assets” and “Other non-current Financial Assets” of the Issuer’s Consolidated Statement of Financial Position.
Consolidated Assets free of any pledge, mortgage or other lien will only be regarded as those assets free of any pledge, mortgage or other real lien voluntarily and conventionally constituted by the issuer less asset balances of derivative financial instruments, taken to cover exchange rate or interest rate risks on financial liabilities and under “Other Current Financial Assets” and “Other non-current Financial Assets” of the Issuer’s Consolidated Statement of Financial Position.
As of June 30, 2019, this index is 1.71 times.
Restrictions to bond lines registered in the Securities Registered under number 641.
· Maintain a level of “Net Financial Debt” within its quarterly financial statements that may not exceed 1.5 times, measured over figures included in its consolidated statement of financial position. To this end, net financial debt shall be defined as the ratio between net financial debt and total equity of the issuer (equity attributable to controlling owners plus non-controlling interest). On its part, net financial debt will be the difference between the Issuer’s financial debt and cash.
As of June 30, 2019, the level of Net Financial Debt was 0.66 times.
· Maintain consolidated assets free of any pledge, mortgage or other encumbrances for an amount at least equal to 1.3 times of the issuer’s unsecured consolidated liabilities.
Unencumbered assets refer to the assets that are the property of the issuer; classified under Total Assets of the Issuer’s Financial Statements; and that are free of any pledge, mortgage or other liens constituted in favor of third parties, less “Other Current Financial Assets” and “Other Non-Current Financial Assets” of the Issuer’s Financial Statements (to the extent they correspond to asset balances of derivative financial instruments, taken to hedge exchange rate and interest rate risk of the financial liabilities).
Unsecured total liabilities correspond to: liabilities from Total Current Liabilities and Total Non-Current Liabilities of Issuer’s Financial Statement which do not benefit from preferences or privileges, less “Other Current Financial Assets” and “Other Non-Current Financial Assets” of the Issuer’s Financial Statements (to the extent they correspond to asset balances of derivative financial instruments, taken to hedge exchange rate and interest rate risk of the financial liabilities).
As of June 30, 2019, this index is 1.71 times.
· Maintain a level of “Financial net coverage” in its quarterly financial statements of more than 3 times. Net financial coverage means the ratio between the Issuer’s Ebitda for the past 12 months and net financial expenses (financial income less financial expenses) of the issuer for the past 12 months. However, this restriction will be considered breached when the mentioned net financial coverage level is lower than the level previously indicated during two consecutive quarters.
As of June 30, 2019, Net Financial Coverage level is 6.32 times.
Restrictions to bond lines registered in the Securities Registrar under numbers 759 and 760 D-E.
· Maintain an indebtedness level where Consolidated Financial Liabilities to Consolidated Equity does not exceed 1.20 times. For these purposes Consolidated Financial Liabilities shall be regarded as Liabilities Receivables accruing interest, namely: (i) other current financial liabilities, plus (ii) other non-current financial liabilities, less (iii) cash and cash equivalent and (iv) other current financial assets, and (v) other non-current financial assets (to the extent they are asset balances of derivative financial instruments, taken to hedge exchange rate or interest rate risks on financial liabilities). Consolidated Equity will be regarded as total equity including non-controlling interest.
As of June 30, 2019, Indebtedness Level is 0.66 times of Consolidated Equity.
· Maintain consolidated assets free of any pledge, mortgage or other encumbrances for an amount at least equal to 1.3 times of the issuer’s unsecured consolidated liabilities payable.
Unsecured Consolidated Liabilities Payable shall be regarded as the total liabilities, obligations and debts of the issuer that are not secured by real guarantees on goods and assets of the latter, voluntarily and conventionally constituted by the issuer less the asset balances of derivative financial instruments, taken to cover exchange rate or interest rate risks on financial liabilities under “Other Current Financial Assets” and “Other non-current Financial Assets” of the Issuer’s Consolidated Statement of Financial Position.
The following will be considered in determining Consolidated Assets: assets free of any pledge, mortgage or other lien, as well as those assets having a pledge, mortgage or real encumbrances that operate solely by law, less asset balances of derivative financial instruments, taken to hedge exchange rate or interest rate risks on financial liabilities under “Other Current Financial Assets” and “Other non-current Financial Assets” of the Issuer’s Consolidated Financial Statements. Therefore, Consolidated Assets free of any pledge, mortgage or other lien will only be regarded as those assets free of any pledge, mortgage or other real lien voluntarily and conventionally constituted by the issuer less asset balances of derivative financial instruments, taken to cover exchange rate or interest rate risks on financial liabilities and under “Other Current Financial Assets” and “Other non-current Financial Assets” of the Issuer’s Consolidated Statement of Financial Position.
As of June 30, 2019, this index is 1.71 times.
· Maintain, and in no manner, lose, sell, assign or transfer to a third party, the geographical area currently denominated as the “Metropolitan Region” as a territory franchised to the Issuer in Chile by The Coca-Cola Company, hereinafter also referred to as “TCCC” or the “Licensor” for the development, production, sale and distribution of products and brands of said licensor, in accordance to the respective bottler or license agreement, renewable from time to time. Losing said territory, means the non-renewal, early termination or cancellation of this license agreement by TCCC, for the geographical area today called “Metropolitan Region”. This reason shall not apply if, as a result of the loss, sale, transfer or disposition, of that licensed territory is purchased or acquired by a subsidiary or an entity that consolidates in terms of accounting with the Issuer.
· Not lose, sell, assign, or transfer to a third party any other territory of Argentina or Brazil, which as of the issuance date of these instruments is franchised by TCCC to the Issuer for the development, production, sale and distribution of products and brands of such licensor, as long as any of these territories account for more than 40% of the Issuer’s Adjusted Consolidated Operating Cash Flow of the audited period immediately before the moment of loss, sale, assignment or transfer. For these purposes, the term “Adjusted Consolidated Operating Cash Flow” shall mean the addition of the following accounting accounts of the Issuer’s Consolidated Statement of Financial Position: (i) “Gross Profit” which includes regular activities and cost of sales; less (ii) “Distribution Costs”; less (iii) “Administrative Expenses”; plus (iv) “Participation in profits (losses) of associates and joint ventures that are accounted for using the equity method”; plus (v) “Depreciation”; plus (vi) “Intangibles Amortization”.
Restrictions to bond lines registered in the Securities Registrar under number 912.
· Maintain an indebtedness level where Consolidated Financial Liabilities to Consolidated Equity does not exceed 1.20 times.
For these purposes Consolidated Financial Liabilities shall be regarded as Liabilities Receivables accruing interest, namely: (i) other current financial liabilities, plus (ii) other non-current financial liabilities, less (iii) cash and cash equivalent and (iv) other current financial assets, and (v) other non-current financial assets (to the extent they are asset balances of derivative financial instruments, taken to hedge exchange rate or interest rate risks on financial liabilities). Consolidated Equity will be regarded as total equity including non-controlling interest.
As of June 30, 2019, this index equals 0.66 times.
· Maintain consolidated assets free of any pledge, mortgage or other encumbrances for an amount at least equal to 1.3 times of the issuer’s unsecured consolidated liabilities payable.
Unsecured Consolidated Liabilities Payable shall be regarded as the total liabilities, obligations and debts of the issuer that are not secured by real guarantees on goods and assets of the latter, voluntarily and conventionally constituted by the issuer less the asset balances of derivative financial instruments, taken to cover exchange rate or interest rate risks on financial liabilities under “Other Current Financial Assets” and “Other non-current Financial Assets” of the Issuer’s Consolidated Statement of Financial Position.
The following will be considered in determining Consolidated Assets: assets free of any pledge, mortgage or other lien, as well as those assets having a pledge, mortgage or real encumbrances that operate solely by law, less asset balances of derivative financial instruments, taken to hedge exchange rate or interest rate risks on financial liabilities under “Other Current Financial Assets” and “Other non-current Financial Assets” of the Issuer’s Consolidated Financial Statements. Therefore, Consolidated Assets free of any pledge, mortgage or other lien will only be regarded as those assets free of any pledge, mortgage or other real lien voluntarily and conventionally constituted by the issuer less asset balances of derivative financial instruments, taken to cover exchange rate or interest rate risks on financial liabilities and under “Other Current Financial Assets” and “Other non-current Financial Assets” of the Issuer’s Consolidated Statement of Financial Position.
As of June 30, 2019, this index equals 1.71 times.
· Not lose, sell, assign, or transfer to a third party any other territory of Argentina or Brazil, which as of the issuance date of local bonds Series C, D and E is franchised by TCCC to the Issuer for the development, production, sale and distribution of products and brands of such licensor, as long as any of these territories account for more than 40% of the Issuer’s Adjusted Consolidated Operating Cash Flow of the audited period immediately before the moment of loss, sale, assignment or transfer. For these purposes, the term “Adjusted Consolidated Operating Cash Flow” shall mean the addition of the following accounting accounts of the Issuer’s Consolidated Statement of Financial Position: (i) “Gross Profit” which includes regular activities and cost of sales; less (ii) “Distribution Costs”; less (iii) “Administrative Expenses”; plus (iv) “Participation in profits (losses) of associates and joint ventures that are accounted for using the equity method”; plus (v) “Depreciation”; plus (vi) “Intangibles Amortization”.
As of June 30, 2019, and December 31, 2018, the Company complies with all financial collaterals.
17.2.6 Repurchased bonds
In addition to UF bonds, the Company holds bonds that it has repurchased in full through companies that are included in the consolidation:
The subsidiary Rio de Janeiro Refrescos Ltda. maintains a liability corresponding to a bond issuance for US $75 million due in December 2020 and semi-annual interest payments. As of December 2017 June 30, 2019, these issues are held by Andina. On January 1, 2013, Abisa Corp S.A. transferred the totality of this asset to Embotelladora are Andina S.A., the latter becoming the creditor of the above-mentioned Brazilian subsidiary. Consequently, the assets and liabilities related to the transaction have been eliminated from these Consolidated Financial Statements. In addition, the transaction has been treated as a net investment of the group in the Brazilian subsidiary; consequently, the effects of exchange rate differences between the dollar and the functional currency of each one has been recorded in other comprehensive income.
17.3 Derivative contract obligations
Please see details in Note 22
17.4.1 Current liabilities for leasing agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Maturity |
| Total |
| ||||
Indebted Entity |
| Creditor Entity |
|
|
| Amortization |
| Effective |
| Nominal |
| Up to |
| 90 days to |
| At |
| At |
| ||||||
Name |
| Country |
| Tax ID |
| Name |
| Country |
| Currency |
| Type |
| Rate |
| Rate |
| 90 days |
| 1 year |
| 06.30.2019 |
| 12.31.2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| CLP |
| CLP |
| CLP |
| CLP (000’s) |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Banco Santander |
| Brazil |
| BRL |
| Monthly |
| 9.65 | % | 9.47 | % | — |
| — |
| — |
| 11,996 |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Citibank |
| Brazil |
| BRL |
| Monthly |
| 8.54 | % | 8.52 | % | — |
| — |
| — |
| 75,260 |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Cogeração - Light ESCO |
| Brazil |
| BRL |
| Monthly |
| 13.00 | % | 12.28 | % | 179,785 |
| 573,520 |
| 753,305 |
| 109,573 |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Tetra Pack |
| Brazil |
| BRL |
| Monthly |
| 7.65 | % | 7.39 | % | 80,674 |
| 251,138 |
| 331,812 |
| 716,978 |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Real estate |
| Brazil |
| BRL |
| Monthly |
| 8.20 | % | 8.20 | % | 77,645 |
| 234,587 |
| 312,232 |
| 339,665 |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Leão |
| Brazil |
| BRL |
| Monthly |
| 6.56 | % | 6.56 | % | 224,329 |
| 545,221 |
| 769,550 |
| 280,995 |
|
Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Tetra Pak SRL |
| Argentina |
| USD |
| Monthly |
| 12.00 | % | 12.00 | % | 243,901 |
| — |
| 243,901 |
| — |
|
Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Tetra Pak SRL |
| Argentina |
| USD |
| Monthly |
| 12.00 | % | 12.00 | % | 20,755 |
| 62,264 |
| 83,019 |
| — |
|
Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Banco Comafi |
| Argentina |
| USD |
| Monthly |
| 12.00 | % | 12.00 | % | 31,208 |
| 93,623 |
| 124,831 |
| — |
|
Embotelladora del Atlántico S.A. |
| Argentina |
| Foreign |
| Real estate |
| Argentina |
| ARS |
| Monthly |
| 50.00 | % | 50.00 | % | 63,201 |
| 189,602 |
| 252,803 |
| — |
|
Vital Aguas S.A |
| Chile |
| 76.389.720-6 |
| Coca-Cola del Valle New Ventures S.A |
| Chile |
| CLP |
| Lineal |
| 6.20 | % | 6.20 | % | 271,625 |
| 814,875 |
| 1,086,500 |
| — |
|
Envases Central S.A |
| Chile |
| 96.705.990-0 |
| Coca-Cola del Valle New Ventures S.A |
| Chile |
| CLP |
| Lineal |
| 6.20 | % | 6.20 | % | 493,323 |
| 1,479,967 |
| 1,973,290 |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
| 5,931,244 |
| 1,534,467 |
|
The Company maintains lease agreements on forklifts, vehicles, real estate and machinery. These leases have an average life of between one and eight years without including a renewal option in the contracts.
17.4.2 Non-current liabilities for leasing agreements, non-current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Maturity |
| More |
|
|
| ||||||||
Indebted entity |
| Creditor entity |
|
|
| Type of |
| Effective |
| Nominal |
| 1 year to |
| 2 years to |
| 3 years to |
| 4 years to |
| than |
| At |
| ||||||
Name |
| Country |
| Tax ID |
| Name |
| Country |
| Currency |
| Amortization |
| Rate |
| Rate |
| 2 years |
| 3 years |
| 4 years |
| 5 years |
| 5 years |
| 06.30.2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| CLP |
| CLP |
| CLP |
| CLP |
| CLP |
| CLP (000’s) |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Cogeração - Light ESCO |
| Brazil |
| BRL |
| Monthly |
| 13.00 | % | 12.28 | % | 851,235 |
| 961,895 |
| 1,001,350 |
| 1,228,244 |
| 8,487,741 |
| 12,530,465 |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Tetra Pack |
| Brazil |
| BRL |
| Monthly |
| 7.65 | % | 7.39 | % | 339,351 |
| 151,630 |
| 49,026 |
| — |
| — |
| 540,007 |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Real estate |
| Brazil |
| BRL |
| Monthly |
| 8.20 | % | 8.20 | % | 186,008 |
| 23,125 |
| 2,968 |
| — |
| — |
| 212,101 |
|
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Leão Alimentos e Bebidas Ltda. |
| Brazil |
| BRL |
| Monthly |
| 6.56 | % | 6.56 | % | 494,089 |
| 341,690 |
| 334,634 |
| 315,969 |
| 516,397 |
| 2,002,779 |
|
Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Tetra Pak SRL |
| Argentina |
| USD |
| Monthly |
| 12.00 | % | 12.00 | % | — |
| 152,200 |
| — |
| — |
| — |
| 152,200 |
|
Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Banco Comafi |
| Argentina |
| USD |
| Monthly |
| 12.00 | % | 12.00 | % | — |
| 249,662 |
| — |
| 249,662 |
| 260,064 |
| 759,388 |
|
Embotelladora del Atlántico S.A. |
| Argentina |
| O-E |
| Real estate |
| Argentina |
| ARS |
| Monthly |
| 50.00 | % | 50.00 | % | — |
| 63,984 |
| — |
| — |
| — |
| 63,984 |
|
Vital Aguas S.A |
| Chile |
| 76.572.588-7 |
| Coca-Cola del Valle New Ventures S.A |
| Chile |
| CLP |
| Monthly |
| 6.2 | % | 0.27 | % | 2,625,708 |
| — |
| — |
| — |
| — |
| 2,625,708 |
|
Envases Central S.A |
| Chile |
| 76.572.588-7 |
| Coca-Cola del Valle New Ventures S.A |
| Chile |
| CLP |
| Monthly |
| 6.7 | % | 0.27 | % | 5,426,551 |
| — |
| — |
| — |
| — |
| 5,426,551 |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 24,313,183 |
|
17.4.3 Non-current liabilities for leasing agreements (previous year)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Maturity |
|
|
| |||||||||
Indebted Entity |
| Creditor Entity |
|
|
| Amortization |
| Effective |
| Nominal |
| 1 year to |
| 2 years |
| 3 years to |
| 4 years to |
| More |
| at |
| |||||||
Name |
| Country |
| Tax, ID |
| Name |
| Country |
| Currency |
| Type |
| rate |
| Rate |
| 2 years |
| 3 years |
| 4 years |
| 5 years |
| 5 years |
| 12.31.2018 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| CLP |
| CLP |
| CLP |
| CLP |
| CLP |
| CLP (000’s) |
| |
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Cogeração Light Esco |
| Brazil |
| BRL |
| Monthly |
| 13.00 | % | 12.28 | % | 810,185 |
| 915,509 |
| 1,034,525 |
| 1,169,014 |
| 9,466,995 |
| 13,396,228 |
| |
Rio de Janeiro Refrescos Ltda. |
| Brazil |
| Foreign |
| Tetra Pack |
| Brazil |
| BRL |
| Monthly |
| 7.65 | % | 7.39 | % | 401,240 |
| — |
| — |
| — |
| — |
| 401,240 |
| |
TOTAL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 13,797,468 |
| |
Leasing agreement obligations are not subject to financial restrictions for the reported periods.
18 - TRADE AND OTHER ACCOUNTS PAYABLE
Trade and other current accounts payable are detailed as follows:
Item |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Trade accounts payable |
| 124,294,684 |
| 174,486,806 |
|
Withholding tax |
| 25,181,473 |
| 47,693,379 |
|
Others |
| 24,584,606 |
| 16,665,327 |
|
Total |
| 174,060,763 |
| 238,845,512 |
|
|
|
|
|
|
|
Current |
| 173,269,063 |
| 238,109,847 |
|
Non-current |
| 791,700 |
| 735,665 |
|
Total |
| 174,060,763 |
| 238,845,512 |
|
19 - OTHER PROVISIONS, CURRENT AND NON-CURRENT
19.1 Balances
The composition of provisions is as follows:
Detail |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Litigation (1) |
| 53,914,247 |
| 62,452,526 |
|
Total |
| 53,914,247 |
| 62,452,526 |
|
|
|
|
|
|
|
Current |
| 2,033,033 |
| 3,485,613 |
|
Non-current |
| 51,881,214 |
| 58,966,913 |
|
Total |
| 53,914,247 |
| 62,452,526 |
|
(1) Correspond to the provision made for the probable losses of fiscal, labor and commercial contingencies, based on the opinion of our legal advisors, according to the following detail:
Detail (see note 23.1) |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Tax contingencies |
| 39,643,784 |
| 47,991,514 |
|
Labor contingencies |
| 10,984,533 |
| 10,376,830 |
|
Civil contingencies |
| 3,285,930 |
| 4,084,182 |
|
Total |
| 53,914,247 |
| 62,452,526 |
|
19.2 Movements
The movement of principal provisions over litigation is detailed as follows:
Description |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Opening Balance as of January 01 |
| 62,452,526 |
| 65,624,166 |
|
Additional provisions |
| 76,657 |
| 46,657 |
|
Increase (decrease) in existing(*) provisions |
| (9,509,262 | ) | (4,998,530 | ) |
|
|
|
|
|
|
Payments |
| 5,524,094 |
| 6,139,963 |
|
|
|
|
|
|
|
Reversal of unused provision |
| (2,504,503 | ) | (2,157,152 | ) |
Increase (decrease) due to foreign exchange differences |
| (2,125,265 | ) | (2,202,578 | ) |
Total |
| 53,914,247 |
| 62,452,526 |
|
(*) During 2019 and 2018, provisions consisting of fines demanded by the Brazilian tax authority on the use of tax credits resulting from favorable sentencing to Rio de Janeiro Refrescos Ltda. have been reversed, for approximate values of CLP 3,700 million and CLP 2,150 million, respectively
20 — OTHER NON-FINANCIAL LIABILITIES
Other current and non-current liabilities at each reporting period end are detailed as follows:
Description |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Dividends payable |
| 21,369,217 |
| 21,584,314 |
|
Other |
| 10,273,958 |
| 12,189,900 |
|
Total |
| 31,643,175 |
| 33,774,214 |
|
21 - EQUITY
21.1 Number of shares:
|
| Number of shares |
| Number of shares paid in |
| Number of voting shares |
| ||||||
Series |
| 2019 |
| 2018 |
| 2019 |
| 2018 |
| 2019 |
| 2018 |
|
A |
| 473,289,301 |
| 473,289,301 |
| 473,289,301 |
| 473,289,301 |
| 473,289,301 |
| 473,289,301 |
|
B |
| 473,281,303 |
| 473,281,303 |
| 473,281,303 |
| 473,281,303 |
| 473,281,303 |
| 473,281,303 |
|
21.1.1 Equity:
|
| Subscribed Capital |
| Paid-in capital |
| ||||
Series |
| 2019 |
| 2018 |
| 2019 |
| 2018 |
|
|
| CLP |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
A |
| 135,379,504 |
| 135,379,504 |
| 135,379,504 |
| 135,379,504 |
|
B |
| 135,358,070 |
| 135,358,070 |
| 135,358,070 |
| 135,358,070 |
|
Total |
| 270,737,574 |
| 270,737,574 |
| 270,737,574 |
| 270,737,574 |
|
21.1.2 Rights of each series:
· Series A: Elects 12 of the 14 Directors
· Series B: Receives an additional 10% of dividends distributed to Series A and elects 2 of the 14 Directors.
21.2 Dividend policy
According to Chilean law, cash dividends must be paid equal to at least 30% of annual net profit, barring a unanimous vote by shareholders to the contrary. If there is no net profit in a given year, the Company will not be legally obligated to pay dividends from retained earnings. At the ordinary Shareholders’ Meeting held in April 2019, the shareholders agreed to pay out of the 2018 earnings a final dividend additional to the 30% required by Chile’s Law 18,046 which will be paid in May 2019, and an additional dividend that will be paid in August 2019.
Pursuant to Circular Letter N° 1,945 of the Chilean Financial Market Commission (CMF) dated September 29, 2009, the Company’s Board of Directors decided to maintain the initial adjustments from adopting IFRS as retained earnings for future distribution.
The dividends declared and paid per share are presented below:
Periods |
| Dividend |
| Profits imputable to |
| Ch$ per Series A |
| Ch$ per Series B |
| ||
2018 |
| January |
| Interim |
| 2017 |
| 21.50 |
| 23.65 |
|
2018 |
| May |
| Final |
| 2017 |
| 21.50 |
| 23.65 |
|
2018 |
| August |
| Additional |
| Retained Earnings |
| 21.50 |
| 23.65 |
|
2018 |
| October |
| Interim |
| 2018 Earnings |
| 21.50 |
| 23.65 |
|
2019 |
| January |
| Interim |
| 2018 Earnings |
| 21.50 |
| 23.65 |
|
21.3 Other Reserves
The balance of other reserves includes the following:
Description |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Goodwill in share exchange reserve |
| 421,701,520 |
| 421,701,520 |
|
Translation differences reserves |
| (344,307,255 | ) | (306,674,529 | ) |
Cash flow hedge reserves |
| (12,994,206 | ) | (13,668,932 | ) |
Reserve for employee benefits actuarial gains or losses |
| (1,954,077 | ) | (1,954,077 | ) |
Legal and statutory reserves |
| 5,435,538 |
| 5,435,538 |
|
Other |
| 6,014,583 |
| 6,014,569 |
|
Total |
| 73,896,103 |
| 110,854,089 |
|
21.3.1 Goodwill in share exchange reserve
This amount corresponds to the difference between the valuation at fair value of the issuance of shares of Embotelladora Andina S.A. and the book value of the paid capital of Embotelladoras Coca-Cola Polar S.A., which was finally the value of the capital increase notarized in legal terms.
21.3.2 Cash flow hedge reserve
They arise from the fair value of the existing derivative contracts that have been qualified for hedge accounting at the end of each financial period. When contracts are expired, these reserves are adjusted and recognized in the income statement in the corresponding period (see Note 22).
21.3.3 Reserve for employee benefit actuarial gains or losses
Corresponds to the restatement effect of employee benefits actuarial losses that according to IAS 19 amendments must be carried to other comprehensive income.
21.3.4 Legal and statutory reserves
In accordance with Official Circular N° 456 issued by the Chilean Financial Market Commission (CMF), the legally required price-level restatement of paid-in capital for 2009 is presented as part of other equity reserves and is accounted for as a capitalization from Other Reserves with no impact on net income or retained earnings under IFRS. This amount totaled CLP 5,435,538 thousand as of December 31, 2009.
21.3.5 Foreign currency translation reserves
This corresponds to the conversion of the financial statements of foreign subsidiaries whose functional currency is different from the presentation currency of the Consolidated Financial Statements. Additionally, exchange differences between accounts receivable kept by the companies in Chile with foreign subsidiaries are presented in this account, which have been treated as investment equivalents accounted for using the equity method. Translation reserves are detailed as follows:
Details |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Brazil |
| (117,744,296 | ) | (114,180,197 | ) |
Argentina |
| (220,444,428 | ) | (201,118,180 | ) |
Paraguay |
| (6,118,516 | ) | 8,623,849 |
|
Total |
| (334,307,240 | ) | (306,674,528 | ) |
The movement of this reserve for the fiscal years ended June 30, 2019 and December 31, 2018, is detailed as follows:
Details |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Brazil |
| (3,564,099 | ) | (10,313,069 | ) |
Argentina |
| (19,326,248 | ) | (72,770,068 | ) |
Paraguay |
| (14,742,365 | ) | 13,486,181 |
|
Total |
| (37,632,712 | ) | (69,596,956 | ) |
21.4 Non-controlling interests
This is the recognition of the portion of equity and income from subsidiaries owned by third parties. As of June 30, 2019and December 31, 2018, this account is detailed as follows:
|
| Non-controlling interests |
| ||||||||||
|
| Ownership interest % |
| Shareholders’ Equity |
| Income |
| ||||||
|
|
|
|
|
| June |
| December |
| June |
| December |
|
Details |
| 2019 |
| 2018 |
| 2019 |
| 2018 |
| 2019 |
| 2018 |
|
|
|
|
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP |
| CLP |
|
Embotelladora del Atlántico S.A. |
| 0.0171 |
| 0.0171 |
| 27,382 |
| 23,260 |
| 2,764 |
| 3,633 |
|
Andina Empaques Argentina S.A. |
| 0.0209 |
| 0.0209 |
| 2,468 |
| 2,113 |
| 224 |
| 96 |
|
Paraguay Refrescos S.A. |
| 2.1697 |
| 2.1697 |
| 4,738,367 |
| 5,378,074 |
| 264,866 |
| 556,112 |
|
Vital S.A. |
| 35.0000 |
| 35.0000 |
| 7,657,221 |
| 7,674,785 |
| (98,902 | ) | 271,063 |
|
Vital Aguas S.A. |
| 33.5000 |
| 33.5000 |
| 2,036,105 |
| 1,986,493 |
| 38,592 |
| 36,696 |
|
Envases Central S.A. |
| 40.7300 |
| 40.7300 |
| 4,991,689 |
| 4,836,892 |
| 156,413 |
| (20,225 | ) |
Total |
|
|
|
|
| 19,453,233 |
| 19,901,617 |
| 363,957 |
| 847,375 |
|
21.5 Earnings per share
The basic earnings per share presented in the statement of comprehensive income is calculated as the quotient between income for the period and the average number of shares outstanding during the same period.
Earnings per share used to calculate basic and diluted earnings per share is detailed as follows:
Earnings per share |
| 06.30.2019 |
| ||||
|
| SERIES A |
| SERIES B |
| TOTAL |
|
Earnings attributable to shareholders (CLP 000’s) |
| 29,342,166 |
| 32,275,863 |
| 61,618,029 |
|
Average weighted number of shares |
| 473,289,301 |
| 473,281,303 |
| 946,570,604 |
|
Earnings per share (in CLP) |
| 62.00 |
| 68.20 |
| 65.10 |
|
Earnings per share |
| 06.30.2018 |
| ||||
|
| SERIES A |
| SERIES B |
| TOTAL |
|
Earnings attributable to shareholders (CLP (000’s)) |
| 22,648,652 |
| 24,913,116 |
| 47,561,768 |
|
Average weighted number of shares |
| 473,289,301 |
| 473,281,303 |
| 946,570,604 |
|
Earnings per share (in CLP) |
| 47.85 |
| 52.64 |
| 50.25 |
|
22 - DERIVATIVE ASSETS AND LIABILITIES
Embotelladora Andina currently maintains “Cross Currency Swaps” and “Currency Forward” agreements as derivative financial instruments.
Cross Currency Swaps (“CCS”), also known as interest rate and currency swaps, are valued by the method of discounted future cash flows at a market rate corresponding to the risk of the operation. CCS are currently maintained to re-denominate debt incurred in currency and rate in USD to currency and rate in BRL. To discount future flows in BRL and USD, the Zero coupon curves of the BRL and the Zero coupon USD are used, respectively.
On the other hand, the fair value of forward currency contracts is calculated in reference to current forward exchange rates for contracts with similar maturity profiles.
As of the closing dates as of June 30, 2019 and December 31, 2018, the Company held the following derivative instruments:
22.1 Derivatives accounted for as cash flow hedges:
Cross Currency Swaps associated with US Bonds
At June 30, 2019, the Company entered into cross currency swap derivative contracts to convert US Dollar public bond obligations of USD 360 million into Real liabilities to hedge the Company’s exposure to variations in foreign exchange rates. Said contracts are valued at their value and the net value to be received as of June 30, 2019 amounted to CLP 85,597,714 thousand. These swap contracts have the same terms of the underlying bond obligation and expire in 2023.
The amount of exchange differences recognized in the statement of income related to financial liabilities in U.S. dollars and the identified effective portion that was absorbed by the amounts recognized under comprehensive income.
22.2. Forward currency transactions expected to be very likely:
During 2019 and 2018, the Company entered into foreign currency forward contracts to hedge its exposure to expected future raw materials purchases in US Dollars during these years. The total amount of outstanding forward contracts was USD 54.7 million as of June 30, 2019 (USD 56.8 million as of December 31, 2018).
Futures contracts that ensure prices of future raw materials have not been designated as hedge agreements, since they do not fulfill IFRS documentation requirements, whereby its effects on variations in fair value are accounted for directly under statements of income in the “other gains and losses” account.
Fair value hierarchy
As of June 30, 2019, the Company held assets for derivative contracts for CLP 85,597,714 thousand (CLP 88,116,189 thousand as of December 31, 2018) and liabilities for CLP 474,319 thousand as of June 30, 2019 (CLP 130,829 thousand as of December 31, 2018). Those contracts covering existing items have been classified in the same category of hedged, the net amount of derivative contracts by concepts covering forecasted items have been classified in financial assets and financial liabilities. All the derivative contracts are carried at fair value in the consolidated statement of financial position. The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2: Inputs other than quoted prices included in level 1 that are observable for the assets and liabilities, either directly (that is, as prices) or indirectly (that is, derived from prices)
Level 3: Inputs for assets and liabilities that are not based on observable market data.
During the reporting period, there were no transfers of items between fair value measurement categories; all of which were valued during the period using level 2.
|
| Fair Value Measurements at June 30, 2019 |
|
|
| ||||
|
| Quoted prices in active |
| Observable |
| Unobservable |
|
|
|
|
| (Level 1) |
| (Level 2) |
| (Level 3) |
| Total |
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
Assets |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
Other current financial assets |
|
|
|
|
|
|
|
|
|
Other current financial assets |
| — |
| — |
| — |
| — |
|
Other non-current financial assets |
| — |
| 85,597,714 |
| — |
| 85,597,714 |
|
Total assets |
| — |
| 85,597,714 |
| — |
| 85,597,714 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
Other current financial liabilities |
| — |
| 474,319 |
| — |
| 474,319 |
|
Total liabilities |
| — |
| 474,319 |
| — |
| 474,319 |
|
|
| Fair Value Measurements at December 31, 2018 |
|
|
| ||||
|
| Quoted prices in active |
| Observable |
| Unobservable |
|
|
|
|
| (Level 1) |
| (Level 2) |
| (Level 3) |
| Total |
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
Assets |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
Other current financial assets |
| — |
| 669,527 |
|
|
| 669,527 |
|
Other non-current financial assets |
| — |
| 87,446,662 |
| — |
| 87,446,662 |
|
Total assets |
| — |
| 88,116,189 |
| — |
| 88,116,189 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
Other current financial liabilities |
| — |
| 130,829 |
| — |
| 130,829 |
|
Total liabilities |
| — |
| 130,829 |
| — |
| 130,829 |
|
23 - LITIGATION AND CONTINGENCIES
23.1 Lawsuits and other legal actions:
In the opinion of the Company’s legal counsel, the Parent Company and its subsidiaries do not face legal or extrajudicial contingencies that might result in material or significant losses or gains, except for the following:
1) Embotelladora del Atlántico S.A. faces labor, tax, civil and trade lawsuits. Accounting provisions have been made for the contingency of a probable loss because of these lawsuits, totaling CLP 972,063 thousand. Management considers it unlikely that non-provisioned contingencies will affect the Company’s income and equity, based on the opinion of its legal counsel. Additionally, Embotelladora del Atlántico S.A. maintains time deposits for an amount of CLP 533,741 thousand to guaranty judicial liabilities
2) Rio de Janeiro Refrescos Ltda. faces labor, tax, civil and trade lawsuits. Accounting provisions have been made for the contingency of a probable loss because of these lawsuits, totaling CLP 50,873,392 thousand. Management considers it unlikely that non-provisioned contingencies will affect the Company’s income and equity, based on the opinion of its legal counsel. As it is customary in Brazil, Rio de Janeiro Refrescos Ltda. maintains Deposit in courts and assets given in pledge to secure the compliance of certain processes, irrespective of whether these have been classified as a possible, probable or remote. The amounts deposited or pledged as legal guarantees as of June 30, 2019 and December 31, 2018, amounted to CLP 17,135,265 thousand and CLP 29,197,711 thousand, respectively.
To ensure fulfillment of the obligations arising from legal proceedings faced in Brazil, Rio de Janeiro Refrescos Ltda., has taken guarantee insurance and guarantee letters amounting to BRL 666,671,809 with different financial institutions and insurance companies in Brazil, through which these entities after a 0.34% annual commission, become responsible of fulfilling obligations with the Brazilian tax authorities should any trial result against Rio de Janeiro Refrescos Ltda. Additionally, if the warranty and bail letters are executed, Rio de Janeiro Refrescos Ltda. promises to reimburse to the financial institutions and Insurance Companies any amounts disbursed by them to the Brazilian government.
Main contingencies faced by Rio de Janeiro Refrescos are as follows:
a) Tax contingencies resulting from credits on tax on industrialized products (IPI).
Rio de Janeiro Refrescos is a party to a series of proceedings under way, in which the Brazilian federal tax authorities demand payment of value-added tax on industrialized products (Imposto sobre Produtos Industrializados, or IPI) allegedly owed by ex-Companhia de Bebidas Ipiranga. The initial amount demanded reached BRL 1,330,473,161 (historical amount without adjustments), corresponding to different trials related to the same cause. In September 2014, one of these trials for BRL 598,745,218, was settled in favor of the Company, and additionally during 2017 several trials were settled in favor of the Company in the amount for BRL 135,282,155 however, there are new lawsuits arising after the purchase of ex-Companhia de Bebidas Ipiranga (October 2013) that amount to BRL 341,845,707.
The Company rejects the position of the Brazilian tax authority in these procedures and considers that Companhia de Bebidas Ipiranga was entitled to claim IPI tax credits in connection with purchases of certain exempt raw materials from suppliers located in the Manaus free trade zone.
Based on the opinion of its advisers, and legal outcomes to date, Management estimates that these procedures do not represent probable losses and has not recorded a provision on these matters.
Notwithstanding the above, the IFRS related to business combination in terms of distribution of the purchase price establish that contingencies must be measured one by one according to their probability of occurrence and discounted at fair value from the date on which it is deemed the loss can be generated. According to this criterion, from a total of identified contingencies amounting BRL 1,103,585,800 (including readjustments of current lawsuits), the Company recorded a provision for the beginning of business combination accounting in the amount BRL 142,907,0125 equivalent to CLP 24,135,711 thousand.
b) Tax contingencies on ICMS and IPI causes.
They refer mainly to tax settlements issued by advance appropriation of ICMS credits on fixed assets, payment of the replacement of ICMS tax to the operations, untimely IPI credits calculated on bonuses, among other claims.
The Company does not consider that these judgments will result in significant losses, given that their loss, according to its legal counsel, is considered unlikely. However, the accounting standards of financial information related to business combination in terms of distribution of the purchase price, establish contingencies must be valued one by one according to their probability of occurrence and discounted to fair value from the date on which it is deemed that the loss can be generated. According to this criterion, an initial provision has been made in the business combination accounting for an amount of BRL 39,159,107 equivalent to CLP 6,939,853 thousand.
3) Embotelladora Andina S.A. and its Chilean subsidiaries face labor, tax, civil and trade lawsuits. Accounting provisions have been made for the contingency of a probable loss because of these lawsuits, totaling CLP 2,029,735 thousand. Management considers it is unlikely that non-provisioned contingencies will affect income and equity of the Company, in the opinion of its legal advisors.
4) Paraguay Refrescos S.A. faces tax, trade, labor and other lawsuits. Accounting provisions have been made for the contingency of any loss because of these lawsuits amounting to CLP 3,298 thousand. Management considers it is unlikely that non-provisioned contingencies will affect income and equity of the Company, in the opinion of its legal advisors.
23.2 Direct guarantees and restricted assets:
Guarantees and restricted assets are detailed as follows:
Guarantees that commit assets included in the financial statements:
|
|
|
|
|
| Committed assets |
| Accounting value |
| ||||
Guaranty creditor |
| Debtor name |
| Relationship |
| Guaranty |
| Type |
| 06-30-2019 |
| 12-31-2018 |
|
|
|
|
|
|
|
|
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Gas Licuado Lipigas S.A |
| Embotelladora Andina S.A. |
| Parent company |
| Cash |
| Trade debtors and other accounts receivable |
| — |
| 1,140 |
|
Inmob. e invers. supetar Ltda. |
| Transportes Polar |
| Subsidiary |
| Cash |
| Other non-current non-financial assets |
| 4,579 |
| 4,579 |
|
Maria Lobos Jamet |
| Transportes Polar |
| Subsidiary |
| Cash |
| Other non-current non-financial assets |
| 2,565 |
| 2,565 |
|
Bodega San Francisco |
| Transportes Polar |
| Subsidiary |
| Cash |
| Other non-current non-financial assets |
| 6,483 |
| — |
|
Employee claims |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Deposit in court |
| Other non-current non-financial assets |
| 5,594,690 |
| 5,336,644 |
|
Civil and tax claims |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Deposit in court |
| Other non-current non-financial assets |
| 11,540,575 |
| 12,597,136 |
|
Government entities |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Plant & equipment, net |
| Property, Plant & Equipment |
| 12,768,048 |
| 13,209,635 |
|
Distribuidora Baraldo S.H. |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Deposit in court |
| Other non-current non-financial assets |
| 320 |
| 369 |
|
Acuña Gomez |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Deposit in court |
| Other non-current non-financial assets |
| 480 |
| 553 |
|
Nicanor López |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Deposit in court |
| Other non-current non-financial assets |
| 343 |
| 395 |
|
Labarda |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Deposit in court |
| Other non-current non-financial assets |
| 6 |
| 7 |
|
Municipalidad Bariloche |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Deposit in court |
| Other non-current non-financial assets |
| 18,590 |
| 21,420 |
|
Municipalidad San Antonio Oeste |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Deposit in court |
| Other non-current non-financial assets |
| 35,307 |
| 40,682 |
|
Municipalidad Carlos Casares |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Deposit in court |
| Other non-current non-financial assets |
| 1,428 |
| 1,645 |
|
Municipalidad Chivilcoy |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Deposit in court |
| Other non-current non-financial assets |
| 220,812 |
| 254,430 |
|
Others |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Deposit in court |
| Other non-current non-financial assets |
| 68 |
| 78 |
|
Granada Maximiliano |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Deposit in court |
| Other non-current non-financial assets |
| 2,879 |
| 3,317 |
|
Cicsa |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash deposit |
| Other current non-financial assets |
| 4,002 |
| 4,612 |
|
Other lessors |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash deposit |
| Other current non-financial assets |
| 26,652 |
| 46,169 |
|
Aduana de EZEIZA |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash deposit |
| Other current non-financial assets |
| 2,299 |
| 3,013 |
|
Municipalidad de Junin |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Deposit in court |
| Other non-current non-financial assets |
| 1,382 |
| 1,592 |
|
Almada Jorge |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Deposit in court |
| Other non-current non-financial assets |
| 4,295 |
| 4,949 |
|
Municipalidad de Picun Leufu |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Deposit in court |
| Other non-current non-financial assets |
| 62 |
| 72 |
|
Mirgoni Marano |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Deposit in court |
| Other non-current non-financial assets |
| 97 |
| 112 |
|
Farias Matias Luis |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Deposit in court |
| Other non-current non-financial assets |
| 268 |
| 309 |
|
Temas Industriales SA - Embargo General de Fondos |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Deposit in court |
| Other non-current non-financial assets |
| 200,545 |
| 231,077 |
|
Gomez Alejandra Raquel |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Deposit in court |
| Other non-current non-financial assets |
| 30 |
| 35 |
|
Lopez Gustavo Gerardo C/Inti Saic Y Otros |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Cash deposit |
| Other current financial assets |
| 196 |
| 226 |
|
Tribunal Superior De Justicia De La Provincia De Córdoba |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Deposit in court |
| Other non-current non-financial assets |
| 252 |
| 290 |
|
DBC SA C CERVECERIA ARGENTINA SA ISEMBECK |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Deposit in court |
| Other non-current non-financial assets |
| 35,986 |
| 41,465 |
|
Coto Cicsa |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Deposit in court |
| Other non-current non-financial assets |
| 6,398 |
| — |
|
Cencosud |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Deposit in court |
| Other non-current non-financial assets |
| 3,998 |
| 0- |
|
Marcus A.Peña |
| Paraguay Refrescos |
| Subsidiary |
| Real estate |
| Property, Plant & Equipment |
| 4,093 |
| 4,164 |
|
Mauricio J Cordero C |
| Paraguay Refrescos |
| Subsidiary |
| Real estate |
| Property, Plant & Equipment |
| 883 |
| 904 |
|
José Ruoti Maltese |
| Paraguay Refrescos |
| Subsidiary |
| Real estate |
| Property, Plant & Equipment |
| 714 |
| 758 |
|
Alejandro Galeano |
| Paraguay Refrescos |
| Subsidiary |
| Real estate |
| Property, Plant & Equipment |
| 1,221 |
| 1,251 |
|
Ana Maria Mazó |
| Paraguay Refrescos |
| Subsidiary |
| Real estate |
| Property, Plant & Equipment |
| 1,163 |
| 1,191 |
|
Total |
|
|
|
|
|
|
|
|
| 30,491,709 |
| 31,816,784 |
|
Guarantees provided without obligation of assets included in the financial statements:
|
|
|
|
|
| Committed assets |
| Amounts involved |
| ||||
Guaranty creditor |
| Debtor name |
| Relationship |
| Guaranty |
| Type |
| 06-30-2019 |
| 12-31-2018 |
|
|
|
|
|
|
|
|
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Employee procedures |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Guaranty receipt |
| Legal proceeding |
| 2,550,058 |
| 2,601,353 |
|
Administrative procedures |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Guaranty receipt |
| Legal proceeding |
| 7,634,034 |
| 8,233,853 |
|
Federal Government |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Guaranty receipt |
| Legal proceeding |
| 117,643,285 |
| 116,192,877 |
|
State Government |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Guaranty receipt |
| Legal proceeding |
| 45,824,061 |
| 43,015,207 |
|
Sorocaba Refrescos |
| Rio de Janeiro Refrescos Ltda. |
| Associate |
| Loan |
| Guarantor |
| 3,544,439 |
| 3,586,095 |
|
Others |
| Rio de Janeiro Refrescos Ltda. |
| Subsidiary |
| Guaranty receipt |
| Legal proceeding |
| 2,846,548 |
| 3,236,092 |
|
Aduana de EZEIZA |
| Embotelladora del Atlántico S.A. |
| Subsidiary |
| Surety insurance |
| Faithful compliance of contract |
| 611,224 |
| 699,502 |
|
Aduana de EZEIZA |
| Andina Empaques Argentina S.A. |
| Subsidiary |
| Surety insurance |
| Faithful compliance of contract |
| 289,017 |
| 182,459 |
|
24 — FINANCIAL RISK MANAGEMENT
The Company’s businesses are exposed to a variety of financial and market risks (including foreign exchange risk, interest rate risk and price risk). The Company’s global risk management program focuses on the uncertainty of financial markets and seeks to minimize potential adverse effects on the performance of the Company. The Company uses derivatives to hedge certain risks. A description of the primary policies established by the Company to manage financial risks are provided below:
Interest Rate Risk
As of June 30, 2019, the Company maintains all its debt liabilities at a fixed rate as to avoid fluctuations in financial expenses resulting from tax rate increases.
The Company’s greatest indebtedness corresponds to own issued Chilean local bonds at a fixed rate for UF 16,582 million denominated in UF (“UF”), a currency indexed to inflation in Chile (Company sales are correlated with the UF variation).
There is also the Company’s indebtedness on the international market through a 144A/RegS Bond at a fixed rate for USD 365 million (original amount issued USD 575 million and partial prepayment in October 2019 for USD 210 million), denominated in dollars, and practically 100% of which has been re-denominated to BRL through Cross Currency Swaps.
Credit risk
The credit risk to which the Company is exposed comes mainly from trade accounts receivable maintained with retailers, wholesalers and supermarket chains in domestic markets; and the financial investments held with banks and financial institutions, such as time deposits, mutual funds and derivative financial instruments.
a. Trade accounts receivable and other current accounts receivable
Credit risk related to trade accounts receivable is managed and monitored by the area of Finance and Administration of each business unit. The Company has a wide base of more than 100 thousand clients implying a high level of atomization of accounts receivable, which are subject to policies, procedures and controls established by the Company. In accordance with such policies, credits must be based objectively, non-discretionary and uniformly granted to all clients of a same segment and channel, provided these will allow generating economic benefits to the Company. The credit limit is checked periodically considering payment behavior. Trade accounts receivable pending of payment are monitored on a monthly basis.
i. Sale Interruption:
In accordance with Corporate Credit Policy, the interruption of sale must be within the following framework: when a customer has outstanding debts for an amount greater than USD 250,000, and over 60 days expired, sale is suspended. The General Manager in conjunction with the Finance and Administration Manager authorize exceptions to this rule, and if the outstanding debt should exceed USD 1,000,000, and in order to continue operating with that client, the authorization of the Chief Financial Officer is required. Notwithstanding the foregoing, each operation can define an amount lower than USD 250,000 according to the country’s reality.
ii. Impairment
The impairment recognition policy establishes the following criteria for provisions: 30% is provisioned for 31 to 60 days overdue, 60% between 60 and 91 days, 90% between 91 and 120 days overdue and 100% for more than 120 days. Exemption of the calculation of global impairment is given to credits whose delays in the payment correspond to accounts disputed with the customer whose nature is known and where all necessary documentation for collection is available, therefore, there is no uncertainty on recovering them. However, these accounts also have an impairment provision as follows: 40% for 91 to 120 days overdue, 80% between 120 and 170, and 100% for more than 170 days.
iii. Prepayment to suppliers
The Policy establishes that USD 25,000 prepayments can only be granted to suppliers if its value is properly and fully provisioned. The Treasurer of each subsidiary must approve supplier warranties that the Company receives for prepayments before signing the respective service contract. In the case of domestic suppliers, a warranty ballot (or the instrument existing in the country) shall be required, in favor of Andina executable in the respective country, non-endorsable, payable on demand or upon presentation and its validity will depend on the term of the contract. In the case of foreign suppliers, a stand-by credit letter will be required which shall be issued by a first line bank; in the event that this document is not issued in the country where the transaction is done, a direct bank warranty will be required. Subsidiaries can define the best way of safeguarding the Company’s assets for prepayments under USD 25,000.
iv. Guarantees
In the case of Chile, we have insurance with Compañía de Seguros de Crédito Continental S.A. (AA rating —according to Fitch Chile and Humphreys rating agencies) covering the credit risk regarding trade debtors in Chile for 92% both for the existing as well as the expired debt, total amount of the trade debtors in Chile reached CLP 62,105,536 thousand. A provision of CLP 1,544,050 thousand has been made for the portion of past due outstanding debt portfolio not covered by the insurance.
The rest of the operations do not have credit insurance, instead mortgage guarantees are required for volume operations of wholesalers and distributors in the case of trade accounts receivables. In the case of other debtors, different types of guarantees are required according to the nature of the credit granted.
Historically, uncollectible trade accounts have been lower than 0.5% of the Company’s total sales.
b. Financial investments
The Company has a Policy that is applicable to all of the companies of the group in order to cover credit risks for financial investments, restricting both the types of instruments as well as the institutions and degree of concentration. The companies of the group can invest in:
a. Time deposits: only in banks or financial institutions that have a risk rating equal or higher than Level 1 (Fitch) or equivalent for deposits of less than 1 year and rated A or higher (S&P) or equivalent for deposits of more than 1 year.
b. Mutual funds: investments with immediate liquidity and no risk of capital (funds composed of investments at a fixed-term, current account, fixed rate Tit BCRA, negotiable obligations, Over Night, etc.) in all those counter-parties that have a rating greater than or equal to AA-(S&P) or equivalent, Type 1 Pacts and Mutual Funds, with AA+ rating (S&P) or equivalent.
c. Other investment alternatives must be evaluated and authorized by the office of the Chief Financial Officer.
Exchange Rate Risk
The company is exposed to three types of risk caused by exchange rate volatility:
a) Exposure of foreign investment
This risk originates from the translation of net investment from the functional currency of each country (Brazilian Real, Paraguayan Guaraní, and Argentine Peso) to the Parent Company’s reporting currency (Chilean Peso). Appreciation or devaluation of the Chilean Peso with respect to the functional currencies of each country, originates decreases and increases in equity, respectively. The Company does not hedge this risk.
a.1 Investment in Argentina
As of June 30, 2019, the Company maintains a net investment of CLP 146,060,583 thousand. in Argentina, composed by the recognition of assets amounting to CLP 213,346,367 thousand and liabilities amounting to CLP 67,285,784. These investments accounted for 21.5% of the Company’s consolidated sales revenues
As of June 30, 2019, the Argentine peso devalued by 15.1% with respect to the Chilean peso.
If the exchange rate of the Argentine Peso depreciated an additional 5% with respect to the Chilean Peso, the Company would have lower income from the operation in Argentina of CLP 649,200 thousand and a decrease in equity of CLP 5,719,518 thousand, originated by lower asset recognition of CLP 9,767,224 thousand and by lower liabilities recognition of CLP 4,047,706 thousand.
a.2 Investment in Brazil
As of June 30, 2019, the Company maintains a net investment of CLP 271,365,967 thousand in Brazil, composed by the recognition of assets amounting to CLP 790,620,826 thousand and liabilities amounting to CLP 519,254,859 thousand. These investments accounted for 34.7% of the Company’s consolidated sales revenues.
As of June 30, 2019, the Brazilian Real devalued by 2.9% with respect to the Chilean peso.
If the exchange rate of the Brazilian Real depreciated an additional 5% with respect to the Chilean Peso, the Company would have lower income from the operation in Brazil of CLP 693,067 thousand and a decrease in equity of CLP 12,304,067 thousand, originated by lower asset recognition of CLP 37,663,596 thousand and by lower liabilities recognition of CLP 25,358,920 thousand.
a.3 Investment in Paraguay
As of June 30, 2019, the Company maintains a net investment of CLP 241,432,644 thousand in Paraguay, composed by the recognition of assets amounting to CLP 272,963,528 thousand and liabilities amounting to CLP 31,530,885 thousand. These investments accounted for 8.7% of the Company’s consolidated sales revenues.
As of June 30, 2019, the Paraguayan Guarani appreciated by 5.8% with respect to the Chilean peso.
If the exchange rate of the Paraguayan Guaraní devalued by 5% with respect to the Chilean Peso, the Company would have lower income from the operations in Paraguay of CLP 379,610 thousand and a decrease in equity of CLP 11,115,499 thousand originated by lower asset recognition of CLP 12,828,296 thousand and lower liabilities recognition of CLP 1,712,797 thousand.
b) Net exposure of assets and liabilities in foreign currency
This risk stems mostly from carrying liabilities in US dollar, so the volatility of the US dollar with respect to the functional currency of each country generates a variation in the valuation of these obligations, with consequent effect on results.
As of June 30, 2019, the Company maintains a net liability position totaling CLP 232,178,185 thousand, basically composed of bonds payable and leasing contracts for CLP 248,977,984 thousand partially offset by financial assets denominated in dollars for CLP 16,799,799 thousand.
All U.S. Dollar liabilities amounting to CLP 248,977,984 thousand correspond to dollar liabilities of the Chilean, Argentinean and Brazilian operations and are, therefore, exposed to the volatility of the Chilean peso against the U.S. Dollar.
In order to protect the Company from the effects on income resulting from the volatility of the Brazilian Real and the Chilean Peso against the U.S. dollar, the Company maintains derivative contracts (cross currency swaps) to cover almost 100% of US dollar-denominated financial liabilities.
By designating such contracts as hedging derivatives, the effects on income for variations in the Chilean Peso and the Brazilian Real against the US dollar, are mitigated annulling its exposure to exchange rates.
The Company’s net exposure as of June 30, 2019, to foreign currency over existing assets and liabilities, discounting the derivatives contracts, is an asset position of CLP 12,092,615 thousand.
c) Assets purchased or indexed to foreign currency exposure
This risk originates from purchases of raw materials and investments in Property, plant and equipment, whose values are expressed in a currency other than the functional currency of the subsidiary. Changes in the value of costs or investments can be generated through time, depending on the volatility of the exchange rate.
Annual purchases of raw materials denominated or indexed in U.S. dollars, amounts to 19% of our cost of sales or approximately USD 340 million.
In order to minimize this risk, the Company maintains a currency hedging policy stipulating that it is necessary to enter into foreign currency derivatives contracts to lessen the effect of the exchange rate over cash expenditures expressed in US dollars, corresponding mainly to payment to suppliers of raw materials in each of the operations. This policy stipulates a 12-month forward horizon. As of June 30, 2019, USD 54.7 million for future purchases have been hedged-for the following 12 months.
According to the percentage of purchases of raw materials which are carried out or indexed to U.S. dollars, a possible change in the value of the US dollar by 5% in the four countries where the Company operates, and excluding derivatives contracts taken to mitigate the effect of currency volatility, keeping everything constant, would lead to a lower accumulated result amounting to CLP 1,410,817 thousand as of June 30, 2019. Currently, the Company has contracts to hedge this effect in Chile, Argentina, Paraguay and Brazil.
Commodities risk
The Company is subject to a risk of price fluctuations in the international markets mainly for sugar, PET resin and aluminum, which are inputs used to produce beverages and, as a whole, account for 35% to 40% of operating costs. Procurement and anticipated purchase contracts are made frequently to minimize and/or stabilize this risk. The possible effects in these Consolidated Financial Statements, in case of a 5% increase in prices of its main raw materials, would be a reduction of CLP 2,260,300 thousand in earnings for the period ended June 30, 2019. To minimize this risk or stabilize often supply contracts and anticipated purchases are made when market conditions warrant.
Liquidity risk
The products we sell are mainly paid for in cash and short-term credit; therefore, the Company´s main source of financing comes from the cash flow of our operations. This cash flow has historically been sufficient to cover the investments necessary for the normal course of our business, as well as the distribution of dividends approved by the General Shareholders’ Meeting. Should additional funding be required for future geographic expansion or other needs, the main sources of financing to consider are: (i) debt offerings in the Chilean and foreign capital markets (ii) borrowings from commercial banks, both internationally and in the local markets where the Company operates; and (iii) public equity offerings
The following table presents an analysis of the Company’s committed maturities for liability payments throughout the coming years:
|
| Maturity |
| ||||||||
Item |
| 1 year |
| More than 1 |
| More than 2 |
| More than |
| More than 4 |
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP |
| CLP (000’s) |
|
Bank debt |
| 31,279,930 |
| 23,886,037 |
| 23,167,171 |
| 22,438,190 |
| 271,085,057 |
|
Bond payable |
| 43,115,677 |
| 41,288,217 |
| 39,189,702 |
| 39,040,815 |
| 830,195,114 |
|
Lease obligations |
| 7,059,863 |
| 7,336,631 |
| 6,682,198 |
| 4,073,824 |
| 11,847,784 |
|
Contractual obligations |
| 43,539,106 |
| 7,682,630 |
| 1,157,171 |
| 614,604 |
| — |
|
Total |
| 124,994,576 |
| 80,193,515 |
| 70,196,242 |
| 66,167,433 |
| 1,113,127,955 |
|
25 - EXPENSES BY NATURE
Other expenses by nature are:
|
| 01.01.2019 |
| 01.01.2018 |
| 04.01.2019 |
| 04.01.2018 |
|
Details |
| 06.30.2019 |
| 06.30.2018 |
| 06.30.2019 |
| 06.30.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
Direct production costs |
| 368,124,018 |
| 375,324,980 |
| 177,967,092 |
| 168,316,464 |
|
Employee expenses |
| 129,880,705 |
| 128,568,152 |
| 64,667,555 |
| 52,769,568 |
|
Transportation and distribution |
| 96,082,258 |
| 71,393,249 |
| 34,755,241 |
| 31,465,494 |
|
Advertising |
| 10,210,043 |
| 15,759,035 |
| 7,549,418 |
| 6,469,787 |
|
Depreciation and amortization |
| 53,895,240 |
| 48,328,822 |
| 27,275,029 |
| 24,622,762 |
|
Repairs and maintenance |
| 11,871,990 |
| 6,817,551 |
| 6,831,892 |
| 398,512 |
|
Other expenses |
| 65,362,647 |
| 64,986,224 |
| 25,522,980 |
| 45,488,666 |
|
Total (1) |
| 735,426,901 |
| 711,178,013 |
| 344,569,207 |
| 329,531,254 |
|
(1) Corresponds to the addition of cost of sales, administration expenses and distribution cost.
26 - OTHER INCOME
Other income by function is detailed as follows:
|
| 01.01.2019 |
| 01.01.2018 |
| 04.01.2019 |
| 04.01.2018 |
|
Details |
| 06.30.2019 |
| 06.30.2018 |
| 06.30.2019 |
| 06.30.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
Gain on disposal of Property, plant and equipment |
| 94,644 |
| 118,219 |
| 81,462 |
| 88,576 |
|
Recovery PIS/CONFINS tax |
| — |
| 55,180 |
| — |
| 55,180 |
|
Others |
| 168,916 |
| 63,742 |
| 97,135 |
| 9,431 |
|
Total |
| 263,560 |
| 237,141 |
| 178,597 |
| 153,187 |
|
27 — OTHER EXPENSES BY FUNCTION
Other expenses by function are detailed as follows:
|
| 01.01.2019 |
| 01.01.2018 |
| 04.01.2019 |
| 04.01.2018 |
|
Details |
| 06.30.2019 |
| 06.30.2018 |
| 06.30.2019 |
| 06.30.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
Contingencies and non-operating fees |
| 3,580,545 |
| 6,196,728 |
| 2,263,694 |
| 2,456,459 |
|
Reversal IPI Manaus processes |
| (3,770,309 | ) | — |
| (3,770,309 | ) | — |
|
Tax on bank debits |
| 2,187,617 |
| 2,243,222 |
| 910,299 |
| 598,417 |
|
Disposal and write-offs (earnings) of Property, plant and equipment |
| (37,653 | ) | 75,098 |
| (64,168 | ) | 268,897 |
|
Others |
| 15,692 |
| 275,967 |
| 169,586 |
| 64,788 |
|
Total |
| 1,975,892 |
| 8,791,015 |
| (490,898 | ) | 3,388,562 |
|
28 — FINANCIAL INCOME AND EXPENSES
Financial income and expenses are detailed as follows:
a) Financial income
|
| 01.01.2019 |
| 01.01.2018 |
| 04.01.2019 |
| 04.01.2018 |
|
Detail |
| 06.30.2019 |
| 06.30.2018 |
| 06.30.2019 |
| 06.30.2018 |
|
|
| CLP (000’s) |
| CLP |
| CLP (000’s) |
| CLP (000’s) |
|
|
|
|
|
|
|
|
|
|
|
Interest income |
| 1,565,744 |
| 224,933 |
| 771,734 |
| 106,840 |
|
Guaranty restatement Ipiranga acquisition |
| 16,802 |
| 215,562 |
| 6,598 |
| 215,562 |
|
Other financial income |
| 1,328,310 |
| 1,678,643 |
| 711,073 |
| 819,766 |
|
Total |
| 2,910,856 |
| 2,119,138 |
| 1,489,405 |
| 1,142,168 |
|
b) Financial costs
|
| 01.01.2019 |
| 01.01.2018 |
| 04.01.2019 |
| 04.01.2018 |
|
Details |
| 06.30.2019 |
| 06.30.2018 |
| 06.30.2019 |
| 06.30.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
Bond interest |
| 18,967,900 |
| 19,354,730 |
| 9,399,971 |
| 10,049,366 |
|
Bank loan interest |
| 855,626 |
| 1,347,677 |
| 386,817 |
| 833,221 |
|
Other financial costs |
| 2,496,330 |
| 1,322,881 |
| 1,259,364 |
| 39,295 |
|
Total |
| 22,319,856 |
| 22,025,288 |
| 11,046,152 |
| 10,921,882 |
|
29 — OTHER (LOSSES) GAINS
Other (losses) gains are detailed as follows:
|
| 01.01.2019 |
| 01.01.2018 |
| 04.01.2019 |
| 04.01.2018 |
|
Details |
| 06.30.2019 |
| 06.30.2018 |
| 06.30.2019 |
| 06.30.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
(Losses) gains on ineffective portion of hedge derivatives |
| — |
| (1,693,349 | ) | — |
| (896,751 | ) |
Other income and expenses |
| — |
| 92 |
| — |
| 92 |
|
Total |
| — |
| (1,693,257 | ) | — |
| (896,659 | ) |
30 - LOCAL AND FOREIGN CURRENCY
Local and foreign currency balances as of June 30, 2019 and December 31, 2018, are the following:
CURRENT ASSETS |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Cash and cash equivalents |
| 117,450,341 |
| 137,538,613 |
|
USD |
| 14,168,805 |
| 5,917,041 |
|
EUR |
| 9,622 |
| 51,401 |
|
CLP |
| 50,201,043 |
| 86,121,695 |
|
BRL |
| 42,293,673 |
| 28,040,970 |
|
ARS |
| 10,777,198 |
| 6,726,906 |
|
PGY |
| — |
| 10,680,600 |
|
|
|
|
|
|
|
Other financial assets, current |
| — |
| 683,537 |
|
USD |
| — |
| — |
|
UF |
| — |
| — |
|
CLP |
| — |
| 355,126 |
|
BRL |
| — |
| 14,040 |
|
ARS |
| — |
| 300,359 |
|
PGY |
| — |
| 14,042 |
|
|
|
|
|
|
|
Other non-financial assets, current |
| 16,904,319 |
| 5,948,923 |
|
USD |
| 157,610 |
| 45,053 |
|
UF |
| 365,849 |
| 78,623 |
|
CLP |
| 10,095,058 |
| 3,589,253 |
|
BRL |
| 1,718,225 |
| 1,275,073 |
|
ARS |
| 4,567,577 |
| 460,125 |
|
PGY |
| — |
| 500,796 |
|
|
|
|
|
|
|
Trade accounts and other accounts receivable |
| 122,174,667 |
| 174,113,323 |
|
USD |
| 1,740,350 |
| 863,794 |
|
EUR |
| 747,643 |
| 52,332 |
|
UF |
| 446,773 |
| 1,414,800 |
|
CLP |
| 59,036,045 |
| 73,028,244 |
|
BRL |
| 43,595,388 |
| 66,585,089 |
|
ARS |
| 11,562,896 |
| 25,000,141 |
|
PGY |
| — |
| 7,168,923 |
|
|
|
|
|
|
|
Accounts receivable related entities |
| 7,240,512 |
| 9,450,263 |
|
USD |
| 31,969 |
| 26,557 |
|
CLP |
| 6,013,709 |
| 6,911,814 |
|
ARS |
| 1,194,834 |
| 2,511,892 |
|
|
|
|
|
|
|
Inventory |
| 155,701,481 |
| 151,319,709 |
|
USD |
| 626,181 |
| 2,197,382 |
|
EUR |
| — |
| 12,522 |
|
CLP |
| 46,567,740 |
| 50,130,341 |
|
BRL |
| 51,683,489 |
| 36,797,523 |
|
ARS |
| 43,346,937 |
| 46,394,230 |
|
PGY |
| 13,477,134 |
| 15,787,711 |
|
|
|
|
|
|
|
Current tax assets |
| 5,858,023 |
| 2,532,056 |
|
CLP |
| 3,824,521 |
| — |
|
BRL |
| 2,033,502 |
| 2,532,056 |
|
|
|
|
|
|
|
Total current assets |
| 425,329,343 |
| 481,586,454 |
|
USD |
| 16,724,915 |
| 9,049,827 |
|
EUR |
| 757,265 |
| 116,255 |
|
UF |
| 812,622 |
| 1,493,423 |
|
CLP |
| 175,738,116 |
| 220,136,473 |
|
BRL |
| 141,324,277 |
| 135,244,751 |
|
ARS |
| 71,449,442 |
| 81,393,653 |
|
PGY |
| 18,522,706 |
| 34,152,072 |
|
NON-CURRENT ASSETS |
| 06.30.2019 |
| 12.31.2018 |
|
|
| CLP (000’s) |
| CLP (000’s) |
|
Other non-current financial assets |
| 96,518,349 |
| 97,362,295 |
|
CLP |
| — |
| — |
|
BRL |
| 85,597,714 |
| 87,446,661 |
|
ARS |
| 10,920,635 |
| 9,915,634 |
|
|
|
|
|
|
|
Other non-current, non-financial assets |
| 33,350,240 |
| 34,977,264 |
|
USD |
| — |
| 22,917 |
|
UF |
| 308,853 |
| 314,283 |
|
CLP |
| 61,668 |
| 47,532 |
|
BRL |
| 30,466,286 |
| 32,070,120 |
|
ARS |
| 2,354,501 |
| 2,315,682 |
|
PGY |
| 158,932 |
| 206,730 |
|
|
|
|
|
|
|
Accounts receivable, non-current |
| 189,511 |
| 1,270,697 |
|
UF |
| 133,804 |
| 1,204,097 |
|
CLP |
|
|
| — |
|
ARS |
| 1,306 |
| 90 |
|
PGY |
| 54,401 |
| 66,510 |
|
|
|
|
|
|
|
Accounts receivable related entities, non-current |
| 122,506 |
| 74,340 |
|
CLP |
| 122,506 |
| 74,340 |
|
|
|
|
|
|
|
Investments accounted for using the equity method |
| 101,187,696 |
| 102,410,945 |
|
CLP |
| 49,237,481 |
| 50,136,221 |
|
BRL |
| 51,950,215 |
| 52,274,724 |
|
ARS |
| — |
| — |
|
|
|
|
|
|
|
Intangible assets other than goodwill |
| 655,962,412 |
| 668,822,553 |
|
USD |
| 9,568,070 |
| 4,960,399 |
|
CLP |
| 301,332,126 |
| 306,508,710 |
|
BRL |
| 180,380,628 |
| 182,657,545 |
|
ARS |
| 2,233,519 |
| 2,101,571 |
|
PGY |
| 162,448,069 |
| 172,594,328 |
|
|
|
|
|
|
|
Goodwill |
| 117,733,476 |
| 117,229,173 |
|
CLP |
| 9,523,767 |
| 9,523,767 |
|
BRL |
| 71,222,325 |
| 72,059,356 |
|
ARS |
| 30,090,247 |
| 28,318,129 |
|
PGY |
| 6,897,137 |
| 7,327,921 |
|
|
|
|
|
|
|
Property, plant & equipment |
| 714,339,943 |
| 710,770,968 |
|
USD |
| — |
| — |
|
Euros |
| — |
| 381,732 |
|
CLP |
| 285,870,214 |
| 271,625,978 |
|
BRL |
| 243,928,822 |
| 252,674,783 |
|
ARS |
| 123,510,846 |
| 117,532,176 |
|
PGY |
| 61,030,061 |
| 68,556,299 |
|
|
|
|
|
|
|
Deferred tax assets |
| 1,618,274 |
| — |
|
CLP |
| 1,618,274 |
| — |
|
|
|
|
|
|
|
Total non-current assets |
| 1,721,022,407 |
| 1,732,918,235 |
|
USD |
| 9,568,070 |
| 4,983,316 |
|
Euros |
| — |
| 381,732 |
|
UF |
| 442,657 |
| 1,518,380 |
|
CLP |
| 647,766,036 |
| 637,916,548 |
|
BRL |
| 663,545,990 |
| 679,183,189 |
|
ARS |
| 169,111,054 |
| 160,183,282 |
|
PGY |
| 230,588,600 |
| 248,751,788 |
|
|
| 06.30.2019 |
| 12.31.2018 |
| ||||||||
CURRENT LIABILITIES |
| Up to 90 days |
| 90 days up to 1 year |
| Total |
| Up to 90 days |
| 90 days up to 1 year |
| Total |
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
Other financial liabilities, current |
| 19,983,776 |
| 40,338,956 |
| 60,322,732 |
| 9,377,421 |
| 46,737,556 |
| 56,114,977 |
|
USD |
| 295,864 |
| 3,179,134 |
| 3,474,998 |
| 130,829 |
| 3,304,011 |
| 3,434,840 |
|
UF |
| 6,856,484 |
| 11,511,563 |
| 18,368,047 |
| 7,831,899 |
| 10,536,509 |
| 18,368,408 |
|
CLP |
| 764,948 |
| 12,207,622 |
| 12,972,570 |
| — |
| 9,681,676 |
| 10,342,404 |
|
BRL |
| 12,003,279 |
| 11,023,834 |
| 23,027,113 |
| 1,413,622 |
| 20,833,877 |
| 20,674,416 |
|
ARS |
| 63,201 |
| 1,346,623 |
| 1,409,824 |
| 1,071 |
| 1,357,285 |
| 14,876,804 |
|
PGY |
| — |
| 1,070,180 |
| 1,070,180 |
| — |
| 1,024,198 |
| 871,811 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade accounts and other accounts payable |
| 167,092,043 |
| 6,177,020 |
| 173,269,063 |
| 251,551,666 |
| 3,394,362 |
| 238,109,847 |
|
USD |
| 17,783,460 |
| 3,688,042 |
| 21,471,502 |
| 11,716,262 |
| — |
| 14,514,082 |
|
EUR |
| 1,738,571 |
| 267,990 |
| 2,006,561 |
| 2,202,581 |
| 59,951 |
| 4,371,675 |
|
UF |
| 1,928,095 |
| — |
| 1,928,095 |
| 2,198,131 |
| — |
| 192,055 |
|
CLP |
| 60,948,789 |
| 2,174,721 |
| 63,123,510 |
| 82,576,800 |
| 3,334,412 |
| 84,433,657 |
|
BRL |
| 53,219,746 |
| — |
| 53,219,746 |
| 74,524,169 |
| — |
| 68,940,973 |
|
ARS |
| 31,472,873 |
| 46,267 |
| 31,519,140 |
| 69,859,508 |
| — |
| 54,846,437 |
|
PGY |
| — |
| — |
| — |
| 8,472,550 |
| — |
| 10,805,605 |
|
Other currencies |
| 509 |
| — |
| 509 |
| 1,665 |
| — |
| 5,362 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable related entities, current |
| 44,088,670 |
| — |
| 44,088,670 |
| 45,687,476 |
| 140,383 |
| 45,827,859 |
|
USD |
| — |
| — |
| — |
| — |
| — |
|
|
|
CLP |
| 29,102,721 |
| — |
| 29,102,721 |
| 27,729,582 |
| 140,383 |
| 27,869,965 |
|
BRL |
| 9,874,809 |
| — |
| 9,874,809 |
| 12,478,179 |
| — |
| 12,478,179 |
|
ARS |
| 5,111,140 |
| — |
| 5,111,140 |
| 5,479,714 |
| — |
| 5,479,714 |
|
PGY |
|
|
|
|
|
|
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oher current provisions |
| 1,691,925 |
| 341,108 |
| 2,033,033 |
| 1,789,275 |
| 1,696,338 |
| 3,485,613 |
|
CLP |
| 1,691,925 |
| 337,810 |
| 2,029,735 |
| 1,789,275 |
| 1,681,178 |
| 3,470,453 |
|
PGY |
| — |
| 3,298 |
| 3,298 |
| — |
| 15,160 |
| 15,160 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax liabilities, current |
| — |
| 2,078,402 |
| 2,078,402 |
| 4,302,370 |
| 5,036,242 |
| 9,338,612 |
|
CLP |
|
|
|
|
|
|
| 4,302,370 |
| 1,184,842 |
| 5,487,212 |
|
BRL |
|
|
|
|
|
|
| — |
| — |
| — |
|
ARS |
| — |
| 1,237,694 |
| 1,237,694 |
| — |
| 2,980,634 |
| 2,980,634 |
|
PGY |
| — |
| 840,708 |
| 840,708 |
| — |
| 870,766 |
| 870,766 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee benefits current provisions |
| 16,830,149 |
| 8,919,569 |
| 25,749,718 |
| 10,189,264 |
| 23,021,715 |
| 33,210,979 |
|
CLP |
| 3,979,555 |
| 709,051 |
| 4,688,606 |
| 1,177,114 |
| 4,854,163 |
| 6,031,277 |
|
BRL |
| 12,682,285 |
| 1,163,833 |
| 13,846,118 |
| — |
| 17,180,455 |
| 17,180,455 |
|
ARS |
| 168,309 |
| 6,251,751 |
| 6,420,060 |
| 9,012,150 |
| — |
| 9,012,150 |
|
PGY |
| — |
| 794,934 |
| 794,934 |
| — |
| 987,097 |
| 987,097 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-financial current liabilities |
| 660,294 |
| 30,982,881 |
| 31,643,175 |
| 1,346,839 |
| 32,427,375 |
| 33,774,214 |
|
UF |
| — |
| — |
| — |
| — |
| — |
| — |
|
CLP |
| 659,894 |
| 30,560,331 |
| 31,220,225 |
| 869,964 |
| 32,276,377 |
| 33,146,341 |
|
BRL |
| — |
| — |
| — |
| — |
| — |
| — |
|
ARS |
| 400 |
| 4,397 |
| 4,797 |
| 476,875 |
| — |
| 476,875 |
|
PGY |
| — |
| 418,153 |
| 418,153 |
| — |
| 150,998 |
| 150,998 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
| 250,346,857 |
| 88,837,936 |
| 339,184,793 |
| 307,408,129 |
| 112,453,972 |
| 419,862,101 |
|
USD |
| 18,079,324 |
| 6,867,176 |
| 24,946,500 |
| 14,644,911 |
| 3,304,011 |
| 17,948,922 |
|
EUR |
| 1,738,571 |
| 267,990 |
| 2,006,561 |
| 4,311,724 |
| 59,951 |
| 4,371,675 |
|
UF |
| 8,784,579 |
| 11,511,563 |
| 20,296,142 |
| 8,023,954 |
| 10,536,509 |
| 18,560,463 |
|
CLP |
| 97,147,832 |
| 45,989,535 |
| 143,137,367 |
| 116,967,550 |
| 53,153,031 |
| 170,120,581 |
|
BRL |
| 87,780,119 |
| 12,187,667 |
| 99,967,786 |
| 82,832,774 |
| 38,014,332 |
| 120,847,106 |
|
ARS |
| 36,815,923 |
| 8,886,732 |
| 45,702,655 |
| 69,816,247 |
| 4,337,919 |
| 74,154,166 |
|
PGY |
| — |
| 3,127,273 |
| 3,127,273 |
| 10,805,605 |
| 3,048,219 |
| 13,853,824 |
|
Other Currencies |
| 509 |
| — |
| 509 |
| 5,362 |
| — |
| 5,362 |
|
|
| 06.30.2019 |
| 12.31.2018 |
| ||||||||||||
NON-CURRENT LIABILITIES |
| More than 1 |
| More than 3 |
| More than 5 |
| Total |
| More than 1 year |
| More than 3 |
| More than 5 |
| Total |
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
Other non-current, financial liabilities |
| 36,855,099 |
| 284,113,886 |
| 398,691,269 |
| 719,660,254 |
| 28,642,101 |
| 276,409,074 |
| 411,512,603 |
| 716,563,778 |
|
USD |
| 401,862 |
| 257,117,580 |
| 260,064 |
| 257,779,507 |
| — |
| 250,976,154 |
| — |
| 250,976,154 |
|
UF |
| 24,945,401 |
| 23,919,919 |
| 389,427,066 |
| 438,292,386 |
| 25,634,958 |
| 23,105,123 |
| 402,045,609 |
| 450,785,690 |
|
CLP |
| 8,052,259 |
| — |
| — |
| 8,052,259 |
| — |
| — |
| — |
| — |
|
BRL |
| 3,391,593 |
| 3,076,387 |
| 9,004,138 |
| 15,472,118 |
| 3,007,143 |
| 2,327,797 |
| 9,466,994 |
| 14,801,934 |
|
ARS |
| 63,984 |
| — |
| — |
| 63,984 |
| — |
| — |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable, non-current |
| 791,700 |
| — |
| — |
| 791,700 |
| 735,665 |
| — |
| — |
| 735,665 |
|
USD |
| 469,201 |
| — |
| — |
| 469,201 |
| 585,289 |
| — |
| — |
| 585,289 |
|
CLP |
| 316,918 |
| — |
| — |
| 316,918 |
| 148,680 |
| — |
| — |
| 148,680 |
|
ARS |
| 5,581 |
| — |
| — |
| 5,581 |
| 1,696 |
| — |
| — |
| 1,696 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other provisions, non-current |
| 1,007,822 |
| 50,873,392 |
| — |
| 51,881,214 |
| 3,448,042 |
| 55,518,871 |
| — |
| 58,966,913 |
|
CLP |
| — |
| — |
| 5,000,000 |
| 5,000,000 |
| 2,500,000 |
| — |
|
|
| 2,500,000 |
|
BRL |
| — |
| 50,873,392 |
| — |
| 50,873,392 |
| — |
| 55,518,871 |
| — |
| 55,518,871 |
|
ARS |
| 23,337 |
| — |
| — |
| 23,337 |
| 948,042 |
| — |
| — |
| 948,042 |
|
PGY |
| 1,075,683 |
| — |
| — |
| 1,075,683 |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax assets |
| 13,546,346 |
| 109,315,838 |
| 24,666,453 |
| 147,528,637 |
| 16,607,605 |
| 101,512,040 |
| 27,126,303 |
| 145,245,948 |
|
UF |
| — |
| — |
| 1,302,167 |
| 1,302,167 |
| — |
| — |
| — |
| — |
|
CLP |
| — |
| 83,290,366 |
| 9,110,060 |
| 92,400,426 |
| 497,175 |
| 81,630,530 |
| 11,899,975 |
| 94,027,680 |
|
BRL |
| — |
| 26,025,472 |
| — |
| 26,025,472 |
| — |
| 19,881,510 |
| — |
| 19,881,510 |
|
ARS |
| 13,546,346 |
| — |
| — |
| 13,546,346 |
| 16,110,430 |
| — |
| — |
| 16,110,430 |
|
PGY |
| — |
| — |
| 14,254,226 |
| 14,254,226 |
| — |
| — |
| 15,226,328 |
| 15,226,328 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee benefits non-current provisions |
| 778,545 |
| 4,237,374 |
| 8,453,228 |
| 13,469,147 |
| 742,297 |
| 240,148 |
| 8,433,096 |
| 9,415,541 |
|
CLP |
| 274,837 |
| 4,237,374 |
| 8,453,228 |
| 12,965,439 |
| 230,528 |
| 240,148 |
| 8,433,096 |
| 8,903,772 |
|
PGY |
| 503,708 |
| — |
| — |
| 503,708 |
| 511,769 |
| — |
| — |
| 511,769 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-financial non-current liabilities |
| 167,682 |
| — |
| — |
| 167,682 |
| — |
| — |
| — |
| — |
|
ARS |
| 167,682 |
| — |
| — |
| 167,682 |
| — |
| — |
| — |
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-current liabilities |
| 53,147,195 |
| 448,540,490 |
| 431,810,950 |
| 933,498,634 |
| 50,175,710 |
| 433,680,133 |
| 447,072,002 |
| 930,927,845 |
|
USD |
| 871,063 |
| 257,117,580 |
| 260,064 |
| 258,248,708 |
| 585,289 |
| 250,976,154 |
| — |
| 251,561,443 |
|
UF |
| 24,945,401 |
| 23,919,919 |
| 390,729,233 |
| 439,594,553 |
| 25,634,958 |
| 23,105,123 |
| 402,045,609 |
| 450,785,690 |
|
CLP |
| 8,644,014 |
| 87,527,740 |
| 17,563,288 |
| 113,735,042 |
| 3,376,383 |
| 81,870,678 |
| 20,333,071 |
| 105,580,131 |
|
BRL |
| 3,391,593 |
| 79,975,251 |
| 9,004,138 |
| 92,370,982 |
| 3,007,143 |
| 77,728,178 |
| 9,466,994 |
| 90,202,315 |
|
ARS |
| 14,791,415 |
| — |
| — |
| 14,791,415 |
| 17,060,168 |
| — |
| — |
| 17,060,169 |
|
PGY |
| 503,708 |
| — |
| 14,254,226 |
| 14,757,935 |
| 511,769 |
| — |
| 15,226,328 |
| 15,738,097 |
|
31 - THE ENVIRONMENT (unaudited)
The Company has made disbursements totaling CLP 1,487,495 thousand for improvements in industrial processes, equipment to measure industrial waste flows, laboratory analysis, consulting on environmental impacts and others,
These disbursements by country are detailed as follows:
|
| 2019 period |
| Future commitments |
| ||||
Country |
| Recorded as |
| Capitalized to |
| To be |
| To be |
|
|
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
| CLP (000’s) |
|
Chile |
| 721,159 |
| — |
| — |
| — |
|
Argentina |
| 155,207 |
| — |
| 14,326 |
| — |
|
Brazil |
| 425,030 |
| 121,943 |
| 399,685 |
| 232,634 |
|
Paraguay |
| 31,419 |
| 32,737 |
| — |
| — |
|
Total |
| 1,332,815 |
| 154,680 |
| 414,011 |
| 232,634 |
|
32 - SUBSEQUENT EVENTS
There are no subsequent events that may significantly affect the Company’s consolidated financial position as of June 30, 2019.
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/ Andrés Wainer |
|
| Name: | Andrés Wainer |
|
| Title: | Chief Financial Officer |
Santiago, August 23, 2019