IRSA Inversiones y Representaciones Sociedad Anónima
Unaudited Condensed Interim Consolidated Financial Statements as of September 30, 2023 and for the three-month period ended as of that date, presented comparatively
Legal information
Denomination: IRSA Inversiones y Representaciones Sociedad Anónima.
Fiscal year N°: 81, beginning on July 1st, 2023.
Legal address: 261 Carlos Della Paolera St., 9th floor, Autonomous City of Buenos Aires, Argentina.
Company activity: Real estate investment and development.
Date of registration of the by-laws in the Public Registry of Commerce: June 23, 1943.
Date of registration of last amendment of the by-laws in the Public Registry of Commerce: General Ordinary and Extraordinary Shareholders’ Meeting held on April 27, 2023 and registered in the Superintendence on September 12, 2023 with the number 15555, Book 114 Volume – of Joint Stock Companies.
Expiration of the Company’s by-laws: April 5, 2043.
Registration number with the Superintendence: 213,036.
Capital: 736,421,306 shares. (*)
Common Stock subscribed, issued and paid-up nominal value (in millions of ARS): 7,364.
Parent Company: Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria
(Cresud S.A.C.I.F. y A.).
Legal Address: 261 Carlos Della Paolera St., 9th floor, Autonomous City of Buenos Aires, Argentina.
Main activity of parent Company: Real estate, agricultural, commercial and financial activities.
Direct and indirect interest of the Parent Company on the capital stock: 412,698,839 common shares.
Percentage of votes of the Parent Company (direct and indirect interest) on the shareholders’ equity: 57.16% (1).
Type of stock | CAPITAL STATUS | |
Shares authorized for Public Offering (2) | Subscribed, issued and paid-up nominal value (in millions of Pesos) | |
Common stock with a face value of ARS 10 per share and entitled to 1 vote each | 736,421,306 | 7,364 |
(1) For computation purposes, treasury shares have been subtracted.
(2) Company not included in the Optional Statutory System of Public Offer of Compulsory Acquisition.
(*) The capital increase and the issuance of shares resolved by the board of directors on October 5, 2023, are in process of being registered in the “Inspección General de Justicia” (General Inspection of Justice).
Index
1 | |
Unaudited Condensed Interim Consolidated Statement of Financial Position | 2 |
Unaudited Condensed Interim Consolidated Statement of Income and Other Comprehensive Income | 3 |
Unaudited Condensed Interim Consolidated Statement of Changes in Shareholders’ Equity | 4 |
Unaudited Condensed Interim Consolidated Statement of Cash Flows | 6 |
Notes to the Unaudited Condensed Interim Consolidated Financial Statements: | |
Note 1 – The Group’s business and general information | 7 |
Note 2 – Summary of significant accounting policies | 7 |
Note 3 – Seasonal effects on operations | 8 |
Note 4 – Acquisitions and disposals | 9 |
Note 5 – Financial risk management and fair value estimates | 9 |
Note 6 – Segment information | 9 |
Note 7 – Investments in associates and joint ventures | 11 |
Note 8 – Investment properties | 13 |
Note 9 – Property, plant and equipment | 15 |
Note 10 – Trading properties | 15 |
Note 11 – Intangible assets | 16 |
Note 12 – Right-of-use assets | 16 |
Note 13 – Financial instruments by category | 17 |
Note 14 – Trade and other receivables | 18 |
Note 15 – Cash flow information | 19 |
Note 16 – Trade and other payables | 20 |
Note 17 – Borrowings | 20 |
Note 18 – Provisions | 20 |
Note 19 – Taxes | 22 |
Note 20 – Revenues | 22 |
Note 21 – Expenses by nature | 23 |
Note 22 – Costs | 23 |
Note 23 – Other operating results, net | 24 |
Note 24 – Financial results, net | 24 |
Note 25 – Related party transactions | 25 |
Note 26 – CNV General Resolution N° 622 | 27 |
Note 27 – Foreign currency assets and liabilities | 27 |
Note 28 – Other significant events of the period | 28 |
Note 29 – Subsequent Events | 29 |
Glossary
The following are not technical definitions, but help the reader to understand certain terms used in the wording of the notes to the Group´s Financial Statements.
Terms | Definitions | |
Annual Financial Statements | Consolidated Financial Statements as of June 30, 2023 | |
BACS | Banco de Crédito y Securitización S.A. | |
BHSA | Banco Hipotecario S.A. | |
CCL | Cash settlement | |
Celap | Centro de Entretenimientos La Plata S.A. | |
CNV | Securities Exchange Commission | |
Condor | Condor Hospitality Trust Inc. | |
CPF | Collective Promotion Funds | |
Cresud | Cresud S.A.C.I.F. y A. | |
Financial Statements | Unaudited Condensed Interim Consolidated Financial Statements | |
GCDI | GCDI S.A. | |
IAS | International Accounting Standards | |
IASB | International Accounting Standards Board | |
IFRS | International Financial Reporting Standards | |
IRSA, The Company”, “Us”, “We” | IRSA Inversiones y Representaciones Sociedad Anónima | |
IRSA CP | IRSA Propiedades Comerciales S.A. | |
MEP | Electronic Payment Market | |
MPIT | Minimum presumed income tax | |
New Lipstick | New Lipstick LLC | |
Puerto Retiro | Puerto Retiro S.A. | |
Zetol | Zetol S.A. | |
1
IRSA Inversiones y Representaciones Sociedad Anónima
Unaudited Condensed Interim Consolidated Statement of Financial Position
as of September 30, 2023 and June 30, 2023
(All amounts in millions of pesos, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
Note | 09.30.2023 | 06.30.2023 | |
ASSETS | |||
Non-current assets | |||
Investment properties | 8 | 866,371 | 768,496 |
Property, plant and equipment | 9 | 13,534 | 13,682 |
Trading properties | 10, 22 | 8,126 | 8,136 |
Intangible assets | 11 | 10,739 | 10,712 |
Right-of-use assets | 12 | 4,164 | 3,957 |
Investments in associates and joint ventures | 7 | 42,709 | 49,982 |
Deferred income tax assets | 19 | 974 | 1,159 |
Income tax credit | 13 | 28 | |
Trade and other receivables | 13, 14 | 8,514 | 5,982 |
Investments in financial assets | 13 | 2,865 | 2,591 |
Total non-current assets | 958,009 | 864,725 | |
Current assets | |||
Trading properties | 10, 22 | 177 | 194 |
Inventories | 22 | 387 | 446 |
Income tax credit | 834 | 983 | |
Trade and other receivables | 13, 14 | 30,172 | 34,885 |
Investments in financial assets | 13 | 50,183 | 46,395 |
Cash and cash equivalents | 13 | 21,601 | 11,777 |
Total current assets | 103,354 | 94,680 | |
TOTAL ASSETS | 1,061,363 | 959,405 | |
SHAREHOLDERS’ EQUITY | |||
Shareholders' equity attributable to equity holders of the parent (according to corresponding statement) | 563,110 | 488,124 | |
Non-controlling interest | 32,647 | 30,107 | |
TOTAL SHAREHOLDERS’ EQUITY | 595,757 | 518,231 | |
LIABILITIES | |||
Non-current liabilities | |||
Borrowings | 13, 17 | 87,081 | 90,767 |
Lease liabilities | 3,594 | 3,563 | |
Deferred income tax liabilities | 19 | 264,731 | 223,389 |
Trade and other payables | 13, 16 | 11,836 | 13,264 |
Income tax and MPIT liabilities | 1,385 | - | |
Provisions | 18 | 7,896 | 7,980 |
Salaries and social security liabilities | 96 | 121 | |
Total non-current liabilities | 376,619 | 339,084 | |
Current liabilities | |||
Borrowings | 13, 17 | 53,260 | 54,760 |
Lease liabilities | 845 | 504 | |
Trade and other payables | 13, 16 | 30,914 | 40,521 |
Income tax liabilities | 522 | 1,420 | |
Provisions | 18 | 1,145 | 1,138 |
Derivative financial instruments | 13 | 14 | 8 |
Salaries and social security liabilities | 2,287 | 3,739 | |
Total current liabilities | 88,987 | 102,090 | |
TOTAL LIABILITIES | 465,606 | 441,174 | |
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES | 1,061,363 | 959,405 | |
The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.
. Alejandro G. Elsztain Vicepresident II |
2
IRSA Inversiones y Representaciones Sociedad Anónima
Unaudited Condensed Interim Consolidated Statement of Income and Other Comprehensive Income
for the three-month periods ended September 30, 2023 and 2022
(All amounts in millions of pesos, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
Note | 09.30.2023 | 09.30.2022 | |
Revenues | 20 | 30,725 | 27,803 |
Costs | 21, 22 | (9,998) | (10,161) |
Gross profit | 20,727 | 17,642 | |
Net gain / (loss) from fair value adjustment of investment properties | 8 | 102,292 | (15,797) |
General and administrative expenses | 21 | 410 | (3,642) |
Selling expenses | 21 | (1,610) | (1,175) |
Other operating results, net | 23 | (414) | 452 |
Profit / (loss) from operations | 121,405 | (2,520) | |
Share of profit of associates and joint ventures | 7 | 2,217 | 2,281 |
Profit / (loss) before financial results and income tax | 123,622 | (239) | |
Finance income | 24 | 378 | 140 |
Finance costs | 24 | (4,121) | (4,404) |
Other financial results | 24 | (2,359) | 512 |
Inflation adjustment | 24 | 6,510 | 10,700 |
Financial results, net | 408 | 6,948 | |
Profit before income tax | 124,030 | 6,709 | |
Income tax expense | 19 | (42,950) | (3,620) |
Profit for the year | 81,080 | 3,089 | |
Other comprehensive loss: | |||
Items that may be reclassified subsequently to profit or loss: | |||
Currency translation adjustment and other comprehensive loss from subsidiaries (i) | (336) | (620) | |
Total other comprehensive loss for the period | (336) | (620) | |
Total comprehensive income for the period | 80,744 | 2,469 | |
Profit for the year attributable to: | |||
Equity holders of the parent | 77,042 | 2,768 | |
Non-controlling interest | 4,038 | 321 | |
Total comprehensive income attributable to: | |||
Equity holders of the parent | 76,716 | 2,184 | |
Non-controlling interest | 4,028 | 285 | |
Profit per share attributable to equity holders of the parent: (ii) | |||
Basic | 104.82 | 3.74 | |
Diluted | 103.27 | 3.83 | |
(i)
Components of other comprehensive income have no impact on income tax.
(ii)
See note 28 to the Annual Consolidated Financial Statements as of June 30, 2023.
The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.
. Alejandro G. Elsztain Vicepresident II |
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IRSA Inversiones y Representaciones Sociedad Anónima
Unaudited Condensed Interim Consolidated Statement of Changes in Shareholders’ Equity
for the three-month period ended September 30, 2023
(All amounts in millions of pesos, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
Attributable to equity holders of the parent | ||||||||||||||
Share capital | ||||||||||||||
Outstanding shares | Shares to issue (iv) | Treasury shares | Inflation adjustment of share capital and treasury shares (i) | Warrants (ii) | Share premium | Additional paid-in capital from treasury shares | Legal reserve | Special reserve Resolution CNV 609/12 | Other reserves (v) | Retained earnings | Subtotal | Non-controlling interest | Total Shareholders’ equity | |
Balance as of June 30, 2023 | 799 | 6,553 | 12 | 113,704 | 8,447 | 172,600 | 677 | 13,533 | 67,304 | 15,859 | 88,636 | 488,124 | 30,107 | 518,231 |
Net profit for the period | - | - | - | - | - | - | - | - | - | - | 77,042 | 77,042 | 4,038 | 81,080 |
Other comprehensive loss for the period | - | - | - | - | - | - | - | - | - | (326) | - | (326) | (10) | (336) |
Total comprehensive (loss) / income for the period | - | - | - | - | - | - | - | - | - | (326) | 77,042 | 76,716 | 4,028 | 80,744 |
Repurchase of treasury shares (iii) | (132) | - | 132 | - | - | - | - | - | - | (1,742) | - | (1,742) | - | (1,742) |
Warrants exercise (ii) | - | - | - | - | (7) | 21 | - | - | - | - | - | 14 | - | 14 |
Issuance of shares | 6,553 | (6,553) | - | - | - | - | - | - | - | - | - | - | - | - |
Capitalization of irrevocable contributions | - | - | - | - | - | - | - | - | - | - | - | - | 23 | 23 |
Dividend distribution | - | - | - | - | - | - | - | - | - | - | - | - | (1,511) | (1,511) |
Changes in non-controlling interest | - | - | - | - | - | - | - | - | - | (2) | - | (2) | - | (2) |
Balance as of September 30, 2023 | 7,220 | - | 144 | 113,704 | 8,440 | 172,621 | 677 | 13,533 | 67,304 | 13,789 | 165,678 | 563,110 | 32,647 | 595,757 |
(i) Includes ARS 4 of Inflation adjustment of treasury shares. See Note 17 to the Annual Consolidated Financial Statements as of June 30,2023.
(ii) As of September 30, 2023, the remaining warrants to exercise amount to 79,646,262. See Note 28 to these Financial Statements.
(iii) Related to the Shares Buyback Program approved by the Board on June 15, 2023. As of September 30, 2023 the Company has bought 4,193,634 shares. See Note 28 to these Financial Statements.
(iv) See Note 28 to these Financial Statements.
(v) Group´s other reserves for the period ended September 30, 2023 are comprised as follows:
Cost of treasury stock | Reserve for future dividends | Currency translation adjustment reserve | Special reserve | Other reserves (1) | Total Other reserves | |
Balance as of June 30, 2023 | (4,483) | 12,114 | 255 | 41,942 | (33,969) | 15,859 |
Other comprehensive loss for the period | - | - | (326) | - | - | (326) |
Total comprehensive loss for the period | - | - | (326) | - | - | (326) |
Repurchase of treasury shares | (1,742) | - | - | - | - | (1,742) |
Changes in non-controlling interest | - | - | - | - | (2) | (2) |
Balance as of September 30, 2023 | (6,225) | 12,114 | (71) | 41,942 | (33,971) | 13,789 |
(1) Includes revaluation surplus.
There are no cumulative unpaid dividends on preferred shares.
The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.
4
Unaudited Condensed Interim Consolidated Statement of Changes in Shareholders’ Equity
for the three-month period ended September 30, 2022
(All amounts in millions of pesos, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
Attributable to equity holders of the parent | |||||||||||||
Share capital | |||||||||||||
Outstanding shares | Treasury shares | Inflation adjustment of share capital and treasury shares (i) | Warrants | Share premium | Additional paid-in capital from treasury shares | Legal reserve | Special reserve Resolution CNV 609/12 | Other reserves (ii) | Retained earnings | Subtotal | Non-controlling interest | Total Shareholders’ equity | |
Balance as of June 30, 2022 | 805 | 6 | 101,212 | 8,473 | 191,579 | 705 | 9,062 | 67,304 | (18,175) | 100,732 | 461,703 | 31,607 | 493,310 |
Net profit for the period | - | - | - | - | - | - | - | - | - | 2,768 | 2,768 | 321 | 3,089 |
Other comprehensive loss for the period | - | - | - | - | - | - | - | - | (584) | - | (584) | (36) | (620) |
Total comprehensive (loss) / income for the period | - | - | - | - | - | - | - | - | (584) | 2,768 | 2,184 | 285 | 2,469 |
Repurchase of treasury shares | (5) | 5 | - | - | - | - | - | - | (1,637) | - | (1,637) | - | (1,637) |
Warrants exercise | - | - | - | - | 2 | - | - | - | - | - | 2 | - | 2 |
Dividend distribution | - | - | - | - | - | - | - | - | - | - | - | (81) | (81) |
Reserve for share-based payments | - | - | - | - | - | (7) | - | - | 7 | - | - | - | - |
Other changes in equity | - | - | - | - | - | - | - | - | 95 | - | 95 | 2 | 97 |
Balance as of September 30, 2022 | 800 | 11 | 101,212 | 8,473 | 191,581 | 698 | 9,062 | 67,304 | (20,294) | 103,500 | 462,347 | 31,813 | 494,160 |
(i) Includes ARS 3 of Inflation adjustment of treasury shares. See Note 17 to the Annual Financial Statements.
(ii) Group’s other reserves for the period ended September 30, 2022 are comprised as follows:
Cost of treasury stock | Reserve for future dividends | Currency translation adjustment reserve | Special reserve | Other reserves (1) | Total Other reserves | |
Balance as of June 30, 2022 | (2,164) | 12,114 | 1,465 | 3,886 | (33,476) | (18,175) |
Other comprehensive loss for the period | - | - | (584) | - | - | (584) |
Total comprehensive loss for the period | - | - | (584) | - | - | (584) |
Repurchase of treasury shares | (1,637) | - | - | - | - | (1,637) |
Other changes in equity | - | - | 95 | - | - | 95 |
Reserve for share-based payments | 10 | - | - | - | (3) | 7 |
Balance as of September 30, 2022 | (3,791) | 12,114 | 976 | 3,886 | (33,479) | (20,294) |
(1) Includes revaluation surplus.
There are no cumulative unpaid dividends on preferred shares.
The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.
. Alejandro G. Elsztain Vicepresident II |
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IRSA Inversiones y Representaciones Sociedad Anónima
Unaudited Condensed Interim Consolidated Statement of Cash Flows
for the three-month periods ended September 30, 2023 and 2022
(All amounts in millions of pesos, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
Note | 09.30.2023 | 09.30.2022 | |
Operating activities: | |||
Net cash generated from continuing operating activities before income tax paid | 15 | 11,805 | 12,379 |
Income tax paid | (1,133) | (2,061) | |
Net cash generated from operating activities | 10,672 | 10,318 | |
Investing activities: | |||
Acquisition and improvements of investment properties | (1,350) | (1,556) | |
Proceeds from sales of investment properties | 4,847 | 4,322 | |
Acquisitions and improvements of property, plant and equipment | (246) | (236) | |
Proceeds from sales of property, plant and equipment | 1 | - | |
Acquisitions of intangible assets | (100) | (33) | |
Dividends collected from associates and joint ventures | - | 141 | |
Proceeds from sales of interest held in associates and joint ventures | 8,472 | - | |
Payments of derivative financial instruments | - | (19) | |
Acquisitions of investments in financial assets | (19,927) | (17,628) | |
Proceeds from disposal of investments in financial assets | 14,854 | 19,434 | |
Interest received from financial assets | 410 | 205 | |
Increase of loans granted to related parties | (52) | - | |
Net cash generated from investing activities | 6,909 | 4,630 | |
Financing activities: | |||
Borrowings, issuance and new placement of non-convertible notes | 991 | 598 | |
Payment of borrowings and non-convertible notes | (2,906) | (23,778) | |
Payments of short term loans, net | (1,988) | (13,165) | |
Interests paid | (2,077) | (5,874) | |
Capital contributions from non-controlling interest in subsidiaries | 23 | - | |
Payment of borrowings to related parties | - | (38) | |
Warrants exercise | 14 | 2 | |
Payment of financial leases | (49) | (12) | |
Repurchase of treasury shares | (1,742) | (1,637) | |
Net cash used in financing activities | (7,734) | (43,904) | |
Net increase / (decrease) in cash and cash equivalents | 9,847 | (28,956) | |
Cash and cash equivalents at the beginning of the period | 13 | 11,777 | 37,134 |
Inflation adjustment | (615) | (422) | |
Foreign exchange gain on cash and unrealized fair value result for cash equivalents | 592 | 319 | |
Cash and cash equivalents at end of the period | 13 | 21,601 | 8,075 |
The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.
. Alejandro G. Elsztain Vicepresident II |
6
IRSA Inversiones y Representaciones Sociedad Anónima
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
(Amounts in millions of pesos, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
1.
The Group’s business and general information
These Financial Statements have been approved for issuance by the Board of Directors, on November 6, 2023.
IRSA was founded in 1943, and it has engaged in diverse real estate activities in Argentina since 1991. IRSA and its subsidiaries are collectively referred to hereinafter as “the Group”.
Cresud is our direct parent company, whose main shareholders are Inversiones Financieras del Sur S.A., Agroinvestment S.A. and Consultores Venture Capital Uruguay S.A., and whose final beneficiary is Eduardo Sergio Elsztain.
As of the end of these Consolidated Financial Statements, the Group owns 15 shopping malls, 5 office buildings, three hotels and an extensive land reserve for future mixed-use developments. Additionally, the Group holds a 29.91% interest in Banco Hipotecario S.A. (BHSA), which is a leading commercial bank in the provision of mortgaged loans in Argentina. BHSA's shares are listed on the BYMA.
The Group operates and holds a majority interest (with the exception of La Ribera Shopping Center, of which it has a 50% ownership interest) in a portfolio of 14 shopping malls in Argentina, six of which are located in the Autonomous City of Buenos Aires (Abasto Shopping, Alcorta Shopping, Alto Palermo, Patio Bullrich, Dot Baires Shopping and Distrito Arcos), two in Buenos Aires province (Alto Avellaneda and Soleil Premium Outlet) and the rest are situated in different provinces (Alto Noa in the City of Salta, Alto Rosario in the City of Rosario, Mendoza Plaza in the City of Mendoza, Córdoba Shopping Villa Cabrera in the City of Córdoba, Alto Comahue in the City of Neuquén and La Ribera Shopping in the City of Santa Fe). The Group also owns the historic building where the Patio Olmos Shopping Mall is located, operated by a third party.
Likewise, the Group manages a 5 office buildings portfolio and has majority stakes in three luxury hotels including the Libertador and Intercontinental hotels in the Autonomous City of Buenos Aires and the exclusive Llao Llao resort, in the city of San Carlos de Bariloche, in southern Argentina. Additionally, the Group participates in the development of residential properties for sale, as well as in other investments.
2.
Summary of significant accounting policies
2.1.
Basis of preparation
These financial statements have been prepared in accordance with IAS 34 “Interim financial reporting” and should therefore be read in conjunction with the Group's annual Consolidated Financial Statements as of June 30, 2023 prepared in accordance with IFRS. Also, these financial statements include additional information required by Law No. 19,550 and / or regulations of the CNV. Such information is included in the notes to these financial statements, as accepted by IFRS.
These financial statements for the interim periods of three months ended September 30, 2023 and 2022 have not been audited. Management considers that they include all the necessary adjustments to fairly present the results of each period. Intermediate period results do not necessarily reflect the proportion of the Group's results for the entire fiscal years.
IAS 29 "Financial Reporting in Hyperinflationary Economies" requires that the financial statements of an entity whose functional currency is one of a hyperinflationary economy be expressed in terms of the current unit of measurement at the closing date of the reporting period, regardless of whether they are based on the historical cost method or the current cost method. To do so, in general terms, the inflation produced from the date of acquisition or from the revaluation date, as applicable, must be calculated by non-monetary items. This requirement also includes the comparative information of the financial statements.
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IRSA Inversiones y Representaciones Sociedad Anónima
In order to conclude on whether an economy is categorized as highly inflationary in the terms of IAS 29, the standard details a series of factors to be considered, including the existence of an accumulated inflation rate in three years that approximates or exceeds 100%. Accumulated inflation in Argentina in three years is over 100%. For that reason, in accordance with IAS 29, Argentina must be considered a country with a highly inflationary economy starting July 1, 2018.
In relation to the inflation index to be used and in accordance with FACPCE Resolution No. 539/18, it is determined based on the Wholesale Price Index (IPIM) until 2016, considering the average variation of the Consumer Price Index (CPI) of the Autonomous City of Buenos Aires for the months of November and December 2015, because during those two months there were no national IPIM measurements. Then, from January 2017, the National Consumer Price Index (National CPI) is considered. The table below presents the index for the period ended September 30, 2023, according to official statistics (INDEC) and following the guidelines described in Resolution 539/18.
As of September 30, 2023 (accumulated three months) | |
Price variation | 35% |
As a consequence of the aforementioned, these financial statements as of September 30, 2023 were restated in accordance with IAS 29.
2.2.
Significant accounting policies
The accounting policies applied in the presentation of these Financial Statements are consistent with those applied in the preparation of the Annual Financial Statements, as described in Note 2 to those Financial Statements.
2.3.
Comparability of information
Balance items as of June 30, 2023 and September 30, 2022 presented in these Unaudited Condensed Interim Consolidated Financial Statements for comparative purposes arise from the financial statements as of and for such periods restated according to IAS 29 (See note 2.1). Certain items from prior periods have been reclassified for consistency purposes.
2.4.
Use of estimates
The preparation of Financial Statements at a certain date requires Management to make estimations and evaluations affecting the amount of assets and liabilities recorded and contingent assets and liabilities disclosed at such date, as well as income and expenses recorded during the period. Actual results might differ from the estimates and evaluations made at the date of preparation of these financial statements. In the preparation of these financial statements, the significant judgments made by Management in applying the Group’s accounting policies and the main sources of uncertainty were the same as the ones applied by the Group in the preparation of the Annual Financial Statements described in Note 3 to those Financial Statements.
3.
Seasonal effects on operations
The operations of the Group’s shopping malls are subject to seasonal effects, which affect the level of sales recorded by lessees. During summertime in Argentina (January and February), the lessees of shopping malls experience the lowest sales levels in comparison with the winter holidays (July) and Christmas and year-end holidays celebrated in December, when they tend to record peaks of sales. Apparel stores generally change their collections during the spring and the fall, which impacts positively on shopping malls sales. Sale discounts at the end of each season also affect the business. As a consequence, for shopping mall operations, a higher level of business activity is expected in the period from July through December, compared to the period from January through June.
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IRSA Inversiones y Representaciones Sociedad Anónima
4.
Acquisitions and disposals
Significant acquisitions and disposals for the three-month period ended September 30, 2023 are detailed below. Significant acquisitions and disposals for the fiscal year ended June 30, 2023, are detailed in Note 4 to the Annual Financial Statements.
1.
“Maple Building" sale
On July 24, 2023, IRSA signed the deed for the sale of all the functional and complementary units of the “Maple Building” located at 664 Suipacha Street in the Autonomous City of Buenos Aires. The price of the operation was USD 6.75 million, of which USD 3 million has been collected in cash, USD 750,000 through the delivery of 3 functional units in a building owned by the buyer at Avenida Córdoba 633 in the Autonomous City of Buenos Aires, with a bailment agreement for 30 months and the remaining balance of USD 3 million will be paid as follows:
- USD 2.5 million in 10 semiannual, equal and consecutive installments of USD 250,000, the first due 24 months from the signing of the deed, with an annual interest of 5%;
- USD 0.5 million through the provision of services by the buyer, which were valued at the CCL exchange rate according to the conditions agreed in the contract.
2.
“261 Della Paolera” floor sale
On August 9, 2023, IRSA signed the deed for the sale of the 9th floor of the "261 Della Paolera" tower located in the Catalinas neighborhood of the Autonomous City of Buenos Aires with a total of 1,184 square meters, 10 parking spaces, and 2 complementary units of the same building. The transaction price was approximate USD (MEP) 6.3 million, which had already been paid in ARS.
3.
Sale of Quality Investment S.A.
On August 31, 2023, IRSA sold and transferred 100% of its participation in Quality Invest S.A. representing of 50% of the share capital. The amount of the transaction amounted to USD 22.9 million, of which USD 21.5 million has been collected together with the transfer of the shares and the balance of USD 1.4 million will be collected after 3 years, accruing an interest of 7% per year.
5.
Financial risk management and fair value estimates
These Financial Statements do not include all the information and disclosures on financial risk management; therefore, they should be read along with Note 5 to the Annual Financial Statements. There have been no changes in risk management or risk management policies applied by the Group since year-end.
From June 30, 2023 and up to the date of issuance of these Financial Statements, there have been no significant changes in business or economic circumstances affecting the fair value of the Group's assets or liabilities (either measured at fair value or amortized cost).
6.
Segment information
Segment information was prepared and classified according to the business in which the Group operates, they were described in Note 6 to the Annual Financial Statements.
Below is a summary of the Group’s operating segments and a reconciliation between the operating income according to segment information and the operating income of the Statements of Income and Other Comprehensive Income of the Group for the three-month periods ended September 30, 2023 and 2022:
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09.30.2023 | |||||
Total | Joint ventures (1) | Expensesand collectivepromotion funds | Elimination of inter-segment transactions and non-reportable assets / liabilities (2) | Total as per statement of income / statement of financial position | |
Revenues | 25,302 | (144) | 5,567 | - | 30,725 |
Costs | (4,327) | 14 | (5,685) | - | (9,998) |
Gross profit / (loss) | 20,975 | (130) | (118) | - | 20,727 |
Net gain / (loss) from fair value adjustment of investment properties | 102,283 | 9 | - | - | 102,292 |
General and administrative expenses | 343 | 19 | - | 48 | 410 |
Selling expenses | (1,624) | 14 | - | - | (1,610) |
Other operating results, net | (421) | (1) | 56 | (48) | (414) |
Profit / (loss) from operations | 121,556 | (89) | (62) | - | 121,405 |
Share of profit / (loss) of associates and joint ventures | 2,080 | 137 | - | - | 2,217 |
Segment profit / (loss) | 123,636 | 48 | (62) | - | 123,622 |
Reportable assets | 941,576 | 73 | - | 119,714 | 1,061,363 |
Reportable liabilities (i) | - | - | - | (465,606) | (465,606) |
Net reportable assets | 941,576 | 73 | - | (345,892) | 595,757 |
09.30.2022 | |||||
Total | Joint ventures (1) | Expensesand collectivepromotion funds | Elimination of inter-segment transactions and non-reportable assets / liabilities (2) | Total as per statement of income / statement of financial position | |
Revenues | 22,194 | (138) | 5,747 | - | 27,803 |
Costs | (4,393) | 67 | (5,835) | - | (10,161) |
Gross profit / (loss) | 17,801 | (71) | (88) | - | 17,642 |
Net loss from fair value adjustment of investment properties | (15,996) | 199 | - | - | (15,797) |
General and administrative expenses | (3,682) | 26 | - | 14 | (3,642) |
Selling expenses | (1,187) | 12 | - | - | (1,175) |
Other operating results, net | 431 | - | 35 | (14) | 452 |
Loss from operations | (2,633) | 166 | (53) | - | (2,520) |
Share of profit of associates and joint ventures | 2,438 | (157) | - | - | 2,281 |
Segment (loss) / profit | (195) | 9 | (53) | - | (239) |
Reportable assets | 928,592 | (5,598) | - | 103,632 | 1,026,626 |
Reportable liabilities (i) | - | - | - | (532,464) | (532,464) |
Net reportable assets | 928,592 | (5,598) | - | (428,832) | 494,162 |
(1) Represents the equity value of joint ventures that were proportionately consolidated for segment information.
(2) Includes amounts pertaining to building administration expenses and collective promotion funds (“FPC”, as per its Spanish acronym) as well as total recovered costs, whether by way of expenses or other concepts included under financial results (for example default interest and other concepts). Includes deferred income tax assets, income tax credits, trade and other receivables, investment in financial assets, cash and cash equivalents and intangible assets except for rights to receive future units under barter agreements, net of investments in associates with negative equity which are included in provisions in the amount of ARS 4 as of September 30, 2023.
(i) The CODM focuses its review on reportable assets.
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Below is a summarized analysis of the segments from the Group for the periods ended September 30, 2023 and 2022:
09.30.2023 | ||||||
Shopping Malls | Offices | Sales and developments | Hotels | Others (i) | Total | |
Revenues | 17,150 | 1,584 | 262 | 5,987 | 319 | 25,302 |
Costs | (999) | (98) | (215) | (2,747) | (268) | (4,327) |
Gross profit | 16,151 | 1,486 | 47 | 3,240 | 51 | 20,975 |
Net (loss) / gain from fair value adjustment of investment properties | (2,491) | 32,178 | 72,705 | - | (109) | 102,283 |
General and administrative expenses | (1,928) | (159) | (767) | (925) | 4,122 | 343 |
Selling expenses | (857) | (37) | (233) | (432) | (65) | (1,624) |
Other operating results, net | (198) | (27) | (614) | (46) | 464 | (421) |
Profit from operations | 10,677 | 33,441 | 71,138 | 1,837 | 4,463 | 121,556 |
Share of profit of associates and joint ventures | - | - | - | - | 2,080 | 2,080 |
Segment profit | 10,677 | 33,441 | 71,138 | 1,837 | 6,543 | 123,636 |
Investment properties and trading properties | 249,795 | 185,771 | 439,818 | - | 980 | 876,364 |
Investment in associates and joint ventures | - | - | - | - | 40,862 | 40,862 |
Other operating assets | 893 | 138 | 9,700 | 11,663 | 1,956 | 24,350 |
Reportable assets | 250,688 | 185,909 | 449,518 | 11,663 | 43,798 | 941,576 |
09.30.2022 | ||||||
Shopping Malls | Offices | Sales and developments | Hotels | Others (i) | Total | |
Revenues | 14,385 | 1,635 | 1,098 | 4,773 | 303 | 22,194 |
Costs | (1,134) | (100) | (493) | (2,378) | (288) | (4,393) |
Gross profit | 13,251 | 1,535 | 605 | 2,395 | 15 | 17,801 |
Net loss from fair value adjustment of investment properties | (12,198) | (1,220) | (2,526) | - | (52) | (15,996) |
General and administrative expenses | (1,825) | (234) | (672) | (591) | (360) | (3,682) |
Selling expenses | (615) | (7) | (145) | (391) | (29) | (1,187) |
Other operating results, net | (62) | (43) | (83) | (5) | 624 | 431 |
(Loss) / profit from operations | (1,449) | 31 | (2,821) | 1,408 | 198 | (2,633) |
Share of profit of associates and joint ventures | - | - | - | - | 2,438 | 2,438 |
Segment (loss) / profit | (1,449) | 31 | (2,821) | 1,408 | 2,636 | (195) |
Investment properties and trading properties | 253,645 | 194,687 | 411,740 | - | 1,183 | 861,255 |
Investment in associates and joint ventures | - | - | - | - | 35,981 | 35,981 |
Other operating assets | 826 | 7,008 | 7,149 | 12,203 | 4,170 | 31,356 |
Reportable assets | 254,471 | 201,695 | 418,889 | 12,203 | 41,334 | 928,592 |
7.
Investments in associates and joint ventures
Changes in the Group’s investments in associates and joint ventures for the three-month period ended September 30, 2023 and for the year ended June 30, 2023 were as follows:
09.30.2023 | 06.30.2023 | |
Beginning of the period / year | 49,980 | 46,871 |
Sale of interest in joint ventures (i) | (9,421) | - |
Capital contributions | - | 74 |
Share of profit | 2,217 | 3,536 |
Currency translation adjustment | 89 | (71) |
Dividends (Note 25) | (160) | (430) |
End of the period / year (ii) | 42,705 | 49,980 |
(i)
Corresponds to the sale of interest in Quality Invest S.A. as of September 30, 2023.
(ii)
As of September 30, 2023 and June 30, 2023 includes ARS (4) and ARS (2) respectively, reflecting interests in companies with negative equity, which were disclosed in “Provisions” (Note 18).
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% ownership interest | Value of Group's interest in equity | Group's interest in comprehensive income / (loss) | ||||
Name of the entity | 09.30.2023 | 06.30.2023 | 09.30.2023 | 06.30.2023 | 09.30.2023 | 06.30.2023 |
Associates and joint ventures | ||||||
New Lipstick | 49.96% | 49.96% | 406 | 328 | 3 | (14) |
BHSA | 29.91% | 29.91% | 34,215 | 32,247 | 1,968 | 1,506 |
Quality (1) | - | 50.00% | - | 9,421 | - | (133) |
La Rural SA | 50.00% | 50.00% | 2,083 | 1,637 | 446 | 234 |
GCDI (2) | 27.82% | 27.82% | 2,137 | 2,582 | (445) | 631 |
Other joint ventures | N/A | N/A | 3,864 | 3,765 | 334 | 88 |
Total associates and joint ventures | 42,705 | 49,980 | 2,306 | 2,312 | ||
Below is additional information about the Group’s investments in associates and joint ventures:
Latest financial statements issued | ||||||
Name of the entity | Place of business / Country of incorporation | Main activity | Common shares 1 vote | Share capital (nominal value) | (Loss) / profit for the period | Shareholders’ equity |
Associates and joint ventures | ||||||
New Lipstick | USA | Real estate | 23,631,037 | (*) 47 | (*) (1) | (*) (45) |
BHSA | Argentina | Financial | 448,689,072 | (**) 1.500 | (**) 6,579 | (**) 111,303 |
La Rural SA | Argentina | Organization of events | 714,998 | 1 | 924 | 3,498 |
GCDI (2) | Argentina | Real estate | 257,330,595 | 925 | (1,644) | 7,879 |
(1)
Interest in Quality Invest S.A. was sold on August 31, 2023. See note 4 to these Financial Statements.
(2)
See note 8 to the Annual Financial Statements as of June 30, 2023.
(*)
Amounts in millions of US Dollars under US GAAP.
(**)
Information as of September 30, 2023 according to IFRS.
Puerto Retiro and La Rural (joint venture):
There have been no changes to what was informed in Note 8 to the Annual Financial Statements.
Arcos del Gourmet S.A. (“Arcos” or “AGSA”)
Regarding the information provided in Note 7 to the Annual Financial Statements as of June 30, 2023, and in relation to item 1.A. "ARCOS DEL GOURMET SA AND ANOTHER V. EN-AABE KNOWLEDGE PROCESS", the following should be noted:
On September 22, 2023, the Chamber for Federal Administrative Litigation - Room V issued a judgment rejecting the appeal filed by Arcos del Gourmet S.A.
The judgment of the Court was appealed to the Supreme Court of Justice of the Nation through a federal extraordinary appeal filed on October 17, 2023. The legal advisors of the Company believe that this appeal has reasonable expectations of success, as there is a federal matter to enable the intervention of the Supreme Court.
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8.
Investment properties
Changes in the Group’s investment properties for the three-month period ended September 30, 2023 and for the year ended June 30, 2023 were as follows:
09.30.2023 | 06.30.2023 | |||
Level 2 | Level 3 | Level 2 | Level 3 | |
Fair value at the beginning of the period / year | 529,991 | 238,505 | 606,171 | 246,282 |
Additions | 569 | 983 | 4,472 | 3,655 |
Capitalized leasing costs | - | 24 | 19 | 69 |
Amortization of capitalized leasing costs (i) | (5) | (11) | (24) | (23) |
Transfers | (2) | (2) | 3,601 | 1,189 |
Disposals | (5,977) | - | (30,634) | - |
Currency translation adjustment | 4 | - | (26) | - |
Net gain / (loss) from fair value adjustment (ii) | 108,206 | (5,914) | (53,588) | (12,667) |
Fair value at the end of the period / year | 632,786 | 233,585 | 529,991 | 238,505 |
(i)
Amortization charges of capitalized leasing costs were recognized in "Costs" in the Statement of Income (Note 21).
(ii)
For the three-month period ended September 30, 2023, the net gain from fair value adjustment of investment properties was ARS 102,292. The net impact of the values in pesos of our properties was mainly a consequence of the change in macroeconomic conditions:
a)
loss of ARS 2,003 as a consequence of the variation in the projected income growth rate increase and the conversion to dollars of the projected cash flow in pesos according to the exchange rate estimates used in the cash flow from shopping malls.
b)
positive impact of ARS 62,002 resulting from the conversion into pesos of the value of the shopping malls in dollars based on the exchange rate at the end of the period.
c)
an increase of 35 basis points in the discount rate used for cash flows and an increase of 23 basis points in the discount rate used for perpetuity, mainly due to an increase in the country-risk rate component and risk-free rate of the WACC discount rate used to discount the cash flow, which led to a decrease in the value of the shopping malls of ARS 3,384.
d)
Additionally, due to the impact of the inflation adjustment, ARS 64,616 were reclassified for shopping malls from “Net gain from fair value adjustment” to “Inflation Adjustment” in the Statement of Income and Other Comprehensive Income.
e)
The value of our office buildings and other rental properties measured in real terms increased by 13.21% during the three-month period ended as of September 30, 2023, due to the variation of the implicit exchange rate. Likewise, there is an impact for the sales of the period.
The following is the balance by type of investment property of the Group for the three-month period ended September 30, 2023 and for the year ended June 30, 2023:
09.30.2023 | 06.30.2023 | |
Shopping Malls (i) | 248,114 | 250,180 |
Offices and other rental properties | 205,364 | 178,585 |
Undeveloped parcels of land | 412,195 | 338,924 |
Properties under development | 105 | 105 |
Others | 593 | 702 |
Total | 866,371 | 768,496 |
(i) Includes parking spaces.
The following amounts have been recognized in the Statements of Income and Other Comprehensive Income:
09.30.2023 | 09.30.2022 | |
Revenues (Note 20) | 24,708 | 22,087 |
Direct operating costs | (7,086) | (7,377) |
Development costs | (113) | (76) |
Net realized gain from fair value adjustment of investment properties (i) | 2,331 | 2,161 |
Net unrealized gain / (loss) from fair value adjustment of investment properties (ii) | 99,961 | (17,958) |
(i) As of September 30, 2023 corresponds (ARS 2,960) to the realized result from fair value adjustment for the period ((ARS 602) for the sale of floors of Catalinas Building and (ARS 2,358) for the sale of Maple Building) and ARS 5,291 for realized result from fair value adjustment made in previous years (ARS 2,654 for the sale of floors of Catalinas Building, ARS 42 for the sale of parking spaces in Libertador 498 and ARS 2,595 for the sale of Maple Building). As of September 30, 2022, ARS 150 corresponds to the result for changes in the fair value realized for the period and ARS 2,011 for the result of changes in fair value made in previous years, both for the sale of floors of Catalinas Building.
(ii) Includes the result from changes in the fair value of those investment properties that are in the portfolio and have not yet been sold. This was generated in accordance with what is described in the section named "valuation techniques" in Note 9 to the Annual Consolidated Financial Statements as of June 30, 2023.
Valuation techniques are described in Note 9 to the Annual Financial Statements. There were no changes to such techniques.
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Costa Urbana –former Solares de Santa María– Costanera Sur, Buenos Aires City (IRSA)
On December 21, 2021, it was published the law from Buenos Aires City congress approving the Regulations for the development of the property of approximately 70 hectares, owned by the Company since 1997, previously known as "Solares de Santa María", located in front of the Río de la Plata in the South Coast of the Autonomous City of Buenos Aires, southeast of Puerto Madero. The published law grants a New Standard, designated: "U73 - Public Park and Costa Urbana Urbanization", which enables the combination of diverse uses such as homes, offices, retail, services, public spaces, education, and entertainment.
The Company will have a construction capacity of approximately 866,806 sqm, which will drive growth for the coming years through the development of mixed-use projects.
IRSA agreed to give in 50.8 hectares for public use, which represents approximately 71% of the total area of the property to the development of public green spaces and will contribute with three additional lots of the property, two for the Sustainable Urban Development Fund (FODUS) and one for the Innovation Trust, Science and Technology of the Government of the Autonomous City of Buenos Aires, and the sum of USD 2 million in cash and the amount of 3,000,000 sovereign bonds (AL35) which have already been paid.
In March 2023, Mensura was approved with a proposal for subdivision, fractioning, transfer of streets and public space and we are in the process of deeding the 3 plots and the public park sector that is transferred for consideration.
Likewise, the Company will be in charge of the infrastructure and road works on the property and will carry out the public space works contributing up to USD 40 million together with the maintenance of the public spaces assigned for 10 years or until the sum of USD 10 million is completed.
“Costa Urbana” will change the landscape of Buenos Aires City, giving life to an undeveloped area and will be in an exceptional property due to its size, location and connectivity, providing the City the possibility of expanding and recovering access to the Río de la Plata coast with areas for walks, recreation, green spaces, public parks and mixed uses.
On the judicial front, it should be noted that there are two (2) related judicial processes:
(i)
On October 29, 2021, the Company was notified of the amparo lawsuit initiated by the Civil Association Observatory of Law in the City in relation to the property, in which it was stated that there were nullities that affected the approval process of the Agreement. Urban Planning (CU). The lawsuit was subsequently expanded, also challenging issues proposed in the CU. The Company proceeded to answer the claim on November 12, 2021, requesting its rejection, and on March 10, 2022, the court issued a ruling partially granting protection, which was appealed by the Company and the GCBA. On March 6, 2023, the Chamber of Administrative, Tax and Consumer Relations Litigation - Chamber IV decided to revoke the first instance ruling, and consequently reject the claim. Since this ruling was not appealed, the case has concluded favorably for the Company.
(ii)
On October 18, 2023, the Company was notified of the amparo lawsuit initiated by Messrs. Jonatan Baldiviezo and María Eva Koutsovitis in relation to the property, in which they intend to suspend the holding of the public hearing (which took place in August 2021), extend the registration period for the aforementioned hearing and declare the nullity of the public hearing, in the event that it had already been carried out, based on alleged violations of the right to informed participation in the same and access to environmental information. In this regard, the Company answered the complaint on November 1, 2023, requesting its rejection. This is based on the fact that the issue was already partially resolved by the trial referred to in point (i), and that all the relevant information for carrying out the approval process of the Urban Planning Agreement was fully provided. The environmental issues of the project must be addressed at the corresponding stage, as established by Law 123. Considering the issues discussed in this process, a resolution favorable to the interests of the Company is expected.
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9.
Property, plant and equipment
Changes in the Group’s property, plant and equipment for the three-month period ended September 30, 2023 and for the year ended June 30, 2023 were as follows:
Buildings and facilities | Machinery and equipment | Others (i) | 09.30.2023 | 06.30.2023 | |
Costs | 30,643 | 12,524 | 2,845 | 46,012 | 53,807 |
Accumulated depreciation | (18,252) | (11,856) | (2,222) | (32,330) | (30,583) |
Net book amount at the beginning of the period / year | 12,391 | 668 | 623 | 13,682 | 23,224 |
Additions | 143 | 81 | 22 | 246 | 1,069 |
Disposals | - | (2) | - | (2) | (4,562) |
Currency translation adjustment | - | - | - | - | (5) |
Transfers | - | 4 | - | 4 | (4,297) |
Depreciation charges (ii) | (292) | (73) | (31) | (396) | (1,747) |
Balances at the end of the period / year | 12,242 | 678 | 614 | 13,534 | 13,682 |
Costs | 30,786 | 12,607 | 2,867 | 46,260 | 46,012 |
Accumulated depreciation | (18,544) | (11,929) | (2,253) | (32,726) | (32,330) |
Net book amount at the end of the period / year | 12,242 | 678 | 614 | 13,534 | 13,682 |
(i)
includes furniture and fixtures and vehicles.
(ii)
As of September 30, 2023, depreciation charges of property, plant and equipment were recognized as follows: ARS 297 in "Costs", ARS 98 in "General and administrative expenses" and ARS 1 in "Selling expenses", respectively in the Statement of Income and Other Comprehensive Income (Note 21)
10.
Trading properties
Changes in the Group’s trading properties for the three-month period ended September 30, 2023 and for the year ended June 30, 2023 were as follows:
Completed properties | Properties under development | Undeveloped sites | 09.30.2023 | 06.30.2023 | |
Beginning of the period / year | 802 | 4,371 | 3,157 | 8,330 | 9,400 |
Additions | - | 43 | 13 | 56 | 427 |
Currency translation adjustment | - | (73) | - | (73) | 19 |
Transfers | - | - | - | - | (582) |
Disposals | (10) | - | - | (10) | (934) |
End of the period / year | 792 | 4,341 | 3,170 | 8,303 | 8,330 |
Non-current | 8,126 | 8,136 | |||
Current | 177 | 194 | |||
Total | 8,303 | 8,330 | |||
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11.
Intangible assets
Changes in the Group’s intangible assets for the three-month period ended September 30, 2023 and for the year ended June 30, 2023 were as follows:
Goodwill | Information systems and software | Future units to be received from barters and others | 09.30.2023 | 06.30.2023 | |
Costs | 642 | 4,026 | 11,235 | 15,903 | 14,505 |
Accumulated amortization | - | (3,689) | (1,502) | (5,191) | (4,685) |
Net book amount at the beginning of the period / year | 642 | 337 | 9,733 | 10,712 | 9,820 |
Additions | - | 99 | 1 | 100 | 1,909 |
Disposals | - | - | - | - | (241) |
Transfers | - | - | - | - | (270) |
Amortization charges (i) | - | (70) | (3) | (73) | (506) |
Balances at the end of the period / year | 642 | 366 | 9,731 | 10,739 | 10,712 |
Costs | 642 | 4,125 | 11,236 | 16,003 | 15,903 |
Accumulated amortization | - | (3,759) | (1,505) | (5,264) | (5,191) |
Net book amount at the end of the period / year | 642 | 366 | 9,731 | 10,739 | 10,712 |
(i)
As of September 30, 2023, amortization charges were recognized in the amount of ARS 56 in "Costs" and ARS 17 in "General and administrative expenses", in the Statement of Income and Other Comprehensive Income (Note 21).
12.
Right-of-use assets
The Group’s right-of-use assets as of September 30, 2023 and June 30, 2023 are the following:
09.30.2023 | 06.30.2023 | |
Offices, shopping malls and other rental properties | 876 | 616 |
Convention center | 3,288 | 3,341 |
Total Right-of-use assets | 4,164 | 3,957 |
Non-current | 4,164 | 3,957 |
Total | 4,164 | 3,957 |
The depreciation charge of the right-of use-assets is detailed below:
09.30.2023 | 09.30.2022 | |
Offices, shopping malls and other rental properties | 41 | 28 |
Convention center | 49 | 34 |
Total depreciation of right-of-use assets (i) | 90 | 62 |
(i)
As of September 30, 2023, amortization charges were recognized as follows: ARS 55 in "Costs", ARS 18 in "General and administrative expenses" and ARS 17 in "Selling expenses", respectively in the Consolidated Statement of Income and Other Comprehensive Income (Note 21).
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13.
Financial instruments by category
This note presents the financial assets and financial liabilities by category of financial instrument and a reconciliation to the corresponding line in the Consolidated Statements of Financial Position, as appropriate. Financial assets and liabilities measured at fair value are assigned based on their different levels in the fair value hierarchy. For further information related to fair value hierarchy refer to Note 14 to the Annual Financial Statements. Financial assets and financial liabilities as of September 30, 2023 are the following:
Financial assets at amortized cost | Financial assets at fair value through profit or loss | Subtotal financial assets | Non-financial assets | Total | |
Level 1 | |||||
September 30, 2023 | |||||
Assets as per Statements of Financial Position | |||||
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables) (Note 14) | 31,741 | - | 31,741 | 8,383 | 40,124 |
Investments in financial assets: | |||||
- Public companies’ securities | - | 4,948 | 4,948 | - | 4,948 |
- Mutual funds | - | 34,228 | 34,228 | - | 34,228 |
- Bonds | - | 11,007 | 11,007 | - | 11,007 |
- Others | 828 | 2,037 | 2,865 | - | 2,865 |
Cash and cash equivalents: | |||||
- Cash at bank and on hand | 15,603 | - | 15,603 | - | 15,603 |
- Short-term investments | - | 5,998 | 5,998 | - | 5,998 |
Total assets | 48,172 | 58,218 | 106,390 | 8,383 | 114,773 |
Financial liabilities at amortized cost | Financial liabilities at fair value through profit or loss | Subtotal financial liabilities | Non-financial liabilities | Total | |
Level 1 | |||||
September 30, 2023 | |||||
Liabilities as per Statements of Financial Position | |||||
Trade and other payables (Note 16) | 17,904 | - | 17,904 | 24,846 | 42,750 |
Borrowings (Note 17) | 140,341 | - | 140,341 | - | 140,341 |
Derivative financial instruments: | |||||
- Bond futures | - | 14 | 14 | - | 14 |
Total liabilities | 158,245 | 14 | 158,259 | 24,846 | 183,105 |
Financial assets and financial liabilities as of June 30, 2023 were as follows:
Financial assets at amortized cost | Financial assets at fair value through profit or loss | Subtotal financial assets | Non-financial assets | Total | |
Level 1 | |||||
June 30, 2023 | |||||
Assets as per Statements of Financial Position | |||||
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables) (Note 14) | 32,562 | - | 32,562 | 9,915 | 42,477 |
Investments in financial assets: | |||||
- Public companies’ securities | - | 6,803 | 6,803 | - | 6,803 |
- Mutual funds | - | 27,169 | 27,169 | - | 27,169 |
- Bonds | - | 12,424 | 12,424 | - | 12,424 |
- Others | 845 | 1,745 | 2,590 | - | 2,590 |
Cash and cash equivalents: | |||||
- Cash at bank and on hand | 7,084 | - | 7,084 | - | 7,084 |
- Short term investments | - | 4,693 | 4,693 | - | 4,693 |
Total assets | 40,491 | 52,834 | 93,325 | 9,915 | 103,240 |
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Financial liabilities at amortized cost | Financial liabilities at fair value through profit or loss | Subtotal financial liabilities | Non-financial liabilities | Total | |
Level 1 | |||||
June 30, 2023 | |||||
Liabilities as per Statements of Financial Position | |||||
Trade and other payables (Note 16) | 26,513 | - | 26,513 | 27,272 | 53,785 |
Borrowings (Note 17) | 145,527 | - | 145,527 | - | 145,527 |
Derivative financial instruments: | |||||
- Bond futures | - | 8 | 8 | - | 8 |
Total liabilities | 172,040 | 8 | 172,048 | 27,272 | 199,320 |
The fair value of financial assets and liabilities at their amortized cost does not differ significantly from their book value, except for borrowings (Note 17). The fair value of payables approximates their respective carrying amounts because, due to their short-term nature, the effect of discounting is not considered significant. Fair values are based on discounted cash flows (Level 3).
The valuation models used by the Group for the measurement of Level 2 instruments are no different from those used as of June 30, 2023.
As of September 30, 2023, there have been no changes to the economic or business circumstances affecting the fair value of the financial assets and liabilities of the Group.
14.
Trade and other receivables
Group’s trade and other receivables as of September 30, 2023 and June 30, 2023 are as follows:
09.30.2023 | 06.30.2023 | |
Sale, leases and services receivables | 17,277 | 20,114 |
Less: Allowance for doubtful accounts | (1,438) | (1,610) |
Total trade receivables | 15,839 | 18,504 |
Borrowings, deposits and others | 13,113 | 12,625 |
Advances to suppliers | 3,043 | 3,140 |
Tax receivables | 1,772 | 1,995 |
Prepaid expenses | 765 | 821 |
Long-term incentive plan | 1 | 1 |
Dividends | 119 | - |
Others | 4,034 | 3,781 |
Total other receivables | 22,847 | 22,363 |
Total trade and other receivables | 38,686 | 40,867 |
Non-current | 8,514 | 5,982 |
Current | 30,172 | 34,885 |
Total | 38,686 | 40,867 |
Movements on the Group’s allowance for doubtful accounts were as follows:
09.30.2023 | 06.30.2023 | |
Beginning of the period / year | 1,610 | 2,481 |
Additions (i) | 105 | 283 |
Recovery (i) | (51) | (163) |
Exchange rate differences | 219 | 500 |
Inflation adjustment | (445) | (1,491) |
End of the period / year | 1,438 | 1,610 |
(i)
Additions and recovery of the allowance for doubtful accounts have been included in “Selling expenses” in the Statement of Income and Other Comprehensive Income (Note 21).
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IRSA Inversiones y Representaciones Sociedad Anónima
15.
Cash flow and cash equivalent information
Following is a detailed description of cash flows generated by the Group’s operations for the three-month periods ended September 30, 2023 and 2022:
Note | 09.30.2023 | 09.30.2022 | |
Profit for the period | 81,080 | 3,089 | |
Adjustments for: | |||
Income tax | 19 | 42,950 | 3,620 |
Amortization and depreciation | 21 | 575 | 520 |
Loss from disposal of property, plant and equipment | 1 | - | |
Net (gain) / loss from fair value adjustment of investment properties | 8 | (102,292) | 15,797 |
Loss from disposal of joint ventures | 558 | - | |
Realization of currency translation adjustment | - | (365) | |
Gain from disposal of trading properties | (26) | (717) | |
Financial results, net | (2,695) | (9,036) | |
Provisions and allowances | (2,969) | 845 | |
Share of profit of associates and joint ventures | 7 | (2,217) | (2,281) |
Changes in operating assets and liabilities: | |||
(Increase) / decrease in inventories | (89) | 2 | |
(Increase) / decrease in trading properties | (20) | 26 | |
Decrease in trade and other receivables | 3,066 | 2,709 | |
Decrease in trade and other payables | (4,551) | (1,322) | |
Decrease in salaries and social security liabilities | (1,474) | (484) | |
Decrease in provisions | (92) | (24) | |
Net cash generated by operating activities before income tax paid | 11,805 | 12,379 | |
The following table presents a detail of significant non-cash transactions occurred in the three-month periods ended September 30, 2023 and 2022:
09.30.2023 | 09.30.2022 | |
Issuance of non-convertible notes | - | 53,547 |
Increase in investment properties through an increase in trade and other payables | - | 10 |
Currency translation adjustment | 336 | 620 |
Decrease in investment properties through an increase in property, plant and equipment | 4 | - |
Decrease in investments in financial assets through a decrease in trade and other payables | - | 496 |
Decrease in dividends receivables through an increase in investments in financial assets | - | 14 |
Decrease in Shareholders’ Equity through a decrease in trade and other receivables | 1,511 | - |
Increase in right-of-use assets through a decrease in lease liabilities | 296 | 88 |
Decrease in Shareholders’ Equity through an increase in trade and other payables | - | 71 |
Increase in intangible assets through a decrease in trading properties | - | 677 |
Barter transactions of investment properties | 226 | - |
Decrease in investment properties through an increase in trade and other receivables | 904 | - |
Decrease in investments in associates and joint ventures through an increase in trade and other receivables | 651 | - |
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IRSA Inversiones y Representaciones Sociedad Anónima
16.
Trade and other payables
Group’s trade and other payables as of September 30, 2023 and June 30, 2023 were as follows:
09.30.2023 | 06.30.2023 | |
Customers´ advances (*) | 11,516 | 12,254 |
Trade payables | 3,326 | 3,810 |
Accrued invoices | 2,740 | 3,306 |
Admission fees (*) | 10,481 | 11,015 |
Other income to be accrued | 190 | 195 |
Tenant deposits | 171 | 190 |
Total trade payables | 28,424 | 30,770 |
Taxes payable | 2,659 | 3,806 |
Other payables | 11,667 | 19,209 |
Total other payables | 14,326 | 23,015 |
Total trade and other payables | 42,750 | 53,785 |
Non-current | 11,836 | 13,264 |
Current | 30,914 | 40,521 |
Total | 42,750 | 53,785 |
(*) Mainly, corresponds to admission rights and rents collected in advance, which will accrue in an average term of 3 to 5 years.
17.
Borrowings
The breakdown of the Group’s borrowings as of September 30, 2023 and June 30, 2023 was as follows:
Book value | Fair value | |||
09.30.2023 | 06.30.2023 | 09.30.2023 | 06.30.2023 | |
Non-convertible notes | 128,491 | 130,236 | 127,751 | 131,150 |
Bank loans and others | 3,818 | 3,472 | 3,818 | 3,472 |
Bank overdrafts | 5,057 | 8,887 | 5,057 | 8,887 |
Other borrowings | 2,353 | 2,319 | 2,353 | 2,319 |
Loans with non-controlling interests | 622 | 613 | 622 | 613 |
Total borrowings | 140,341 | 145,527 | 139,601 | 146,441 |
Non-current | 87,081 | 90,767 | ||
Current | 53,260 | 54,760 | ||
Total | 140,341 | 145,527 | ||
18.
Provisions
The table below shows the movements in the Group's provisions categorized by type:
Legal claims (iii) | Investments in associates and joint ventures (ii) | 09.30.2023 | 06.30.2023 | |
Beginning of period / year | 9,116 | 2 | 9,118 | 1,146 |
Additions (i) | 681 | - | 681 | 10,349 |
Share of loss of associates | - | 2 | 2 | (22) |
Recovery (i) | (19) | - | (19) | (302) |
Used during the period / year | (92) | - | (92) | (90) |
Inflation adjustment | (649) | - | (649) | (1,963) |
End of period / year | 9,037 | 4 | 9,041 | 9,118 |
Non-current | 7,896 | 7,980 | ||
Current | 1,145 | 1,138 | ||
Total | 9,041 | 9,118 | ||
(i) Additions and recovery of legal claims are included in "Other operating results, net".
(ii) Corresponds to investments in Puerto Retiro, a joint venture with negative equity.
(iii) Includes the provision for the IDBD demand.
20
IRSA Inversiones y Representaciones Sociedad Anónima
IDBD
As indicated in Note 1 to the Annual Consolidated Financial Statements as of June 30, 2023, the Group lost control of IDBD on September 25, 2020.
On September 21, 2020, IDBD filed a lawsuit against Dolphin Netherlands B.V. (“Dolphin BV”) and IRSA before the Tel-Aviv Jaffa District Court (civil case no. 29694-09-20). The amount claimed by IDBD is NIS 140 million, alleging that Dolphin BV and IRSA breached an alleged legally binding commitment to transfer to IDBD 2 installments of NIS 70 million. On December 24, 2020, and following approval by the insolvency court, the IDBD trustee filed a motion to dismiss the claim, maintaining the right as IDBD trustee, to file a new inter alia claim in the same matter, after conduct an investigation into the reasons for IDBD's insolvency. On December 24, 2020, the court entered a judgment to dismiss the claim as requested. On October 31, 2021, the Insolvency Commissioner notified that he did not oppose the motion, and on that same date, the court affirmed the motion initiated by the trustee of IDBD.
On December 26, 2021 IDBD filed the lawsuit against Dolphin BV and IRSA for the sum of NIS 140 million, plus interest and costs
On January 30, 2023, a copy of the lawsuit was sent to us and we evaluated the legal defense alternatives for the company's interests.
On May 9, 2023, two filings were made by Dolphin BV and IRSA for the purpose of reversing the decision of the Tel-Aviv Jaffa District Court regarding the manner in which the lawsuits were made, the law and the jurisdiction applicable. The following day, the Court granted a period of 20 days for IDBD to respond to the presentations made by Dolphin BV and IRSA and set a hearing for June 29, 2023.
On May 30, 2023, IDBD made a presentation to answer the arguments raised by IRSA and Dolphin BV in their briefs.
On June 29, 2023, the hearing set by the Court took place, where the parties had the opportunity to explain the arguments raised in their briefs. The Court would be in a position to issue a verdict regarding the statements made on the way in which the notification of the lawsuits was made, the law and applicable jurisdiction.
On July 3, 2023, the Court issued a verdict on the claims made by IRSA and Dolphin BV, ordering that a new notification of the lawsuit be made to the domicile of Dolphin BV and considering valid the way in which the lawsuit was notified to IRSA. Likewise, the Court confirmed its jurisdiction over IRSA and Dolphin B.V; ordered that they assume the plaintiff's costs for the sum of NIS 25,000 and established that the deadline to answer the underlying claims of the lawsuit expires on December 7, 2023. IRSA will appeal the Court's verdict, and may do so until October 27. of 2023.
On September 14, 2023, IDBD made a presentation for the purposes of requesting the general inhibition of assets of IRSA and Dolphin B.V. for the sum of NIS 144 million for the purposes of ensuring the payment of a possible sentence. IRSA and Dolphin BV responded to said presentation on October 24, 2023 and a hearing was set for November 21, 2023 to discuss this matter.
Based on the review of the commitments and the analysis of the Company's lawyers, the sum of NIS 81 million, equivalent to ARS 7,401 million, are provisioned in these condensed consolidated interim financial statements.
21
IRSA Inversiones y Representaciones Sociedad Anónima
19.
Taxes
The details of the Group’s income tax, is as follows:
09.30.2023 | 09.30.2022 | |
Current income tax | (1,423) | (7,673) |
Deferred income tax | (41,527) | 4,053 |
Income tax | (42,950) | (3,620) |
Below is a reconciliation between income tax recognized and the amount which would result from applying the prevailing tax rate on profit before income tax for the three-month periods ended September 30, 2023 and 2022:
09.30.2023 | 09.30.2022 | |
Profit for the period at tax rate applicable in the respective countries | (43,787) | (2,211) |
Permanent differences: | ||
Share of loss of associates and joint ventures | 1,271 | 1,613 |
(Provision) / recovery of tax loss carry forwards | (130) | (872) |
Inflation adjustment permanent difference | (1,496) | 8,938 |
Difference between provision and tax return | 1,533 | - |
Non-taxable profit, non-deductible expenses and others | (1,467) | (1,187) |
Tax inflation adjustment | 1,126 | (9,901) |
Income tax | (42,950) | (3,620) |
The gross movement in the deferred income tax account is as follows:
09.30.2023 | 06.30.2023 | |
Beginning of period / year | (222,230) | (286,330) |
Deferred income tax charge | (41,527) | 64,100 |
End of period / year | (263,757) | (222,230) |
Deferred income tax assets | 974 | 1,159 |
Deferred income tax liabilities | (264,731) | (223,389) |
Deferred income tax liabilities, net | (263,757) | (222,230) |
20.
Revenues
09.30.2023 | 09.30.2022 | |
Base rent | 9,353 | 7,744 |
Contingent rent | 6,580 | 6,262 |
Admission rights | 1,488 | 1,179 |
Parking fees | 925 | 612 |
Commissions | 219 | 226 |
Property management fees | 150 | 149 |
Others | 187 | 145 |
Averaging of scheduled rent escalation | 239 | 26 |
Rentals and services income | 19,141 | 16,343 |
Revenue from hotels operation and tourism services | 5,981 | 4,772 |
Sale of trading properties | 36 | 944 |
Total revenues from sales, rentals and services | 25,158 | 22,059 |
Expenses and collective promotion fund | 5,567 | 5,744 |
Total revenues from expenses and collective promotion funds | 5,567 | 5,744 |
Total Group’s revenues | 30,725 | 27,803 |
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IRSA Inversiones y Representaciones Sociedad Anónima
21.
Expenses by nature
The Group discloses expenses in the statements of income by function as part of the line items “Costs”, “General and administrative expenses” and “Selling expenses”. The following table provides additional disclosures regarding expenses by nature and their relationship to the function within the Group.
Costs | General and administrative expenses | Selling expenses | 09.30.2023 | 09.30.2022 | |
Cost of sale of goods and services | 504 | - | - | 504 | 601 |
Salaries, social security costs and other personnel expenses | 3,607 | 1,708 | 285 | 5,600 | 5,302 |
Depreciation and amortization | 424 | 133 | 18 | 575 | 520 |
Fees and payments for services | 232 | 641 | 126 | 999 | 812 |
Maintenance, security, cleaning, repairs and others | 3,078 | 368 | 5 | 3,451 | 3,223 |
Advertising and other selling expenses | 1,213 | 8 | 271 | 1,492 | 1,802 |
Taxes, rates and contributions | 588 | 203 | 841 | 1,632 | 1,526 |
Director´s fees (Note 25) (i) | - | (3,685) | - | (3,685) | 716 |
Leases and service charges | 102 | 14 | 2 | 118 | 174 |
Allowance for doubtful accounts, net | - | - | 54 | 54 | (56) |
Other expenses | 250 | 200 | 8 | 458 | 358 |
Total as of September 30, 2023 | 9,998 | (410) | 1,610 | 11,198 | - |
Total as of September 30, 2022 | 10,161 | 3,642 | 1,175 | - | 14,978 |
(i) On 5 October 2023, fees to the Board of Directors were approved at the General Ordinary and Extraordinary Shareholders' Meeting for ARS 9,050. The Board of Directors of the Company had proposed Director´s fees for ARS 13,500 and accordingly made provision for such amount in the Annual Consolidated Financial Statements as of June 30, 2023. During the current period, with the final approval of said fee, the Company proceeded to recover the excess in the provision, with a balancing entry in the line that gave rise to it.
22.
Costs
09.30.2023 | 09.30.2022 | |
Inventories at the beginning of the period | 8,776 | 9,760 |
Purchases and expenses | 9,995 | 10,399 |
Currency translation adjustment | (73) | (381) |
Disposals | (10) | (226) |
Inventories at the end of the period | (8,690) | (9,391) |
Total costs | 9,998 | 10,161 |
The following table presents the composition of the Group’s inventories as of September 30, 2023 and June 30, 2023:
09.30.2023 | 06.30.2023 | |
Real estate | 8,303 | 8,330 |
Others | 387 | 446 |
Total inventories at the end of the period (*) | 8,690 | 8,776 |
(*) Inventories include trading properties and inventories.
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IRSA Inversiones y Representaciones Sociedad Anónima
23.
Other operating results, net
09.30.2023 | 09.30.2022 | |
Realization of currency translation adjustment (*) | - | 364 |
Donations | (33) | (70) |
Loss from disposal of joint ventures | (558) | - |
Lawsuits and other contingencies | (662) | (185) |
Administration fees | 34 | 39 |
Interest and allowances generated by operating credits | 303 | 103 |
Loss from disposal of property, plant and equipment | (1) | - |
Others | 503 | 201 |
Total other operating results, net | (414) | 452 |
(*) Corresponds to the liquidation of Condor.
24.
Financial results, net
09.30.2023 | 09.30.2022 | |
Finance income: | ||
- Interest income | 378 | 140 |
Total finance income | 378 | 140 |
Finance costs: | ||
- Interest expenses | (3,700) | (3,964) |
- Other finance costs | (421) | (440) |
Total finance costs | (4,121) | (4,404) |
Other financial results: | ||
- Fair value gain / (loss) of financial assets and liabilities at fair value through profit or loss, net | 290 | (4,465) |
- Exchange rate differences, net | (4,008) | 4,947 |
- (Loss) / gain from repurchase of non-convertible notes | (31) | 216 |
- (Loss) / gain from derivative financial instruments, net | (8) | 24 |
- Other financial results | 1,398 | (210) |
Total other financial results | (2,359) | 512 |
- Inflation adjustment | 6,510 | 10,700 |
Total financial results, net | 408 | 6,948 |
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IRSA Inversiones y Representaciones Sociedad Anónima
25.
Related party transactions
The following is a summary of the balances with related parties as of September 30, 2023 and June 30, 2023:
Item | 09.30.2023 | 06.30.2023 |
Trade and other receivables | 10,444 | 10,528 |
Investments in financial assets | 2,240 | 2,322 |
Borrowings | (415) | (415) |
Trade and other payables | (9,102) | (17,821) |
Total | 3,167 | (5,386) |
Related party | 09.30.2023 | 06.30.2023 | Description of transaction | Item |
New Lipstick LLC | 85 | 84 | Reimbursement of expenses receivable | Trade and other receivable |
Comparaencasa Ltd. | 761 | 754 | Other investments | Investments in financial assets |
54 | - | Loans granted | Trade and other receivable | |
Galerias Pacifico | 1,233 | 2,117 | Others | Trade and other receivable |
La Rural S.A. | 1,315 | 1,073 | Loans granted | Trade and other receivable |
(13) | (185) | Others | Trade and other payables | |
21 | 3 | Others | Trade and other receivable | |
Other associates and joint ventures | 1 | 1 | Reimbursement of expenses receivable | Trade and other receivable |
(113) | (115) | Loans obtained | Borrowings | |
16 | 16 | Leases and/or rights of use receivable | Trade and other receivable | |
- | 61 | Irrevocable contributions pending subscription | Trade and other receivable | |
26 | 36 | Management Fee | Trade and other receivable | |
(180) | (181) | Non-convertible notes | Borrowings | |
(35) | (94) | Others | Trade and other payables | |
19 | 24 | Others | Trade and other receivable | |
1 | 1 | Share based payments | Trade and other payables | |
4 | - | Loans granted | Trade and other receivable | |
119 | - | Dividends | Trade and other receivable | |
Total associates and joint ventures | 3,314 | 3,595 | ||
Cresud | 332 | - | Reimbursement of expenses receivable | Trade and other receivable |
(29) | (1,057) | Corporate services receivable | Trade and other payables | |
478 | 576 | Non-convertible notes | Investments in financial assets | |
(252) | (340) | Others | Trade and other payables | |
(3) | (4) | Share based payments | Trade and other payables | |
Total parent company | 526 | (825) | ||
Futuros y Opciones S.A. | 1 | 1 | Others | Trade and other receivable |
Helmir S.A. | (122) | (119) | Non-convertible notes | Borrowings |
Total subsidiaries of parent company | (121) | (118) | ||
Directors | (8,610) | (15,960) | Fees for services received | Trade and other payables |
Rundel Global LTD | 1,001 | 992 | Other investments | Investments in financial assets |
Yad Levim LTD | 6,533 | 6,389 | Loans granted | Trade and other receivable |
Others (1) | (28) | (12) | Leases and/or rights of use receivable | Trade and other payables |
660 | 689 | Others | Trade and other receivable | |
(133) | (170) | Others | Trade and other payables | |
25 | 34 | Reimbursement of expenses receivable | Trade and other receivable | |
Total directors and others | (552) | (8,038) | ||
Total at the end of the year | 3,167 | (5,386) | ||
(1) Includes CAMSA, Estudio Zang, Bergel & Viñes, Fundación Puerta 18, Sociedad Rural Argentina, CAM Communication LP, Sutton and Fundación Museo de los Niños.
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IRSA Inversiones y Representaciones Sociedad Anónima
The following is a summary of the results with related parties for the three-month periods ended September 30, 2023 and 2022:
Related party | 09.30.2023 | 09.30.2022 | Description of transaction |
Condor | - | 5 | Financial operations |
BHN Vida S.A | (3) | 2 | Leases and/or rights of use |
BHN Seguros Generales S.A. | (1) | 2 | Leases and/or rights of use |
Comparaencasa Ltd. | 43 | (69) | Financial operations |
Otras asociadas y negocios conjuntos | 11 | 95 | Financial operations |
(9) | (14) | Leases and/or rights of use | |
28 | 33 | Corporate services | |
Total associates and joint ventures | 69 | 54 | |
Cresud | 13 | 38 | Leases and/or rights of use |
(987) | (1,160) | Corporate services | |
14 | 1,663 | Financial operations | |
Total parent company | (960) | 541 | |
Helmir | (4) | - | Financial operations |
Total subsidiaries of parent company | (4) | - | |
Directors (1) | 3,685 | (717) | Fees and remunerations |
Senior Management | (54) | (91) | Fees and remunerations |
Rundel Globa LTD | 298 | - | Financial operations |
Yad Leviim LTD | 76 | 74 | Financial operations |
Others (2) | 5 | 2 | Corporate services |
(12) | 2 | Leases and/or rights of use | |
(56) | (12) | Financial operations | |
(30) | (60) | Donations | |
- | 2 | Corporate services | |
(110) | (19) | Fees and remuneration | |
(48) | (24) | Legal services | |
Total others | 3,754 | (843) | |
Total at the end of the year | 2,859 | (248) | |
(1)
See Note 21 these Financial Statements.
(2)
Includes CAMSA, Fundación Puerta 18, Galerías Pacífico, Estudio Zang, Austral Gold, Bergel y Viñes, Fundación Museo de los Niños, Sociedad Rural Argentina, Sutton, Espacio Digital S.A. and Casposo Argentina Ltd.
The following is a summary of the transactions with related parties for the three-month periods ended September 30, 2023 and 2022:
Related party | 09.30.2023 | 09.30.2022 | Description of the operation |
Quality Invest S.A. | (9,421) | - | Sale of shares |
Total sale of shares | (9,421) | - | |
Condor | - | ��141 | Dividends received |
Nuevo Puerto Santa Fe | 160 | - | Dividends received |
Total dividends received | 160 | 141 | |
26
IRSA Inversiones y Representaciones Sociedad Anónima
26.
CNV General Resolution N° 622
As required by Section 1°, Chapter III, Title IV of CNV General Resolution N° 622, below there is a detail of the notes to the Unaudited Condensed Interim Consolidated Financial Statements that disclose the information required by the Resolution in Exhibits.
Exhibit A - Property, plant and equipment | Note 8 Investment properties and Note 9 Property, plant and equipment |
Exhibit B - Intangible assets | Note 11 Intangible assets |
Exhibit C - Investment in associates | Note 7 Investments in associates and joint ventures |
Exhibit D - Other investments | Note 13 Financial instruments by category |
Exhibit E - Provisions and allowances | Note 14 Trade and other receivables and Note 18 Provisions |
Exhibit F - Cost of sales and services provided | Note 22 Costs |
Exhibit G - Foreign currency assets and liabilities | Note 27 Foreign currency assets and liabilities |
27.
Foreign currency assets and liabilities
Book amounts of foreign currency assets and liabilities are as follows:
Item / Currency (1) | Amount (2) | Peso exchange rate (3) | 09.30.2023 | 06.30.2023 |
Assets | ||||
Trade and other receivables | ||||
US Dollar | 27.86 | 348.95 | 9,722 | 8,840 |
Euros | 0.08 | 368.32 | 30 | 31 |
Receivables with related parties: | ||||
US Dollar | 20.20 | 349.95 | 7,070 | 7,030 |
Total trade and other receivables | 16,822 | 15,901 | ||
Investments in financial assets | ||||
US Dollar | 60.43 | 348.95 | 21,088 | 24,691 |
Pounds | 0.68 | 425.20 | 289 | 320 |
New Israel Shekel | 6.21 | 91.72 | 570 | 471 |
Investments with related parties: | ||||
US Dollar | 5.77 | 349.95 | 2,020 | 2,030 |
Total investments in financial assets | 23,967 | 27,512 | ||
Cash and cash equivalents | ||||
US Dollar | 37.33 | 348.95 | 13,026 | 5,877 |
Euros | 0.01 | 368.32 | 2 | 3 |
New Israel Shekel | 0.11 | 91.72 | 10 | 35 |
Total cash and cash equivalents | 13,038 | 5,915 | ||
Total Assets | 53,827 | 49,328 | ||
Liabilities | ||||
Trade and other payables | ||||
US Dollar | 16.35 | 349.95 | 5,723 | 5,654 |
Uruguayan pesos | 1.10 | 9.10 | 10 | 12 |
Payables to related parties: | ||||
US Dollar | 0.04 | 349.95 | 14 | 16 |
Total Trade and other payables | 5,747 | 5,682 | ||
Borrowings | ||||
US Dollar | 332.78 | 349.95 | 116,455 | 117,008 |
Borrowings with related parties | ||||
US Dollar | 1.13 | 349.95 | 397 | 392 |
Total Borrowings | 116,852 | 117,400 | ||
Derivative financial instruments | ||||
US Dollar | 0.04 | 349.95 | 14 | 8 |
Total derivative financial instruments | 14 | 8 | ||
Lease liabilities | ||||
US Dollar | 12.38 | 349.95 | 4,334 | 3,923 |
Total lease liabilities | 4,334 | 3,923 | ||
Provisions | ||||
New Israel Shekel | 80.69 | 91.72 | 7,401 | 7,464 |
Total Provisions | 7,401 | 7,464 | ||
Total Liabilities | 134,348 | 134,477 | ||
(1) Considering foreign currencies as those that differ from each Group’s subsidiaries functional currency at each period/year-end.
(2) Stated in millions of each foreign currency.
(3) Exchange rates as of September 30, 2023 according to Banco de la Nación Argentina.
27
IRSA Inversiones y Representaciones Sociedad Anónima
28.
Other relevant events of the period
Shares Buyback Program – New program
On June 15, 2023, the Board of Directors of IRSA approved a new program for the buyback program of shares issued by the Company and established the terms and conditions for the acquisition of treasury shares issued by the Company, under the terms of Article 64. of Law No. 26,831 and the CNV regulations, for up to a maximum amount of ARS 5,000 million and up to 10% of the share capital, up to a daily limit of up to 25% of the average volume of daily transactions that the shares have experienced of the Company, jointly in the markets it is listed, during the previous 90 business days, and up to a maximum price of USD 8 per GDS and ARS 425 per share. Likewise, the repurchase period was set at up to 180 days, beginning the day following the date of publication of the information in the Daily Bulletin of the Buenos Aires Stock Exchange.
The Company reported that on September 5, 2023, the Company's Board of Directors resolved to modify the acquisition price of its own shares, establishing a maximum value of USD 9 per GDS and up to a maximum value in pesos of ARS 720 per share, maintaining the remaining terms and conditions duly communicated.
Since the beginning of the program approved on June 15, 2023 and until the closing date of these condensed consolidated interim financial statements, the Company acquired 4,193,634 common shares (V.N. ARS 10 per share) for a total of ARS 1,901 million, 38.03% of the program approved on June 15, 2023. The amounts are expressed in the currency at the time of acquisition. As of the date of issuance of these financial statements, no deadline has been established for the disposal of the acquired shares.
Change in the total amount of shares and its nominal value
On September 13, 2023, the Company announced that having obtained the authorizations from the CNV and the Buenos Aires Stock Exchange as resolved at the Shareholders' Meeting held on April 27, 2023, in relation to:
(i)
an increase in the capital stock in the amount of ARS 6,552.4 million, through the partial capitalization of the Issue Premium account, resulting in the issuance of 6,552,405,000 common shares, with a par value of ARS 1 (one peso) and with the right to one vote per share; and
(ii)
changing the nominal value of the ordinary shares from ARS 1 to ARS 10 each and entitled to one (1) vote per share.
Having obtained the authorizations from the Comisión Nacional de Valores (the Argentine National Securities Commission) and from the Buenos Aires Stock Exchange, the Company informs all shareholders who have such quality as of September 19, 2023, according to the registry maintained by Caja de Valores S.A., that from September 20, 2023, the shares distribution and the change in nominal value was made simultaneously and the entry of the change of 811,137,457 book-entry common shares, with a nominal value of ARS 1 each and one vote per share, for the amount of 736,354,245 book-entry common shares with a nominal value of ARS 10 each and one vote per share, consequently, a reverse split of the Company’s shares shall be carried out, where every 1 (one) old share with nominal value of ARS 1 shall be exchanged for 0.907804514 new shares with nominal value ARS 10. The new shares distributed due to the described capitalization have economic rights under equal conditions with those that are currently in circulation.
Regarding the shareholders who, because of the entry in the Scriptural Registry, have fractions of common shares with a nominal value of ARS 10 and one vote per share, they were settled in cash in accordance with the listing regulations of Bolsas y Mercados Argentinos. Regarding the shareholders who, due to the exchange of shares did not reach at least one share with a nominal value of ARS 10, the necessary amount was be assigned to them until the nominal value of ARS 10 is completed.
The Company share capital after de indicated operations will amount to ARS 7,364 million represented by 736,354,245 book-entry common shares with a nominal value of ARS 10 each and one vote per share.
28
IRSA Inversiones y Representaciones Sociedad Anónima
Likewise, the Buenos Aires Stock Exchange has been requested to change the modality of the negotiation of the shares representing the share capital. Specifically, the negotiation price will be registered per share instead of being negotiated by Argentine peso (ARS) of nominal value, given that the change in nominal value, and the issuance of shares resulting from the capitalization, would produce a substantial downward effect on the share price.
This capitalization and change in the nominal value of the shares do not modify the economic values of the holdings or the percentage of participation in the share capital.
Warrants – Modification on Ratio and Price -
On September 14, 2023, we reported that as a result of (i) an increase in the capital stock through the partial capitalization of the Issue Premium account; and (ii) an amendment to section seven of its bylaws, changing the nominal value of the ordinary shares from one peso (ARS 1) to ten pesos (ARS 10) each and entitled to one (1) vote per share, which was informed in September 13, 2023, where the outstanding shares will change from 811,137,457 common shares, with a nominal value of ARS 1 each and one vote per share, to the amount of 736,354,245 common shares with a nominal value of ARS 10 each and one vote per share, as it was approved by the shareholders meeting held on April 27, 2023. The terms and conditions of the outstanding warrants for common shares of the Company have been modified as follows:
Amount of shares to be issued per warrant:
● Ratio previous to the adjustment: 1.1719 (Nominal Value ARS 1);
● Ratio after the adjustment (current): 1.0639 (Nominal Value ARS 10).
Warrant exercise price per new share to be issued:
● Price previous to the adjustment: USD 0.3689 (Nominal Value ARS 1);
● Price after the adjustment (current): USD 0.4063 (Nominal Value ARS 10).
The other terms and conditions of the warrants remain the same.
Warrants exercise
During the three-month period ended September 30, 2023, certain warrant holders exercised their right to purchase additional shares. For this reason, USD 27,247 were received, for a converted warrants of 63,039 common shares.
29.
Subsequent events
“261 Della Paolera” floor sale
On October 5, 2023, the transfer deed was signed for the sale of the 25th and 26th floors of the “261 Della Paolera” tower located in the Catalinas neighborhood of the Autonomous City of Buenos Aires for a total of 2,395 square meters, 18 units of garages and 6 complementary units of the same building. The transaction price was approximately USD (MEP) 14.9 million, all of which were paid in ARS.
After this transaction, IRSA keeps the property of 4 floors of the building with an approximate leasable area of 4,937 sqm, in addition to parking spaces and other complementary spaces.
29
IRSA Inversiones y Representaciones Sociedad Anónima
General Ordinary and Extraordinary Shareholders’ Meeting
On October 5, 2023, the General Ordinary and Extraordinary Shareholders’ Meeting was held where it was resolved to allocate the results of the year as follows: (I) ARS 2,867.5 million to the integration of the Legal Reserve, (ARS 3,428.9 million in homogeneous currency of the date of the Assembly) and, (II) the remainder for the sum of ARS 54,483.3 million (ARS 65,148.9 million in homogeneous currency of the date of the Assembly), to the distribution of a dividend to Shareholders in proportion to their shareholdings, payable in cash for the sum of ARS 64,000 million. Taking into consideration that the restated results were sufficient to cover the payment of the proposed dividends, it was approved to allocate the balance of the restated results for the year (ARS 1,148.9 million) to the integration of the Reserve for the distribution of future dividends.
Likewise, it was approved to distribute 13,928,410 own shares in the portfolio of NV ARS 1 to the Shareholders in proportion to their shareholdings. Due to the aforementioned change in nominal value, each share of nominal value ARS1 corresponds to 0.90780451408 shares of nominal value ARS10, therefore, said amount updated by the aforementioned liquidation corresponds to the amount of 12,644,273 shares of NV ARS 10.
On October 20, 2023, IRSA reported that it had made the payment of the dividend approved at the meeting held on October 5, 2023 in Argentina.
With respect to our holders of Global Depositary Shares (“GDS”), and due to the exchange and stock exchange regulations in force in the Argentine Republic, which have increased their restrictions in recent weeks, the Bank of New York Mellon (“BONY”), depositary bank of the GDS, is prevented from distributing the dividend paid by the Company.
Given the aforementioned restrictions, the Company has deposited the corresponding funds in a common investment fund Super Ahorro ARS (pure money market fund) managed by Banco Santander, BONY's representative bank in Argentina and is collaborating with BONY in order to analyze possible alternatives for the distribution or investment of said funds until such time as that entity can channel them in favor of the GDS holders, making available to any GDS holder who so decides the pesos corresponding to their dividend.
Change in Warrants terms and conditions
Because of the payment of cash dividends and the pro-rata distribution of treasury shares among its shareholders, made by the Company on October 12, 2023, certain terms and conditions of the outstanding warrants to subscribe common shares have changed:
●
Number of shares to be issued per warrant: Pre-dividend ratio: 1.0639. Post-dividend ratio: 1.2272 (VN ARS 10).
●
Exercise price per new share to be issued: Pre-dividend price: USD 0.4063. Post-dividend price: USD 0.3522 (VN ARS 10).
The other terms and conditions of the warrants remain the same.
30
Free translation from the original prepared in Spanish for publication in Argentina
REVIEW REPORT ON THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
To the Shareholders, President and Directors of
IRSA Inversiones y Representaciones Sociedad Anónima
Legal address: Carlos Della Paolera 261 - 9th floor
Autonomous City of Buenos Aires
Tax Registration Number: 30-52532274-9
Introduction
We have reviewed the accompanying unaudited condensed interim consolidated financial statements of IRSA Inversiones y Representaciones Sociedad Anónima and its subsidiaries (hereinafter “the Company”), which comprise the unaudited condensed interim consolidated statement of financial position as of September 30, 2023, the unaudited condensed interim consolidated statements of income and other comprehensive income, of changes in shareholders’ equity and of cash flows for the three-month period then ended, and selected explanatory notes.
Management’s responsibility
The Board of Directors of the Company is responsible for the preparation and presentation of these unaudited condensed interim consolidated financial statements in accordance with International Financial Reporting Standards, adopted by the Argentine Federation of Professional Councils in Economic Sciences (FACPCE) as professional accounting standards and included by the National Securities Commission (CNV) in its regulations, as approved by the International Accounting Standards Board (IASB), and is therefore responsible for the preparation and presentation of the unaudited condensed interim consolidated financial statements mentioned in the first paragraph, in accordance with International Accounting Standard 34 Interim Financial Information (IAS 34).
Scope of our review
Our review was limited to the application of the procedures established under International Standards on Review Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity, adopted as a review standard in Argentina by Technical Pronouncement No. 33 of the FACPCE and approved by the International Auditing and Assurance Standards Board (IAASB). A review of interim financial information consists of inquiries of Company staff responsible for preparing the information included in the unaudited condensed interim consolidated financial statements and of analytical and other review procedures. This review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
31
Conclusion
On the basis of our review, nothing has come to our attention that causes us to believe that the unaudited condensed interim consolidated financial statements mentioned in the first paragraph of this report have not been prepared, in all material respects, in accordance with International Accounting Standard 34 Interim Financial Reporting.
Report on compliance with current regulations
In accordance with current regulations, we report, in connection with IRSA Inversiones y Representaciones Sociedad Anónima, that:
a)
the unaudited condensed interim consolidated financial statements of IRSA Inversiones y Representaciones Sociedad Anónima have not been transcribed into the Inventory and Balance Sheet book and, except for the above mentioned situation, as regards those matters that are within our competence, they are in compliance with the provisions of the General Companies Law and pertinent resolutions of the National Securities Commission;
b)
the unaudited condensed interim separate financial statements of IRSA Inversiones y Representaciones Sociedad Anónima arise from accounting records carried in all formal aspects in accordance with legal requirements except for i) the lack of transcription to the Inventories and Balance Sheet Book, and ii) the lack of transcription to the General Journal Book of the accounting entries corresponding to the month of September 2023;
c)
we have read the Business Summary (“Reseña Informativa”), on which we have no observations to make regarding matters that are within our competence;
d)
as of September 30, 2023 the debt of IRSA Inversiones y Representaciones Sociedad Anónima accrued in favor of the Argentine Integrated Social Security System, as shown by the Company’s accounting records, amounted to ARS 539,282,080, which was not due at that date.
Autonomous City of Buenos Aires, November 6, 2023.
PRICE WATERHOUSE & CO. S.R.L. (Partner) | ABELOVICH, POLANO & ASOCIADOS S.R.L. (Partner) | |
C.P.C.E.C.A.B.A. V° 1 F° 17 | C.P.C.E.C.A.B.A. V. 1 F. 30 Marcelo Héctor Fuxman Public Accountant (UBA) C.P.C.E. C.A.B.A. V. 134 F. 85 | |
Carlos Brondo Public Accountant (UNCUYO) C.P.C.E.C.A.B.A. V. 391 F. 078 | Noemí I. Cohn Public Accountant (UBA) C.P.C.E. C.A.B.A. V. 116 F. 135 |
32
IRSA Inversiones y Representaciones Sociedad Anónima
Unaudited Condensed Interim Separate Financial Statements as of September 30, 2023 and for the three month periods ended as of that date, presented comparatively.
33
IRSA Inversiones y Representaciones Sociedad Anónima
Unaudited Condensed Interim Separate Statement of Financial Position
as of September 30, 2023 and June 30, 2023
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
Note | 09.30.2023 | 06.30.2023 | |
ASSETS | |||
Non-current assets | |||
Investment properties | 7 | 655,203 | 585,795 |
Property, plant and equipment | 8 | 1,748 | 1,768 |
Trading properties | 9 | 3,947 | 3,930 |
Intangible assets | 10 | 9,800 | 9,789 |
Right of use assets | 11 | 791 | 520 |
Investments in subsidiaries, associates and joint ventures | 6 | 220,267 | 212,380 |
Trade and other receivables | 13 | 17,573 | 14,329 |
Total non-current assets | 909,329 | 828,511 | |
Current assets | |||
Trading properties | 9 | 14 | 28 |
Inventories | 131 | 152 | |
Income tax credit | 748 | 910 | |
Trade and other receivables | 13 | 13,962 | 18,047 |
Investments in financial assets | 12 | 35,797 | 31,601 |
Cash and cash equivalents | 12 | 12,111 | 4,637 |
Total current assets | 62,763 | 55,375 | |
TOTAL ASSETS | 972,092 | 883,886 | |
SHAREHOLDERS’ EQUITY | |||
Shareholders' equity (according to corresponding statements) | 563,878 | 488,892 | |
TOTAL SHAREHOLDERS’ EQUITY | 563,878 | 488,892 | |
LIABILITIES | |||
Non-current liabilities | |||
Trade and other payables | 15 | 8,246 | 9,079 |
Borrowings | 16 | 91,279 | 95,057 |
Deferred income tax liabilities | 17 | 208,423 | 177,944 |
Provisions | 18 | 686 | 581 |
Lease liabilities | 705 | 448 | |
Total non-current liabilities | 309,339 | 283,109 | |
Current liabilities | |||
Trade and other payables | 15 | 23,104 | 32,844 |
Salaries and social security liabilities | 1,107 | 2,142 | |
Borrowings | 16 | 73,723 | 75,975 |
Provisions | 18 | 816 | 847 |
Lease liabilities | 125 | 77 | |
Total current liabilities | 98,875 | 111,885 | |
TOTAL LIABILITIES | 408,214 | 394,994 | |
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES | 972,092 | 883,886 |
The accompanying notes are an integral part of these Financial Statements.
.. Alejandro G. Elsztain Vicepresident II |
34
IRSA Inversiones y Representaciones Sociedad Anónima
Unaudited Condensed Interim Separate Statement of Income and Other Comprehensive Income
for the three-month periods ended September 30, 2023 and 2022
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
Note | 09.30.2023 | 09.30.2022 | |
Revenues | 19 | 19,458 | 17,983 |
Costs | 20 | (5,694) | (6,350) |
Gross profit | 13,764 | 11,633 | |
Net gain / (loss) from fair value adjustment of investment properties | 7 | 73,966 | (11,714) |
General and administrative expenses | 20 | 1,713 | (2,585) |
Selling expenses | 20 | (1,021) | (667) |
Other operating results, net | 21 | (549) | - |
Profit / (loss) from operations | 87,873 | (3,333) | |
Share of profit / (loss) of subsidiaries, associates and joint ventures | 6 | 19,143 | (141) |
Profit / (loss) before financial results and income tax | 107,016 | (3,474) | |
Finance income | 22 | 107 | 62 |
Finance costs | 22 | (3,876) | (4,348) |
Other financial results | 22 | (916) | 2,135 |
Inflation adjustment | 22 | 5,190 | 9,584 |
Financial results, net | 505 | 7,433 | |
Profit before income tax | 107,521 | 3,959 | |
Income tax | 17 | (30,479) | (1,191) |
Profit for the period | 77,042 | 2,768 | |
Other comprehensive loss: | |||
Items that may be reclassified subsequently to profit or loss: | |||
Currency translation adjustment and other comprehensive results of subsidiaries, associates and joint ventures | (326) | (584) | |
Total other comprehensive loss for the period (i) | (326) | (584) | |
Total comprehensive income for the period | 76,716 | 2,184 | |
Profit per share for the period (ii) | |||
Basic | 104.82 | 3.74 | |
Diluted | 103.27 | 3.83 |
(i)
Components of other comprehensive income have no impact on income tax.
(ii)
See Note 28 to the Annual Consolidated Financial Statements as of June 30, 2023.
The accompanying notes are an integral part of these Financial Statements.
.. Alejandro G. Elsztain Vicepresident II |
35
IRSA Inversiones y Representaciones Sociedad Anónima
Unaudited Condensed Interim Separate Statement of Changes in Shareholders’ Equity
for the three-month period ended September 30, 2023
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
Share capital | ||||||||||||
Outstanding shares | Shares to issue (iii) | Treasury shares | Inflation adjustment of share capital and treasury shares (i) | Warrants (ii) | Share premium | Additional paid-in capital from treasury shares | Legal reserve | Special Reserve Resolution CNV 609/12 | Other reserves (iv) | Retained earnings | Total Shareholders’ equity | |
Balance as of June 30, 2023 | 799 | 6,553 | 12 | 113,704 | 8,447 | 172,600 | 677 | 13,533 | 67,326 | 27,920 | 77,321 | 488,892 |
Profit for the period | - | - | - | - | - | - | - | - | - | - | 77,042 | 77,042 |
Other comprehensive loss for the period | - | - | - | - | - | - | - | - | - | (326) | - | (326) |
Total comprehensive (loss) / income for the period | - | - | - | - | - | - | - | - | - | (326) | 77,042 | 76,716 |
Repurchase of treasury shares (ii) | (132) | - | 132 | - | - | - | - | - | - | (1,742) | - | (1,742) |
Exercise of warrants (ii) | - | - | - | - | (7) | 21 | - | - | - | - | - | 14 |
Issuance of shares (iii) | 6,553 | (6,553) | - | - | - | - | - | - | - | - | - | - |
Changes in non-controlling interest | - | - | - | - | - | - | - | - | - | (2) | - | (2) |
Balance as of September 30, 2023 | 7,220 | - | 144 | 113,704 | 8,440 | 172,621 | 677 | 13,533 | 67,326 | 25,850 | 154,363 | 563,878 |
(i) Includes ARS 4 of inflation adjustment of treasury shares. See Note 17 of Consolidated Financial Statements as of June 30, 2023.
(ii) See Notes 28 and 29 to the Unaudited Condensed Interim Consolidated Financial Statements.
(iii) See Note 28 to the Unaudited Condensed Interim Consolidated Financial Statements.
(iv) Group’s other reserves for the period ended September 30, 2023 are comprised as follows:
Cost of treasury shares | Reserve for future dividends | Reserve for currency translation adjustment | Special reserve | Other reserves (i) | Total other reserves | |
Balance as of June 30, 2023 | (4,483) | 12,114 | 255 | 41,942 | (21,908) | 27,920 |
Other comprehensive loss for the period | - | - | (326) | - | - | (326) |
Total comprehensive loss for the period | - | - | (326) | - | - | (326) |
Repurchase of treasury shares | (1,742) | - | - | - | - | (1,742) |
Changes in non-controlling interest | - | - | - | - | (2) | (2) |
Balance as of September 30, 2023 | (6,225) | 12,114 | (71) | 41,942 | (21,910) | 25,850 |
(i) Includes revaluation surplus
There are no cumulative unpaid dividends on preferred shares.
The accompanying notes are an integral part of these Financial Statements.
. Alejandro G. Elsztain Vicepresident II |
36
IRSA Inversiones y Representaciones Sociedad Anónima
Unaudited Condensed Interim Separate Statement of Changes in Shareholders’ Equity
for the three-month period ended September 30, 2022
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
Share capital | |||||||||||
Outstanding shares | Treasury shares | Inflation adjustment of share capital and treasury shares (i) | Warrants | Share premium | Additional paid-in capital from treasury shares | Legal reserve | Special Reserve Resolution CNV 609/12 | Other reserves (ii) | Retained earnings | Total Shareholders’ equity | |
Balance as of June 30, 2022 | 805 | 6 | 101,212 | 8,473 | 191,579 | 705 | 9,062 | 67,326 | (6,211) | 89,418 | 462,375 |
Profit for the period | - | - | - | - | - | - | - | - | - | 2,768 | 2,768 |
Other comprehensive loss for the period | - | - | - | - | - | - | - | - | (584) | - | (584) |
Total comprehensive (loss) / income for the period | - | - | - | - | - | - | - | - | (584) | 2,768 | 2,184 |
Repurchase of treasury shares | (5) | 5 | - | - | - | - | - | - | (1,637) | - | (1,637) |
Exercise of warrants | - | - | - | - | 2 | - | - | - | - | - | 2 |
Reserve for share-based payments | - | - | - | - | - | (7) | - | - | 7 | - | - |
Other changes in equity | - | - | - | - | - | - | - | - | 95 | - | 95 |
Balance as of September 30, 2022 | 800 | 11 | 101,212 | 8,473 | 191,581 | 698 | 9,062 | 67,326 | (8,330) | 92,186 | 463,019 |
(i) Includes ARS 3 of inflation adjustment of treasury shares. See Note 17 of Consolidated Financial Statements as of June 30, 2023.
(ii) Group’s other reserves for the period ended September 30, 2022 are comprised as follows:
Cost of treasury shares | Reserve for future dividends | Reserve for currency translation adjustment | Special reserve | Other reserves (i) | Total other reserves | |
Balance as of June 30, 2022 | (2,164) | 12,114 | 1,465 | 3,886 | (21,512) | (6,211) |
Other comprehensive loss for the period | - | - | (584) | - | - | (584) |
Total comprehensive loss for the period | - | - | (584) | - | - | (584) |
Repurchase of treasury shares | (1,637) | - | - | - | - | (1,637) |
Reserve for share-based payments | 10 | - | - | - | (3) | 7 |
Other changes in equity | - | - | 95 | - | - | 95 |
Balance as of September 30, 2022 | (3,791) | 12,114 | 976 | 3,886 | (21,515) | (8,330) |
(i) Includes revaluation surplus
There are no cumulative unpaid dividends on preferred shares.
The accompanying notes are an integral part of these Financial Statements.
.. Alejandro G. Elsztain Vicepresident II |
37
IRSA Inversiones y Representaciones Sociedad Anónima
Unaudited Condensed Interim Separate Statement of Cash Flows
for the three-month periods ended September 30, 2023 and 2022
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
Note | 09.30.2023 | 09.30.2022 | |
Operating activities: | |||
Net cash generated from operations before income tax paid | 14 | 6,634 | 8,979 |
Income tax paid | (92) | (1,496) | |
Net cash flow generated from operating activities | 6,542 | 7,483 | |
Investing activities: | |||
Acquisition of investment properties | 7 | (1,207) | (1,065) |
Acquisition of property, plant and equipment | 8 | (80) | (31) |
Acquisition of intangible assets | 10 | (29) | (2) |
Increase of investments in financial assets | (14,781) | (14,883) | |
Proceeds from sale of investment properties | 4,847 | 4,322 | |
Proceeds from sale of property, plant and equipment | 1 | - | |
Proceeds from sale of joint ventures | 8,472 | - | |
Derivative financial instruments, net | - | (5) | |
Increase in loans granted to related parties | (122) | (86) | |
Proceeds from sale of investments in financial assets | 10,893 | 17,194 | |
Capital contributions to subsidiaries, associates and joint ventures pending subscription | (27) | (200) | |
Interest collected | 9 | 93 | |
Net cash flow generated from investing activities | 7,976 | 5,337 | |
Financing activities: | |||
Payment of short-term loans, net | (2,571) | (12,783) | |
Interests paid | (2,046) | (5,957) | |
Loans obtained from subsidiaries, associates and joint ventures | 961 | 894 | |
Payment of loans from subsidiaries, associates and joint ventures | - | (45) | |
Payment of lease liabilities | (41) | (2) | |
Repurchase of treasury shares | (1,742) | (1,637) | |
Exercise of warrants | 14 | 2 | |
Payment of borrowings and non-convertible notes | (2,906) | (22,849) | |
Borrowings, issuance and new placement of non-convertible notes | 841 | - | |
Net cash flow used in financing activities | (7,490) | (42,377) | |
Increase / (decrease) in cash and cash equivalents, net | 7,028 | (29,557) | |
Cash and cash equivalents at the beginning of the period | 4,637 | 30,481 | |
Foreign exchange gain in cash and changes in fair value of cash equivalents | 457 | 415 | |
Result from exposure to inflation on cash and cash equivalents | (11) | (191) | |
Cash and cash equivalents at the end of the period | 12 | 12,111 | 1,148 |
The accompanying notes are an integral part of these Financial Statements.
.. Alejandro G. Elsztain Vicepresident II |
38
IRSA Inversiones y Representaciones Sociedad Anónima
Notes to the Unaudited Condensed Interim Separate Financial Statements
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
1.
General information and company’s business
IRSA Inversiones y Representaciones Sociedad Anónima (“IRSA” or “The Company”) was founded in 1943, it is primarily engaged in managing real estate holdings in Argentina since 1991.
IRSA is a corporation incorporated and domiciled in Argentina. The registered office is Carlos Della Paolera 261, 9th. Floor, Buenos Aires, Argentina.
The Company owns, manages and develops a portfolio of office and other rental properties in Buenos Aires.Directly and indirectly, it also participates in the operation of shopping malls. In addition, IRSA through its subsidiaries, associates and joint ventures manages and develops branded hotels across Argentina.
These Unaudited Condensed Interim Separate Financial Statements have been approved for issue by the Board of Directors on November 6, 2023.
2.
Summary of significant accounting policies
2.1.
Basis of preparation
See Note 2.1. to the Unaudited Condensed Interim Consolidated Financial Statements.
2.2. Significant accounting policies
The accounting policies applied in the presentation of these Unaudited Condensed Interim Separate Financial Statements are consistent with those applied in the preparation of the Annual Separate Financial Statements, as described in Note 2 to those Annual Financial Statements.
2.3.
Comparability of information
The amounts as of June 30, 2023 and September 30, 2022, which are disclosed for comparative purposes, arise from the financial statements at said dates restated in accordance with IAS 29 (note 2.1).Certain items from prior periods have been reclassified for consistency purposes.
2.4.
Use of estimates
The preparation of Financial Statements at a certain date requires Management to make estimates and evaluations affecting the amount of assets and liabilities recorded and contingent assets and liabilities disclosed at such date, as well as income and expenses recorded during the period. Future results might differ from the estimates and evaluations made at the date of preparation of these Unaudited Condensed Interim Separate Financial Statements.In the preparation of these Unaudited Condensed Interim Separate Financial Statements, the significant judgments made by Management in applying the Company’s accounting policies and the main sources of uncertainty were the same that the Company used in the preparation of the Annual Separate Financial Statements for the fiscal year ended June 30, 2023, described in Note 3 to those financial statements.
3.
Seasonal effects on operations
See Note 3 to the Unaudited Condensed Interim Consolidated Financial Statements.
39
IRSA Inversiones y Representaciones Sociedad Anónima
4.
Acquisitions and disposals
See description of acquisitions and disposals made by the Company and/or its subsidiaries for the three-month period ended September 30, 2023 in Note 4 to the interim condensed consolidated financial statements.
5.
Financial risk management and fair value estimates
These Unaudited Condensed Interim Financial Statements do not include all the information and disclosures of the risk management, so they should be read together with the Annual Separate Financial Statements as of June 30, 2023. There has been no changes in the risk management or risk management policies applied by the Company since the end of the annual fiscal year.See notes to the Unaudited Condensed Interim Consolidated Financial Statements. Furthermore, there have been no transfers between the different hierarchies used to assess the fair value of the Company’s financial instruments.
6.
Investments in subsidiaries, associates and joint ventures
The Company conducts its business through several operating and holding subsidiaries, associates and joint ventures. Its main subsidiaries include Tyrus S.A., Panamerican Mall S.A., Arcos del Gourmet S.A. and Torodur S.A..The main associates include Banco Hipotecario S.A. The main joint ventures include Cyrsa S.A. and Nuevo Puerto Santa Fe S.A.
Detailed below is the evolution of investments in subsidiaries, associates and joint ventures of the Company, for the three-month period ended September 30, 2023 and for the year ended June 30, 2023:
09.30.2023 | 06.30.2023 | |
Beginning of period / year | 212,111 | 231,208 |
Share of profit / (loss) | 19,143 | (6,431) |
Other comprehensive loss | (326) | (1,765) |
Capital contributions (Note 23) | 17 | 391 |
Sale / acquisition of interest (i) | (9,421) | 109 |
Changes in non-controlling interest | - | (35) |
Dividends (Note 23) | (1,672) | (4,886) |
Decrease in participation (ii) | - | (6,675) |
Other changes in subsidiaries’ equity | (2) | 195 |
End of the period / year (iii) | 219,850 | 212,111 |
(i)
Corresponds to the sale of interest in Quality Invest S.A. as of September 30, 2023.
(ii)
Corresponds to the Efanur´s liquidation.
(iii)
Includes ARS (417) as of September 30, 2023 and ARS (269) as of June 30, 2023 reflecting interests in companies with negative equity, which were disclosed in “provisions”
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IRSA Inversiones y Representaciones Sociedad Anónima
Name of the entity | % ownership interest | Company'sinterest in equity | Company’sinterest in comprehensive income / (loss) | |||
09.30.2023 | 06.30.2023 | 09.30.2023 | 06.30.2023 | 09.30.2023 | 09.30.2022 | |
Subsidiaries | ||||||
Tyrus S.A. | 100.00% | 100.00% | 11,059 | 11,655 | (588) | (399) |
Efanur S.A. (*) | - | - | - | - | - | 69 |
Ritelco S.A. | 100.00% | 100.00% | 5,429 | 5,079 | 347 | 250 |
Inversora Bolívar S.A. | 96.57% | 96.57% | 5,361 | 5,048 | 313 | 236 |
ECLASA | 98.93% | 98.93% | 7,678 | 7,292 | 386 | 48 |
Palermo Invest S.A. | 97.34% | 97.34% | 6,485 | 6,156 | 328 | 250 |
Nuevas Fronteras S.A. | 76.34% | 76.34% | 2,453 | 2,273 | 180 | (2) |
Llao Llao Resorts S.A. | 50.00% | 50.00% | 2,610 | 2,113 | 498 | 174 |
Hoteles Argentinos S.A.U. | 100.00% | 100.00% | 1,457 | 1,343 | 114 | (55) |
Liveck S.A. | 9.30% | 9.30% | 525 | 520 | (13) | (26) |
Panamerican Mall S.A. | 80.00% | 80.00% | 107,008 | 92,359 | 14,649 | (2,230) |
Torodur S.A. | 100.00% | 100.00% | 29,580 | 29,356 | 224 | (941) |
Arcos del Gourmet S.A. | 90.00% | 90.00% | 12,224 | 11,643 | 581 | 367 |
Shopping Neuquén S.A. | 99.95% | 99.95% | 11,235 | 10,733 | 502 | (67) |
Centro de Entretenimientos La Plata S.A. (5) (6) | 95.40% | 95.40% | 3,586 | 2,686 | 901 | 100 |
We Are Appa S.A. (4) | 98.67% | 98.67% | (416) | (268) | (148) | (269) |
Entertainment Holdings S.A. | 70.00% | 70.00% | 1,399 | 1,057 | 342 | 281 |
Emprendimiento Recoleta S.A. (3) | 53.68% | 53.68% | 146 | 175 | (30) | (7) |
Entretenimiento Universal S.A. (4) | 3.75% | 3.75% | (1) | (1) | - | 2 |
Fibesa S.A.U. | 100.00% | 100.00% | 540 | 128 | 412 | 231 |
IRSA - Galerías Pacífico S.A. - U.T. (9) | 50.00% | 50.00% | - | 1,832 | (322) | 522 |
Associates | ||||||
Banco Hipotecario S.A. (1) (2) | 4.93% | 4.93% | 5,486 | 5,162 | 324 | 250 |
Banco de Crédito y Securitización S.A. (2) | 37.72% | 37.72% | 2,022 | 1,897 | 125 | 12 |
GCDI S.A. (Ex TGLT S.A.) (7) | 27.82% | 27.82% | 2,137 | 2,582 | (445) | 631 |
Joint ventures | ||||||
Cyrsa S.A. | 50.00% | 50.00% | 198 | 201 | (3) | (12) |
Quality Invest S.A. (8) | - | 50.00% | - | 9,421 | - | (133) |
Nuevo Puerto Santa Fe S.A. (6) | 50.00% | 50.00% | 1,649 | 1,669 | 140 | (7) |
Total subsidiaries, associates and joint ventures | 219,850 | 212,111 | 18,817 | (725) |
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IRSA Inversiones y Representaciones Sociedad Anónima
Latest financial information issued | ||||||
Name of the entity | Location of business / Country of incorporation | Main activity | Common shares 1 vote | Share capital (nominal value) | (Loss) / profit for the period | Shareholders’ equity |
Subsidiaries | ||||||
Tyrus S.A. | Uruguay | Investment | 21,365,969,546 | 12,213 | (295) | 10,942 |
Ritelco S.A. | Uruguay | Investment | 453,321,176 | 94 | 341 | 5,431 |
Inversora Bolívar S.A. | Argentina | Investment | 1,726,178,768 | 1,788 | 324 | 5,551 |
ECLASA | Argentina | Investment | 1,710,302,484 | 1,729 | 390 | 7,747 |
Palermo Invest S.A. | Argentina | Investment | 1,327,155,303 | 1,363 | 337 | 5,738 |
Nuevas Fronteras S.A. | Argentina | Hotel | 38,068,363 | 50 | 212 | 3,943 |
Llao Llao Resorts S.A. | Argentina | Hotel | 73,580,206 | 147 | 995 | 5,219 |
Hoteles Argentinos S.A.U. | Argentina | Hotel | 685,978,099 | 686 | 114 | 1,526 |
Liveck S.A. | Islas Vírgenes Británicas | Investment | 56,604,500 | 890 | (72) | 3,992 |
Panamerican Mall S.A. | Argentina | Real estate | 397,661,435 | 497 | 18,312 | 133,761 |
Torodur S.A. | Uruguay | Investment | 581,675,948 | 1,884 | 198 | 29,517 |
Arcos del Gourmet S.A. | Argentina | Real estate | 72,973,903 | 81 | 646 | 13,583 |
Shopping Neuquén S.A. | Argentina | Real estate | 53,511,353 | 54 | 503 | 11,241 |
Centro de Entretenimientos La Plata S.A. (5) (6) | Argentina | Real estate | 905,428 | 95 | (28) | 987 |
We Are Appa S.A. (4) | Argentina | Developer | 510,946,719 | 518 | (150) | (1,021) |
Entertainment Holdings S.A. | Argentina | Investment | 32,503,379 | 46 | 302 | 2,677 |
Emprendimiento Recoleta S.A. (3) | Argentina | Real estate | 13,449,990 | 25 | (55) | 271 |
Entretenimiento Universal S.A. (4) | Argentina | Event organization and others | 825 | - | 2 | (21) |
Fibesa S.A.U. | Argentina | Real estate | (i) | 2 | 79 | 1,715 |
IRSA - Galerías Pacífico S.A. - U.T. (9) | Argentina | Hotel | 500,000 | 1 | (645) | - |
Associates | ||||||
Banco Hipotecario S.A. (1) (2) | Argentina | Financial | 73,939,835 | 1,500 | 6,579 | 111,303 |
Banco de Crédito y Securitización S.A. (2) | Argentina | Financial | 33,125,751 | 88 | 332 | 5,360 |
GCDI S.A. (Ex TGLT S.A.) (7) | Argentina | Real estate | 257,330,595 | 925 | (1,644) | 7,879 |
Joint ventures | ||||||
Cyrsa S.A. | Argentina | Real estate | 8,748,269 | 17 | (6) | 396 |
Nuevo Puerto Santa Fe S.A. (6) | Argentina | Real estate | 13,875,000 | 28 | 279 | 3,147 |
(1)
Considered significant. See Notes 7 and 8 to the Annual Consolidated Financial Statements as of June 30, 2023.
(2)
Information as of September 30, 2023 according to BCRA's standards. For the purpose of the valuation of the investments in the Company, figures as of September 30, 2023 have been considered, with the necessary IFRS adjustments. Share market price of Banco Hipotecario S.A as of September 30, 2023 amounts to ARS 39.45. See Note 8 to the Annual Consolidated Financial Statements as of June 30, 2023.
(3)
Concession ended on November 18, 2018. As of September 30, 2023, is in liquidation.
(4)
Included in other liabilities
(5)
Include the necessary adjustments to get to the balances in accordance with the International Financial Reporting Standards.
(6)
Nominal value per share ARS 100.
(7)
See note 8 to the Annual Consolidated Financial Statements as of June 30, 2023.
(8)
Interest in Quality Invest S.A. was sold on August 31, 2023. See note 4 to the Unaudited Condensed Interim Consolidated Financial Statements.
(9)
Company liquidated as of September 30, 2023.
(i)
Corresponds to 2,394,974 shares. Nominal value per share ARS 1 with 5 votes rights.
(*) Company liquidated as of October 31, 2022.
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IRSA Inversiones y Representaciones Sociedad Anónima
7.
Investment properties
Changes in the Company’s investment properties for the three-month period ended September 30, 2023 and for the year ended June 30, 2023 were as follows:
09.30.2023 | 06.30.2023 | |||
Level 2 | Level 3 | Level 2 | Level 3 | |
Fair value at the beginning of the period / year | 397,191 | 188,604 | 465,284 | 188,910 |
Additions | 549 | 861 | 3,725 | 3,284 |
Disposals | (5,977) | - | (30,982) | - |
Transfers | (1) | (3) | (938) | 1,189 |
Net gain / (loss) from fair value adjustment | 79,728 | (5,762) | (39,891) | (4,808) |
Additions of capitalized leasing costs | - | 23 | 11 | 49 |
Amortization of capitalized lease costs (i) | (2) | (8) | (18) | (20) |
Fairvalue at the end of the period / year | 471,488 | 183,715 | 397,191 | 188,604 |
(i) Amortization charges of capitalized leasing costs were included in “Costs” in the Statements of Income and Other Comprehensive Income (Note 20).
The balance by type of investment property of the Company as of September 30, 2023 and June 30, 2023 is presented below:
09.30.2023 | 06.30.2023 | |
Offices and other rental properties | 80,111 | 75,381 |
Land reserve | 376,849 | 310,134 |
Shopping malls (i) | 198,243 | 200,280 |
Total | 655,203 | 585,795 |
(i) Includes parking spaces.
The following amounts have been recognized in the Statements of Comprehensive Income and Other Comprehensive Income:
09.30.2023 | 09.30.2022 | |
Revenues (Note 19) | 19,422 | 17,306 |
Direct operating costs (Note 20) | (5,552) | (6,138) |
Development costs (Note 20) | (103) | (67) |
Net unrealized gain / (loss) from fair value adjustment on investment properties (ii) | 71,635 | (13,875) |
Net realized gain from fair value adjustment on investment properties (i) | 2,331 | 2,161 |
(i) As of September 30, 2023 corresponds (ARS 2,960) to the realized result from fair value adjustment for the period ((ARS 602) for the sale of floors of Catalinas Building and (ARS 2,358) for the sale of Maple Building) and ARS 5,291 for realized result from fair value adjustment made in previous years (ARS 2,654 for the sale of floors of Catalinas Building, ARS 42 for the sale of parking spaces in Libertador 498 and ARS 2,595 for the sale of Maple Building). As of September 30, 2022, ARS 150 corresponds to the result for changes in the fair value realized for the period and ARS 2,011 for the result of changes in fair value made in previous years, both for the sale of floors of Catalinas Building.
(ii) Includes the result from changes in the fair value of those investment properties that are in the portfolio and have not yet been sold. This was generated in accordance with what is described in the section named "valuation techniques" in Note 9 to the Annual Consolidated Financial Statements as of June 30, 2023.
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IRSA Inversiones y Representaciones Sociedad Anónima
Valuation techniques are described in Note 9 to the Annual Consolidated Financial Statements as of June 30, 2023. There were no changes to the valuation techniques.
8.
Property, plant and equipment
Changes in the Company’s property, plant and equipment for the three-month period ended September 30, 2023 and for the year ended June 30, 2023 were as follows:
09.30.2023 | 06.30.2023 | ||||||
Buildings and facilities | Furniture and fixtures | Machinery and equipment | Vehicles | Others | Total | Total | |
Costs | 4,583 | 2,068 | 11,183 | 146 | 7 | 17,987 | 21,735 |
Accumulated depreciation | (3,764) | (1,692) | (10,617) | (146) | - | (16,219) | (15,677) |
Net book amount at the beginning of the period / year | 819 | 376 | 566 | - | 7 | 1,768 | 6,058 |
Additions | 16 | 23 | 41 | - | - | 80 | 364 |
Disposals | - | - | (2) | - | - | (2) | (4,143) |
Transfers | - | - | 4 | - | - | 4 | 31 |
Depreciation (Note 20) | (23) | (17) | (62) | - | - | (102) | (542) |
Balances at the end of the period / year | 812 | 382 | 547 | - | 7 | 1,748 | 1,768 |
Costs | 4,599 | 2,091 | 11,226 | 146 | 7 | 18,069 | 17,987 |
Accumulated depreciation | (3,787) | (1,709) | (10,679) | (146) | - | (16,321) | (16,219) |
Net book amount at the end of the period / year | 812 | 382 | 547 | - | 7 | 1,748 | 1,768 |
9.
Trading properties
Changes in the Company’s trading properties for the three-month period ended September 30, 2023 and for the year ended June 30, 2023 were as follows:
09.30.2023 | 06.30.2023 | |||
Completed properties | Undeveloped properties | Total | Total | |
Beginning of the period / year | 802 | 3,156 | 3,958 | 4,096 |
Additions | - | 13 | 13 | 233 |
Disposals | (10) | - | (10) | (359) |
Transfers | - | - | - | (12) |
End of the period / year | 792 | 3,169 | 3,961 | 3,958 |
Non-current | 3,947 | 3,930 | ||
Current | 14 | 28 | ||
Total | 3,961 | 3,958 |
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IRSA Inversiones y Representaciones Sociedad Anónima
10.
Intangible assets
Changes in Company’s intangible assets for the three-month period ended September 30, 2023 and for the year ended June 30, 2023 were as follows:
09.30.2023 | 06.30.2023 | |||
Computer software | Future units to be received from barters | Total | Total | |
Costs | 3,586 | 9,699 | 13,285 | 12,009 |
Accumulated amortization | (3,496) | - | (3,496) | (3,197) |
Net book amount at the beginning of the period / year | 90 | 9,699 | 9,789 | 8,812 |
Additions | 28 | 1 | 29 | 1,741 |
Disposals | - | - | - | (195) |
Transfers | - | - | - | (270) |
Amortization (Note 20) | (18) | - | (18) | (299) |
Balances at the end of the period / year | 100 | 9,700 | 9,800 | 9,789 |
Costs | 3,614 | 9,700 | 13,314 | 13,285 |
Accumulated amortization | (3,514) | - | (3,514) | (3,496) |
Net book amount at the end of the period / year | 100 | 9,700 | 9,800 | 9,789 |
11.
Rights of use assets
Changes in Company’s right of use assets for the three-month period ended September 30, 2023 and for the year ended June 30, 2023 were as follows:
09.30.2023 | 06.30.2023 | |
Offices and shopping malls | 791 | 520 |
Total right of use assets | 791 | 520 |
Non-current | 791 | 520 |
Total | 791 | 520 |
The depreciation charge of the rightof useassets is detailed below:
09.30.2023 | 09.30.2022 | |||
Offices and shopping malls | 35 | 446 | ||
Total depreciation of right of use assets (Note 20) | 35 | 446 |
12.
Financial instruments by category
This note presents financial assets and financial liabilities by category of financial instrument and a reconciliation to the corresponding line item in the Statements of Financial Position, as appropriate. Financial assets and liabilities measured at fair value are assigned based on their different levels in the fair value hierarchy. For further information, related to fair value hierarchy see Note 14 to the Consolidated Financial Statements as of June 30, 2023.
Financial assets and financial liabilities as of September 30, 2023 and June 30, 2023 are as follows:
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IRSA Inversiones y Representaciones Sociedad Anónima
Financial assets at amortized cost (i) | Financial assets at fair value through profit or loss | Subtotal financial assets | Non-financial assets | Total | |
Level 1 | |||||
September 30, 2023 | |||||
Assets as per Statement of Financial Position | |||||
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables) (Note 13) | 27,919 | - | 27,919 | 4,869 | 32,788 |
Investments in financial assets: | |||||
- Public companies’ securities | - | 636 | 636 | - | 636 |
- Mutual funds | - | 27,869 | 27,869 | - | 27,869 |
- Bonds | - | 7,292 | 7,292 | - | 7,292 |
Cash and cash equivalents: | |||||
- Cash at bank and on hand | 9,043 | - | 9,043 | - | 9,043 |
- Short- term investments | - | 3,068 | 3,068 | - | 3,068 |
Total | 36,962 | 38,865 | 75,827 | 4,869 | 80,696 |
Financial liabilities at amortized cost (i) | Subtotal financial liabilities | Non-financial liabilities | Total | |
September 30, 2023 | ||||
Liabilities as per Statement of Financial Position | ||||
Trade and other payables (Note 15) | 13,522 | 13,522 | 17,828 | 31,350 |
Borrowings (Note 16) | 165,002 | 165,002 | - | 165,002 |
Total | 178,524 | 178,524 | 17,828 | 196,352 |
Financial assets at amortized cost (i) | Financial assets at fair value through profit or loss | Subtotal financial assets | Non-financial assets | Total | |
Level 1 | |||||
June 30, 2023 | |||||
Assets as per Statement of Financial Position | |||||
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables) (Note 13) | 28,553 | - | 28,553 | 5,225 | 33,778 |
Investments in financial assets: | |||||
- Public companies’ securities | - | 814 | 814 | - | 814 |
- Mutual funds | - | 23,006 | 23,006 | - | 23,006 |
- Bonds | - | 7,781 | 7,781 | - | 7,781 |
Cash and cash equivalents: | |||||
- Cash at bank and on hand | 1,861 | - | 1,861 | - | 1,861 |
- Short-term investments | - | 2,776 | 2,776 | - | 2,776 |
Total | 30,414 | 34,377 | 64,791 | 5,225 | 70,016 |
Financial liabilities at amortized cost (i) | Subtotal financial liabilities | Non-financial liabilities | Total | |
June 30, 2023 | ||||
Liabilities as per Statement of Financial Position | ||||
Trade and other payables (Note 15) | 22,038 | 22,038 | 19,885 | 41,923 |
Borrowings (Note 16) | 171,032 | 171,032 | - | 171,032 |
Total | 193,070 | 193,070 | 19,885 | 212,955 |
(i)
The fair value of financial assets and liabilities at amortized cost does not differ significantly from their book value, except for borrowings (Note 16).
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IRSA Inversiones y Representaciones Sociedad Anónima
As of September 30, 2023, there have been no changes to the economic or business circumstances affecting the fair value of the financial assets and liabilities of the Company.
13.
Trade and other receivables
Company’s trade and other receivables, as of September 30, 2023 and June 30, 2023 are comprised as follows:
09.30.2023 | 06.30.2023 | |
Sales, leases and services receivables | 11,879 | 13,370 |
Less: Allowance for doubtful accounts | (1,253) | (1,402) |
Total trade receivables | 10,626 | 11,968 |
Borrowings granted, deposits and others | 15,387 | 15,085 |
Advanced payments | 2,743 | 2,872 |
Tax credits | 990 | 1,164 |
Prepaid expenses | 622 | 631 |
Long-term incentive plan | 15 | 20 |
Dividends | 119 | - |
Others | 1,033 | 636 |
Total other receivables | 20,909 | 20,408 |
Total trade and other receivables | 31,535 | 32,376 |
Non-current | 17,573 | 14,329 |
Current | 13,962 | 18,047 |
Total | 31,535 | 32,376 |
The fair value of current trade and other receivables approximate their respective carrying amounts because, due to their short-term nature, the impact of discounting is not considered significant.
The carrying amounts of the Company’s trade and other receivables denominated in foreign currencies are detailed in Note 24.
Trade receivables are generally presented in the statement of financial position net of allowances for doubtful receivables. Impairment policies and procedures by type of receivables are discussed in detail in Note 2.14 to the Annual Consolidated Financial Statements as of June 30, 2023.
Movements on the Company’s allowance for doubtful accounts are as follows:
09.30.2023 | 06.30.2023 | |
Beginning of period / year | 1,402 | 2,185 |
Additions | 94 | 248 |
Recoveries | (49) | (156) |
Exchange rate differences | 193 | 433 |
Inflation adjustment | (387) | (1,308) |
End of the period / year | 1,253 | 1,402 |
The additions, disposals and recoveries of the allowance for doubtful accounts have been included in “Selling expenses” in the Statements of Income (Note 20). Amounts charged to the allowance for doubtful accounts are generally written off when there is no expectation of recovery.
14.
Cash flow and cash equivalent information
Following is a detailed description of cash flows generated by the Company’s operations for the three-month periods ended September 30, 2023 and 2022:
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IRSA Inversiones y Representaciones Sociedad Anónima
Note | 09.30.2023 | 09.30.2022 | |
Operating activities | |||
Profit for the period | 77,042 | 2,768 | |
Adjustments: | |||
Income tax | 17 | 30,479 | 1,191 |
Amortization and depreciation | 20 | 165 | 641 |
Gain from disposal of trading properties | (26) | (632) | |
Financial results, net | 30 | (9,625) | |
Increase in trading properties | 23 | (107) | |
Net (gain) / loss from fair value adjustment of investment properties | 7 | (73,966) | 11,714 |
Share of (profit) / loss of subsidiaries, associates and joint ventures | 6 | (19,143) | 141 |
Loss from disposal of properties, plant and equipment | 1 | - | |
Loss from disposal of joint ventures | 558 | - | |
Provisions and allowances | (3,343) | 819 | |
Changes in operating assets and liabilities: | |||
Decrease in inventories | 21 | - | |
Decrease in salaries and social security liabilities | (1,035) | (460) | |
Decrease in trade and other receivables | 2,549 | 4,380 | |
Use of provisions | (52) | (21) | |
Decrease in trade and other payables | (6,669) | (1,830) | |
Net cash flow generated from operating activities before income tax paid | 6,634 | 8,979 |
The following table presents a detail of significant non-cash transactions occurred in the the three-month periods ended September 30, 2023 and 2022:
Operations not affecting cash flows | 09.30.2023 | 09.30.2022 |
Currency translation adjustment and other comprehensive results of subsidiaries, associates and joint ventures | 326 | 584 |
Other changes in subsidiaries` equity | 2 | 95 |
Increase in non-convertible notes through a decrease in non-convertible notes | - | 53,547 |
Increase in intangible assets through a decrease in trading properties | - | 677 |
Increase in rights of use assets through an increase in lease liabilities | 296 | 88 |
Decrease in investments in associates and joint ventures through an increase in trade and other receivables | 651 | 1,356 |
Decrease in trade and other receivables through an increase in investment in financial assets | - | 14 |
Decrease in investments in associates and joint ventures through a decrease in provisions | 149 | 436 |
Decrease in investments in financial assets through a decrease in trade and other payables | - | 496 |
Increase in investments in associates and joint ventures through a decrease in trade and other receivables | - | 148 |
Decrease in investment properties through an increase in property, plant and equipment | 4 | - |
Barter transactions of investment properties | 226 | - |
Decrease in investment properties through an increase in trade and other receivables | 904 | - |
Decrease in borrowings through a decrease in trade and other receivables | 23 | - |
Increase in rights of use assets through an increase in trade and other receivables | 10 | - |
Decrease in investments in associates and joint ventures through a decrease in borrowings | 1,511 | - |
Increase in investments in associates and joint ventures through an increase in borrowings | 17 | - |
15. Trade and other payables
Company’s trade and other payables as of September 30, 2023and June 30, 2023 were as follows:
09.30.2023 | 06.30.2023 | |
Customers´ advances (*) | 6,614 | 7,108 |
Trade payables | 1,970 | 2,477 |
Accrued invoices | 2,274 | 2,496 |
Admission rights | 9,056 | 9,593 |
Other income to be accrued | 190 | 195 |
Tenant deposits | 86 | 96 |
Total trade payables | 20,190 | 21,965 |
Dividends | 154 | 207 |
Director´s fees | 8,599 | 15,949 |
Long-term incentive plan | 4 | 4 |
Tax amnesty plans | 25 | 43 |
Other tax payables | 1,942 | 2,947 |
Other payables | 436 | 808 |
Total other payables | 11,160 | 19,958 |
Total trade and other payables | 31,350 | 41,923 |
Non-current | 8,246 | 9,079 |
Current | 23,104 | 32,844 |
Total | 31,350 | 41,923 |
(*) As of September 30, 2023 corresponds mainly to rents collected in advance, which accrue in an average term of 3 to 5 years.
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IRSA Inversiones y Representaciones Sociedad Anónima
The fair value of trade and other payables approximate their respective carrying amounts due to their short-term nature, as the impact of discounting is considered as not significant. Fair values are based on discounted cash flows.
Book value of trade and other payables denominated in foreign currencies are detailed in Note 24.
16.
Borrowings
Company’s borrowings as of September 30, 2023 and June 30, 2023 are comprised as follows:
Book value as of 09.30.2023 | Book value as of 06.30.2023 | Fairvalue as of 09.30.2023 | Fairvalue as of 06.30.2023 | |
Non-convertible notes | 128,188 | 129,935 | 127,451 | 130,848 |
Bank loans | 3,818 | 3,472 | 3,818 | 3,472 |
Related parties (Note 23) | 28,608 | 28,953 | 28,583 | 28,983 |
Bank overdrafts | 4,388 | 8,672 | 4,388 | 8,672 |
Total borrowings | 165,002 | 171,032 | 164,240 | 171,975 |
Non-current | 91,279 | 95,057 | ||
Current | 73,723 | 75,975 | ||
Total | 165,002 | 171,032 |
See Note 17 to the Unaudited Condensed Interim Consolidated Financial Statements.
17.
Currents and deferred income tax
The charge for the Company’s income tax is comprised as follows:
09.30.2023 | 09.30.2022 | |
Deferred income tax | (30,479) | 5,338 |
Current income tax | - | (6,529) |
Income tax | (30,479) | (1,191) |
Below is a reconciliation between income tax recognized and the amount which would arise from applying the prevailing tax rate on profit before income tax for the three-month periods ended September 30, 2023 and 2022:
09.30.2023 | 09.30.2022 | |
Net income at tax rate (i) | (37,632) | (1,386) |
Permanent differences: | ||
Share of profit / (loss) of subsidiaries, associates and joint ventures | 6,700 | (50) |
Tax rate differential | - | (64) |
Difference between provision and tax return | 1,558 | - |
Recovery of tax loss carry forwards | - | (705) |
Tax inflation adjustment | (4,839) | (11,378) |
Inflation adjustment permanent difference | 4,579 | 12,903 |
Non-deductible expenses and others | (845) | (511) |
Income tax | (30,479) | (1,191) |
(i) The income tax rate applicable as of September 30, 2023 and 2022 is 35%.
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IRSA Inversiones y Representaciones Sociedad Anónima
Changes in the deferred tax account are as follows:
09.30.2023 | 06.30.2023 | |
Beginning of the period / year | (177,944) | (236,288) |
Income tax charge | (30,479) | 58,344 |
End of the period / year | (208,423) | (177,944) |
See Note 19 to the interim condensed consolidated financial statements.
18.
Provisions
The table below shows the movements in the Group's provisions categorized by type of provision:
09.30.2023 | 06.30.2023 | |||
Investments in associates and joint ventures | Labor, legal and other claims | Total | Total | |
Beginning of period / year | 269 | 1,159 | 1,428 | 977 |
Additions (i) | - | 307 | 307 | 1,309 |
Decreases (i) | - | (2) | (2) | (216) |
Used during the period / year | - | (52) | (52) | (51) |
Inflation adjustment | - | (327) | (327) | (613) |
Share of income | 148 | - | 148 | 22 |
End of period / year | 417 | 1,085 | 1,502 | 1,428 |
Non-current | 686 | 581 | ||
Current | 816 | 847 | ||
Total | 1,502 | 1,428 |
(i)
Additions and decreases in labor, legal and other claims are included in "Other operating results, net”.
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IRSA Inversiones y Representaciones Sociedad Anónima
19.
Revenues
09.30.2023 | 09.30.2022 | |
Base rent | 7,181 | 5,769 |
Contingent rent | 5,464 | 5,214 |
Admission rights | 1,278 | 1,027 |
Parking fees | 617 | 458 |
Property management fees | 124 | 122 |
Others | 32 | 24 |
Averaging of scheduled rent escalation | 55 | (95) |
Rentals and services income | 14,751 | 12,519 |
Sale of trading properties | 36 | 677 |
Total revenues from sales, rentals and services | 14,787 | 13,196 |
Expenses and collective promotion funds | 4,671 | 4,787 |
Total revenues from expenses and collective promotion funds | 4,671 | 4,787 |
Total revenues | 19,458 | 17,983 |
20.
Expenses by nature
The Company discloses expenses in the Statements of Income and Other Comprehensive Income by function as part of the line items “Costs”, “General and administrative expenses” and “Selling expenses”.The following table provides additional disclosure regarding expenses by nature and their relationship to the function within the Company.
Costs (i) | General and administrative expenses | Selling expenses | 09.30.2023 | 09.30.2022 | |
Salaries, social security costs and other personnel expenses | 1,699 | 1,298 | 208 | 3,205 | 2,933 |
Maintenance, security, cleaning, repairs and others | 2,176 | 189 | 4 | 2,369 | 2,130 |
Taxes, rates and contributions | 467 | 1 | 524 | 992 | 975 |
Advertising and other selling expenses | 1,055 | - | 204 | 1,259 | 1,482 |
Director´s fees (Note 23) (ii) | - | (3,693) | - | (3,693) | 707 |
Amortization and depreciation | 82 | 65 | 18 | 165 | 641 |
Fees and payments for services | 41 | 309 | 11 | 361 | 370 |
Leases and services’ charges | 102 | 11 | 2 | 115 | 195 |
Traveling, transportation and stationery expenses | 50 | 60 | 5 | 115 | 76 |
Cost of sales of trading properties | 10 | - | - | 10 | 45 |
Allowance for doubtful accounts (charge and recovery, net) (Note 13) | - | - | 45 | 45 | (55) |
Bank expenses | 9 | 47 | - | 56 | 67 |
Freight expenses | 2 | - | - | 2 | - |
Others | 1 | - | - | 1 | 36 |
Total expenses by nature as of 09.30.2023 | 5,694 | (1,713) | 1,021 | 5,002 | - |
Total expenses by nature as of 09.30.2022 | 6,350 | 2,585 | 667 | - | 9,602 |
(i) For the three-month period ended September 30, 2023, includes ARS 5,552 of rental and services costs and ARS 142 of costs of sales and developments, of which ARS 103 corresponds to investment properties and ARS 39 to trading properties. For the three-month period ended September 30, 2022, includes ARS 6,138 which corresponds to rental and services costs and ARS 212 to costs of sales and developments, of which ARS 67 corresponds to investment properties and ARS 145 to trading properties.
(ii) On 5 October 2023, fees to the Board of Directors were approved at the General Ordinary and Extraordinary Shareholders' Meeting for ARS 9,050. The Board of Directors of the Company had proposed Director's fees for ARS 13,500 and accordingly made provision for such amount in the Annual Consolidated Financial Statements as of June 30, 2023. During the current period, with the final approval of said fee, the Company proceeded to recover the excess in the provision, with a balancing entry in the line that gave rise to it.
21.
Other operating results, net
09.30.2023 | 09.30.2022 | |
Lawsuits and other contingencies (i) | (305) | (167) |
Donations | (33) | (69) |
Loss from disposal of joint ventures | (558) | - |
Administration fees | 132 | 203 |
Loss from disposal of property, plant and equipment | (1) | - |
Interest and allowances generated by operating assets | 259 | 83 |
Others | (43) | (50) |
Total other operating results, net | (549) | - |
(i)
Includes legal costs and expenses.
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IRSA Inversiones y Representaciones Sociedad Anónima
22.
Financial results, net
09.30.2023 | 09.30.2022 | |
Interest income | 107 | 62 |
Total finance income | 107 | 62 |
Interest expense | (3,628) | (4,017) |
Other finance costs | (248) | (331) |
Total finance costs | (3,876) | (4,348) |
Exchange rate differences, net | (2,347) | 6,586 |
Fair value net gain / (loss) from financial assets and liabilities at fair value through profit or loss, net | 32 | (4,239) |
Loss from derivative financial instruments, net | - | (5) |
Gain from repurchase of non-convertible notes | - | 2 |
Other financial results | 1,399 | (209) |
Total other financial results | (916) | 2,135 |
Inflation adjustment | 5,190 | 9,584 |
Total financial results, net | 505 | 7,433 |
23.
Related party transactions
See description of the main transactions conducted with related parties in Note 30 to the Annual Consolidated Financial Statements as of June 30, 2023.
The following is a summary of the balances with related parties as of September 30, 2023 and June 30, 2023:
Item | 09.30.2023 | 06.30.2023 |
Right of use assets | 9 | - |
Trade and other receivables | 16,182 | 15,713 |
Investments in financial assets | 257 | 285 |
Trade and other payables | (9,131) | (17,932) |
Borrowings | (28,608) | (28,953) |
Total | (21,291) | (30,887) |
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IRSA Inversiones y Representaciones Sociedad Anónima
Related parties | 09.30.2023 | 06.30.2023 | Operation description | Item |
Cresud | 329 | - | Debtors for sales, rentals and services | Trade and other receivables |
257 | 285 | Bonds | Investments in financial assets | |
(29) | (1,057) | Corporate services payable | Trade and other payables | |
(3) | (4) | Long-term incentive plan payable | Trade and other payables | |
(252) | (340) | Other liabilities | Trade and other payables | |
Total controlante | 302 | (1,116) | ||
Tyrus S.A. | 24 | 31 | Debtors for sales, rentals and services | Trade and other receivables |
11,346 | 11,165 | Borrowings granted | Trade and other receivables | |
(5) | (5) | Leases and services received | Trade and other payables | |
(2,615) | (2,705) | Non-Convertible Notes | Borrowings | |
(184) | (164) | Borrowings | Borrowings | |
ECLASA | (1,940) | (1,940) | Borrowings | Borrowings |
Panamerican Mall S.A. | 46 | 79 | Debtors for sales, rentals and services | Trade and other receivables |
1 | 2 | Long-term incentive plan | Trade and other receivables | |
- | 5 | Leases and services received | Trade and other payables | |
(24) | (66) | Other payables | Trade and other payables | |
Arcos del Gourmet S.A. | 61 | 87 | Debtorsfor sales, rentals and services | Trade and other receivables |
(14) | (33) | Leases and servicesreceived | Trade and other payables | |
(14) | (52) | Other payables | Trade and other payables | |
Fibesa S.A.U. | 1 | 2 | Debtors for sales, rentals and services | Trade and other receivables |
13 | 13 | Borrowings granted | Trade and other receivables | |
5 | - | Leases and services received | Trade and other payables | |
13 | 17 | Long-term incentive plan | Trade and other receivables | |
(8) | (11) | Other payables | Trade and other payables | |
Shopping Neuquen S.A. | 9 | - | Rights of use assets | Rightof use assets |
- | (2) | Other payables | Trade and other payables | |
2 | 13 | Debtors for sales, rentals and services | Trade and other receivables | |
278 | 348 | Borrowings granted | Trade and other receivables | |
Torodur S.A. | (15) | (15) | Leases and services received | Trade and other payables |
(3) | (4) | Other payables | Trade and other payables | |
(1,393) | (1,348) | Non-Convertible Notes | Borrowings | |
(20,234) | (19,855) | Borrowings | Borrowings | |
Ritelco S.A. | 8 | 28 | Debtors for sales, rentals and services | Trade and other receivables |
(127) | (125) | Borrowings | Borrowings | |
Entretenimiento Universal S.A. | 177 | 174 | Borrowings granted | Trade and other receivables |
We Are Appa S.A. | 17 | 1 | Debtors for sales, rentals and services | Trade and other receivables |
24 | - | Capital contributions pending integration | Trade and other receivables | |
1,286 | 1,119 | Borrowings granted | Trade and other receivables | |
Emprendimiento Recoleta S.A. | 14 | 15 | Debtors for sales, rentals and services | Trade and other receivables |
1 | 1 | Long-term incentive plan | Trade and other receivables | |
Centro de Entretenimiento La Plata S.A. | 17 | 17 | Debtors for sales, rentals and services | Trade and other receivables |
262 | 260 | Capital contributions pending integration | Trade and other receivables | |
Banco Hipotecario S.A. | 16 | 17 | Debtors for sales, rentals and services | Trade and other receivables |
(1) | (34) | Leases and services received | Trade and other payables | |
CYRSA S.A. | (113) | (116) | Borrowings | Borrowings |
GCDI S.A. (Ex TGLT S.A.) | - | 1 | Advance to suppliers | Trade and other receivables |
Hoteles Argentinos S.A.U. | 5 | 2 | Debtors for sales, rentals and services | Trade and other receivables |
(1) | - | Leases and services received | Trade and other payables | |
2 | - | Advance to suppliers | Trade and other receivables | |
- | (1) | Other payables | Trade and other payables | |
Nuevas Fronteras S.A. | 3 | 162 | Debtors for sales, rentals and services | Trade and other receivables |
(32) | (65) | Borrowings | Borrowings | |
Llao Llao Resorts S.A. | 1 | 1 | Debtors for sales, rentals and services | Trade and other receivables |
- | (2) | Invoices to receive | Trade and other payables | |
(1,228) | (336) | Borrowings | Borrowings | |
Nuevo Puerto Santa Fe S.A. | 26 | 36 | Debtors for sales, rentals and services | Trade and other receivables |
119 | - | Dividends receivable | Trade and other receivables | |
1 | 1 | Long-term incentive plan | Trade and other receivables | |
(2) | (8) | Other payables | Trade and other payables | |
IRSA - Galerías Pacífico S.A. U.T. | - | 1 | Debtors for sales, rentals and services | Trade and other receivables |
- | (190) | Other payables | Trade and other payables | |
- | (1,569) | Borrowings | Borrowings | |
Quality Invest S.A. | - | 1 | Debtors for sales, rentals and services | Trade and other receivables |
- | 61 | Capital contribution spending integration | Trade and other receivables | |
- | (4) | Leases and services received | Trade and othe rpayables | |
Total subsidiaries, associates and joint ventures | (14,175) | (14,990) |
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IRSA Inversiones y Representaciones Sociedad Anónima
Related parties | 09.30.2023 | 06.30.2023 | Operation description | Item |
Directors | (8,599) | (15,949) | Directors' fees provision | Trade and other payables |
Total directors | (8,599) | (15,949) | ||
Futuros y Opciones S.A. | 1 | 1 | Debtors for sales, rentals and services | Trade and other receivables |
BHN Vida S.A. | (9) | (9) | Tenant deposits | Trade and other payables |
(134) | (135) | Non-Convertible Notes | Borrowings | |
BHN Seguros Generales S.A. | (46) | (46) | Non-Convertible Notes | Borrowings |
Consultores Asset Management S.A. | 25 | 20 | Debtors for sales, rentals and services | Trade and other receivables |
Estudio Zang, Bergel &Viñes | (23) | (8) | Invoice store ceive | Trade and other payables |
Austral Gold | 4 | 4 | Debtors for sales, rentals and services | Trade and other receivables |
Fundación Museo de los Niños | - | 13 | Debtors for sales, rentals and services | Trade and other receivables |
- | (7) | Leases and services received | Trade and other payables | |
Real Estate Strategies LLC | 621 | 611 | Borrowings granted | Trade and other receivables |
IRSA International LLC | (106) | (105) | Other payables | Trade and other payables |
(440) | (431) | Borrowings | Borrowings | |
La Rural S.A. | 20 | 1 | Debtors for sales, rentals and services | Trade and other receivables |
(12) | (15) | Leases and services received | Trade and other payables | |
Ogden Argentina S.A. | 5 | 14 | Debtors for sales, rentals and services | Trade and other receivables |
1,324 | 1,304 | Borrowings granted | Trade and other receivables | |
La Arena S.A. | 1 | 2 | Debtors for sales, rentals and services | Trade and other receivables |
Boulevard Norte S.A. | (16) | (16) | Other payables | Trade and other payables |
New Lipstick | 84 | 83 | Debtors for sales, rentals and services | Trade and other receivables |
Agrofy S.A. | 4 | 5 | Debtors for sales, rentals and services | Trade and other receivables |
Helmir S.A. | (122) | (118) | Non-Convertible Notes | Borrowings |
Total others | 1,181 | 1,168 | ||
Total | (21,291) | (30,887) |
The following is a summary of the results with related parties for the three-month period ended September 30, 2023 and 2022:
Related parties | 09.30.2023 | 09.30.2022 | Operation description |
Cresud | 13 | 36 | Leases and/or right of use assets |
30 | 1,802 | Financial operations | |
(987) | (1,161) | Corporate services | |
Total parent company | (944) | 677 | |
Arcos del Gourmet S.A. | (13) | (26) | Leases and/or right of use assets |
44 | 47 | Fees | |
Fibesa S.A.U. | - | 3 | Leases and/or right of use assets |
1 | 2 | Fees | |
- | 5 | Financial operations | |
Ritelco S.A. | (2) | 4 | Financial operations |
Torodur S.A. | (409) | 658 | Financial operations |
Efanur S.A. | - | 24 | Financial operations |
Tyrus S.A. | 17 | (297) | Financial operations |
Shopping Neuquen S.A. | (13) | (72) | Financial operations |
(1) | (443) | Leases and/or right of use assets | |
Entretenimiento Universal S.A. | 3 | (5) | Financial operations |
ECLASA | (28) | 62 | Financial operations |
Panamerican Mall S.A. | 84 | 96 | Fees |
(26) | (25) | Leases and/or right of use assets | |
Emprendimiento Recoleta S.A. | - | 1 | Fees |
CYRSA S.A. | (1) | 8 | Financial operations |
Centro de Entretenimiento La Plata S.A. | 10 | (3) | Leases and/or right of use assets |
(2) | - | Financial operations | |
IRSA - Galerías Pacífico S.A. U.T. | (4) | 31 | Financial operations |
- | 1 | Fees | |
Hoteles Argentinos S.A.U. | (3) | 1 | Fees |
Nuevas Fronteras S.A. | (42) | 13 | Fees |
(1) | 10 | Financial operations | |
We Are Appa S.A. | 4 | 3 | Fees |
46 | (15) | Financial operations | |
2 | - | Leases and/or right of use assets | |
Nuevo Puerto Santa Fe S.A. | (3) | 2 | Leases and/or right of use assets |
26 | 31 | Fees | |
Quality Invest S.A. | - | 3 | Fees |
- | 4 | Financial operations | |
- | (12) | Leases and/or right of use assets | |
Total subsidiaries, associates and joint ventures | (311) | 111 |
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IRSA Inversiones y Representaciones Sociedad Anónima
Related parties | 09.30.2023 | 09.30.2022 | Operation description |
Directors (1) | 3,693 | (707) | Fees |
Senior Management | (54) | (91) | Fees |
Total Directors and Senior Management | 3,639 | (798) | |
BHN Seguros Generales S.A. | (1) | 1 | Financial operations |
BHN Vida S.A. | (3) | 2 | Financial operations |
Austral Gold S.A | (2) | 2 | Fees |
Consultores Asset Management S.A. | (2) | 1 | Fees |
Hamonet S.A. | (3) | (3) | Leases and/or right of use assets |
Helmir S.A. | (4) | - | Financial operations |
Isaac Elsztain e Hijos S.C.A. | (8) | (7) | Leases and/or right of use assets |
Estudio Zang, Bergel &Viñes | (39) | (17) | Fees |
Fundación IRSA | (23) | (43) | Donations |
Fundación Museo de los Niños | (9) | 6 | Leases and/or right of use assets |
Fundación Puerta 18 | (6) | (17) | Donations |
Ogden Argentina S.A. | 20 | (34) | Financial operations |
UT La Rural S.A. - OFC S.R.L - Ogden y Enusa | (1) | 1 | Fees |
Real Estate Strategies LLC | 3 | - | Financial operations |
La Rural S.A. | 2 | 2 | Leases and/or right of use assets |
IRSA International LLC | (5) | (4) | Financial operations |
Other subsidiaries, associates and joint ventures | (81) | (110) | |
Total at the end of the period | 2,303 | (120) |
(1) See Note 20 to these Financial Statements.
The following is a summary of the transactions with related parties without impact in resultsfor the three-month period ended September 30, 2023 and 2022:
Related parties | 09.30.2023 | 09.30.2022 | Operation description |
Quality Invest S.A. | (9,421) | - | Sale of shares |
Total distribution of dividends | (9,421) | - | |
Fibesa S.A.U. | - | 667 | Dividends received |
IRSA - Galerías Pacífico S.A. U.T. | 1,512 | - | Dividends received |
Arcos del Gourmet S.A | - | 689 | Dividends received |
Nuevo Puerto Santa Fe S.A. | 160 | - | Dividends received |
Total dividends received | 1,672 | 1,356 | |
Palermo Invest S.A. | - | (5) | Irrevocable contributions |
Liveck S.A. | (17) | - | Irrevocable contributions |
Centro de Entretenimientos La Plata S.A. | - | (143) | Irrevocable contributions |
Total irrevocable contributions to subsidiaries | (17) | (148) |
55
24.
Foreign currency assets and liabilities
Book amounts of foreign currency assets and liabilities are as follows:
Item (1) | Amount | Foreign exchange rate (2) | Total as of 09.30.2023 | Total as of 06.30.2023 |
Assets | ||||
Trade and other receivables | ||||
US Dollar | 11.37 | 348.95 | 3,967 | 2,261 |
Euros | 0.08 | 368.32 | 30 | 30 |
Receivables with related parties | ||||
US Dollar | 43.30 | 349.95 | 15,154 | 14,648 |
Total Trade and other receivables | 19,151 | 16,939 | ||
Investments in financial assets | ||||
US Dollar | 35.88 | 348.95 | 12,522 | 13,554 |
Investment in financial assets with related parties | ||||
US Dollar | 0.73 | 349.95 | 257 | 286 |
Total Investments in financial assets | 12,779 | 13,840 | ||
Cash and cash equivalents | ||||
US Dollar | 25.80 | 348.95 | 9,004 | 1,821 |
Total Cash and cash equivalents | 9,004 | 1,821 | ||
Total Assets | 40,934 | 32,600 | ||
Liabilities | ||||
Trade and other payables | ||||
US Dollar | 5.33 | 349.95 | 1,865 | 1,766 |
Payables with related parties | ||||
US Dollar | 0.42 | 349.95 | 146 | 147 |
Total Trade and other payables | 2,011 | 1,913 | ||
Lease liabilities | ||||
US Dollar | 2.37 | 349.95 | 831 | 524 |
Total Lease liabilities | 831 | 524 | ||
Borrowings | ||||
US Dollar | 324.59 | 349.95 | 113,592 | 114,191 |
Borrowings with related parties | ||||
US Dollar | 81.55 | 349.95 | 28,540 | 28,865 |
Total Borrowings | 142,132 | 143,056 | ||
Total Liabilities | 144,974 | 145,493 | ||
(1)
Considering foreign currencies those that differ from the Group’s functional currency at each period / year.
(2)
Exchange rate as of September 30, 2023 according to Banco de la Nación Argentina records.
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IRSA Inversiones y Representaciones Sociedad Anónima
25.
CNV General Resolution N° 622/13
As required by Section 1°, Chapter III, Title IV of CNV General Resolution N° 622/13, below is a detail of the notes to the Unaudited Condensed Interim Separate Financial Statements that disclose the information required by the Resolution in Exhibits.
Exhibit A - Property, plant and equipment | Note 7 Investment properties and Note 8 Property, plant and equipment |
Exhibit B - Intangible assets | Note 10 Intangible assets |
Exhibit C - Equity investments | Note 6 Information about the main subsidiaries, associates and joint ventures |
Exhibit D - Other investments | Note 12 Financial instruments by category |
Exhibit E - Provisions and allowances | Note 13 Trade and other receivables and Note 17 Provisions |
Exhibit F - Cost of sales and services provided | Note 9 Trading properties and Note 19 Expenses by nature |
Exhibit G - Foreign currency assets and liabilities | Note 24 Foreign currency assets and liabilities |
26.
CNV General Resolution N° 629/14 – Storage of documentation
On August 14, 2014, the CNV issued General Resolution N° 629 whereby it introduced amendments to rules related to storage and conservation of corporate books, accounting books and commercial documentation. In this sense, it should be noted that the Company has entrusted the storage of certain non-sensitive and old information to the following provider:
Storage of documentation responsible | Location | |
Iron Mountain Argentina S.A. | Av. Amancio Alcorta 2482, Autonomous City of Buenos Aires | |
San Miguel de Tucumán 601, Carlos Spegazzini. | ||
Torcuato Di Tella 1800, Carlos Spegazzini. | ||
Puente del Inca 2540, Carlos Spegazzini |
It is further noted that a detailed list of all documentation held in custody by providers, as well as documentation required in section 5 a.3) of Section I, Chapter V, Title II of the CNV RULES (2013 as amended) are available at the registered office.
On February 5, 2014 there was a widely known accident in Iron Mountain’s warehouse. Such company is a supplier of the Company and Company’s documentation was being kept in the mentioned warehouse. Based on the internal review carried out by the Company, duly reported to the CNV on February 12, 2014, the information kept at the Iron Mountain premises that were on fire do not appear to be sensitive or capable of affecting normal operations.
27.
Negative working capital
As of September 30, 2023, the Company presents a negative working capital of ARS 36,112, which is permanently monitored by the Shareholder meeting and the Management.
28.
Other relevant events of the period
See Note 28 to the Unaudited Condensed Interim Consolidated Financial Statements.
29.
Subsequent events
See Note 29 to the Unaudited Condensed Interim Consolidated Financial Statements.
57
Free translation from the original prepared in Spanish for publication in Argentina
REVIEW REPORT ON THE UNAUDITED CONDENSED INTERIM SEPARATE FINANCIAL STATEMENTS
To the Shareholders, President and Directors of
IRSA Inversiones y Representaciones Sociedad Anónima
Legal address: Carlos Della Paolera 261 - 9th floor
Autonomous City of Buenos Aires
Tax Registration Number: 30-52532274-9
Introduction
We have reviewed the accompanying unaudited condensed interim separate financial statements of IRSA Inversiones y Representaciones Sociedad Anónima (hereinafter “the Company”), which comprise the unaudited condensed interim separate statement of financial position as of September 30, 2023, the unaudited condensed interim separate statements of income and other comprehensive income, of changes in shareholders’ equity and of cash flows for the three-month period then ended, and selected explanatory notes.
Management’s responsibility
The Board of Directors of the Company is responsible for the preparation and presentation of these unaudited condensed interim separate financial statements in accordance with International Financial Reporting Standards, adopted by the Argentine Federation of Professional Councils in Economic Sciences (FACPCE) as professional accounting standards and included by the National Securities Commission (CNV) in its regulations, as approved by the International Accounting Standards Board (IASB), and is therefore responsible for the preparation and presentation of the unaudited condensed interim separate financial statements mentioned in the first paragraph, in accordance with International Accounting Standard 34 Interim Financial Information (IAS 34).
58
Free translation from the original prepared in Spanish for publication in Argentina
Scope of our review
Our review was limited to the application of the procedures established under International Standards on Review Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity, adopted as a review standard in Argentina by Technical Pronouncement No. 33 of the FACPCE and approved by the International Auditing and Assurance Standards Board (IAASB). A review of interim financial information consists of inquiries of Company staff responsible for preparing the information included in the unaudited condensed interim separate financial statements and of analytical and other review procedures. This review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
On the basis of our review, nothing has come to our attention that causes us to believe that the unaudited condensed interim separate financial statements mentioned in the first paragraph of this report have not been prepared, in all material respects, in accordance with International Accounting Standard 34 Interim Financial Reporting.
Report on compliance with current regulations
In accordance with current regulations, we report, in connection with IRSA Inversiones y Representaciones Sociedad Anónima, that:
a) the unaudited condensed interim separate financial statements of IRSA Inversiones y Representaciones Sociedad Anónima have not been transcribed into the Inventory and Balance Sheet book and, except for the above mentioned situation, as regards those matters that are within our competence, they are in compliance with the provisions of the General Companies Law and pertinent resolutions of the National Securities Commission;
b) the unaudited condensed interim separate financial statements of IRSA Inversiones y Representaciones Sociedad Anónima arise from accounting records carried in all formal aspects in accordance with legal requirements except for i) the lack of transcription to the Inventories and Balance Sheet Book, and ii) the lack of transcription to the General Journal Book of the accounting entries corresponding to the month of September 2023;
59
Free translation from the original prepared in Spanish for publication in Argentina
c) as of September 30, 2023 the debt of IRSA Inversiones y Representaciones Sociedad Anónima accrued in favor of the Argentine Integrated Social Security System, as shown by the Company’s accounting records, amounted to ARS 539,282,080 which was not due at that date.
Autonomous City of Buenos Aires, November 6, 2023.
PRICE WATERHOUSE & CO. S.R.L. (Partner) | ABELOVICH, POLANO & ASOCIADOS S.R.L. (Partner) | |
C.P.C.E.C.A.B.A. V° 1 F° 17 | C.P.C.E.C.A.B.A. V. 1 F. 30 Marcelo Héctor Fuxman Public Accountant (UBA) C.P.C.E. C.A.B.A. V. 134 F. 85 | |
Carlos Brondo Public Accountant (UNCUYO) C.P.C.E.C.A.B.A. V. 391 F. 078 | Noemí I. Cohn Public Accountant (UBA) C.P.C.E. C.A.B.A. V. 116 F. 135 |
60
I. Brief comment on the Company’s activities during the period, including references to significant events occurred after the end of the period.
Consolidated Results
(in millions of ARS) | IQ 24 | IQ 23 | YoY Var |
Revenues | 30,725 | 27,803 | 10.5% |
Result from fair value adjustment of investment properties | 102,292 | (15,797) | - |
Result from operations | 121,405 | (2,520) | - |
Depreciation and amortization | 575 | 520 | 10.6% |
EBITDA (1) | 121,980 | (2,000) | - |
Adjusted EBITDA (1) | 17,030 | 15,958 | 6.7% |
Result for the period | 81,080 | 3,089 | 2,524.8% |
Attributable to equity holders of the parent | 77,042 | 2,768 | 2,683.3% |
Attributable to non-controlling interest | 4,038 | 321 | 1,157.9% |
Group revenues increased by 10.5% during the three-months period of 2024 compared to the same period in 2023, mainly due to the favorable evolution of Shopping Centers and Hotels segments.
Adjusted EBITDA from the rental segments reached ARS 16,713 million, 21.0% higher than the three-month period of the previous year, ARS 13,321 million coming from the Shopping Centers segment, ARS 1,282 million from the office segment and ARS 2,110 million from Hotels segment. Total Adjusted EBITDA reached ARS 17,030 million, increasing 6.7% in the period.
The net result for the three-month period of fiscal year 2024 registered a gain of ARS 81,080,2,524.8% higher than the same period of the previous year. This is mainly explained by the gain recorded from changes in the fair value of investment properties due to the impact of a devaluation greater than inflation on those properties valued in USD.
II.Shopping Malls
Our portfolio’s leasable area totaled 334,737 sqm of GLA. Real tenants’ sales of our shopping centers reached ARS 224,171 million in the three-months period of fiscal year 2024, 10.1% higher than in the same period of the previous fiscal year.
Portfolio occupancy reached 98.0%during the first quarter of fiscal year 2024, keeping the trend observed during recent quarters.
Shopping Malls’ Operating Indicators
IQ 24 | IVQ 23 | IIIQ 23 | IIQ 23 | IQ 23 | |
Gross leasable area (sqm) | 334,737 | 335,826 | 335,893 | 336,240 | 336,240 |
Tenants’ sales (3 months cumulative in current currency) | 224,171 | 228,140 | 184,602 | 242,222 | 203,640 |
Occupancy | 98.0% | 97.4% | 96.8% | 93.9% | 93.7% |
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IRSA Inversiones y Representaciones Sociedad Anónima
Summary as of September 30, 2023
Shopping Malls’ Financial Indicators
(in millions of ARS) | IQ 24 | IQ 23 | YoY Var |
Revenues from sales, leases, and services | 17,150 | 14,385 | 19.2% |
Net result from fair value adjustment on investment properties | (2,491) | (12,198) | (79.6)% |
Result from operations | 10,677 | (1,449) | - |
Depreciation and amortization | 153 | 153 | - |
EBITDA (1) | 10,830 | (1,296) | - |
Adjusted EBITDA (1) | 13,321 | 10,902 | 22.2% |
(1)
See Point XVI: EBITDA Reconciliation
Income from this segment during the first quarter of fiscal year 2024 reached ARS 17,150 million, 10.1% higher compared with the same period of previous fiscal year. Adjusted EBITDA reached ARS 13,321 million, 22.2% higher than in the same period of fiscal year 2023 as costs increased at a lower rate than revenues.
Operating data of our shopping malls
Date of acquisition | Location | Gross Leasable Area (sqm)(1) | Stores | Occupancy (2) | IRSAInterest (3) | |
Alto Palermo | Dec-97 | City of Buenos Aires | 20,629 | 141 | 99.8% | 100% |
Abasto Shopping(4) | Nov-99 | City of Buenos Aires | 37,167 | 156 | 99.5% | 100% |
Alto Avellaneda | Dec-97 | Province of Buenos Aires | 38,368 | 121 | 95.2% | 100% |
Alcorta Shopping | Jun-97 | City of Buenos Aires | 15,839 | 107 | 99.7% | 100% |
Patio Bullrich | Oct-98 | City of Buenos Aires | 11,396 | 90 | 92.4% | 100% |
Dot Baires Shopping | May-09 | City of Buenos Aires | 47,811 | 162 | 99.2% | 80% |
Soleil | Jul-10 | Province of Buenos Aires | 15,673 | 74 | 100.0% | 100% |
Distrito Arcos | Dec-14 | City of Buenos Aires | 14,458 | 63 | 100.0% | 90.0% |
Alto Noa Shopping | Mar-95 | Salta | 19,427 | 84 | 99.8% | 100% |
Alto Rosario Shopping | Nov-04 | Santa Fe | 34,859 | 132 | 93.8% | 100% |
Mendoza Plaza Shopping | Dec-94 | Mendoza | 41,511 | 120 | 98.6% | 100% |
Córdoba Shopping | Dec-06 | Córdoba | 15,368 | 98 | 99.0% | 100% |
La Ribera Shopping | Aug-11 | Santa Fe | 10,531 | 67 | 97.0% | 50% |
Alto Comahue | Mar-15 | Neuquén | 11,700 | 87 | 98.7% | 99.95% |
Patio Olmos(5) | Sep-07 | Córdoba | - | - | - | |
Total | 334,737 | 1,502 | 98.0% |
(1) Corresponds to gross leasable area in each property. Excludes common areas and parking spaces.
(2) Calculated dividing occupied square meters by leasable area as of the last day of the fiscal period.
(3) Company’s effective interest in each of its business units.
(4) Excludes Museo de los Niños (3,732 square meters in Abasto).
(5) IRSA owns the historic building of the Patio Olmos shopping mall in the Province of Córdoba, operated by a third party.
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IRSA Inversiones y Representaciones Sociedad Anónima
Summary as of September 30, 2023
Quarterly and cumulative tenants’ sales as of September 30, 2023, compared to the same period of fiscal years 2023, 2022, 2021, and 2020
(ARS million) | IQ 24 | IQ 23 | YoY Var | IQ 22 | IQ 21 | IQ 20 |
Alto Palermo | 30,500 | 26,140 | 16.7% | 17,590 | 847 | 20,723 |
Abasto Shopping | 31,733 | 29,815 | 6.4% | 17,419 | 622 | 21,483 |
Alto Avellaneda | 21,823 | 19,388 | 12.6% | 13,008 | 608 | 18,812 |
Alcorta Shopping | 16,775 | 14,801 | 13.3% | 13,086 | 109 | 11,740 |
Patio Bullrich | 9,463 | 8,867 | 6.7% | 6,302 | 1,114 | 7,931 |
Buenos Aires Design(1) | - | - | 0.0% | - | - | - |
Dot Baires Shopping | 17,815 | 15,612 | 14.1% | 11,394 | 554 | 15,895 |
Soleil | 12,775 | 11,121 | 14.9% | 9,689 | 1,223 | 9,158 |
Distrito Arcos | 18,387 | 16,024 | 14.7% | 11,315 | 3,328 | 9,918 |
Alto Noa Shopping | 9,031 | 8,794 | 2.7% | 7,319 | 4,346 | 7,306 |
Alto Rosario Shopping | 23,349 | 23,433 | -0.4% | 18,392 | 8,180 | 16,686 |
Mendoza Plaza Shopping | 13,904 | 12,795 | 8.7% | 10,526 | 8,152 | 13,107 |
Córdoba Shopping | 7,302 | 6,884 | 6.1% | 6,044 | 3,362 | 5,128 |
La Ribera Shopping(2) | 3,931 | 3,852 | 2.1% | 2,635 | 943 | 3,803 |
Alto Comahue | 7,383 | 6,114 | 20.8% | 4,430 | 1,011 | 5,310 |
Total sales | 224,171 | 203,640 | 10.1% | 149,149 | 34,399 | 167,000 |
(1) December 5, 2018, end of concession
(2) Through our joint venture Nuevo Puerto Santa Fe S.A.
Quarterly and cumulative tenants’ sales per type of business as of September 30, 2023, compared to the same period of fiscal years 2023, 2022, 2021 and 2020(1)
(in millions of ARS) | IQ 24 | IQ 23 | YoY Var | IQ 22 | IQ 21 | IQ 20 |
Department Store | - | - | - | - | 2,528 | 8,828 |
Clothes and footwear | 126,194 | 116,042 | 8.7% | 88,690 | 16,461 | 90,267 |
Entertainment | 7,668 | 7,806 | -1.8% | 3,335 | 34 | 6,966 |
Home and decoration | 5,740 | 4,913 | 16.8% | 4,208 | 882 | 3,279 |
Restaurants | 28,032 | 23,584 | 18.9% | 14,222 | 2,891 | 20,382 |
Miscellaneous | 26,782 | 23,848 | 12.3% | 22,431 | 6,396 | 20,883 |
Services | 4,801 | 3,589 | 33.8% | 2,399 | 157 | 1,968 |
Home Appliances | 24,954 | 23,858 | 4.6% | 13,864 | 5,050 | 14,427 |
Total | 224,171 | 203,640 | 10.1% | 149,149 | 34,399 | 167,000 |
(1)
Includes sales from stands and excludes spaces used for special exhibitions.
Revenues from quarterly and cumulative leases as of September 30, 2023, compared to the same period of fiscal year 2023, 2022, 2021& 2020
(ARS million) | IQ 24 | IQ 23 | YoY Var | IQ 22 | IQ 21 | IQ 20 |
Base rent(1) | 7,010 | 5,552 | 26.3% | 3,118 | 432 | 6,952 |
Percentage rent | 6,609 | 6,312 | 4.7% | 4,828 | 419 | 3,319 |
Total rent | 13,619 | 11,864 | 14.8% | 7,946 | 851 | 10,271 |
Non-traditional advertising | 506 | 350 | 44.5% | 192 | 218 | 371 |
Revenues from admission rights | 1,498 | 1,182 | 26.7% | 864 | 973 | 1,749 |
Fees | 138 | 136 | 1.6% | 153 | 166 | 192 |
Parking | 925 | 612 | 51.0% | 270 | 22 | 811 |
Commissions | 218 | 217 | 0.5% | 236 | 192 | 371 |
Other | 246 | 24 | 925.0% | 44 | 22 | 100 |
Subtotal(2) | 17,150 | 14,385 | 19.2% | 9,705 | 2,444 | 13,865 |
Expenses and Collective Promotion Fund | 5,350 | 5,478 | -2.3% | 4,200 | 2,355 | 5,613 |
Total | 22,500 | 19,863 | 13.3% | 13,905 | 4,799 | 19,478 |
(1)
Includes Revenues from stands for ARS 655.7 million cumulative as of September 2023.
(2)
Includes ARS 16.5 million from Patio Olmos and ARS 194.9 million from sponsorship income from “Buenos Aire Fashion Week” Production.
63
IRSA Inversiones y Representaciones Sociedad Anónima
Summary as of September 30, 2023
III. Offices
According to Colliers, the quarter closes with a slight increase in vacancy standing at 17.3%, in the Buenos Aires City premium market (A+ & A),while prices remain stable at average levels of USD 22.6 per sqm.
Offices’ Operating Indicators
IQ 24 | IVQ 23 | IIIQ 23 | IIQ 23 | IQ 23 | |
Gross Leasable area | 61,742 | 74,392 | 74,392 | 82,708 | 82,708 |
Total Occupancy | 83.0% | 68.7% | 68.4% | 68.6% | 68.5% |
Class A+ & A Occupancy | 88.5% | 86.9% | 86.9% | 83.7% | 82.0% |
Class B Occupancy | 46.4% | 17.2% | 16.1% | 19.6% | 24.9% |
Rent USD/sqm | 25.2 | 25.5 | 25.6 | 24.8 | 25.0 |
The gross leasable area of the first quarter of fiscal year 2024 was 61,742 sqm,decreasing significantly when compared to the previous quarter due to the full sale of the class B building located in Suipacha 652/664, as well as one floor in the “261 Della Paolera” building. The average occupancy of the portfolio grew to 83.0% mainly due to the impact of the Suipacha Building sale, which was entirely vacant. The average rent of the portfolio reached USD 25.2/m2.
Offices’ Financial Indicators
(in ARS million) | IQ 24 | IQ 23 | YoY Var |
Revenues from sales, leases and services | 1,584 | 1,635 | (3.1)% |
Net result from fair value adjustment on investment properties, PP&E e inventories | 32,178 | (1,220) | - |
Profit from operations | 33,441 | 31 | 107,774.2% |
Depreciation and amortization | 19 | 88 | (78.4)% |
EBITDA(1) | 33,460 | 119 | 28,017.6% |
Adjusted EBITDA (1) | 1,282 | 1,339 | (4.3)% |
(1)
See Point XVI: EBITDA Reconciliation
During the first quarter of fiscal year 2024, revenues from the offices segment decreased by 3.1% and Adjusted EBITDA decreased 4.3% compared to the previous fiscal year, mainly explained by the impact of asset sales. Adjusted EBITDA margin was 80.9%.
Below is information on our office segment:
Offices & Others | Date of Acquisition | Gross Leasable Area (sqm)(1) | Occupancy (2) | Actual Interest | 3M 24 - Rental revenues (ARS thousand) (4) |
AAA & A Offices | |||||
Boston Tower | Dec-14 | 1,748 | |||
Intercontinental Plaza (3) | Dec-14 | 2,979 | 100.0% | 100% | 71,974 |
Dot Building | Nov-06 | 11,242 | 57.6% | 80% | 171,066 |
Zetta | May-19 | 32,173 | 95.7% | 80% | 969,810 |
261 Della Paolera – Catalinas(5) | Dec-20 | 7,331 | 100% | 100% | 317,848 |
Total AAA & A Offices | 53,725 | 88.5% | 1,532,446 | ||
B Offices | |||||
Philips | Jun-17 | 8,017 | 46.4% | 100% | 51,937 |
Total B Buildings | 8,017 | 46.4% | 100% | 51,937 | |
Subtotal Offices | 61,742 | 83.0% | 1,584,383 |
(1) Corresponds to the total gross leasable area of each property as of September 30, 2023. Excludes common areas and parking lots.
(2) Calculated by dividing occupied square meters by gross leasable area as of September 30, 2023.
(3) We own 13.2% of the building that has 22,535 square meters of gross leasable area.
(4)Corresponds to the accumulated income of the period.
(5) We own 20% of the building that has 35,872 square meters of gross leasable area.
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IRSA Inversiones y Representaciones Sociedad Anónima
Summary as of September 30, 2023
IV. Hotels
The company's hotels continue to register good levels of income and occupancy thanks to the increase in international tourism, exchange rate competitiveness in Argentina and the recovery of the conventions and corporate events segment.
(in ARS million) | IQ 24 | IQ 23 | YoY Var |
Revenues | 5,987 | 4,773 | 25.4% |
Profit from operations | 1,837 | 1,408 | 30.5% |
Depreciation and amortization | 273 | 162 | 68.5% |
EBITDA | 2,110 | 1,570 | 34.4% |
During the first quarter of fiscal year 2024, Hotels segment recorded an increase in revenues of 25.4% compared with the same period of fiscal year 2023 while the segment’s EBITDA reached ARS 2,110 million, a 34.4% increase when compared to the same period of fiscal year 2023.
The following chart shows certain information regarding our luxury hotels:
Hotels | Date of Acquisition | IRSA’s Interest | Number of rooms | Occupancy(4) |
Intercontinental (1) | 11/01/1997 | 76,34% | 313 | 59.0% |
Sheraton Libertador (2) | 03/01/1998 | 100,00% | 200 | 68.9% |
Llao Llao (3) | 06/01/1997 | 50,00% | 205 | 75.4% |
Total | - | - | 718 | 66.4% |
(1) Through Nuevas Fronteras S.A. (Subsidiary of IRSA).
(2) Through Hoteles Argentinos S.A.U.
(3) Through Llao Llao Resorts S.A.
(4) Three months cumulated average.
Hotels’ operating and financial indicators.
IQ 24 | IVQ 23 | IIIQ 23 | IIQ 23 | IQ 23 | |
Average Occupancy | 66.4% | 64.5% | 68.6% | 71.4% | 62.7% |
Average Rate per Room (USD/night) | 267 | 201 | 231 | 208 | 227 |
V. Sales and Developments
(in ARS million) | IQ 24 | IQ 23 | YoY Var |
Revenues | 262 | 1,098 | (76.1)% |
Net result from fair value adjustment on investment properties | 72,705 | (2,526) | - |
Result from operations | 71,138 | (2,821) | - |
Depreciation and amortization | 19 | 26 | (26.9)% |
Net result from fair value adjustment on investment properties | 2,331 | 2,161 | 7.9% |
EBITDA (1) | 71,157 | (2,795) | - |
Adjusted EBITDA (1) | 783 | 1,892 | (58.6)% |
(1)
See Point XVI: EBITDA Reconciliation
Adjusted EBITDA of “Sales and Developments” segment reached ARS 783 million during the first quarter of fiscal year 2024, 38.0% lower than the registered during the same quarter of the previous fiscal year, mainly due to lower sales recorded during the quarter.
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IRSA Inversiones y Representaciones Sociedad Anónima
Summary as of September 30, 2023
VI. Others
(in millions of ARS) | IQ 24 | IQ 23 | YoY Var |
Revenues | 319 | 303 | 5.3% |
Net result from fair value adjustment on investment properties | (109) | (52) | 109.6% |
Result from operations | 4,463 | 198 | 2,154.0% |
Depreciation and amortization | 119 | 96 | 24.0% |
Recovery of provision | 4,989 | - | - |
EBITDA | 4,582 | 294 | 1,458.5% |
Adjusted EBITDA | (298) | 346 | (186.1)% |
VII. Financial Operations and Others
Interest in Banco Hipotecario S.A. (“BHSA”)
BHSA is a leading bank in the mortgage lending industry, in which IRSA held an equity interest of 29.91% as of September 30, 2023. During the three-month period of fiscal year 2024, the investment in Banco Hipotecario generated an ARS 1,968 million gain compared to a ARS 1,506 million loss during the same period of 2023. For further information, visit http://www.cnv.gob.ar or http://www.hipotecario.com.ar.
VIII. EBITDA by Segment (ARS million)
3M 24 | Shopping Malls | Offices | Sales and Developments | Hotels | Others | Total |
Result from operations | 10,677 | 33,441 | 71,138 | 1,837 | 4,463 | 121,556 |
Depreciation and amortization | 153 | 19 | 19 | 273 | 119 | 583 |
EBITDA | 10,830 | 33,460 | 71,157 | 2,110 | 4,582 | 122,139 |
3M 23 | Shopping Malls | Offices | Sales and Developments | Hotels | Others | Total |
Result from operations | (1,449) | 31 | (2,821) | 1,408 | 198 | (2,633) |
Depreciation and amortization | 153 | 88 | 26 | 162 | 96 | 525 |
EBITDA | (1,296) | 119 | (2,795) | 1,570 | 294 | (2,108) |
EBITDA Var | - | 28,017.6% | - | 34.4% | 1,458.5% | - |
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IRSA Inversiones y Representaciones Sociedad Anónima
Summary as of September 30, 2023
IX. Reconciliation with Consolidated Statements of Income (ARS million)
Below is an explanation of the reconciliation of the company’s profit by segment with its Consolidated Statements of Income. The difference lies in the presence of joint ventures included in the segment but not in the Statements of Income.
Total as per segment | Joint ventures* | Expenses and CPF | Elimination of inter-segment transactions | Total as per Statements of Income | |
Revenues | 25,302 | (144) | 5,567 | - | 30,725 |
Costs | (4,327) | 14 | (5,685) | - | (9,998) |
Gross result | 20,975 | (130) | (118) | - | 20,727 |
Result from sales of investment properties | 102,283 | 9 | - | - | 102,292 |
General and administrative expenses | 343 | 19 | - | 48 | 410 |
Selling expenses | (1,624) | 14 | - | - | (1,610) |
Other operating results, net | (421) | (1) | 56 | -48 | (414) |
Result from operations | 121,556 | (89) | (62) | - | 121,405 |
Share of loss of associates and joint ventures | 2,080 | 137 | - | - | 2,217 |
Result before financial results and income tax | 123,636 | 48 | (62) | - | 123,622 |
*Includes Puerto Retiro, CYRSA, Nuevo Puerto Santa Fe and Quality (San Martín plot).
X. Financial Debt and Other Indebtedness
The following table describes our total indebtedness as of September 30, 2023:
Description | Currency | Amount (USD MM) (1) | Interest Rate | Maturity |
Bank overdrafts | ARS | 21.0 | Floating | < 360 days |
Series VIII | USD | 10.8 | 10.0% | Nov-23 |
Series XI | USD | 12.8 | 5.0% | Mar-24 |
Series XII | ARS | 43.8 | Floating | Mar-24 |
Series XIII | USD | 22.2 | 3.9% | Aug-24 |
Series XIV | USD | 157.8 | 8.75% | Jun-28 |
Series XV | USD | 61.7 | 8.0% | Mar-25 |
Series XVI | USD | 28.3 | 7.0% | Jul-25 |
Series XVII | USD | 25.0 | 5.0% | Dic-25 |
IRSA’s Total Debt | USD | 383.4 | ||
Cash & Cash Equivalents + Investments (2) | USD | 192.3 | ||
IRSA’s Net Debt | USD | 191.1 |
(1)
Principal amount in USD (million) at an exchange rate of ARS 349.95/USD, without considering accrued interest or eliminations of balances with subsidiaries.
(2)
Includes Cash and cash equivalents, Investments in Current Financial Assets and related companies notes holding.
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IRSA Inversiones y Representaciones Sociedad Anónima
Summary as of September 30, 2023
XI. Material and Subsequent Events
July 2023: “Suipacha 652/664” Building Sale
On July 24, 2023, the Company sold the entire "Suipacha 652/64" office building, located in the Microcentro district of the Autonomous City of Buenos Aires.The class B building, with 7 office floors and 62 parking lots, acquired by IRSA in 1991, has a gross leasable area of 11,465 sqm, which was vacant at the moment of the transaction.
The price was set at USD 6.75 million, of which USD 3 million have been collected in cash, USD 750,000 through the delivery of 3 units in a building owned by the buyer, with a 30-month free lease agreement and the remaining balance of USD 3 million will be paid as follows:
●
USD 2.5 million in 10 semi-annual, equal and consecutive installments of USD 250,000, the first due 24 months after the signing of the deed, with annual interest of 5%;
●
USD 500,000 through the provision of services by the buyer.
This sale is part of the company's strategy to consolidate a portfolio of premium offices in the City of Buenos Aires.
August 2023: LEED Certification of '200 Della Paolera' Building
On August 3, 2023, the '200 Della Paolera' building, located in Catalinas Norte, Autonomous City of Buenos Aires, has achieved LEED Gold Core & Shell certification (Leadership in Energy and Environmental Design).
This certification, renowned in the sector and highly valued by the market, recognizes the company's commitment to sustainable real estate development, incorporating into construction aspects related to energy efficiency, improvement of indoor environmental quality, water consumption efficiency, the sustainable development of the free spaces of the plot and the selection and recycling of materials.
With this achievement, 74% of our premium office portfolio has the LEED seal and several tenants are in the process of certifying their interiors, promoting energy and environmental design, quality of life, and healthy workspaces.
We continue advancing in our ESG strategy, applying high quality standards in our real estate operations through the responsible use of resources and the most sustainable technologies, developing projects in balance with the environment, with social responsibility, diverse committed teams, and good corporate governance practices.
August 2023: Sale Quality Invest S.A.
On August 31, 2023, IRSA has sold and transferred 100% of its stake in Quality Invest S.A. equivalent to 50% of the stock capital.
Quality Invest S.A. owns a property located at Avenida San Martín 601/611/645 in the district of San Martín, Province of Buenos Aires, of 159,996 sqm with a covered area of 80,027 sqm, which used to be Nobleza Picardo´s industrial plant until 2011. The transaction price was set at USD 22,900,000, of which USD 21,500,000 has been collected with the transfer of the shares and the balance of USD 1,400,000 will be collected after 3 years, accruing an annual interest of 7%.
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IRSA Inversiones y Representaciones Sociedad Anónima
Summary as of September 30, 2023
August 2023 and October 2023: “261 Della Paolera” three floors sale
On August 9, 2023, IRSA sold and transferred an additional floor, for a total area of 1,184 m2, 10 garage units and 2 complementary units of the same building. The transaction price was USD (MEP) 6.3 million (USD 5,300/m2), which was paid in full in ARS.
Subsequently, on October 6, 2023, IRSA sold and transferred two additional floors, for a total area of 2,395 m2 and 18 garage units. The transaction price was USD (MEP) 14.9 million (USD 6,300/m2), which was paid in full in ARS.
After this transaction, IRSA keeps the property of 4 floors of the building with an approximate leasable area of 4,937 sqm, in addition to parking spaces and other complementary spaces.
September 2023: Shares Buyback Program - Price Modification
On September 5, 2023, the Company informs that its Board of Directors, at the meeting held on June 15, 2023, where the share repurchase program was created for an amount of up to ARS 5,000,000,000 under the terms of Article 64 of Law 26,831 and the Regulations of the National Securities Commission, has resolved to modify the acquisition price of its own shares, establishing a maximum value of USD 9.00 per GDS and up to a maximum value in pesos of ARS 720 per share, maintaining the remaining terms and conditions duly communicated.
As of this date, the Company has repurchased the equivalent of 4,532,583 common shares representing approximately 42.23% of the approved program.
September 2023: Capitalization and Change in Nominal Value
The Comisión Nacional de Valores (the Argentine National Securities Commission) and Buenos Aires Stock Exchange approved what has been decided in the Company’s Shareholders meeting held on April 27, 2023:
1) An increase in the capital stock in the amount of ARS 6,552,405,000, through the partial capitalization of the Issue Premium account, resulting in the issuance of 6,552,405,000 common shares, with a par value of ARS 1 (one peso) and with the right to one vote per share.
2) changing the nominal value of the ordinary shares from ARS 1 to ARS 10 each and entitled to one (1) vote per share.
From September 20, 2023, the shares distribution and the change in nominal value will be made simultaneously and the entry of the change of 811,137,457 book-entry common shares, with a nominal value of ARS 1 each and one vote per share, for the amount of 736,354,245 book-entry common shares with a nominal value of ARS 10 each and one vote per share, consequently, a reverse split of the Company’s shares shall be carried out, where every 1 (one) old share with nominal value of ARS 1 shall be exchanged for 0.907804514 new shares with nominal value ARS 10. The new shares distributed due to the described capitalization will have economic rights under equal conditions with those that are currently in circulation.
It is reported that the Company share capital after de indicated operations will amount to ARS 7,363,542,450 represented by 736,354,245 book-entry common shares with a nominal value of ARS 10 each and one vote per share.
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IRSA Inversiones y Representaciones Sociedad Anónima
Summary as of September 30, 2023
Likewise, the Buenos Aires Stock Exchange has been requested to change the modality of the negotiation of the shares representing the share capital. Specifically, the negotiation price will be registered per share instead of being negotiated by Argentinean peso (ARS) of nominal value, given that the change in nominal value, and the issuance of shares resulting from the capitalization, would produce a substantial downward effect on the share price.
It should be mentioned that this capitalization and change in the nominal value of the shares do not modify the economic values of the holdings or the percentage of participation in the share capital.
September 2023: Warrants – Post Capitalization
On September 15, 2023, the Company reported that as a result of an increase in the capital stock through the partial capitalization of the Issue Premium account and an amendment to section seven of its bylaws, changing the nominal value of the ordinary shares from one peso ARS 1to ARS 10.
Each and entitled to one (1) vote per share, which was informed in September 13, 2023, where the outstanding shares will change from 811,137,457 common shares, with a nominal value of ARS 1 each and one vote per share, to the amount of 736,354,245 common shares with a nominal value of ARS 10 each and one vote per share, as it was approved by the shareholders meeting held on April 27, 2023. The terms and conditions of the outstanding warrants for common shares of the Company have been modified as follows, while the other terms and conditions remain the same:
Amount of shares to be issued per warrant:
●
Ratio previous to the adjustment: 1.1719 (Nominal Value ARS 1)
●
Ratio after the adjustment (current): 1.0639 (Nominal Value ARS 10).
Warrant exercise price per new share to be issued:
●
Price previous to the adjustment: USD 0.3689 (Nominal Value ARS 1)
●
Price after the adjustment (current): USD 0.4063 (Nominal Value ARS 10).
September 2023: Warrants Exercise
Between September 17 and 25, 2023, certain warrants holders have exercised their right to acquire additional shares and 67,061 ordinary shares of the Company will be registered, with a face value of ARS 10. As a result of the exercise, USD 27,246.88 were collected by the Company.
After the exercise of these warrants, the number of shares of the Company increased from 736,354,245 to 736,421,306 with a face value of ARS 10, the capital stock increases from 7,363,542,450 to 7,364,213,060, and the new number of outstanding warrants decreased from 79,709,301 to 79,646,262.
October 2023: General Ordinary and Extraordinary Shareholders’ Meeting
On October 5, 2023, our General Ordinary and Extraordinary Shareholders’ Meeting was held. The following matters. inter alia, were resolved by majority of votes:
●
Distribution of ARS 64,000 million as cash dividends as of the date of the Shareholders’ Meeting.
●
Distribution of 12.644.273. of own shares with NV ARS 10.
●
Designation of board members.
●
Compensations to the Board of Directors for the fiscal year ended June 30, 2023.
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IRSA Inversiones y Representaciones Sociedad Anónima
Summary as of September 30, 2023
On October 12, 2023, the Company distributed among its shareholders the cash dividend in an amount of ARS 4,340,000,000 equivalent to 884.687833212% of the stock capital, an amount per share of ARS 88.4687833212 (ARS 10 par value) and an amount per ADR of ARS 884.687833212.
On the same day, the Company distributed own shares, the distribution of the shares constitutes 0.01747849138 shares per ordinary share and 0.1747849138 per GDS, a percentage of 1.747849138% of the stock capital of 723,419,014 shares and NV ARS 10, net of treasury shares.
As of the date of presentation of the financial statements, the cash dividend and treasury shares have not yet been distributed among GDS holders due to the exchange and securities restrictions in force in Argentina. IRSA is analyzing, together with the Bank of New York Mellon (“BONY”), custodian of the GDS, possible alternatives for the distribution or investment of said funds until the entity can transfer them in favor of the GDS holders, making it available to any shareholder who decides so to receive the dividend in Argentine pesos.
Meanwhile, the funds are deposited in the common investment fund called “Super Ahorro $” managed by Santander Asset Management Gerente de Fondos Comunes de Inversión S.A., to preserve the value of the dividend in Argentinean pesos.
October 2023: Warrants – Post dividends distribution
Subsequently, on October 27, 2023, the Company reported that due to the cash dividend and own shares distributed to the shareholders, The terms and conditions of the outstanding warrants for common shares of the Company have been modified as follows, while the other terms and conditions remain the same:
Amount of shares to be issued per warrant:
●
Ratio previous to the adjustment: 1.0639 (Nominal Value ARS 10);
●
Ratio after the adjustment (current): 1.2272 (Nominal Value ARS 10).
Warrant exercise price per new share to be issued:
●
Price previous to the adjustment: USD 0.4063 (Nominal Value ARS 10);
●
Price after the adjustment (current): USD 0.3522 (Nominal Value ARS 10).
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IRSA Inversiones y Representaciones Sociedad Anónima
Summary as of September 30, 2023
XII. Summarized Comparative Consolidated Balance Sheet
(in ARS million) | 09.30.2023 | 09.30.2022 | 09.30.2021 | 09.30.2020 | 09.30.2019 |
Non-current assets | 958,009 | 943,189 | 967,315 | 1,245,023 | 3,220,685 |
Current assets | 103,354 | 83,437 | 66,762 | 87,676 | 1,491,762 |
Total assets | 1,061,363 | 1,026,626 | 1,034,077 | 1,332,699 | 4,712,447 |
Capital and reserves attributable to the equity holders of the parent | 563,110 | 462,347 | 291,338 | 467,972 | 342,541 |
Non-controlling interest | 32,647 | 31,815 | 97,791 | 155,363 | 416,027 |
Total shareholders’ equity | 595,757 | 494,162 | 389,129 | 623,335 | 758,568 |
Non-current liabilities | 376,619 | 392,075 | 552,266�� | 509,540 | 3,030,346 |
Current liabilities | 88,987 | 140,389 | 92,682 | 199,824 | 923,533 |
Total liabilities | 465,606 | 532,464 | 644,948 | 709,364 | 3,953,879 |
Total liabilities and shareholders’ equity | 1,061,363 | 1,026,626 | 1,034,077 | 1,332,699 | 4,712,447 |
XIII. Summarized Comparative Consolidated Income Statement
(in ARS million) | 09.30.2023 | 09.30.2022 | 09.30.2021 | 09.30.2020 | 09.30.2019 |
Profit from operations | 121,405 | (2,520) | (21,286) | 156,378 | 94,041 |
Share of profit of associates and joint ventures | 2,217 | 2,281 | (674 | 982 | 4,901 |
Result from operations before financing and taxation | 123,622 | (239) | (21,960) | 157,360 | 98,942 |
Financial income | 378 | 140 | 269 | 374 | 553 |
Financial cost | (4,121) | (4,404) | (7,906) | (10,594) | (11,850) |
Other financial results | (2,359) | 512 | 12,939 | 4,151 | (60,857) |
Inflation adjustment | 6,510 | 10,700 | 1,482 | (388) | (2,614) |
Financial results, net | 408 | 6,948 | 6,784 | (6,457) | (74,768) |
Results before income tax | 124,030 | 6,709 | (15,176) | 150,903 | 24,174 |
Income tax | (42,950) | (3,620) | 10,756 | (52,915) | (16,658) |
Result for the period from continued operations | 81,080 | 3,089 | (4,420) | 97,988 | 7,516 |
Result for the period from discontinued operations after taxes | - | - | - | (42,531) | 92,344 |
Result of the period | 81,080 | 3,089 | (4,420) | 55,457 | 99,860 |
Other comprehensive results for the period | (336) | (620) | (712 | (57,669) | 105,378 |
Total comprehensive result for the period | 80,744 | 2,469 | (5,132) | (2,212) | 205,238 |
Attributable to: | |||||
Equity holders of the parent | 76,716 | 2,184 | (3,322) | 19,377 | 23,726 |
Non-controlling interest | 4,028 | 285 | (1,810) | (21,589) | 181,512 |
XIV. Summary Comparative Consolidated Cash Flow
(in ARS million) | 09.30.2023 | 09.30.2022 | 09.30.2021 | 09.30.2020 | 09.30.2019 |
Net cash generated from operating activities | 10,672 | 10,318 | 7,208 | 22,351 | 69,602 |
Net cash generated from investing activities | 6,909 | 4,630 | (960) | 275,576 | 23,206 |
Net cash used in financing activities | (7,734) | (43,904) | (4,506) | (180,501) | (234,329) |
Net (decrease) / increase in cash and cash equivalents | 9,847 | (28,956) | 1,742 | 117,426 | (141,521) |
Cash and cash equivalents at beginning of year | 11,777 | 37,134 | 9,202 | 646,856 | 618,815 |
Cash and cash equivalents reclassified to held for sale | - | - | - | - | 238 |
Inflation adjustment | (615) | (422) | (1,594) | (207) | (200) |
Deconsolidation of subsidiaries | - | - | - | (692,660) | - |
Foreign exchange (loss) / gain on cash and changes in fair value for cash equivalents | 592 | 319 | 38 | (42,178) | 92,468 |
Cash and cash equivalents at period-end | 21,601 | 8,075 | 9,388 | 29,237 | 569,800 |
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IRSA Inversiones y Representaciones Sociedad Anónima
Summary as of September 30, 2023
XV. Comparative Ratios
(in ARS million) | 09.30.2023 | 09.30.2022 | 09.30.2021 | 09.30.2020 | 09.30.2019 | |||||
Liquidity | ||||||||||
CURRENT ASSETS | 103,354 | 1.16 | 83,437 | 0.59 | 66,762 | 0.72 | 87,676 | 0.44 | 1,491,762 | 1.62 |
CURRENT LIABILITIES | 88,987 | 140,389 | 92,682 | 199,824 | 923,533 | |||||
Solvency | ||||||||||
SHAREHOLDERS’ EQUITY | 595,757 | 1.28 | 494,162 | 0.93 | 389,129 | 0.60 | 623,335 | 0.88 | 758,568 | 0.19 |
TOTAL LIABILITIES | 465,606 | 532,464 | 644,948 | 709,364 | 3,953,879 | |||||
Capital Assets | ||||||||||
NON-CURRENT ASSETS | 958,009 | 0.90 | 943,189 | 0.92 | 967,315 | 0.94 | 1,245,023 | 0.93 | 3,220,685 | 0.68 |
TOTAL ASSETS | 1,061,363 | 1,026,626 | 1,034,077 | 1,332,699 | 4,712,447 | |||||
Profitability | ||||||||||
RESULT OF THE PERIOD | 81,080 | 0.15 | 3,089 | 0.01 | -4,420 | -0.01 | 55,457 | 0.08 | 99,860 | 0.12 |
AVERAGE SHAREHOLDERS’ EQUITY | 544,960 | 441,646 | 506,232 | 690,952 | 832,779 |
XVI. EBITDA Reconciliation
In this summary report we present EBITDA and Adjusted EBITDA. We define EBITDA as profit for the period excluding: (i) interest income, (ii) interest expense, (iii) income tax expense, and (iv) depreciation and amortization. We define Adjusted EBITDA as EBITDA minus (i) total financial results, net excluding interest expense, net (mainly foreign exchange differences, net gains/losses from derivative financial instruments; gains/losses of financial assets and liabilities at fair value through profit or loss; and other financial results, net) and minus (ii) share of profit of associates and joint ventures and minus (iii) net profit from fair value adjustment of investment properties, not realized.
EBITDA and Adjusted EBITDA are non-IFRS financial measures that do not have standardized meanings prescribed by IFRS. We present EBITDA and adjusted EBITDA because we believe they provide investors supplemental measures of our financial performance that may facilitate period-to-period comparisons on a consistent basis. Our management also uses EBITDA and Adjusted EBITDA from time to time, among other measures, for internal planning and performance measurement purposes. EBITDA and Adjusted EBITDA should not be construed as an alternative to profit from operations, as an indicator of operating performance or as an alternative to cash flow provided by operating activities, in each case, as determined in accordance with IFRS. EBITDA and Adjusted EBITDA, as calculated by us, may not be comparable to similarly titled measures reported by other companies. The table below presents a reconciliation of profit from operations to EBITDA and Adjusted EBITDA for the periods indicated:
For the three-month period ended September 30 (in ARS million) | ||
2023 | 2022 | |
Profit for the period | 81,080 | 3,089 |
Interest income | (378) | (140) |
Interest expense | 3,700 | 3,964 |
Income tax | 42,950 | 3,620 |
Depreciation and amortization | 575 | 520 |
EBITDA (unaudited) | 127,927 | 11,053 |
Net gain / (loss) from fair value adjustment of investment properties | (102,292) | 15,797 |
Realized net gain from fair value adjustment of investment properties | 2,331 | 2,161 |
Recovery of provision | (4,989) | - |
Share of profit of associates and joint ventures | (2,217) | (2,281) |
Foreign exchange differences net | 4,008 | (4,947) |
Result from derivative financial instruments | 8 | (24) |
Fair value gains of financial assets and liabilities at fair value through profit or loss | (290) | 4,465 |
Inflation adjustment | (6,510) | (10,700) |
Other financial costs/income | (946) | 434 |
Adjusted EBITDA (unaudited) | 17,030 | 15,958 |
Adjusted EBITDA Margin (unaudited) (1) | 67.69% | 72.34% |
(1) Adjusted EBITDA margin is calculated as Adjusted EBITDA, divided by revenue from sales, rents and services.
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IRSA Inversiones y Representaciones Sociedad Anónima
Summary as of September 30, 2023
XVII.
NOI Reconciliation
In addition, we present in this summary report Net Operating Income or “NOI”. We define NOI as gross profit from operations, less Selling expenses, plus realized result from fair value adjustments of investment properties, plus Depreciation and amortization.
NOI is a non-IFRS financial measure that does not have a standardized meaning prescribed by IFRS. We present NOI because we believe it provides investors a supplemental measure of our financial performance that may facilitate period-to-period comparisons on a consistent basis. Our management also uses NOI from time to time, among other measures, for internal planning and performance measurement purposes. NOI should not be construed as an alternative to profit from operations, as an indicator of operating performance or as an alternative to cash flow provided by operating activities, in each case, as determined in accordance with IFRS. NOI, as calculated by us, may not be comparable to similarly titled measures reported by other companies. The table below presents a reconciliation of profit from operations to NOI for the periods indicated:
For the three-month period ended September 30 (in ARS million) | ||
2023 | 2022 | |
Gross profit | 20,727 | 17,642 |
Selling expenses | (1,610) | (1,175) |
Depreciation and amortization | 575 | 520 |
Realized result from fair value of investment properties | 2,331 | 2,161 |
NOI (unaudited) | 22,023 | 19,148 |
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IRSA Inversiones y Representaciones Sociedad Anónima
Summary as of September 30, 2023
XVIII.
FFO Reconciliation
We also present in this summary report Adjusted Funds From Operations attributable to the controlling interest (or “Adjusted FFO”), which we define as Total profit for the year or period plus depreciation and amortization of property, plant and equipment, intangible assets and amortization of initial costs of leases minus total net financial results excluding net financial interests, minus unrealized result from fair value adjustments of investment properties minus inflation adjustment plus deferred tax, and less non-controlling interest net of the result for fair value, less the result of participation in associates and joint ventures.
Adjusted FFO is a non-IFRS financial measure that does not have a standardized meaning prescribed by IFRS. Adjusted FFO is not equivalent to our profit for the period as determined under IFRS. Our definition of Adjusted FFO is not consistent and does not comply with the standards established by the White Paper on funds from operations (FFO) approved by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”), as revised in February 2004, or the “White Paper.”
We present Adjusted FFO because we believe it provides investors a supplemental measure of our financial performance that may facilitate period-to-period comparisons on a consistent basis. Our management also uses Adjusted FFO from time to time, among other measures, for internal planning and performance measurement purposes. Adjusted FFO should not be construed as an alternative to profit from operations, as an indicator of operating performance or as an alternative to cash flow provided by operating activities, in each case, as determined in accordance with IFRS. Adjusted FFO, as calculated by us, may not be comparable to similarly titled measures reported by other companies. The table below presents a reconciliation of profit from operations to Adjusted FFO for the periods indicated:
For the three-month period ended September 30 (in ARS million)) | ||
2023 | 2023 | |
Result for the period | 81,080 | 3,089 |
Result from fair value adjustments of investment properties | (102,292) | 15,797 |
Result from fair value adjustments of investment properties, realized | 2,331 | 2,161 |
Recovery of provision | (4,989) | - |
Depreciation and amortization | 575 | 520 |
Foreign exchange, net | 4,008 | (4,947) |
Other financial results | (1,398) | 210 |
Results from derivative financial instruments | 8 | (24) |
Results of financial assets and liabilities at fair value through profit or loss | (290) | 4,465 |
Other financial costs | 421 | 440 |
Income tax current / deferred(1) | 41,527 | 2,476 |
Non-controlling interest | (4,038) | (321) |
Non-controlling interest related to PAMSA’s fair value | 5,259 | (571) |
Results of associates and joint ventures | (2,217) | (2,281) |
Inflation adjustment | (6,510) | (10,700) |
Repurchase of non-convertible notes | 31 | (216) |
Adjusted FFO | 13,506 | 10,098 |
(1)
Net of the effect of current Income Tax that contains the reversal of an unpaid provision.
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IRSA Inversiones y Representaciones Sociedad Anónima
Summary as of September 30, 2023
XIX. Brief comment on prospects for the Next Quarter
The first quarter of fiscal year 2024 maintained good operational performance in the rental businesses, mainly shopping malls and hotels, with increasing occupancy levels and EBITDA. The next quarters of the fiscal year are presented as a challenge for the Company given the uncertainty inherent to the electoral context, but we trust in the quality of our portfolio of malls, offices and hotels to sustain activity levels.
We expect to maintain the growth rate of our tenant sales and visitors in the shopping malls and reach full occupancy of the portfolio. Regarding the office segment, we are confident that the sector will continue to recover in its rental values and occupancy, and we are optimistic regarding the future evolution of hotels given the growth of domestic and international tourism and the expectation of a full recovery of the events and conventions sector. In this direction, prospects for the entertainment sector, which we have through our investment in La Rural and the Buenos Aires and Punta del Este Convention Centers, are favorable. We will continue expanding our portfolio of products and services and enhancing the synergies of our business operations.
Regarding the sales and developments segment, we will continue to analyze real estate acquisition and sale opportunities while evaluating the best moment to launch the mixed-use projects that the company has in its huge landbank portfolio. Regarding our largest development, Costa Urbana, we are prepared to launch the most ambitious project in the company's history, with the potential to develop 866,806 sqm of mixed uses in one of the best locations of Buenos Aires city.
During fiscal year 2024, we´ll continue working on the reduction and efficiency of the cost structure, while we´ll continue evaluating financial, economic and/or corporate tools that allow the Company to improve its position in the market in which it operates and have the necessary liquidity to meet its obligations, such as public and/or private disposal of assets that may include real estate as well as negotiable securities owned by the Company, issuance of negotiable bonds, repurchase of own shares, among other useful instruments for the proposed objectives.
Looking to the future, we will continue to innovate in the development of unique real estate projects, betting on the integration of commercial and residential spaces, offering our clients a mix of attractive products and services, meeting places and a memorable experience, with the aim to achieve an increasingly modern and sustainable portfolio. Although the current economic context and the political electoral agenda generate uncertainty, we are confident in the quality of our portfolio and the ability of our management to carry out the business successfully.
Alejandro G. Elsztain
Second Vice-Chairman
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