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
|
Adama
|
|
Adama
Agricultural Solutions Ltd.
|
BACS
|
|
Banco
de Crédito y Securitización S.A.
|
Baicom
|
|
Baicom Networks S.A.
|
BCRA
|
|
Central
Bank of the Argentine Republic
|
BHSA
|
|
Banco
Hipotecario S.A.
|
Cellcom
|
|
Cellcom
Israel Ltd.
|
Clal
|
|
Clal
Holdings Insurance Enterprises Ltd.
|
CNV
|
|
Securities
Exchange Commission
|
Condor
|
|
Condor
Hospitality Trust Inc.
|
Cresud
|
|
Cresud
S.A.C.I.F. y A.
|
Cyrsa
|
|
Cyrsa
S.A.
|
DIC
|
|
Discount
Investment Corporation Ltd.
|
Dolphin
|
|
Dolphin
Fund Ltd. and Dolphin Netherlands B.V.
|
Financial
Statements
|
|
Unaudited
Condensed Interim Consolidated Financial Statements
|
Annual
Financial Statements
|
|
Consolidated
Financial Statements as of June 30, 2017
|
CPF
|
|
Collective
Promotion Funds
|
IASB
|
|
International
Accounting Standards Board
|
IDB
Tourism
|
|
IDB
Tourism (2009) Ltd
|
IDBD
|
|
IDB
Development Corporation Ltd.
|
IFISA
|
|
Inversiones
Financieras del Sur S.A.
|
IRSA,
The Company”, “Us”, “We”
|
|
IRSA
Inversiones y Representaciones Sociedad Anónima
|
IRSA
CP
|
|
IRSA
Propiedades Comerciales S.A.
|
Israir
|
|
Israir
Airlines & Tourism Ltd.
|
Lipstick
|
|
Lipstick
Management LLC
|
LRSA
|
|
La
Rural S.A.
|
Metropolitan
|
|
Metropolitan
885 Third Avenue Leasehold LLC
|
MPIT
|
|
Minimum
Presumed Income Tax
|
New
Lipstick
|
|
New
Lipstick LLC
|
IAS
|
|
International
Accounting Standards
|
IFRS
|
|
International
Financial Reporting Standards
|
NIS
|
|
New
Israeli Shekel
|
NPSF
|
|
Nuevo
Puerto Santa Fe S.A.
|
NCN
|
|
Non-Convertible
Notes
|
PBC
|
|
Property
& Building Corporation Ltd.
|
PBEL
|
|
PBEL
Real Estate LTD
|
Quality
|
|
Quality
Invest S.A.
|
Shufersal
|
|
Shufersal
Ltd.
|
Tarshop
|
|
Tarshop
S.A.
|
IRSA
Inversiones y Representaciones Sociedad Anónima
Unaudited Condensed Interim Consolidated Statements of Financial
Position
as of December 31, 2017 and June 30, 2017
(All
amounts in millions, except otherwise indicated)
Free
translation from the original prepared in Spanish for publication
in Argentina
|
Note
|
12.31.17
|
|
06.30.17
|
ASSETS
|
|
|
|
|
Non-current assets
|
|
|
|
|
Investment properties
|
8
|
113,465
|
|
99,953
|
Property, plant and equipment
|
9
|
28,015
|
|
27,113
|
Trading properties
|
10, 21
|
3,496
|
|
4,532
|
Intangible assets
|
11
|
12,809
|
|
12,387
|
Investments in associates and joint ventures
|
7
|
8,195
|
|
7,885
|
Deferred income tax assets
|
18
|
306
|
|
285
|
Income tax and MPIT credit
|
|
43
|
|
145
|
Restricted assets
|
12
|
1,048
|
|
448
|
Trade and other receivables
|
13
|
5,316
|
|
4,974
|
Investments in financial assets
|
12
|
1,266
|
|
1,772
|
Financial assets held for sale
|
12
|
6,667
|
|
6,225
|
Derivative financial instruments
|
12
|
-
|
|
31
|
Total non-current assets
|
|
180,626
|
|
165,750
|
Current assets
|
|
|
|
|
Trading properties
|
10, 21
|
2,962
|
|
1,249
|
Inventories
|
21
|
4,184
|
|
4,260
|
Restricted assets
|
12
|
1,157
|
|
506
|
Income tax and MPIT credit
|
|
83
|
|
339
|
Group of assets held for sale
|
26
|
3,062
|
|
2,681
|
Trade and other receivables
|
13
|
17,094
|
|
17,264
|
Investments in financial assets
|
12
|
19,312
|
|
11,951
|
Financial assets held for sale
|
12
|
2,503
|
|
2,337
|
Derivative financial instruments
|
12
|
60
|
|
51
|
Cash and cash equivalents
|
12
|
29,495
|
|
24,854
|
Total current assets
|
|
79,912
|
|
65,492
|
TOTAL ASSETS
|
|
260,538
|
|
231,242
|
SHAREHOLDERS’ EQUITY
|
|
|
|
|
Shareholders´equity (according to corresponding
statement)
|
|
30,585
|
|
25,864
|
Non-controlling interest
|
|
27,221
|
|
21,472
|
TOTAL SHAREHOLDERS’ EQUITY
|
|
57,806
|
|
47,336
|
LIABILITIES
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
Borrowings
|
16
|
128,088
|
|
109,489
|
Deferred income tax liabilities
|
18
|
22,396
|
|
23,024
|
Trade and other payables
|
15
|
2,379
|
|
3,040
|
Provisions
|
17
|
795
|
|
943
|
Employee benefits
|
|
823
|
|
763
|
Derivative financial instruments
|
12
|
103
|
|
86
|
Salaries and social security liabilities
|
|
96
|
|
127
|
Total non-current liabilities
|
|
154,680
|
|
137,472
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
15
|
23,120
|
|
20,839
|
Borrowings
|
16
|
19,307
|
|
19,926
|
Provisions
|
17
|
941
|
|
890
|
Group of liabilities held for sale
|
26
|
2,087
|
|
1,855
|
Salaries and social security liabilities
|
|
2,036
|
|
2,041
|
Income tax and MPIT liabilities
|
|
420
|
|
797
|
Derivative financial instruments
|
12
|
141
|
|
86
|
Total current liabilities
|
|
48,052
|
|
46,434
|
TOTAL LIABILITIES
|
|
202,732
|
|
183,906
|
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES
|
|
260,538
|
|
231,242
|
The
accompanying notes are an integral part of these Unaudited
Condensed Interim Consolidated Financial Statements.
|
______________________
Alejandro G.
Elsztain
Vice-president II
acting as
President
|
2
IRSA
Inversiones y Representaciones Sociedad Anónima
Unaudited Condensed Interim Consolidated Statements of Income and
Other Comprehensive Income
for the six-month and three-month periods ended December 31, 2017
and 2016
(All
amounts in millions, except otherwise indicated)
Free
translation from the original prepared in Spanish for publication
in Argentina
|
|
Six month
|
|
Three month
|
|
Note
|
12.31.17
|
|
12.31.16(recast)
|
|
12.31.2017
|
|
12.31.2016(recast)
|
Revenues
|
19
|
43,040
|
|
36,831
|
|
22,827
|
|
19,044
|
Costs
|
20, 21
|
(29,277)
|
|
(25,625)
|
|
(15,550)
|
|
(13,299)
|
Gross profit
|
|
13,763
|
|
11,206
|
|
7,277
|
|
5,745
|
Net gain from fair value adjustment of investment
properties
|
8
|
11,502
|
|
3,470
|
|
8,098
|
|
2,074
|
General and administrative expenses
|
20
|
(2,195)
|
|
(1,809)
|
|
(1,200)
|
|
(957)
|
Selling expenses
|
20
|
(7,717)
|
|
(6,564)
|
|
(4,156)
|
|
(3,395)
|
Other operating results, net
|
22
|
604
|
|
(121)
|
|
580
|
|
(52)
|
Profit from operations
|
|
15,957
|
|
6,182
|
|
10,599
|
|
3,415
|
Share of profit / (loss) of associates and joint
ventures
|
7
|
393
|
|
62
|
|
(5)
|
|
53
|
Profit before financial results and income tax
|
|
16,350
|
|
6,244
|
|
10,594
|
|
3,468
|
Finance income
|
23
|
650
|
|
510
|
|
355
|
|
230
|
Finance costs
|
23
|
(8,069)
|
|
(4,715)
|
|
(3,026)
|
|
(2,684)
|
Other financial results
|
23
|
1,196
|
|
1,531
|
|
903
|
|
1,269
|
Financial results, net
|
|
(6,223)
|
|
(2,674)
|
|
(1,768)
|
|
(1,185)
|
Profit before income tax
|
|
10,127
|
|
3,570
|
|
8,826
|
|
2,283
|
Income tax
|
18
|
497
|
|
(1,027)
|
|
1,737
|
|
(435)
|
Profit for the period from continuing operations
|
|
10,624
|
|
2,543
|
|
10,563
|
|
1,848
|
Profit for the period from discontinued operations
|
28
|
207
|
|
4,273
|
|
194
|
|
4,624
|
Profit for the period
|
|
10,831
|
|
6,816
|
|
10,757
|
|
6,472
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
|
Items that may be reclassified subsequently to profit or
loss:
|
|
|
|
|
|
|
|
|
Currency translation adjustment
|
|
457
|
|
2,502
|
|
944
|
|
277
|
Share of other comprehensive loss of associates and joint
ventures
|
|
(208)
|
|
(1,923)
|
|
(352)
|
|
(207)
|
Change in the fair value of hedging instruments net of income
taxes
|
|
(33)
|
|
(10)
|
|
(24)
|
|
(66)
|
Items that may not be reclassified subsequently to profit or loss,
net of income tax:
|
|
|
|
|
|
|
|
|
Actuarial (loss) /profit from defined contribution
plans
|
|
(47)
|
|
(19)
|
|
(34)
|
|
3
|
Share of other comprehensive income generated by
associates
|
|
-
|
|
-
|
|
-
|
|
3
|
Other comprehensive income for the period from continuing
operations
|
|
169
|
|
550
|
|
534
|
|
10
|
Other comprehensive income for the period from discontinued
operations
|
|
(8)
|
|
-
|
|
78
|
|
-
|
Total other comprehensive income for the period
|
|
161
|
|
550
|
|
612
|
|
10
|
Total comprehensive income for the period
|
|
10,992
|
|
7,366
|
|
11,369
|
|
6,482
|
|
|
|
|
|
|
|
|
|
Total comprehensive income from continuing operations
|
|
10,793
|
|
3,093
|
|
11,097
|
|
1,858
|
Total comprehensive income from discontinued
operations
|
|
199
|
|
4,273
|
|
272
|
|
4,624
|
Total comprehensive income for the period
|
|
10,992
|
|
7,366
|
|
11,369
|
|
6,482
|
|
|
|
|
|
|
|
|
|
Profit for the period attributable to:
|
|
|
|
|
|
|
|
|
Equity holders of the parent
|
|
8,918
|
|
3,835
|
|
8,365
|
|
3,635
|
Non-controlling interest
|
|
1,913
|
|
2,981
|
|
2,392
|
|
2,837
|
|
|
|
|
|
|
|
|
|
Profit from continuing operations attributable to:
|
|
|
|
|
|
|
|
|
Equity holders of the parent
|
|
8,778
|
|
1,503
|
|
8,233
|
|
1,044
|
Non-controlling interest
|
|
1,846
|
|
1,040
|
|
2,330
|
|
804
|
|
|
|
|
|
|
|
|
|
Total comprehensive income attributable to:
|
|
|
|
|
|
|
|
|
Equity holders of the parent
|
|
8,646
|
|
3,857
|
|
8,374
|
|
3,429
|
Non-controlling interest
|
|
2,346
|
|
3,509
|
|
2,995
|
|
3,053
|
|
|
|
|
|
|
|
|
|
Profit per share from continuing operations attributable to equity
holders of the parent:
|
|
|
|
|
|
|
|
|
Basic
|
|
15.51
|
|
6.67
|
|
14.55
|
|
6.32
|
Diluted
|
|
15.40
|
|
6.62
|
|
14.45
|
|
6.28
|
|
|
|
|
|
|
|
|
|
Profit per share from continuing operations attributable to equity
holders of the parent:
|
|
|
|
|
|
|
|
|
Basic
|
|
15.27
|
|
2.61
|
|
14.32
|
|
1.82
|
Diluted
|
|
15.16
|
|
2.60
|
|
14.22
|
|
1.80
|
(i)
As
of December 31, 2017, it includes Ps. (2,228) which corresponds to
the DIC´s debt exchange (see Note 16).
The
accompanying notes are an integral part of these Unaudited
Condensed Interim Consolidated Financial Statements.
The
previous period has been recast due to the change in the accounting
policy for investment properties described in Note
2.3.
|
______________________
Alejandro G.
Elsztain
Vice-president II
acting as
President
|
3
IRSA
Inversiones y Representaciones Sociedad Anónima
Unaudited Condensed Interim Consolidated Statements of Changes in
Shareholders’ Equity
for the six-month period ended December 31, 2017
(All
amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for
publication in Argentina
|
Attributable to equity holders of the parent
|
|
|
|
Share capital
|
Treasury shares
|
Inflation adjustment of share capital and treasury shares
(1)
|
Share premium
|
Additional paid-in capital from treasury shares
|
Legal reserve
|
Special reserve Resolution CNV 609/12 (2)
|
Other reserves (3)
|
Retained earnings
|
Subtotal
|
Non-controlling interest
|
Total Shareholders’ equity
|
Balance as of July 1, 2017
|
575
|
4
|
123
|
793
|
17
|
143
|
2,751
|
2,165
|
19,293
|
25,864
|
21,472
|
47,336
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
8,918
|
8,918
|
1,913
|
10,831
|
Other comprehensive (loss) / profit for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(272)
|
-
|
(272)
|
433
|
161
|
Total comprehensive (loss) / profit for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(272)
|
8,918
|
8,646
|
2,346
|
10,992
|
Appropriation of retained earnings approved by Shareholders’
meeting held as of 10.31.17
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
2,081
|
(2,081)
|
-
|
-
|
-
|
Shared-based compensation
|
-
|
-
|
-
|
-
|
1
|
-
|
-
|
2
|
-
|
3
|
33
|
36
|
Dividends distribution
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,400)
|
(1,400)
|
(100)
|
(1,500)
|
Changes in non-controlling interest
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(2,528)
|
-
|
(2,528)
|
3,470
|
942
|
Balance as of December 31, 2017
|
575
|
4
|
123
|
793
|
18
|
143
|
2,751
|
1,448
|
24,730
|
30,585
|
27,221
|
57,806
|
The
accompanying notes are an integral part of these Unaudited
Condensed Interim Consolidated Financial Statements.
(1)
Includes Ps. 1 of
Inflation adjustment of treasury shares. See Note 17 to the
Consolidated Financial Statements as of June 30, 2017
(2)
Related to CNV
General Resolution N° 609/12. See Notes 2.1.b) and 17 to the
Consolidated Financial Statements as of June 30, 2017.
(3)
Group´s
other reserves for the period ended December 31, 2017 are comprised
as follows:
|
Cost of treasury stock
|
|
Changes in non-controlling interest
|
|
Reserve for share-based payments
|
|
Reserve for future dividends
|
|
Currency translation adjustment reserve
|
|
Hedging instrument
|
|
Special reserve
|
|
Reserve for defined contribution plans
|
|
Other reserves from subsidiaries
|
|
Total Other reserves
|
Balance as of July 1, 2017
|
(28)
|
|
186
|
|
78
|
|
494
|
|
1,394
|
|
19
|
|
-
|
|
(15)
|
|
37
|
|
2,165
|
Other comprehensive loss for the period
|
-
|
|
-
|
|
-
|
|
-
|
|
(216)
|
|
(9)
|
|
-
|
|
(47)
|
|
-
|
|
(272)
|
Total comprehensive loss for the period
|
-
|
|
-
|
|
-
|
|
-
|
|
(216)
|
|
(9)
|
|
-
|
|
(47)
|
|
-
|
|
(272)
|
Share-based compensation
|
-
|
|
-
|
|
2
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
2
|
Appropriation of retained earnings approved by Shareholders’
meeting held as of 10.31.17
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
2,081
|
|
-
|
|
-
|
|
2,081
|
Changes in non-controlling interest
|
-
|
|
(2,527)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(1)
|
|
(2,528)
|
Balance as of December 31, 2017
|
(28)
|
|
(2,341)
|
|
80
|
|
494
|
|
1,178
|
|
10
|
|
2,081
|
|
(62)
|
|
36
|
|
1,448
|
|
______________________
Alejandro G.
Elsztain
Vice-president II
acting as
President
|
4
IRSA
Inversiones y Representaciones Sociedad Anónima
Unaudited Condensed Interim Consolidated Statements of Changes in
Shareholders’ Equity
for the six-month period ended December 31, 2016
(All
amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for
publication in Argentina
|
Attributable to equity holders of the parent
|
|
|
|
Share capital
|
Treasury shares
|
Inflation adjustment of share capital and treasury shares
(1)
|
Share premium
|
Additional paid-in capital from treasury shares
|
Legal reserve
|
Special reserve Resolution CNV 609/12 (2)
|
Other reserves (3)
|
Retained earnings
|
Subtotal
|
Non-controlling interest
|
Total Shareholders’ equity
|
Balance as of July 1, 2016 (recast)
|
575
|
4
|
123
|
793
|
16
|
117
|
2,755
|
990
|
16,259
|
21,632
|
14,224
|
35,856
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
3,835
|
3,835
|
2,981
|
6,816
|
Other comprehensive profit for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
22
|
-
|
22
|
528
|
550
|
Total comprehensive profit for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
22
|
3,835
|
3,857
|
3,509
|
7,366
|
Appropriation of retained earnings approved by Shareholders’
meeting held as of 10.31.16
|
-
|
-
|
-
|
-
|
-
|
26
|
(4)
|
(26)
|
4
|
-
|
-
|
-
|
Shared-based compensation
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
6
|
-
|
6
|
-
|
6
|
Currency translation adjustment for interest held before business
combination
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
2
|
2
|
Incorporated by business combination
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
45
|
45
|
Changes in non-controlling interest
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(202)
|
-
|
(202)
|
1,245
|
1,043
|
Dividends distribution to non-controlling interest in
subsidiaries
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(157)
|
(157)
|
Balance as of December 31, 2016 (recast)
|
575
|
4
|
123
|
793
|
16
|
143
|
2,751
|
790
|
20,098
|
25,293
|
18,868
|
44,161
|
The
accompanying notes are an integral part of these Unaudited
Condensed Interim Consolidated Financial Statements.
The previous period has been recast due to the change in the
accounting policy for investment properties described in Note
2.3.
(1)
Includes Ps. 1 of
Inflation adjustment of treasury shares. See Note 17 to the
Consolidated Financial Statements as of June 30, 2017.
(2)
Related to CNV
General Resolution N° 609/12. See Notes 2.1.b) and 17 to the
Consolidated Financial Statements as of June 30, 2017.
(3)
Group’s
other reserves for the period ended December 31, 2016 are comprised
as follows:
|
Cost of treasury stock
|
|
Changes in non-controlling interest
|
|
Reserve for share-based payments
|
|
Reserve for future dividends
|
|
Currency translation adjustment reserve
|
|
Hedging instruments
|
|
Reserve for defined contribution plans
|
|
Other reserves from subsidiaries
|
|
Total Other reserves
|
Balance as of July 1, 2016 (recast)
|
(29)
|
|
21
|
|
67
|
|
520
|
|
421
|
|
(37)
|
|
(10)
|
|
37
|
|
990
|
Other comprehensive income / (loss) for the period
|
-
|
|
-
|
|
-
|
|
-
|
|
33
|
|
1
|
|
(12)
|
|
-
|
|
22
|
Total comprehensive income / (loss) for the period
|
-
|
|
-
|
|
-
|
|
-
|
|
33
|
|
1
|
|
(12)
|
|
-
|
|
22
|
Share-based compensation
|
-
|
|
-
|
|
6
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
6
|
Appropriation of retained earnings approved by Shareholders’
meeting held as of 10.31.16
|
-
|
|
-
|
|
-
|
|
(26)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(26)
|
Changes in non-controlling interest
|
-
|
|
(202)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(202)
|
Balance as of December 31, 2016 (recast)
|
(29)
|
|
(181)
|
|
73
|
|
494
|
|
454
|
|
(36)
|
|
(22)
|
|
37
|
|
790
|
|
______________________
Alejandro G.
Elsztain
Vice-president II
acting as
President
.
|
5
IRSA
Inversiones y Representaciones Sociedad Anónima
Unaudited Condensed Interim Consolidated Statements of Cash
Flows
for the six-month periods ended December 31, 2017 and
2016
(All
amounts in millions, except otherwise indicated)
Free
translation from the original prepared in Spanish for publication
in Argentina
|
Note
|
12.31.17
|
|
12.31.16 (recast)
|
Operating activities:
|
|
|
|
|
Net cash generated from continuing operating activities before
income tax paid
|
14
|
6,792
|
|
5,559
|
Income tax and MPIT paid
|
|
(231)
|
|
(488)
|
Net cash generated from continuing operating
activities
|
|
6,561
|
|
5,071
|
Net cash generated from (used in) discontinued operating
activities
|
|
246
|
|
(209)
|
Net cash generated from operating activities
|
|
6,807
|
|
4,862
|
Investing activities:
|
|
|
|
|
Interest held decrease (increase) in associates and joint
ventures
|
|
12
|
|
(360)
|
Acquisition and improvements of investment properties
|
|
(1,247)
|
|
(1,346)
|
Advance payments
|
|
(146)
|
|
-
|
Proceeds from sales of investment properties
|
|
258
|
|
171
|
Acquisitions and improvements of property, plant and
equipment
|
|
(1,715)
|
|
(1,302)
|
Proceeds from sales of property, plant and equipment
|
|
4
|
|
-
|
Acquisitions of intangible assets
|
|
(323)
|
|
(209)
|
Acquisitions of subsidiaries, net of cash acquired
|
|
(719)
|
|
(46)
|
Net increase of restricted assets
|
|
(624)
|
|
-
|
Dividends received
|
|
75
|
|
60
|
Proceeds from sales of interest held in associates and joint
ventures
|
|
241
|
|
-
|
Proceeds from loans granted
|
|
558
|
|
-
|
Proceeds from liquidation of an associate
|
|
65
|
|
-
|
Acquisitions of investments in financial assets
|
|
(13,113)
|
|
(1,582)
|
Proceeds from disposal of investments in financial
assets
|
|
7,168
|
|
2,679
|
Interest received from financial assets
|
|
137
|
|
68
|
Loans granted to related parties
|
|
(345)
|
|
(4)
|
Loans granted
|
|
(88)
|
|
-
|
Net cash used in continuing investing activities
|
|
(9,802)
|
|
(1,871)
|
Net cash (used in) / generated from discontinued investing
activities
|
|
(61)
|
|
4,027
|
Net cash (used in) / generated from in investing
activities
|
|
(9,863)
|
|
2,156
|
Financing activities:
|
|
|
|
|
Borrowings
|
|
14,831
|
|
13,657
|
Payment of borrowings
|
|
(6,183)
|
|
(9,422)
|
Payment of borrowings to related parties
|
|
-
|
|
(9)
|
Interests paid
|
|
(2,636)
|
|
(2,407)
|
Capital distributions to non-controlling interest in
subsidiaries
|
|
(18)
|
|
(43)
|
Capital contributions from non-controlling interest in
subsidiaries
|
|
82
|
|
2
|
Acquisition of non-controlling interest in
subsidiaries
|
|
(612)
|
|
(990)
|
Proceeds from sales of non-controlling interest in
subsidiaries
|
|
3,303
|
|
2,440
|
Dividends paid
|
|
(1,400)
|
|
(515)
|
Dividends paid to non-controlling interest in
subsidiaries
|
|
(179)
|
|
-
|
Payments of derivative financial instruments
|
|
(29)
|
|
(90)
|
Proceeds from derivative financial instruments
|
|
137
|
|
69
|
Net cash generated from continuing financing
activities
|
|
7,296
|
|
2,692
|
Net cash used in discontinued financing activities
|
|
(111)
|
|
(515)
|
Net cash generated from financing activities
|
|
7,185
|
|
2,177
|
Net increase in cash and cash equivalents from continuing
activities
|
|
4,055
|
|
5,892
|
Net increase in cash and cash equivalents from discontinued
activities
|
|
74
|
|
3,303
|
Net increase in cash and cash equivalents
|
|
4,129
|
|
9,195
|
Cash and cash equivalents at beginning of period
|
13
|
24,854
|
|
13,866
|
Cash and cash equivalents reclassified to held for
sale
|
|
(74)
|
|
-
|
Foreign exchange gain on cash and changes in fair value orf cash
equivalents
|
|
586
|
|
639
|
Cash and cash equivalents at end of period
|
13
|
29,495
|
|
23,700
|
The
accompanying notes are an integral part of these Unaudited
Condensed Interim Consolidated Financial Statements.
The
previous period has been recast due to the change in the accounting
policy for investment properties described in Note
2.3.
|
______________________
Alejandro G.
Elsztain
Vice-president II
acting as
President
.
|
6
IRSA Inversiones y Representaciones Sociedad
Anónima
Notes to the Unaudited Condensed Interim Consolidated Financial
Statements
(Amounts
in millions, 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 February 8, 2018.
IRSA
was founded in 1943, and it is engaged in a diversified range of
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 and IFIS Limited
is our ultimate parent company.
The
Group has established two Operations Centers, Argentina and Israel,
to manage its global business, mainly through the following
companies:
(*) See
note 4. for more information about the changes within the
Operations Center in Israel.
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", therefore, should be read together
with the Annual Financial Statements of the Group as of June 30,
2017 prepared in accordance with IFRS in force. Furthermore, these
Financial Statements include supplementary information required by
Law N° 19,550 and/or regulations of the CNV. Such information
is included in notes to these Financial Statements according to
IFRS.
These
Financial Statements corresponding to the interim six-month periods
ended December 31, 2017 and 2016 have not been audited. The
management considers they include all necessary adjustments to
fairly present the results of each period. The Company’s
interim periods results do not necessarily reflect the proportion
of the Group’s full-year results.
IRSA Inversiones y Representaciones Sociedad
Anónima
Under
IAS 29 “Financial Reporting in Hyperinflationary
Economies”, the Financial Statements of an entity whose
functional currency belongs to a hyperinflationary economy,
regardless of whether they apply historic cost or current cost
methods, should be stated at the current unit of measure as of the
date of this Consolidated Financial Statements. For such purpose,
in general, inflation is to be computed in non-monetary items from
the acquisition or revaluation date, as applicable. In order to
determine whether an economy is to be considered hyperinflationary,
the standard lists a set of factors to be taken into account,
including an accumulated inflation rate near or above 100% over a
three-year period.
For the
Groups' business in Argentina, considering the released inflation
data in Argentina and the declining inflation trend in recent
years, the Management is of the view that there is not enough
evidence to conclude that Argentina is a hyperinflationary economy.
Therefore, no restatement has been applied on financial
information, as set forth by IAS 29, for the reporting periods.
However, over the last years, certain macroeconomic variables, such
as payroll costs and goods prices, have experienced significant
annual changes, which should be taken into consideration in
assessing and interpreting the financial situation and results of
operations of the Group in these Financial Statements.
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 Consolidated Financial Statements as of June 30, 2017, as
described in Note 2 to those Financial Statements.
2.3.
Comparability
of information
Balance
items as of June 30, 2017 and December 31, 2016 shown in these
Unaudited Condensed Interim Consolidated Financial Statements for
comparative purposes arise from financial statements then ended. As
mentioned in Note 2 to the Consolidated Financial Statements as of
June 30, 2017, during the fiscal year ended June 30, 2017 the
Group’s Board of Directors decided to change the accounting
policy for investment property from cost model to fair value model,
as permitted under IAS 40. Therefore, the previously issued Interim
Financial Statements were retroactively recast as required by IAS
8.
The
table below includes the reconciliation between the Statements of
Income and Other Comprehensive Income for the six-month and the
three-month periods ended December 31, 2016 as they were originally
issued, and the recast statements included in these Financial
Statements for comparative purposes. There is no impact on any of
the relevant total sums of the Consolidated Statement of Cash
Flows.
IRSA Inversiones y Representaciones Sociedad
Anónima
Statement
of Income and Other Comprehensive Income for the six-month period
ending as of December 31, 2016:
|
Six month
|
|
12.31.2016 (originally issued)
|
|
12.31.2016 (adjustment)
|
|
12.31.2016 (other reclassifications) g)
|
|
12.31.2016 (recast)
|
Revenues
|
36,831
|
|
-
|
|
-
|
|
36,831
|
Costs
|
(25,945)
|
|
531
|
a)
|
(211)
|
|
(25,625)
|
Gross profit
|
10,886
|
|
531
|
|
(211)
|
|
11,206
|
Gain from disposal of investment properties
|
105
|
|
(105)
|
b)
|
-
|
|
-
|
Net gain from fair value adjustment of investment
properties
|
-
|
|
3,470
|
c)
|
-
|
|
3,470
|
General and administrative expenses
|
(1,831)
|
|
-
|
|
22
|
|
(1,809)
|
Selling expenses
|
(6,749)
|
|
-
|
|
185
|
|
(6,564)
|
Other operating results, net
|
(123)
|
|
(2)
|
|
4
|
|
(121)
|
Profit from operations
|
2,288
|
|
3,894
|
|
-
|
|
6,182
|
Share of (loss) / profit of associates and joint
ventures
|
(93)
|
|
86
|
d)
|
69
|
|
62
|
Profit before finance results and income tax
|
2,195
|
|
3,980
|
|
69
|
|
6,244
|
Finance income
|
732
|
|
-
|
|
(222)
|
|
510
|
Finance costs
|
(4,868)
|
|
-
|
|
153
|
|
(4,715)
|
Other financial results
|
1,531
|
|
-
|
|
-
|
|
1,531
|
Financial results, net
|
(2,605)
|
|
-
|
|
(69)
|
|
(2,674)
|
(Loss) / profit before income tax
|
(410)
|
|
3,980
|
|
-
|
|
3,570
|
Income tax
|
334
|
|
(1,361)
|
e)
|
-
|
|
(1,027)
|
(Loss) / profit from continuing operations
|
(76)
|
|
2,619
|
|
-
|
|
2,543
|
Profit from discontinued operations
|
4,273
|
|
-
|
|
-
|
|
4,273
|
Profit for the period
|
4,197
|
|
2,619
|
|
-
|
|
6,816
|
Other comprehensive income
|
|
|
|
|
|
|
|
Items that may be reclassified subsequently to profit or
loss:
|
|
|
|
|
|
|
|
Currency translation adjustment
|
121
|
|
2,381
|
f)
|
-
|
|
2,502
|
Share of other comprehensive income / (loss) of associates and
joint ventures
|
310
|
|
(2,233)
|
d)
|
-
|
|
(1,923)
|
Change in the fair value of hedging instruments net of income
tax
|
(10)
|
|
-
|
|
-
|
|
(10)
|
Items that may not be reclassified subsequently to profit or loss,
net of income tax
|
|
|
|
|
|
|
|
Actuarial loss from defined contribution plans
|
(19)
|
|
-
|
|
-
|
|
(19)
|
Other comprehensive income for the period from continuing
operations
|
402
|
|
148
|
|
-
|
|
550
|
Other comprehensive income for the period
|
4,599
|
|
2,767
|
|
-
|
|
7,366
|
|
|
|
|
|
|
|
|
Profit for the period attributable to:
|
|
|
|
|
|
|
|
Equity holders of the parent
|
2,067
|
|
1,768
|
|
-
|
|
3,835
|
Non-controlling interest
|
2,130
|
|
851
|
|
-
|
|
2,981
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period attributable
to:
|
|
|
|
|
|
|
|
Equity holders of the parent
|
2,034
|
|
1,823
|
|
-
|
|
3,857
|
Non-controlling interest
|
2,565
|
|
944
|
|
-
|
|
3,509
|
IRSA Inversiones y Representaciones Sociedad
Anónima
Statement
of Income and Other Comprehensive Income for the three-month period
ending as of December 31, 2016:
|
Three month
|
|
12.31.2016 (originally issued)
|
|
12.31.2016 (adjustment)
|
|
12.31.2016 (other reclassifications) g)
|
|
12.31.2016 (recast)
|
Revenues
|
18,144
|
|
-
|
|
900
|
|
19,044
|
Costs
|
(12,678)
|
|
269
|
a)
|
(890)
|
|
(13,299)
|
Gross profit
|
5,466
|
|
269
|
|
10
|
|
5,745
|
Gain from disposal of investment properties
|
86
|
|
(86)
|
b)
|
-
|
|
-
|
Net gain from fair value adjustment of investment
properties
|
-
|
|
2,074
|
c)
|
-
|
|
2,074
|
General and administrative expenses
|
(897)
|
|
-
|
|
(60)
|
|
(957)
|
Selling expenses
|
(3,453)
|
|
-
|
|
58
|
|
(3,395)
|
Other operating results, net
|
(61)
|
|
(2)
|
|
11
|
|
(52)
|
Profit from operations
|
1,141
|
|
2,255
|
|
19
|
|
3,415
|
Share of (loss) / profit of associates and joint
ventures
|
(50)
|
|
61
|
d)
|
42
|
|
53
|
Profit before finance results and income tax
|
1,091
|
|
2,316
|
|
61
|
|
3,468
|
Finance income
|
344
|
|
-
|
|
(114)
|
|
230
|
Finance costs
|
(2,744)
|
|
-
|
|
60
|
|
(2,684)
|
Other financial results
|
1,269
|
|
-
|
|
-
|
|
1,269
|
Financial results, net
|
(1,131)
|
|
-
|
|
(54)
|
|
(1,185)
|
(Loss) / profit before income tax
|
(40)
|
|
2,316
|
|
7
|
|
2,283
|
Income tax
|
388
|
|
(823)
|
e)
|
-
|
|
(435)
|
Profit from continuing operations
|
348
|
|
1,493
|
|
7
|
|
1,848
|
Profit from discontinued operations
|
4,631
|
|
-
|
|
(7)
|
|
4,624
|
Profit for the period
|
4,979
|
|
1,493
|
|
-
|
|
6,472
|
Other comprehensive (loss) / income
|
|
|
|
|
|
|
|
Items that may be reclassified subsequently to profit or
loss:
|
|
|
|
|
|
|
|
Currency translation adjustment
|
(360)
|
|
637
|
f)
|
-
|
|
277
|
Share of other comprehensive income / (loss) of associates and
joint ventures
|
327
|
|
(534)
|
d)
|
-
|
|
(207)
|
Change in the fair value of hedging instruments net of income
tax
|
(66)
|
|
-
|
|
-
|
|
(66)
|
Items that may not be reclassified subsequently to profit or loss,
net of income tax
|
|
|
|
|
|
|
|
Actuarial profit from defined contribution plans
|
3
|
|
-
|
|
-
|
|
3
|
Other profit generated by associates
|
3
|
|
-
|
|
-
|
|
3
|
Other comprehensive (loss) / income for the period from continuing
operations
|
(93)
|
|
103
|
|
-
|
|
10
|
Other comprehensive income for the period
|
4,886
|
|
1,596
|
|
-
|
|
6,482
|
|
|
|
|
|
|
|
|
Profit for the period attributable to:
|
|
|
|
|
|
|
|
Equity holders of the parent
|
2,644
|
|
991
|
|
-
|
|
3,635
|
Non-controlling interest
|
2,335
|
|
502
|
|
-
|
|
2,837
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period attributable
to:
|
|
|
|
|
|
|
|
Equity holders of the parent
|
2,399
|
|
1,030
|
|
-
|
|
3,429
|
Non-controlling interest
|
2,487
|
|
566
|
|
-
|
|
3,053
|
a)
Corresponds
to the elimination of depreciation expense from investment
property, and the adjustment, if applicable, to the depreciation of
property, plant and equipment to
adjust the value of
transfers from investment property to that item.
b)
It relates to the
elimination of the gain from disposal of investment property, as
such property is accounted for at its fair value on the date of
sale, which generally coincides with the transaction
price.
c)
It represents the
net change in fair value of investment property.
d)
It relates to
change in the value, as per the equity method, in associates and
joint ventures after applying the change to equity in the
accounting policy implemented by the Group.
e)
It reflects the tax
effect on the items indicated above, as applicable.
f)
It pertains to
exchange differences related to the change in the accounting policy
implemented by the Group in subsidiaries, associates and joint
ventures with functional currency other than the peso.
g)
See Notes 2.26 and
32 to the Consolidated Financial Statements as of June 30,
2017.
IRSA Inversiones y Representaciones Sociedad
Anónima
The
preparation of Financial Statements at a certain date requires the
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 applied by the Group in the
preparation of the Consolidated Financial Statements as of June 30,
2017 described in Note 3 to those Financial
Statements.
3.
Seasonal
effects on operations
Operations
Center in Argentina
The
operations of the Group’s shopping malls are subject to
seasonal effects, which affect the level of sales recorded by
lessees. During summer time 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 ranging between July and December, compared to the period
between January and June.
Operations
Center in Israel
The
operations of the supermarket chain are subject to fluctuations of
quarterly sales and income due to the increase in activity during
religious holidays in different quarters throughout the year. For
instance, in Pesaj (Passover) sometime between March and April, and
Rosh Hashaná (Jewish New Year), sometime between September and
October each year.
The
results of operations of Telecommunications and Tourism are also
usually affected by seasonality in summer months in Israel and by
the Jewish New Year, given a higher consumption due to internal and
external tourism.
4.
Acquisitions
and disposals
Significant
acquisitions and disposals for the six-month period ended December
31, 2017 are detailed below. Significant acquisitions and disposals
for the fiscal year ended June 30, 2017, are detailed in Note 4 to
the Consolidated Financial Statements as of June 30,
2017.
Operations
Center in Argentina
Sale of ADS of IRSA CP
During
October 2017, IRSA completed the sale in the secondary market of
10,240,000 ordinary shares of IRSA CP, par value Ps. 1 per share,
represented by American Depositary Shares (“ADSs”),
representing four ordinary shares each, which represents nearly
8.1% of IRSA CP capital for a total amount of Ps. 2,440 (US$ 138).
After the transaction, IRSA’s direct and indirect interest in
IRSA CP amounts to approximately 86.5%. This transaction was
accounted in equity as an increase in the equity attributable to
the parent for an amount of Ps. 271, net of taxes.
IRSA Inversiones y Representaciones Sociedad
Anónima
Operations
Center in Israel
Purchase of DIC shares by Dolphin
As
mentioned in Note 7 to the Consolidated Financial Statements as of
June 30, 2017, in connection with the Promotion of Competition and
Reduction of Concentration Law in Israel, after June 30, 2017,
Dolphin Netherlands B.V. made a non-binding tender offer for the
acquisition of all DIC shares held by IDBD. For purposes of the
transaction, a committee of independent directors has been set up
to assess the tender offer and negotiate the terms and conditions.
The Audit Committee has issued an opinion without reservations as
to the transaction in accordance with the terms of section 72 et
al. of the Capital Markets Law N° 26,831.
In
November 2017, Dolphin IL Investments Ltd. (Dolphin IL), a
subsidiary of Dolphin Netherlands B.V., has subscribed the final
documents for the acquisition of the total shares owned by IDBD in
DIC.
The
transaction has been made for an amount of NIS 1,843 (equivalent to
NIS 17.20 per share of DIC). The consideration was paid NIS 70 in
cash (equivalent to Ps. 348 as of the date of the transaction) and
NIS 1,773 (equivalent to Ps. 8,814 as of the date of the
transaction) were financed by IDBD to Dolphin, maturing in five
years, with the possibility of an extension of three additional
years in tranches of one year each, that will accrue an initial
interest of 6.5% annually, which will increase by 1% annually in
case of extension for each annual tranche. Furthermore, guarantees
have been implemented for IDBD, for IDBD bondholders and their
creditors, through pledges of different degree of privilege over
DIC shares resulting from the purchase. Moreover, a pledge will be
granted in relation to 9,636,097 (equivalent to 6.38%) of the
shares of DIC that Dolphin currently holds in the first degree of
privilege in favor of IDBD and in second degree of privilege in
favor of IDBD's creditors. This transaction has no effect in the
Groups consolidation structure and has been accounted in equity as
a decrease in the equity attributable to the parent for an amount
of Ps. 114.
It
should be noted that the financial position of IDBD and its
subsidiaries at the Operations Center in Israel does not affect the
financial position of IRSA and subsidiaries at the Operations
Center in Argentina. In addition, the commitments and other
covenants resulting from IDBD’s financial debt do not have
impact on IRSA since such indebtedness has no recourse against IRSA
and it is not granted by IRSA’s assets.
Purchase of IDBD shares by IFISA
In
December, 2017, Dolphin Netherlands BV (Dolphin), has executed a
stock purchase agreement for all of the shares that IFISA held of
IDBD, which amounted to 31.7% of the capital stock. In this way, as
of the end of December 31, 2017, Dolphin holds the 100% of IDBD's
shares.
The
transaction was made at a price of NIS 398 (equivalent to NIS 1.894
per share and approximately to
Ps. 1,968 as of the date of the transaction). As consideration of
the transaction all receivables from IFISA to Dolphin have been
canceled plus a payment of USD 33.7 (equivalents to Ps. 588 as of
the date of the transaction). This transaction was accounted in
equity as a decrease in the equity attributable to the parent for
an amount of Ps. 2,923.
Tender offer for Clal
In
July 2017, IDBD received a non-binding offer from an international
group for the potential acquisition of its entire interest in Clal.
The consideration will be based on the equity value of Clal, in
accordance with Clal Financial Statement at the time of completing
the transaction and is subject to the performance of a due
diligence and the execution of an agreement, as well as obtaining
the approvals required by law. IDBD is analyzing the offer. On June
30, 2017, this value amounted to NIS 4,880 (equivalent to
approximately Ps. 23,278 as of the date of these Financial
Statements), at the proportionate equity interest as of the date of
the transaction. In November 2017 the period for the parties to
execute an agreement for the sale of the shares, has expired.
However, the parties continue negotiating according to the
principles of the initial proposal. There is no certainty that the
offer will go forward under the terms proposed, or that the
transaction will be completed.
IRSA Inversiones y Representaciones Sociedad
Anónima
Sale of Shufersal shares
On
December 24, 2017, DIC sold shares of Shufersal, in a manner
whereby its equity interest decreased from 53.30% to 50.12%. The
consideration with respect to the sale of the aforementioned shares
amounted to NIS 169.5 (equivalent to Ps. 847 as of the date of the
transaction). This transaction was accounted in equity as an
increase in the equity attributable to the parent for an amount of
Ps. 385.
Acquisition of New Pharm
As
mentioned in Note 4.G to the Consolidated Financial Statements as
of June 30, 2017, Shufersal entered into an agreement for the
purchase of the shares of New Pharm Drugstores Ltd. ("New Pharm"),
representative of 100% of that Company’s share capital. On
December 20, 2017, the transaction was completed and Shufersal is
the sole shareholder of New Pharm, after the sale of one of its
stores and the approval by the antitrust committee. The total
consideration was NIS 151 (equivalent to Ps. 734 as of the date of
the transaction).
The
Group is working on the allocation of the purchase price of the net
assets acquired. The information below is preliminar and is subject
to change. The following table summarizes the consideration, the
fair value of the assets acquired and the liabilities
assumed:
|
|
December 2017
|
Identified assets and assumed liabilities:
|
|
|
|
|
|
Assets
|
|
850
|
Liabilities
|
|
926
|
Total identified net assets
|
|
(76)
|
Goodwill (pending allocation)
|
|
810
|
Total consideration
|
|
734
|
Ispro
In
August 2017, PBC’s Board of Directors, decided to start a
process to examine the potential sale of its interest in Ispro. In
this respect, it has received several offers. As of the date of
these Financial Statements, the transaction does not comply with
the requirements to be classified as assets held for
sale.
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 Consolidated Financial Statements as
of June 30, 2017.
There
have been no changes in risk management or risk management policies
applied by the Group since year-end.
Since
June 30, 2017 as of the date of this 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).
Furthermore, there have been no transfers between the different
hierarchies used to assess the fair value of the Group’s
financial instruments.
IRSA Inversiones y Representaciones Sociedad
Anónima
As
explained in Note 6. to the Consolidated Financial Statements as of
June 30, 2017, the Group reports its financial performance
separately in two Operations Centers. As of the year ended June 30,
2017 the CODM reviews certain corporate expenses associated with
all the segments of the Operations Center in Argentina in an
aggregate and separate manner from each of the segments, and has
been disclosed in the Financial Operations, Corporate and Others
segment. The segment information for the period ended December 30,
2016 has been modified for the purposes of comparability. Below is
a summary of the business unit and a reconciliation between the
operating income according to segment information and the operating
income of the statement of income and other comprehensive income of
the Group for the periods ended December 31, 2017 and
2016:
|
December 31, 2017
|
|
|
Operations Center in Argentina
|
|
Operations Center in Israel
|
|
Total
|
|
Joint ventures (1)
|
|
Expenses and collective promotion funds
|
|
Elimination of inter-segment transactions and non-reportable assets
/ liabilities
|
|
Total as per statement of income / statement of financial
position
|
Revenues
|
2,593
|
|
39,621
|
|
42,214
|
|
(28)
|
|
860
|
|
(6)
|
|
43,040
|
Costs
|
(517)
|
|
(27,896)
|
|
(28,413)
|
|
11
|
|
(876)
|
|
1
|
|
(29,277)
|
Gross profit
|
2,076
|
|
11,725
|
|
13,801
|
|
(17)
|
|
(16)
|
|
(5)
|
|
13,763
|
Net gain from fair value adjustment of investment
properties
|
10,476
|
|
1,150
|
|
11,626
|
|
(124)
|
|
-
|
|
-
|
|
11,502
|
General and administrative expenses
|
(421)
|
|
(1,793)
|
|
(2,214)
|
|
13
|
|
-
|
|
6
|
|
(2,195)
|
Selling expenses
|
(202)
|
|
(7,519)
|
|
(7,721)
|
|
4
|
|
-
|
|
-
|
|
(7,717)
|
Other operating results, net
|
(46)
|
|
635
|
|
589
|
|
16
|
|
-
|
|
(1)
|
|
604
|
Profit / (loss) from operations
|
11,883
|
|
4,198
|
|
16,081
|
|
(108)
|
|
(16)
|
|
-
|
|
15,957
|
Share of profit / (loss) of associates and joint
ventures
|
460
|
|
(227)
|
|
233
|
|
160
|
|
-
|
|
-
|
|
393
|
Segment profit / (loss)
|
12,343
|
|
3,971
|
|
16,314
|
|
52
|
|
(16)
|
|
-
|
|
16,350
|
Reportable assets
|
56,466
|
|
194,258
|
|
250,724
|
|
(198)
|
|
-
|
|
10,012
|
|
260,538
|
Reportable liabilities
|
-
|
|
(170,926)
|
|
(170,926)
|
|
-
|
|
-
|
|
(31,806)
|
|
(202,732)
|
Net reportable assets
|
56,466
|
|
23,332
|
|
79,798
|
|
(198)
|
|
-
|
|
(21,794)
|
|
57,806
|
|
December 31, 2016 (recast)
|
|
|
Operations Center in Argentina
|
|
Operations Center in Israel
|
|
Total
|
|
Joint ventures (1)
|
|
Expenses and collective promotion funds
|
|
Elimination of inter-segment transactions and non-reportable assets
/ liabilities
|
|
Total as per statement of income / statement of financial
position
|
Revenues
|
2,085
|
|
34,021
|
|
36,106
|
|
(18)
|
|
745
|
|
(2)
|
|
36,831
|
Costs
|
(411)
|
|
(24,463)
|
|
(24,874)
|
|
8
|
|
(759)
|
|
-
|
|
(25,625)
|
Gross profit
|
1,674
|
|
9,558
|
|
11,232
|
|
(10)
|
|
(14)
|
|
(2)
|
|
11,206
|
Net gain from fair value adjustment of investment
properties
|
3,045
|
|
973
|
|
4,018
|
|
(548)
|
|
-
|
|
-
|
|
3,470
|
General and administrative expenses
|
(337)
|
|
(1,478)
|
|
(1,815)
|
|
2
|
|
-
|
|
4
|
|
(1,809)
|
Selling expenses
|
(185)
|
|
(6,381)
|
|
(6,566)
|
|
2
|
|
-
|
|
-
|
|
(6,564)
|
Other operating results, net
|
(19)
|
|
(95)
|
|
(114)
|
|
(5)
|
|
-
|
|
(2)
|
|
(121)
|
Profit / (loss) from operations
|
4,178
|
|
2,577
|
|
6,755
|
|
(559)
|
|
(14)
|
|
-
|
|
6,182
|
Share of (loss) / profit of associates and joint
ventures
|
(58)
|
|
86
|
|
28
|
|
34
|
|
-
|
|
-
|
|
62
|
Segment profit / (loss)
|
4,120
|
|
2,663
|
|
6,783
|
|
(525)
|
|
(14)
|
|
-
|
|
6,244
|
Reportable assets
|
41,913
|
|
154,468
|
|
196,381
|
|
(213)
|
|
-
|
|
7,073
|
|
203,241
|
Reportable liabilities
|
-
|
|
(133,155)
|
|
(133,155)
|
|
-
|
|
-
|
|
(25,925)
|
|
(159,080)
|
Net reportable assets
|
41,913
|
|
21,313
|
|
63,226
|
|
(213)
|
|
-
|
|
(18,852)
|
|
44,161
|
(1)
Represents the
equity value of joint ventures that were proportionately
consolidated for the segment information.
(2)
Includes deferred
income tax assets, income tax and MPIT credits, trade and other
receivables, investment in financial assets, cash and cash
equivalents and intangible assets except for right to receive
future units under barter agreements, net of investments in
associates with negative equity which are included in provisions in
the amount of Ps. 16 and Ps. 80, as of December 31, 2017 and
2016.
IRSA Inversiones y Representaciones Sociedad
Anónima
Below
is a summarized analysis of the business unit of the Group’s
Operations Center in Argentina for the periods ended December 31,
2017 and 2016:
|
December 31, 2017
|
|
Operations Center in Argentina
|
|
Shopping Malls
|
|
Officesand others
|
|
Sales and developments
|
|
Hotels
|
|
International
|
|
Financial operations, Corporate and others
|
|
Total
|
Revenues
|
1,810
|
|
251
|
|
54
|
|
478
|
|
-
|
|
-
|
|
2,593
|
Costs
|
(173)
|
|
(17)
|
|
(20)
|
|
(307)
|
|
-
|
|
-
|
|
(517)
|
Gross profit
|
1,637
|
|
234
|
|
34
|
|
171
|
|
-
|
|
-
|
|
2,076
|
Net gain from fair value adjustment of investment
properties
|
9,041
|
|
885
|
|
550
|
|
-
|
|
-
|
|
-
|
|
10,476
|
General and administrative expenses
|
(135)
|
|
(19)
|
|
(29)
|
|
(90)
|
|
(44)
|
|
(104)
|
|
(421)
|
Selling expenses
|
(108)
|
|
(17)
|
|
(9)
|
|
(57)
|
|
-
|
|
(11)
|
|
(202)
|
Other operating results, net
|
(24)
|
|
10
|
|
(23)
|
|
(2)
|
|
(5)
|
|
(2)
|
|
(46)
|
Profit / (loss) from operations
|
10,411
|
|
1,093
|
|
523
|
|
22
|
|
(49)
|
|
(117)
|
|
11,883
|
Share of profit of associates and joint ventures
|
-
|
|
25
|
|
11
|
|
-
|
|
40
|
|
384
|
|
460
|
Segment profit / (loss)
|
10,411
|
|
1,118
|
|
534
|
|
22
|
|
(9)
|
|
267
|
|
12,343
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment properties and trading properties
|
37,987
|
|
8,783
|
|
5,992
|
|
-
|
|
-
|
|
-
|
|
52,762
|
Investment in associates and joint ventures
|
-
|
|
126
|
|
150
|
|
-
|
|
671
|
|
2,326
|
|
3,273
|
Other operating assets
|
85
|
|
75
|
|
43
|
|
170
|
|
58
|
|
-
|
|
431
|
Operating assets
|
38,072
|
|
8,984
|
|
6,185
|
|
170
|
|
729
|
|
2,326
|
|
56,466
|
|
December 31, 2016 (recast)
|
|
Operations Center in Argentina
|
|
Shopping Malls
|
|
Officesand others
|
|
Sales and developments
|
|
Hotels
|
|
International
|
|
Financial operations, Corporate and Others
|
|
Total
|
Revenues
|
1,494
|
|
217
|
|
1
|
|
373
|
|
-
|
|
-
|
|
2,085
|
Costs
|
(146)
|
|
(17)
|
|
(14)
|
|
(234)
|
|
-
|
|
-
|
|
(411)
|
Gross profit / (loss)
|
1,348
|
|
200
|
|
(13)
|
|
139
|
|
-
|
|
-
|
|
1,674
|
Net gain / (loss) from fair value adjustment of investment
properties
|
1,698
|
|
1,505
|
|
(158)
|
|
-
|
|
-
|
|
-
|
|
3,045
|
General and administrative expenses
|
(123)
|
|
(16)
|
|
(19)
|
|
(66)
|
|
(42)
|
|
(71)
|
|
(337)
|
Selling expenses
|
(93)
|
|
(22)
|
|
(9)
|
|
(46)
|
|
-
|
|
(15)
|
|
(185)
|
Other operating results, net
|
(24)
|
|
46
|
|
(30)
|
|
-
|
|
(9)
|
|
(2)
|
|
(19)
|
Profit / (loss) from operations
|
2,806
|
|
1,713
|
|
(229)
|
|
27
|
|
(51)
|
|
(88)
|
|
4,178
|
Share of (loss) / profit of associates and joint
ventures
|
(1)
|
|
32
|
|
7
|
|
-
|
|
(140)
|
|
44
|
|
(58)
|
Segment profit / (loss)
|
2,805
|
|
1,745
|
|
(222)
|
|
27
|
|
(191)
|
|
(44)
|
|
4,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment properties and trading properties
|
28,385
|
|
6,800
|
|
4,368
|
|
-
|
|
-
|
|
-
|
|
39,553
|
Investment in associates and joint ventures
|
-
|
|
148
|
|
69
|
|
-
|
|
4
|
|
1,768
|
|
1,989
|
Other operating assets
|
82
|
|
92
|
|
32
|
|
163
|
|
2
|
|
-
|
|
371
|
Operating assets
|
28,467
|
|
7,040
|
|
4,469
|
|
163
|
|
6
|
|
1,768
|
|
41,913
|
IRSA Inversiones y Representaciones Sociedad
Anónima
Below
is a summarized analysis of the business unit of the Group’s
Operations Center in Israel for the periods ended December 31, 2017
and 2016:
|
December 31, 2017
|
|
Operations Center in Israel
|
|
Real Estate
|
|
Supermarkets
|
|
Telecommunications
|
|
Insurance
|
|
Others
|
|
Total
|
Revenues
|
2,503
|
|
27,854
|
|
9,065
|
|
-
|
|
199
|
|
39,621
|
Costs
|
(753)
|
|
(20,654)
|
|
(6,377)
|
|
-
|
|
(112)
|
|
(27,896)
|
Gross profit
|
1,750
|
|
7,200
|
|
2,688
|
|
-
|
|
87
|
|
11,725
|
Net gain from fair value adjustment of investment
properties
|
1,150
|
|
-
|
|
-
|
|
-
|
|
-
|
|
1,150
|
General and administrative expenses
|
(171)
|
|
(430)
|
|
(848)
|
|
-
|
|
(344)
|
|
(1,793)
|
Selling expenses
|
(51)
|
|
(5,659)
|
|
(1,787)
|
|
-
|
|
(22)
|
|
(7,519)
|
Other operating results, net
|
22
|
|
(103)
|
|
146
|
|
-
|
|
570
|
|
635
|
Profit from operations
|
2,700
|
|
1,008
|
|
199
|
|
-
|
|
291
|
|
4,198
|
Share of (loss) / profit of associates and joint
ventures
|
(146)
|
|
9
|
|
-
|
|
-
|
|
(90)
|
|
(227)
|
Segment profit
|
2,554
|
|
1,017
|
|
199
|
|
-
|
|
201
|
|
3,971
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating assets
|
88,661
|
|
42,214
|
|
31,115
|
|
9,170
|
|
23,098
|
|
194,258
|
Operating liabilities
|
(70,253)
|
|
(30,443)
|
|
(24,447)
|
|
-
|
|
(45,783)
|
|
(170,926)
|
Operating assets (liabilities), net
|
18,408
|
|
11,771
|
|
6,668
|
|
9,170
|
|
(22,685)
|
|
23,332
|
|
December 31, 2016 (recast)
|
|
Operations Center in Israel
|
|
Real Estate
|
|
Supermarkets
|
|
Telecommunications
|
|
Insurance
|
|
Others
|
|
Total
|
Revenues
|
2,492
|
|
23,439
|
|
7,748
|
|
-
|
|
342
|
|
34,021
|
Costs
|
(1,234)
|
|
(17,769)
|
|
(5,275)
|
|
-
|
|
(185)
|
|
(24,463)
|
Gross profit
|
1,258
|
|
5,670
|
|
2,473
|
|
-
|
|
157
|
|
9,558
|
Net gain from fair value adjustment of investment
properties
|
973
|
|
-
|
|
-
|
|
-
|
|
-
|
|
973
|
General and administrative expenses
|
(130)
|
|
(303)
|
|
(728)
|
|
-
|
|
(317)
|
|
(1,478)
|
Selling expenses
|
(46)
|
|
(4,593)
|
|
(1,714)
|
|
-
|
|
(28)
|
|
(6,381)
|
Other operating results, net
|
31
|
|
(31)
|
|
(19)
|
|
-
|
|
(76)
|
|
(95)
|
Profit / (loss) from operations
|
2,086
|
|
743
|
|
12
|
|
-
|
|
(264)
|
|
2,577
|
Share of (loss) / profit of associates and joint
ventures
|
(87)
|
|
-
|
|
-
|
|
-
|
|
173
|
|
86
|
Segment profit / (loss)
|
1,999
|
|
743
|
|
12
|
|
-
|
|
(91)
|
|
2,663
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating assets
|
64,189
|
|
32,545
|
|
28,532
|
|
6,143
|
|
23,059
|
|
154,468
|
Operating liabilities
|
(51,822)
|
|
(25,964)
|
|
(22,641)
|
|
-
|
|
(32,728)
|
|
(133,155)
|
Operating assets (liabilities), net
|
12,367
|
|
6,581
|
|
5,891
|
|
6,143
|
|
(9,669)
|
|
21,313
|
IRSA Inversiones y Representaciones Sociedad
Anónima
7.
Investments
in associates and joint ventures
Changes
in the Group’s investments in associates and joint ventures
for the six-month period ended December 31, 2017 and for the year
ended June 30, 2017 were as follows:
|
December 31, 2017
|
|
June 30, 2017
|
Beginning of the period / year
|
7,813
|
|
16,835
|
Increase in equity interest in associates and joint
ventures
|
49
|
|
1,102
|
Issuance of capital and contributions
|
89
|
|
160
|
Capital reduction
|
(150)
|
|
(32)
|
Decrease for control obtainment
|
-
|
|
(59)
|
Associates incorporated by business combination
|
-
|
|
107
|
Share of profit
|
393
|
|
378
|
Currency translation adjustment
|
140
|
|
232
|
Cash dividends (i)
|
(51)
|
|
(250)
|
Distribution for associate liquidation (ii)
|
(65)
|
|
-
|
Reclassification to held for sale
|
(44)
|
|
(10,709)
|
Others
|
5
|
|
49
|
End of the period / year (iii)
|
8,179
|
|
7,813
|
(i)
During the period
ended December 31, 2017 the amount corresponds Ps. 23 to Condor,
Ps. 13 to LRSA and Ps. 15 to Manaman. During the fiscal year ended
June 30, 2017 the amount corresponds Ps. 101 to Emco, Ps. 36 to
Aviareps AG, Ps. 22 to Condor, Ps. 19 to Manibil,
Ps. 7
to Millenium, Ps. 36 to Manaman, Ps. 12 to NPSF, Ps. 9 to LRSA, Ps.
7 to Cyrsa S.A. and Ps. 1 to Baicom.
(ii)
It corresponds to
the distribution following the partial liquidation of
Baicom
(iii) As
of December 31,
2017 and June 30, 2017 includes Ps. (16) and Ps. (72) respectively,
reflecting interests in companies with negative equity, which were
disclosed in “Provisions” (see Note
17)
Name of the entity
|
|
% ownership interest
|
|
Value of Group's interest in equity
|
|
Group's interest in comprehensive income / (loss)
|
|
|
December 30, 2017
|
June 30, 2017
|
|
December 30, 2017
|
June 30, 2017
|
|
December 30, 2017
|
December 30, 2016 (recast)
|
Associates
|
|
|
|
|
|
|
|
|
|
New Lipstick (1)
|
|
49.9%
|
49.9%
|
|
(16)
|
(72)
|
|
56
|
(99)
|
BHSA
|
|
29.9%
|
29.9%
|
|
2,103
|
1,693
|
|
410
|
38
|
Condor
|
|
28.2%
|
28.7%
|
|
678
|
634
|
|
64
|
(35)
|
PBEL
|
|
45.4%
|
45.4%
|
|
661
|
768
|
|
-
|
48
|
Other associates
|
|
-
|
-
|
|
1,484
|
1,552
|
|
(139)
|
392
|
Joint
ventures
|
|
|
|
|
|
|
|
|
|
Quality
|
|
50.0%
|
50.0%
|
|
618
|
482
|
|
124
|
16
|
La Rural SA
|
|
50.0%
|
50.0%
|
|
124
|
113
|
|
24
|
11
|
Mehadrin
|
|
45.4%
|
45.4%
|
|
1,219
|
1,312
|
|
(92)
|
16
|
Other joint ventures
|
|
-
|
-
|
|
1,308
|
1,331
|
|
86
|
(23)
|
Total associates and joint ventures
|
|
|
|
|
8,179
|
7,813
|
|
533
|
364
|
(1)
Metropolitan,
a subsidiary of New Lipstick, has renegotiated its non-recourse
debt with IRSA, which amounted to US$ 113.1, and obtained a debt
reduction of US$ 20 by the lending bank, an extension to April 30,
2020 and an interest rate reduction from LIBOR + 4 b.p. to 2 b.p.
upon payment of US$ 40 in cash (US$ 20 in September 2017 and US$ 20
in October 2017), of which IRSA has contributed with US$ 20.
Following the renegotiation, Metropolitan’s debt amounts to
US$ 53.1. Additionally, Metropolitan has agreed to exercise on or
before February 1, 2019 the purchase option on part of the land
where the property is built and, to deposit the sum of money
corresponding to 1% of the purchase price. Furthermore,
Metropolitan has agreed to cause IRSA and other shareholders to
furnish the bank, on or before February 1, 2020, with a payment
guarantee with financial ratios acceptable to the Bank for the
outstanding balance of the purchase price, or a letter of credit in
relation to the loan balance then outstanding.
Below
is additional information about the Group’s investments in
associates and joint ventures:
Name of the entity
|
|
Place of business / Country of incorporation
|
|
Main activity
|
|
Common shares 1 vote
|
|
Latest financial statements issued
|
|
|
|
|
Share capital (nominal value)
|
|
Profit / (loss) for the period
|
|
Shareholders’ equity
|
Associates
|
|
|
|
|
|
|
|
|
|
|
|
|
New Lipstick
|
|
U.S.
|
|
Real estate
|
|
N/A
|
|
N/A
|
|
(*) (24)
|
|
(*) (159)
|
BHSA
|
|
Argentina
|
|
Financial
|
|
448,689,072
|
|
(***) 1,500
|
|
(***) 486
|
|
(***) 7,167
|
Condor
|
|
U.S.
|
|
Hotel
|
|
3,337,613
|
|
N/A
|
|
(*) (1)
|
|
(*) 111
|
PBEL
|
|
India
|
|
Real estate
|
|
450
|
|
(**) 1
|
|
(**) (63)
|
|
(**) (619)
|
Other associates
|
|
|
|
|
|
|
|
N/A
|
|
N/A
|
|
N/A
|
Joint
ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
Quality
|
|
Argentina
|
|
Real estate
|
|
81,814,342
|
|
164
|
|
249
|
|
1,229
|
La Rural SA
|
|
Argentina
|
|
Organization of events
|
|
714,498
|
|
1
|
|
90
|
|
201
|
Mehadrin
|
|
Israel
|
|
Agriculture
|
|
1,509,889
|
|
(**) 3
|
|
(*) (36)
|
|
(*) 503
|
Other joint ventures
|
|
|
|
|
|
-
|
|
N/A
|
|
N/A
|
|
N/A
|
(*)
Amounts
in millions of US Dollars under USGAAP. Condor’s year-end
falls on December 31, so the Group estimates their interest with a
three-month lag, including material adjustments, if
any.
(**)
Amounts
in millions of NIS.
(***)
Information as of
September 30,
2017 according to BCRA's
standards. For the purpose of the valuation of the investment in
the Company, preliminary figures as of December 31, 2017 have been
considered with the necessary IFRS adjustments.
IRSA Inversiones y Representaciones Sociedad
Anónima
Changes
in the Group’s investment properties for the six-month period
ended December 31, 2017 and for the year ended June 30, 2017 were
as follows:
|
Period ended December 31, 2017
|
|
Year ended June 30, 2017
|
|
Rental properties
|
|
Undeveloped parcels of land
|
|
Properties under development
|
|
Total
|
|
Total
|
Fair value at the beginning of the period / year
|
89,301
|
|
7,647
|
|
3,005
|
|
99,953
|
|
82,703
|
Additions
|
576
|
|
19
|
|
652
|
|
1,247
|
|
2,651
|
Capitalized finance costs
|
-
|
|
-
|
|
8
|
|
8
|
|
3
|
Capitalized leasing costs
|
15
|
|
-
|
|
1
|
|
16
|
|
24
|
Amortization of capitalized leasing costs (i)
|
(2)
|
|
-
|
|
-
|
|
(2)
|
|
(2)
|
Transfers
|
(4)
|
|
4
|
|
-
|
|
-
|
|
-
|
Transfers from property, plant and equipment
|
-
|
|
-
|
|
-
|
|
-
|
|
156
|
Transfers to trading properties
|
(351)
|
|
-
|
|
-
|
|
(351)
|
|
(14)
|
Transfers to assets held for sale
|
-
|
|
-
|
|
-
|
|
-
|
|
(71)
|
Reclassifications previous periods
|
-
|
|
-
|
|
-
|
|
-
|
|
(224)
|
Disposals due to sales
|
(26)
|
|
-
|
|
-
|
|
(26)
|
|
(220)
|
Currency translation adjustment
|
1,086
|
|
33
|
|
(1)
|
|
1,118
|
|
10,494
|
Net gain from fair value adjustment
|
10,881
|
|
571
|
|
50
|
|
11,502
|
|
4,453
|
Fair value at the end of the period / year
|
101,476
|
|
8,274
|
|
3,715
|
|
113,465
|
|
99,953
|
(i)
Amortization
charges of capitalized leasing costs were included in
“Costs” in the Statements of Income (Note
20).
The
following amounts have been recognized in the Statements of
Income:
|
December 31, 2017
|
|
December 31, 2016 (recast)
|
Rental and services income
|
5,241
|
|
4,242
|
Direct operating expenses
|
(1,474)
|
|
(1,351)
|
Development expenditures
|
(347)
|
|
(822)
|
Net realized gain from fair value adjustment of investment
properties
|
84
|
|
105
|
Net unrealized gain from fair value adjustment of investment
properties
|
11,418
|
|
3,365
|
Valuation
techniques are described in Note 10 to the Consolidated Financial
Statements as of June 30, 2017. There were no changes to the
valuation techniques. The Company has reassessed the assumptions at
the end of the period, incorporating the effect of the tax reform
described in Note 18 to these financial statements, which increased
the fair value of the shopping malls.
9.
Property,
plant and equipment
Changes
in the Group’s property, plant and equipment for the
six-month period ended December 31, 2017 and for the year ended
June 30, 2017 were as follows:
|
Period ended December 31, 2017
|
|
Year ended June 30, 2017
|
|
Buildings and facilities
|
|
Machinery and equipment
|
|
Communication networks
|
|
Others
|
|
Total
|
|
Total
|
Costs
|
17,573
|
|
4,614
|
|
8,156
|
|
1,973
|
|
32,316
|
|
25,839
|
Accumulated depreciation
|
(1,418)
|
|
(1,152)
|
|
(1,994)
|
|
(639)
|
|
(5,203)
|
|
(1,790)
|
Net book amount at the beginning of the year
|
16,155
|
|
3,462
|
|
6,162
|
|
1,334
|
|
27,113
|
|
24,049
|
Additions
|
435
|
|
357
|
|
497
|
|
413
|
|
1,702
|
|
2,751
|
Disposals
|
(2)
|
|
(19)
|
|
(39)
|
|
(9)
|
|
(69)
|
|
(241)
|
Reclassification to assets held for sale
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(1,557)
|
Impairment / recovery
|
(31)
|
|
-
|
|
-
|
|
-
|
|
(31)
|
|
12
|
Assets incorporated by business combinations
|
80
|
|
150
|
|
-
|
|
-
|
|
230
|
|
-
|
Currency translation adjustment
|
428
|
|
90
|
|
156
|
|
40
|
|
714
|
|
5,013
|
Transfers to investment properties
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(156)
|
Depreciation charges (i)
|
(423)
|
|
(303)
|
|
(624)
|
|
(294)
|
|
(1,644)
|
|
(2,758)
|
Balances at the end of the period / year
|
16,642
|
|
3,737
|
|
6,152
|
|
1,484
|
|
28,015
|
|
27,113
|
Costs
|
18,570
|
|
5,239
|
|
8,861
|
|
2,436
|
|
35,106
|
|
32,316
|
Accumulated depreciation
|
(1,928)
|
|
(1,502)
|
|
(2,709)
|
|
(952)
|
|
(7,091)
|
|
(5,203)
|
Net book amount at the end of the period / year
|
16,642
|
|
3,737
|
|
6,152
|
|
1,484
|
|
28,015
|
|
27,113
|
(i)
As of December 31,
2017, depreciation charges of property, plant and equipment were
recognized as follows: Ps. 978 in "Costs", Ps. 97 in "General and
administrative expenses" and Ps. 569 in "Selling expenses",
respectively in the statement of income (Note 20).
IRSA Inversiones y Representaciones Sociedad
Anónima
Changes
in the Group’s trading properties for the six-month period
ended December 31, 2017 and for the year ended June 30, 2017 were
as follows:
|
Period ended December 31, 2017
|
|
Year ended June 30, 2017
|
|
Completed properties
|
|
Properties under development
|
|
Undeveloped sites
|
|
Total
|
|
Total
|
Beginning of the period / year
|
801
|
|
3,972
|
|
1,008
|
|
5,781
|
|
4,971
|
Additions
|
5
|
|
695
|
|
46
|
|
746
|
|
1,229
|
Capitalized finance costs
|
-
|
|
3
|
|
-
|
|
3
|
|
-
|
Currency translation adjustment
|
71
|
|
142
|
|
22
|
|
235
|
|
971
|
Transfers
|
325
|
|
(268)
|
|
(57)
|
|
-
|
|
-
|
Transfers from intangible assets
|
4
|
|
-
|
|
-
|
|
4
|
|
13
|
Transfers from investment properties
|
351
|
|
-
|
|
-
|
|
351
|
|
14
|
Disposals
|
(661)
|
|
(1)
|
|
-
|
|
(662)
|
|
(1,417)
|
End of the period / year
|
896
|
|
4,543
|
|
1,019
|
|
6,458
|
|
5,781
|
Non-current
|
|
|
|
|
|
|
3,496
|
|
4,532
|
Current
|
|
|
|
|
|
|
2,962
|
|
1,249
|
Total
|
|
|
|
|
|
|
6,458
|
|
5,781
|
Changes
in the Group’s intangible assets for the six-month period
ended December 31, 2017 and for the year ended June 30, 2017 were
as follows:
|
Period ended December 31, 2017
|
|
Year ended June 30, 2017
|
|
Goodwill
|
|
Trademarks
|
|
Licenses
|
|
Customer relations
|
|
Information systems and software
|
|
Contracts and others
|
|
Total
|
|
Total
|
Costs
|
2,778
|
|
4,029
|
|
1,002
|
|
4,746
|
|
2,103
|
|
1,659
|
|
16,317
|
|
12,979
|
Accumulated amortization
|
-
|
|
(75)
|
|
(210)
|
|
(2,184)
|
|
(814)
|
|
(647)
|
|
(3,930)
|
|
(1,216)
|
Net book amount at the beginning of the period / year
|
2,778
|
|
3,954
|
|
792
|
|
2,562
|
|
1,289
|
|
1,012
|
|
12,387
|
|
11,763
|
Additions
|
-
|
|
-
|
|
-
|
|
27
|
|
256
|
|
40
|
|
323
|
|
612
|
Disposals
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(52)
|
Reclassifications previous periods
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
31
|
Transfers to assets held for sale
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(182)
|
Transfers to trading properties
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(4)
|
|
(4)
|
|
(13)
|
Assets incorporated by business combination
|
810
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
810
|
|
26
|
Currency translation adjustment
|
60
|
|
106
|
|
19
|
|
43
|
|
33
|
|
13
|
|
274
|
|
2,284
|
Amortization charges (i)
|
-
|
|
(23)
|
|
(32)
|
|
(486)
|
|
(248)
|
|
(192)
|
|
(981)
|
|
(2,082)
|
Balances at the end of the period / year
|
3,648
|
|
4,037
|
|
779
|
|
2,146
|
|
1,330
|
|
869
|
|
12,809
|
|
12,387
|
Costs
|
3,648
|
|
4,140
|
|
1,029
|
|
4,639
|
|
2,158
|
|
1,737
|
|
17,351
|
|
16,317
|
Accumulated amortization
|
-
|
|
(103)
|
|
(250)
|
|
(2,493)
|
|
(828)
|
|
(868)
|
|
(4,542)
|
|
(3,930)
|
Net book amount at the end of the period / year
|
3,648
|
|
4,037
|
|
779
|
|
2,146
|
|
1,330
|
|
869
|
|
12,809
|
|
12,387
|
(i)
As of December 31,
2017, amortization charges were recognized in the amount of Ps. 223
in "Costs", Ps. 208 in "General and administrative expenses" and
Ps. 550 in "Selling expenses", in the statement of income (Note
20).
IRSA Inversiones y Representaciones Sociedad
Anónima
12.
Financial
instruments by category
The
present note shows 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 see Note 14 to the Consolidated Financial
Statements as of June 30, 2017.
Financial
assets and financial liabilities as of December 31, 2017 are 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
|
Level 2
|
Level 3
|
|
|
|
|
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
Assets as per Statement of Financial Position
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other receivables (excluding the allowance for doubtful
accounts and other receivables)
|
16,356
|
|
-
|
-
|
2,288
|
|
18,644
|
|
4,130
|
|
22,774
|
Investments in financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
- Public companies’ securities
|
-
|
|
2,204
|
-
|
124
|
|
2,328
|
|
-
|
|
2,328
|
- Private companies’ securities
|
-
|
|
-
|
-
|
823
|
|
823
|
|
-
|
|
823
|
- Deposits
|
1,846
|
|
15
|
-
|
-
|
|
1,861
|
|
-
|
|
1,861
|
- Mutual funds
|
-
|
|
5,034
|
-
|
-
|
|
5,034
|
|
-
|
|
5,034
|
- Bonds
|
-
|
|
10,066
|
343
|
-
|
|
10,409
|
|
-
|
|
10,409
|
- Others
|
-
|
|
123
|
-
|
-
|
|
123
|
|
-
|
|
123
|
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
|
|
- Foreign-currency future contracts
|
-
|
|
-
|
51
|
-
|
|
51
|
|
-
|
|
51
|
- Swaps
|
-
|
|
-
|
4
|
-
|
|
4
|
|
-
|
|
4
|
- Others
|
-
|
|
-
|
5
|
-
|
|
5
|
|
-
|
|
5
|
Restricted assets
|
2,205
|
|
-
|
-
|
-
|
|
2,205
|
|
-
|
|
2,205
|
Financial assets held for sale:
|
|
|
|
|
|
|
|
|
|
|
|
- Clal
|
-
|
|
9,170
|
-
|
-
|
|
9,170
|
|
-
|
|
9,170
|
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
- Cash at bank and on hand
|
4,923
|
|
-
|
-
|
-
|
|
4,923
|
|
-
|
|
4,923
|
- Short-term investments
|
21,304
|
|
3,268
|
-
|
-
|
|
24,572
|
|
-
|
|
24,572
|
Total assets
|
46,634
|
|
29,880
|
403
|
3,235
|
|
80,152
|
|
4,130
|
|
84,282
|
|
Financial liabilities at amortized cost
|
|
Financial liabilities at fair value through profit or
loss
|
|
Subtotal financial liabilities
|
|
Non-financial liabilities
|
|
Total
|
|
|
|
Level 1
|
Level 2
|
Level 3
|
|
|
|
|
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities as per Statement of Financial Position
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables
|
17,425
|
|
-
|
-
|
-
|
|
17,425
|
|
8,074
|
|
25,499
|
Borrowings (excluding finance leases)
|
147,388
|
|
-
|
-
|
-
|
|
147,388
|
|
-
|
|
147,388
|
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
|
|
- Foreign-currency future contracts
|
-
|
|
-
|
38
|
-
|
|
38
|
|
-
|
|
38
|
- Swaps
|
-
|
|
-
|
54
|
-
|
|
54
|
|
-
|
|
54
|
- Others
|
-
|
|
5
|
-
|
15
|
|
20
|
|
-
|
|
20
|
- Forwards
|
-
|
|
-
|
132
|
-
|
|
132
|
|
-
|
|
132
|
Total liabilities
|
164,813
|
|
5
|
224
|
15
|
|
165,057
|
|
8,074
|
|
173,131
|
IRSA Inversiones y Representaciones Sociedad
Anónima
Financial assets
and financial liabilities as of June 30, 2017 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
|
Level 2
|
Level 3
|
|
|
|
|
|
|
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
Assets as per Statements of Financial Position
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other receivables (excluding the allowance for doubtful
accounts and other receivables)
|
16,575
|
|
-
|
-
|
2,156
|
|
18,731
|
|
3,819
|
|
22,550
|
Investments in financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
- Public companies’ securities
|
-
|
|
1,665
|
-
|
82
|
|
1,747
|
|
-
|
|
1,747
|
- Private companies’ securities
|
-
|
|
16
|
-
|
964
|
|
980
|
|
-
|
|
980
|
- Deposits
|
1,235
|
|
13
|
-
|
-
|
|
1,248
|
|
-
|
|
1,248
|
- Mutual funds
|
-
|
|
3,855
|
-
|
-
|
|
3,855
|
|
-
|
|
3,855
|
- Bonds
|
-
|
|
4,719
|
425
|
-
|
|
5,144
|
|
-
|
|
5,144
|
- Others
|
-
|
|
749
|
-
|
-
|
|
749
|
|
-
|
|
749
|
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
|
|
- Warrants
|
-
|
|
-
|
26
|
-
|
|
26
|
|
-
|
|
26
|
- Foreign-currency future contracts
|
-
|
|
-
|
27
|
-
|
|
27
|
|
-
|
|
27
|
- Swaps
|
-
|
|
-
|
29
|
-
|
|
29
|
|
-
|
|
29
|
Restricted assets
|
954
|
|
-
|
-
|
-
|
|
954
|
|
-
|
|
954
|
Financial assets held for sale:
|
|
|
|
|
|
|
|
|
|
|
|
- Clal
|
-
|
|
8,562
|
-
|
-
|
|
8,562
|
|
-
|
|
8,562
|
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
- Cash at bank and on hand
|
8,529
|
|
-
|
-
|
-
|
|
8,529
|
|
-
|
|
8,529
|
- Short term investments
|
14,510
|
|
1,815
|
-
|
-
|
|
16,325
|
|
-
|
|
16,325
|
Total assets
|
41,803
|
|
21,394
|
507
|
3,202
|
|
66,906
|
|
3,819
|
|
70,725
|
|
Financial liabilities at amortized cost
|
|
Financial liabilities at fair value through profit or
loss
|
|
Subtotal financial liabilities
|
|
Non-financial liabilities
|
|
Total
|
|
|
|
Level 1
|
Level 2
|
Level 3
|
|
|
|
|
|
|
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities as per Statement of Financial Position
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables
|
16,166
|
|
-
|
-
|
-
|
|
16,166
|
|
7,713
|
|
23,879
|
Borrowings (excluding finance leases)
|
129,412
|
|
-
|
-
|
-
|
|
129,412
|
|
-
|
|
129,412
|
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
|
|
- Foreign-currency future contracts
|
-
|
|
-
|
5
|
-
|
|
5
|
|
-
|
|
5
|
- Forwards
|
-
|
|
5
|
152
|
10
|
|
167
|
|
-
|
|
167
|
Total liabilities
|
145,578
|
|
5
|
157
|
10
|
|
145,750
|
|
7,713
|
|
153,463
|
The fair value of financial assets and liabilities
at their amortized cost does not differ significantly from their
book value, except for borrowings (Note 16).
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
and Level 3 instruments are no different from those used as of June
30, 2017.
As of
December 31, 2017, there have been no changes to the economic or
business circumstances affecting the fair value of the financial
assets and liabilities of the Group.
IRSA Inversiones y Representaciones Sociedad
Anónima
The
Group uses a range of valuation models for the measurement of Level
2 and Level 3 instruments, details of which may be obtained from
the following table. When no quoted prices are available in an
active market, fair values (particularly with derivatives) are
based on recognized valuation methods.
|
|
|
|
|
|
|
|
|
Description
|
|
Pricing model / method
|
|
Parameters
|
|
Fair value hierarchy
|
|
Range
|
Trade
and other receivables - Cellcom
|
|
Discounted cash flows
|
|
Discount
interest rate.
|
|
Level 3
|
|
3.3
|
Interest
rate swaps
|
|
Cash flows - Theoretical price
|
|
Interest
rate future contracts and cash flows
|
|
Level 2
|
|
-
|
Preferred
shares of Condor
|
|
Binomial tree – Theoretical price I
|
|
Underlying
asset price (Market price); share price volatility (historical) and
market interest-rate (Libor rate curve).
|
|
Level 3
|
|
Underlying asset price 1.8 to 2.2
Share price volatility 58% to 78%
Market interest-rate
1.7%
to 2.1%
|
Promissory
note
|
|
Discounted cash flows - Theoretical price
|
|
Market
interest-rate (Libor rate curve)
|
|
Level 3
|
|
Market interest-rate
1.8%
to 2.2%
|
Warrants
of Condor
|
|
Black-Scholes – Theoretical price
|
|
Underlying
asset price (Market price); share price volatility (historical) and
market interest-rate (Libor rate curve).
|
|
Level 2
|
|
Underlying asset price 1.8 to 1.7
Share price volatility 58% to 78%
Market interest-rate
1.7%
to 2.1%
|
Call
option of Arcos
|
|
Discounted cash flows
|
|
Projected
revenues and discounting rate.
|
|
Level 3
|
|
-
|
Investments
in financial assets - Other private companies’
securities
|
|
Cash flow / NAV - Theoretical price
|
|
Projected revenue
discounted at the discount rate /
The
value is calculated in accordance with shares in the equity funds
on the basis of their Financial Statements, based on fair value or
investments assessments.
|
|
Level
3
|
|
1 -
3.5
|
Investments
in financial assets - Others
|
|
Discounted cash flow - Theoretical price
|
|
Projected revenue
discounted at the discount rate /
The
value is calculated in accordance with shares in the equity funds
on the basis of their Financial Statements, based on fair value or
investment assessments.
|
|
Level
3
|
|
1 -
3.5
|
Derivative
financial instruments – Forwards
|
|
Theoretical price
|
|
Underlying
asset price and volatility
|
|
Level 2
and 3
|
|
-
|
The
following table presents the changes in Level 3 instruments as of
December 31, 2017 and June 30, 2017:
|
Investments in financial assets - Public companies’
Securities
|
|
Derivative financial instruments - Forwards
|
|
Investments in financial assets - Private companies’
Securities
|
|
Trade and other receivables
|
|
Total as of December 31, 2017
|
|
Total as of June 30, 2017
|
Balances at beginning of the period / year
|
82
|
|
(10)
|
|
964
|
|
2,156
|
|
3,192
|
|
(7,105)
|
Additions and acquisitions
|
-
|
|
-
|
|
9
|
|
1,038
|
|
1,047
|
|
1,761
|
Transfer to level 1 (i)
|
-
|
|
-
|
|
(100)
|
|
,
|
|
(100)
|
|
-
|
Transfer to current trade and other receivables
|
-
|
|
-
|
|
-
|
|
(964)
|
|
(964)
|
|
(1,874)
|
Currency translation adjustment
|
13
|
|
(5)
|
|
(2)
|
|
58
|
|
64
|
|
875
|
Reclassification to liabilities held for sale
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
11,272
|
Write off
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(782)
|
Gain / (loss) for the period / year (ii)
|
29
|
|
-
|
|
(48)
|
|
-
|
|
(19)
|
|
(955)
|
Balances at the end of the period / year
|
124
|
|
(15)
|
|
823
|
|
2,288
|
|
3,220
|
|
3,192
|
(i)
The group
transferred a financial asset measured at fair value from level 3
to level 1, because it began trading in the stock
exchange.
(ii)
Included within
“Financial results, net” in the Statements of
Income.
Clal
As
mentioned in Note 14 to the Annual Financial Statements, IDBD is
subject to a judicial process on the sale of its equity interest in
Clal. On August 30, 2017, IDBD sold an additional 5% of its equity
interest in Clal through a swap transaction, based on the same
principles that were applied to the swap transaction mentioned in
Note 14 to the Consolidated Financial Statements as of June 30,
2017. The consideration for the transaction amounted to around NIS
152.5 (equivalent to approximately Ps. 762 as of the transaction
date). Following completion of the transaction, IDBD’s
interest in Clal was reduced from 49.9% to 44.9% of its capital
share.
IRSA Inversiones y Representaciones Sociedad
Anónima
13.
Trade
and other receivables
Group’s trade
and other receivables as of December 31, 2017 and June 30, 2017 are
as follows:
|
Total as of December 31, 2017
|
|
Total as of June 30, 2017
|
Sale, leases and services receivables
|
16,507
|
|
16,127
|
Less: Allowance for doubtful accounts
|
(364)
|
|
(312)
|
Total trade receivables
|
16,143
|
|
15,815
|
Prepaid expenses
|
2,597
|
|
2,532
|
Borrowings, deposits and other debit balances
|
1,731
|
|
2,378
|
Advances to suppliers
|
856
|
|
825
|
Tax receivables
|
233
|
|
216
|
Others
|
850
|
|
472
|
Total other receivables
|
6,267
|
|
6,423
|
Total trade and other receivables
|
22,410
|
|
22,238
|
Non-current
|
5,316
|
|
4,974
|
Current
|
17,094
|
|
17,264
|
Total
|
22,410
|
|
22,238
|
Movements on the
Group’s allowance for doubtful accounts were as
follows:
|
December 31, 2017
|
|
June 30, 2017
|
Beginning of the period / year
|
312
|
|
173
|
Additions
|
118
|
|
234
|
Recoveries
|
(17)
|
|
(11)
|
Currency translation adjustment
|
27
|
|
182
|
Receivables written off during the period/year as
uncollectable
|
(76)
|
|
(266)
|
End of the period / year
|
364
|
|
312
|
The
creation and release of the allowance for doubtful accounts have
been included in “Selling expenses” in the Statement of
Income (Note 20).
14.
Cash
flow information
Following is a
detailed description of cash flows generated by the Group’s
operations for the six-month periods ended December 31, 2017 and
2016:
|
Nota
|
December 31, 2017
|
|
December 31, 2016 (recast)
|
Profit for the period
|
|
10,831
|
|
6,816
|
Profit for the period from discontinued operations
|
|
(207)
|
|
(4,273)
|
Adjustments
for
:
|
|
|
|
|
Income tax
|
18
|
(497)
|
|
1,027
|
Amortization and depreciation
|
20
|
2,627
|
|
2,374
|
Loss from disposal of property, plant and equipment
|
|
22
|
|
19
|
Net gain from fair value adjustment of investment
properties
|
|
(11,502)
|
|
(3,470)
|
Share-based compensation
|
|
35
|
|
52
|
Expenses for sale of investment properties
|
|
-
|
|
2
|
Derecognition of intangible assets by TGLT agreement
|
|
-
|
|
27
|
Result from business combination
|
|
-
|
|
(44)
|
Disposal of investment properties
|
|
-
|
|
(4)
|
Gain from disposal of subsidiary
|
|
(393)
|
|
-
|
Other financial results, net
|
|
6,553
|
|
3,087
|
Provisions and allowances
|
|
(84)
|
|
23
|
Share of profit of associates and joint ventures
|
7
|
(393)
|
|
(62)
|
Changes in operating assets and liabilities:
|
|
|
|
|
Decrease in inventories
|
|
487
|
|
126
|
Decrease in trading properties
|
|
71
|
|
301
|
Increase in trade and other receivables
|
|
(593)
|
|
(1,640)
|
(Decrease) / increase in trade and other payables
|
|
(18)
|
|
1,163
|
(Decrease) / increase in salaries and social security
liabilities
|
|
(144)
|
|
22
|
(Decrease) / increase in provisions
|
|
(3)
|
|
13
|
Net cash generated by continuing operating activities before income
tax paid
|
|
6,792
|
|
5,559
|
Net cash generated by / (used in) discontinued operating activities
before income tax paid
|
|
246
|
|
(209)
|
Net cash generated by operating activities before income tax
paid
|
|
7,038
|
|
5,350
|
IRSA Inversiones y Representaciones Sociedad
Anónima
The
following table show a detail of significant non-cash transactions
occurred in the six-month periods ended December 31, 2017 and
2016:
|
|
December 31, 2017
|
|
December 31, 2016 (recast)
|
Decrease in investments in associates and joint ventures through an
increase in trade and other receivables
|
|
-
|
|
8
|
Increase in investments in intangible assets through an increase in
trade and other payables
|
|
-
|
|
64
|
Increase in investment properties through an increase in trade and
other payables
|
|
-
|
|
339
|
Decrease in investments in associates and joint ventures through a
decrease in borrowings
|
|
-
|
|
8
|
Increase in investments in associates and joint ventures through a
decrease in trade and other receivables
|
|
-
|
|
20
|
Acquisition of non-controlling interest through a decrease in trade
and other receivables
|
|
1,380
|
|
-
|
Changes in non-controlling interest through a decrease in trade and
other receivables
|
|
218
|
|
-
|
Increase in property, plant and equipment through an increase of
trade and other payables
|
|
13
|
|
-
|
Increase in investment properties through a decrease in trade and
other receivables
|
|
35
|
|
-
|
Dividends distribution to non-controlling shareholders not yet
paid
|
|
-
|
|
22
|
Balances
incorporated as result of business combination / reclassification
of assets and liabilities held for sale:
|
|
December 31, 2016 (recast)
|
Property, plant and equipment
|
|
1,482
|
Intangible assets
|
|
4
|
Investments in associates and joint ventures
|
|
123
|
Deferred income tax
|
|
41
|
Trade and other receivables
|
|
950
|
Inventories
|
|
8
|
Trade and other payables
|
|
(1,007)
|
Salaries and social security liabilities
|
|
(114)
|
Borrowings
|
|
(648)
|
Provisions
|
|
2
|
Income tax and MPIT liabilities
|
|
1
|
Employee benefits
|
|
(43)
|
Group of liabilities held for sale
|
|
-
|
Net amount of non-cash assets incorporated / held for
sale
|
|
799
|
Cash and cash equivalents
|
|
54
|
Non-controlling interest
|
|
45
|
Goodwill not yet allocated
|
|
(23)
|
Net amount of assets incorporated / held for sale
|
|
875
|
Interest held before acquisition
|
|
31
|
Seller financing
|
|
44
|
Cash and cash equivalents incorporated / held for sale
|
|
(54)
|
Net outflow of cash and cash equivalents / assets and liabilities
held for sale
|
|
896
|
15.
Trade
and other payables
Group’s trade
and other payables as of December 31, 2017 and June 30, 2017 were
as follows:
|
Total as of December 31, 2017
|
|
Total as of June 30, 2017
|
Trade payables
|
15,734
|
|
14,793
|
Sales, rental and services payments received in
advance
|
5,007
|
|
4,339
|
Construction obligations
|
1,317
|
|
1,226
|
Accrued invoices
|
918
|
|
633
|
Deferred income
|
70
|
|
73
|
Total trade payables
|
23,046
|
|
21,064
|
Dividends payable to non-controlling shareholders
|
54
|
|
251
|
Tax payables
|
149
|
|
510
|
Construction obligations
|
285
|
|
343
|
Other payables
|
1,965
|
|
1,711
|
Total other payables
|
2,453
|
|
2,815
|
Total trade and other payables
|
25,499
|
|
23,879
|
Non-current
|
2,379
|
|
3,040
|
Current
|
23,120
|
|
20,839
|
Total
|
25,499
|
|
23,879
|
IRSA Inversiones y Representaciones Sociedad
Anónima
The
breakdown of the Group’s borrowings as of December 31, 2017
and June 30, 2017 was as follows:
|
Total as of December 31, 2017
|
|
Total as of June 30, 2017
|
|
Fair value as of December 31, 2017
|
|
Fair value as of June 30, 2017
|
NCN
|
127,311
|
|
108,417
|
|
127,573
|
|
110,164
|
Bank loans
|
18,017
|
|
12,012
|
|
17,963
|
|
12,048
|
Non-recourse loans
|
-
|
|
7,025
|
|
-
|
|
6,930
|
Bank overdrafts
|
133
|
|
91
|
|
133
|
|
91
|
Other borrowings (i)
|
1,934
|
|
1,870
|
|
1,888
|
|
1,828
|
Total borrowings
|
147,395
|
|
129,415
|
|
147,557
|
|
131,061
|
Non-current
|
128,088
|
|
109,489
|
|
|
|
|
Current
|
19,307
|
|
19,926
|
|
|
|
|
|
147,395
|
|
129,415
|
|
|
|
|
(i)
Includes finance leases in the amount of Ps. 7 as of December 31,
2017 and Ps. 3 as of June 30, 2017.
The
following table describes the Group’s issuance of debt during
the present period:
Entity
|
Title
|
Issuance / expansion date
|
Amount
|
Maturity
|
Interest rate
|
Principal payment
|
Interest payment
|
|
IRSA CP
|
Class IV
|
Sep-17
|
US$ 140
|
09/14/2020
|
5% n.a.
|
At expiration
|
quarterly
|
|
IDBD
|
SERIES N
|
Jul-17
|
NIS 642.1
|
12/30/2022
|
5.3% e.a
|
At expiration
|
quarterly
|
(1)
|
IDBD
|
SERIES N
|
Nov-17
|
NIS 357
|
12/30/2022
|
5.3% e.a
|
At expiration
|
quarterly
|
(2)
|
DIC
|
SERIES J
|
Dic-17
|
NIS 762
|
12/30/2026
|
4.8%
e.a.
|
6
annual payments since 2021
|
biannual
|
(2)
|
PBC
|
SERIES I
|
Dic-17
|
NIS
496
|
07/01/2029
|
3.95%
e.a.
|
At expiration
|
quarterly
|
(2)
|
Gav - Yam
|
SERIES H
|
Sep-17
|
NIS
424
|
06/30/2034
|
2.55%
e.a
|
annually
|
biannual
|
|
(1)
IDBD has the right
to make an early repayment, total or partial. As a collateral for
the full compliance of all the commitments IDBD has placed
approximately 60.4 million shares in DIC under a single fixed
charge of first line and, in an unlimited amount, in favor of the
trustee for the holders of the NCN.
(2)
Corresponds to an
expansion of the series.
DIC
: On September 28, 2017 DIC
offered the holders of Series F NCN to swap their notes for Series
J NCN. Series J NCN terms and conditions differ substantially from
those of Series F. Therefore, DIC recorded the payment of Series F
NCN and recognized a new financial commitment at fair value for
Series J NCN. As a result of the swap, DIC recorded a loss
resulting from the difference between the Series F NCN cancellation
value and the new debt value in the amount of approximately NIS 461
(equal to approximately Ps. 2,228 as of that date), which was
accounted for under “Finance costs” (Note
23).
IDBD
: On November 28, 2017,
IDBD made an early redemption of the Series L NCN for an amount of
NIS 424 (or
Ps.
2,120 as of the transaction date).
IRSA Inversiones y Representaciones Sociedad
Anónima
The
table below shows the movements in the Group's provisions
categorized by type:
|
Period ended December 31, 2017
|
|
Year ended June 30, 2017
|
|
Legal claims (i)
|
|
Investments in associates and joint ventures (ii)
|
|
Site dismantling and remediation
|
|
Onerous contracts
|
|
Other provisions
|
|
Total
|
|
Total
|
Beginning of period / year
|
821
|
|
72
|
|
140
|
|
220
|
|
580
|
|
1,833
|
|
1,571
|
Additions
|
118
|
|
-
|
|
5
|
|
-
|
|
-
|
|
123
|
|
502
|
Incorporated by business combination
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
2
|
Recovery
|
(49)
|
|
(56)
|
|
(48)
|
|
(47)
|
|
(11)
|
|
(211)
|
|
(319)
|
Used during the period / year
|
(21)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(21)
|
|
(219)
|
Currency translation adjustment
|
22
|
|
-
|
|
(2)
|
|
4
|
|
(12)
|
|
12
|
|
296
|
End of period / year
|
891
|
|
16
|
|
95
|
|
177
|
|
557
|
|
1,736
|
|
1,833
|
Non-current
|
|
|
|
|
|
|
|
|
|
|
795
|
|
943
|
Current
|
|
|
|
|
|
|
|
|
|
|
941
|
|
890
|
Total
|
|
|
|
|
|
|
|
|
|
|
1,736
|
|
1,833
|
(i)
Additions and
recoveries are included in "Other operating results,
net".
(ii)
As of December 31
and June 30, 2017 corresponds to the equity interest in New
Lipstick with negative equity.
There
were no significant changes to the processes mentioned in Note 19
to the Consolidated Financial Statements as of June 30,
2017.
Argentine tax reform
On
December 27, 2017, the Argentine Congress approved the Tax Reform,
through Law No. 27,430, which was enacted on December 29, 2017, and
has introduced many changes to the income tax treatment applicable
to financial income. The key components of the Tax Reform are as
follows:
Dividends:
Tax on dividends distributed by
argentine companies would be as follows: (i) dividends originated
from profits obtained before fiscal year ending June 30, 2018 will
not be subject to withholding tax; (ii) dividends derived from
profits generated during fiscal years of the Company ending June
30, 2019 and 2020 paid to argentine individuals and/or foreign
residents, will be subject to a 7% withholding tax; and (iii)
dividends originated from profits obtained during fiscal year
ending June 30, 2021 onward will be subject to withholding tax at a
rate of 13%.
Income tax:
Corporate income tax would be
gradually reduced to 30% for fiscal years commencing after January
1, 2018 through December 31, 2019, and to 25% for fiscal years
beginning after January 1, 2020, inclusive.
Presumptions of
dividends:
Certain facts will
be presumed to constitute dividend payments, such as: i)
withdrawals from shareholders, ii) shareholders private use of
property of the company, iii) transactions with shareholders at
values different from market values, iv) personal expenses from
shareholders or shareholder remuneration without
substance.
Revaluation of
assets:
The regulation
establishes that, at the option of the companies, tax revaluation
of assets is permitted for assets located in Argentina and affected
to the generation of taxable profits. The special tax on the amount
of the revaluation depends on the asset, being (i) 8% for real
estate not classified as inventories, (ii) 15% for real estate
classified as inventories, (iii) 5% for shares, quotas and equity
interests owned by individuals and (iv) 10% for the rest of the
assets. As of the date of these financial statements, the Group has
not exercised the option. The gain generated by the revaluation is
exempted according to article 291 of Law 27,430 and, the additional
tax generated by the revaluation is not
deductible.
In
addition, the argentine tax reform contemplates other amendments
regarding the following matters: social security contributions, tax
administrative procedures law, criminal tax law, tax on liquid
fuels, and excise taxes, among others. As of the date of
presentation of these Financial Statements, many aspects are
pending regulation by the National Executive Power.
IRSA Inversiones y Representaciones Sociedad
Anónima
US tax reform
In
December 2017, a bill was passed to reform the Federal Taxation Law
in the United States. The reform included a reduction of the
corporate tax rate from 35% to 21%, for the tax years 2018 and
thereafter. The reform has impact in certain subsidiaries of the
Group in the United States.
The
details of the provision for the Group’s income tax, is as
follows:
|
December 31, 2017
|
|
December 31, 2016 (recast)
|
Current income tax
|
(562)
|
|
(383)
|
Deferred income tax
|
1,059
|
|
(644)
|
Income tax from continuing operations
|
497
|
|
(1,027)
|
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 six-month periods ended December 31, 2017
and 2016:
|
December 31, 2017
|
|
December 31, 2016 (recast)
|
Profit from continuing operations at tax rate applicable in the
respective countries
|
(3,407)
|
|
(1,350)
|
Permanent differences:
|
|
|
|
Share of profit of associates and joint ventures
|
107
|
|
661
|
Unrecognized tax loss carryforwards (i)
|
(864)
|
|
(356)
|
Change of income tax rate (ii)
|
3,971
|
|
455
|
Non-taxable profit, non-deductible expenses and others
|
690
|
|
(437)
|
Income tax from continuing operations
|
497
|
|
(1,027)
|
(i)
Corresponds
principally to holding companies in Israel.
(ii)
As of December 31,
2017 corresponds to the effect of applying the changes in the tax
rates applicable in accordance with the tax reform explained above,
being Ps. 390 the effect of the rate change in US and Ps. 3,581 the
effect of the rate change in Argentina.
The
gross movement in the deferred income tax account is as
follows:
|
December 31, 2017
|
|
June 30, 2017
|
Beginning of period / year
|
(22,739)
|
|
(19,099)
|
Incorporated by business combination
|
-
|
|
(6)
|
Reclassification to liabilities held for sale
|
-
|
|
(12)
|
Use of tax loss carryforwards
|
(114)
|
|
(171)
|
Change of income tax rate
|
3,971
|
|
529
|
Reclassification previous periods
|
-
|
|
59
|
Currency translation adjustment
|
(296)
|
|
(1,440)
|
Deferred income tax expense
|
(2,912)
|
|
(2,599)
|
End of period / year
|
(22,090)
|
|
(22,739)
|
Deferred income tax assets
|
306
|
|
285
|
Deferred income tax liabilities
|
(22,396)
|
|
(23,024)
|
Deferred income tax assets (liabilities), net
|
(22,090)
|
|
(22,739)
|
|
December 31, 2017
|
|
December 31, 2016 (recast)
|
Revenue from supermarkets
|
27,854
|
|
23,476
|
Income from communication services
|
6,827
|
|
5,937
|
Rental and services income
|
5,241
|
|
4,242
|
Sale of communication equipment
|
2,238
|
|
1,926
|
Sale of trading properties and developments
|
380
|
|
814
|
Revenue from hotels operation and tourism services
|
500
|
|
436
|
Total Group’s revenues
|
43,040
|
|
36,831
|
IRSA Inversiones y Representaciones Sociedad
Anónima
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
|
|
Total as of December 31, 2017
|
|
Total as of December 31, 2016 (recast)
|
Cost of sale of goods and services
|
21,178
|
|
-
|
|
-
|
|
21,178
|
|
18,955
|
Salaries, social security costs and other personnel
expenses
|
2,423
|
|
891
|
|
2,820
|
|
6,134
|
|
4,874
|
Depreciation and amortization
|
1,203
|
|
305
|
|
1,119
|
|
2,627
|
|
2,374
|
Fees and payments for services
|
854
|
|
414
|
|
1,020
|
|
2,288
|
|
2,007
|
Maintenance, security, cleaning, repairs and others
|
798
|
|
57
|
|
437
|
|
1,292
|
|
1,050
|
Advertising and other selling expenses
|
156
|
|
-
|
|
865
|
|
1,021
|
|
935
|
Taxes, rates and contributions
|
133
|
|
22
|
|
423
|
|
578
|
|
466
|
Interconnection and roaming expenses
|
976
|
|
-
|
|
-
|
|
976
|
|
870
|
Fees to other operators
|
1,135
|
|
-
|
|
-
|
|
1,135
|
|
762
|
Director´s fees
|
-
|
|
112
|
|
-
|
|
112
|
|
89
|
Leases and service charges
|
18
|
|
6
|
|
67
|
|
91
|
|
29
|
Allowance for doubtful accounts, net
|
-
|
|
9
|
|
92
|
|
101
|
|
119
|
Other expenses
|
403
|
|
379
|
|
874
|
|
1,656
|
|
1,468
|
Total as of December 31, 2017
|
29,277
|
|
2,195
|
|
7,717
|
|
39,189
|
|
-
|
Total as of December 31, 2016 (recast)
|
25,625
|
|
1,809
|
|
6,564
|
|
-
|
|
33,998
|
21.
Cost
of goods sold and services provided
|
Total as of December 31, 2017
|
|
Total as of December 31, 2016 (recast)
|
Inventories at the beginning of the period (*)
|
10,041
|
|
7,938
|
Purchases and expenses
|
28,715
|
|
24,072
|
Capitalized finance costs
|
3
|
|
-
|
Currency translation adjustment
|
779
|
|
1,495
|
Incorporated by business combination
|
4
|
|
-
|
Transfers
|
377
|
|
(4)
|
Inventories at the end of the period (*)
|
(10,642)
|
|
(7,876)
|
Total costs
|
29,277
|
|
25,625
|
The
following table presents the composition of the Group’s
inventories for the periods ended December 31, 2017 and
2016:
|
Total as of December 31, 2017
|
|
Total as of December 31, 2016(recast)
|
Real estate
|
6,485
|
|
4,548
|
Supermarkets
|
3,835
|
|
3,056
|
Telecommunications
|
279
|
|
237
|
Others
|
43
|
|
35
|
Total inventories at the end of the period (*)
|
10,642
|
|
7,876
|
(*)
Inventories includes trading properties and
inventories.
22.
Other
operating results, net
|
December 31, 2017
|
|
December 31, 2016 (recast)
|
Gain from disposal of subsidiary (1)
|
393
|
|
44
|
Donations
|
(30)
|
|
(29)
|
Loss from TGLT agreement
|
-
|
|
(27)
|
Lawsuits and other contingencies (2)
|
387
|
|
(15)
|
Others
|
(146)
|
|
(94)
|
Total other operating results, net
|
604
|
|
(121)
|
(1)
Includes the gain
from the sale of the Group´s equity interest in Cloudyn for
Ps. 252.
(2)
As of December 31,
2017 corresponds to the favourable resolution of a judicial process
in the Operations Center in Israel for Ps. 400. Includes legal
costs and expenses.
IRSA Inversiones y Representaciones Sociedad
Anónima
23.
Financial
results, net
|
December 31, 2017
|
|
December 31, 2016 (recast)
|
Finance income:
|
|
|
|
- Interest income
|
363
|
|
319
|
- Foreign exchange gain
|
201
|
|
125
|
- Dividends income
|
42
|
|
28
|
- Other finance income
|
44
|
|
38
|
Total finance income
|
650
|
|
510
|
Finance costs:
|
|
|
|
- Interest expenses
|
(3,981)
|
|
(3,340)
|
- Loss on debt swap (Note 16)
|
(2,228)
|
|
-
|
- Foreign exchange loss
|
(1,550)
|
|
(794)
|
- Other finance costs
|
(310)
|
|
(581)
|
Total finance costs
|
(8,069)
|
|
(4,715)
|
Other financial results:
|
|
|
|
- Fair value gain of financial assets and liabilities at fair
value through profit or loss, net
|
1,138
|
|
1,465
|
- Gain from derivative financial instruments,
net
|
58
|
|
66
|
Total other financial results
|
1,196
|
|
1,531
|
Total financial results, net
|
(6,223)
|
|
(2,674)
|
24.
Related
party transactions
The
following is a summary of the balances with related parties as of
December 31, 2017 and June 30, 2017:
Item
|
|
December 31, 2017
|
|
June 30, 2017
|
Trade and other receivable
|
|
513
|
|
1,434
|
Investments in financial assets
|
|
382
|
|
324
|
Trade and other payable
|
|
(223)
|
|
(172)
|
Borrowings
|
|
(10)
|
|
(11)
|
Total
|
|
662
|
|
1,575
|
Related party
|
|
December 30, 2017
|
|
June 30, 2017
|
|
Description of transaction
|
Manibil S.A.
|
|
47
|
|
84
|
|
Contributions in advance
|
New Lipstick LLC
|
|
376
|
|
-
|
|
Loans granted
|
|
|
6
|
|
-
|
|
Reimbursement of expenses
|
Condor
|
|
124
|
|
8
|
|
Dividends receivables
|
|
|
10
|
|
82
|
|
Public companies securities
|
LRSA
|
|
1
|
|
29
|
|
Leases and/or rights of use
|
|
|
(1)
|
|
-
|
|
Reimbursement of expenses
|
|
|
4
|
|
-
|
|
Loans granted
|
|
|
40
|
|
-
|
|
Canon
|
|
|
5
|
|
-
|
|
Dividends receivables
|
Other associates and joint ventures
|
|
2
|
|
3
|
|
Loans granted
|
|
|
2
|
|
8
|
|
Foreign-currency future contracts
|
|
|
(5)
|
|
-
|
|
Commissions
|
|
|
(10)
|
|
(11)
|
|
Mortgage bond
|
|
|
(5)
|
|
(5)
|
|
Derivatives
|
|
|
(2)
|
|
(1)
|
|
Leases and/or rights of use
|
|
|
5
|
|
5
|
|
NCN
|
|
|
(6)
|
|
-
|
|
Advances of clients
|
|
|
-
|
|
1
|
|
Management fees
|
|
|
1
|
|
1
|
|
Proceeds from leases
|
|
|
-
|
|
(1)
|
|
Credit for capital reduction
|
Total associates and joint ventures
|
|
594
|
|
203
|
|
|
Cresud
|
|
(27)
|
|
(36)
|
|
Reimbursement of expenses
|
|
|
(48)
|
|
(23)
|
|
Corporate services
|
|
|
258
|
|
242
|
|
NCN
|
|
|
(3)
|
|
(1)
|
|
Leases and/or rights of use
|
|
|
-
|
|
5
|
|
Leases and/or rights of use
|
|
|
(20)
|
|
-
|
|
Leases and/or rights of use receivable
|
|
|
(2)
|
|
(1)
|
|
Long-term incentive plan
|
Total parent company
|
|
158
|
|
186
|
|
|
IFISA
|
|
-
|
|
1,283
|
|
Loans granted
|
Taaman
|
|
(29)
|
|
(24)
|
|
Leases and/or rights of use
|
Willifood
|
|
(34)
|
|
(29)
|
|
NCN
|
Directors
|
|
(35)
|
|
(44)
|
|
Fees for services received
|
Others (1)
|
|
1
|
|
2
|
|
Leases and/or rights of use
|
|
|
7
|
|
2
|
|
Fees
|
|
|
1
|
|
-
|
|
Management fees
|
|
|
(1)
|
|
(4)
|
|
Loans
|
Total others
|
|
(90)
|
|
1,186
|
|
|
Total at the end of the period/year
|
|
662
|
|
1,575
|
|
|
(1)
It includes CAMSA,
Avenida compras, Avenida Inc., Estudio Zang, Bergel &
Viñes, Austral Gold, Fundación IRSA, Hamonet S.A. and
Museo de los Niños
IRSA Inversiones y Representaciones Sociedad
Anónima
The
following is a summary of the results with related parties for the
six-month periods ended December 31, 2017 and 2016:
Related party
|
|
December 31, 2017
|
|
December 31, 2016 (recast)
|
|
Description of transaction
|
BACS
|
|
8
|
|
4
|
|
Leases and/or rights of use
|
|
|
-
|
|
16
|
|
Financial operations
|
Adama
|
|
-
|
|
64
|
|
Corporate services
|
Condor
|
|
23
|
|
196
|
|
Financial operations
|
ISPRO - Mehadrin
|
|
50
|
|
-
|
|
Corporate services
|
Other associates and joint ventures
|
|
(1)
|
|
-
|
|
Financial operations
|
|
|
13
|
|
8
|
|
Leases and/or rights of use
|
|
|
2
|
|
-
|
|
Fees and remunerations
|
|
|
-
|
|
2
|
|
Management fees
|
Total associates and joint ventures
|
|
95
|
|
290
|
|
|
Cresud
|
|
3
|
|
1
|
|
Leases and/or rights of use
|
|
|
(113)
|
|
(
85)
|
|
Corporate services
|
|
|
9
|
|
24
|
|
Financial operations
|
Total parent company
|
|
(101)
|
|
(60)
|
|
|
IFISA
|
|
56
|
|
-
|
|
Financial operations
|
Inversiones Financieras del Sur S.A.
|
|
-
|
|
54
|
|
Financial operations
|
Directores
|
|
(86)
|
|
(84)
|
|
Fees and remunerations
|
Taaman
|
|
74
|
|
-
|
|
Corporate services
|
Willifood
|
|
129
|
|
-
|
|
Corporate services
|
Others (1)
|
|
4
|
|
-
|
|
Corporate services
|
|
|
-
|
|
(1)
|
|
Leases and/or rights of use
|
|
|
4
|
|
-
|
|
Financial operations
|
|
|
(7)
|
|
(4)
|
|
Donations
|
|
|
(6)
|
|
(5)
|
|
Legal services
|
Total others
|
|
168
|
|
(40)
|
|
|
Total at the end of the period
|
|
162
|
|
190
|
|
|
(1)
It includes
Isaac
Elsztain e Hijos, CAMSA. Hamonet S.A., Ramat Hanassi, Estudio Zang,
Bergel y Viñes, and Fundación IRSA.
The
following is a summary of the transactions with related parties for
the six-month periods ended December 31, 2017 and
2016:
Related party
|
|
December 31, 2017
|
|
December 31, 2016 (recast)
|
|
Description of the operation
|
La Rural S.A.
|
|
13
|
|
-
|
|
Dividends received
|
Cresud
|
|
882
|
|
-
|
|
Dividends received
|
Helmir
|
|
5
|
|
-
|
|
Dividends paid
|
Total distribution
|
|
900
|
|
-
|
|
|
Manibil
|
|
44
|
|
-
|
|
Additional paid-in capital
|
Total subsidiaries contributions
|
|
44
|
|
-
|
|
|
IFISA (see Note 4.)
|
1,968
|
|
-
|
|
Acquisition of non-controlling interest
|
Total other transactions
|
|
1,968
|
|
-
|
|
|
25.
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 - Equity investments
|
Note 7
Equity interest in associates and joint ventures
|
Exhibit
D - Other investments
|
Note 12
Financial instruments by category
|
Exhibit
E - Provisions
|
Note 17
Provisions
|
Exhibit
F - Cost of sales and services provided
|
Note 21
Cost of goods sold and services provided
|
Exhibit
G - Foreign currency assets and liabilities
|
Note 26
Foreign currency assets and liabilities
|
IRSA Inversiones y Representaciones Sociedad
Anónima
26.
Foreign
currency assets and liabilities
Book
amounts of foreign currency assets and liabilities are as
follows:
Item / Currency (1)
|
Amount (2)
|
Exchange rate (3)
|
Total as of 12.31.17
|
Amount (2)
|
Exchange rate (3)
|
Total as of 06.30.17
|
Assets
|
|
|
|
|
|
|
Trade and other
receivables
|
|
|
|
|
|
|
US Dollar
|
77
|
18.549
|
1,420
|
35
|
16.530
|
572
|
Euros
|
6
|
22.283
|
140
|
9
|
18.848
|
172
|
Receivables with related parties:
|
|
|
|
|
|
|
US Dollar
|
50
|
18.649
|
932
|
52
|
16.630
|
855
|
Total trade and other receivables
|
|
|
2,492
|
|
|
1,599
|
Restricted
assets
|
|
|
|
|
|
|
US Dollar
|
-
|
18.549
|
3
|
2
|
16.530
|
41
|
Total Restricted assets
|
|
|
3
|
|
|
41
|
Investments in financial
assets
|
|
|
|
|
|
|
US Dollar
|
195
|
18.549
|
3,620
|
61
|
16.530
|
1,014
|
Pounds
|
1
|
25.071
|
19
|
1
|
21.486
|
18
|
Investments with related parties:
|
|
|
|
|
|
|
US Dollar
|
20
|
18.649
|
382
|
20
|
16.630
|
324
|
Total investments in financial assets
|
|
|
4,021
|
|
|
1,356
|
Derivative financial
instruments
|
|
|
|
|
|
|
US Dollar
|
1
|
18.549
|
15
|
1
|
16.530
|
10
|
Derivative financial instruments with related parties:
|
|
|
|
|
|
|
US Dollar
|
-
|
18.649
|
-
|
2
|
16.630
|
26
|
Total Derivative financial instruments
|
|
|
15
|
|
|
36
|
Cash and cash
equivalents
|
|
|
|
|
|
|
US Dollar
|
240
|
18.549
|
4,444
|
318
|
16.530
|
5,250
|
Euros
|
3
|
22.283
|
70
|
3
|
18.848
|
49
|
New Israel Shekel
|
-
|
4.899
|
-
|
-
|
4.770
|
1
|
Total Cash and cash equivalents
|
|
|
4,514
|
|
|
5,300
|
Total Assets
|
|
|
11,045
|
|
|
8,332
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Trade and other
payables
|
|
|
|
|
|
|
US Dollar
|
89
|
18.649
|
1,662
|
57
|
16.630
|
955
|
Euros
|
11
|
22.450
|
255
|
1
|
19.003
|
19
|
Payables to related parties:
|
|
|
|
|
|
|
US Dollar
|
1
|
18.649
|
18
|
1
|
16.630
|
21
|
Total Trade and other payables
|
|
|
1,935
|
|
|
995
|
Borrowings
|
|
|
|
|
|
|
US Dollar
|
1,192
|
18.649
|
22,223
|
1,123
|
16.630
|
18,683
|
Total Borrowings
|
|
|
22,223
|
|
|
18,683
|
Total Liabilities
|
|
|
24,158
|
|
|
19,678
|
(1)
Considering
foreign currencies those that differ from each Group’s
subsidiaries functional currency at each
period/year-end.
(2)
Stated in millions
of the corresponding in foreign currency.
(3)
Exchange rates as
of December 31, 2017 and June 30, 2017, respectively according to
Banco Nación Argentina.
IRSA Inversiones y Representaciones Sociedad
Anónima
27.
Groups
of assets and liabilities held for sale
As
mentioned in Note 4.F to the Consolidated Financial Statements as
of June 30, 2017, the Group has certain assets and liabilities
classified as held for sale. The following table shows the main
ones:
|
December 31, 2017
|
|
June 30, 2017
|
Property, plant and equipment
|
1,690
|
|
1,712
|
Intangible assets
|
20
|
|
19
|
Investments in associates
|
29
|
|
33
|
Deferred income tax assets
|
64
|
|
57
|
Employee benefits
|
-
|
|
5
|
Income tax credits
|
-
|
|
10
|
Trade and other receivables
|
1,024
|
|
688
|
Cash and cash equivalents
|
235
|
|
157
|
Total group of assets held for sale
|
3,062
|
|
2,681
|
Trade and other payables
|
1,200
|
|
930
|
Salaries and social security liabilities
|
127
|
|
148
|
Employee benefits
|
113
|
|
52
|
Deferred income tax liability
|
15
|
|
10
|
Borrowings
|
632
|
|
715
|
Total group of liabilities held for sale
|
2,087
|
|
1,855
|
Total net assets held for sale
|
975
|
|
826
|
28.
Results
from discontinued operations
The
results from operations of Israir, Open Sky and IDB Tourism, and
the share of profit of Adama and the finance costs associated to
the non-recourse loan, until its sale in November 2016; have been
reclassified in the Statements of Income under discontinued
operations.
|
December 31, 2017
|
|
December 31, 2016 (recast)
|
Revenues
|
3,619
|
|
2,603
|
Costs
|
(3,107)
|
|
(2,193)
|
Gross profit
|
512
|
|
410
|
General and administrative expenses
|
(130)
|
|
(93)
|
Selling expenses
|
(148)
|
|
(131)
|
Other operating results, net
|
(4)
|
|
4,803
|
Profit from operations
|
230
|
|
4,989
|
Share of profit of associates and joint ventures
|
18
|
|
406
|
Profit before financial results and income tax
|
248
|
|
5,395
|
Finance cost
|
(41)
|
|
(1,122)
|
Financial results, net
|
(41)
|
|
(1,122)
|
Profit before income tax
|
207
|
|
4,273
|
Income tax
|
-
|
|
-
|
Profit from discontinued operations
|
207
|
|
4,273
|
|
|
|
|
|
|
|
|
Profit for the period from discontinued operations attributable
to:
|
|
|
|
Equity holders of the parent
|
140
|
|
2,332
|
Non-controlling interest
|
67
|
|
1,941
|
|
|
|
|
Profit per share from discontinued operations attributable to
equity holders of the parent:
|
|
|
|
Basic
|
0.24
|
|
4.06
|
Diluted
|
0.24
|
|
4.03
|
Israir
On
January 10, 2019, the Anti-Trust Authority communicated IDBD its
objection to the transaction between Sun D’or and Israir,
described in note 4.f to the consolidated financial statements as
of June 31, 2017. The Group is evaluating the reasons for the
objection and the decision regarding whether to
appeal.
IRSA Inversiones y Representaciones Sociedad
Anónima
Sale of Clal shares
On
January 1, 2018, continuing with the instructions given by the
Commissioner of Capital Markets, Insurance and Savings of Israel,
IDBD has sold 5% of its stake in Clal through a swap transaction,
in accordance with the same principles that applied to the swap
transactions made and informed to the market on May and August
2017.
The
consideration was set at an amount of approximately NIS 170.5
(equivalent to approximately Ps. 852). After the completion of the
transaction, IDBD’s interest in Clal was reduced to 39.8% of
its share capital.
Transfer of shares of Cellcom
On
January 22, 2018 DIC transferred 5% of Cellcom’s shares (the
“Transferred Shares”), by way of a loan transaction in
equal parts to two private companies incorporated in Israel, which
are related parties to the Group. The agreement will be in effect
from the date of its closing until December 31, 2018 and will be
extended automatically for a year, until it is terminated in
accordance with its terms. DIC will be entitled to terminate the
agreement at any time, in its discretion, and to receive back all
or some of the Transferred Shares. The Israeli entities will not be
entitled to transfer the Transferred Shares to any entity
whatsoever without DIC’s consent. The Israeli entities will
together be entitled to appoint 10% of Cellcom directors (i.e., as
of the present date - one director). Additionally, the Israeli
entities and the designated director will undertake to vote,
together with DIC, on all resolutions which will be presented to
Cellcom’s general meeting. Furthermore, the economic benefits
of the Transferred Shares will be kept by DIC. The Transferred
Shares are pledged in favor of DIC.
Shufersal Corporate Notes
On
January 22, 2018, Shufersal issued an expansion of Series E NCN of
NIS 544 for a total gross consideration of NIS 567 (equivalent to
Ps. 2,835 as of the date of the transaction).
Cellcom Corporate Notes
On
January 24, 2018, Cellcom issued Serie L NCN at par value of NIS
401 for a total net consideration of NIS 396 (equivalent to Ps.
1,980 as of the date of the transaction).
Eurocom purchase offer
On
February 4, 2018, DIC made a binding offer for the acquisition in
stages of Eurocom Communications Ltd ("Eurocom"), a private Israeli
group whose business is developed in the communications, real
estate and renewable energy industries. Eurocom is Bezeq's parent
company (Israel's leading telecommunications company). The proposal
must be approved by Eurocom and by the authorities and creditors
involved in the Eurocom debt restructuring process. Should the
proposal succeed, this transaction requires the approval of
different regulatory authorities and a disinvestment of the Group's
interest in Cellcom.
Free
translation from the original prepared in Spanish for publication
in Argentina
IRSA Inversiones y Representaciones Sociedad
Anónima
Summary as of December 31, 2017
I. Brief comment on the Company’s activities during the
period, including references to significant events occurred after
the end of the period.
Argentine Tax reform: Main impacts
On
December 27, 2017, the Argentine Congress approved the Tax Reform,
through Law No. 27,430, which was enacted on December 29, 2017, and
has introduced many changes to the income tax treatment applicable
to financial income. The key components of the Tax Reform are as
follows:
Income
tax
: Corporate income tax
gradually would be reduced to 30% for fiscal periods commencing
after January 1st, 2018 through December 31, 2019, and to 25% for
fiscal periods commencing after January 1st, 2020,
inclusive.
Dividends
:
Tax on dividends distributed by Argentine companies would be as
follows: (i) dividends originated from profits obtained before
fiscal year ending June 30, 2018 will not be subject to withholding
tax; (ii) dividends derived from profits generated during fiscal
years ending June 30, 2019 and 2020 paid to Argentine Individuals
and/or foreign residents, will be subject to a 7% withholding tax;
and (iii) dividends originated from profits obtained during fiscal
year ending June 30, 2021 onward will be subject to withholding tax
at a rate of 13%.
Presumptions of
dividends
: Certain facts will
be presumed to constitute dividend payments, such as: i)
withdrawals from shareholders, ii) shareholders private use of
property of the company, iii) transactions with shareholders at
values different from market values, iv) personal expenses from
shareholders or shareholder remuneration without
substance.
Revaluation of
assets
: The regulation
establishes that, at the option of the companies, tax revaluation
of assets is permitted for assets located in Argentina and affected
to the generation of taxable profits. The special tax on the amount
of the revaluation depends on the asset, being (i) 8% for real
estate not classified as inventories, (ii) 15% for real estate
classified as inventories, (iii) 5% for shares, quotas and equity
interests owned by individuals and (iv) 10% for the rest of the
assets. As of the date of these financial statements, the Group has
not exercised the option. The gain generated by the revaluation is
exempted according to article 291 of Law No. 27,430 and, the
additional tax generated by the revaluation is not
deductible.
In
addition, the Argentine tax reform contemplates other amendments
regarding the following matters: social security contributions, tax
administrative procedures law, criminal tax law, tax on liquid
fuels, and excise taxes, among others. At the date of presentation
of these financial statements, many aspects are pending regulation
by the National Executive Power.
USA Tax reform: Main impacts
In December 2017, a bill was passed to reform the federal taxation
law in the United States. The reform included a reduction of the
corporate tax rate from 35% to 21%, for the tax years 2018 and
thereafter.
IRSA Inversiones y Representaciones Sociedad
Anónima
Summary as of December 31, 2017
Consolidated Results
In Ps. Million
|
IITQ 18
|
IIQ 17
|
YoY Var
|
6M 18
|
6M 17
|
YoY Var
|
Revenues
|
22,827
|
19,044
|
19.9%
|
43,040
|
36,831
|
16.9%
|
Net gain from fair value adjustment of investment
properties
|
8,098
|
2,074
|
290.5%
|
11,502
|
3,470
|
231.5%
|
Profit from operations
|
10,599
|
3,415
|
210.4%
|
15,957
|
6,182
|
158.1%
|
Depreciation and amortization
|
1,390
|
1,261
|
10.2%
|
2,627
|
2,374
|
10.7%
|
EBITDA
|
11,989
|
4,677
|
156.3%
|
18,584
|
8,557
|
117.2%
|
Adjusted EBITDA
|
3,951
|
2,689
|
46.9%
|
7,166
|
5,191
|
38.0%
|
Profit for the period
|
10,757
|
6,472
|
66.2%
|
10,831
|
6,816
|
58.9%
|
Attributable to equity holders of the parent
|
8,365
|
3,635
|
130.1%
|
8,918
|
3,835
|
132.5%
|
Attributable to non-controlling interest
|
2,392
|
2,837
|
-15.7%
|
1,913
|
2,981
|
-35.8%
|
Consolidated revenues from sales, leases and services increased by
16
.
9% during the first semester of FY2018 compared to
the same semester of FY2017, whereas adjusted EBITDA, which
excludes the effect of the net gain from fair value adjustment not
realized of investment properties, reached Ps. 7,166 million, 38.0%
higher than in the same period of 2017.
Profit for the first semester of fiscal year 2018 reached Ps.
10
,
831 million, mainly explained by a higher net gain
from fair value adjustment on investment properties due to the
positive impact of tax reform driven by the Government, mainly in
the value of shopping malls valued through the discounted cash flow
method, and the changes in the exchange rate of our assets
denominated in U.S. dollars. This effect was partially offset by a
non-monetary effect in the operations center in Israel in September
2017, Discount Corporation (“DIC”), subsidiary of IDB
Development Corporation (“IDBD”) made a partial debt
exchange, recognizing a loss equal to the difference between the
repayment of the existing loan and the fair value of the new debt
for an approximate amount of NIS 461 million (equivalent to Ps.
2,228 million) recorded under “Financial Results” as
financial costs.
Operations Center in Argentina
II. Shopping Malls (through our subsidiary IRSA Propiedades
Comerciales S.A.)
During the first six months of fiscal year 2018, our tenants’
sales reached Ps. 21,801 million
,
22.6% higher than in the same period
of 2017. Our portfolio’s leasable area totaled 340,111 square
meters during the quarter under review, whereas the occupancy rate
stood at optimum levels of 99.1%, reflecting the quality of our
portfolio.
Shopping Malls’ Financial Indicators
(in Ps. million)
|
IITQ 18
|
IIQ 17
|
YoY Var
|
6M 18
|
6M 17
|
YoY Var
|
Revenues from sales, leases and services
|
960
|
812
|
18.2%
|
1,810
|
1,494
|
21.2%
|
Net gain from fair value adjustment of investment
properties
|
6,997
|
812
|
761.7%
|
9,041
|
1,698
|
432.4%
|
Profit from operations
|
7,725
|
1,412
|
447.1%
|
10,410
|
2,806
|
271.0%
|
Depreciation and amortization
|
6
|
8
|
-25.0%
|
12
|
13
|
-7.7%
|
EBITDA
|
7,731
|
1,420
|
444.4%
|
10,422
|
2,820
|
269.6%
|
Adjusted EBITDA
|
734
|
608
|
20.7%
|
1,381
|
1,121
|
23.1%
|
IRSA Inversiones y Representaciones Sociedad
Anónima
Summary as of December 31, 2017
Shopping Malls’ Operating Indicators
(in Ps. million, except as indicated)
|
IIQ 18
|
IQ 18
|
IVQ 17
|
IIIQ 17
|
IIQ 17
|
Total leasable area (sqm)
|
340,111
|
339,080
|
341,289
|
341,391
|
337,396
|
Tenants’ sales (3 month cumulative)
|
12,031.0
|
9,777.7
|
9,306.4
|
7,331.7
|
9,804.1
|
Occupancy
|
99.1%
|
98.8%
|
98.6%
|
98.0%
|
98.4%
|
Revenues from this segment grew 21.2% during this six-month period,
whereas adjusted EBITDA, which excludes the impact of changes in
the fair value of investment properties, reached Ps. 1,381 million
(+ 23.1% compared to the same period of 2017). The EBITDA margin
was 76.4%, 1.1 pp higher than the figure recorded in the same
semester of the previous fiscal year.
Operating data of our Shopping Malls
Shopping Mall
|
Date of Acquisition
|
Gross Leasable Area
(sqm)
(1)
|
Stores
|
IRSA Propiedades Comerciales S.A.’s Interest
|
Occupancy
(2)
|
Alto Palermo
|
Dec-97
|
18,633
|
138
|
100.0%
|
98.7%
|
Abasto Shopping
(3)
|
Nov-99
|
36,795
|
171
|
100.0%
|
100.0%
|
Alto Avellaneda
|
Dec-97
|
36,039
|
134
|
100.0%
|
99.9%
|
Alcorta Shopping
|
Jun-97
|
15,721
|
114
|
100.0%
|
99.4%
|
Patio Bullrich
|
Oct-98
|
11,503
|
92
|
100.0%
|
99.4%
|
Buenos Aires Design
|
Nov-97
|
13,735
|
61
|
53.7%
|
100.0%
|
Dot Baires Shopping
|
May-09
|
49,407
|
156
|
80.0%
|
99.9%
|
Soleil
|
Jul-10
|
15,214
|
79
|
100.0%
|
100.0%
|
Distrito Arcos
|
Dec-14
|
14,325
|
69
|
90.0%
|
100.0%
|
Alto Noa Shopping
|
Mar-95
|
19,059
|
90
|
100.0%
|
99.4%
|
Alto Rosario Shopping
(4)
|
Nov-04
|
31,507
|
149
|
100.0%
|
99.7%
|
Mendoza Plaza Shopping
|
Dec-94
|
42,867
|
141
|
100.0%
|
96.7%
|
Córdoba Shopping
|
Dec-06
|
15,317
|
106
|
100.0%
|
98.6%
|
La Ribera Shopping
(5)
|
Aug-11
|
10,530
|
68
|
50.0%
|
96.1%
|
Alto Comahue
|
Mar-15
|
9,459
|
100
|
99.1%
|
97.1%
|
Patio Olmos
(6)
|
Sep-07
|
|
|
|
|
Total
|
|
340,111
|
1,668
|
|
99.1%
|
(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 period.
(3) Excludes Museo de los Niños (3,732 square
meters).
(4) Excludes Museo de los Niños (1,261 square
meters).
(5) Through our joint venture Nuevo Puerto Santa Fe
S.A.
(6) IRSA CP owns the historic building of the Patio Olmos shopping
mall in the province of Córdoba, operated by a third
party.
IRSA Inversiones y Representaciones Sociedad
Anónima
Summary as of December 31, 2017
Cumulative tenants’ sales as of December 31
(per Shopping Mall, for the quarter of each fiscal year, in Ps.
million)
Shopping mall
|
IIQ 18
|
IIQ 17
|
YoY Var
|
6M 18
|
6M 17
|
YoY Var
|
Alto Palermo
|
1,446.9
|
1,234.6
|
17.2%
|
2,576.7
|
2,208.0
|
16.7%
|
Abasto Shopping
|
1,573.7
|
1,322.7
|
19.0%
|
2,891.1
|
2,424.0
|
19.3%
|
Alto Avellaneda
|
1,521.4
|
1,236.5
|
23.0%
|
2,726.8
|
2,245.0
|
21.5%
|
Alcorta Shopping
|
813.3
|
682.3
|
19.2%
|
1,417.9
|
1,181.4
|
20.0%
|
Patio Bullrich
|
447.3
|
376.6
|
18.8%
|
782.9
|
657.1
|
19.1%
|
Buenos Aires Design
|
172.4
|
139.3
|
23.8%
|
342.7
|
269.7
|
27.1%
|
Dot Baires Shopping
|
1,366.9
|
1,116.4
|
22.4%
|
2,386.1
|
1,959.2
|
21.8%
|
Soleil
|
610.5
|
453.1
|
34.7%
|
1,141.7
|
853.2
|
33.8%
|
Distrito Arcos
|
527.5
|
420.0
|
25.6%
|
967.1
|
739.5
|
30.8%
|
Alto Noa Shopping
|
522.9
|
424.7
|
23.1%
|
968.1
|
797.0
|
21.5%
|
Alto Rosario Shopping
|
1,089.4
|
885.2
|
23.1%
|
2,008.6
|
1,626.0
|
23.5%
|
Mendoza Plaza Shopping
|
894.2
|
706.9
|
26.5%
|
1,690.7
|
1,354.6
|
24.8%
|
Córdoba Shopping
|
415.0
|
337.6
|
22.9%
|
736.3
|
607.2
|
21.3%
|
La Ribera Shopping
(1)
|
274.1
|
198.4
|
38.2%
|
520.1
|
379.2
|
37.2%
|
Alto Comahue
|
355.5
|
269.7
|
31.8%
|
644.0
|
486.2
|
32.5%
|
Total
|
12,031.0
|
9,804.0
|
22.7%
|
21,800.8
|
17,787.3
|
22.6%
|
(1) Through our joint venture Nuevo Puerto Santa Fe
S.A.
Cumulative tenants’ sales as of December 31
(per Type of Business, in Ps. million)
Type of Business
|
IIQ 18
|
IIQ 17
|
YoY Var
|
6M 18
|
6M 17
|
YoY Var
|
Anchor Store
|
696.9
|
527.7
|
32.1%
|
1,237.5
|
945.2
|
30.9%
|
Clothes and Footwear
|
6,701.5
|
5,586.8
|
19.4%
|
11,687.2
|
9,732.0
|
20.1%
|
Entertainment
|
236.0
|
201.5
|
17.1%
|
651.7
|
545.5
|
19.5%
|
Home
|
311.7
|
252.1
|
23.6%
|
590.4
|
471.5
|
25.2%
|
Restaurant
|
1,126.7
|
871.4
|
29.3%
|
2,329.8
|
1,771.8
|
31.5%
|
Miscellaneous
|
1,465.5
|
1,208.5
|
21.3%
|
2,572.0
|
2,122.0
|
21.2%
|
Services
|
110.5
|
53.4
|
106.9%
|
213.0
|
108.2
|
96.9%
|
Electronic appliances
|
1,382.2
|
1,102.6
|
25.4%
|
2,519.2
|
2,091.1
|
20.5%
|
Total
|
12,031.0
|
9,804.0
|
22.7%
|
21,800.8
|
17,787.3
|
22.6%
|
Revenues from cumulative leases as of December 31
(Breakdown per quarter of each fiscal year, in Ps.
million)
|
IIQ 18
|
IIQ 17
|
YoY Var
|
6M 18
|
6M 17
|
YoY Var
|
Base rent
(1)
|
503.6
|
411.0
|
22.5%
|
973.9
|
785.8
|
23.9%
|
Percentage rent
|
247.6
|
232.4
|
6.5%
|
418.5
|
382.7
|
9.4%
|
Total rent
|
751.2
|
643.4
|
16.8%
|
1,392.4
|
1,168.5
|
19.2%
|
Revenues from non-traditional advertising
|
27.5
|
16.2
|
69.7%
|
44.3
|
32.3
|
37.2%
|
Admission rights
|
77.2
|
63.7
|
21.1%
|
150.5
|
125.6
|
19.8%
|
Fees
|
14.6
|
11.9
|
23.2%
|
28.3
|
22.6
|
25.1%
|
Parking
|
59.0
|
48.9
|
20.5%
|
119.0
|
95.0
|
25.3%
|
Commissions
|
27.3
|
23.7
|
15.2%
|
69.3
|
45.0
|
54.0%
|
Others
|
3.1
|
4.1
|
-24.2%
|
5.8
|
6.3
|
-8.7%
|
Revenues from sales, leases and services
|
959.9
|
812.0
|
18.2%
|
1,809.5
|
1,495.3
|
21.0%
|
(1)
Includes Revenues
from stands for Ps. 101.6 million.
IRSA Inversiones y Representaciones Sociedad
Anónima
Summary as of December 31, 2017
III. Offices
The A+ office market in the City of Buenos Aires remains robust.
The price of Premium commercial spaces stood at USD 4,600 per
square meter. Rental prices remained at the same levels as in the
previous year, averaging USD 30 per square meter for the A+
segment, and vacancy continues to fall, reaching 3.30% as of
December 2017.
As concerns the A+ office market in the Northern Area, we have
noted a significant improvement in the price of units during the
last 10 years, and we believe in its potential during the next
years. Rental prices have remained at USD 27 per square
meter.
Sale and Rental Prices of A+ Offices – City of Buenos
Aires
Source: LJ
Ramos
Sale and Rental Prices of A+ Offices – Northern
Area
Source: LJ
Ramos
IRSA Inversiones y Representaciones Sociedad
Anónima
Summary as of December 31, 2017
During
the first six months of fiscal year 2018, revenues from the offices
segment increased 15.7% as compared to the same period of 2017,
whereas Adjusted EBITDA from this segment reached Ps. 211 million,
1.4% lower than in the previous year, mainly due to
the realized gain
registered in IIQ 17 for the additional purchase of 30% of
Entertainment Holdings S.A. whose share, passing to be a controlled
company, was revalued at fair value.
Rental prices in USD per sqm increased, reaching
USD 26.9 per sqm.
The EBITDA margin from the offices segment reached
84%.
|
IIQ 18
|
IIQ 17
|
YoY Var
|
6M 18
|
6M 17
|
YoY Var
|
Revenues
|
129
|
116
|
11.2%
|
251
|
217
|
15.7%
|
Net gain from fair value adjustment of investment
properties
|
605
|
1,358
|
-55.4%
|
885
|
1,505
|
-41.2%
|
Profit from operations
|
709
|
1,489
|
-52.4%
|
1,093
|
1,713
|
-36.2%
|
Depreciation and Amortization
|
3
|
6
|
-50.0%
|
3
|
6
|
-50.0%
|
EBITDA
|
712
|
1,495
|
-52.4%
|
1,096
|
1,719
|
-36.2%
|
Adjusted EBITDA
|
107
|
137
|
-21.9%
|
211
|
214
|
-1.4%
|
|
IIQ 18
|
IQ 18
|
IVQ 17
|
IIIQ 17
|
IIQ 17
|
Gross
leasable area
|
85,378
|
85,378
|
85,784
|
86,682
|
87,232
|
Occupancy
|
93.2%
|
96.2%
|
96.2%
|
97.9%
|
100.0%
|
Rent
(ARS/sqm)
|
505
|
464
|
436
|
409
|
414
|
Rent
(USD/sqm)
|
26.9
|
26.8
|
26.2
|
26.2
|
26.1
|
Below is information on our offices and other rental
properties’ segment as of December 31, 2017.
|
Date of Acquisition
|
Leasable Area sqm
(1)
|
Occupancy Rate
(2)
|
IRSA’s Effective Interest
|
Offices
|
|
|
|
|
Edificio República
(3)
|
04/28/08
|
19,885
|
94%
|
100%
|
Torre Bankboston
(3)
|
08/27/07
|
14,873
|
86%
|
100%
|
Intercontinental Plaza
(3)
|
11/18/97
|
3,876
|
100%
|
100%
|
Bouchard 710
(3)
|
06/01/05
|
15,014
|
100%
|
100%
|
Maipú 1300
(4)
|
09/28/95
|
397
|
-
|
100%
|
Libertador 498
|
12/20/95
|
620
|
100%
|
100%
|
Suipacha 652/64
(3)
|
11/22/91
|
11,465
|
86%
|
100%
|
Dot Building
(3)(7)
|
11/28/06
|
11,242
|
100%
|
80%
|
Philips
(3)
(7)
|
06/05/17
|
8,006
|
24%
|
100%
|
Subtotal Offices
|
|
85,378
|
93.2%
|
|
Other
Properties
|
|
|
|
|
Santa María del Plata S.A.
|
17/10/97
|
116,100
|
91%
|
100%
|
Ex – Nobleza Piccardo
(5)
|
05/31/11
|
109,610
|
89%
|
50%
|
Other Properties
(6)
|
|
22,654
|
67%
|
|
Subtotal Other Properties
|
|
248,364
|
88%
|
|
TOTAL OFFICES AND OTHERS
|
|
333,743
|
90%
|
|
(1)
Total leasable area
for each property as of December 31, 2017. Excludes common areas
and parking.
(2)
Calculated dividing
occupied sqm by leasable area as of December 31, 2017.
(3)
Through IRSA
Propiedades Comerciales S.A.
(4)
As of December 31,
2017, a sale ticket with possession for the remaining meters of the
Maipú 1300 building has been signed. The title deed of the
building has not yet been signed.
(5)
Through Quality
Invest S.A.
(6)
Includes the
following properties: Dot adjacent plot, Intercontinental plot,
Anchorena 665, Chanta IV, Ferro, Puerto Retiro, Abril Manor House,
Constitución 1111 and Rivadavia 2774.
(7) As
of December 31, 2017, 24% of the sqm of the Philips Building had
been taken over, which were included in the calculation of the
average occupation of IIT 17.
IRSA Inversiones y Representaciones Sociedad
Anónima
Summary as of December 31, 2017
IV. Sales and Developments
|
IQ 18
|
IVQ 17
|
IIIQ 17
|
IIQ 17
|
IQ 17
|
IQ 18
|
Revenues from sales, leases and services
|
20
|
0
|
100.0%
|
54
|
1
|
5,300.0%
|
Net gain from fair value adjustment of investment
properties
|
353
|
-195
|
-281.0%
|
550
|
-158
|
-448.1%
|
Profit from operations
|
342
|
-245
|
-239.6%
|
523
|
-229
|
-328.4%
|
Depreciation and amortization
|
0
|
0
|
0.0%
|
0
|
0
|
0.00%
|
EBITDA
|
342
|
-245
|
-239.6%
|
523
|
-229
|
-328.4%
|
Adjusted EBITDA
|
-11
|
-50
|
-78.0%
|
-27
|
-71
|
-62.0%
|
For
the six months’ period of fiscal year 2018, adjusted EBITDA
from the Sales and Developments segment was a loss of Ps. 27
million as compared to a loss of Ps. 71 million during the first
semester of 2017, due to the sale of apartment units and parking
spaces in Astor Beruti, a floor and parking spaces from the
building Maipú 1300 and the sale of the Baicom
plot.
V. CAPEX 2018
Alto Palermo Expansion
The expansion project of Alto Palermo shopping mall will add a
gross leasable area of approximately 4,000 square meters to the
shopping mall with the highest sales per square meter in our
portfolio and it consists in moving the food court to a third level
by using the area of an adjacent building acquired in 2015.
Demolition was completed in FY2017, and the expansion works are
estimated to start during this fiscal year 2018.
First Stage of Polo Dot
The project called “Polo Dot”, located in the
commercial complex adjacent to our Dot Baires shopping mall, has
experienced significant growth since our first investments in the
area. The total project will consist in 3 office buildings (one of
them could include a hotel) in land reserves owned by the Company
and the expansion of the shopping mall by approximately 15,000
square meters of gross leasable area. At a first stage, we will
develop an 11-floor office building with an area of approximately
32,000 square meters on an existing building, in respect of which
we have already executed lease agreements for almost all the
footage. As of December 31, 2017, degree of progress was 44%. The
second stage of the project will include two office/hotel buildings
that will add 38,400 square meters of gross leasable area to the
complex. We have seen a significant demand for Premium office
spaces in this new commercial hotspot, and we are confident that we
will be able to open these buildings with attractive rent levels
and high occupancy.
IRSA Inversiones y Representaciones Sociedad
Anónima
Summary as of December 31, 2017
Catalinas Building
The building to be constructed will have 35,000 square meters of
gross leasable area consisting of 30 office floors and 316 parking
spaces, and will be located in the “Catalinas” area in
the City of Buenos Aires, one of the most sought-after spots for
Premium office development in Argentina. The Company owns 16,000
square meters consisting of 14 floors and 142 parking spaces in the
building project. Construction works started during the second
quarter of FY2017, and are expected to be completed in about 3
years. As of December 31, 2017, work progress was
8.6%.
Other Projects
We will build 2,200 sqm to add 6 cinema screens in Alto Comahue, a
large store of 2,400 sqm in Alto Rosario shopping mall, 12,800 sqm
mainly in a Sodimac store in Mendoza Plaza Shopping, and we will
expand by 3,000 sqm Alto Avellaneda, our shopping mall located in
the southern region of Buenos Aires. In addition, we will continue
working on optimizing the performance of our current properties
through improvements that allow us to take best advantage of their
GLA potential and to furnish them with increased functionality and
appeal for the benefit of consumers and tenants alike.
For the first six months of fiscal year 2018, revenues from the
hotel segment grew 28.2%, mainly due to the increase in the average
rate per room and a 3.1% rise in the occupancy rate, which reached
71.5% in IIQ18. However, this segment’s EBITDA totaled Ps. 29
million during the semester under review.
Hotels (in millions of ARS)
|
IITQ 18
|
IIQ 17
|
YoY Var
|
6M 18
|
6M 17
|
YoY Var
|
Revenues
|
264
|
200
|
32.0%
|
478
|
373
|
28.2%
|
(Loss) / profit from operations
|
24
|
23
|
4.3%
|
22
|
27
|
-18.5%
|
Depreciation and amortization
|
3
|
3
|
0.0%
|
7
|
7
|
0.0%
|
EBITDA
|
27
|
26
|
3.8%
|
29
|
33
|
-14.7%
|
|
IIQ 18
|
IQ 18
|
IVQ 17
|
IIIQ 17
|
IIQ 17
|
Average
Occupancy
|
71.5%
|
68.4%
|
67.3%
|
69.6%
|
69.1%
|
Average
Rate per Room (ARS/night)
|
3,420
|
3,290
|
2,803
|
2,873
|
2,784
|
Average
Rate per Room (USD/night)
|
195
|
190
|
181
|
186
|
182
|
The following is information on our hotel segment as of December
31, 2017:
Hotels
|
Date of
Acquisition
|
IRSA’s
Interest
|
Number
of Rooms
|
Average
Occupancy
(1)
|
Average
Rate
(2)
|
Intercontinental (3)
|
11/01/97
|
76.34%
|
309
|
74.6%
|
2,538
|
Sheraton Libertador (4)
|
03/01/98
|
80.00%
|
200
|
81.1%
|
2,416
|
Llao Llao (5)
|
06/01/97
|
50.00%
|
205
|
57.6%
|
6,520
|
Total
|
-
|
|
714
|
71.5%
|
3,420
|
1)
Cumulative average for the 6-months period.
2)
Cumulative average for the 6-months period.
3)
Through Nuevas Fronteras S.A. (IRSA’s
subsidiary).
4)
Through Hoteles Argentinos S.A. (IRSA’s
subsidiary).
5)
Through Llao Llao Resorts S.A. (IRSA’s
subsidiary).
IRSA Inversiones y Representaciones Sociedad
Anónima
Summary as of December 31, 2017
Lipstick Building, New York, United States
The Lipstick Building is a landmark building in the City of New
York, located at Third Avenue and 53
th
Street in Midtown Manhattan, New York.
It was designed by architects John Burgee and Philip Johnson (Glass
House and Seagram Building, among other renowned works) and it is
named after its elliptical shape and red façade. Its gross
leasable area is approximately 57,500 sqm and consists of 34
floors.
As of December 31, 2017, the building reached an occupancy rate of
94.7%, thus generating an average rent of USD 71.6 per
sqm.
Lipstick
|
Dec-17
|
Dec-16
|
YoY Var
|
Gross Leasable Area (sqm)
|
58,092
|
58,092
|
0.0%
|
Occupancy
|
94.7%
|
96.6%
|
-1.93
|
Rental price (USD/sqm)
|
71.6
|
68.9
|
3.9%
|
Investment in Condor Hospitality Inc.
We maintain our 28.2% investment in the Condor Hospitality Trust
hotel REIT’s voting rights (NASDAQ: CDOR) through our
subsidiary Real Estate Strategies L.P. (“RES”), in
which we hold a 66.83% interest. Condor is a REIT listed in Nasdaq
focused on medium-class and long-stay hotels located in various
states of the United States of America, operated by various
operators and franchises.
During the semester under review, the company’s results have
shown an improvement in operating levels and it has continued with
its strategy of selectively disposing of lower-class hotels at very
attractive prices and replacing them with higher-class
hotels.
VIII. Financial
Operations
,
Corporate and
Others
Interest in Banco Hipotecario S.A. (“BHSA”) through
IRSA
BHSA is a leading bank in the mortgage lending industry, in which
IRSA held an equity interest of 29.91% as of December 31, 2017
(excluding treasury shares). During the first six months of fiscal
year 2018, the investment in Banco Hipotecario generated income of
Ps. 410.0 million, compared to income of Ps. 38 million in the same
period of 2017, mainly due to the increase in the present value of
the bank’s financial assets. For further information,
visit
http://www.cnv.gob.ar
or
http://www.hipotecario.com.ar
.
IRSA Inversiones y Representaciones Sociedad
Anónima
Summary as of December 31, 2017
Operations Center in Israel
IX. Investment in IDB Development Corporation
As of December 31, 2017, IRSA’s indirect equity interest
reached 100% of IDBD’s stock capital.
Below is comparative segment information on our operations center
in Israel for the period from July 1 to September 30 of both fiscal
years.
Real Estate (Property & Building - PBC) - Ps. MM
|
IIQ 18
|
IIQ 17
|
YoY Var
|
6M 18
|
6M 17
|
Var a/a
|
Revenues
|
1,506
|
1,443
|
4.4%
|
2,503
|
2,492
|
0.4%
|
Net gain from fair value adjustment of investment
properties
|
228
|
637
|
-64.3%
|
1,150
|
973
|
18.2%
|
Profit from operations
|
1,118
|
1,194
|
-6.4%
|
2,700
|
2,086
|
29.4%
|
Depreciation and amortization
|
5
|
5
|
0.0%
|
14
|
12
|
16.7%
|
EBITDA
|
1,123
|
1,199
|
-6.3%
|
2,714
|
2,098
|
29.4%
|
Adjusted EBITDA
|
895
|
562
|
59.3%
|
1,564
|
1,125
|
39.0%
|
It should be clarified that the Argentine peso suffered a 21%
devaluation on the one year period that started on September 2016.
The Real Estate segment recorded a decrease in its revenues in the
first half of fiscal year 2018 compared with the same semester of
2017 (taking into account the devaluation) mainly due to less
availability of apartments available for sale offset by an increase
in rents of projects completed in 2017 and an increase in the value
of rents. Adjusted EBITDA for the first semester of 2018 reached
Ps. 1,624 million, increasing 42.0% with respect to the same
semester of 2017.
Supermarkets (Shufersal) - $ MM
|
IIQ 18
|
IIQ 17
|
YoY Var
|
Var a/a
|
6M 18
|
6M 17
|
Revenues
|
14,672
|
11,972
|
22.6%
|
27,854
|
23,439
|
18.8%
|
Profit from operations
|
519
|
358
|
45.0%
|
1,008
|
743
|
35.7%
|
Depreciation and amortization
|
428
|
327
|
30.9%
|
801
|
629
|
27.3%
|
EBITDA
|
947
|
685
|
38.2%
|
1,809
|
1,372
|
31.9%
|
The supermarket segment recorded an increase of 18.8% in revenues
and 31.9% in EBITDA in the six months FY18 compared to the same
period of 2017. The higher results in pesos are explained by the
devaluation. The growth was lower than the devaluation mainly due
to the seasonality of the Jewish holidays, which are within the
semester 2018 but not so during the first semester of 2017, this
fall in sales is offset by a better sales mix and growth of the own
brand of Shufersal.
Telecommunications (Cellcom) - $ MM
|
IIQ 18
|
IIQ 17
|
YoY Var
|
6M 18
|
6M 17
|
Var a/a
|
Revenues
|
4,839
|
3,907
|
23.9%
|
9,065
|
7,748
|
17.0%
|
Profit from operations
|
27
|
-51
|
-152.9%
|
199
|
12
|
1,558.3%
|
Depreciation and amortization
|
932
|
822
|
13.4%
|
1,762
|
1,602
|
10.0%
|
EBITDA
|
959
|
771
|
24.4%
|
1,961
|
1,614
|
21.5%
|
The Telecommunications segment recorded a 17% rise in its revenues
due to the effect of the devaluation of the Argentine peso. In
Israeli currency, revenues fell slightly in IIQ18 in comparison to
IIQ17 as a result of a decline in revenues from the mobile segment
offset by an increase in fixed line segment revenues. Operating
Income increased by 1,558.3% reaching Ps. 199 million, of which Ps.
145 million comes from the sale of Rimon, a subsidiary of
Cellcom.
IRSA Inversiones y Representaciones Sociedad
Anónima
Summary as of December 31, 2017
Others (Corporate expenses and other subsidiaries) - $
MM
|
IIQ 18
|
IIQ 17
|
YoY Var
|
6M 18
|
6M 17
|
Var a/a
|
Revenues
|
10
|
200
|
-95.0%
|
199
|
342
|
-41.8%
|
Loss from operations
|
329
|
-138
|
-338.4%
|
291
|
-264
|
-210.2%
|
Depreciation and amortization
|
10
|
92
|
-89.1%
|
23
|
106
|
-78.3%
|
EBITDA
|
339
|
-46
|
-837.00%
|
314
|
-158
|
-298.7%
|
As concerns “Clal”, the Group values its
holding in this insurance company as a financial asset at market
value. The variation in the share price of CLAL during the semester
2018 generated a profit for the period of Ps. 368 million, while in
the first semester of 2017 the profit was Ps. 1,278.
X. Reconciliation with Consolidated Income Statement (ARS
million)
Below is an explanation of the reconciliation of the
Company’s income by segment with its consolidated income
statement. The difference lies in the presence of joint ventures
included in the segment but not in the income
statement.
|
Total as per Segment information
|
Adjustment for share of profit/(loss) of Joint Ventures
*
|
Expenses and Collective Promotion Funds
|
Adjustment to income for elimination of inter-segment
transactions
|
Total as per Statement of Income
|
Revenues
|
42,214
|
-28
|
860
|
-6
|
43,040
|
Costs
|
-28,413
|
11
|
-876
|
1
|
-29,277
|
Gross profit
|
13,801
|
-17
|
-16
|
-5
|
13,763
|
Net gain from fair value adjustment of investment
properties
|
11,626
|
-124
|
-
|
-
|
11,502
|
General and administrative expenses
|
-2,214
|
13
|
-
|
6
|
-2,195
|
Selling expenses
|
-7,721
|
4
|
-
|
-
|
-7,717
|
Other operating results, net
|
589
|
16
|
-
|
-1
|
604
|
Profit / (loss) from operations
|
16,081
|
-108
|
-16
|
-
|
15,957
|
Share of profit of associates and joint ventures
|
233
|
160
|
-
|
-
|
393
|
Net segment profit before financial results and income
tax
|
16,314
|
52
|
-16
|
-
|
16,350
|
*
Includes Puerto Retiro,
Baicom, CYRSA, Nuevo Puerto Santa Fe and Quality (San Martín
plot).
IRSA Inversiones y Representaciones Sociedad
Anónima
Summary as of December 31, 2017
XI. Financial Debt and Other Indebtedness
Operations Center in Argentina
Financial debt as of December 31, 2017:
Description
|
Currency
|
Amount
(1)
|
Interest Rate
|
Maturity
|
Bank overdrafts
|
ARS
|
5.6
|
Floating
|
< 360 days
|
IRSA 2020 Series II Non-Convertible Notes.
|
USD
|
71.4
|
11.50%
|
Jul-20
|
Series VII Non-Convertible Notes
|
ARS
|
20.6
|
Badlar + 299
|
Sep-19
|
Series VIII Non-Convertible Notes
|
USD
|
184.5
|
7.00%
|
Sep-19
|
ICBC Dubai Loan
|
USD
|
50.0
|
5.95%
|
Feb-22
|
ICBC Loan
|
ARS
|
6.7
|
21.20%
|
May-18
|
IRSA’s Total Debt
|
|
338.9
|
|
|
IRSA’s Cash + Cash Equivalents + Investments
(2)
|
USD
|
4.0
|
|
|
IRSA’s Net Debt
|
USD
|
334.9
|
|
|
Bank overdrafts
|
ARS
|
1.3
|
Floating
|
< 360 d
|
CAPEX Citi 5600 loan
|
ARS
|
0.1
|
Fixed
|
Jan-18
|
ICBC loan
|
ARS
|
4.0
|
Fixed
|
May-18
|
IRCP Class IV Non-Convertible Notes
|
USD
|
140.0
|
5.0%
|
Sep-20
|
IRSA CP Class II Non-Convertible Notes
|
USD
|
360.0
|
8.75%
|
Mar-23
|
IRSA CP’s Total Debt
|
|
505.4
|
|
|
Cash + Cash Equivalents + Investments
(3)
|
|
314.8
|
|
|
IRSA CP’s Net Debt
|
|
190.6
|
|
|
(1)
Principal amount in
USD (million) at an exchange rate of Ps. 18.65/USD, without
considering accrued interest or eliminations of balances with
subsidiaries.
(2)
“IRSA’s
Cash & Cash Equivalents plus Investments” includes
IRSA’s Cash & Cash Equivalents + IRSA’s Investments
in current and non-current financial assets.
(3)
“IRSA
CP’s Cash & Cash Equivalents plus Investments”
includes IRSA CP’s Cash and cash equivalents + Investments in
Current Financial Assets and our holding in TGLT's convertible
Notes.
Operations Center in Israel
Net financial debt (USD million)
Indebtedness
(1)
|
|
Amount
|
IDBD
|
|
704
|
DIC
|
|
978
|
(1)
Net Debt as of
September 30, 2017 according to the companies Separate Statutory
Financial Statements.
On September 28, 2017 DIC offered the holders of NCN Series F to
swap their notes for NCN Series J. NCN Series J terms and
conditions differ substantially from those of Series F. Therefore,
DIC recorded the payment of NCN Series F and recognized a new
financial commitment at fair value for NCN Series J. As a result of
the swap, DIC recorded a loss resulting from the difference between
the NCN Series F cancellation value and the new debt value in the
amount of approximately NIS 461 (equal to approximately Ps. 2,228
as of that date), which was accounted for under “Financial
costs”
.
IRSA Inversiones y Representaciones Sociedad
Anónima
Summary as of December 31, 2017
XII. Material and Subsequent Events
Operations Center in Argentina
October 2017: Lipstick’s Debt Refinancing
In October 2017, in light of the approaching maturity of the USD
113.1 million non-recourse-to-IRSA debt owed by Metropolitan 885
3rd Ave (“Metropolitan”), owner of the Lipstick
Building, the term of such debt was extended to April 30, 2020 with
respect to an amount of USD 53.1 million, and USD 40
million were repaid in cash. Out of this sum, IRSA contributed
USD 20 million, and an additional reduction of debt in an
amount of USD 20 million was obtained from the lender
bank.
In addition, as a result of the negotiations held, a reduction in
the interest rate of this loan from Libor + 4% to Libor + 2% was
achieved.
October 2017: Sale of Equity Interest in IRSA Propiedades
Comerciales
On October 26, 2017, IRSA completed the sale in the secondary
market of 10,240,000 ordinary shares of IRSA CP, N.V. Ps. 1 per
share, represented by American Depositary Shares
(“ADSs”), representing four ordinary shares each, which
represents nearly 8.1% of IRSA CP capital for a total amount of Ps.
2,440 million (USD 138 million). After the transaction,
IRSA’s direct and indirect interest in IRSA CP amounts to
approximately 86.5%. This transaction was accounted in equity as an
increase in the equity attributable to the parent for an amount of
Ps. 271 million, net of taxes.
October 2017: General Ordinary and Extraordinary
Shareholders’ Meeting
At the General Ordinary and Extraordinary Shareholders’
Meeting held on October 31, 2017, the following matters,
inter alia,
were resolved:
●
Distribution
of a cash dividend for Ps. 1,400 million.
●
Fees
payable to the Board of Directors and Supervisory Committee for
fiscal year 2017 closed as of June 30, 2017.
●
Renewal
of regular and alternate directors due to expiration of their terms
and appointment of new alternate director.
●
Creation
of a new Global Note Program for up to USD 350
million.
November 2017: Payment of cash dividend
At the Board meeting held on November 1, 2017, it was resolved to
make available to the shareholders, as from November 14, 2017, a
cash dividend of Ps. 1,400,000,000 (Argentine legal tender)
equivalent to 241
.
931389433% of the Stock Capital, i.e., an amount
per share (Ps. 1 par value) of $2.41931389433 and an amount per ADR
(Argentine Pesos per ADR) of $24.1931389433 to be charged against
the fiscal year ended June 30, 2017, which was paid to all the
shareholders recorded as such as of November 13, 2017, according to
the register kept by Caja de Valores S.A.
Operations Center in Israel
November 2017: Purchase of DIC shares by Dolphin
As mentioned in Note 7 to the Consolidated Financial Statements as
of June 30, 2017, in connection with the Promotion of Competition
and Reduction of Concentration Law in Israel, after June 30, 2017,
Dolphin Netherlands B.V. made a non-binding tender offer for the
acquisition of all DIC shares held by IDBD. For purposes of the
transaction, a committee of independent directors has been set up
to assess the tender offer and negotiate the terms and conditions.
The Audit Committee has issued an opinion without reservations as
to the transaction in accordance with the terms of section 72 et
al. of the Capital Markets Law N° 26,831.
IRSA Inversiones y Representaciones Sociedad
Anónima
Summary as of December 31, 2017
In November 2017, Dolphin IL Investment Ltd. (Dolphin IL), a
subsidiary of Dolphin Netherlands B.V., has subscribed the final
documents for the acquisition of the total shares owned by IDBD in
DIC.
The transaction has been made for an amount of NIS 1,843 million
(equivalent to NIS 17.20 per share of DIC). The consideration was
paid NIS 70 million in cash (equivalent to Ps. 348 million as of
the date of the transaction) and NIS 1,773 million (equivalent to
Ps. 8,814 million as of the date of the transaction) was financed
by IDBD to Dolphin, maturing in five years, with the possibility of
an extension of three additional years in tranches of one year
each, that will accrue an initial interest of 6.5% annually, which
will increase by 1% annually in case of extension for each year.
Furthermore, guarantees have been implemented for IDBD, for IDBD
bondholders and their creditors, through pledges of different
degree of privilege over DIC shares resulting from the purchase.
Moreover, a pledge will be granted in relation to 9,636,097
(equivalent to 6.38%) of the shares of DIC that Dolphin currently
holds in the first degree of privilege in favor of IDBD and in
second degree of privilege in favor of IDBD's creditors. This
transaction has no effect in the Groups consolidation structure and
has been accounted in equity as a decrease in the equity
attributable to the parent for an amount of Ps. 114
million.
It should be noted that the financial position of IDBD and its
subsidiaries at the Operations Center in Israel does not affect the
financial position of IRSA and subsidiaries at the Operations
Center in Argentina. In addition, the commitments and other
covenants resulting from IDBD’s financial debt do not have
impact on IRSA since such indebtedness has no recourse against IRSA
and it is not granted by IRSA’s assets.
November
2017: Tender offer for Clal
In July 2017, IDBD received a non-binding offer from an
international group for the potential acquisition of its entire
interest in Clal. The consideration will be based on the equity
value of Clal, in accordance with Clal Financial Statement at the
time of specifying the transaction and is subject to the
performance of a due diligence and the execution of an agreement,
as well as getting the approvals required by law. IDBD is analyzing
the offer. On June 30, 2017, this value amounted to NIS 4,880
million (equivalent to approximately Ps. 23,278 million as of the
date of these Financial Statements), at the proportionate equity
interest as of the date of the transaction. In November 2017 the
period to perform each party undertaking expired. However, the
parties are continuing to conduct negotiations in connection with
the sale of the sold shares.
There
is no certainty that the offer will go forward under the terms
offered, or that the transaction will be
completed.
December 2017: Purchase of IDBD shares by IFISA
In December 1, 2017, Dolphin Netherlands BV (Dolphin),
has executed a share purchase agreement for all of the
shares that IFISA held of IDBD, which amounted to 31.7% of the
capital stock. In this way, as of the end of December 31, 2017,
Dolphin controls 100% of IDBD's shares.
The transaction was made at a price of NIS 398 million
(equivalent to NIS 1.968 per share and approximately to Ps. 1,968
million as of the date of the transaction). As consideration of the
transaction all receivables from IFISA to Dolphin have been
canceled plus a payment of USD 33.7 million (equivalents to Ps. 588
million as of the date of the transaction). This transaction was
accounted in equity as a decrease in the equity attributable to the
parent for an amount of Ps. 2,923 million.
December 2017: Sale of Shufersal shares
On December 24, 2017, DIC sold shares of Shufersal, in a manner
whereby its equity interest decreased from 53.30% to 50.12%. The
consideration with respect to the sale of the aforementioned shares
amounted to NIS 169.5 million (equivalent to Ps 847 million as of
the date of the transaction). This transaction was accounted in
equity as an increase in the equity attributable to the parent for
an amount of Ps 385 million.
December 2017: New Pharm Acquisition
As mentioned in Note 4.G to the Consolidated Financial Statements
as of June 30, 2017, Shufersal entered into an agreement for the
purchase of the shares of New Pharm Drugstores Ltd. ("New Pharm"),
representative of 100% of that Company’s share capital. On
December 20, 2017, the transaction was completed and Shufersal is
the sole shareholder of New Pharm, after the sale of one of its
stores and the approval by the antitrust committee. The total
consideration was NIS 151 millones (equivalent to Ps. 734 millones
as of the date of the transaction).
IRSA Inversiones y Representaciones Sociedad
Anónima
Summary as of December 31, 2017
The Group is working on the allocation of the purchase price of the
net assets acquired. The information below is preliminar and is
subject to change.
The following table summarizes the consideration, the fair values
of the assets acquired and the liabilities assumed.
|
|
December 2017
|
Identified assets and liabilities:
|
|
|
|
|
|
Assets
|
|
850
|
Liabilities
|
|
926
|
Total identified net assets
|
|
-76
|
Goodwill (pending allocation)
|
|
810
|
Total consideration
|
|
734
|
February 2018: Eurocom purchase offer
On February 4, 2018, DIC made a binding offer for the acquisition
in stages of Eurocom Communications Ltd ("Eurocom"), a private
Israeli group whose business is developed in the communications,
real estate and renewable energy industries. Eurocom is Bezeq's
parent company (an Israel's leading telecommunications company).
The proposal must be approved by Eurocom and by the authorities and
creditors involved in the Eurocom debt restructuring process.
Should the proposal succeed, this transaction requires the approval
of different regulatory authorities and a divestment of the group's
holding in Cellcom.
XIII. Comparative Summary Consolidated Balance Sheet
Data
|
12.31.17
|
12.31.16
|
Non-current assets
|
180,626
|
144,551
|
Current assets
|
79,912
|
58,690
|
Total Assets
|
260,538
|
203,241
|
Capital and reserves attributable to equity holders of the
parent
|
30,585
|
25,293
|
Non-controlling interest
|
27,221
|
18,868
|
Total shareholders’ equity
|
57,806
|
44,161
|
Non-current liabilities
|
154,680
|
117,917
|
Current liabilities
|
48,052
|
41,163
|
Total Liabilities
|
202,732
|
159,080
|
Total liabilities and shareholders’ equity
|
260,538
|
203,241
|
XIV. Summary Consolidated Income Statement Data
|
12.31.17
|
12.31.16
|
Profit from operations
|
15,957
|
6,182
|
Share of profit of associates and joint ventures
|
393
|
62
|
Profit before financial results and income tax
|
16,350
|
6,244
|
Finance income
|
650
|
510
|
Finance expenses
|
-8,069
|
-4,715
|
Other financial results
|
1,196
|
1,531
|
Financial results, net
|
-6,223
|
-2,674
|
Income before income tax
|
10,127
|
3,570
|
Income tax expense
|
497
|
-1,027
|
Profit for the period from continuing operations
|
10,624
|
2,543
|
I
ncome / (loss) for the period
from discontinued operations after income tax
|
207
|
4,273
|
Profit for the period
|
10,831
|
6,816
|
Other comprehensive (loss) / income for the period
|
161
|
550
|
Comprehensive net (loss) / income for the period
|
10,992
|
7,366
|
|
|
|
Attributable
to
:
|
|
|
Equity holders of the parent
|
8,918
|
3,835
|
Non-controlling interest
|
1,913
|
2,981
|
IRSA Inversiones y Representaciones Sociedad
Anónima
Summary as of December 31, 2017
XV. Comparative Summary Consolidated Cash Flow Data
|
12.31.17
|
12.31.16
|
Net cash generated by operating activities
|
6,807
|
4,862
|
Net cash used in investing activities
|
-9,863
|
2,156
|
Net cash generated by financing activities
|
7,185
|
2,177
|
Net increase in cash and cash equivalents
|
4,129
|
9,195
|
Cash and cash equivalents at beginning of fiscal year
|
24,854
|
13,866
|
Cash and cash equivalents reclassified to held for
sale
|
-74
|
0
|
Foreign exchange gain on cash and cash equivalents
|
586
|
639
|
Cash and cash equivalents at the end of the period
|
29,495
|
23,700
|
XVI. Comparative Ratios
|
12.31.17
|
|
12.31.16
|
|
Liquidity
|
|
|
|
|
CURRENT ASSETS
|
79,912
|
1.66
|
58,690
|
1.43
|
CURRENT LIABILITIES
|
48,052
|
|
41,163
|
|
Indebtedness
|
|
|
|
|
TOTAL LIABILITIES
|
202,732
|
6.63
|
159,080
|
6.29
|
SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE
PARENT
|
30,585
|
|
25,293
|
|
Solvency
|
|
|
|
|
SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE
PARENT
|
30,585
|
0.15
|
25,293
|
0.16
|
TOTAL LIABILITIES
|
202,732
|
|
159,080
|
|
Restricted
Assets
|
|
|
|
|
NON-CURRENT ASSETS
|
180,626
|
0.69
|
144,551
|
0.71
|
TOTAL ASSETS
|
260,538
|
|
203,241
|
|
XVII. Brief comment on prospects for the next period
Our businesses in the Operations Center in Argentina and Israel
have posted sound operating results in the first semester of fiscal
year 2018. We believe that the diversification of our business,
with real estate assets in Argentina and abroad, favorably
positions us to face all the challenges and opportunities that may
arise in the coming years.
As concerns our Operations Center in Argentina and our subsidiary
IRSA Propiedades Comerciales S.A., prospects for fiscal year 2018
are positive, in light of the rebound in economic activity and
consumption, which decelerated in 2017 as compared to 2016. We hope
to continue growing in terms of sales, visitors to our shopping
malls and tenants in our office spaces, as well as maintaining
optimum occupancy levels.
IRSA Inversiones y Representaciones Sociedad
Anónima
Summary as of December 31, 2017
During the second semester of the fiscal year 2018, we expect to
consummate certain acquisitions of new lands or existing commercial
properties, and we plan to make progress in the commercial
developments already launched, including the 4,000 sqm expansion of
our Alto Palermo shopping mall, the development of the 32,000 sqm
office building in the commercial complex adjoining our Dot Baires
shopping mall, and the “Catalinas” building in Buenos
Aires, in which we own 16,012 sqm. In addition, in fiscal year 2018
and 2019 we expect to finish the expansion works in some of our
shopping malls for approximately 21,000 of GLA. We will build 2,200
sqm to add 6 cinema screens in Alto Comahue, a large store of 2,400
sqm in Alto Rosario shopping mall, 12,800 sqm mainly in a Sodimac
store in Mendoza Plaza Shopping, and we will expand by 3,500 sqm
Alto Avellaneda, our shopping mall located in the southern region
of Buenos Aires. In addition, we will continue working on
optimizing the performance of our current properties through
improvements that allow us to take best advantage of their GLA
potential and to furnish them with increased functionality and
appeal for the benefit of consumers and tenants alike.
We will continue to promote marketing actions, events and targeted
promotions at our shopping malls to attract consumers, through the
joint endeavors of the Company, the retailers and the credit card
issuer banks, as these actions have proved to be highly effective
and are welcomed by the public.
We are optimistic about the opportunities that may arise in
Argentina for the second semester fiscal year 2018. We have a large
reserve of lands for future shopping mall and office development
projects in an industry scenario with high growth
potential.
As concerns our investments outside Argentina, we will continue
working in the improvement of the operating ratios of our
“Lipstick” building in New York and backing the new
strategy of selectively selling low-class hotels and replacing them
with higher-class hotels, that is being developed by the
“Condor Hospitality Trust” hotel REIT (NASDAQ:
CDOR).
Regarding our investment in the Israeli company IDBD, we are much
pleased with the results obtained in the first semester of FY18 we
will continue to work towards deleveraging the company, selling
non-strategic assets in its portfolio and improving the operating
margins of each of its operating subsidiaries.
Taking into account the quality of the real estate assets in our
portfolio, the Company’s financial position and low
indebtedness level and its franchise for accessing the capital
markets, we remain confident that we will continue consolidating
the best real estate portfolio in Argentina and Israel. Moreover,
in line with our continuous pursuit of business opportunities and
having in mind the general and specific conditions of the national
and international markets, we keep evaluating different actions to
optimize our capital structure. As concerns our operations center
in Argentina, to keep increasing the liquidity of our controlled
company IRSA Propiedades Comerciales S.A., the Company could make
additional sales of the shares held by it in such company, in one
or more tranches, in the over-the-counter market or through a
private sale, aps agreed by the Company’s shareholders in due
course.