UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 6-K

 

REPORT OF FOREIGN ISSUER

PURSUANT TO RULE 13a-16 OR 15b-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of July 2023

 

Commission File Number 001-35991

 

AENZA S.A.A.

(Exact name of registrant as specified in its charter)

 

N/A

(Translation of registrant’s name into English)

 

Republic of Peru

(Jurisdiction of incorporation or organization)

 

Av. Petit Thouars 4957

Miraflores

Lima 34, Peru

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

 

Form 20-F  ☒      Form 40-F  ☐

 

 

 

 

 

 

July 31, 2023

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

AENZA S.A.A.

 

By: /s/ FERNANDO RODRIGO BARRON  
Name:  Fernando Rodrigo Barron  
Title: VP of Corporate Finance and Business Development  
Date: July 31, 2023  

 

 

 

 

 

AENZA S.A.A. AND SUBSIDIARIES

 

UNAUDITED INTERIM CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS AS OF JUNE 30, 2023

 

(Free translation from the original in Spanish)

 

 

 

 

AENZA S.A.A. AND SUBSIDIARIES

 

UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2023 AND FOR THE THREE AND SIX-MONTHS PERIODS THEN ENDED

 

CONTENTS

Page
   
Interim Condensed Consolidated Statement of Financial Position 1
Interim Condensed Consolidated Statement of Income 2
Interim Condensed Consolidated Statement of Comprehensive Income 3
Interim Condensed Consolidated Statement of Changes in Equity 4
Interim Condensed Consolidated Statement of Cash Flows 5
Notes to the Interim Condensed Consolidated Financial Statements 6 - 53

 

S/ = Peruvian Sol
US$ = United States dollar

 

 

 

 

AENZA S.A.A. and Subsidiaries

Interim Condensed Consolidated Statement of Financial Position

 

As of December 31, 2022 and June 30, 2023 (unaudited)

 

       As of   As of 
       December 31,   June 30, 
In thousands of soles  Note   2022   2023 
Assets            
Current assets            
Cash and cash equivalents   9    917,554    891,225 
Trade accounts receivable, net   10    1,078,582    1,050,273 
Accounts receivable from related parties   11    27,745    46,892 
Other accounts receivable, net   12    393,195    387,309 
Inventories, net   13    346,783    388,581 
Prepaid expenses        28,098    40,541 
Total current assets        2,791,957    2,804,821 
                
Non-current assets               
Trade accounts receivable, net   10    723,869    749,900 
Accounts receivable from related parties   11    542,392    555,107 
Other accounts receivable, net   12    285,730    310,519 
Inventories, net   13    65,553    70,139 
Prepaid expenses        17,293    23,551 
Investments in associates and joint ventures   14    14,916    12,920 
Investment property, net   15    61,924    59,997 
Property, plant and equipment, net   15    284,465    280,588 
Right-of-use assets, net   15    50,207    44,360 
Intangible assets, net   15    787,336    803,057 
Deferred tax asset   22    295,638    291,380 
Total non-current assets        3,129,323    3,201,518 
Total assets        5,921,280    6,006,339 
Liabilities            
Current liabilities            
Borrowings   16    574,262    570,230 
Bonds   17    77,100    82,141 
Trade accounts payable   18    1,027,256    1,019,080 
Accounts payable to related parties   11    53,488    50,861 
Current income tax        69,652    33,773 
Other accounts payable   19    705,442    888,409 
Other provisions   20    132,926    123,737 
Total current liabilities        2,640,126    2,768,231 
                
Non-current liabilities               
Borrowings   16    305,631    339,551 
Bonds   17    792,813    764,956 
Trade accounts payable   18    9,757    8,985 
Accounts payable to related parties   11    27,293    27,917 
Other accounts payable   19    102,319    82,163 
Other provisions   20    569,027    568,107 
Deferred tax liability   22    128,308    149,376 
Total non-current liabilities        1,935,148    1,941,055 
Total liabilities        4,575,274    4,709,286 
                
Equity   21           
Capital        1,196,980    1,196,980 
Legal reserve        132,011    132,011 
Voluntary reserve        29,974    29,974 
Share Premium        1,142,092    1,142,092 
Other reserves        (97,191)   (87,974)
Retained earnings        (1,342,362)   (1,364,924)
Equity attributable to controlling interest in the Company           1,061,504       1,048,159  
Non-controlling interest   29    284,502    248,894 
Total equity        1,346,006    1,297,053 
Total liabilities and equity        5,921,280    6,006,339 

 

The notes on pages 6 to 53 are an integral part of these interim condensed consolidated financial statements.

 

- 1 -

 

 

AENZA S.A.A. and Subsidiaries

Interim Condensed Consolidated Statement of Profit or Loss

 

For the three and six-month period ended June 30, 2022 and June 30, 2023 (unaudited)

 

      For the three   For the six 
      month period ended
June 30,
   month period ended
June 30,
 
In thousands of soles  Note  2022   2023   2022   2023 
Revenue                   
Revenue from construction activities      704,393    589,395    1,248,633    1,038,038 
Revenue from services provided      253,532    259,763    496,492    516,343 
Revenue from real estate and sale of goods      169,746    187,763    302,472    332,678 
Total revenue from ordinary activities arising from contracts with customers  23   1,127,671    1,036,921    2,047,597    1,887,059 
Cost                       
Cost of construction activities      (589,827)   (561,255)   (1,185,680)   (1,019,147)
Cost of services provided      (195,524)   (201,509)   (372,359)   (399,933)
Cost of real estate and sale of goods      (121,538)   (139,871)   (223,983)   (252,771)
Cost of sales and services  24   (906,889)   (902,635)   (1,782,022)   (1,671,851)
Gross profit      220,782    134,286    265,575    215,208 
Administrative expenses  24   (53,881)   (57,060)   (95,609)   (102,923)
Other income and expenses, net  25   3,706    568    (3,424)   1,001 
Operating profit      170,607    77,794    166,542    113,286 
Financial expenses  26.A   (35,143)   (44,625)   (76,790)   (86,437)
Financial income  26.A   4,306    8,132    8,612    26,164 
Interests for present value of financial asset or liability  26.B   (28,670)   6,357    (68,265)   20,163 
Share of the profit or loss of associates and joint ventures accounted for using the equity method  14   1,494    792    1,069    1,656 
Profit before income tax      112,594    48,450    31,168    74,832 
Income tax expense  27   (24,123)   (40,032)   (21,168)   (72,413)
Profit for the period      88,471    8,418    10,000    2,419 
                        
Profit (loss) attributable to:                       
Controlling interest in the Company      72,631    (5,174)   (15,213)   (22,562)
Non-controlling interest      15,840    13,592    25,213    24,981 
       88,471    8,418    10,000    2,419 
                        
Profit (loss) per share attributable to controlling interest in the Company during the period  31   0.074    (0.004)   (0.015)   (0.019)
Diluted profit (loss) per share attributable to controlling interest in the Company during the periodo  31   0.060    (0.004)   (0.013)   (0.019)

 

The notes on pages 6 to 53 are an integral part of these interim condensed consolidated financial statements.

 

- 2 -

 

 

AENZA S.A.A. and Subsidiaries

Interim Condensed Consolidated Statement of Other Comprehensive Income

 

For the three-month and six-month period ended June 30, 2022 and June 30, 2023 (unaudited)

 

   For the three   For the six 
   month period ended
June 30,
   month period ended
June 30,
 
In thousands of soles  2022   2023   2022   2023 
Profit for the period   88,471    8,418    10,000    2,419 
Other comprehensive income:                    
Items that may be subsequently reclassified to profit or loss                    
Cash flow hedge, net of tax   163    -    163    - 
Foreign currency translation adjustment, net of tax   (5,184)   9,001    (9,773)   9,173 
Exchange difference from net investment in a foreign operation, net of tax   (631)   (243)   (670)   79 
Other comprehensive income for the period, net of tax   (5,652)   8,758    (10,280)   9,252 
Total comprehensive income for the period   82,819    17,176    (280)   11,671 
Comprehensive income attributable to:                    
Controlling interest in the Company   67,322    2,693    (25,369)   (13,345)
Non-controlling interest   15,497    14,483    25,089    25,016 
    82,819    17,176    (280)   11,671 

 

The notes on pages 6 to 53 are an integral part of these interim condensed consolidated financial statements.

 

- 3 -

 

 

AENZA S.A.A. and Subsidiaries

Interim Condensed Consolidated Statement of Changes in Equity

 

For the three and six-month period ended June 30, 2022 and June 30, 2023 (unaudited) 

 

In thousands of soles  Note   Number of
shares in
thousands
   Capital   Legal
reserve
   Voluntary
reserve
   Share
premium
   Other
reserves
   Retained
earnings
   Total   Non-controlling
interest
   Total 
Balances as of January 1, 2022        871,918    871,918    132,011    29,974    1,131,574    (68,629)   (893,803)   1,203,045    252,965    1,456,010 
(Loss) profit for the period        -    -    -    -    -    -    (15,213)   (15,213)   25,213    10,000 
Cash flow hedge, net of tax        -    -    -    -    -    163    -    163    -    163 
Foreign currency translation adjustment        -    -    -    -    -    (9,653)   -    (9,653)   (120)   (9,773)
Exchange difference from net investment in a foreign operation        -    -    -    -    -    (666)   -    (666)   (4)   (670)
Comprehensive income of the period        -    -    -    -    -    (10,156)   (15,213)   (25,369)   25,089    (280)
Transactions with shareholders:                                                       
Dividend distribution   25    -    -    -    -    -    -    -    -    (2,310)   (2,310)
Acquisition of (profit distribution to) non-controlling
interests, net
        -    -    -    -    -    -    -    -    (22,835)   (22,835)
Capital increase        325,062    325,062    -    -    10,518    -    -    335,580    -    335,580 
Total transactions with shareholders        325,062    325,062    -    -    10,518    -    -    335,580    (25,145)   310,435 
Balances as of June 30, 2022        1,196,980    1,196,980    132,011    29,974    1,142,092    (78,785)   (909,016)   1,513,256    252,909    1,766,165 
Balances as of January 1, 2023        1,196,980    1,196,980    132,011    29,974    1,142,092    (97,191)   (1,342,362)   1,061,504    284,502    1,346,006 
(Loss) profit for the period        -    -    -    -    -    -    (22,562)   (22,562)   24,981    2,419 
Foreign currency translation adjustment        -    -    -    -    -    9,138    -    9,138    35    9,173 
Exchange difference from net investment in a foreign operation        -    -    -    -    -    79    -    79    -    79 
Comprehensive income of the period        -    -    -    -    -    9,217    (22,562)   (13,345)   25,016    11,671 
Transactions with shareholders:                                                       
Dividend distribution   25    -    -    -    -    -    -    -    -    (50,735)   (50,735)
Acquisition of (profit distribution to) non-controlling interests, net        -    -    -    -    -    -    -    -    (9,889)   (9,889)
Total transactions with shareholders        -    -    -    -    -    -    -    -    (60,624)   (60,624)
Balances as of June 30, 2023        1,196,980    1,196,980    132,011    29,974    1,142,092    (87,974)   (1,364,924)   1,048,159    248,894    1,297,053 

 

The notes on pages 6 to 53 are an integral part of these interim condensed consolidated financial statements.

 

- 4 -

 

 

AENZA S.A.A. and Subsidiaries

Interim Condensed Consolidated Statement of Cash Flows

 

For the three and six-month period ended June 30, 2022 and June 30, 2023 (unaudited)

 

      For the three   For the six 
      month period ended
June 30,
   month period ended
June 30,
 
In thousands of soles  Note  2022   2023   2022   2023 
                    
Operating activities                       
Profit before income tax      112,594    48,450    31,168    74,832 
Adjustments to profit not affecting cash flows from operating activities:                       
Depreciation  15   18,288    17,442    37,183    35,378 
Amortization of intangible assets  15   23,378    39,775    47,737    75,061 
Impairment (reversal) of inventories      37    (385)   99    - 
Impairment of accounts receivable and other accounts receivable      -    2,180    46    2,180 
Debt condonation      -    2,342    -    (192)
Impairment of property, plant and equipment      (236)   1,309    (236)   1,318 
Impairment of intangible assets      1,256    -    661    - 
Other provisions      10,012    3,067    21,412    9,122 
Renegotiation of liability for acquisition of non-controlling Morelco      3,706    -    3,706    - 
Financial expense,net      76,987    16,564    69,456    46,797 
Share of the profit and loss of associates and joint ventures accounted for using the equity method  14. A and B   (1,494)   (792)   (1,069)   (1,656)
Reversal of provisions      (2,856)   (1,255)   (3,632)   (4,726)
Disposal (reversal) of assets      39    (723)   6    (1,258)
Profit on sale of property, plant and equipment      (675)   1,301    (638)   881 
Loss on remeasurement of accounts receivable and accounts payable      36,412    (7,781)   70,203    (20,322)
Net variations in assets and liabilities:                       
Trade accounts receivable      (210,927)   (34,412)   (27,833)   1,720 
Other accounts receivable      (91,445)   7,825    (76,722)   (16,060)
Other accounts receivable from related parties      (25,249)   16,090    16,476    (7,313)
Inventories      31,112    (1,538)   9,883    (46,094)
Prepaid expenses and other assets      8,737    11,292    (4,456)   (15,690)
Trade accounts payable      11,239    16,370    (61,416)   (8,799)
Other accounts payable      3,364    86,817    (30,067)   147,163 
Other accounts payable to related parties      17,576    (25,772)   (2,500)   (5,615)
Other provisions      (29,569)   (1,734)   (29,997)   (4,960)
Interest paid      (24,084)   (38,120)   (62,711)   (79,532)
Payments for purchases of intangible assets - Concessions      908    -    -    - 
Income tax paid      (42,633)   (26,771)   (76,332)   (88,474)
Net cash (applied to) provided by operating activities      (73,523)   131,541    (69,573)   93,761 
Investing activities                       
Proceeds from sale of property, plant and equipment      849    -    4,879    1,043 
Interest received      3,192    7,047    3,934    13,782 
Dividends received      -    3,652    -    3,652 
Acquisition of investment property      (11)   -    (11)   (2)
Acquisition of intangible assets      (30,801)   (37,572)   (44,289)   (85,374)
Acquisition of property, plant and equipment      (16,621)   (10,282)   (23,312)   (22,311)
Net cash applied to investing activities      (43,392)   (37,155)   (58,799)   (89,210)
Financing activities                       
Borrowing received      456,432    40,926    464,050    171,066 
Amortization of borrowings received      (107,504)   (35,969)   (161,946)   (104,793)
Amortization of bonds issued      (12,796)   (16,051)   (26,837)   (33,845)
Payment for debt transaction costs      (11,914)   1,819    (13,732)   (17)
Dividends paid to non-controlling interest      (5,825)   (22,256)   (9,055)   (47,044)
Cash received (return of contributions) from non-controlling shareholders      (20,502)   (673)   (22,835)   (9,889)
Net cash provided by (applied to) financing activities      297,891    (32,204)   229,645    (24,522)
Net increase (net decrease) in cash      180,976    62,182    101,273    (19,971)
Exchange difference      42,232    3,463    8,994    (6,358)
Cash and cash equivalents at the beginning of the period      844,237    825,580    957,178    917,554 
Cash and cash equivalents at the end of the period  9   1,067,445    891,225    1,067,445    891,225 
Non-cash transactions:                       
Capitalization of interests      (354)   162    498    290 
Acquisition of right-of-use assets      (788)   6,304    7,988    7,988 
Capitalization of convertible bonds  21   -    -    335,580    - 

 

The notes on pages 6 to 53 are an integral part of these interim condensed consolidated financial statements.

- 5 -

 

 

AENZA S.A.A. and Subsidiaries

Notes to the Interim Condensed Consolidated Financial Statements

 

As of June 30, 2023 and 2022 and December 31, 2022

 

1.General Information

 

A. Incorporation and operations

 

AENZA S.A.A. (hereinafter the “Company” or “AENZA”) is the parent Company of the AENZA Corporation, which comprise the Company and its subsidiaries (hereinafter, the “Corporation”) and is mainly engaged in holding investments in its subsidiaries. Additionally, the Company provides services of strategic and functional advice and office leases space to the Corporation companies. The Company registered office is at Av. Petit Thouars N° 4957, Miraflores, Lima.

 

The Corporation is a conglomerate of companies with operations including different business activities, the most significant are engineering and construction, energy, infrastructure (public concession ownership and operation) and real estate businesses. See details of operating segments in Note 7.

 

B. Authorization for Financial Statements Issuance

 

The interim condensed consolidated financial statements for the period ended June 30, 2023 have been prepared and issued with authorization of Management and approved by the Board of Directors on July 31, 2023.

 

The consolidated financial statements for the year ended December 31, 2022 were prepared and issued with the authorization of Management and approved by the Board of Directors on May 15, 2023 and were approved by the General Shareholders’ Meeting on June 12, 2023.

 

C. Compliance with laws and regulations

 

The Company is involved in a series of criminal investigations conducted by the Public Ministry of Peru and administrative proceedings conducted by the National Institute for the Defense of Competition and Protection of Intellectual Property (INDECOPI, for its Spanish Acronym) based on events that occurred between years 2003 and 2016. Such situations led to significant changes in the Company’s corporate governance structure, the opening of independent investigations and the adoption of measures to address and clarify these situations.

 

Criminal investigations derived from projects developed in partnership with companies of the Odebrecht Group

 

In connection with the Lava Jato case, the Company participated as a minority partner in six infrastructure projects with Odebrecht Group, directly or through its subsidiaries, in entities or consortia. The resulting contingency from these proceedings has been determined in the Plea Agreement (“the Agreement”) signed with the Public Prosecutor’s Office and Attorney General’s Office and includes the following projects: IIRSA Sur Tranches 2 and 3, IIRSA Norte, the Electric Train Construction Project (Tranches 1 and 2) and Gasoducto Sur Peruano S.A. (GSP).

 

Criminal investigations in relation to the Construction Club case

 

Cumbra Peru S.A. has been included, along with other construction companies, in the criminal investigation that the Public Ministry has been carrying out for the alleged crime of corruption of officials in relation to the so-called ‘Construction Club’. The resulting contingency from these proceedings has been determined in the Agreement with the Public Prosecutor’s Office and the Attorney General’s Office.

 

Moreover, at the end of February 2020, the Public Ministry requested Unna Transporte S.A.C., be included in such criminal investigation. That request was approved in October 2021. Just like other executives of other construction companies, former officers of the Corporation have been included in these criminal investigations.

 

The Company’s Management cannot guarantee the finding nor rule out the possibility of authorities or third parties finding additional adverse evidence not currently known with respect to other projects executed during the period under investigation. If applicable, these new facts could be included in the Agreement entered into with the Public Prosecutor’s Office and the Attorney General’s Office.

 

Final Plea Agreement and Benefits

 

On May 21, 2021, the Company entered into an Agreement with the Special Team of Peruvian prosecutors who are committed to full dedication to the knowledge of investigations related to corruption offenses of officials and related personnel, in which the company Odebrecht and others would have incurred (the “Prosecutor’s Office”) and with the ad hoc Public Prosecutor’s Office for investigations and processes related to crimes corruption of officials, money laundering and related activities allegedly committed by the Odebrecht company and others (the “Attorney General’s Office”).

 

- 6 -

 

 

AENZA S.A.A. and Subsidiaries

Notes to the Interim Condensed Consolidated Financial Statements

 

As of June 30, 2023 and 2022 and December 31, 2022

 

On September 15, 2022, the Agreement was entered into between the Public Prosecutor’s Office, the Attorney General’s Office and the Company, whereby AENZA accepted they were utilized by certain former executives to commit illicit acts in a series of periods until 2016, and committed to pay a civil penalty to the Peruvian State of S/ 333.3 million and US$ 40.7 million, totalling S/481.3 million as of June 30, 2023, calculated according to the formulae established by Law 30737.

 

According to the Agreement, payment shall be made within twelve (12) years at a legal interest rate in soles and dollars (3.8% and 1.7% annual interest as of June 30, 2023, respectively). The Company also undertakes to establish a series of guarantees after the approval (by which the judge verify that the agreement are in accordance with Law) of the Agreement, composed of i) a trust agreement that includes shares issued by a subsidiary of the Company, ii) mortgage on a property owned by the Company, and iii) a guarantee account with funds equivalent to the annual installment for the following year. Among other conditions, the Agreement includes a restriction for AENZA S.A.A. and subsidiaries Cumbra Peru S.A. and Unna Transporte S.A.C. to participate in public infrastructure and construction, and road maintenance contracts for two (2) years from the approval of the Agreement. The other member companies of the Corporation are not subject to any impediment or prohibition to contract with the Peruvian Government. As of June 30, 2023, the Company recognized in its financial statements the total liabilities associated to the Agreement for S/481.3 million (As of December 31, 2022, the balance was S/488.9 million) (see Note 20.a).

 

As of June 30, 2023, and as of the reporting date of the interim condensed consolidated financial statements, in the opinion of the Company’s Management and legal advisors, the civil compensation covers the total contingency to which the Company is exposed to as a result of the investigations revealed since 2017. Nevertheless, the Agreement enforceability is subject to court approval and its terms and conditions are subject to confidentiality provisions.

 

Investigations and administrative process initiated by INDECOPI in relation to the Construction Club case

 

On July 11, 2017, the INDECOPI initiated an investigation against several Peruvian construction companies (including Cumbra Peru S.A.), about the existence of an alleged cartel called the Construction Club.

 

On February 11, 2020, the subsidiary Cumbra Peru S.A. was notified by the Technical Secretariat (the “TS”) of the Free Competition Defense Commission of INDECOPI with the resolution that begins a sanctioning administrative procedure involving a total of 35 companies and 28 natural persons, for alleged anticompetitive conduct in the market of Public Works.

 

On November 17, 2021, the Commission imposed a fine of approximately S/67 million against Cumbra Peru S.A., which is currently being challenged and is pending of resolution by the final administrative instance within the INDECOPI Court. As of June 30, 2023, Cumbra Peru S.A. maintains an estimated provision amounting to S/56.4 million (S/ 52.4 as of December 31, 2022).

 

Investigations and administrative process initiated by INDECOPI in relation to the labor recruitment market

 

On February 7, 2022, Cumbra Peru S.A. and Unna Transporte S.A.C. were notified with Resolution 038-2021/DLC-INDECOPI, by means of which the National Directorate of Research and Promotion of Free Competition of INDECOPI decided to initiate an administrative sanctioning procedure regarding the alleged horizontal collusive practice in the modality of concerted sharing of suppliers in the market of hiring workers in the construction sector at national level from 2011 to 2017.

 

On April 7, 2022, Cumbra Peru S.A. and Unna Transporte S.A.C. proposed a cease-and-desist agreement for the early termination of the sanctioning administrative procedure, where they (i) accepted the alleged conduct, (ii) committed to comply with a free competition rules compliance program during years 2022, 2023, and 2024, and (iii) committed to paying a compensation amounting to S/ 2.7 million in two installments (the first one within 60 days after the notification of the Resolution approving the cessation undertaking and the second one within 12 months). By means of Resolution 054-2022/CLC-INDECOPI dated August 19, 2022, the INDECOPI approved the proposed cease-and-desist agreement and concluded the sanctioning procedure. As of June 30, 2023, the Company maintains a provision amounting to S/1.4 million.

 

- 7 -

 

 

AENZA S.A.A. and Subsidiaries

Notes to the Interim Condensed Consolidated Financial Statements

 

As of June 30, 2023 and 2022 and December 31, 2022

 

2.Basis of preparation

 

The interim condensed consolidated financial statements for the period ended June 30, 2023 have been prepared in accordance with IAS 34 “Interim Financial Reporting”. The interim condensed consolidated financial statements provide comparative information regarding prior year; however, they do not include all the information and disclosures required in the consolidated financial statements, so they must be read together with the annual consolidated financial statements, which have been prepared in accordance with International Standards of Financial Information (hereinafter “IFRS”). The interim condensed consolidated financial statements are presented in thousands of Peruvian Soles, unless otherwise stated.

 

Management continues to have a reasonable expectation that the Corporation has adequate resources to continue in operation for a reasonable period of time and that the going concern basis of accounting remains appropriate. Management believes that there are no material uncertainties that may cause significant doubt about this assumption, and that there is a reasonable expectation that the Corporation has adequate resources to continue operations for the expected future, and not less than 12 months from the end of the reporting period.

 

A. Immaterial corrections of previously reported balances as of June 30, 2022

 

In connection with the preparation of its consolidated financial statements, the Corporation identified an error in the interpretation and application of the accounting treatment of revenue and cost recognition arising from contracts with customers in the engineering and construction segment in prior periods. Management of the Corporation has evaluated and concluded that the correction of this error has resulted in non-material adjustment to the net income previously reported in the interim condensed consolidated financial statements as of June 30, 2022. It should be noted that the aforementioned adjustments had no impact on total cash flows from operating, investing or financing activities. A reconciliation between the previously reported amounts and the revised amounts as of June 30, 2022, and for the period then ended is presented below:

 

Interim Condensed Consolidated Statement of Financial Position:

 

   As of June 30, 2022 
In thousands of soles  Reported   Adjustment     Revised 
ASSETS              
Current assets                 
Trade accounts receivables, net   672,380    176,726  (a)   849,106 
Work in progress, net   180,916    (180,916) (b)   - 
Other accounts receivable   385,088    13,508  (a)   398,596 
Other current assets   1,624,873    -      1,624,873 
Total current assets   2,863,257    9,318      2,872,575 
                  
Non-current assets                 
Deferred tax asset   303,510    (7,274) (c)   296,236 
Other non-current assets   2,796,526    -      2,796,526 
Total non-current assets   3,100,036    (7,274)     3,092,762 
Total assets   5,963,293    2,044      5,965,337 
                  
LIABILITIES AND EQUITY                 
Current liabilities                 
Trade accounts payable   860,151    (10,559) (b)   849,592 
Current income tax   23,594    (1,555) (c)   22,039 
Other provisions   132,019    5,296  (b)   137,315 
Other current liabilities   1,048,626    -      1,048,626 
Total current liabilities   2,064,390    (6,818)     2,057,572 
                  
Non-current liabilities                 
Deferred tax liability   109,839    (150) (c)   109,689 
Other non-current liabilities   2,031,911    -      2,031,911 
Total non-current liabilities   2,141,750    (150)     2,141,600 
Total liabilities   4,206,140    (6,968)     4,199,172 
                  
Equity                 
Equity attributable to controlling interest in the Company   1,503,828    9,428      1,513,256 
Non-controlling interest   253,325    (416)     252,909 
Total equity   1,757,153    9,012      1,766,165 
Total liabilities and equity   5,963,293    2,044      5,965,337 

 

- 8 -

 

 

AENZA S.A.A. and Subsidiaries

Notes to the Interim Condensed Consolidated Financial Statements

 

As of June 30, 2023 and 2022 and December 31, 2022

 

Interim Condensed Consolidated statements of profit or loss:

 

   For the six 
   month period ended June 30, 2022 
In thousands of soles  Reported   Adjustment     Revised 
               
                 
Revenue from construction activities   1,300,050    (51,417) (a)   1,248,633 
Revenue from services provided   496,492    -      496,492 
Revenue from real estate and sale of goods   302,472    -      302,472 
    2,099,014    (51,417)     2,047,597 
                  
Cost of construction activities   (1,265,910)   80,230  (b)   (1,185,680)
Cost of services provided   (388,071)   15,712  (b)   (372,359)
Cost of real estate and  sale of goods   (223,983)   -      (223,983)
    (1,877,964)   95,942      (1,782,022)
Gross profit   221,050    44,525      265,575 
                  
Administrative expenses   (69,775)   (25,834)     (95,609)
Other income and expenses   2,383    (5,807)     (3,424)
Operating profit   153,658    12,884      166,542 
                  
Financial expenses   (147,105)   -      (147,105)
Financial income   10,150    -      10,150 
Share of the profit or loss of associates and joint ventures accounted for using the equity method   1,069    -      1,069 
Profit before income tax   17,772    12,884      30,656 
Income tax expense   (17,592)   (3,576) (c)   (21,168)
Profit for the period   180    9,308      9,488 
                  
(Loss) profit attributable to:                 
Controlling interest in the Company   (24,767)   9,554      (15,213)
Non-controlling interest   24,947    266      25,213 
    180    9,820      10,000 
                  
Loss per share attributable to controlling interest                 
in the Company during the period   (0.023)   0.008      (0.015)
                  
Total comprehensive income for the period                 
Comprehensive income attributable to:                 
Controlling interest in the Company   (31,568)   6,199      (25,369)
Non-controlling interest   25,020    69      25,089 
    (6,548)   6,268      (280)

 

Segment information by geographic area:

 

   For the six 
   month period ended June 30, 2022 
In thousands of soles  Reported   Adjustment   Revised 
Revenue            
Peru   1,594,271    8,307    1,602,578 
Chile   457,614    (59,564)   398,050 
Colombia   47,129    (160)   46,969 
    2,099,014    (51,417)   2,047,597 

 

- 9 -

 

 

AENZA S.A.A. and Subsidiaries

Notes to the Interim Condensed Consolidated Financial Statements

 

As of June 30, 2023 and 2022 and December 31, 2022

 

As a result of this process, the balances in the interim condensed consolidated statement of cash flows were revised as follows:

 

   For the six 
   month period ended June 30, 2022 
In thousands of soles  Reported   Adjustment     Revised 
Operating activities              
Profit before income tax   17,772    13,396  (a, b)   31,168 
Adjustments to  profit not affecting cash flows from                 
operating activities:                 
Other adjustments   244,934    -      244,934 
Net variations in assets and liabilities:                 
Trade accounts receivable and working in progress   32,688    (60,521) (a, b)   (27,833)
Other accounts receivable   (65,438)   (11,284) (a)   (76,722)
Trade accounts payable   (118,798)   57,382  (b)   (61,416)
Other accounts payable   (26,514)   (3,553) (b)   (30,067)
Other provisions   (34,577)   4,580  (b)   (29,997)
Other variations   (119,640)   -      (119,640)
Net cash provided by operating activities   (69,573)   -      (69,573)
                  
Investing activities                 
Net cash applied to investing activities   (58,799)   -      (58,799)
                  
Financing activities                 
Net cash applied to financing activities   229,645    -      229,645 
Net increase in cash   101,273    -      101,273 
Exchange difference   8,994    -      8,994 
Cash and cash equivalents at the beginning of the period   957,178    -      957,178 
Cash and cash equivalents at the end of the period   1,067,445    -      1,067,445 
                  
NON-CASH TRANSACTIONS:                 
Capitalization of convertible bonds   335,580    -      335,580 
Acquisition of right-of-use assets   8,618    -      8,618 
Capitalization of interests   498    -      498 

 

(a) Revenue from engineering and construction contracts is recognized over time as the Corporation fulfills its obligations, as there is a continuous transfer of control of the deliverable to the customer and revenue is recognized using the percentage-of-completion method for each contract through the date of the consolidated financial statements.

 

Revenue from additional work resulting from a modification or instruction received from the customer to make a change in the scope of work, price, or both will result in an increase in contract revenue which is also recognized using the percentage-of-completion method when the Corporation concludes that it is highly probable that there will not be a significant reversal of such revenue. Before the immaterial correction, the Corporation recognized a lower proportion of this additional revenue at the date of the consolidated financial statements depending on the status or stage in the process of obtaining formal, written approval for the additional work. After the immaterial correction, the Corporation recognized additional revenue based on the percentage of completion of the additional work, as long as the Corporation can conclude from its dealings with its clients that it is highly probable that there will not be a significant reversal of such revenue.

 

(b) Before the immaterial correction, the Corporation presented the net position of construction contracts as either an asset or a liability. The contract was considered an asset when the gross margin earned at the measurement date was less than the Corporation’s estimated gross margin at contract completion. This asset was presented as “Work in progress”. If the gross margin obtained was greater than the estimated gross margin at completion, it was presented as a liability under “Accounts payable - Provision for estimated contract costs” by stage of completion, both with an effect on the cost of construction activities account.

 

In order to correct the immaterial error, the Corporation reversed the balances of the work in progress account from assets and the provision for construction contract costs from liabilities, recognized the costs incurred in the consolidated statement of profit or loss.

 

(c) Corresponds to the recognition of the tax effects related to the adjustments described in (a) and (b) above.

 

- 10 -

 

 

AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
 
As of June 30, 2023 and 2022 and December 31, 2022

 

3.Summary of Significant Accounting Policies

 

The accounting policies used in the preparation of these interim condensed consolidated financial statements are consistent with those applied in the preparation of the consolidated financial statements as of December 31, 2022.

 

Standards, amendments, and interpretation adopted by the Corporation

 

Standards, amendments and interpretation that have entered in force as of January 1, 2023, have not had impact on the interim condensed consolidated financial statements as of June 30, 2023, and for this reason they have not been disclosed. The Corporation has not adopted in advance any amendment and modification that are not yet effective.

 

4.Financial Risk Management

 

The Corporation’s Management is responsible for managing financial risks. The corporation Management manages the general administration of financial risks such risks include currency risk, price risk, fair-value and cash-flow interest rate risks, credit risk, the use of derivative and non-derivative financial instruments, and investment of liquidity surplus, as well as financial risks; all of which are regularly supervised and monitored.

 

A.Financial risk factors

 

The Corporation’s activities expose it to a variety of financial risks: market risks (including currency risk, price risk, fair-value and cash-flow interest rate risks), credit risk, and liquidity risk.

 

The Corporation’s general program for risk management is mainly focused on financial market unpredictability and seeks to minimize potential adverse effects on the Corporation’s financial performance.

 

a)Market risks

 

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices. Market prices involve four types of risk: interest rate risk, exchange rate risk, commodity price risk and other price risks. Financial instruments affected by market risk include bank deposits, trade accounts receivable, other accounts receivable, other financial liabilities, bonds, trade accounts payable, other accounts payable and accounts receivable from and payable to related parties.

 

i)Currency risk

 

Foreign exchange risk is the risk that the fair value of future cash flows of a financial instrument will be reduced by adverse fluctuations in exchange rates. Management is responsible for identifying, measuring, controlling and reporting the exposure to foreign exchange risk.

 

The Corporation is exposed to foreign exchange risk arising from local transactions in foreign currencies and from its foreign operations. As of December 31, 2022 and as of June 30, 2023, this exposure is focused mainly on fluctuations of the U.S. dollar, Chilean peso, and Colombian peso. The Corporation’s management monitors this risk by analyzing the country’s macroeconomic variables.

 

- 11 -

 

 

AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
 
As of June 30, 2023 and 2022 and December 31, 2022

 

The balances of financial assets and liabilities denominated in foreign currencies correspond to balances in U.S. Dollars, Chilean pesos and Colombian pesos, which are stated exchange rate published on that date, according to the currency type:

 

   As of December 31,   As of June 30, 
   2022   2023 
   suppley   demand   suppley   demand 
U.S. Dollars (a)   3.808    3.820    3.624    3.633 
Chilean Peso (b)   0.004449    0.004463    0.004521    0.004532 
Colombian Peso (c)   0.000792    0.000794    0.000865    0.000867 

 

(a)U.S. Dolar as published by the Superintendencia de Bancos, Seguros y Administradoras de Fondos de Pensiones (hereinafter “SBS”).

 

(b)Chilean peso as published by the Banco Central de Chile.

 

(c)Colombian peso as published by Banco de la Republica de Colombia.

 

The consolidated statement of financial position includes the following:

 

   As of   As of 
   December 31,   June 30, 
In thousands of US dollars  2022   2023 
Assets        
Cash and cash equivalents   58,280    69,934 
Trade accounts receivable, net   124,593    169,612 
Accounts receivable from related parties   276,048    361,342 
Other accounts receivable   75,536    87,606 
    534,457    688,494 
           
Liabilities          
Borrowings   (215,076)   (241,969)
Bonds   (5,569)   (5,064)
Trade accounts payable   (119,104)   (124,976)
Accounts payable to related parties   (133,745)   (149,624)
Other accounts payable   (88,012)   (32,692)
Other provisions   (42,241)   (42,113)
    (603,747)   (596,438)

 

The Corporation assumes foreign exchange risk because it does not use derivative financial instruments to mitigate exchange rate fluctuations.

 

For the periods ended June 30, 2022 and 2023, the Corporation’s exchange gains and losses for the exposure of U.S. Dollar, the Chilean peso and the Colombian peso against the Peruvian Sol was (Note 26.A):

 

   For the three   For the six 
   month period ended
June 30,
   month period ended
June 30,
 
In thousands of soles  2022   2023   2022   2023 
Gain   103,374    86,197    292,896    140,690 
Loss   (102,224)   (85,114)   (288,593)   (128,311)
    1,150    1,083    4,303    12,379 

 

- 12 -

 

 

AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
 
As of June 30, 2023 and 2022 and December 31, 2022

 

The consolidated statement of changes in equity comprises a foreign currency translation adjustment originated by its subsidiaries. The consolidated statement of financial position includes the following assets and liabilities in its currency (in thousands):

 

   As of December 31,   As of June 30, 
   2022   2023 
   Assets   Liabilities   Assets   Liabilities 
Chilean Peso   60,684,971    81,864,810    62,696,750    75,404,887 
Colombian Peso   96,944,436    59,114,296    130,216,785    161,614,150 

 

The Corporation’s foreign currency translation adjustment for the six-month period ended June 30, 2023 was positive by S/9.2 million (negative by S/9.8 million for the same period in 2022).

 

ii)Price risk

 

The Corporation is exposed to the risk of hydrocarbon price fluctuations which impacts on the selling price of the products that it commercializes, which are significantly affected by changes in global economic conditions, resource availability, and the cycles of related industries. Management considers reasonable these possible fluctuations in the hydrocarbons prices, based in the Corporation´s economic market environment.

 

iii)Fair-value and cash flow interest rate risk

 

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates.

 

The Corporation’s interest rate risk arises mainly from its long-term borrowings. Variable rate long-term financial liabilities expose the Corporation to cash-flow interest rate risk. Fixed-rate financial liabilities expose the Corporation to fair-value interest rate risk.

 

The Corporation assumes the interest rate risk, due to they do not use financial derivative instruments for mitigate variations in the interest rate risk.

 

b)Credit risk

 

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or commercial contract, resulting in a financial loss.

 

Credit risk for the Corporation arises from its operating activities due to credit exposure to customers and from its financial activities, including deposits with banks and financial institutions, foreign exchange transactions, and other financial instruments. The maximum exposure to credit risk for the consolidated financial statements as of December 31, 2022 and as of June 30, 2023 is represented by the sum of cash and cash equivalents (Note 9), trade accounts receivable (Note 10), accounts receivable from related parties (Note 11) and other accounts receivable (Note 12).

 

Customer credit risk is managed by Management subject to the Corporation’s established policies, procedures and control related to customer credit risk management. The credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined based on this assessment. The maximum credit risk exposure at the reporting date is the carrying value of each class of financial assets disclosed in Note 10.

 

- 13 -

 

 

AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
 
As of June 30, 2023 and 2022 and December 31, 2022

 

The Corporation assesses the concentration of risk with respect to trade accounts receivable as low risk because sales are not concentrated in small customer groups and no customers account for 10% or more of the Corporation’s revenues.

 

Management monitors the credit risk of other receivables on an ongoing basis and assesses those receivables that show evidence of impairment to determine the required allowance for doubtful accounts.

 

Concerning loans to related parties, the Corporation has measures in place to ensure the recovery of these loans through the controls maintained by Corporate Finance Management and the performance evaluation conducted by the Board of Directors (Note 11).

 

Management does not expect the Corporation to incur in losses arisen from the performance of these counterparties, except for the ones already recorded at the consolidated financial statements.

 

c)Liquidity risk

 

Prudent liquidity risk management implies holding enough cash and cash equivalent, and financing available through a proper number of credit sources, and the ability to close positions in the market. Historically, the Corporation’s cash flows from operations have enabled it to meet its obligations. The Corporation has implemented various actions to reduce its exposure to liquidity risk and has developed a Financial Plan based on several steps, which were designed with a commitment to compliance within a reasonable period of time. The Financial Plan is intended to meet the various obligations at the Company and Corporation entities levels.

 

The Corporate Finance Office monitors the cash flow projections made on liquidity requirements of the Corporation to ensure it exists sufficient cash to meet operational needs so that the Corporation does not breach borrowing limits or covenants, where applicable, on any of its borrowing facilities. Less significant financing transactions are controlled by the Finance Management of each subsidiary.

 

Such forecasting takes into consideration the Corporation’s debt financing plans, covenant compliance, compliance with ratio targets in the statement of financial position and, if applicable, with external regulatory or legal requirements.

 

As of June 30, 2023, the Company has significant current payment obligations arising from the Plea Agreement (Note 1.C) and the Bridge Loan (Note 16.A.i). For this purpose, Management is developing a financial plan with the aim of covering the short-term part of these obligations.

 

Cash surplus on the amounts required for the administration of working capital are invested in checking accounts that generate interest and time deposits, selecting instruments with appropriate maturities or sufficient liquidity.

 

The table below analyzes the Corporation’s financial liabilities grouped according to the remaining period from the date of the statement of financial position to the date of maturity. The amounts disclosed in the table below are the contractual undiscounted cash flows, which include interest to be accrued according to the established schedule.

 

- 14 -

 

 

AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
 
As of June 30, 2023 and 2022 and December 31, 2022

 

       Contractual cash flows 
   Carrying   Less than   1-2   2-5   More than     
In thousands of soles  amount   1 year   years   years   5 years   Total 
As of December 31, 2022                        
Other financial liabilities (except for finance leases and lease liability for right-of-use asset)   819,973    599,310    71,732    216,392    -    887,434 
Finance leases   835    873    -    -    -    873 
Lease liability for right-of-use asset   59,085    19,075    31,705    23,386    113    74,279 
Bonds   869,913    141,246    185,114    419,969    707,800    1,454,129 
                               
Trade accounts payables (except non-financial liabilities)   1,037,013    1,027,256    9,757    -    -    1,037,013 
Accounts payables to related parties   80,781    53,488    25,420    697    1,176    80,781 
Other accounts payables and other
provisions (except non-financial liabilities)
   712,071    186,326    64,307    89,868    470,129    810,630 
    3,579,671    2,027,574    388,035    750,312    1,179,218    4,345,139 

 

       Contractual cash flows 
   Carrying   Less than   1-2   2-5   More than     
In thousands of soles  amount   1 year   years   years   5 years   Total 
As of June 30, 2023                        
Other financial liabilities (except for finance leases and lease liability for right-of-use asset)   861,494    597,560    171,783    189,562    -    958,905 
Lease liability for right-of-use asset   48,287    18,835    68,495    862    81    88,273 
Bonds   847,097    144,176    181,227    386,127    687,234    1,398,764 
                               
Trade accounts payables (except non-financial liabilities)   1,028,065    1,019,080    8,985    -    -    1,028,065 
Accounts payables to related parties   78,778    50,861    26,233    678    1,006    78,778 
Other accounts payables and other provisions (except non-financial liabilities)   696,351    172,653    70,830    100,107    479,823    823,413 
    3,560,072    2,003,165    527,553    677,336    1,168,144    4,376,198 

 

B.Capital management

 

The Corporation’s objective in managing capital is to safeguard its ability to continue operations as a going concern basis in order to generate returns to its shareholders, benefits to stakeholders and keep an optimal capital structure to reduce capital cost. Since 2017, due to the situation of the Corporation, Management has monitored deviations that might cause the non-compliance of covenants and may renegotiation of liabilities (Note 16.a). In special situations and events, the Corporation identifies potential deviations, requirements and establishes a plan.

 

The Corporation may adjust the amount of dividends payable to shareholders, return capital to shareholders, issue new shares or sell assets to reduce its debt to maintain or adjust the capital structure.

 

The Corporation monitors its capital based on the leverage ratio. This ratio is calculated as net debt divided by the sum of net debt plus equity. The net debt corresponds to the total financial liabilities (including current and non-current indebtedness) adding the provision for civil compensation less cash and cash equivalents.

 

- 15 -

 

 

AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
 
As of June 30, 2023 and 2022 and December 31, 2022

 

As of December 31, 2022 and as of June 30, 2023, the leverage ratio is as follows:

 

      As of   As of 
      December 31,   June 30, 
In thousands of soles  Note  2022   2023 
Total borrowing, bonds and civil compensation (*)  16 and 17   2,238,699    2,238,156 
Less: Cash and cash equivalents  9   (917,554)   (891,225)
Net debt (a)      1,321,145    1,346,931 
Total equity (b)      1,346,006    1,297,053 
Total net debt plus equity (a) + (b)      2,667,151    2,643,984 
Gearing ratio      0.50    0.51 

 

(*)The provision for civil compensation is included in other provisions (Note 20).

 

During the periods ended December 31, 2022 and as of June 30, 2023, there were no changes in the objectives, policies or processes related to capital management.

 

5.Critical Accounting Estimates and Judgments

 

Estimates and judgments used are continuously evaluated and are based on historical experience among other factors, including expectations of future events that are believed to be reasonable under current circumstances.

 

In preparing these interim condensed consolidated financial statements, the significant judgements made by management in applying Corporation’s accounting policies and the key sources of uncertainty were the same as those that applied to the consolidated financial statements for the year ended December 31, 2022.

 

6.Seasonality of Operations

 

The Corporation does not present seasonality in the operations of any of its subsidiaries; and develop its business during the normal course of the period.

 

7.Operating Segments

 

Operating segments are reported consistently with the internal reports that are reviewed by Corporation’s, chief decision-maker; that is the Executive Committee, which is led by the Chief Executive Officer. This Committee acts as the highest authority in making operational decisions, responsible for allocating resources and evaluating the performance of each operating segment.

 

As set forth under IFRS 8, reportable segments by significance of income are: ‘engineering and construction’, ‘energy’ and ‘infrastructure’. However, Management has voluntarily decided to report on all its operating segments.

 

The Corporation has identified four reportable segments. These operating segments are components of an enterprise for which separate financial information is available and periodically evaluated by the Corporate Governance Board to decide how to allocate resources and assess performance.

 

Corporation’s operating segments are assessed by the activities of the following business units: (i) engineering and construction, (ii) energy, (iii) infrastructure, and (iv) real estate.

 

The operations of Corporation in each reportable segment are as follows:

 

(a)Engineering and construction: This segment includes traditional engineering services such as architectural planning, structural, civil and design engineering for advanced specialties including process design, simulation, and environmental services, as well as construction at three divisions: i) civil works, such as the construction of hydroelectric power stations and other large infrastructure facilities; (ii) electromechanical construction, such as concentrator plants, oil and natural gas pipelines, and electric transmission lines; iii) building construction, such as offices, residential buildings, hotels, and affordable housing projects, shopping centers, and industrial facilities.

 

- 16 -

 

 

AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
 
As of June 30, 2023 and 2022 and December 31, 2022

 

(b)Energy: This segment includes oil exploration, exploitation, production, treatment, and trade in four oil deposits, separation and trade of natural gas and its byproducts at the gas processing plant, as well as the construction and assembly of oil facilities or those linked to the oil and gas industry. It also includes storage and dispatch of fuel and oil byproducts.

 

(c)Infrastructure: The Corporation has long-term concessions or similar contractual arrangements in Peru for three highways with tolls, Lima Metro, a sewage treatment plant in Lima, and operation and maintenance services for infrastructure assets.

 

(d)Real Estate: The Corporation mainly develops and sells properties for low- and middle-resource sectors, which are experiencing a significant increase in available income, as well as luxury properties to a lesser degree. It also develops commercial spaces and offices.

 

The CODM uses the Adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) as the primary relevant measure to understand the Corporation’s operating performance and allocate resources and its operating segments.

 

Adjusted EBITDA is not a measurement of results based on International Financial Reporting Standards. The Corporation’s definition related to adjusted EBITDA may not be comparable to similar performance measures and disclosures from other entities.

 

The adjusted EBITDA is reconciled to profit as follows:

 

   For the three   For the six 
   month period ended
June 30,
   month period ended
June 30,
 
In thousands of soles  2022   2023   2022   2023 
Net profit   88,471    8,418    10,000    2,419 
Financial income and expenses   31,860    36,493    68,178    60,273 
Interests for present value of financial asset or
liability
   27,647    (6,357)   68,265    (20,163)
Income tax   24,123    40,032    21,168    72,413 
Depreciation and amortization   41,666    57,217    84,920    110,439 
Adjusted EBITDA   213,767    135,803    252,531    225,381 

 

The adjusted EBITDA per segment is as follows:

 

   For the three   For the six 
   month period ended
June 30,
   month period ended
June 30,
 
In thousands of soles  2022   2023   2022   2023 
Engineering and construction   103,148    162    22,539    (29,381)
Energy   39,027    44,996    82,428    100,841 
Infrastructure   59,677    62,243    129,549    118,714 
Real estate   17,665    29,097    21,247    31,145 
Parent company operations   98,793    (3,719)   50,827    (143)
Intercompany eliminations   (104,543)   3,024    (54,059)   4,205 
    213,767    135,803    252,531    225,381 

 

Inter-segmental sales transactions are entered into prices similar to those that would have been agreed with unrelated third parties. Revenues from external customers reported are measured in a consistent manner under the basis for preparation of the consolidated financial statements. Sales of goods are related to real estate segment. Revenues from services are related to other segments.

 

Corporation sales and receivables are not concentrated on a few customers. There is no external customer that represents 10% or more of Corporation’s revenue.

 

- 17 -

 

 

AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
 
As of June 30, 2023 and 2022 and December 31, 2022

 

Operating segments financial position

 
 
   Engineering       Infrastructure       Parent         
In thousands of soles  And
construction
   Energy   Toll roads   Transportation   Water treatment   Real estate   Company
operations
   Eliminations   Consolidated 
As of December 31, 2022                                    
Assets                                    
Cash and cash equivalent   209,737    104,553    130,213    171,747    2,910    111,487    186,907    -    917,554 
Trade accounts receivables, net   697,512    80,245    34,183    118,867    898    146,316    561    -    1,078,582 
Accounts receivable from related parties   86,146    68    51,523    4,455    52    378    115,736    (230,613)   27,745 
Other accounts receivable   298,784    39,921    28,902    15,229    30    5,380    7,294    (2,345)   393,195 
Inventories, net   41,933    29,935    9,655    39,780    -    227,067    -    (1,587)   346,783 
Prepaid expenses   10,945    2,055    5,496    369    160    448    8,625    -    28,098 
Total current assets   1,345,057    256,777    259,972    350,447    4,050    491,076    319,123    (234,545)   2,791,957 
Long-term trade accounts receivable, net   2,806    -    16,215    699,487    1,392    3,969    -    -    723,869 
Long-term accounts receivable from related parties   299,268    -    15,858    42    14,015    -    602,004    (388,795)   542,392 
Prepaid expenses   -    826    14,549    1,731    632    -    65    (510)   17,293 
Other long-term accounts receivable   101,366    89,782    -    -    7,346    55,347    31,889    -    285,730 
Inventories, net   -    -    -    -    -    65,553    -    -    65,553 
Investments in associates and joint ventures   975    12,049    -    -    -    2,752    1,509,790    (1,510,650)   14,916 
Investment property, net   -    -    -    1,507    -    19,823    40,594    -    61,924 
Property, plant and equipment, net   102,822    176,596    6,193    848    150    7,531    1,286    (10,961)   284,465 
Intangible assets, net   131,431    363,066    274,597    238    -    615    13,414    3,975    787,336 
Right-of-use assets, net   8,745    12,795    7,106    23    143    2,580    38,485    (19,670)   50,207 
Deferred income tax asset   175,702    4,572    26,787    -    415    23,781    59,316    5,065    295,638 
Total non-current assets   823,115    659,686    361,305    703,876    24,093    181,951    2,296,843    (1,921,546)   3,129,323 
Total assets   2,168,172    916,463    621,277    1,054,323    28,143    673,027    2,615,966    (2,156,091)   5,921,280 
Liabilities                                             
Borrowings   19,191    38,612    3,844    17    6    43,118    480,735    (11,261)   574,262 
Bonds   4,554    -    41,343    31,203    -    -    -    -    77,100 
Trade accounts payable   740,142    124,259    52,916    52,292    223    35,939    16,950    4,535    1,027,256 
Accounts payable to related parties   297,505    2,734    46,257    22,421    296    12,227    20,291    (348,243)   53,488 
Current income tax   12,495    247    8,609    2,433    104    45,092    672    -    69,652 
Other accounts payable   490,494    19,724    49,187    9,146    1,298    115,661    24,837    (4,905)   705,442 
Provisions   81,288    20,535    1,722    1,197    -    540    27,644    -    132,926 
Total current liabilities   1,645,669    206,111    203,878    118,709    1,927    252,577    571,129    (359,874)   2,640,126 
Borrowings   6,480    100,597    3,462    -    138    10,852    192,435    (8,333)   305,631 
Long-term bonds   16,719    -    177,341    598,753    -    -    -    -    792,813 
Long-term trade accounts payable   -    -    -    9,757    -    -    -    -    9,757 
Other long-term accounts payable   94,261    -    2,243    189    2,932    -    2,694    -    102,319 
Long-term accounts payable to related parties   7,886    57,300    1,176    27,294    21,663    -    189,451    (277,477)   27,293 
Provisions   11,453    49,701    11,463    4,947    -    -    491,463    -    569,027 
Deferred income tax liability   16,670    53,242    -    58,396    -    -    -    -    128,308 
Total non-current liabilities   153,469    260,840    195,685    699,336    24,733    10,852    876,043    (285,810)   1,935,148 
Total liabilities   1,799,138    466,951    399,563    818,045    26,660    263,429    1,447,172    (645,684)   4,575,274 
Equity attributable to controlling interest in the Company   363,404    417,970    166,678    177,208    1,483    278,501    1,165,811    (1,509,551)   1,061,504 
Non-controlling interest   5,630    31,542    55,036    59,070    -    131,097    2,983    (856)   284,502 
Total liabilities and equity   2,168,172    916,463    621,277    1,054,323    28,143    673,027    2,615,966    (2,156,091)   5,921,280 

 

- 18 -

 

 

AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
 
As of June 30, 2023 and 2022 and December 31, 2022

 

Operating segments financial position 
  
   Engineering       Infrastructure       Parent         
In thousands of soles  and
construction
   Energy   Toll roads   Transportation   Water
treatment
   Real estate   Company
operations
   Eliminations   Consolidated 
As of June 30, 2023                                    
Assets                                    
Cash and cash equivalent   178,129    41,559    145,450    119,755    2,280    217,029    187,023    -    891,225 
Trade accounts receivables, net   801,390    72,268    29,319    122,857    1,401    21,982    1,056    -    1,050,273 
Accounts receivable from related parties   86,338    103    44,601    3,594    344    500    306,453    (395,041)   46,892 
Other accounts receivable   312,167    31,902    17,887    15,168    356    4,995    7,179    (2,345)   387,309 
Inventories, net   52,907    41,610    9,383    44,645    -    241,679    -    (1,643)   388,581 
Prepaid expenses   19,622    4,051    7,077    1,007    80    158    8,544    2    40,541 
Total current assets   1,450,553    191,493    253,717    307,026    4,461    486,343    510,255    (399,027)   2,804,821 
Long-term trade accounts receivable, net   815    -    16,832    727,076    1,339    3,838    -    -    749,900 
Long-term accounts receivable from related parties   314,604    -    16,486    42    14,015    -    443,817    (233,857)   555,107 
Prepaid expenses   -    480    21,308    1,667    606    -    -    (510)   23,551 
Other long-term accounts receivable   94,793    84,792    -    -    7,346    56,702    66,886    -    310,519 
Inventories, net   -    -    -    -    -    70,139    -    -    70,139 
Investments in associates and joint ventures   976    10,700    -    -    -    2,103    1,446,099    (1,446,958)   12,920 
Investment property, net   -    -    -    1,467    -    18,918    39,612    -    59,997 
Property, plant and equipment, net   96,587    180,892    5,580    827    229    6,361    1,073    (10,961)   280,588 
Intangible assets, net   137,792    399,645    248,319    187    -    575    13,091    3,448    803,057 
Right-of-use assets, net   6,845    9,545    5,019    4    139    1,941    35,663    (14,796)   44,360 
Deferred income tax asset   180,623    5,123    26,729    -    447    21,147    52,208    5,103    291,380 
Total non-current assets   833,035    691,177    340,273    731,270    24,121    181,724    2,098,449    (1,698,531)   3,201,518 
Total assets   2,283,588    882,670    593,990    1,038,296    28,582    668,067    2,608,704    (2,097,558)   6,006,339 
Liabilities                                             
Borrowings   15,966    34,536    15,787    4    6    14,445    502,387    (12,901)   570,230 
Bonds   6,030    -    45,010    31,101    -    -    -    -    82,141 
Trade accounts payable   824,346    84,910    43,565    27,332    147    24,913    12,837    1,030    1,019,080 
Accounts payable to related parties   301,300    57,136    27,990    33,005    10    11,147    9,582    (389,309)   50,861 
Current income tax   8,932    2,136    1,436    6,959    79    13,509    722    -    33,773 
Other accounts payable   606,427    23,066    72,218    9,742    1,425    152,161    28,275    (4,905)   888,409 
Provisions   80,244    16,850    1,218    933    -    385    24,107    -    123,737 
Total current liabilities   1,843,245    218,634    207,224    109,076    1,667    216,560    577,910    (406,085)   2,768,231 
Borrowings   3,688    96,796    1,927    -    135    71,813    169,629    (4,437)   339,551 
Long-term bonds   12,367    -    154,328    598,261    -    -    -    -    764,956 
Long-term trade accounts payable   -    -    -    8,985    -    -    -    -    8,985 
Other long-term accounts payable   75,078    -    1,371    144    2,874    -    2,696    -    82,163 
Long-term accounts payable to related parties   8,007    -    1,006    27,916    23,146    -    210,259    (242,417)   27,917 
Provisions   11,333    53,850    11,750    3,656    -    -    487,518    -    568,107 
Deferred income tax liability   29,713    57,030    63    62,570    -    -    -    -    149,376 
Total non-current liabilities   140,186    207,676    170,445    701,532    26,155    71,813    870,102    (246,854)   1,941,055 
Total liabilities   1,983,431    426,310    377,669    810,608    27,822    288,373    1,448,012    (652,939)   4,709,286 
Equity attributable to controlling interest in the Company   295,078    423,640    160,001    170,767    759    284,002    1,157,666    (1,443,754)   1,048,159 
Non-controlling interest   5,079    32,720    56,320    56,921    1    95,692    3,026    (865)   248,894 
Total liabilities and equity   2,283,588    882,670    593,990    1,038,296    28,582    668,067    2,608,704    (2,097,558)   6,006,339 

 

- 19 -

 

 

AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
 
As of June 30, 2023 and 2022 and December 31, 2022

 

Operating segment performance
Segment Reporting
                    
                     
   Engineering       Infrastructure       Parent         
In thousands of soles  and
construction
   Energy   Toll
roads
   Transportation   Water
treatment
   Real
estate
   Company
operations
   Elimination   Consolidated 
For the three month period ended June 30, 2022                                    
Revenue   757,564    153,233    121,362    95,510    1,044    54,912    17,113    (73,067)   1,127,671 
Gross profit (loss)   120,210    25,079    21,923    32,014    588    17,636    (8,913)   12,245    220,782 
Administrative expenses   (29,379)   (3,710)   (4,031)   (2,311)   (175)   (3,333)   87    (11,029)   (53,881)
Other income and expenses, net   3,348    909    (3,028)   (363)   -    1,045    3,339    (1,544)   3,706 
Operating profit (loss)   94,179    22,278    14,864    29,340    413    15,348    (5,487)   (328)   170,607 
Financial expenses   (12,426)   (3,840)   (5,239)   (1,667)   (24)   (1,704)   (36,656)   26,413    (35,143)
Financial income   (485)   115    322    (43)   42    360    31,778    (27,783)   4,306 
Interests for present value of financial asset or liability   (3,250)   141    118    -    -    251    (26,901)   971    (28,670)
Share of profit or loss in associates and joint ventures   1,834    750    -    -    -    712    53,556    (55,358)   1,494 
Profit (loss) before income tax   79,852    19,444    10,065    27,630    431    14,967    16,290    (56,085)   112,594 
Income tax   (9,531)   (6,415)   (1,683)   (8,655)   (160)   (4,580)   6,906    (5)   (24,123)
Profit (loss) for the period   70,321    13,029    8,382    18,975    271    10,387    23,196    (56,090)   88,471 
Profit (loss) from attributable to:                                             
Owners of the Company   69,535    11,274    6,051    14,231    271    2,374    23,211    (54,316)   72,631 
Non-controlling interest   786    1,755    2,331    4,744    -    8,013    (15)   (1,774)   15,840 
    70,321    13,029    8,382    18,975    271    10,387    23,196    (56,090)   88,471 

 

- 20 -

 

 

AENZA S.A.A. and Subsidiaries
Notes to the Interim Condensed Consolidated Financial Statements
 
December 31, 2022 and June 30, 2023

 

Operating segment performance
Segment Reporting
                    
                     
   Engineering       Infrastructure       Parent         
In thousands of soles  and
construction
   Energy   Toll
roads
   Transportation   Water
treatment
   Real
estate
   Company
operations
   Elimination   Consolidated 
For the three month period ended June 30, 2023                                    
Revenue   639,939    146,116    125,212    102,570    1,216    76,598    23,591    (78,321)   1,036,921 
Gross profit (loss)   26,508    13,495    23,298    30,576    721    31,767    4,551    3,370    134,286 
Administrative expenses   (31,037)   (3,533)   (4,632)   (2,851)   (231)   (5,116)   (7,819)   (1,841)   (57,060)
Other income and expenses, net   (427)   471    36    (124)   (41)   808    234    (389)   568 
Operating (loss) profit   (4,956)   10,433    18,702    27,601    449    27,459    (3,034)   1,140    77,794 
Financial expenses   (17,979)   (4,661)   (9,334)   (1,828)   (111)   (2,705)   (19,077)   11,070    (44,625)
Financial income   (3,990)   3,125    1,885    2,822    170    2,383    13,395    (11,658)   8,132 
Interests for present value of financial asset or liability   280    (575)   (588)   -    -    1,897    5,343    -    6,357 
Share of profit or loss in associates and joint ventures   -    718    -    -    -    73    (4,138)   4,139    792 
(Loss) profit before income tax   (26,645)   9,040    10,665    28,595    508    29,107    (7,511)   4,691    48,450 
Income tax   (1,532)   (2,521)   (4,880)   (8,969)   (156)   (16,715)   (5,261)   2    (40,032)
(Loss) profit for the period   (28,177)   6,519    5,785    19,626    352    12,392    (12,772)   4,693    8,418 
(Loss) profit from attributable to:                                             
Owners of the Company   (27,419)   5,154    3,591    14,719    352    6,585    (12,805)   4,649    (5,174)
Non-controlling interest   (758)   1,365    2,194    4,907    -    5,807    33    44    13,592 
    (28,177)   6,519    5,785    19,626    352    12,392    (12,772)   4,693    8,418 
                                              

 

- 21 -

 

 

AENZA S.A.A. and Subsidiaries

Notes to the Interim Condensed Consolidated Financial Statements

 

December 31, 2022 and June 30, 2023

 

Operating segment performance

Segment Reporting

 

   Engineering       Infrastructure       Parent         
In thousands of soles  and
construction
   Energy   Toll
roads
   Transportation   Water
treatment
   Real
estate
   Company
operations
   Elimination   Consolidated 
For the six month period ended June 30, 2022                                    
Revenue   1,337,572    292,889    245,463    197,189    2,138    84,415    34,063    (146,132)   2,047,597 
Gross profit (loss)   66,195    53,153    44,522    70,329    1,162    22,642    7,930    (358)   265,575 
Administrative expenses   (53,426)   (6,867)   (7,697)   (5,141)   (371)   (6,481)   (18,167)   2,541    (95,609)
Other income and expenses, net   (6,307)   1,359    (3,002)   (305)   -    1,069    2,987    775    (3,424)
Operating profit (loss)   6,462    47,645    33,823    64,883    791    17,230    (7,250)   2,958    166,542 
Financial expenses   (30,766)   (8,890)   (12,003)   (3,406)   (50)   (5,719)   (28,950)   12,994    (76,790)
Financial income   1,770    246    1,173    1,130    59    530    19,905    (16,201)   8,612 
Interests for present value of financial asset or liability   (5,315)   939    (1,515)   -    -    726    (61,727)   (1,373)   (68,265)
Share of profit or loss in associates and joint ventures   1,222    1,522    -    -    -    712    51,225    (53,612)   1,069 
(Loss) profit before income tax   (26,627)   41,462    21,478    62,607    800    13,479    (26,797)   (55,234)   31,168 
Income tax   4,754    (12,758)   (5,369)   (19,432)   (295)   (4,123)   16,086    (31)   (21,168)
(Loss) profit for the period   (21,873)   28,704    16,109    43,175    505    9,356    (10,711)   (55,265)   10,000 
(Loss) profit from attributable to:                                             
Owners of the Company   (20,386)   25,297    10,346    32,381    505    1,554    (10,731)   (54,179)   (15,213)
Non-controlling interest   (1,487)   3,407    5,763    10,794    -    7,802    20    (1,086)   25,213 
    (21,873)   28,704    16,109    43,175    505    9,356    (10,711)   (55,265)   10,000 

 

- 22 -

 

 

AENZA S.A.A. and Subsidiaries

Notes to the Interim Condensed Consolidated Financial Statements

 

December 31, 2022 and June 30, 2023

 

Operating segment performance

Segment Reporting

 

   Engineering       Infrastructure       Parent         
In thousands of soles  and
construction
   Energy   Toll
roads
   Transportation   Water
treatment
   Real
estate
   Company
operations
   Elimination   Consolidated 
For the six month period ended June 30, 2023                                    
Revenue   1,138,684    310,992    258,600    204,678    2,479    94,373    48,780    (171,527)   1,887,059 
Gross profit (loss)   19,417    43,201    39,613    61,993    1,483    35,417    10,498    3,586    215,208 
Administrative expenses   (54,262)   (7,945)   (9,788)   (5,648)   (471)   (9,027)   (14,455)   (1,327)   (102,923)
Other income and expenses, net   (4,956)   639    409    51    (41)   1,588    4,032    (721)   1,001 
Operating (loss) profit   (39,801)   35,895    30,234    56,396    971    27,978    75    1,538    113,286 
Financial expenses   (29,546)   (10,608)   (15,559)   (3,628)   (219)   (5,940)   (43,793)   22,856    (86,437)
Financial income   974    5,247    3,293    4,293    330    4,296    29,837    (22,106)   26,164 
Interests for present value of financial asset or liability   1,632    (437)   (1,602)   -    -    3,153    17,417    -    20,163 
Share of profit or loss in associates and joint ventures   (1)   1,585    -    -    -    73    (7,016)   7,015    1,656 
(Loss) profit before income tax   (66,742)   31,682    16,366    57,061    1,082    29,560    (3,480)   9,303    74,832 
Income tax   (11,739)   (9,724)   (6,235)   (17,651)   (323)   (16,856)   (9,895)   10    (72,413)
(Loss) profit for the period   (78,481)   21,958    10,131    39,410    759    12,704    (13,375)   9,313    2,419 
(Loss) profit from attributable to:                                             
Owners of the Company   (77,881)   18,621    5,178    29,557    759    5,501    (13,420)   9,123    (22,562)
Non-controlling interest   (600)   3,337    4,953    9,853    -    7,203    45    190