Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria
Unaudited Condensed Interim Consolidated Financial Statements as of December 31, 2020 and for the six-month period ended as of that date, presented comparatively.
Denomination: Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria | ||
Fiscal year N°: 88, beginning on July 1, 2020 | ||
Legal address: Carlos Della Paolera 261, 9th floor – Autonomous City of Buenos Aires, Argentina | ||
Company activity: Real estate, agricultural, commercial and financial activities | ||
Date of registration of the by-laws in the Public Registry of Commerce: February 19, 1937 | ||
Date of registration of last amendment of the by-laws in the Public Registry of Commerce: General Ordinary and Extraordinary Shareholders’ Meeting held on October 29, 2018 and registered in the Superintendence on January 08,2019 with the number 541, Book 93 Volume – of Joint Stock Companies. | ||
Expiration of Company charter: June 6, 2082 | ||
Registration number with the Supervisory Board of Companies: 26, folio 2, book 45, Stock Companies | ||
Stock: 501,642,804 common shares | ||
Common stock subscribed, issued and paid up nominal value (millions of Ps.): 502 | ||
Parent Companies: Inversiones Financieras del Sur S.A. and Agroinvestment S.A. | ||
Legal addresses: Road 8, km 17,500, Zonamérica Building 1, store 106, Montevideo, Uruguay (IFISA) - Cambara 1620, 2nd floor, office 202, Carrasco, 11000 Montevideo, Uruguay (Agroinvesment S.A.) | ||
Parent companies' activity: Investment | ||
Direct ownership interest: 177,145,564 shares | ||
Voting stock (direct and indirect equity interest): 35.47% (*) | ||
CAPITAL STATUS | ||
Type of stock | Authorized to be offered publicly (Shares) | Subscribed, Issued and Paid-in (millions of Ps.) |
Ordinary certified shares of Ps. 1 face value and 1 vote each | 501,642,804(**) | 502 |
(*) For computation purposes, treasury shares have been subtracted. | ||
(**) Company not included in the Optional Statutory System of Public Offer of Compulsory Acquisition. |
Index
Glossary of terms | 1 |
Unaudited Condensed Interim Consolidated Statements of Financial Position | 2 |
Unaudited Condensed Interim Consolidated Statements of Income and Other Comprehensive Income | 3 |
Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders' Equity | 4 |
Unaudited Condensed Interim Consolidated Statements of Cash Flows | 6 |
Notes to the Unaudited Condensed Interim Consolidated Financial Statements: | |
Note 1 - The Group's business and general information | 7 |
Note 2 - Summary of significant accounting policies | 8 |
Note 3 - Seasonal effects on operations | 9 |
Note 4 - Acquisitions and disposals | 9 |
Note 5 - Financial risk management and fair value estimates | 12 |
Note 6 - Segment information | 12 |
Note 7 - Investments in associates and joint ventures | 17 |
Note 8 - Investment properties | 18 |
Note 9 - Property, plant and equipment | 18 |
Note 10 - Trading properties | 19 |
Note 11 - Intangible assets | 19 |
Note 12 - Right-of-use assets | 19 |
Note 13 - Biological assets | 20 |
Note 14 - Inventories | 20 |
Note 15 - Financial instruments by category | 21 |
Note 16 - Trade and other receivables | 23 |
Note 17 - Cash flow and cash equivalents information | 24 |
Note 18 - Trade and other payables | 25 |
Note 19 - Provisions | 26 |
Note 20 - Borrowings | 26 |
Note 21 - Taxation | 29 |
Note 22 - Revenues | 30 |
Note 23 - Costs | 30 |
Note 24 - Expenses by nature | 31 |
Note 25 - Other operating results, net | 31 |
Note 26 - Financial results, net | 31 |
Note 27 - Related parties transactions | 32 |
Note 28 - CNV General Resolution N° 622 | 33 |
Note 29 - Cost of sales and services provided | 33 |
Note 30 - Foreign currency assets and liabilities | 34 |
Note 31 - Groups of assets and liabilities held for sale | 34 |
Note 32 - Result from discontinued operations | 35 |
Note 33 - Other subsequent events of the period | 35 |
Note 34 - Subsequent Events | 38 |
Glossary of terms
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 | |
BACS | Banco de Crédito y Securitización S.A. | |
BCRA | Central Bank of the Argentine Republic | |
BHSA | Banco Hipotecario S.A. | |
Brasilagro | Brasilagro-Companhia Brasileira de Propriedades Agrícolas | |
CAMSA | Consultores Assets Management S.A. | |
Clal | Clal Holdings Insurance Enterprises Ltd. | |
CNV | National Securities Commission | |
Condor | Condor Hospitality Trust Inc. | |
Cresud, “the Company”, “us” | Cresud S.A.C.I.F. y A. | |
DFL | Dolphin Fund Ltd. | |
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, 2019 | |
CPF | Collective Promotion Funds | |
Gav-Yam | Gav-Yam, Bayside Land Corporation Ltd | |
IBC | Israel Broadband Company | |
IDBD | IDB Development Corporation Ltd. | |
IFISA | Inversiones Financieras del Sur S.A. | |
IASB | International Accounting Standards Board | |
IRSA | IRSA Inversiones y Representaciones S.A. | |
IRSA CP | IRSA Propiedades Comerciales S.A. | |
ISPRO | ISPRO the Israel properties rental Corp. Ltd. | |
Israir | Israir Airlines & Tourism Ltd. | |
LRSA | La Rural S.A. | |
Metropolitan | Metropolitan 885 Third Avenue Leasehold LLC | |
MPIT | Minimum Presummed Income Tax | |
New Lipstick | New Lipstick LLC | |
IAS | International Accounting Standards | |
IFRS | International Financial Reporting Standards | |
NIS | New Israeli Shekel | |
PBC | Property & Building Corporation Ltd. | |
PBEL | PBEL Real Estate Ltd. | |
Quality | Quality Invest S.A. | |
Shufersal | Shufersal Ltd. | |
Tarshop | Tarshop S.A. | |
TASE | Bolsa de Comercio de Tel Aviv |
1
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
Unaudited Condensed Interim Consolidated Statements of Financial Position
as of December 31, 2020 and June 30, 2020
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
cuhiuchqe | Note | 12.31.20 | 06.30.20 |
ASSETS | |||
Non-current assets | |||
Investment properties | 8 | 168,223 | 275,853 |
Property, plant and equipment | 9 | 30,954 | 71,857 |
Trading properties | 10 | 1,476 | 5,820 |
Intangible assets | 11 | 1,796 | 33,788 |
Right-of-use assets | 12 | 3,784 | 26,281 |
Biological assets | 13 | 2,299 | 2,108 |
Investment in associates and joint ventures | 7 | 14,363 | 90,040 |
Deferred income tax assets | 21 | 1,399 | 1,111 |
Income tax and MPIT credits | 64 | 76 | |
Restricted assets | 15 | 83 | 2,320 |
Trade and other receivables | 16 | 8,273 | 32,750 |
Investment in financial assets | 15 | 774 | 4,212 |
Derivative financial instruments | 15 | 32 | 196 |
Total non-current assets | 233,520 | 546,412 | |
Current assets | |||
Trading properties | 10 | 52 | 2,776 |
Biological assets | 13 | 5,841 | 3,323 |
Inventories | 14 | 3,330 | 10,870 |
Restricted assets | 15 | - | 7,441 |
Income tax and MPIT credits | 146 | 368 | |
Group of assets held for sale | 31 | 2,067 | 52,513 |
Trade and other receivables | 16 | 18,798 | 52,394 |
Investment in financial assets | 15 | 2,362 | 21,803 |
Financial assets held for sale | 15 | - | 4,047 |
Derivative financial instruments | 15 | 682 | 385 |
Cash and cash equivalents | 15 | 6,684 | 120,959 |
Total current assets | 39,962 | 276,879 | |
TOTAL ASSETS | 273,482 | 823,291 | |
SHAREHOLDERS’ EQUITY | |||
Shareholders' equity (according to corresponding statement) | 30,015 | 30,153 | |
Non-controlling interest | 61,584 | 116,246 | |
TOTAL SHAREHOLDERS' EQUITY | 91,599 | 146,399 | |
LIABILITIES | |||
Non-current liabilities | |||
Borrowings | 20 | 57,695 | 384,018 |
Deferred income tax liabilities | 21 | 49,621 | 59,288 |
Trade and other payables | 18 | 2,709 | 3,579 |
Provisions | 19 | 148 | 3,705 |
Employee benefits | - | 535 | |
Derivative financial instruments | 15 | 26 | 89 |
Lease liabilities | 3,739 | 18,210 | |
Payroll and social security liabilities | 51 | 296 | |
Total non-current liabilities | 113,989 | 469,720 | |
Current liabilities | |||
Trade and other payables | 18 | 15,593 | 42,934 |
Borrowings | 20 | 43,981 | 117,918 |
Provisions | 19 | 139 | 2,928 |
Group of liabilities held for sale | 31 | 1,557 | 28,343 |
Payroll and social security liabilities | 848 | 5,615 | |
Income tax and MPIT liabilities | 101 | 988 | |
Lease liabilities | 1,556 | 6,784 | |
Derivative financial instruments | 15 | 4,119 | 1,662 |
Total Current liabilities | 67,894 | 207,172 | |
TOTAL LIABILITIES | 181,883 | 676,892 | |
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 273,482 | 823,291 |
The accompanying notes are an integral part of these Financial Statements.
PRICE WATERHOUSE . S.R.L. (Socio) | ) | ) | ||
C.P.C.E.C.A.B.A. T° 1 F° 17 Dr. Mariano C. Tomatis Contador Público (UBA) C.P.C.E.C.A.B.A. T° 241 F° 118 | Marcelo H. Fuxman Síndico Titular Por Comisión Fiscalizadora | Alejandro G. Elsztain Vicepresident II acting as President |
2
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
Unaudited Condensed Interim Consolidated Statements of Income and Other Comprehensive Income
for the six and three-month periods ended December 31, 2020 and 2019
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
Six months | Three months | ||||
Note | 12.31.20 | 12.31.19 | 12.31.20 | 12.31.19 | |
Revenues | 22 | 20,168 | 27,760 | 9,397 | 13,196 |
Costs | 23 | (15,509) | (18,421) | (6,621) | (8,301) |
Initial recognition and changes in the fair value of biological assets and agricultural products at the point of harvest | 1,679 | 1,700 | 923 | 1,131 | |
Changes in the net realizable value of agricultural products after harvest | 259 | 574 | (329) | (17) | |
Gross profit | 6,597 | 11,613 | 3,370 | 6,009 | |
Net gain from fair value adjustment of investment properties | 9,023 | 5,156 | (17,335) | (8,338) | |
Gain from disposal of farmlands | 91 | 407 | 1 | 84 | |
General and administrative expenses | 24 | (2,295) | (2,491) | (1,205) | (1,342) |
Selling expenses | 24 | (2,314) | (2,499) | (964) | (1,284) |
Other operating results, net | 25 | (1,881) | 567 | (2,187) | 140 |
Management fees | - | - | 523 | - | |
Profit / (Loss) from operations | 9,221 | 12,753 | (17,797) | (4,731) | |
Share of profit of associates and joint ventures | 7 | (487) | (1,284) | (636) | (2,252) |
Profit / (Loss) before financial results and income tax | 8,734 | 11,469 | (18,433) | (6,983) | |
Finance income | 26 | 268 | 179 | 28 | 69 |
Finance cost | 26 | (6,060) | (6,375) | (2,846) | (3,138) |
Other financial results | 26 | 3,272 | (9,702) | 3,283 | 7,027 |
Inflation adjustment | 26 | 1,731 | 222 | 1,534 | 684 |
Financial results, net | 26 | (789) | (15,676) | 1,999 | 4,642 |
Profit / (loss) before income tax | 7,945 | (4,207) | (16,434) | (2,341) | |
Income tax | 21 | (4,089) | (3,707) | 4,792 | (680) |
Profit / (loss) for the period from continuing operations | 3,856 | (7,914) | (11,642) | (3,021) | |
(Loss) / Profit for the period from discontinued operations | 32 | (7,120) | 10,192 | - | (5,268) |
(Loss) / Profit for the period | (3,264) | 2,278 | (11,642) | (8,289) | |
Other comprehensive income / (loss): | |||||
Items that may be reclassified subsequently to profit or loss: | |||||
Currency translation adjustment and other comprehensive income from subsidiaries | (1,135) | 1,406 | 3,242 | (3,589) | |
Revaluation of fixed assets transferred to investment properties | 232 | - | (161) | - | |
Items that may not be reclassified subsequently to profit or loss: | |||||
Actuarial loss from defined benefit plans | - | - | - | 12 | |
Other comprehensive (loss) / income for the period from continuing operations | (903) | 1,406 | 3,081 | (3,577) | |
Other comprehensive income for the period from discontinued operations | (5,337) | 10,838 | - | (4,811) | |
Total other comprehensive (loss) / income for the period | (6,240) | 12,244 | 3,081 | (8,388) | |
Total comprehensive (loss) / income for the period | (9,504) | 14,522 | (8,561) | (16,677) | |
Total comprehensive income from continuing operations | 2,953 | (13,860) | (8,561) | (14,033) | |
Total comprehensive (loss) / income from discontinued operations | (12,457) | 28,382 | - | (2,644) | |
Total comprehensive (loss) / income from the period | (9,504) | 14,522 | (8,561) | (16,677) | |
(Loss) / Profit for the period attributable to: | |||||
Equity holders of the parent | (3,002) | (6,461) | (6,222) | (2,906) | |
Non-controlling interest | (262) | 8,739 | (5,420) | (5,383) | |
Profit / (Loss) from continuing operations attributable to: | |||||
Equity holders of the parent | 510 | (7,623) | (6,222) | (1,104) | |
Non-controlling interest | 3,346 | (291) | (5,420) | (1,917) | |
Total comprehensive income attributable to: | |||||
Equity holders of the parent | (4,288) | (7,432) | (5,058) | (4,801) | |
Non-controlling interest | (5,216) | 21,954 | (3,503) | (11,876) | |
(Loss) / Profit for the period per share attributable to equity holders of the parent: | |||||
Basic | (6.01) | (13.19) | (12.46) | (5.93) | |
Diluted | (6.01) | (13.19) | (12.46) | (5.93) | |
Profit / (Loss) per share from continuing operations attributable to equity holders of the parent: | |||||
Basic | 1.02 | (15.57) | (12.46) | (2.25) | |
Diluted | 0.99 | (15.57) | (12.46) | (2.25) |
The accompanying notes are an integral part of these Financial Statements.
C.P.C.E.C.A.B.A. T° 1 F° 17 Dr. Mariano C. Tomatis Contador Público (UBA) C.P.C.E.C.A.B.A. T° 241 F° 118 | Marcelo H. Fuxman Síndico Titular Por Comisión Fiscalizadora | Alejandro G. Elsztain Vicepresident II acting as President |
3
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity
for the six-month period ended December 31, 2020
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
vhufsvhnofsvh | Share capital | Treasury shares | Inflation adjustment of share capital and treasury shares (i) | Share premium | Additional paid-in capital from treasury shares | Legal reserve | Special reserve (ii) | Other reserves (iii) | Retained earnings | Subtotal | Non-controlling interest | Total Shareholders' equity |
Adjusted balance as of June 30, 2019 | 499 | 3 | 11,827 | 12,694 | 108 | 447 | 924 | 1,206 | 2,445 | 30,153 | 116,246 | 146,399 |
Loss for the period | - | - | - | - | - | - | - | - | (3,002) | (3,002) | (262) | (3,264) |
Other comprehensive loss for the period | - | - | - | - | - | - | - | (1,286) | - | (1,286) | (4,954) | (6,240) |
Total comprehensive loss for the period | - | - | - | - | - | - | - | (1,286) | (3,002) | (4,288) | (5,216) | (9,504) |
Assignment of results - Shareholders’ meeting | - | - | - | - | - | 114 | - | - | (114) | - | - | - |
Changes in non-controlling interest | - | - | - | - | - | - | - | 307 | - | 307 | (231) | 76 |
Other changes in equity | - | - | - | - | - | - | - | 3,767 | 76 | 3,843 | 2,855 | 6,698 |
Capitalisation of irrevocable contributions | - | - | - | - | - | - | - | - | - | - | 13 | 13 |
Dividend distribution | - | - | - | - | - | - | - | - | - | - | (2,276) | (2,276) |
Decrease due to loss of control | - | - | - | - | - | - | - | - | - | - | (49,886) | (49,886) |
Integration of irrevocable contributions | - | - | - | - | - | - | - | - | - | - | 79 | 79 |
Balance as of December 31, 2020 | 499 | 3 | 11,827 | 12,694 | 108 | 561 | 924 | 3,994 | (595) | 30,015 | 61,584 | 91,599 |
(i)
Includes Ps. 1 of Inflation adjustment of treasury shares. See Note 18 to the Annual Financial Statements.
(ii)
Related to CNV General Resolution N° 609/12.
(iii)
Group’s other reserves for the period ended December 31, 2020 are comprised as follows:
Cost of treasury shares | Changes in non-controlling interest | Revaluation surplus | Reserve for currency translation adjustment | Reserve shared-based compensation | Other comprehensive results from subsidiaries | Other reserves from subsidiaries | Reserve for the acquisition of securities issued by the Company | Total other reserves | |
Balance as of June 30, 2019 | (180) | (3,948) | 1,544 | 3,577 | 592 | (563) | 80 | 104 | 1,206 |
Other comprehensive (loss) / profit for the period | - | - | - | (1,518) | - | 232 | - | - | (1,286) |
Total comprehensive (loss) / profit for the period | - | - | - | (1,518) | - | 232 | - | - | (1,286) |
Changes in non-controlling interest | - | 307 | - | - | - | - | - | - | 307 |
Other changes in equity | - | (32) | - | 3,136 | - | 735 | (72) | - | 3,767 |
Balance as of December 31, 2020 | (180) | (3,673) | 1,544 | 5,195 | 592 | 404 | 8 | 104 | 3,994 |
The accompanying notes are an integral part of these Financial Statements.
C.P.C.E.C.A.B.A. T° 1 F° 17 Dr. Mariano C. Tomatis Contador Público (UBA) C.P.C.E.C.A.B.A. T° 241 F° 118 | Marcelo H. Fuxman Síndico Titular Por Comisión Fiscalizadora | Alejandro G. Elsztain Vicepresident II acting as President |
4
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity
for the six-month period ended December 31, 2019
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
Share capital | Treasury shares | Inflation adjustment of share capital and treasury shares (i) | Share premium | Additional paid-in capital from treasury shares | Legal reserve | Special reserve (ii) | Other reserves (iii) | Retained earnings | Subtotal | Non-controlling interest | Total Shareholders' equity | |
Balance as of June 30, 2019 | 486 | 16 | 11,828 | 12,694 | 110 | 445 | 6,208 | 43,667 | (46,643) | 28,811 | 123,639 | 152,450 |
Adjustments previous periods (IFRS 9 and 15) (Note 2.2) | - | - | - | - | - | - | - | - | (867) | (867) | (1,555) | (2,422) |
Adjusted balance as of June 30, 2019 | 486 | 16 | 11,828 | 12,694 | 110 | 445 | 6,208 | 43,667 | (47,510) | 27,944 | 122,084 | 150,028 |
(Loss) / profit for the period | - | - | - | - | - | - | - | - | (6,461) | (6,461) | 8,739 | 2,278 |
Other comprehensive (loss) / income for the period | - | - | - | - | - | - | - | (971) | - | (971) | 13,215 | 12,244 |
Total comprehensive (loss) / profit for the period | - | - | - | - | - | - | - | (971) | (6,461) | (7,432) | 21,954 | 14,522 |
Assignment of results according to A.G.O. | - | - | - | - | - | - | - | - | - | - | (176) | (176) |
Reserve for share-based payments | 13 | (13) | - | - | - | - | - | 1,812 | (1,812) | - | (265) | (265) |
Issuance of shares | - | - | - | - | - | - | - | - | - | - | 102 | 102 |
Reserve for share-based payments | - | - | - | - | - | - | - | (3) | - | (3) | - | (3) |
Changes in non-controlling interest | - | - | - | - | - | - | - | (171) | - | (171) | 3,327 | 3,156 |
Dividends distribution | - | - | - | - | - | - | - | - | - | - | (1,888) | (1,888) |
Decrease due to loss of control | - | - | - | - | - | - | - | - | - | - | (51,868) | (51,868) |
Other changes in equity | - | - | - | - | - | - | - | - | 16 | 16 | 213 | 229 |
Capitalisation of irrevocable contributions | - | - | - | - | - | - | - | - | - | - | 31 | 31 |
Loss absorption | - | - | - | - | - | - | (5,285) | (41,942) | 47,227 | - | - | - |
Balance as of September 30, 2019 | 499 | 3 | 11,828 | 12,694 | 110 | 445 | 923 | 2,392 | (8,540) | 20,354 | 93,514 | 113,868 |
(i)
Includes Ps. 1 of Inflation adjustment of treasury shares. See Note 18 to the Annual Financial Statements.
(ii)
Related to CNV General Resolution N° 609/12.
(iii)
Group’s other reserves for the period ended December 31, 2019 are comprised as follows:
Cost of treasury shares | Changes in non-controlling interest | Revaluation surplus | Reserve for currency translation adjustment | Reserve shared-based compensation | Special reserve | Other comprehensive results from subsidiaries | Other reserves from subsidiaries | Reserve for the acquisition of securities issued by the Company | Total other reserves | |
Adjusted balance as of June 30, 2019 | (1,994) | (3,326) | 1,149 | 5,452 | 576 | 41,942 | (261) | 11 | 118 | 43,667 |
Other comprehensive loss for the period | - | - | (16) | (850) | - | - | (105) | - | - | (971) |
Total comprehensive loss for the period | - | - | (16) | (850) | - | - | (105) | - | - | (971) |
Reserve for share-based payments | 1,812 | - | - | - | - | - | - | - | - | 1,812 |
Other changes in equity | - | - | - | - | - | - | - | (3) | - | (3) |
Changes in non-controlling interest | - | (171) | - | - | - | - | - | - | - | (171) |
Reserve for share-based payments | - | - | - | - | - | (41,942) | - | - | - | (41,942) |
Balance as of September 30, 2019 | (182) | (3,497) | 1,133 | 4,602 | 576 | - | (366) | 8 | 118 | 2,392 |
The accompanying notes are an integral part of these Financial Statements.
C.P.C.E.C.A.B.A. T° 1 F° 17 Dr. Mariano C. Tomatis Contador Público (UBA) C.P.C.E.C.A.B.A. T° 241 F° 118 | Marcelo H. Fuxman Síndico Titular Por Comisión Fiscalizadora | Alejandro G. Elsztain Vicepresident II acting as President |
5
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
Unaudited Condensed Interim Consolidated Statements of Cash Flows
for the six and six-month periods ended December 31, 2020 and 2019
(All amounts in millions, except otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
gygy | Note | 12.31.20 | 12.31.19 |
Operating activities: | |||
Net cash generated from operating activities before income tax paid | 17 | 813 | 9,168 |
Income tax paid | (34) | (294) | |
Net cash generated from continuing operating activities | 779 | 8,874 | |
Net cash generated from discontinued operating activities | 2,473 | 17,626 | |
Net cash generated from operating activities | 3,252 | 26,500 | |
Investing activities: | |||
Acquisition of participation in associates and joint ventures | - | (84) | |
Capital contributions to associates and joint ventures | (27) | (342) | |
Acquisition and improvement of investment properties | (2,032) | (1,696) | |
Proceeds from sales of investment properties | 14,245 | 59 | |
Acquisitions and improvements of property, plant and equipment | (711) | (688) | |
Financial advances | (21) | (27) | |
Acquisition of intangible assets | (21) | (42) | |
Proceeds from sales of property, plant and equipment | 9 | 5 | |
Dividends collected from associates and joint ventures | 590 | 598 | |
Proceeds from loans granted | - | 37 | |
Acquisitions of investments in financial assets | (18,441) | (14,872) | |
Proceeds from disposal of investments in financial assets | 21,407 | 19,738 | |
Interest charged on financial assets | 313 | 314 | |
Dividends received from financial assets | - | 10 | |
Acquisition of subsidiaries, net of funds acquired | - | (97) | |
Loans granted to related parties | - | (275) | |
Loans granted | (173) | (1,172) | |
Increase in securities | - | (250) | |
Net cash generated from continuing investing activities | 15,138 | 1,216 | |
Net cash generated from discontinued investing activities | 35,434 | 17,278 | |
Net cash generated from investing activities | 50,572 | 18,494 | |
Financing activities: | |||
Borrowings and issuance of non-convertible notes | 8,209 | 13,127 | |
Payment of borrowings and non-convertible notes | (34,970) | (14,283) | |
Obtaining of short term loans, net | 1,542 | (144) | |
Interest paid | (5,483) | (4,728) | |
Repurchase of non-convertible notes | (89) | (3,361) | |
Capital contributions from non-controlling interest in subsidiaries | 84 | - | |
Acquisition of non-controlling interest in subsidiaries | (144) | (343) | |
Proceeds from sales of non-controlling interest in subsidiaries | 3,138 | - | |
Loans received from associates and joint ventures, net | - | 109 | |
Dividends paid | (735) | (1,597) | |
Dividends paid to non-controlling interest in subsidiaries | (2,064) | (276) | |
Proceeds from derivative financial instruments, net | (653) | 53 | |
Net cash used in continuing financing activities | (31,165) | (11,443) | |
Net cash used in discontinued financing activities | (14,492) | (54,022) | |
Net cash used in financing activities | (45,657) | (65,465) | |
Net decrease in cash and cash equivalents from continuing activities | (15,248) | (1,353) | |
Net increase / (decrease) in cash and cash equivalents from discontinued activities | 23,415 | (19,118) | |
Net Increase / (Decrease) in cash and cash equivalents | 8,167 | (20,471) | |
Cash and cash equivalents at beginning of the period | 15 | 120,959 | 107,030 |
Cash and cash equivalents reclassified to held for sale | - | (711) | |
Foreign exchange gain on cash and changes in fair value of cash equivalents | (6,479) | 6,273 | |
Deconsolidation | (115,963) | - | |
Cash and cash equivalents at the end of the period | 6,684 | 92,121 |
The accompanying notes are an integral part of these Financial Statements.
C.P.C.E.C.A.B.A. T° 1 F° 17 Dr. Mariano C. Tomatis Contador Público (UBA) C.P.C.E.C.A.B.A. T° 241 F° 118 | Marcelo H. Fuxman Síndico Titular Por Comisión Fiscalizadora | Alejandro G. Elsztain Vicepresident II acting as President |
6
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
(Amounts in millions, except otherwise indicated)
1.
The Group’s business and general information
Cresud was founded in 1936 as a subsidiary of Credit Foncier, a Belgian company primarily engaged in providing rural and urban loans in Argentina and administering real estate holdings foreclosed by Credit Foncier. Credit Foncier was liquidated in 1959, and as part of such liquidation, the shares of Cresud were distributed to Credit Foncier’s shareholders. From the 1960s through the end of the 1970s, the business of Cresud shifted exclusively to agricultural activities.
In 2002, Cresud acquired a 19.85% interest in IRSA, a real estate company related to certain shareholders of Cresud. In 2009, Cresud increased its ownership percentage in IRSA to 55.64% and IRSA became Cresud’s direct principal subsidiary.
Cresud and its subsidiaries are collectively referred to hereinafter as the Group.
Main shareholders of the Company are jointly Inversiones Financieras del Sur S.A. and Agroinvestment S.A. Both entities are companies incorporated in Uruguay and belong to the same controlling group and ultimate beneficiary.
The Board of Directors has approved these Financial Statements for issuance on November 19, 2020.
As of December 31, 2020, the Group operates in two major business lines: (i) agricultural business and (ii) urban property and investment business, which, with the acquisition of IDBD, was divided into two centers of operations: (a) Argentina Operations Center and (b) Israel Operations Center. With the loss of control of the Israel Operations Center and its deconsolidation, as of October 1, 2020, the Group manages its operations through a single operations center:
(i)
See Note 4 to the Annual Financial Statements for more information about the Operations Center in Israel.
Operations Center in Israel
As stated in Note 1. to the consolidated financial statements as of June 30, 2020, on September 25, 2020 the Court decreed the insolvency and liquidation of IDBD and appointed a trustee for its shares along with a custodian over DIC and Clal shares. After this decision, the Board of Directors of IDBD was removed from its functions, therefore, the Group lost control as of that date. For comparability purposes and as required by IFRS 5, the results of the Israel Operations Center have been reclassified to discontinued operations for all periods presented.
Véase nuestro informe de fecha 09/118
PRICE WATERHOUSE & Co. S
C.P.C.E.C.A.B.A. T° 1 F
7
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
2.
Summary of significant accounting policies
2.1.
Basis of preparation
These financial statements have been prepared in accordance with IAS 34 “Interim financial reporting” and should therefore be read in conjunction with the Group's annual Consolidated Financial Statements as of June 30, 2020 prepared in accordance with IFRS. Also, these financial statements include additional information required by Law No. 19,550 and / or regulations of the CNV. Such information is included in the notes to these financial statements, as accepted by IFRS.
These financial statements for the interim periods of six months ended December 31, 2020 and 2019 have not been audited. Management considers that they include all the necessary adjustments to fairly present the results of each period. Intermediate period results do not necessarily reflect the proportion of the Group's results for the entire fiscal years.
IAS 29 "Financial Reporting in Hyperinflationary Economies" requires that the financial statements of an entity whose functional currency is one of a hyperinflationary economy be expressed in terms of the current unit of measurement at the closing date of the reporting period, regardless of whether they are based on the historical cost method or the current cost method. To do so, in general terms, the inflation produced from the date of acquisition or from the revaluation date, as applicable, must be calculated by non-monetary items. This requirement also includes the comparative information of the financial statements.
In order to conclude on whether an economy is categorized as highly inflationary in the terms of IAS 29, the standard details a series of factors to be considered, including the existence of an accumulated inflation rate in three years that approximates or exceed 100%. Accumulated inflation in Argentina in three years is over 100%. For that reason, in accordance with IAS 29, Argentina must be considered a country with a highly inflationary economy starting July 1, 2018.
In relation to the inflation index to be used and in accordance with FACPCE Resolution No. 539/18, it is determined based on the Wholesale Price Index (IPIM) until 2016, considering the average variation of the Consumer Price Index (CPI) of the Autonomous City of Buenos Aires for the months of November and December 2015, because during those two months there were no national IPIM measurements. Then, from January 2017, the National Consumer Price Index (National CPI) is considered. The table below presents the index for the period ended December 31, 2020, according to official statistics (INDEC) and following the guidelines described in Resolution 539/18.
As of December 31, 2020 (accumulated three months) | As of December 31, 2020 (accumulated three months) | As of December 31, 2020 (accumulated six months) | |
Price variation | 8% | 12% | 20% |
As a consequence of the aforementioned, these financial statements as of December 31, 2020 were restated in accordance with IAS 29.
2.2
Accounting policies
The accounting policies applied in the presentation of these Financial Statements are consistent with those applied in the preparation of the Annual Financial Statements, as described in Note 2 to those Financial Statements.
As described in Note 2.2 to the annual financial statements, the Group has adopted IFRS 16: “Leases” and Amendment to IAS 28 “Investment in associates and joint ventures” in the current year, applying the cumulative effect approach, therefore, accumulated impact was recognized in retained earnings as of July 1, 2019. Comparative figures were not restated.
2.3
Comparability of information
Balance items as of June 30, 2019 and December 31, 2019 presented in these Financial Statements for comparative purposes arise from the financial statements as of and for such period, restated in accordance with IAS 29 (See Note 2.1).Certain items from prior periods have been reclassified for consistency purposes regarding the loss of control in IDBD. See Notes 1 and 6 to these Financial Statements.
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
8
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
2.4
Use of estimates
The preparation of Financial Statements at a certain date requires Management to make estimations and evaluations affecting the amount of assets and liabilities recorded and contingent assets and liabilities disclosed at such date, as well as income and expenses recorded during the period. Actual results might differ from the estimates and evaluations made at the date of preparation of these financial statements. In the preparation of these financial statements, the significant judgments made by Management in applying the Group’s accounting policies and the main sources of uncertainty were the same as the ones applied by the Group in the preparation of the Annual Financial Statements described in Note 3 to those Consolidated Financial Statements, except for those mentioned in Note 34.
3.
Seasonal effects on operations
Agricultural business
Some of the Group’s businesses are more affected by seasonal effects than others. The operations of the Group’s agricultural business are subject to seasonal effects. The harvests and sale of grains in Argentina generally take place each year since March in the case of corn and soybean, since October in the case of wheat, and since December in the case of sunflower. In Brazil, the harvest and sale of soybean take place since February, and in the case of corn weather conditions make it possible to have two seasons, therefore the harvest take place between March and July. In Bolivia, weather conditions also make it possible to have two soybean, corn and sorghum seasons and, therefore, these crops are harvested in July and May, whereas wheat is harvested in August and September, respectively. In the case of sugarcane, harvest and sale take place between April and November of each year. Other segments of the agricultural business, such as beef cattle production tend to be more stable. However, beef cattle production is generally larger during the second quarter, when conditions are more favorable. As a result, there may be material fluctuations in the agricultural business results across quarters.
Urban properties and investments business
The operations of the Group’s shopping malls are subject to seasonal effects, which affect the level of sales recorded by lessees. During summertime in Argentina (January and February), the lessees of shopping malls experience the lowest sales levels in comparison with the winter holidays (July) and Christmas and year-end holidays celebrated in December, when they tend to record peaks of sales. Apparel stores generally change their collections during the spring and the fall, which impacts positively on shopping malls sales. Sale discounts at the end of each season also affect the business. As a consequence, for shopping mall operations, a higher level of business activity is expected in the period ranging between July and December, compared to the period between January and June.
4.
Acquisitions and disposals
Significant acquisitions and disposals for the six-month period ended December 31, 2020 are detailed below. Significant acquisitions and disposals for the fiscal year ended June 30, 2019, are detailed in Note 4 to the Annual Financial Statements.
Agricultural business
Sale of Bananal Farm
BrasilAgro concluded the sale of 2,160 hectares (1,714 useful hectares) of Bananal Farm (Magalhães municipality - BA). The farm was included in the Group of assets held for sale due to a disagreement involving the tenant at the time of sale. The previous conditions recognized in the purchase agreement were fully met on July 31, 2020 after receipt of R$ 5.5 (equivalent to Ps. 95). The face value of the sale is R$ 28 (equivalent to Ps. 441), of which the Company has already received R$ 7.5 (equivalent to Ps. 126). For this operation, the company will not recognize results since the asset was recorded at its fair value.
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
9
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
Urban properties and investments business
Sale of floors from Boston Tower
On July 15, 2020, IRSA CP entered into a preliminary sale agreement (with delivery of possession) with respect to a medium-height floor from Boston tower located at Della Paolera 265, Catalinas district, City of Buenos Aires, covering a total area of approximately 1,063 sq. meters and 5 parking lots located in the building. The price of the transaction was Ps. 477.7 (US$ 6.7), which has been paid in full.
On August 25, 2020, IRSA CP executed a preliminary sale agreement (with delivery of possession) with respect to 5 floors from Boston tower located at Della Paolera 265, Catalinas district, City of Buenos Aires, covering a total area of approximately 6,235 sq. meters and 25 parking lots located in the building. The price of the transaction was Ps. 2,562 (US$ 34.7), which has been paid in full.
On November 5, 2020, IRSA CP has signed a purchase and sale agreement with possession of 4 floors of the Boston Tower located at 265 Della Paolera in the Catalinas District in the Autonomous City of Buenos Aires for a gross rental area of approximately 3,892 square meters and 15 parking lots located in the building. The price of the transaction was Ps. 1,812 (US$ 22.9).
On November 12, 2020, IRSA CP has signed with an unrelated third party a purchase and sale agreement with possession of 3 floors of the Boston Tower located at 265 Della Paolera in the Catalinas District in the Autonomous City of Buenos Aires for a gross rental area of approximately 3,266 square meters, a commercial space located on the ground floor of approximately 225 square meters and 15 parking lots located in the building. The price of the transaction was Ps. 1,521 (US$ 19.1).
Bouchard sale
On July 30, 2020, IRSA CP sold the entire “Bouchard 710” building, located in the Plaza Roma district of the City of Buenos Aires. The tower has a gross leasable area of 15,014 sq. meters divided into 12 floors for office use and 116 parking lots. The price of the transaction was approximately Ps. 6,300 (US$ 87), which has been paid in full.
Lipstick Building, New York, United States
On August 7, 2020, Metropolitan signed an agreement with the owner of the Ground Lease through which it terminated the relationship, leaving the administration of the building. For this reason, Metropolitan stopped recognizing the liabilities associated with the ground lease, as well as all the assets and liabilities associated with the building and the administration of the building; and made an agreement with the owner of the Ground Lease that states that Metropolitan is completely released from responsibilities, except for (i) claims for liabilities prior to June 1, 2020 from people who have performed work or provided services in the Building or to Metropolitan and (ii) claims from people who have had an accident on the property dated before August 7, 2020. This situation had an impact on the consolidated Financial Statements as of June 30, 2020.
Condor Merger Agreement
On July 19, 2019, Condor entered into a merger agreement with Nexponint Hospitality Trust. In accordance with the contractual terms, each Condor common share, with a par value of US$ 0.01 per share, was canceled prior to the merger and became the right to receive a cash amount equivalent to US$ 11.10 per ordinary share. Additionally, in accordance with the terms and conditions of the merger agreement, each Class E convertible share was automatically canceled and became the right to receive a cash amount equivalent to US$ 10.00 per share.
The closing of the transaction, which had been scheduled for March 23, 2020, did not occur.
On October 14, 2020, Condor entered into an agreement with Nexponint Hospitality Trust and some of its affiliates ("NHT Parties") to resolve any and all claims between them related to the aforementioned merger agreement.
According to this agreement, NHT and its affiliates shall make three payments to Condor in three installments ending on December 30, 2020 and totaling US$ 7.0. As of the date of these financial statements, the total compensation for breach of the contract has been collected.
As of the date of presentation of these financial statements, the Company has 2,245,100 ordinary shares and 325,752 Series E shares of Condor.
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
10
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
Loss of control of IDBD
As described in Note 1. to these financial statements, at the end of September 2020, the Group has lost control of IDBD, deconsolidating the related assets and liabilities and reclassifying the operations from this operations center to discontinued operations.
The following table details the net assets disposed:
09.30.20 | |
ASSETS | |
Investment properties | 93,794 |
Property, plant and equipment | 38,292 |
Trading properties | 6,136 |
Intangible assets | 29,161 |
Right-of-use assets | 20,629 |
Investments in associates and joint ventures | 38,654 |
Deferred income tax assets | 453 |
Income tax credit | 340 |
Restricted assets | 6,703 |
Trade and other receivables | 56,408 |
Investments in financial assets | 25,249 |
Derivative financial instruments | 294 |
Inventories | 3,760 |
Group of assets held for sale | 43,909 |
Cash and cash equivalents | 115,962 |
TOTAL ASSETS | 479,744 |
Borrowings | 339,375 |
Lease liabilities | 18,908 |
Deferred income tax liabilities | 12,975 |
Trade and other payables | 25,363 |
Income tax liabilities | 475 |
Provisions | 5,661 |
Employee benefits | 498 |
Derivative financial instruments | 498 |
Salaries and social security liabilities | 3,532 |
Group of liabilities held for sale | 22,985 |
TOTAL LIABILITIES | 430,270 |
TOTAL NET ASSETS | 49,474 |
Non-controlling interest | (49,886) |
Result for loss of control | (412) |
Recycling of currency translation adjustment and other reserves | (2,796) |
Total result for loss of control (*) | (3,208) |
(*) included within discontinued operations.
Distribution of dividends in kind
On October 26, 2020, the Ordinary and Extraordinary Shareholders’ Meeting of IRSA, approved, a dividend distribution in kind for the equivalent amount of Ps. 484 (representative of Ps. 0.84 per share) payable in shares of IRSA CP. IRSA CP’s quoted price per share as of October 23, 2020, was considered and, it amounted to 320 pesos per share. As a result 1,512,500 shares were distributed. This transaction was accounted for as a change in equity generating a reduction of the equity attributable to the controlling shareholders for Ps. 673 restated for inflation as of the date of these financial statements. As of the end of the period the groups interest in IRSA CP amounts to 79.92%.
Manibil Sale
On December 22, 2020, the Company sold 217,332,873 ordinary Class B shares, nominative not endorsable, with a nominal value of Ps. 1 and entitled to one vote per share owned by the Company, representing 49% of the stock capital of MANIBIL S.A., a company dedicated to real estate developments. The price for the sale of the shares amounts to Ps. 576.9. The operation was completed in February 2021, for which the Company is no longer a shareholder of MANIBIL S.A.
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
11
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
5.
Financial risk management and fair value estimates
These Financial Statements do not include all the information and disclosures on financial risk management; therefore, they should be read along with Note 5 to the Annual Financial Statements. There have been no changes in risk management or risk management policies applied by the Group since year-end.
Since June 30, 2020 and up to the date of issuance of these Financial Statements, there have been no significant changes in business or economic circumstances affecting the fair value of the Group's assets or liabilities, (either measured at fair value or amortized cost), except as mentioned in Note 33. Furthermore, there have been no transfers between the different hierarchies used to assess the fair value of the Group’s financial instruments, except as mentioned in Note 33.
6.
Segment information
As explained in Note 6 to the annual Financial Statements, the Group reports the information by segments from the perspective of products and services: (i) agricultural business and (ii) urban properties and investments business. Additionally, this last segment was geographically divided into two centers of operations to manage its global interests: Argentina and Israel. However, as detailed in Note 1, during September 2020 the Group lost control of IDBD and reclassified the results related to discontinued operations. As a consequence of the loss of control over IDBD, as of October 1, 2020, the Group reports its financial and equity performance under a single operations center. The information by segment for the period ended December 31, 2019 has been modified for the purposes of its comparability with the current period.
Below is a summary of the Group’s business units 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, 2020 and 2019:
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
12
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
Below is a summarized analysis of the lines of business of the Group for the year ended December 31, 2020:
12.31.20 | |||||||||
Urban Properties and Investment business (II) | |||||||||
Operations Center in Argentina | Operations Center in Israel | Subtotal | Total segment information | Joint ventures (i) | Adjustments (ii) | Elimination of inter-segment transactions and non-reportable assets / liabilities (iii) | Total Statement of Income / Financial Position | ||
Revenues | 15,795 | 3,854 | - | 3,854 | 19,649 | (17) | 1,127 | (591) | 20,168 |
Costs | (13,353) | (1,422) | - | (1,422) | (14,775) | 31 | (1,237) | 472 | (15,509) |
Initial recognition and changes in the fair value of biological assets and agricultural products at the point of harvest | 1,647 | - | - | - | 1,647 | - | - | 32 | 1,679 |
Changes in the net realizable value of agricultural products after harvest | 259 | - | - | - | 259 | - | - | - | 259 |
Gross profit | 4,348 | 2,432 | - | 2,432 | 6,780 | 14 | (110) | (87) | 6,597 |
Gain from disposal of farmlands | 91 | - | - | - | 91 | - | - | - | 91 |
Net gain from fair value adjustment of investment properties | 50 | 9,481 | - | 9,481 | 9,531 | (508) | - | - | 9,023 |
General and administrative expenses | (786) | (1,542) | - | (1,542) | (2,328) | 3 | - | 30 | (2,295) |
Selling expenses | (1,587) | (793) | - | (793) | (2,380) | 7 | - | 59 | (2,314) |
Other operating results, net | (1,780) | (104) | - | (104) | (1,884) | 1 | 1 | 1 | (1,881) |
Profit from operations | 336 | 9,474 | - | 9,474 | 9,810 | (483) | (109) | 3 | 9,221 |
Share profit of associates and joint ventures | (32) | (808) | - | (808) | (840) | 354 | - | (1) | (487) |
Segment profit | 304 | 8,666 | - | 8,666 | 8,970 | (129) | (109) | 2 | 8,734 |
Reportable assets | 46,440 | 184,424 | - | 184,424 | 230,864 | (933) | - | 43,551 | 273,482 |
Reportable liabilities | - | - | - | - | - | - | - | (181,883) | (181,883) |
Net reportable assets | 46,440 | 184,424 | - | 184,424 | 230,864 | (933) | - | (138,332) | 91,599 |
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PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
13
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
Below is a summarized analysis of the lines of business of the Group for the year ended December 31, 2019:
12.31.19 | |||||||||
Urban Properties and Investment business (II) | |||||||||
Operations Center in Argentina | Operations Center in Israel | Subtotal | Total segment information | Joint ventures (i) | Adjustments (ii) | Elimination of inter-segment transactions and non-reportable assets / liabilities (iii) | Total Statement of Income / Financial Position | ||
Revenues | 17,455 | 8,891 | - | 8,891 | 26,346 | (54) | 2,097 | (629) | 27,760 |
Costs | (14,759) | (1,878) | - | (1,878) | (16,637) | 31 | (2,189) | 374 | (18,421) |
Initial recognition and changes in the fair value of biological assets and agricultural products at the point of harvest | 1,503 | - | - | - | 1,503 | - | - | 197 | 1,700 |
Changes in the net realizable value of agricultural products after harvest | 574 | - | - | - | 574 | - | - | - | 574 |
Gross profit | 4,773 | 7,013 | - | 7,013 | 11,786 | (23) | (92) | (58) | 11,613 |
Net gain from fair value adjustment of investment properties | 16 | 5,484 | - | 5,484 | 5,500 | (344) | - | - | 5,156 |
Gain from disposal of farmlands | 407 | - | - | - | 407 | - | - | - | 407 |
General and administrative expenses | (914) | (1,617) | - | (1,617) | (2,531) | 7 | - | 33 | (2,491) |
Selling expenses | (1,757) | (729) | - | (729) | (2,486) | 5 | (34) | 16 | (2,499) |
Other operating results, net | 560 | (39) | - | (39) | 521 | 19 | 27 | - | 567 |
Profit from operations | 3,085 | 10,112 | - | 10,112 | 13,197 | (336) | (99) | (9) | 12,753 |
Share profit / (loss) of associates and joint ventures | 211 | (1,755) | - | (1,755) | (1,544) | 247 | - | 13 | (1,284) |
Segment profit | 3,296 | 8,357 | - | 8,357 | 11,653 | (89) | (99) | 4 | 11,469 |
Reportable assets | 43,721 | 139,200 | 509,531 | 648,731 | 692,452 | (788) | - | 12,133 | 703,797 |
Reportable liabilities | - | - | (449,324) | (449,324) | (449,324) | - | - | (15,603) | (464,927) |
Net reportable assets | 43,721 | 139,200 | 60,207 | 199,407 | 243,128 | (788) | - | (3,470) | 238,870 |
(i)
Represents the equity value of joint ventures that were proportionately consolidated for information by segment purposes.
(ii)
Includes Ps. (110) and Ps. (95) corresponding to Expenses and FPC as of December 31, 2020 and 2019, respectively.
(iii)
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 rights to receive future units under barter agreements, net of investments in associates with negative equity which are included in provisions in the amount of Ps. 8 as of December 31, 2020.
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
14
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
(I)
Agriculture line of business
The following tables present the reportable segments of the agriculture line of business:
12.31.20 | |||||
Agricultural production | Land transformation and sales | Corporate | Others | Total Agricultural business | |
Revenues | 9,866 | - | - | 5,929 | 15,795 |
Costs | (8,391) | (15) | - | (4,947) | (13,353) |
Initial recognition and changes in the fair value of biological assets and agricultural products at the point of harvest | 1,647 | - | - | - | 1,647 |
Changes in the net realizable value of agricultural products after harvest | 259 | - | - | - | 259 |
Gross profit / (loss) | 3,381 | (15) | - | 982 | 4,348 |
Gain from disposal of farmlands | - | 91 | - | - | 91 |
Net gain from fair value adjustment of investment properties | - | 50 | - | - | 50 |
General and administrative expenses | (467) | (2) | (132) | (185) | (786) |
Selling expenses | (987) | - | - | (600) | (1,587) |
Other operating results, net | (3,179) | 1,346 | - | 53 | (1,780) |
(Loss) / profit from operations | (1,252) | 1,470 | (132) | 250 | 336 |
Share of loss of associates and joint ventures | (8) | - | - | (24) | (32) |
Segment (loss) / profit | (1,260) | 1,470 | (132) | 226 | 304 |
Investment properties | 5,849 | - | - | - | 5,849 |
Property, plant and equipment | 26,033 | 214 | - | 65 | 26,312 |
Investments in associates | 457 | - | - | 301 | 758 |
Other reportable assets | 9,111 | - | - | 4,410 | 13,521 |
Reportable assets | 41,450 | 214 | - | 4,776 | 46,440 |
12.31.19 | |||||
Agricultural production | Land transformation and sales | Corporate | Others | Total Agricultural business | |
Revenues | 11,364 | - | - | 6,091 | 17,455 |
Costs | (9,669) | (16) | - | (5,074) | (14,759) |
Initial recognition and changes in the fair value of biological assets and agricultural products at the point of harvest | 1,477 | - | - | 26 | 1,503 |
Changes in the net realizable value of agricultural products after harvest | 574 | - | - | - | 574 |
Gross profit / (loss) | 3,746 | (16) | - | 1,043 | 4,773 |
Net gain from fair value adjustment of investment properties | - | 16 | - | - | 16 |
Gain from disposal of farmlands | - | 407 | - | - | 407 |
General and administrative expenses | (591) | (1) | (138) | (184) | (914) |
Selling expenses | (1,242) | - | - | (515) | (1,757) |
Other operating results, net | 149 | 289 | - | 122 | 560 |
Profit / (loss) from operations | 2,062 | 695 | (138) | 466 | 3,085 |
Share of profit of associates and joint ventures | 38 | - | - | 173 | 211 |
Segment profit / (loss) | 2,100 | 695 | (138) | 639 | 3,296 |
Investment properties | 3,236 | - | - | - | 3,236 |
Property, plant and equipment | 26,026 | 214 | - | 889 | 27,129 |
Investments in associates | 477 | - | - | 449 | 926 |
Other reportable assets | 9,482 | - | - | 2,948 | 12,430 |
Reportable assets | 39,221 | 214 | - | 4,286 | 43,721 |
(II)
Urban properties and investments line of business
Below is a summarized analysis of the lines of business of Group’s operations center in Argentina:
12.31.20 | ||||||||
Shopping Malls | Offices | Sales and developments | Hotels | International | Corporate | Others | Total | |
Revenues | 1,943 | 1,118 | 358 | 119 | 297 | - | 19 | 3,854 |
Costs | (292) | (93) | (368) | (335) | (251) | - | (83) | (1,422) |
Gross profit / (loss) | 1,651 | 1,025 | (10) | (216) | 46 | - | (64) | 2,432 |
Net (loss) / profit from fair value adjustment of investment properties (i) | (4,762) | 7,503 | 6,167 | - | 3 | - | 570 | 9,481 |
General and administrative expenses | (674) | (182) | (146) | (157) | (31) | (325) | (27) | (1,542) |
Selling expenses | (116) | (78) | (529) | (47) | (20) | - | (3) | (793) |
Other operating results, net | (65) | (8) | (37) | 10 | (1) | - | (3) | (104) |
(Loss) / Profit from operations | (3,966) | 8,260 | 5,445 | (410) | (3) | (325) | 473 | 9,474 |
Share of profit / (loss) of associates and joint ventures | - | - | (15) | - | (543) | - | (250) | (808) |
Segment (loss) / profit | (3,966) | 8,260 | 5,430 | (410) | (546) | (325) | 223 | 8,666 |
Investment and trading properties | 54,295 | 67,273 | 44,353 | (2) | 111 | - | 2,026 | 168,056 |
Property, plant and equipment | 243 | 2,129 | - | 2,265 | - | 7 | - | 4,644 |
Investment in associates and joint ventures | - | - | 623 | - | 1,858 | - | 7,840 | 10,321 |
Other reportable assets | 127 | 147 | 995 | 27 | - | - | 107 | 1,403 |
Reportable assets | 54,665 | 69,549 | 45,971 | 2,290 | 1,969 | 7 | 9,973 | 184,424 |
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
15
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
(i) For the six-month period ended December 31, 2020, the net gain from fair value adjustment of investment properties was Ps. 9,481. The net impact of the values in pesos of our properties was mainly a consequence of the change in macroeconomic conditions:
(a)
loss of Ps. 235.0 as a consequence of the variation in the projected income growth rate increase in the projected inflation rate and the conversion to dollars of the projected cash flow in pesos according to the exchange rate estimates used in the cash flow from shopping malls;
(b)
positive impact of Ps. 8,350.9 resulting from the conversion into pesos of the value of the shopping malls in dollars based on the exchange rate at the end of the period;
(c)
an increase of 103 basis points in the discount rate, mainly due to an increase in the country-risk rate component of the WACC discount rate used to discount the cash flow, which led to a decrease in the value of the shopping malls of Ps. 4,743.8.
(d)
Additionally, due to the impact of the inflation adjustment, Ps. 9,323.0 were reclassified for shopping malls from “Net gain from fair value adjustment” to “Inflation Adjustment” in the Statement of Income and Other Comprehensive Income.
The value of our office buildings and other rental properties measured in real terms increased by 15.0% during the six-month period ended as of December 31, 2020, due to the implicit exchange rate.
12.31.19 | ||||||||
Shopping Malls | Offices | Sales and developments | Hotels | International | Corporate | Others | Total | |
Revenues | 4,961 | 1,491 | 626 | 1,726 | 7 | - | 80 | 8,891 |
Costs | (394) | (86) | (371) | (961) | (7) | - | (59) | (1,878) |
Gross profit | 4,567 | 1,405 | 255 | 765 | - | - | 21 | 7,013 |
Net (loss) / profit from fair value adjustment of investment properties | (2,554) | 4,375 | 3,463 | - | - | - | 200 | 5,484 |
General and administrative expenses | (594) | (158) | (155) | (241) | (74) | (317) | (78) | (1,617) |
Selling expenses | (346) | (58) | (133) | (184) | - | - | (8) | (729) |
Other operating results, net | (89) | (42) | (4) | (12) | (1) | - | 109 | (39) |
Profit / (Loss) from operations | 984 | 5,522 | 3,426 | 328 | (75) | (317) | 244 | 10,112 |
Share of loss of associates and joint ventures | - | - | - | - | (519) | - | (1,236) | (1,755) |
Segment profit / (loss) | 984 | 5,522 | 3,426 | 328 | (594) | (317) | (992) | 8,357 |
Investment and trading properties | 58,359 | 40,882 | 35,217 | - | 121 | - | 1,473 | 136,052 |
Property, plant and equipment | 283 | 1,254 | - | 2,363 | 244 | - | - | 4,144 |
Investment in associates and joint ventures | - | - | 620 | - | (10,251) | - | 7,236 | (2,395) |
Other reportable assets | 132 | 145 | 979 | 35 | - | - | 108 | 1,399 |
Reportable assets | 58,774 | 42,281 | 36,816 | 2,398 | (9,886) | - | 8,817 | 139,200 |
Below is a summarized analysis of the segments from the Group’s Operations Center in Israel where only assets and liabilities are presented as of December 31,2019:
12.31.19 | |||||||
Real Estate | Supermarkets | Telecommunications | Insurance | Corporate | Others | Total | |
Reportable assets | 182,170 | 30,553 | 156,780 | 9,989 | 39,527 | 90,512 | 509,531 |
Reportable liabilities | (167,716) | - | (122,483) | - | (131,502) | (27,623) | (449,324) |
Net reportable assets | 14,454 | 30,553 | 34,297 | 9,989 | (91,975) | 62,889 | 60,207 |
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
16
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
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, 2020 and for the year ended June 30, 2019 were as follows:
12.31.20 | 06.30.20 | |
Beginning of the period / year | 90,020 | 43,400 |
Adjustments of previous years (IFRS 9 and IAS 28) | - | (2,372) |
Issuance of capital and contributions | 27 | 3,418 |
Capital reduction | - | (127) |
(Decrease) / Increase of interest in associates and joint ventures (iv) | (34,381) | 3,325 |
Share of profit / (loss) | 87 | 10,561 |
Other comprehensive income | (44) | (1,491) |
Currency translation adjustment | (2,653) | 11 |
Dividends (i) | (37) | (2,212) |
Deconsolidation (iii) | (38,654) | 34,967 |
Reclassification to held-for-sale | - | (2,481) |
Incorporation by business combination | - | 3,017 |
Others | (10) | 4 |
End of the period / year (ii) | 14,355 | 90,020 |
(i)
See Note 28.
(ii)
As of December 31, 2020, and June 30, 2019 includes Ps. (15) and (18) reflecting interests in companies with negative equity, which were disclosed in “Provisions” (see Note 19)
(iii)
The amount as of September 30, 2021 corresponds to the effect of the deconsolidation of IDBD (See note 4.E). Regarding the amount as of June 30, 2020, it corresponds to the effect of the deconsolidation of Gav-Yam (See Note 4 to the consolidated Financial Statements as of June 30, 2020)
(iv)
Mainly corresponds to the sale of the remaining equity interest in Shufersal in July 2020
Below is additional information about the Group’s investments in associates and joint ventures:
% ownership interest | Value of Group's interest in equity | Group's interest in comprehensive income / (loss) | ||||
Name of the entity | 12.31.20 | 06.30.20 | 12.31.20 | 06.30.20 | 12.31.20 | 12.31.19 |
Associates | ||||||
New Lipstick | 49.96% | 49.96% | 189 | 560 | (378) | (501) |
BHSA | 29.91% | 29.91% | 5,042 | 4,881 | 161 | (1,352) |
Condor | 18.89% | 18.89% | 1,601 | 1,775 | (166) | (18) |
PBEL | N/A | 45.40% | - | - | - | - |
Shufersal | N/A | 26.02% | - | 33,691 | 19 | - |
Mehadrin | N/A | 45.41% | - | - | - | - |
Gav-Yam | N/A | N/A | - | 32,691 | 31 | - |
TGLT S.A. (1) | 30.20% | N/A | 2,047 | 2,468 | (421) | - |
Quality | 50.00% | 50.00% | 2,919 | 2,518 | 383 | 252 |
La Rural S.A. | 50.00% | 50.00% | 277 | 243 | 32 | 128 |
Cresca S.A. | 50.00% | 50.00% | 25 | 25 | (3) | (1) |
Other associates and joint ventures | - | - | 2,255 | 11,168 | (2,224) | 695 |
Total associates and joint ventures | 14,355 | 90,020 | (2,566) | (797) |
Last financial statement issued | ||||||
Name of the entity | Location of business / Country of incorporation | Main activity | Common shares 1 vote | Share capital (nominal value) | Profit / (loss) for the period | Shareholders' equity |
New Lipstick | U.S. | Real estate | N/A | - | (*) (9) | (*) (31) |
BHSA | Argentina | Financing | 448,689,072 | (***) 1,500 | (***) 539 | (***) 16,342 |
Condor | U.S. | Hotel | 2,245,100 | (*) 232 | (*) (11) | (*) 72 |
PBEL | India | Real estate | N/A | N/A | (**) (2) | N/A |
Shufersal | Israel | Retail | N/A | N/A | (**) 89 | N/A |
Mehadrin | Israel | Agricultural | N/A | N/A | N/A | N/A |
Gav-Yam | Israel | Real estate | N/A | N/A | (**) 76 | N/A |
TGLT S.A. (1) | Argentina | Real estate | 279,502,813 | 925 | (1,479) | 5,803 |
Quality | Argentina | Real estate | 203,158,129 | 406 | 766 | 5,764 |
La Rural S.A. | Argentina | Organization of events | 714,498 | 1 | 75 | 466 |
(1)
Additionally, 21,600,000 preferred class A shares and 24,948,798 preferred class B shares were subscribed, subject to conversion. As of the date of issuance of these financial statements, these preferred shares have not yet been converted.
(*)
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-monthlag, including material adjustments, if any.
(**)
Amounts in millions of NIS.
(***)
Preliminary information as of December 31, 2020 according to NIIF.
Puerto Retiro (joint venture):
There have been no changes to what was informed in Note 8 to the Annual Financial Statements.
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
17
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
8.
Investment properties
Changes in the Group’s investment properties for the six-month period ended December 31, 2020 and for the year ended June 30, 2019 were as follows:
Leased out farmland | Rental properties | Underdeveloped parcels of land | Properties under development | Others | Total as of 12.31.20 | Total as of 06.30.20 | |
Fair value at the beginning of the period / year | 4,949 | 229,122 | 37,813 | 3,879 | 90 | 275,853 | 401,513 |
Adjustments of previous years (IFRS 15) | - | - | - | - | - | - | 511 |
Additions | - | 488 | 53 | - | - | 541 | 6,543 |
Capitalized leasing costs | - | 10 | 1 | - | - | 11 | 24 |
Amortization of capitalized leasing costs (i) | - | (6) | - | - | - | (6) | (18) |
Transfers | 495 | (216) | - | - | - | 279 | (27,164) |
Incorporation by business combination | - | - | - | - | - | - | 292 |
Deconsolidation | - | (91,416) | (951) | (1,427) | - | (93,794) | (188,810) |
Disposals | - | (14,154) | - | - | - | (14,154) | (18,159) |
Currency translation adjustment | 356 | (9,607) | (99) | (158) | - | (9,508) | 63,267 |
Net gain / (loss) from fair value adjustment | 49 | 1,390 | 6,006 | 1,522 | 34 | 9,001 | 37,854 |
Fair value at the end of the period / year | 5,849 | 115,611 | 42,823 | 3,816 | 124 | 168,223 | 275,853 |
(i)
Amortization charges of capitalized leasing costs were included in “Costs” in the Statements of Income (Note 24).
The following amounts have been recognized in the Statements of Income:
12.31.20 | 12.31.19 | |
Rental and services income | 4,316 | 8,655 |
Direct operating expenses | (1,828) | (3,003) |
Development expenses | (43) | (63) |
Net realized gain from fair value adjustment of investment properties | 7,915 | 436 |
Net unrealized loss from fair value adjustment of investment properties | 1,108 | 4,720 |
(i)
As of December 31, 2020 includes Ps. 3,950 for the sale of Torre Boston and Ps. 3,965 for the sale of Bouchard 710. As of December 31, 2019 includes Ps. 436 corresponding to the barter transaction of the Caballito Ferro land and Ps. 236 for the deconsolidation of the La Maltería S.A land.
(ii)
As of December 31, 2020, (ARS 1,209) corresponds to the realized result from fair value adjustment for the period ((ARS 835) for the sale of Torre Boston and (ARS 374) for the sale of Bouchard 710) and Ps. 9,124 for realized result from fair value adjustment made in previous years (ARS 4,786 for the sale of Torre Boston and Ps. 4,338 for the sale of Bouchard 710). As of December 31, 2019 Ps. 60 corresponds to net realized fair value adjustment on investment properties for the period (which includes the barter transaction of the Caballito Ferro land) and Ps. 612 corresponds to the realized fair value adjustment made in previous years (ARS 376 corresponding to the barter transaction of the Caballito Ferro land and Ps. 236 for the deconsolidation of the La Maltería S.A. land).
Valuation techniques are described in Note 9 to the Annual Financial Statements. There were no changes to such techniques. The Group has reassessed the assumptions December 31, 2020, considering the market conditions existing at that date due to the pandemic described in Note 33, incorporating the effect of the variation in the exchange rate in other assets denominated in US Dollars.
9.
Property, plant and equipment
Changes in the Group’s property, plant and equipment for the six-month period ended December 31, 2020 and for the year ended June 30, 2019 were as follows:
Owner occupied farmland | Bearer plant | Buildings and facilities | Machinery and equipment | Communication networks | Others | Total as of 12.31.20 | Total as of 06.30.20 | |
Costs | 31,241 | 2,457 | 17,040 | 3,110 | 114,412 | 18,801 | 187,061 | 170,826 |
Accumulated depreciation | (2,800) | (1,105) | (9,322) | (2,164) | (89,107) | (10,706) | (115,204) | (105,980) |
Net book amount at the beginning of the period / year | 28,441 | 1,352 | 7,718 | 946 | 25,305 | 8,095 | 71,857 | 64,846 |
Additions | 466 | 41 | 138 | 23 | 464 | 708 | 1,840 | 8,214 |
Disposals | (17) | - | (70) | (1) | (44) | (77) | (209) | (4,192) |
Deconsolidation | (4,869) | - | (3,419) | (634) | (22,599) | (6,771) | (38,292) | (1,272) |
Assets incorporated by business combinations | - | - | - | - | - | - | - | 11,355 |
Currency translation adjustment | 393 | 80 | (261) | (48) | (1,824) | (525) | (2,185) | 5,143 |
Transfers | 101 | - | 738 | - | - | (1) | 838 | (3,013) |
Depreciation charges (i) | (170) | (241) | (240) | (49) | (1,302) | (893) | (2,895) | (9,224) |
Balances at the end of the period / year | 24,345 | 1,232 | 4,604 | 237 | - | 536 | 30,954 | 71,857 |
Costs | 26,327 | 2,194 | 7,897 | 2,263 | - | 1,245 | 39,926 | 196,990 |
Accumulated depreciation | (1,982) | (962) | (3,293) | (2,026) | - | (709) | (8,972) | (125,133) |
Net book amount at the end of the period / year | 24,345 | 1,232 | 4,604 | 237 | - | 536 | 30,954 | 71,857 |
(i)
As of December 31, 2020, the amortization charge has been charged to the line "Costs" for Ps. 128, "General and administrative expenses" for Ps. 10, respectively, in the income statement (Note 24), Ps. 483 were capitalized as part of the cost of biological assets and Ps. 2,274 corresponds to discontinued operations.
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
18
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
10.
Trading properties
Changes in the Group’s trading properties for the six-month period ended December 31, 2020 and for the year ended June 30, 2019 were as follows:
Completed properties | Properties under development | Undeveloped sites | Total as of 12.31.20 | Total as of 06.30.20 | |
Beginning of the period / year | 2,427 | 992 | 5,177 | 8,596 | 10,041 |
Additions | - | - | 309 | 309 | 2,669 |
Capitalized finance costs | - | 256 | - | 256 | 111 |
Currency translation adjustment | (157) | (17) | (298) | (472) | 1,053 |
Transfers | 155 | (155) | - | - | 258 |
Impairment | - | - | - | - | (186) |
Deconsolidation | (1,698) | (113) | (4,325) | (6,136) | - |
Disposals | (630) | (224) | (171) | (1,025) | (5,350) |
End of the period / year | 97 | 739 | 692 | 1,528 | 8,596 |
Non-current | 1,476 | 5,820 | |||
Current | 52 | 2,776 | |||
Total | 1,528 | 8,596 |
11.
Intangible assets
Changes in the Group’s intangible assets for the six-month period ended December 31, 2020 and for the year ended June 30, 2019 were as follows:
Goodwill | Trademarks | Licenses | Customer relations | Information systems and software | Contracts and others | Total as of 12.31.20 | Total as of 06.30.20 | |||||||||||||||||||||||||
Costs | 6,976 | 9,944 | 12,006 | 18,641 | 12,606 | 15,085 | 75,258 | 67,024 | ||||||||||||||||||||||||
Accumulated amortization | - | (802) | (9,106) | (15,675) | (7,506) | (8,381) | (41,470) | (35,842) | ||||||||||||||||||||||||
Net book amount at the beginning of the period / year | 6,976 | 9,142 | 2,900 | 2,966 | 5,100 | 6,704 | 33,788 | 31,182 | ||||||||||||||||||||||||
Additions | - | - | - | 22 | 331 | 706 | 1,059 | 5,438 | ||||||||||||||||||||||||
Disposals | - | - | - | - | (88) | - | (88) | (186) | ||||||||||||||||||||||||
Deconsolidation | (6,521) | (8,469) | (2,627) | (2,506) | (3,914) | (5,124) | (29,161) | - | ||||||||||||||||||||||||
Transfers | - | - | - | - | (2) | - | (2) | (65) | ||||||||||||||||||||||||
Assets incorporated by business combination | - | - | - | - | - | - | - | 81 | ||||||||||||||||||||||||
Currency translation adjustment | (114) | (651) | (207) | (217) | (350) | (433) | (1,972) | 6,898 | ||||||||||||||||||||||||
Impairment | - | - | - | - | - | - | - | (3,932) | ||||||||||||||||||||||||
Amortization charges (i) | - | (22) | (66) | (265) | (847) | (628) | (1,828) | (5,628) | ||||||||||||||||||||||||
Balances at the end of the period / year | 341 | - | - | - | 230 | 1,225 | 1,796 | 33,788 | ||||||||||||||||||||||||
Costs | 341 | - | - | - | 781 | 1,699 | 2,821 | 75,258 | ||||||||||||||||||||||||
Accumulated amortization | - | - | - | - | (551) | (474) | (1,025) | (41,470) | ||||||||||||||||||||||||
Net book amount at the end of the period / year | 341 | - | - | - | 230 | 1,225 | 1,796 | 33,788 |
(i)
Amortization charge was recognized in the amount of Ps. 14 under "Costs", in the amount of Ps. 48 under "General and administrative expenses" as of December 31, 2020 in the Statements of Income (Note 24) and Ps. 1,766 corresponds to discontinued operations.
12.
Right-of-use assets
The Group’s right-of-use assets as of December 31, 2020 and June 30, 2020 are the following:
12.31.20 | 06.30.20 | |
Farmland | 2,989 | 2,429 |
Offices, shopping malls and other buildings | 9 | 4,933 |
Communication networks | - | 13,188 |
Machinery and equipment | 79 | 41 |
Others | 707 | 5,690 |
Right-of-use assets | 3,784 | 26,281 |
Non-current | 3,784 | 26,281 |
Total | 3,784 | 26,281 |
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
19
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
The depreciation charge of the right-of use-assets is detailed below:
12.31.20 | 12.31.19 | |
Farmland | 239 | 246 |
Offices, shopping malls and other buildings | 1,180 | 1,974 |
Communication networks | 270 | 643 |
Others | 42 | 178 |
Depreciation charge of right-of-use assets | 1,731 | 3,041 |
(i)
Includes Ps. 1,457 and Ps. 2,770 charged to the result of discontinued operations as of December 31, 2020 and 2019 respectively.
13.
Biological assets
Changes in the Group’s biological assets and their allocation to the fair value hierarchy six-month period ended December 31, 2020 and for the year ended June 30, 2019 were as follows:
Agricultural business | |||||||||||||||||
Sown land-crops | Sugarcane fields | Breeding cattle and cattle for sale | Other cattle | Others | Total as of 12.31.20 | Total as of 06.30.20 | |||||||||||
Level 1 | Level 3 | Level 3 | Level 2 | Level 2 | Level 1 | ||||||||||||
Net book amount at the beginning of the period / year | 323 | 1,252 | 1,232 | 2,552 | 34 | 38 | 5,431 | 6,712 | |||||||||
Purchases | - | - | - | 259 | - | - | 259 | 343 | |||||||||
Changes by transformation | (193) | 193 | - | - | - | - | - | - | |||||||||
Initial recognition and changes in the fair value of biological assets (i) | - | 814 | 786 | 63 | 6 | - | 1,669 | 3,373 | |||||||||
Decrease due to harvest | - | (4,989) | (2,631) | - | - | - | (7,620) | (15,542) | |||||||||
Sales | - | - | - | (880) | (1) | - | (881) | (1,928) | |||||||||
Consumes | - | - | - | (2) | - | (3) | (5) | (443) | |||||||||
Costs for the period / year | 3,738 | 2,848 | 1,801 | 702 | - | 2 | 9,091 | 13,700 | |||||||||
Addition | - | - | - | - | - | - | - | 74 | |||||||||
Foreign exchange gain | 113 | 8 | 75 | - | - | - | 196 | (858) | |||||||||
Balances at the end of the period / year | 3,981 | 126 | 1,263 | 2,694 | 39 | 37 | 8,140 | 5,431 | |||||||||
- | - | ||||||||||||||||
Non-current (Production) | - | - | - | 2,230 | 32 | 37 | 2,299 | 2,108 | |||||||||
Current (Consumable) | 3,981 | 126 | 1,263 | 464 | 7 | - | 5,841 | 3,323 | |||||||||
Net book amount at the end of the period / year | 3,981 | 126 | 1,263 | 2,694 | 39 | 37 | 8,140 | 5,431 |
(i)
Biological assets with a production cycle of more than one year (that is, cattle) generated “Initial recognition and changes in fair value of biological assets” amounting to Ps. 68 and Ps. 352 for the six-month periods ended December 31, 2020 and for the fiscal year ended June 30, 2019, respectively; amounts of Ps. 432 and Ps. 369, was attributable to price changes, and amounts of Ps. (364) and Ps. 17, was attributable to physical changes, respectively.
During the six-month period ended December 31, 2020, there were transfers between the fair value hierarchies 1 and 3 of grain seeding (due to the degree of phenological growth of the crop) for Ps. 193. There were also no reclassifications between categories thereof.
The fair value less estimated point of sale costs of agricultural produce at the point of harvest (which have been harvested during the period) amount to Ps. (7,620) and Ps. (15,542) for the six-month period ended December 31, 2020 and the year ended June 30, 2019, respectively.
See information on valuation processes used by the entity in Note 14 to the Annual Financial Statements.
As of December 31, 2020, and June 30, 2019, the better and maximum use of biological assets shall not significantly differ from the current use.
14.
Inventories
Breakdown of Group’s inventories as of December 31, 2020 and June 30, 2020 are as follows:
12.31.20 | 06.30.20 | |
Crops | 920 | 3,232 |
Materials and supplies | 2,008 | 1,690 |
Seeds and fodders | 333 | 330 |
Sugarcane | - | 5 |
Agricultural inventories | 3,261 | 5,257 |
Telephones and other communication equipment | - | 2,023 |
Fruit | - | 3,242 |
Others | 69 | 348 |
Total inventories | 3,330 | 10,870 |
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
20
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
15.
Financial instruments by category
Determining fair values
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 refer to Note 15 to the Annual Financial Statements.
Financial assets and financial liabilities as of December 31, 2020 are as follows:
Financial assets at fair value through profit or loss | |||||||
Financial assets at amortized cost | Level 1 | Level 2 | Level 3 | Subtotal financial assets | Non-financial assets | Total | |
December 31, 2020 | |||||||
Assets as per Statement of Financial Position | |||||||
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables) (Note 16) | 19,614 | - | - | - | 19,614 | 8,244 | 27,858 |
Investment in financial assets: | |||||||
- Public companies’ securities | - | 357 | - | 237 | 594 | - | 594 |
- Bonds | - | 1,816 | - | - | 1,816 | - | 1,816 |
- Mutual funds | - | 43 | - | - | 43 | - | 43 |
-Others | 11 | 636 | - | 36 | 683 | - | 683 |
Derivative financial instruments: | |||||||
- Crops options contracts | - | 215 | - | - | 215 | - | 215 |
- Crops futures contracts | - | 309 | - | - | 309 | - | 309 |
- Foreign-currency options contracts | - | 15 | - | - | 15 | - | 15 |
- Foreign-currency future contracts | - | 156 | 6 | - | 162 | - | 162 |
- Swaps | - | - | 13 | - | 13 | - | 13 |
Restricted assets (i) | 83 | - | - | - | 83 | - | 83 |
Cash and cash equivalents (excluding bank overdrafts): | |||||||
- Cash on hand and at bank | 4,161 | - | - | - | 4,161 | - | 4,161 |
- Short-term investments | - | 2,523 | - | - | 2,523 | - | 2,523 |
Total assets | 23,869 | 6,070 | 19 | 273 | 30,231 | 8,244 | 38,475 |
Financial liabilities at fair value through profit or loss | |||||||
Financial liabilities at amortized cost | Level 1 | Level 2 | Level 3 | Subtotal financial liabilities | Non-financial liabilities | Total | |
December 31, 2020 | |||||||
Liabilities as per Statement of Financial Position | |||||||
Trade and other payables (Note 18) | 12,761 | - | - | - | 12,761 | 5,541 | 18,302 |
Borrowings (excluding finance lease liabilities) (Note 20) | 101,674 | 2 | - | - | 101,676 | - | 101,676 |
Derivative financial instruments: | |||||||
- Crops options contracts | - | 1,627 | 376 | - | 2,003 | - | 2,003 |
- Crops futures contracts | - | 1,891 | - | - | 1,891 | - | 1,891 |
- Foreign-currency options contracts | - | 21 | - | - | 21 | - | 21 |
- Foreign-currency contracts | - | 34 | 110 | - | 144 | - | 144 |
- Swaps | - | 6 | 80 | - | 86 | - | 86 |
Total liabilities | 114,435 | 3,581 | 566 | - | 118,582 | 5,541 | 124,123 |
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
21
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
Financial assets and financial liabilities as of June 30, 2020 were as follows:
Financial assets at fair value through profit or loss | |||||||
Financial assets at amortized cost (i) | Level 1 | Level 2 | Level 3 | Subtotal financial assets | Non-financial assets | Total | |
June 30, 2020 | |||||||
Assets as per Statement of Financial Position | |||||||
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables) (Note 16) | 69,224 | - | - | - | 69,224 | 20,534 | 89,758 |
Investment in financial assets: | |||||||
- Equity securities in public companies | - | 688 | 276 | - | 964 | - | 964 |
- Equity securities in private companies | - | - | - | 3,486 | 3,486 | - | 3,486 |
- Deposits | 1,146 | 73 | - | - | 1,219 | - | 1,219 |
- Bonds | - | 9,375 | 1,731 | - | 11,106 | - | 11,106 |
- Mutual funds | - | 5,339 | - | - | 5,339 | - | 5,339 |
- Others | - | 2,652 | 971 | 278 | 3,901 | - | 3,901 |
Derivative financial instruments: | |||||||
- Crops futures contracts | - | 103 | - | - | 103 | - | 103 |
- Swaps | - | 18 | - | - | 18 | - | 18 |
- Crops options contracts | - | 20 | 153 | - | 173 | - | 173 |
- Foreign-currency options contracts | - | - | 20 | - | 20 | - | 20 |
- Foreign-currency future contracts | - | - | - | 170 | 170 | - | 170 |
- Others | 73 | - | 24 | - | 97 | - | 97 |
Restricted assets (ii) | 9,761 | - | - | - | 9,761 | - | 9,761 |
Financial assets held for sale | |||||||
- Clal | - | 4,047 | - | - | 4,047 | - | 4,047 |
Cash and cash equivalents (excluding bank overdrafts): | |||||||
- Cash on hand and at bank | 32,396 | - | - | - | 32,396 | - | 32,396 |
- Short-term investments | 76,422 | 12,141 | - | - | 88,563 | - | 88,563 |
Total assets | 189,022 | 34,456 | 3,175 | 3,934 | 230,587 | 20,534 | 251,121 |
Financial liabilities at fair value through profit or loss | |||||||
Financial liabilities at amortized cost | Level 1 | Level 2 | Level 3 | Subtotal financial liabilities | Non-financial liabilities | Total | |
June 30, 2020 | |||||||
Liabilities as per Statement of Financial Position | |||||||
Trade and other payables (Note 18) | 37,067 | - | - | - | 37,067 | 9,446 | 46,513 |
Borrowings (excluding finance lease liabilities) (Note 20) | 501,936 | - | - | - | 501,936 | - | 501,936 |
Derivative financial instruments: | |||||||
- Crops futures contracts | - | 85 | - | - | 85 | - | 85 |
- Forward contracts | - | 44 | - | - | 44 | - | 44 |
- Crops options contracts | - | 205 | 60 | - | 265 | - | 265 |
- Foreign-currency options contracts | - | - | 114 | - | 114 | - | 114 |
- Swaps | - | - | 73 | - | 73 | - | 73 |
- Others | - | - | 1,146 | 24 | 1,170 | - | 1,170 |
Total liabilities | 539,003 | 334 | 1,393 | 24 | 540,754 | 9,446 | 550,200 |
(i)
Corresponds to deposits in guarantee and escrows
The fair value of financial assets and liabilities at their amortized cost does not differ significantly from their book value, except for borrowings (Note 20). 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, 2020.
As of December 31, 2020, there have been no changes to the economic or business circumstances affecting the fair value of the financial assets and liabilities of the Group, except for what is mentioned in Note 33.
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
22
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
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 |
Promissory note | Theoretical price | Acquisition agreement. | Level 2 | - |
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 |
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, 2020 and June 30, 2020:
Derivative financial instruments – Forwards | Investments in financial assets - Private companies | Investments in financial assets - Others | Investments in financial assets - Public companies | Derivative financial instruments | Total as of 12.31.20 | Total as of 06.30.20 | |
Balances at beginning of the period / year | (24) | 3,486 | 278 | - | 170 | 3,910 | 4,965 |
Additions and acquisitions | - | - | - | - | - | - | 42 |
Transfer to level 1 | - | - | - | 275 | - | 275 | 421 |
Currency translation adjustment | - | - | - | - | - | - | 982 |
Disposals | - | - | - | - | - | - | (1,902) |
Write off | 24 | (3,486) | (243) | - | (170) | (3,875) | - |
Gain / (loss) for the period / year (i) | - | - | 1 | (38) | - | (37) | (598) |
Balances at the end of the period / year | - | - | 36 | 237 | - | 273 | 3,910 |
(i) Included within “Financial results, net” in the Statements of Income.
16.
Trade and other receivables
Group’s trade and other receivables as of December 31, 2020 and June 30, 2020 are as follows:
12.31.20 | 06.30.20 | |
Trade, leases and services receivable | 16,575 | 55,037 |
Less: allowance for doubtful accounts | (787) | (4,614) |
Total trade receivables | 15,788 | 50,423 |
Prepayments | 4,566 | 14,189 |
Borrowings, deposits and others | 3,169 | 9,159 |
Guarantee deposits | 3 | 4 |
Tax receivables | 2,083 | 1,855 |
Others | 1,462 | 9,514 |
Total other receivables | 11,283 | 34,721 |
Total trade and other receivables | 27,071 | 85,144 |
Non-current | 8,273 | 32,750 |
Current | 18,798 | 52,394 |
Total | 27,071 | 85,144 |
The fair value of current trade and other receivables approximate their respective carrying amounts due to their short-term nature, as the impact of discounting is not considered significant. Fair values are based on discounted cash flows (Level 3).
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
23
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
Movements on the Group’s allowance for doubtful accounts were as follows:
12.31.20 | 06.30.20 | |
Beginning of the period / year | 4,614 | 3,243 |
Incorporation by business combination | - | (216) |
Additions (i) | 408 | 1,296 |
Recovery (i) | (62) | (135) |
Currency translation adjustment | (233) | 1,321 |
Receivables written off during the period / year as uncollectable | (22) | (863) |
Deconsolidation | (3,705) | (24) |
Inflation adjustment | (155) | (30) |
Transfers to assets held for sale | (58) | 22 |
End of the period / year | 787 | 4,614 |
(i)
The creation and release of the allowance for doubtful accounts have been included in “Selling expenses” in the Statement of Income (Note 25).
17.
Cash flow and cash equivalent information
Following is a detailed description of cash flows generated by the Group’s operations for the six and six-month periods ended December 31, 2020 and 2019:
Note | 12.31.20 | 12.31.19 | |
(Loss) / Profit for the period | (3,264) | 2,278 | |
Profit / (Loss) from discontinued operations | 7,120 | (10,192) | |
Adjustments for: | |||
Income tax | 21 | 4,089 | 3,707 |
Amortization and depreciation | 24 | 310 | 400 |
Net gain from fair value adjustment of investment properties | (9,023) | (5,156) | |
Changes in the fair value of investments in financial assets | (629) | (438) | |
Gain from disposal of properties, plant and equipment | (3) | - | |
Financial results, net | (4,576) | 17,314 | |
Provisions and allowances | 1,302 | 403 | |
Share of loss of associates and joint ventures | 7 | 487 | 1,284 |
(Gain) / Loss from repurchase of Non-convertible Notes | (3) | 1 | |
Changes in net realizable value of agricultural products after harvest | (259) | (575) | |
Unrealized initial recognition and changes in fair value of biological assets and agricultural products at the point of harvest | (2,082) | (1,913) | |
Unrealized gain from derivative financial instruments | 1,988 | (289) | |
Other operating results | (4) | 31 | |
Gain from disposal of farmlands | (91) | (407) | |
Changes in operating assets and liabilities: | |||
Decrease in inventories | 2,438 | 2,298 | |
Decrease / (Increase) in trading properties | 749 | (457) | |
Decrease in biological assets | 655 | 1,413 | |
(Increase) / Decrease in trade and other receivables | (1,317) | 2,173 | |
Increase / (Decrease) in trade and other payables | 1,775 | (1,926) | |
Decrease in salaries and social security liabilities | (295) | (568) | |
Decrease in provisions | (63) | (204) | |
Increase / (Decrease) in lease liabilities | 748 | (78) | |
Net variation in derivative financial instruments | 1,751 | 69 | |
Decrease in right of use | (990) | - | |
Net cash generated by continuing operating activities before income tax paid | 813 | 9,168 | |
Net cash generated by discontinued operating activities before income tax paid | 2,672 | 17,803 | |
Net cash generated by operating activities before income tax paid | 3,485 | 26,971 |
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
24
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
The following table presents a detail of significant non-cash transactions occurred in the six and six-month periods ended December 31, 2020 and 2019:
12.31.20 | 12.31.19 | |
Dividends not collected | - | (38) |
Decrease in participation in subsidiaries, associates and joint ventures due to transient conversion differences | (2) | (848) |
Increase in property, plant and equipment through an increase in trade and other payables | - | 609 |
Increase in investment properties through an increase in trade and other payables | - | 658 |
Increase of properties for sale through an increase in borrowings | 256 | 87 |
Distribution of dividends at non-controlling interest pending payment | - | 1,378 |
Increase in investments in associates and joint ventures through a decrease in investments in financial assets | - | 984 |
Increase of investment properties through the acquisition of investments in associates | - | 1,623 |
Increase in investment properties through a decrease in financial assets | - | 334 |
Increase in intangible assets through an increase in trade and other payables | - | 696 |
Increase in investments in financial assets through a decrease in investments in associates and joint ventures | - | 26 |
Decrease in borrowings through a decrease in financial assets | - | 2,942 |
Increase of rights of use through a decrease of property, plant and equipment | - | 26 |
Distribution of dividends in shares | 580 | 707 |
Increase in investments in associates and joint ventures from an increase in trade and other payables | - | 83 |
Increase in rights of use through an increase in lease liabilities | 24 | - |
Increase in property, plant and equipment through an increase in trade and other payables | 33 | - |
The following table presents the balances disposed because of the loss of control of IDBD:
09.30.20 | |
Investment properties | 93,794 |
Property, plant and equipment | 38,292 |
Trading properties | 6,136 |
Intangible assets | 29,161 |
Right-of-use assets | 20,629 |
Investments in associates and joint ventures | 38,654 |
Deferred income tax assets | 453 |
Income tax credit | 340 |
Restricted assets | 6,703 |
Trade and other receivables | 56,408 |
Investments in financial assets | 25,249 |
Derivative financial instruments | 294 |
Inventories | 3,760 |
Group of assets held for sale | 43,909 |
Borrowings | (339,376) |
Lease liabilities | (18,908) |
Deferred income tax liabilities | (12,975) |
Trade and other payables | (25,363) |
Income tax liabilities | (475) |
Provisions | (5,661) |
Employee benefits | (498) |
Derivative financial instruments | (498) |
Salaries and social security liabilities | (3,532) |
Group of liabilities held for sale | (22,985) |
Net value of incorporated assets that do not affect cash | (66,489) |
Cash and cash equivalents | (115,963) |
Non-controlling interest | (49,886) |
Net value of disposal assets | (232,338) |
18.
Trade and other payables
Group’s trade and other payables as of December 31, 2020 and June 30, 2020 were as follows:
12.31.20 | 06.30.20 | |
Trade payables | 6,562 | 27,146 |
Advances from sales, leases and services | 3,075 | 2,363 |
Construction obligations | - | 488 |
Accrued invoices | 1,614 | 1,463 |
Deferred income | - | 170 |
Admission fees | 965 | 1,219 |
Deposits in guarantee | 158 | 121 |
Total trade payables | 12,374 | 32,970 |
Dividends payable to non-controlling interests | 38 | 425 |
Taxes payable | 1,419 | 893 |
Management fees | - | 228 |
Others | 4,471 | 11,997 |
Total other payables | 5,928 | 13,543 |
Total trade and other payables | 18,302 | 46,513 |
Non-current | 2,709 | 3,579 |
Current | 15,593 | 42,934 |
Total | 18,302 | 46,513 |
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
25
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
19.
Provisions
The table below shows the movements in the Group's provisions categorized by type:
Legal claims (i) | Investments in associates and joint ventures (ii) | Sited dismantling and remediation | Other provisions | Total as of 12.31.20 | Total as of 06.30.20 | |
Beginning of period / year | 3,029 | 20 | 537 | 3,047 | 6,633 | 16,725 |
Additions | 69 | - | 22 | (88) | 3 | 603 |
Contributions | - | - | - | - | - | 68 |
Transfers | (11) | - | - | - | (11) | - |
Inflation adjustment | (50) | - | - | - | (50) | (95) |
Recovery | (32) | (10) | - | - | (42) | (22) |
Share of loss in associates and joint ventures | - | (2) | - | - | (2) | (8,942) |
Incorporation by business combination | (2,468) | - | (521) | (2,672) | (5,661) | - |
Currency translation adjustment | (195) | - | (38) | (265) | (498) | 570 |
Used during the period / year | (63) | - | - | (22) | (85) | (2,274) |
End of period / year | 279 | 8 | - | - | 287 | 6,633 |
Non-current | 148 | 3,705 | ||||
Current | 139 | 2,928 | ||||
Total | 287 | 6,633 |
(i)
Additions and recovery are included in "Other operating results, net". Corresponds to investments in New Lipstick and Puerto Retiro, companies that have negative equity. The increase and recovery is included in "Share of profit of associates and joint ventures "
There were no significant changes to the processes mentioned in Note 21 to the Annual Financial Statements.
20.
Borrowings
The breakdown and fair value of the Group’s borrowings as of December 31, 2020 and June 30, 2020 was as follows:
Book value | Fair value | |||
12.31.20 | 06.30.20 | 12.31.20 | 06.30.20 | |
NCN | 75,379 | 411,116 | 71,641 | 331,807 |
Bank loans | 16,757 | 83,755 | 16,561 | 70,656 |
Bank overdrafts | 8,029 | 5,133 | 8,029 | 3,875 |
Other borrowings | 1,511 | 1,932 | 1,511 | 1,932 |
Total borrowings | 101,676 | 501,936 | 97,742 | 408,270 |
Non-current | 57,695 | 384,018 | ||
Current | 43,981 | 117,918 | ||
Total | 101,676 | 501,936 |
(i)
Includes finance leases in the amount of Ps. 347 as of June 30, 2019.
(ii)
Includes Ps. 269,504 and Ps. 373,564 as of December 31, 2020 and June 30, 2020, respectively, corresponding to the Operations Center in Israel.
Issuance of CRESUD Non-Convertible Notes
On August 31, 2020, the seventeenth Series of Notes public tender was carried out, within the framework of the Program approved by the Shareholders Meeting, for up to US$ 500. The main characteristics of the issuance are detailed bellow:
● Series XXX: denominated in dollars and payable in pesos at the applicable exchange rate, as defined in the issuance documents, with a nominal value of US$ 25.0 at a fixed rate of 2.0%, maturing 36 months from the date of issuance with quarterly payments and principal expiring at maturity. The issue price was 100.0% of Nominal Value. Proceeds will be mainly used for debt refinancing.
Issuance of IRSA Non-Convertible Notes
On July 21, 2020, subsequently to the closing of the fiscal year, the Company issued US$ 38.4 Non-convertible Notes in the local market through the following instruments:
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
26
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
● Ps. 335.2 (equivalent to US$ 4.7) Series VI NCNs denominated and payable in Argentine pesos at a variable rate (Private Badlar) + 4.0%, with interest accruing on a quarterly basis. The principal amount is repayable in two installments: the first one -equal to 30% of the par value of the notes- payable on the date that is 9 (nine) months after the Issue and Settlement Date and the second installment -equal to 70% of the par value of the notes- payable on the relevant due date, i.e. July 21, 2021. Notes were issued at 100% of their par value.
● US$ 33.7 Series VII NCNs denominated in US$ and payable in Argentine pesos at the applicable exchange rate, at a fixed 4.0% rate, with interest accruing on a quarterly basis. Repayment of capital is due on January 21, 2021. Notes were issued at 100% of their par value. The proceeds were used to refinance short-term indebtedness. On January 21, 2021, the commitments of this note were cancelled.
Payment of IRSA’s Non-Convertible Notes
On July 20, 2020, the Company paid the twentieth interest installment and the principal installment of the US$ 75 Series II Non-Convertible Notes issued on July 20, 2010.
On August 6, 2020, the Company paid the second interest installment and the principal installment of the US$ 47 Series II Non-Convertible Notes issued on August 6, 2019.
Payment of IRSA CP’s Series IV Non-Convertible Notes
On September 14, 2020, the aggregate principal amount of the Series IV Non-convertible Notes in the amount of Ps. 10,381 (US$ 140) and interest accrued as of such date in the amount of Ps. 134 (US$ 1.8) were paid.
Notes Issuance – Exchange Offer Series XXIV Notes - BCRA “A” 7106 Communication
On November 12, 2020, the company carried out an exchange operation of its Series XXIV Notes, for a nominal value of US$ 73.6.
Nominal Value of Existing Notes presented and accepted for the Exchange (for both Series): approximately US$ 65.1 which represents 88.41% acceptance, through the participation of 1,098 orders.
●
Series XXXI: Face Value of Existing Notes presented and accepted for the Exchange: approximately US$ 30.8.
Nominal Value to be Issued: approximately US$ 1.3.
Issuance Price: 100% nominal value.
Maturity Date: It will be November 12, 2023.
Consideration of the Exchange Offer: eligible holders whose existing notes have been accepted for the Exchange by the Company, will receive for every US$ 1 submitted to the Exchange, the accrued interest of the existing notes until the settlement and issue date and the following:
■
A sum of money of approximately US$ 29.4 for repayment of capital of such existing notes presented to the Exchange, in cash, in United States Dollars, which will be equivalent to US$ 0.95741755 for each US$ 1 of existing notes presented to the Exchange; and
■
The remaining amount until completing 1 US$ for each 1 US$ of existing notes presented to the Exchange, in notes Series XXXI.
Annual Nominal Fixed Interest Rate: 9.00%.
Amortization: The capital of the Series XXXI Notes will be amortized in 3 annual installments (33% of the capital on November 12, 2021, 33% of the capital on November 12, 2022, 34% of the capital on the maturity date of Series XXXI).
Interest Payment Dates: Interest will be paid quarterly for the expired period as of the issue and settlement date.
Payment Address: Payment will be made to an account at Argentine Securities Commission in the Autonomous City of Buenos Aires
●
Series XXXII: Face Value of Existing Notes presented and accepted for the Exchange: approximately US$ 34.3.
Nominal Value to be Issued: approximately US$ 34.3.
Issuance Price: 100% nominal value.
Maturity Date: It will be November 12, 2022.
Consideration of the Exchange Offer: the eligible holders whose existing notes have been accepted for the Exchange by the Company, will receive Series XXXII Notes for 100% of the capital amount presented for exchange and accepted by the Company and the accrued interest of the existing notes until the settlement and issue date.
Early Bird: will consist of the payment of US$ 0.02 for each US$ 1 of existing notes delivered and accepted in the Exchange on or before the deadline date to Access the Early Bird. Said consideration
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
27
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
will be paid in Pesos on the issue and settlement date according to the exchange rate published by Communication “A” 3500 of the Central Bank of Argentina on the business day prior to the expiration date of the Exchange, which is Ps. 79.3433 for each US$ 1 of Existing Notes delivered and accepted in the Exchange.
Annual Nominal Fixed Interest Rate: 9.00%.
Amortization: The capital of the Series XXXII Notes will be amortized in one installment on the maturity date.
Interest Payment Dates: Interest will be paid quarterly for the expired period from the issuance and settlement date.
Payment Address: Payment will be made to an account at Argentine Securities Commission in New York, United States, for which purpose the Company will make US dollars available to an account reported by the Argentine Securities Commission in said jurisdiction.
Cancellation Cresud’s Series XXIV Notes
In relation to the Exchange Offer ended on November 10, 2020, and as a result of the settlement of said Exchange, on November 16, 2020, the Company made a partial cancellation for a V.N. of US$ 65 of Negotiable Obligations Class XXIV. After the cancellation the V.N. in circulation was US$ 8, which was paid in full on November 16, 2020.
Exchange of IRSA’s debentures
On November 12, 2020, the company carried out an exchange operation of its Series I Notes, for a nominal value of US$ 181.5.
Nominal Value of Existing Notes presented and accepted for the Exchange (for both Series): approximately US$ 178.5 which represents 98.31% acceptance, through the participation of 6,571 orders.
●
Series VIII: Face Value of Existing Notes presented and accepted for the Exchange: approximately US$ 104.3.
-
Nominal Value to be Issued: approximately US$ 31.7.
-
Issuance Price: 100% nominal value.
-
Maturity Date: It will be November 12, 2023.
-
Consideration of the Exchange Offer: eligible holders whose existing notes have been accepted for the Exchange by the Company, will receive for every US$ 1 submitted to the Exchange, the accrued interest of the existing notes until the settlement and issue date and the following:
■
A sum of money of approximately US$ 72,6 for repayment of capital of such existing notes presented to the Exchange, in cash, in United States Dollars, which will be equivalent to US$ 0.69622593 for each US$ 1 of existing notes presented to the Exchange; and
■
The remaining amount until completing 1 US$ for each 1 US$ of existing notes presented to the Exchange, in notes Series VIII.
-
Annual Nominal Fixed Interest Rate: 10.00%.
-
Amortization: The capital of the Series VIII Notes will be amortized in 3 annual installments (33% of the capital on November 12, 2021, 33% of the capital on November 12, 2022, 34% of the capital on the maturity date of Series VIII).
-
Interest Payment Dates: Interest will be paid quarterly for the expired period as of the issue and settlement date.
-
Payment Address: Payment will be made to an account at Argentine Securities Commission in the Autonomous City of Buenos Aire
●
Series IX: Face Value of Existing Notes presented and accepted for the Exchange: approximately US$ 74.2.
-
Nominal Value to be Issued (together with the Face Value to be issued as a result of the cash subscription): approximately US$ 80.7 .
-
Issuance Price: 100% nominal value.
-
Maturity Date: It will be March 1, 2023.
-
Consideration of the Exchange Offer: the eligible holders whose existing notes have been accepted for the Exchange by the Company, will receive Series IX Notes for 100% of the capital amount presented for exchange and accepted by the Company and the accrued interest of the existing notes until the settlement and issue date.
-
Early Bird: will consist of the payment of US$ 0.02 for each US$ 1 of existing notes delivered and accepted in the Exchange on or before the deadline date to Access the Early Bird. Said consideration will be paid in Pesos on the issue and settlement date according to the exchange rate published by
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
28
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
-
Communication “A” 3500 of the Central Bank of Argentina on the business day prior to the expiration date of the Exchange, which is Ps. 79.3433 for each US$ 1 of Existing Notes delivered and accepted in the Exchange.
-
Annual Nominal Fixed Interest Rate: 10.00%.
-
Amortization: The capital of the Series IX Notes will be amortized in one installment on the maturity date.
-
Interest Payment Dates: Interest will be paid quarterly for the expired period from the issuance and settlement date.
-
Payment Address: Payment will be made to an account at Argentine Securities Commission in New York, United States, for which purpose the Company will make US dollars available to an account reported by the Argentine Securities Commission in said jurisdiction.
●
Modifications to the Terms of the Existing Notes: Considering that consent has been obtained for an amount greater than 90% of the existing notes capital, the Company has modified and replaced the following essential and non-essential terms and conditions of the existing notes.
-
By virtue of the implementation of the Proposed Non-Essential Modifications, the entire section of "Certain Commitments" and "Events of Default" is eliminated from the terms and conditions set forth in the prospectus supplements dated May 2, 2019 and dated July 25, 2019 corresponding to the existing notes.
-
Additionally, pursuant to the implementation of the Proposed Essential Modifications, the following terms and conditions of the Existing Notes are modified and replaced:
■
Expiration Date: It will be March 1, 2023.
■
Interest Payment Dates: will be the same dates reported for Class IX in the Notice of Results.
-
It is clarified that the terms and conditions of the Series I Notes not modified by the Proposed Essential Modifications and the Proposed Non-Essential Modifications will maintain their full validity.
-
The implementation of the Proposed Essential Modifications and Proposed Non-Essential Modifications were approved by the Board of Directors, on November 11, 2020.
●
Repayment Series I: In relation to the Exchange Offer ended on November 10, 2020, on November 12, 2020, IRSA made a partial repayment of Series I Notes for a Nominal Value of US$ 178,5, after the partial repayment the Nominal Value under circulation was US$ 3,1.
Loan to related party
On October 23, 2020, Dolphin Netherlands has granted a loan to Yad Leviim Ltd. in a principal amount of US$ 16,250,000 at a rate interest of 5% per year. Then, on December 17, Dolphin Netherlands assigned the receivable to Tyrus S.A., partially canceling the current loan agreement between both companies. Yad Leviim Ltd. is a company controlling by Eduardo Elsztain.
21.
Taxation
The details of the Group’s income tax, is as follows:
12.31.20 | 12.31.19 | |
Current income tax | (379) | (643) |
Deferred income tax | (3,710) | (2,883) |
Minimum Presumed Income Tax | - | (181) |
Income tax from continuing operations | (4,089) | (3,707) |
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
29
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
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 and six-month periods ended December 31, 2020 and 2019:
12.31.20 | 12.31.19 | |
Tax calculated at the tax rates applicable to profits in the respective countries | (2,400) | 1,435 |
Permanent differences: | ||
Share of (loss) / profit of joint ventures and associates | 166 | (528) |
Tax rate differential | 2,235 | 1,095 |
Provision for unrecoverability of tax loss carry-forwards / Unrecognized tax loss carry-forwards | (2,495) | (3,790) |
Changes in fair value of financial instruments | - | (1) |
Non-taxable profit, non-deductible expenses and others | (39) | (294) |
Tax inflation adjustment | (4,654) | (5,006) |
Fiscal transparency | (58) | 117 |
Inflation adjustment permanent difference | 3,156 | 3,265 |
Income tax from continuing operations | (4,089) | (3,707) |
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
30
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
The gross movement in the deferred income tax account is as follows:
12.31.20 | 06.30.20 | |
Beginning of period / year | (58,177) | (67,619) |
Deconsolidation | 12,522 | 17,111 |
Currency translation adjustment | 1,260 | 2,287 |
Revaluation surplus | (308) | 244 |
Reserve for changes of non-controlling interest | (31) | 92 |
Business combination and other assets held for sale | - | (1,427) |
Charged to the Statement of Income | (3,488) | (8,865) |
End of the period / year | (48,222) | (58,177) |
Deferred income tax assets | 1,399 | 1,111 |
Deferred income tax liabilities | (49,621) | (59,288) |
Deferred income tax liabilities, net | (48,222) | (58,177) |
22.
Revenues
12.31.20 | 12.31.19 | |
Beef | 3,886 | 4,270 |
Crops | 5,813 | 7,201 |
Sugarcane | 2,818 | 2,968 |
Cattle | 641 | 672 |
Supplies | 857 | 821 |
Consignment | 348 | 264 |
Advertising and brokerage fees | 506 | 429 |
Agricultural rental and other services | 136 | 105 |
Other | 219 | 131 |
Income from sales and services from agricultural business | 15,224 | 16,861 |
Trading properties and developments | 645 | 623 |
Rental and services | 4,180 | 8,550 |
Hotel operations, tourism services and others | 119 | 1,726 |
Income from sales and services from urban properties and investment business | 4,944 | 10,899 |
Total revenues | 20,168 | 27,760 |
23.
Costs
12.31.20 | 12.31.19 | |
Other operative costs | 15 | 16 |
Cost of property operations | 15 | 16 |
Beef | 3,029 | 3,420 |
Crops | 5,161 | 5,920 |
Sugarcane | 2,201 | 2,776 |
Cattle | 881 | 891 |
Supplies | 682 | 687 |
Consignment | 405 | 123 |
Advertising and brokerage fees | 360 | 253 |
Agricultural rental and other services | 147 | 303 |
Cost of sales and services from agricultural business | 12,866 | 14,373 |
Trading properties and developments | 616 | 371 |
Rental and services | 1,680 | 2,700 |
Hotel operations, tourism services and others | 332 | 961 |
Cost of sales and services from sales and services from urban properties and investment business | 2,628 | 4,032 |
Total costs | 15,509 | 18,421 |
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
31
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
24.
Expenses by nature
The Group discloses expenses in the statements of income by function as part of the line items “Costs”, “General and administrative expenses” and “Selling expenses”. The following table provides additional disclosures regarding expenses by nature and their relationship to the function within the Group.
Production costs | Costs (i) | General and administrative expenses | Selling expenses | Total as of 12.31.20 | Total as of 12.31.19 | |
Cost of sale of goods and services | - | 831 | - | - | 831 | 606 |
Supplies and labors | 7,048 | 3,225 | 1 | 165 | 10,439 | 8,886 |
Change in agricultural products and biological assets | - | 6,919 | - | - | 6,919 | 7,728 |
Salaries, social security costs and other personnel expenses | 330 | 1,567 | 929 | 132 | 2,958 | 3,520 |
Depreciation and amortization | 979 | 214 | 92 | 4 | 1,289 | 1,140 |
Fees and payments for services | 15 | 1,534 | 340 | 251 | 2,140 | 2,419 |
Maintenance, security, cleaning, repairs and others | 60 | 678 | 169 | 2 | 909 | 1,494 |
Advertising and other selling expenses | - | 164 | - | 36 | 200 | 497 |
Taxes, rates and contributions | 25 | 173 | 69 | 977 | 1,244 | 1,242 |
Interaction and roaming expenses | - | 79 | - | - | 79 | - |
Director's fees | - | - | 564 | - | 564 | 481 |
Leases and service charges | 5 | 63 | 26 | 11 | 105 | 135 |
Allowance for doubtful accounts, net | - | - | - | 81 | 81 | 130 |
Freights | 54 | 8 | 2 | 548 | 612 | 962 |
Bank expenses | - | 1 | 53 | 1 | 55 | 70 |
Conditioning and clearance | - | - | - | 82 | 82 | 144 |
Travel, library expenses and stationery | 29 | 15 | 21 | 7 | 72 | 135 |
Other expenses | 546 | 38 | 29 | 17 | 630 | 927 |
Total as of 12.31.20 | 9,091 | 15,509 | 2,295 | 2,314 | 29,209 | |
Total as of 12.31.19 | 7,105 | 18,421 | 2,491 | 2,499 | - | 30,516 |
(i)
Includes Ps. 15 and Ps. 16 of other agricultural operating costs as of December 31, 2020 and 2019, respectively.
25.
Other operating results, net
12.31.20 | 12.31.19 | |
(Loss) / Gain from commodity derivative financial instruments | (3,067) | 145 |
Loss from disposal of subsidiaries and associates | - | (8) |
Donations | (63) | (72) |
Lawsuits and other contingencies | (49) | (91) |
Interest earned on operating assets | 1,426 | 428 |
Others | (128) | 165 |
Total other operating results, net | (1,881) | 567 |
26.
Financial results, net
12.31.20 | 12.31.19 | |
Financial income | ||
Interest income | 248 | 175 |
Dividends income | 20 | 4 |
Total financial income | 268 | 179 |
Financial costs | ||
Interest expenses | (5,718) | (6,010) |
Result for debt swap | (2) | (6) |
Other financial costs | (596) | (447) |
Total financial costs | (6,316) | (6,463) |
Capitalized finance costs | 256 | 88 |
Total finance costs | (6,060) | (6,375) |
Other financial results: | ||
Foreign exchange, net | (167) | (10,018) |
Fair value gains of financial assets and liabilities at fair value through profit or loss | 4,284 | 217 |
(Loss) / Gain from repurchase of Non-Convertible Notes | (260) | 84 |
(Loss) / Gain from derivative financial instruments (except commodities) | (545) | 15 |
Others | (40) | - |
Total other financial results | 3,272 | (9,702) |
Inflation adjustment | 1,731 | 222 |
Total financial results, net | (789) | (15,676) |
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
32
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
27.
Related party transactions
The following is a summary of the balances with related parties as of December 31, 2020 and June 30, 2020:
Item | 12.31.20 | 06.30.20 |
Trade and other receivables | 2,126 | 1,258 |
Investments in financial assets | 237 | 322 |
Trade and other payables | (907) | (391) |
Borrowings | (266) | (250) |
Total | 1,190 | 939 |
Related party | 12.31.20 | 06.30.20 | Description of transaction |
Condor | 237 | 322 | Public companies' securities |
237 | - | Loans granted | |
26 | - | Dividends receivable | |
New Lipstick LLC | - | 19 | Reimbursement of expenses receivable |
- | (92) | Loans payable | |
Other associates and joint ventures | 11 | 101 | Leases and/or rights of use receivable |
204 | 243 | Dividends receivables | |
- | 10 | Management fees receivable | |
(23) | - | Other liabilities | |
(204) | (32) | Loans payable | |
9 | 146 | Reimbursement of expenses receivable | |
(79) | (1) | Reimbursement of expenses payable | |
Total associates and joint ventures | 418 | 716 | |
CAMSA and its subsidiaries | - | 1 | Reimbursement of expenses receivable |
- | (228) | Management fees payable | |
Yad Levim LTD | 1,381 | - | Loans granted |
IRSA Real Estate Strategies LP | 141 | 139 | Reimbursement of expenses |
PBS Real Estate Holdings S.R.L | - | 566 | Reimbursement of expenses |
BHN Vida | (62) | (62) | Non-convertible notes |
Otras partes relacionadas (i) | 31 | - | Leases and/or rights of use payable |
(241) | - | Leases and/or rights of use receivable | |
- | (64) | Loans payable | |
73 | - | Loans granted | |
- | 21 | Reimbursement of expenses receivable | |
(88) | - | Legal services payable | |
Total other related parties | 1,235 | 373 | |
IFISA | 2 | 7 | Financial operations receivable |
Total Parent Company | 2 | 7 | |
Directors and Senior Management | (476) | (162) | Fees for services received |
11 | 5 | Advances receivable | |
Total Directors and Senior Management | (465) | (157) | |
Total | 1,190 | 939 |
(i)
Includes Estudio Zang, Bergel & Viñes, Museo de los Niños, Hamonet S.A., CAM Communication L.P., Gary Goldstein, Fundación IRSA, Lartiyrigoyen and SAMSA.
The following is a summary of the results with related parties for the six and six-month periods ended December 31, 2020 and 2019:
Related party | 12.31.20 | 12.31.19 | Description of transaction |
BACS | 32 | 35 | Leases and/or rights of use |
(77) | - | Financial operations | |
Other associates and joint ventures | (3) | 18 | Leases and/or rights of use |
(17) | 18 | Corporate services | |
- | (1) | Financial operations | |
Total associates and joint ventures | (65) | 70 | |
Other related parties (i) | (6) | 3 | Leases and/or rights of use |
12 | (23) | Fees and remunerations | |
(17) | - | Corporate services | |
470 | 3 | Legal services | |
(28) | (159) | Financial operations | |
22 | - | Income from agricultural sales and services | |
- | (18) | Donations | |
Total other related parties | 453 | (194) | |
IFISA | 4 | 3 | Financial operations |
Total Parent Company | 4 | 3 | |
Directors | (504) | - | Compensation of Directors and senior management |
(22) | (309) | Fees and remunerations | |
Senior Management | (12) | 16 | Compensation of Directors and senior management |
Total Directors and Senior Management | (538) | (293) | |
Total | (146) | (414) |
(i)
Includes Estudio Zang, Bergel & Viñes, Fundación IRSA, Ramat Hanassi, Austral Gold Argentina S.A., Isaac Elsztain e Hijos, Hamonet S.A., LRSA, New Lipstick, BHN Vida S.A, TGLT S.A. and BHSA.
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
33
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
The following is a summary of the transactions with related parties for the six and six-month periods ended December 31, 2020 and 2019:
Related party | 12.31.20 | 12.31.19 | Description of transaction |
Agrofy Global | - | 264 | Irrevocable contributions |
Quality | 19 | 35 | Irrevocable contributions |
Manibil | - | 105 | Irrevocable contributions |
Others | - | 105 | Irrevocable contributions |
Total contributions | 19 | 509 | |
Agro-Uranga S.A. | 26 | 31 | Dividends received |
Uranga trading | 11 | - | Dividends received |
Condor | - | 35 | Dividends received |
Emco | - | 20 | Dividends received |
Nuevo Puerto Santa Fe S.A. | - | 34 | Dividends received |
Total dividends received | 37 | 120 | |
Puerto Retiro | 8 | - | Capitalized loan |
TGLT S.A. | - | 4,230 | Buy and change of shares |
Total other transactions | 8 | 4,230 |
28.
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 this Financial Statements that disclose the information required by the Resolution in Exhibits.
Exhibit A - Property, plant and equipment | Note 8 - Investment properties | |
Note 9 - Property, plant and equipment | ||
Exhibit B - Intangible assets | Note 11 - Intangible assets | |
Exhibit C - Equity investments | Note 7 - Investments in associates and joint ventures | |
Exhibit D - Other investments | Note 15 - Financial instruments by category | |
Exhibit E - Provisions | Note 19 - Provisions | |
Exhibit F - Cost of sales and services provided | Note 29 - Cost of sales and services provided | |
Exhibit G - Foreign currency assets and liabilities | Note 30 - Foreign currency assets and liabilities |
29.
Cost of goods sold and services provided
Description | Cost of sales and services from agricultural business (i) | Cost of sales and services from sales and services from urban properties and investment business (ii) | Total as of 12.31.20 | Total as of 12.31.19 |
Inventories at the beginning of the period / year | 7,844 | 14,209 | 22,053 | 20,591 |
Initial recognition and changes in the fair value of biological assets and agricultural products at the point of harvest | 1,350 | - | 1,350 | 899 |
Changes in the net realizable value of agricultural products after harvest | 258 | - | 258 | 575 |
Additions | 4 | - | 4 | - |
Capitalized finance costs | - | - | - | 87 |
Currency translation adjustment | (325) | (4,271) | (4,596) | 5,230 |
Transfers | 90 | - | 90 | - |
Harvest | 3,633 | - | 3,633 | 5,015 |
Acquisitions and classifications | 5,476 | 23,487 | 28,963 | 38,268 |
Consume | (1,588) | - | (1,588) | (1,680) |
Disposals due to sales | - | (938) | (938) | (3,348) |
Deconsolidation | - | (3,760) | (3,760) | 11,969 |
Expenses incurred | 2,118 | - | 2,118 | 1,905 |
Inventories at the end of the period / year | (5,994) | (1,597) | (7,591) | (17,253) |
Cost as of 12.31.20 | 12,866 | 27,130 | 39,996 | - |
Cost as of 12.31.19 | 14,373 | 47,885 | - | 62,258 |
(i)
Includes biological assets (see Note 13).
(ii)
Includes trading properties (see Note 10).
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
34
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
30.
Foreign currency assets and liabilities
Book amounts of foreign currency assets and liabilities are as follows:
Item (3) / Currency | Amount of foreign currency (2) | Prevailing exchange rate (1) | Total as of 12.31.20 | Total as of 06.30.20 |
Assets | ||||
Trade and other receivables | ||||
US Dollar | 64 | 83.95 | 5,403 | 5,533 |
Euros | 0.1 | 103.07 | 11 | 1,055 |
Trade and other receivables related parties | ||||
US Dollar | 17 | 83.95 | 1,398 | 358 |
Total Trade and other receivables | 6,812 | 6,946 | ||
Investment in financial assets | ||||
US Dollar | 10 | 83.95 | 816 | 4,639 |
Pounds | 1 | 114.22 | 77 | 93 |
Total Investment in financial assets | 893 | 4,732 | ||
Derivative financial instruments | ||||
US Dollar | 2 | 83.95 | 180 | 98 |
Total Derivative financial instruments | 180 | 98 | ||
Cash and cash equivalents | ||||
US Dollar | 41 | 83.95 | 3,409 | 18,627 |
Euros | - | - | - | 1,856 |
Uruguayan pesos | 9 | 1.99 | 17 | - |
Total Cash and cash equivalents | 3,426 | 20,483 | ||
Total Assets | 11,311 | 32,259 | ||
Liabilities | ||||
Trade and other payables | ||||
US Dollar | 29 | 84.15 | 2,467 | 17,602 |
Euros | - | - | - | 366 |
Chilean pesos | 9 | 1.99 | 18 | - |
Uruguayan pesos | 1 | 84.15 | 84 | - |
Total Trade and other payables | 2,569 | 17,968 | ||
Borrowings | ||||
US Dollar | 548 | 84.15 | 46,107 | 110,488 |
Total Borrowings | 46,107 | 110,488 | ||
Derivative financial instruments | ||||
US Dollar | 16 | 84.15 | 1,375 | 345 |
Total Derivative financial instruments | 1,375 | 345 | ||
Total Liabilities | 50,051 | 128,801 |
(1)
Exchange rates as of December 31, 2020 and June 30, 2020, respectively according to Banco Nación Argentina.
(2)
Considering foreign currencies those that differ from each Group’s subsidiaries functional currency at each period/year-end.
(3)
The Company uses derivative instruments as a complement in order to reduce its exposure to exchange rate movements (Note 15).
31.
Groups of assets and liabilities held for sale
The Group has certain assets and liabilities classified as held for sale. The following table presents the main ones:
12.31.20 | 06.30.20 | |
Property, plant and equipment | 797 | 44,006 |
Intangible assets | 12 | 1,642 |
Investments in associates | - | 268 |
Deferred income tax assets | - | 976 |
Income tax credit | - | 4 |
Inventories | 336 | 425 |
Trade and other receivables | 915 | 3,141 |
Cash and cash equivalents | 7 | 2,051 |
Total group of assets held for sale | 2,067 | 52,513 |
Trade and other payables | 524 | 12,455 |
Payroll and social security liabilities | 110 | 597 |
Employee benefits | - | 463 |
Deferred and current income tax liabilities | - | 2,374 |
Provisions | 9 | 14 |
Borrowings | 914 | 12,440 |
Total group of liabilities held for sale | 1,557 | 28,343 |
Total net financial assets held for sale | 510 | 24,170 |
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
35
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
32.
Results from discontinued operations
The results of the discontinued operations include the IDBD / DIC operations which were deconsolidated in the current period (see Note 4) and the results of the comparative periods have been reclassified.
12.31.20 | 12.31.19 | |
Revenues | 30,197 | 63,420 |
Costs | (24,502) | (43,853) |
Gross profit | 5,695 | 19,567 |
Net gain from fair value adjustment of investment properties | (22) | (223) |
General and administrative expenses | (3,476) | (5,443) |
Selling expenses | (3,311) | (7,658) |
Impairment of associate | - | (2,207) |
Other operating results, net | (2,078) | 19,660 |
(Loss) / Profit from operations | (3,192) | 23,696 |
Share of profit / (loss) of joint ventures and associates | 574 | (608) |
(Loss) / Profit from operations before financing and taxation | (2,618) | 23,088 |
Financial income | 419 | 680 |
Finance costs | (5,506) | (12,016) |
Other financial results | 364 | (1,015) |
Financial results, net | (4,723) | (12,351) |
(Loss) / Profit before income tax | (7,341) | 10,737 |
Income tax | 221 | (545) |
(Loss) / Profit for the period from discontinued operations | (7,120) | 10,192 |
(Loss) / Profit for the period from discontinued operations attributable to: | ||
Equity holders of the parent | (3,512) | 655 |
Non-controlling interest | (3,608) | 9,537 |
(Loss) / Profit per share from discontinued operations attributable to equity holders of the parent: | ||
Basic | (7.032) | 2.373 |
Diluted | (7.032) | 2.272 |
33.
Other relevant events of the period
Economic context in which the Group operates
The Group operates in a complex context both due to macroeconomic conditions, whose main variables have recently experienced strong volatility, as well as regulatory, social, and political conditions, both nationally and internationally.
The results from operations may be affected by fluctuations in the inflation index and the argentine peso exchange rate against other currencies, mainly the dollar, variations in interest rates which have an impact on the cost of capital, changes in government policies, capital control and other political or economic developments both locally and internationally.
In December 2019, a new strain of coronavirus (SARS-COV-2), which caused severe acute respiratory syndrome (COVID-19) appeared in Wuhan, China. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic. In response, countries have taken extraordinary measures to contain the spread of the virus, including imposing travel restrictions and closing borders, closing businesses deemed non-essential, instructing residents to practice social distancing, implementing quarantines, among other measures. The ongoing pandemic and these extraordinary government actions are affecting global economic activity, resulting in significant volatility in global financial markets.
On March 3, 2020, the first case of COVID-19 was registered in the country and until February 28, 2021, more than 2,100,000 cases of infections had been confirmed in Argentina, by virtue of which the National Government implemented a series of health measures of social, preventive and mandatory isolation at the national level that began on March 19, 2020 and extended several times, most recently until November 8, 2020 inclusive in the Metropolitan Area of Buenos Aires although it has been extended in some cities in the interior of the country. Among these measures, that affected the local economy, the following stand out: the extension of the public emergency in health matters, the total closure of borders, the suspension of international and cabotage flights, the suspension of medium and long-distance land transport, the suspension of artistic and sports shows, closure of businesses not considered essential, including shopping malls and hotels.
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
36
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
This series of measures affected a large part of Argentine companies, which experienced a drop in their income and inconveniences in the payment chain. In this context, the Argentine government announced different measures aimed at alleviating the financial crisis of the companies affected by the COVID-19 pandemic. Likewise, it should be noted that, to the stagnation of the Argentine economy, a context of international crisis is added because of the COVID-19 pandemic. In this scenario, a strong contraction of the Argentine economy was evidenced.
Additionally, the government is challenged to achieve a successful debt renegotiation with the IMF. In the event that Argentina achieves a favourable result and agrees to restructure its debt with the IMF, this could have a positive impact on the Argentine economy in the medium and long term.
At the local environment, the following circumstances are displayed:
●
In December 2020, the monthly economic activity estimator (EMAE) reported by the National Institute of Statistics and Censuses (“INDEC”) registered a contraction of 2.2% in the year-on-year comparison, and an increase of 0,9% in relation to November. In 2020, the EMAE accumulated a fall of 10.0%.
●
The annual inflation reached 36.1% in 2020. The survey on market expectations prepared by the Central Bank in December 2020, called the Market Expectations Survey (“REM” in Spanish), estimates a retail inflation of 49.8% for 2021. The analysts who participate in the REM foresee that in 2021 economic activity will rebound in activity, reaching an economic growth of 5.5%.
●
In the period from December 2019 to December 2020, the argentine peso depreciated 40.5% against the US dollar according to the wholesale average exchange rate of Argentine Nation Bank. Given the exchange restrictions in force since August 2019, as of December 31, 2020 there is an exchange gap of approximately 70% between the official price of the dollar and its price in parallel markets, which impacts the level of activity in the economy and affects the level of reserves of the Central Bank of the Argentine Republic. Additionally, these exchange restrictions, or those that may be dictated in the future, could affect the Group's ability to access the Single Free Exchange Market (MULC in Spanish) to acquire the foreign exchange necessary to meet its financial obligations.
On February 25, 2021, the Central Bank of the Argentine Republic published Communication “A” 7230 which establishes that the provisions of point 7 of communication “A” 7106, published on September 25, 2020, will be applicable to those who register financial debts with capital maturities in foreign currency scheduled between 04.01.2021 and 12.31.2021, for which they must submit a refinancing plan to the BCRA based on the following criteria: (a) that the amount net by which the exchange market will be accessed in the original terms will not exceed 40% of the amount of capital maturing in the period indicated above, and (b) that the rest of the capital is, at least, refinanced with a new external debt with an average life of 2 years, provided that the new debt is settled in the exchange market. It is worth mentioning that for scheduled maturities between 04.01.2021 and 04.15.2021, the refinancing plan must be submitted prior to 03.15.2021; and the submission deadline for the remaining maturities -between 04/16/2021 and 12/31/2021- must be presented with a term of at least 30 calendar days before the maturity of the capital to be refinanced. It should be noted that the financial debt already refinanced under the conditions of Communication “A” 7106, may access the exchange market to be paid in its entirety.
COVID-19 PANDEMIC
As described in the note on the economic context in which the Group operates, the COVID-19 pandemic is adversely impacting both the global economy and the Argentine economy and the Group's business.
The current estimated impacts of the COVID-19 pandemic on the Company as of the date of these financial statements are set out below:
●
The agricultural business of Cresud and its subsidiaries in Brazil, Paraguay and Bolivia continued to operate relatively normally; since the agricultural activity has been considered an essential activity in the countries where the Company operates. In any case, the effect of Covid-19 could cause changes in demand on a global scale and affect the prices of commodities in the international and local markets in the short term.
●
Because of the social, preventive and obligatory isolation, shopping malls throughout the country were closed since March 20, 2020, leaving exclusively those premises dedicated to items considered essential such as pharmacies, supermarkets and banks. The reopening of shopping malls in the interior of the country began during the months of May, June, and July. In August 2020, the Arcos District, an open-air premium outlet in the city of Buenos Aires, was opened and in October 2020, the Group’s shopping malls opened in the City and Greater Buenos Aires. From October to the date of these Financial Statements, all the Group's shopping malls are open operating with strict protocols that include reduced time to 8 hours and public restrictions, social distancing, among other safety and hygiene measures. The Entertainment category protocol is even more rigorous with closed cinemas in most cases. Although we hope to fully resume the
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PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
37
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
●
activity in our shopping malls, the uncertainty of the situation could cause setbacks in the openings already made.
●
Given the closure of the shopping malls, the Group has decided to condone the billing and collection of the Insured Monthly Value until September 30, 2020, with some exceptions and to subsidize the collective promotion fund during the same period, prioritizing the long-term relationship with its tenants. Additionally, an increase in the delinquency rates of some tenants has been detected. As a result of the above, the impact on shopping malls is a 82.4% decrease in rental and service income during the first quarter of fiscal year 2021 compared to the same period of last fiscal year, and a 12.6% increase compared to the immediately preceding quarter.
●
In relation to the offices business, although most of the tenants are working in the home office mode, they are operational with strict safety and hygiene protocols. To date, we have not evidenced a deterioration in collections.
●
The Libertador hotels in the City of Buenos Aires and Llao Llao in the province of Río Negro have temporarily closed since the mandatory lockdown was decreed in March 2020, while the Intercontinental Hotel in the City of Buenos Aires has only worked under a plan of contingency and emergency. The reopening took place in November and December under strict protocols and, after closing, a recovery in occupancy was evidenced, mainly at the Llao Llao hotel. As a result of the foregoing, the impact on these financial statements is a 93% decrease in income in the first half of the 2021 fiscal year compared to the same period of the previous fiscal year.
Regarding debt maturities during the second quarter of fiscal year 2021, the Group had notes maturities within the period contemplated by provision “A” 7106 of the BCRA: Cresud Class XXIV for a nominal value of US$ 73.6 due on November 14, 2020 and IRSA Class I for a nominal value of US$ 181.5 due on November 15, 2020, as well as other bank debts. Cresud and IRSA presented a proposal to the Central Bank within the corresponding deadlines and carried out exchange offers for said Notes. Cresud through the cash cancellation of US$ 29.2 and the issuance of two new series of Class XXXI and Class XXXII Negotiable Obligations for a nominal value of US$ 1.3 and US$ 34.3, respectively. For its part, IRSA did it through the cash cancellation of US$ 72.6 and the issuance of two new series of Class VIII and Class IX Negotiable Obligations for a nominal value of US$ 31.7 and US$ 80.7 (including US$ 6.5 of new subscription). As of the date of these financial statements, the Group had financial debt framed in the period contemplated by Communication “A” 7230 of the BCRA mentioned above for a nominal value of US$ 59.6 corresponding to the Notes Series XXV of CRESUD maturing on July 11, 2021, as well as other bank debts.
Regarding the financial debt of the Group in the next 12 months:
●
Cresud faces the maturity of its Class XXVI Negotiable Obligations in January 2021 for a nominal value of Ps. 995 (approximately US$ 11.8) totally canceled as of the date of release of these financial statements, Class XXVIII in April 2021 for a nominal value of US$ 27.5, Classes XXV and XXVII in July 2021 for a nominal value of US$ 59.6 and US$ 5.7 respectively and Class XXIX in December 2021 for a nominal value of US$ 83.0. Likewise, Cresud has bank overdrafts for US$ 49.9 and other bank debt for US$ 57.5. As of December 31, it had a liquidity position of approximately US$ 39.2.
●
The subsidiary IRSA faces the maturity of its Class III Negotiable Obligations for a nominal value of Ps. 247.8 (equivalent to US$ 2.9) maturing on February 21, 2021 totally canceled as of the date of release of these financial statements, Class IV Negotiable Obligations for a nominal value of US$ 51.4 maturing on May 21, 2021, Class VI Negotiable Obligations for a nominal value of Ps. 335 (equivalent to US$ 4.0) maturing on July 21, 2021, Class VIII Negotiable Obligations for a nominal value of US$ 10.5 (33% of the capital) due on November 12, 2021, bank overdrafts for the equivalent of US$ 27.6 and other bank debt for US$ 13.7. For its part, IRSA PC has bank debt maturities for the approximate sum of US$ 24.6.
●
It is important to mention that IRSA has approved with IRSA PC a line of credit for up to the sum of US$ 180 for 3 years, of which as of December 31, 2020 IRSA used approximately US$ 62.6, leaving the balance available. Likewise, IRSA PC has a cash position and equivalents (including current financial investments) as of December 31, 2020 of approximately US$ 84.9.
The final extent of the Coronavirus outbreak and its impact on the country's economy is unknown and difficult to fully predict. However, although it has produced significant short-term effects, they are not expected to affect business continuity and the Company’s ability to meet financial commitments for the next twelve months.
The Company is closely monitoring the situation and taking all necessary measures to preserve human life and the Group's businesses.
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PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
38
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
34.
Subsequent events
Acquisition of Bolivian Companies
On December 20, 2020, our subsidiary BrasilAgro and its subsidiaries Agrifirma Agro and Imobiliária Engenho de Maracajú signed a Share Purchase Agreement to acquire 100% of the shares issued by the following companies based in Bolivia: (i) Agropecuaria Acres del Sud SA; (ii) Ombú Agropecuaria S.A .; (iii) Yatay Agropecuaria S.A .; and (iv) Yuchán Agropecuaria S.A., all indirectly controlled by The Company, for an amount of US$ 30. This acquisition was approved at a meeting of the BrasilAgro Board of Directors held on December 22, 2020.
The acquisition was subject to compliance with certain precedent conditions, which were fully met on February 4, 2021. Consequently, on February 8, 2021, BrasilAgro made the full payment of the acquisition price for a total of R $160 (equivalent to approximately Ps. 2,624 at the date of the transaction).
Said transaction has no impact on the Group's consolidated assets and liabilities. The Difference in stake will be treated as a change in non-controlling interest within the equity.
Public offering of shares issued by BrasilAgro
On January 25, 2021, our subsidiary BrasilAgro announced that the Board of Directors approved the public offering of primary and secondary distribution of shares with restricted placement efforts. In accordance with CVM Instruction 476 (“Restricted Offer”), with the primary public distribution of 20,000,000 new shares (“Primary Offer”). In addition, the number of shares initially offered could, at the discretion of the Company, Autonomy Luxembourg One, as selling shareholder ("Selling Shareholder") and the coordinators of the offering, by mutual agreement, approved an increase of up to 27.35 % of the total shares initially offered, that is, up to 5,470,710 shares held by the Selling Shareholder, under the same conditions and for the same price of the shares initially offered, which will be used to meet any excess demand that may be found when the Price per Share is set ("Secondary Offer" and "Additional Shares", respectively). BrasilAgro will not receive funds as a result of the Secondary Offer, as these funds belong entirely to the Selling Shareholder.
The Restricted Offer was carried out in Brazil, in an unorganized OTC market, under the coordination of the BTG Pactual Bank of XP Investimentos, in the area of the Restricted Offer, and simultaneously efforts were made to place shares abroad by BTG Pactual. Capital of the United States.
With the completion of the Restricted Offer procedures, the 20,000,000 shares offered in the Primary Offer and 2,735,355 shares in the Secondary Offer were traded, with a price per share set at R$ 22.00. The resources received in the Primary Offer represent an increase of R$ 440 thousand in the Company's capital stock, which will go from R $699,811 to R$ 1,139,811, divided into 82,104,301 ordinary shares, all registered, registered and without value nominal.
The funds will be used to: (i) acquire assets in Bolivia, (ii) acquire land for exploration and development of agricultural properties, and (iii) businesses to optimize and leverage the operating activities of the Company.
Capital Increse - Subscription of shares
On February 17, 2021, the Company announced the launch of its public offering of shares for up to 90 million shares (or its equivalent 9 million ADS) and 90,000,000 warrants to subscribe for new common shares, to registered holders as of February 19, 2021. Each right corresponding to one share (or ADS) allowed its holder to subscribe 0.1794105273 new ordinary shares and receive free of charge an option with the right to subscribe 1 additional ordinary share in the future. The final subscription price for the new shares was Ps. 70.31 or US$ 0.472 and for the new ADS it was US$ 4.72. The new shares, registered, of Ps. 1 (one peso) of par value each and with the right to one vote per share gives the right to receive dividends under the same conditions as the current shares in circulation.
On March 5, 2021, having finished the pre emptive rights subscription period, the Company's shareholders have subscribed the amount of 87,264,898 new additional shares, that is 97% of the shares offered, and have requested through the accretion right 26,017,220 additional new shares, for which 2,735,102 new shares will be issued, completing the total issuance of 90,000,000 new shares (or their equivalent in ADSs) offered. Likewise, 90,000,000 options will be issued that will entitle the holders through their exercise to acquire up to 90,000,000 additional new shares.
The exercise price of the warrants will be US$ 0.566. The warrants may be exercised quarterly from the 90th day of their issuance on the 17th to the 25th (inclusive) of the months of February, May, September, and November of each year (provided that dates are business days in the city of New York and in the Autonomous City of Buenos Aires) until their expiration 5 years from the date of issue.
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PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
39
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
As of the date of issuance of these financial statements, the Company received all the funds in the amount of US$ 42.5 and issued the new shares, increasing the capital stock to 591,642,804 million.
Sale of Carnes Pampeanas
On February 24, 2021, the Company sold 100% of its shares of Sociedad Anónima Carnes Pampeanas S.A., owner of the meat processing plant Carnes Pampeanas in the province of La Pampa, Argentina.
The price of the operation was agreed at US$ 10, which has already been paid in full.
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PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
40
REVIEW REPORT ON THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
To the Shareholders, President and Directors of
Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria
Legal address: Carlos Della Paolera 261, 9° floor
Autonomous City of Buenos Aires
Tax Registration Number: 30-50930070-0
Introduction
We have reviewed the accompanying unaudited condensed interim consolidated financial statements of Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria and its subsidiaries (“the Company”), which comprise the unaudited condensed interim consolidated statement of financial position at December 31, 2020, the unaudited condensed interim consolidated statements of income and other comprehensive income, of changes in shareholders’ equity and of cash flows for the six and three-month period then ended, and selected explanatory notes.
The balances and other information for the fiscal year ended on June 30, 2020 and its interim periods are an integral part of the financial statements mentioned above; therefore, they must be considered in connection with these financial statements.
Management’s responsibility
The Board of Directors of the Company is responsible for the preparation and presentation of these unaudited condensed interim consolidated financial statements in accordance with International Financial Reporting Standards, adopted by the Argentine Federation of Professional Councils in Economic Sciences (FACPCE) as professional accounting standards and included by the National Securities Commission (CNV) in its regulations, as approved by the International Accounting Standards Board (IASB), and is therefore responsible for the preparation and presentation of the unaudited condensed interim consolidated financial statements mentioned in the first paragraph, in accordance with International Accounting Standard 34 Interim Financial Information (IAS 34).
Scope of our review
Our review was limited to the application of the procedures established under International Standards on Review Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity, adopted as a review standard in Argentina by Technical Pronouncement No. 33 of the FACPCE and approved by the International Auditing and Assurance Standards Board (IAASB). A review of interim financial information consists of inquiries of Company staff responsible for preparing the information included in the unaudited condensed interim consolidated financial statements and of analytical and other review procedures. This review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion on the consolidated statements of financial position and the consolidated statements of income and other comprehensive income and of cash flows of the Company.
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PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
41
Conclusion
On the basis of our review, nothing has come to our attention that causes us to believe that the unaudited condensed interim consolidated financial statements mentioned in the first paragraph of this report have not been prepared, in all material respects, in accordance with International Accounting Standard 34 Interim financial reporting.
Report on compliance with current regulations
In accordance with current regulations, we report, in connection with Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria, that:
a) the unaudited condensed interim consolidated financial statements of Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria are not transcribed into the Inventory and Balance Sheet book and, except for the above mentioned situation, as regards those matters that are within our competence, they are in compliance with the provisions of the General Companies Law and pertinent resolutions of the National Securities Commission;
b) the unaudited condensed interim separate financial statements of Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria arise from accounting records carried in all formal aspects in accordance with legal requirements;
c) we have read the Business Summary (“Reseña Informativa”), on which we have no observations to make regarding matters that are within our competence;
d) at December 31, 2020 the debt of Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria accrued in favor of the Argentine Integrated Social Security System, as shown by the Company’s accounting records, amounted to $ 26,780,414, which is not due at that date.
Autonomous City of Buenos Aires, March 11, 2021
PRICE WATERHOUSE & CO. S.R.L. (Partner) | |
C.P.C.E.C.A.B.A. V° 1 F° 17 | |
Walter ZablockyPublic Accountant (UNLP)C.P.C.E.C.A.B.A. V. 340 F. 156 |
Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria
Unaudited Condensed Interim Separate Financial Statements as of December 31, 2020 and for the period of six months ending on that date, presented in comparative form.
42
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
Unaudited Condensed Interim Separate Statements of Financial Position
as of December 31, 2020, and June 30, 2020
(All amounts in millions of Argentine Pesos, except as otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
Note | 12.31.20 | 06.30.20 | |
ASSETS | |||
Non-current assets | |||
Investment properties | 7 | 129 | 129 |
Property, plant and equipment | 8 | 7,183 | 7,205 |
Intangible assets | 9 | 240 | 249 |
Right of use assets | 10 | 1,615 | 904 |
Biological assets | 11 | 1,931 | 1,717 |
Investments in subsidiaries, associates and joint ventures | 6 | 60,795 | 57,587 |
Income tax and minimum presumed income tax credit | 38 | 46 | |
Trade and other receivables | 14 | 860 | 979 |
Total Non-current assets | 72,791 | 68,816 | |
Current assets | |||
Biological assets | 11 | 1,941 | 1,318 |
Inventories | 12 | 1,585 | 2,451 |
Trade and other receivables | 14 | 4,053 | 2,973 |
Investment in financial assets | 13 | 1,288 | 60 |
Derivative financial instruments | 13 | 4 | - |
Cash and cash equivalents | 13 | 247 | 6,812 |
Total Current assets | 9,118 | 13,614 | |
TOTAL ASSETS | 81,909 | 82,430 | |
SHAREHOLDERS’ EQUITY | |||
Shareholders´ equity (according to corresponding statements) | 28,771 | 27,837 | |
TOTAL SHAREHOLDERS' EQUITY | 28,771 | 27,837 | |
LIABILITIES | |||
Non-current liabilities | |||
Borrowings | 18 | 16,316 | 24,520 |
Deferred tax liabilities | 19 | 4,759 | 4,485 |
Provisions | 17 | 8 | 11 |
Lease Liabilities | 447 | 235 | |
Total Non-current liabilities | 21,530 | 29,251 | |
Current liabilities | |||
Trade and other payables | 16 | 2,977 | 2,387 |
Payroll and social security liabilities | 212 | 232 | |
Borrowings | 18 | 26,019 | 22,155 |
Derivative financial instruments | 13 | 1,412 | 37 |
Provisions | 17 | 5 | 4 |
Lease Liabilities | 983 | 527 | |
Total Current liabilities | 31,608 | 25,342 | |
TOTAL LIABILITIES | 53,138 | 54,593 | |
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 81,909 | 82,430 |
The accompanying notes are an integral part of these Unaudited Condensed Interim Separate Financial Statements.
) | ||||
Alejandro G. Elsztain Vice President II acting as President |
43
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
Unaudited Condensed Interim Separate Statements of Income and Other Comprehensive Income for six-month and three-month periods ended December 31, 2020 and 2019
(All amounts in millions of Argentine Pesos, except as otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
Six Months | Three Months | ||||
Note | 12.31.20 | 12.31.19 | 12.31.20 | 12.31.19 | |
Revenues | 20 | 3,869 | 6,039 | 1,229 | 2,634 |
Costs | 21 | (3,182) | (4,750) | (1,077) | (2,023) |
Initial recognition and changes in the fair value of biological assets and agricultural products at the point of harvest | 111 | (225) | 231 | 34 | |
Changes in the net realizable value of agricultural products after harvest | 291 | 633 | (37) | 15 | |
Gross profit | 1,089 | 1,697 | 346 | 660 | |
Net gain from fair value adjustment of investment properties | - | 16 | (1) | (11) | |
General and administrative expenses | 22 | (318) | (324) | (154) | (185) |
Selling expenses | 22 | (616) | (1,017) | (239) | (490) |
Other operating results, net | 23 | (1,300) | 103 | (846) | (5) |
Management fees | - | - | 523 | - | |
(Loss) / Profit from operations | (1,145) | 475 | (371) | (31) | |
Share of loss of subsidiaries, associates and joint ventures | 6 | 1,256 | 84 | (5,420) | (4,226) |
Profit / (Loss) before financing and taxation | 111 | 559 | (5,791) | (4,257) | |
Finance income | 24 | 203 | 10 | 19 | 5 |
Finance costs | 24 | (2,258) | (1,921) | (1,178) | (862) |
Other financial results | 24 | 76 | (4,658) | 583 | 2,683 |
Inflation Adjustment | 24 | 630 | (50) | 399 | (53) |
Financial results, net | 24 | (1,349) | (6,619) | (177) | 1,773 |
Loss before income tax | (1,238) | (6,060) | (5,968) | (2,484) | |
Income tax | 19 | (274) | (439) | (252) | (457) |
Loss for the period | (1,512) | (6,499) | (6,220) | (2,941) | |
Other comprehensive (loss) / income: | |||||
Items that may be reclassified subsequently to profit or loss: | |||||
Currency translation adjustment from subsidiaries and associates | (1,518) | (850) | 911 | (1,826) | |
Participation in other comprehensive results of subsidiaries and associates | 232 | (121) | (397) | (68) | |
Other comprehensive income for the period | (1,286) | (971) | 514 | (1,894) | |
(Loss) / Income and Other Comprehensive (Loss) / Income for the period | (2,798) | (7,470) | (5,706) | (4,835) | |
Loss per share attributable to equity holders of the parent during the period: | |||||
Basic | (3.027) | (13.271) | (12.454) | (6.006) | |
Diluted | (3.027) (i) | (13.271) (i) | (12.454) (i) | (6.006)(i) |
(i)
Since the result of the period showed loss, there is no dilutive effect of said result.
The accompanying notes are an integral part of these Unaudited Condensed Interim Separate Financial Statements.
) | ||||
Alejandro G. Elsztain Vice President II acting as President |
44
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
Unaudited Condensed Interim Separate Statements of Changes in Shareholders’ Equity
for the six-month period ended December 31, 2020
(All amounts in millions, except as otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
Share capital | Treasury shares | Inflation adjustment of share capital and treasury shares (i) | Share premium | Additional paid-in capital from treasury shares | Legal reserve | Special reserve RG 609/12 (ii) | Other reserves (iii) | Retained earnings | Total Shareholders' equity | |
Balance as of June 30, 2020 | 499 | 3 | 11,827 | 12,694 | 108 | 447 | 1,782 | 1,062 | (585) | 27,837 |
Loss for the period | - | - | - | - | - | - | - | - | (1,512) | (1,512) |
Other comprehensive income for the period | - | - | - | - | - | - | - | (1,286) | - | (1,286) |
Total comprehensive loss for the period | - | - | - | - | - | - | - | (1,286) | (1,512) | (2,798) |
As provided by Ordinary and Extraordinary Shareholders´ Meeting held on October 26, 2020: | ||||||||||
- Constitution of Legal Reserve | - | - | - | - | - | 114 | - | - | (114) | - |
Others changes in subsidiaries’ equity | - | - | - | - | - | - | - | 3,767 | 76 | 3,843 |
Changes in non-controlling interest | - | - | - | - | - | - | - | (111) | - | (111) |
Balance as of December 31, 2020 | 499 | 3 | 11,827 | 12,694 | 108 | 561 | 1,782 | 3,432 | (2,135) | 28,771 |
The accompanying notes are an integral part of these Unaudited Condensed Interim Separate Financial Statements.
(i)
Includes Ps. 1 and Ps. 1 of inflation adjustment of Treasury shares as of December 31, 2020 and June 30, 2020, respectively.
(ii) Corresponding to General Resolution 609/12 of the National Securities Commission.
(iii) Group’s Other reserves at December 31, 2020 are comprised as
Cost of treasury shares | Changes in non-controlling interest | Reserve for currency translation adjustment | Other comprehensive income / (loss) | Reserve for share-based payments | Special reserves | Other subsidiary reserves | Reserve for the acquisition of securities issued by the Company | Total Other reserves | |
Balance as of June 30, 2020 | (180) | (4,131) | 3,604 | 978 | 592 | - | 80 | 119 | 1,062 |
Other comprehensive loss for the period | - | - | (1,518) | 232 | - | - | - | - | (1,286) |
Total comprehensive income for the period | - | - | (1,518) | 232 | - | - | - | - | (1,286) |
Acquisition of treasury stock | - | (32) | 3,136 | 735 | - | - | (72) | - | 3,767 |
Changes in non-controlling interest | - | (111) | - | - | - | - | - | - | (111) |
Balance as of December 31, 2020 | (180) | (4,274) | 5,222 | 1,945 | 592 | - | 8 | 119 | 3,432 |
) | ||||
Alejandro G. Elsztain Vice President II acting as President |
45
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
Unaudited Condensed Interim Separate Statements of Changes in Shareholders’ Equity
for the six-month period ended December 31, 2019
(All amounts in millions, except as otherwise indicated)
Share capital | Treasury shares | Inflation adjustment of share capital and treasury shares (i) | Share premium | Additional paid-in capital from treasury shares | Legal reserve | Special reserve RG 609/12 (ii) | Other reserves (iii) | Retained earnings | Total Shareholders' equity | |
Balance as of June 30, 2019 | 486 | 16 | 11,828 | 12,694 | 110 | 445 | 7,067 | 43,001 | (47,229) | 28,418 |
Adjustments previous periods (NIIF 16) | - | - | - | - | - | - | - | - | (867) | (867) |
Adjusted balance as of June 30, 2019 | 486 | 16 | 11,828 | 12,694 | 110 | 445 | 7,067 | 43,001 | (48,096) | 27,551 |
Loss for the period | - | - | - | - | - | - | - | - | (6,499) | (6,499) |
Other comprehensive loss for the period | - | - | - | - | - | - | - | (971) | - | (971) |
Total comprehensive (loss) income for the period | - | - | - | - | - | - | - | (971) | (6,499) | (7,470) |
As provided by Ordinary Shareholders’ Meeting held and Extraordinary Shareholders’ Meeting held on October 30, 2019: | ||||||||||
- Absorption of losses | - | - | - | - | - | - | (5,285) | (41,942) | 47,227 | - |
- Treasury shares distribution | 13 | (13) | - | - | - | - | - | 1,812 | (1,812) | - |
Reserve for share-based payments | - | - | - | - | - | - | - | (3) | - | (3) |
Changes in non-controlling interest | - | - | - | - | - | - | - | (506) | - | (506) |
Changes in interest in subsidiaries | - | - | - | - | - | - | - | - | 16 | 16 |
Balance as of December 31, 2019 | 499 | 3 | 11,828 | 12,694 | 110 | 445 | 1,782 | 1,391 | (9,164) | 19,588 |
The accompanying notes are an integral part of these Unaudited Condensed Interim Separate Financial Statements.
(i) Includes Ps. 1 and Ps. 1 of inflation adjustment of Treasury shares as of December 31, 2019 and June 30, 2019, respectively.
(ii) Corresponding to General Resolution 609/12 of the National Securities Commission.
(iii) Group’s Other reserves at December 31, 2019 are comprised as:
Cost of treasury shares | Changes in non-controlling interest | Reserve for currency translation adjustment | Other comprehensive income / (loss) | Reserve for share-based payments | Special reserves | Other subsidiary reserves | Reserve for the acquisition of securities issued by the Company | Total Other reserves | |
Balance as of June 30, 2019 | (1,994) | (4,020) | 5,480 | 888 | 576 | 41,942 | 11 | 118 | 43,001 |
Other comprehensive loss for the period | - | - | (850) | (121) | - | - | - | - | (971) |
Total comprehensive loss for the period | - | - | (850) | (121) | - | - | - | - | (971) |
As provided by Ordinary Shareholders’ Meeting held and Extraordinary Shareholders’ Meeting held on October 30, 2019: | |||||||||
- Absorption of losses | - | - | - | - | - | (41,942) | - | - | (41,942) |
- Treasury shares distribution | 1,812 | - | - | - | - | - | - | - | 1,812 |
Reserve for share-based payments | - | - | - | - | - | - | (3) | - | (3) |
Changes in non-controlling interest | - | (506) | - | - | - | - | - | - | (506) |
Balance as of December 31, 2019 | (182) | (4,526) | 4,630 | 767 | 576 | - | 8 | 118 | 1,391 |
) | ||||
Alejandro G. Elsztain Vice President II acting as President |
46
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
Unaudited Condensed Interim Separate Statements of Cash Flows
for the six-month period ended December 31, 2020 and 2019
(All amounts in millions of Argentine Pesos, except as otherwise indicated)
Free translation from the original prepared in Spanish for publication in Argentina
cnwjkvnwjv | Note | 12.31.20 | 12.31.19 |
Operating activities: | |||
Cash (used in) / generated from operations | 15 | (1,628) | 1,935 |
Net cash (used in) / generated from operating activities | (1,628) | 1,935 | |
Investing activities: | |||
Capital contribution to subsidiaries, associates and joint ventures | 6 | (85) | (227) |
Acquisition of property, plant and equipment | 8 | (63) | (181) |
Proceeds from sale of property, plant and equipment | 6 | 5 | |
Acquisition of Intangible assets | 9 | (1) | (5) |
Acquisition of investment in financial instruments | (6,596) | (414) | |
Proceeds from disposals of investment in financial assets | 6,056 | 455 | |
Advance payments | (21) | (27) | |
Dividends received | 520 | 280 | |
Loans granted to subsidiaries, associates and joint ventures | (90) | (560) | |
Net cash used in investing activities | (274) | (674) | |
Financing activities: | |||
Repurchase of non-convertible notes | - | (688) | |
Borrowings and issue ON | 2,997 | 2,564 | |
Payment of borrowings and ON | (5,520) | (490) | |
Payment of short-term loans, net | (928) | (1,774) | |
(Payments) / Proceeds from derivative financial instruments | (309) | 64 | |
Interest paid | (1,451) | (814) | |
Net cash used in financing activities | (5,211) | (1,138) | |
Net (decrease) / increase in cash and cash equivalents | (7,113) | 123 | |
Cash and cash equivalents at beginning of the period | 6,812 | 174 | |
Result from exposure to inflation on cash and cash equivalents | 10 | 4 | |
Currency translation adjustment on cash and cash equivalents | 538 | 118 | |
Cash and cash equivalents at the end of the period | 247 | 419 |
The accompanying notes are an integral part of these Unaudited Condensed Interim Separate Financial Statements.
) | ||||
Alejandro G. Elsztain Vice President II acting as President |
47
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
1.
General information
Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria (“Cresud” or the “Company”) was founded in 1936 as a subsidiary of Credit Foncier, a Belgian company primarily engaged in providing rural and urban loans in Argentina and administering real estate holdings foreclosed by Credit Foncier. Credit Foncier was liquidated in 1959, and as part of such liquidation, the shares of Cresud were distributed to Credit Foncier’s shareholders. From the 1960s through the end of the 1970s, the business of Cresud shifted exclusively to agricultural activities.
Cresud is a company organized and domiciled in the Republic of Argentina. The address of its registered office is Moreno 877, 23rd Floor, Buenos Aires, Argentina.
These Unaudited Condensed Interim Separate Financial Statements have been approved for issue by the Board of Directors on March 11, 2021.
2.
Basis of preparation of the Unaudited Condensed Interim Separate Financial Statements
2.1.
Basis of preparation
The National Securities Commission (CNV), in Title IV "Periodic Information Regime" - Chapter III "Rules relating to the presentation and valuation of financial statements" - Article 1, of its standards, has established the application of the Technical Resolution No. 26 (RT 26) of the FACPCE and its amendments, which adopt FRS, issued by the IASB, for certain companies included in the public offering regime of Law No. 26,831, either because of its stock or its non-convertible notes, or that have requested authorization to be included in the aforementioned regime.
For the preparation of these solo financial statements, the Company has used the option provided in IAS 34, and has prepared them in condensed form. Therefore, these financial statements do not include all the information required in a complete set of annual financial statements and, consequently, their reading is recommended together with the annual financial statements as of June 30, 2020.
In view of what has been mentioned in the preceding paragraphs, the management of the Company has prepared these financial statements in accordance with the accounting principles established by the CNV, which is based on the application of IFRS, in particular of IAS 34.
Additionally, the information required by the CNV indicated in article 1, Chapter III, Title IV of RG N ° 622/13 has been included. This information is included in a note to these solo financial statements.
IAS 29 "Financial Reporting in Hyperinflationary Economies" requires that the financial statements of an entity whose functional currency is one of a hyperinflationary economy be expressed in terms of the current unit of measurement at the closing date of the reporting period, regardless of whether they are based on the historical cost method or the current cost method. To do so, in general terms, the inflation produced from the date of acquisition or from the revaluation date, as applicable, must be calculated in the non-monetary items. This requirement also includes the comparative information of the financial statements.
In order to conclude on whether an economy is categorized as high inflation in the terms of IAS 29, the standard details a series of factors to be considered, including the existence of an accumulated inflation rate in three years that is Approximate or exceed 100%. Accumulated inflation in three years is over 100%. It is for this reason that, in accordance with IAS 29, the Argentine economy must be considered as high inflation starting July 1, 2018.
48
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
In addition, Law No. 27,468 (published in the Official Gazette on December 4, 2018), amended Section 10 of Law No. 23,928, as amended, and established that the derogation of all the laws or regulations imposing or authorizing price indexation, monetary restatement, cost variation or any other method for strengthening debts, taxes, prices or rates of goods, works or services, does not extend to financial statements, as to which the provisions of Section 62 in fine of the General Companies Law No. 19,550 (1984 revision), as amended, shall continue to apply. Moreover, the referred law repealed Decree No. 1269/2002 dated July 16, 2002, as amended, and delegated to the Argentine Executive Branch the power to establish, through its controlling agencies, the effective date of the referred provisions in connection with the financial statements filed with it. Therefore, under General Resolution 777/2018 (published in the Official Gazette on December 28, 2018) the Argentine Securities Commission (CNV) ordered that issuers subject to its supervision shall apply the inflation adjustment to reflect the financial statements in terms of the current measuring unit set forth in IAS 29 in their annual, interim and special financial statements closed on or after December 31, 2018.
Pursuant to IAS 29, the financial statements of an entity whose functional currency is that of a high inflationary economy should be reported in terms of the measuring unit current as of the date of the financial statements. All the amounts included in the statement of financial position which are not stated in terms of the measuring unit current as of the date of the financial statements should be restated applying the general price index. All items in the statement of income should be stated in terms of the measuring unit current as of the date of the financial statements, applying the changes in the general price index occurred from the date on which the revenues and expenses were originally recognized in the financial statements.
Adjustment for inflation in the initial balances has been calculated considering the indexes reported by the Argentine Federation of Professional Councils in Economic Sciences (FACPCE) based on the price indexes published by the Argentine Institute of Statistics and Census (INDEC).
The principal inflation adjustment procedures are the following:
Monetary assets and liabilities that are recorded in the current currency as of the balance sheet’s closing date are not restated because they are already stated in terms of the currency unit current as of the date of the financial statements.
Non-monetary assets and liabilities are recorded at cost as of the balance sheet date, and equity components are restated applying the relevant adjustment ratios.
All items in the statement of income are restated applying the relevant conversion factors.
The effect of inflation in the Company’s net monetary position is included in the statement of income under Financial results, net, in the item “Income / (loss) from exposure to changes in the currency’s purchasing power”.
Comparative figures have been adjusted for inflation following the procedure explained in the previous paragraphs.
Upon initially applying inflation adjustment, the equity accounts were restated as follows:
Capital was restated as from the date of subscription or the date of the most recent inflation adjustment for accounting purposes, whichever is later.
The resulting amount was included in the “Capital adjustment” account.
The conversion difference was restated in real terms (as applicable).
Other comprehensive income / (loss) was restated as from each accounting allocation.
The other reserves in the statement of income were not restated as of the initial application date, i.e., June 30, 2016.
2.2.
Accounting policies
The accounting policies applied in the preparation of these Unaudited Condensed Interim Financial Statements are consistent with those applied in the Annual Financial Statements as of June 30, 2020.
49
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
2.3.
Comparative information
The balances as of June 30, 2020 and December 31, 2019, which are disclosed for comparative purposes, arise from the financial statements at such dates restated in accordance with IAS 29.
2.4.
Use of estimates
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. Future results might differ from the estimates and evaluations made at the date of preparation of these Unaudited Condensed Interim Separate Financial Statements.
In the preparation of these Unaudited Condensed Interim Separate Financial Statements, the significant judgments made by Management in applying the Company’s accounting policies and the main sources of uncertainty were the same applied by the Company in the preparation of the Separate Financial Statements for the fiscal year ended June 30, 2020, described in Note 3 to them.
3.
Seasonal effects on operations
The operations of the Company are also subject to seasonal effects. The harvests and sale of grains (corn, soybean and sunflower) generally take place between January and September every year. Wheat is generally harvested between November and February every year. However, milk production is generally larger during the second quarter, when conditions are more favorable. As a result, there may be material fluctuations in the agricultural business results each quarter.
4.
Acquisitions and disposals
See summary of acquisitions and additional disposals of the Company for the six-month period ended December 31, 2020 in Note 4 to Unaudited Condensed Interim Consolidated Financial Statements.
5.
Financial risk management and fair value estimates
5.1.
Financial risk
The Company’s activities are exposed to several financial risks, market risk (including exchange rate risk, interest rate risk and price risk), credit risk, liquidity risk and capital risk.
The Unaudited Condensed Interim Separate Financial Statements do not include all the information and disclosures of the risk management, so they should be read together with the Annual Separate Financial Statements as of June 30, 2020. There have been no significant changes in the risk management or risk management policies applied by the Company since the fiscal year.
5.2.
Fair value estimates
Since June 30, 2020, to the balance sheet date, there have been no significant changes in business or economic circumstances affecting the fair value of the Company's financial assets, liabilities or biological assets (either measured at fair value or amortized cost). Nor there have been transfers between the several hierarchies used in estimating the fair value of the Company’s financial instruments, or reclassifications among their respective categories.
50
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
6.
Information about principal subsidiaries and associates
The Company conducts its business through several subsidiaries and associates.
The Company indirectly participated, until September 30, 2020, through Tyrus, in IDB Development Ltd. (“IDBD”) and Discount Investment Company Ltd (“DIC”). These companies have certain financial restrictions and agreements in relation to their financial debt, including their debentures and loans with banks and financial institutions. These commitments and other restrictions resulting from the indebtedness of IDBD and DIC (such as the pledges granted by IDBD over part of its shareholding in DIC) do not have recursive effects against Cresud, nor has Cresud guaranteed them with its assets, so the economic risk of Cresud is limited to the value of said investments.
IDBD's financial condition as of June 25, 2020 had a deficit in shareholders’ equity, ongoing negative cash flows from continuing operating activities and a low credit rating. IDBD´s cash flow required to meet its liabilities, including short-term liabilities is based on the financial support of its controlling shareholder (Dolphin Netherlands BV) and on the realization of assets which the realization date is not under IDBD´s control. As a result of the above, IDBD had into negotiations with its creditors in order to restructure its financial debt on more favorable terms. As a result, the Company recognized an impairment loss of Ps. 2,405 in its separate financial statements as of June 30, 2020, equivalent to the net value of its investment in IDBD and DIC as of that date.
As of June 30, 2020, the aggregate principal amount of the (i) IDBD Series 9 Bonds was NIS 901 million (“Series 9”), (ii) IDBD Series 14 Bonds was NIS 889 million collateralized by DIC shares owned directly or indirectly by IDBD representing 70% of the share capital of DIC (“Series 14”), (iii) IDBD Series 15 Bonds was NIS 238 million collateralized by shares of Clal representing 5% of the share capital of Clal (“Series 15”).
As no agreement has been reached, on September 17, 2020, the Series 9 trustee submitted to the District Court in Tel-Aviv-Jaffa (the "Court") a petition to grant an order for the opening of proceedings for IDBD pursuant to the Insolvency and Economic Rehabilitation Law, 5778 – 2018 and to instruct the appointment of a trustee for IDBD pursuant to Section 43 and to grant the trustee any and all authority over the decision making of IDBD.
On September 21, 2020, the Series 14 bond holders approved the immediate fully payment of the remaining balances of such series.
On September 22, 2020, IDBD and Dolphin Netherlands B.V. submitted an initial response to the Petition, arguing that it was in the best interest of IDBD and its creditors to exhaust the negotiations among the controlling shareholder and its creditors during a short period with the aim to maximize the value of its assets, avoid costs and additional negative effects.
In addition, responses by the Series 14 trustee and the Series 15 trustee were filed requesting the enforcement of liens and the appointment of a receiver as well as an urgent hearing, which was scheduled for September 24, 2020.
On September 25, 2020, the Court resolved that IDBD is insolvent and therefore it resolved to grant all three orders requested and accordingly, issued an order for the initiation of proceedings and liquidation of IDBD, and appointed a liquidator to IDBD and interim receivers over the Pledged DIC and Clal Shares.
Under IFRS 10 “Consolidated Financial Statements” (“IFRS 10”), an investor controls an investee if and only if the investor has all the following: a) power over the investee; b) exposure, or rights, to variable returns from its involvement with the investee; and c) the ability to use its power over the investee to affect the amount of the investor’s returns. Based on the facts and circumstances outlined above, our management believes that, as from September 25, 2020, Cresud through its subsidiary IRSA lost control over IDBD and DIC and consequently it has derecognized the reserves disclosed in other comprehensive income associated with said investments, recognizing a loss of Ps. 2,002 in the six-month period ended December 31, 2020.
51
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
Set out below are the changes in Company’s investment in subsidiaries and associates for the six-month period ended December 31, 2020 and for the fiscal year ended June 30, 2020:
12.31.20 | 06.30.20 | |
Beginning of the period / year | 57,587 | 49,101 |
Dividends in shares received from subsidiaries | - | 362 |
Capital contribution | 85 | 7,546 |
Sale of interest in subsidiaries | - | (7,225) |
Increase of interest in subsidiaries, associates and joint ventures | 300 | 10 |
Share of profit of subsidiaries and associates | 1,256 | 11,440 |
Foreign exchange gains | (1,518) | (1,876) |
Others changes in subsidiaries’ and associates´ equity | 3,843 | (53) |
Adjustments previous periods (IFRS 16 y IAS 28) | - | (976) |
Other comprehensive loss | 232 | 68 |
Share of changes in subsidiaries’ and associates´ equity | (111) | 4 |
Reserve for share-based payments | - | (4) |
Dividends distributed | (879) | (810) |
End of the period / year | 60,795 | 57,587 |
(i)
Includes the effect of changes in subsidiaries as consequence of repurchase of equity interest.
See changes in Company’s investment in associates and joint ventures for the six-month period ended December 31, 2020 in Note 7 to the Unaudited Condensed Interim Consolidated Financial Statements and for the year ended June 30, 2020 in Note 8 to the Annual Consolidated Financial Statements.
% of ownership interest | Registered value | Entity's interest in comprehensive income / (loss) | ||||
Name of the entity | 12.31.20 | 06.30.20 | 12.31.20 | 06.30.20 | 12.31.20 | 12.31.19 |
Subsidiaries | ||||||
Brasilagro Companhia Brasileira de Propriedades Agrícolas | 2.26% | 2.25% | 961 | 878 | 87 | 1,333 |
Agropecuaria Santa Cruz de la Sierra S.A. (formerly Doneldon S.A.) | 100.00% | 100.00% | 1,980 | 1,978 | 1 | 230 |
Futuros y Opciones.Com S.A. | 50.10% | 50.10% | 611 | 548 | 104 | 229 |
Amauta Agro S.A. (formerly FyO Trading S.A.) | 2.20% | 2.20% | 1 | 1 | - | 1 |
FyO Acopio S.A. (formerly Granos Olavarría S.A.) | 2.20% | 2.20% | 13 | 12 | 5 | 3 |
Helmir S.A. | 100.00% | 100.00% | 11,525 | 10,788 | 666 | 398 |
Sociedad Anómina Carnes Pampeanas S.A. | 99.70% | 99.70% | 273 | 327 | (54) | 14 |
IRSA Inversiones y Representaciones Sociedad Anónima | 61.91% | 61.95% | 43,501 | 41,117 | (918) | (3,105) |
IRSA Propiedades Comerciales S.A. | 3.36% | 2.62% | 1,473 | 1,437 | 88 | (26) |
Total Subsidiaries | 60,338 | 57,086 | (21) | (923) | ||
Associates | ||||||
Agrouranga S.A. | 35.72% | 35.72% | 359 | 399 | (15) | 25 |
Uranga Trading S.A. | 35.72% | 35.72% | 98 | 102 | 6 | 11 |
Total Associates | 457 | 501 | (9) | 36 | ||
Total Investments in subsidiaries, associates and join ventures | 60,795 | 57,587 | (30) | (887) |
52
Last financial statement issued | |||||||
Name of the entity | Market value as of 12.31.20 | Place of business / country of incorporation | Main activity | Amount of common shares 1 vote | Common shares (nominal value) | Income /(loss) for the period | Shareholders' equity |
Subsidiaries | |||||||
Brasilagro Companhia Brasileira de Propriedades Agrícolas | 25.00 | Brazil | Agricultural | 1,334,400 | 2,497 | 1 | 22,969 |
Agropecuaria Santa Cruz de la Sierra S.A. (formerly Doneldon S.A.) | Not publicly traded | Uruguay | Investment | 270,749,722 | 271 | 7 | 1,980 |
Futuros y Opciones.Com S.A. | Not publicly traded | Argentina | Brokerage | 817,683 | 2 | 206 | 1,219 |
Amauta Agro S.A. (formerly FyO Trading S.A.) | Not publicly traded | Argentina | Brokerage | 11,264 | 1 | (6) | 68 |
FyO Acopio S.A. (formerly Granos Olavarría S.A.) | Not publicly traded | Argentina | Warehousing and Brokerage | 506,440 | 23 | 225 | 580 |
Helmir S.A. | Not publicly traded | Uruguay | Investment | 229,368,798 | 229 | 444 | 10,071 |
Sociedad Anómina Carnes Pampeanas S.A. | Not publicly traded | Argentina | Agroindustrial | 496,050,301 | 498 | (54) | 274 |
IRSA Inversiones y Representaciones Sociedad Anónima | 50.80 | Argentina | Real Estate | 356,913,421 | 577 | 1,820 | 70,108 |
IRSA Propiedades Comerciales S.A. | 287.50 | Argentina | Real Estate | 4,237,844 | 126 | 4,761 | 80,117 |
Associates | |||||||
Uranga Trading S.A. | Not publicly traded | Argentina | Agricultural | 2,595,620 | 7 | (40) | 274 |
Uranga Trading S.A. | Not publicly traded | Argentina | Marketing, warehousing and processing | 653,369 | 2 | 19 | 274 |
7.
Investment properties
Changes in Company’s investment properties for the six-month period ended December 31, 2020 and for the fiscal year ended June 30, 2020 were as follows:
12.31.20 | 06.30.20 | |
Beginning of the period / year | 129 | 128 |
Changes in fair value | - | 1 |
End of the period / year | 129 | 129 |
During the period ended December 31, 2020 and for the year ended June 30, 2020, there were no financial costs activated as there have been no assets that qualify for capitalization. No investment property of the Company has been mortgaged to guarantee some of the Company´s loans.
The amounts recognized in the statement of income and other comprehensive income are not material for any of the exercises analyzed.
As described in Note 2.6 to the consolidated financial statements, the Group uses the valuation made by qualified external appraisers to determine the fair value of its investment properties. Fair values are based on comparable values (Level 2 of the fair value hierarchy). The sales prices of comparable land are adjusted taking into account the specific aspects of each land, the most important used premise being the price per hectare.
53
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
8.
Property, plant and equipment
Changes in Company’s property, plant and equipment for the six-month period ended December 31, 2020 and for the fiscal year ended June 30, 2020 were as follows:
Owner occupied farmland (ii) | Others | Total as of 12.31.20 | Total as of 06.30.20 | |
Costs | 8,109 | 442 | 8,551 | 8,365 |
Accumulated depreciation | (1,062) | (284) | (1,346) | (1,187) |
Net book amount at the beginning of the period / year | 7,047 | 158 | 7,205 | 7,178 |
Additions | 53 | 10 | 63 | 209 |
Disposals | (5) | - | (5) | (12) |
Reclassifications | - | - | - | (11) |
Depreciation charge (i) | (57) | (23) | (80) | (159) |
Balances at the end of the period / year | 7,038 | 145 | 7,183 | 7,205 |
Costs | 8,157 | 452 | 8,609 | 8,551 |
Accumulated depreciation | (1,119) | (307) | (1,426) | (1,346) |
Net book amount at the end of the period / year | 7,038 | 145 | 7,183 | 7,205 |
(i)
For the fiscal years ended December 31, 2020 and June 30, 2020, the depreciation expense of property, plant and equipment has been charged as follows: Ps. 8 and Ps. 16 in "Costs";Ps. 3 and Ps. 10 in “General and administrative expenses” and Ps. 0 and Ps. 1 in “Selling expenses” in “the Statement of Income and Other Comprehensive Income";Ps. 69 and Ps. 132 were capitalized as part of the biological assets costs.
(ii)
Includes farms, buildings and facilities of farmlands properties.
9.
Intangible assets
Changes in Company’s intangible assets for the six-month period ended as of December 31, 2020 and for the fiscal year ended as of June 30, 2020 were as follows:
Computer software | Concession rights | Total as of 12.31.20 | Total as of 06.30.20 | |
Costs | 28 | 395 | 423 | 413 |
Accumulated amortization | (17) | (157) | (174) | (163) |
Net book amount at the beginning of the period / year | 11 | 238 | 249 | 250 |
Additions | 1 | - | 1 | 8 |
Reclassifications | - | - | - | 2 |
Amortization charges (i) | (3) | (7) | (10) | (11) |
Balances at the end of the period / year | 9 | 231 | 240 | 249 |
Costs | 29 | 395 | 424 | 423 |
Accumulated amortization | (20) | (164) | (184) | (174) |
Net book amount at the end of the period / year | 9 | 231 | 240 | 249 |
(i)
Amortization charges are included in “General and administrative expenses” in the Statement of Income and Other Comprehensive Income. There are no impairment charges for any of the years presented.
10.
Right of use assets
The composition in the Company's rights of use assets for the six-month period ended as of December 31, 2020 and for the fiscal year ended as of June 30, 2020 is as follows:
12.31.20 | 06.30.20 | |
Non Current | ||
Owner occupied farmland | 1,612 | 900 |
Machines and equipment | 3 | 4 |
Total Right-of-use assets | 1,615 | 904 |
54
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
The amortization charge of the right-of-use assets is detailed below:
12.31.20 | 12.31.19 | |
Owner occupied farmland | 239 | 45 |
Machines and equipment | - | 1 |
Total amortization of Right-of-use assets | 239 | 46 |
11.
Biological assets
Changes in the Company’s biological assets for the six-month period ended as of December 31, 2020 and for the fiscal year ended as of June 30, 2020 were as follows:
Sown land-crops | Breeding cattle | Other cattle | Others | ||||
Level 1 | Level 3 | Level 2 | Level 2 | Level 1 | Total as of 12.31.20 | Total as of 06.30.20 | |
Net book amount at the beginning of the period / year | 185 | 755 | 2,023 | 34 | 38 | 3,035 | 4,002 |
Purchases | - | - | 125 | - | - | 125 | 18 |
Changes by transformation | (88) | 88 | - | - | - | - | - |
Initial recognition and changes in the fair value of biological assets | - | 19 | 76 | 6 | - | 101 | 107 |
Decrease due to harvest | - | (1,576) | - | - | - | (1,576) | (5,601) |
Sales | - | - | (663) | (1) | - | (664) | (1,334) |
Consumes | - | - | (5) | - | (4) | (9) | (15) |
Costs for the period | 1,431 | 840 | 586 | - | 3 | 2,860 | 5,858 |
Balances at the end of the period / year | 1,528 | 126 | 2,142 | 39 | 37 | 3,872 | 3,035 |
Non-current (production) | - | - | 1,862 | 32 | 37 | 1,931 | 1,717 |
Current (consumable) | 1,528 | 126 | 280 | 7 | - | 1,941 | 1,318 |
Net book amount at the end of the period / year | 1,528 | 126 | 2,142 | 39 | 37 | 3,872 | 3,035 |
During the six-month period ended December 31, 2020 and the year ended June 30, 2020 there have been transfers by $88 between the fair value hierarchies 1 and 3 of sown land-crops (due to the degree of phenological growth of the crop). Likewise, there were no reclassifications among their respective categories.
See information on valuation processes used by the entity in Note 14 to the Consolidated Financial Statements as of June 30, 2020.
As of December 31, 2020, and June 30, 2020, the better and maximum use of biological assets shall not significantly differ from the current use.
12.
Inventories
Breakdown of Company’s inventories as of December 31, 2020 and June 30, 2020 are as follows:
12.31.20 | 06.30.20 | |
Current | ||
Crops | 477 | 1,294 |
Materials and supplies | 6 | 5 |
Seeds and fodders | 1,102 | 1,152 |
Total inventories | 1,585 | 2,451 |
As of December 31, 2020, and June 30, 2020 the cost of inventories recognized as expense amounted to Ps. 2,483 and Ps. 6,720, respectively and they have been included in “Costs” in the Unaudited Condensed Interim Separate Statement of Income and Other Comprehensive Income.
55
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
13.
Financial instruments by category
Determining fair values
See determination of the fair value of the Company's financial instruments in Note 16 to the Annual Consolidated Financial Statements as of June 30, 2020.
The following tables present the Company’s financial assets and financial liabilities that are measured at fair value as of December 31, 2020 and June 30, 2020 and their allocation to the fair value hierarchy:
Financial assets at amortized cost | Financial assets at fair value through profit or loss | Subtotal financial assets | Non-financial assets | Total | ||
December 31, 2020 | Level 1 | Level 2 | ||||
Assets as per statement of financial position | ||||||
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables) (Note 14) | 3,110 | - | - | 3,110 | 1,811 | 4,921 |
Investment in financial assets | ||||||
- Mutual funds | - | 26 | - | 26 | - | 26 |
- Bonds | - | 1,262 | - | 1,262 | - | 1,262 |
Derivative financial instruments | ||||||
- Foreign-currency futures contracts | - | 4 | - | 4 | - | 4 |
Cash and cash equivalents | ||||||
- Cash on hand and at bank | 17 | - | - | 17 | - | 17 |
- Short-term investments | - | 230 | - | 230 | - | 230 |
Total assets | 3,127 | 1,522 | - | 4,649 | 1,811 | 6,460 |
Financial liabilities at amortized cost | Financial liabilities at fair value | Subtotal financial liabilities | Non-financial liabilities | Total | ||
December 31, 2020 | Level 1 | Level 2 | ||||
Liabilities as per statement of financial position | ||||||
Trade and others payables (Note 16) | 2,464 | - | - | 2,464 | 513 | 2,977 |
Borrowings (Note 18) | 42,335 | - | - | 42,335 | - | 42,335 |
Derivative financial instruments: | ||||||
- Foreign-currency contracts | - | - | 91 | 91 | - | 91 |
- Crops futures contracts | - | 1,321 | - | 1,321 | - | 1,321 |
Total Liabilities | 44,799 | 1,321 | 91 | 46,211 | 513 | 46,724 |
Financial assets at amortized cost | Financial assets at fair value through profit or loss | Subtotal financial assets | Non-financial assets | Total | |
June 30, 2020 | Level 1 | ||||
Assets as per statement of financial position | |||||
Trade and other receivables (excluding the allowance for doubtful accounts and other receivables) (Note 13) | 3,284 | - | 3,284 | 677 | 3,961 |
Investment in financial assets | |||||
- Mutual funds | - | 60 | 60 | - | 60 |
Cash and cash equivalents | |||||
- Cash on hand and at bank | 372 | - | 372 | - | 372 |
- Short-term investments | 1,363 | 5,077 | 6,440 | - | 6,440 |
Total assets | 5,019 | 5,137 | 10,156 | 677 | 10,833 |
56
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
Financial liabilities at amortized cost | Financial liabilities at fair value | Subtotal financial liabilities | Non-financial liabilities | Total | ||
June 30, 2020 | Level 1 | Level 2 | ||||
Liabilities as per statement of financial position | ||||||
Trade and other payables (Note 16) | 2,150 | - | - | 2,150 | 237 | 2,387 |
Borrowings (excluding finance lease liabilities) (Note 18) | 46,675 | - | - | 46,675 | - | 46,675 |
Derivative financial instruments: | ||||||
- Foreign-currency contracts | - | 2 | 8 | 10 | - | 10 |
- Crops futures contracts | - | 27 | - | 27 | - | 27 |
Total Liabilities | 48,825 | 29 | 8 | 48,862 | 237 | 49,099 |
14.
Trade and other receivables
Breakdown of the Company’s trade and other receivables as of December 31, 2020 and June 30, 2020 are as follows:
12.31.20 | 06.30.20 | |
Receivables from sale of properties (i) | 1,004 | 1,034 |
Receivables from sale of agricultural products and services | 517 | 1,131 |
Debtors under legal proceedings | 8 | 10 |
Less: allowance for doubtful accounts | (8) | (9) |
Total trade receivables | 1,521 | 2,166 |
Prepayments | 29 | 246 |
Tax credits | 531 | 348 |
Loans | 7 | 14 |
Advance payments | 1,205 | 61 |
Expenses to recover | 20 | 13 |
Others | 46 | 28 |
Total other receivables | 1,838 | 710 |
Related parties (Note 25) | 1,554 | 1,076 |
Total trade and other receivables | 4,913 | 3,952 |
Non-current | 860 | 979 |
Current | 4,053 | 2,973 |
Total trade and other receivables | 4,913 | 3,952 |
(i) Net of implicit interests
The fair value of current trade and other receivables approximate their respective carrying amounts because, due to their short-term nature, as the impact of discounting is not considered significant. Fair values are based on discounted cash flows (Level 2 of fair value hierarchy).
The carrying amounts of the Company’s trade and other receivables denominated in foreign currencies are detailed in Note 28.
Trade receivables are generally presented in the statement of financial position net of allowances for doubtful receivables. Impairment policies and procedures by type of receivables are discussed in detail in Note 2.16 to the Consolidated Financial Statements as of June 30, 2020.
Movements on the Company’s allowance for doubtful accounts are as follows:
12.31.20 | 06.30.20 | |
Beginning of the period / year | 9 | 13 |
Recovered | 2 | 1 |
Inflation Adjustment | (3) | (5) |
End of the period / year | 8 | 9 |
57
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
The addition and release of allowance for doubtful accounts have been included in “Selling expenses” in the Unaudited Condensed Interim Separate Statement of Income and Other Comprehensive Income (Note 22). Amounts charged to the provision account are generally written off when there is no expectation of recovering additional cash.
15.
Cash flow information
Following is a detailed description of cash flows used in the Company’s operations for the six-month period s ended as of December 31, 2020 and 2019:
12.31.20 | 12.31.19 | |
Loss for the period | (1,512) | (6,499) |
Adjustments for: | ||
Income tax | 274 | 439 |
Depreciation and amortization | 20 | 23 |
Unrealized gain from derivative financial instruments of commodities | 734 | (189) |
Changes in fair value of financial assets at fair value through profit or loss | (763) | (8) |
Financial results, net | (731) | 6,334 |
Unrealized initial recognition and changes in the fair value of biological assets | (522) | (297) |
Changes in net realizable value of agricultural products after harvest | (291) | (633) |
Provisions | 1,179 | 102 |
(Loss) / Gain from repurchase of Non-convertible Notes | (3) | 1 |
Loss from disposal of associates, subsidiaries and joint ventures | (1,256) | (84) |
Changes in fair value of investment properties | - | (16) |
Changes in operating assets and liabilities: | ||
(Increase) / Decrease in biological assets | (5) | 995 |
Decrease in inventories | 1,157 | 1,474 |
(Increase) / Decrease in trade and other receivables | (777) | 26 |
Increase in right of use assets | (951) | - |
Increase / (Decrease) in lease Liabilities | 668 | (200) |
Increase in derivative financial instruments | 1,764 | 39 |
Decrease in provisions | (2) | (4) |
(Decrease) / Increase in trade and other payables | (593) | 606 |
Decrease in payroll and social security liabilities | (18) | (174) |
Net cash (used in) / generated from operating activities before income tax paid | (1,628) | 1,935 |
The following table shows a detail of non-cash transactions occurred in the six-month period ended as of December 31, 2020 and 2019:
12.31.20 | 12.31.19 | |
Non-cash activities | ||
Dividends not collected | - | (38) |
Decrease of interest in subsidiaries, associates and joint venture by exchange differences on translating foreign operations | (1,520) | (848) |
Increase of interest in subsidiaries, associates and joint ventures by a decrease in trade and other receivables | 2 | 3 |
Decrease of interest in subsidiaries, associates and joint ventures through reserve for share-based compensation | - | (4) |
Decrease of interest in subsidiaries, associates and joint ventures by a decrease in trade and other payables | (359) | - |
58
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
16.
Trade and other payables
The detail of the Company’s trade and other payables as of December 31, 2020 and June 30, 2020 are as follows:
12.31.20 | 06.30.20 | |
Trade payables | 623 | 659 |
Provisions | 1,038 | 880 |
Sales, rent and services payments received in advance | 463 | 163 |
Total trade payables | 2,124 | 1,702 |
Taxes payable | 32 | 31 |
Others | - | - |
Total other payables | 32 | 31 |
Related parties (Note 25) | 821 | 654 |
Total trade and other payables | 2,977 | 2,387 |
Current | 2,977 | 2,387 |
Total trade and other payables | 2,977 | 2,387 |
The fair value of trade and other payables approximate their respective carrying amounts due to their short-term nature, as the impact of discounting is considered as not significant. Fair values are based on discounted cash flows (Level 2 of fair value hierarchy).
Book value of trade and other payables denominated in foreign currencies are detailed in Note 28.
17.
Provisions
The table below shows the movements in Company's provisions categorized by type of provision:
Labor and tax claims and other claims | Total as of 12.31.20 | Total as of 06.30.20 | |
Beginning of period / year | 15 | 15 | 20 |
Additions | - | - | 1 |
Inflation Adjustment | (2) | (2) | (6) |
End of period / year | 13 | 13 | 15 |
Non-current | 8 | 11 | |
Current | 5 | 4 | |
Total | 13 | 15 |
18.
Borrowings
The detail of the Company’s borrowings as of December 31, 2020 and June 30, 2020 is as follows:
Book value | Fair Value | |||
12.31.20 | 06.30.20 | 12.31.20 | 06.30.20 | |
Non-convertible notes | 28,765 | 30,239 | 27,495 | 27,505 |
Bank loans and others | 6,456 | 10,701 | 6,457 | 10,703 |
Related parties (Note 25) | 3,216 | 3,510 | 3,122 | 3,256 |
Bank overdrafts | 3,898 | 2,225 | 3,898 | 2,225 |
Total borrowings | 42,335 | 46,675 | 40,972 | 43,689 |
Non-current | 16,316 | 24,520 | ||
Current | 26,019 | 22,155 | ||
Total borrowings | 42,335 | 46,675 |
59
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
19.
Taxation
The detail of the provision for the Company’s income tax is as follows:
12.31.20 | 12.31.19 | |
Deferred income tax | (274) | (439) |
Income tax | (274) | (439) |
The gross movements on the deferred income tax account were as follows:
12.31.20 | 06.30.20 | |
Beginning of the period / year | (4,485) | (3,842) |
Charged to the Statement of Comprehensive Income | (274) | (643) |
End of the period / year | (4,759) | (4,485) |
The Company´s income tax expense charge differs from the theoretical amount that would arise using the weighted average tax rate applicable to Company´s profit before income tax as follows:
12.31.20 | 12.31.19 | |
Tax calculated at the tax applicable tax rate in effect (i) | 371 | 1,818 |
Permanent differences: | - | |
Share of profit of subsidiaries, associates and joint ventures | 377 | 26 |
Income tax rate change (*) | 55 | (305) |
Provision for unrecoverability of tax loss carry-forwards | (1,297) | (2,191) |
Tax Transparency | (58) | (3) |
Non-taxable results, non-deductible expenses and others | (32) | (6) |
Inflation adjustment for tax purposes | (1,661) | (1,605) |
Inflation Adjustment | 1,971 | 1,827 |
Income tax | (274) | (439) |
(*)
Each period corresponds to the effect of applying to the deferred tax items the changes in the applicable tax rates.
(i)
The Income Tax rate in effect in Argentina as of December 31, 2020 and 2019 was 30%. See Note 22 to the Annual Consolidated Financial Statements.
20.
Revenues
12.31.20 | 12.31.19 | |
Crops | 3,010 | 5,220 |
Cattle | 847 | 761 |
Supplies | 2 | - |
Leases and agricultural services | 10 | 58 |
Total revenues | 3,869 | 6,039 |
21.
Costs
12.31.20 | 12.31.19 | |
Crops | 2,483 | 4,056 |
Cattle | 664 | 609 |
Leases and agricultural services | 20 | 69 |
Other costs | 15 | 16 |
Total costs | 3,182 | 4,750 |
60
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
22.
Expenses by nature
Costs (i) | Cost of Production | General and administrative expenses | Selling expenses | Total as of 12.31.20 | Total as of 12.31.19 | |
Supplies and labors | 9 | 2,195 | - | 1 | 2,205 | 2,240 |
Leases and expenses | - | 5 | 12 | 1 | 18 | 20 |
Amortization and depreciation | 8 | 309 | 12 | - | 329 | 135 |
Doubtful accounts (charge and recovery) | - | - | - | 2 | 2 | - |
Cost of sale of agricultural products and biological assets | 3,148 | - | - | - | 3,148 | 4,666 |
Advertising, publicity and other selling expenses | - | - | - | 51 | 51 | 3 |
Maintenance and repairs | 1 | 48 | 26 | - | 75 | 71 |
Payroll and social security liabilities | 12 | 189 | 190 | 18 | 409 | 384 |
Fees and payments for services | 2 | 14 | 32 | 14 | 62 | 71 |
Freights | - | 53 | - | 382 | 435 | 769 |
Bank commissions and expenses | - | - | 20 | - | 20 | 26 |
Travel expenses and stationery | 1 | 24 | 4 | - | 29 | 37 |
Conditioning and clearance | - | - | - | 90 | 90 | 154 |
Director’s fees | - | - | 22 | - | 22 | 42 |
Taxes, rates and contributions | 1 | 20 | - | 57 | 78 | 117 |
Total expenses by nature as of 12.31.20 | 3,182 | 2,857 | 318 | 616 | 6,973 | |
Total expenses by nature as of 12.31.19 | 4,750 | 2,644 | 324 | 1,017 | 8,735 |
(i)
Include Ps. 15 and Ps. 16 of other agricultural operating costs as of December 31, 2020 and 2019, respectively.
23.
Other operating results, net
12.31.20 | 12.31.19 | |
Administration fees | 2 | - |
Gain from commodity derivative financial instruments | (1,412) | 35 |
Operating interest expense | 41 | 54 |
Others | 69 | 14 |
Total other operating results, net | (1,300) | 103 |
24.
Financial results, net
12.31.20 | 12.31.19 | |
Financial income: | ||
Interest income | 203 | 10 |
Total financial income | 203 | 10 |
Financial costs: | ||
Interest expenses | (2,108) | (1,785) |
Other financial costs | (150) | (136) |
Total financial costs | (2,258) | (1,921) |
Other financial results: | ||
Exchange rate difference, net | (191) | (4,903) |
Fair value gains of financial assets at fair value through profit or loss | 664 | 83 |
Loss from derivative financial instruments (except commodities) | (400) | 163 |
Gain from repurchase of NCN | 3 | (1) |
Total other financial results | 76 | (4,658) |
Inflation Adjustment | 630 | (50) |
Total financial results, net | (1,349) | (6,619) |
61
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
25.
Related party transactions
See description of the main transactions conducted with related parties in Note 32 to the Consolidated Financial Statements as of June 30, 2020.
The following is a summary of the balances with related parties as of December 31, 2020 and June 30, 2020:
Items | 12.31.20 | 06.30.20 |
Trade and other payables | (821) | (654) |
Investment in financial assets | 655 | - |
Borrowings | (3,216) | (3,510) |
Trade and other receivables | 1,554 | 1,076 |
Total | (1,828) | (3,088) |
62
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
The following is a summary of the results with related parties for the six-month period ended as of December 31, 2020 and 2019:
Related party | 12.31.20 | 06.30.20 | Description of transaction | Item |
IRSA Inversiones y Representaciones Sociedad Anónima | 118 | 80 | Corporate services receivable | Trade and other receivables |
(6) | (7) | Reimbursement of expenses payable | Trade and other payables | |
1 | 1 | Leases | Trade and other receivables | |
1 | 1 | Share based payments | Trade and other receivables | |
655 | - | Bounds | Investment in financial assets | |
Brasilagro Companhia Brasileira de Propriedades Agrícolas | (5) | (4) | Leases | Trade and other payables |
- | 10 | Dividends receivables | Trade and other receivables | |
14 | 13 | Reimbursement of expenses receivable | Trade and other receivables | |
Sociedad Anónima Carnes Pampeanas S.A. (formerly EAASA) | 238 | 114 | Sale of goods and/or services | Trade and other receivables |
(2) | - | Reimbursement of expenses receivable | Trade and other payables | |
Helmir S.A. | (530) | (803) | Borrowings | Borrowings |
- | 291 | Loans granted | Trade and other receivables | |
Ombú Agropecuaria S.A. | 2 | 4 | Reimbursement of expenses receivable | Trade and other receivables |
(8) | (7) | Leases | Trade and other payables | |
- | (1) | Reimbursement of expenses payable | Trade and other payables | |
Agropecuaria Acres del Sud S.A. | 4 | 4 | Administration fees | Trade and other receivables |
Yatay Agropecuaria S.A. | 3 | 4 | Administration fees | Trade and other receivables |
(496) | (490) | Borrowings | Borrowings | |
Yuchán Agropecuaria S.A. | 3 | 2 | Administration fees | Trade and other receivables |
Futuros y Opciones.Com S.A. | 782 | 321 | Brokerage operations receivable | Trade and other receivables |
(657) | (245) | Services received | Trade and other payables | |
(105) | - | Borrowings | Borrowings | |
(24) | (43) | Reimbursement of expenses payable | Trade and other payables | |
IRSA Propiedades Comerciales S.A. | 372 | 218 | Reimbursement of expenses receivable | Trade and other receivables |
3 | 4 | Share based payments | Trade and other receivables | |
(1,978) | (2,111) | Non-convertible notes | Borrowings | |
- | (2) | Reimbursement of expenses payable | Trade and other payables | |
Total Subsidiaries | (1,615) | (2,646) | ||
Panamerican Mall S.A. | (44) | (44) | Non-convertible notes | Borrowings |
Amauta Agro S.A. (formerly FyO Trading S.A.) | (72) | (107) | Purchase of goods and/or services | Trade and other payables |
FyO Acopio S.A. | (24) | - | Purchase of goods and/or services | Trade and other payables |
Total Subsidiaries of the subsidiaries | (140) | (151) | ||
CAMSA and its subsidiaries | - | 1 | Reimbursement of expenses receivable | Trade and other receivables |
- | (228) | Reimbursement of expenses receivable | Trade and other payables | |
BNH VIDA | (63) | (62) | Non-convertible notes | Borrowings |
Other Related parties | (63) | (289) | ||
Inversiones Financieras del Sur S.A. (1) | 2 | 8 | Loans granted | Trade and other receivables |
Total Parent Company | 2 | 8 | ||
Directors and Senior Management | 11 | - | Reimbursement of expenses receivable | Trade and other receivables |
(23) | (10) | Director's fees | Trade and other payables | |
Total Directors and Senior Management | (12) | (10) | ||
Total | (1,828) | (3,088) |
The following is a summary of the transactions with related parties for the six-month period ended as of December 31, 2020 and 2019:
Related party | 12.31.20 | 12.31.19 | Description of transaction |
IRSA Inversiones y Representaciones Sociedad Anónima | (4) | (4) | Leases and/or rights of use |
(86) | - | Changes in fair value of financial instruments | |
72 | 80 | Corporate services | |
Futuros y Opciones.Com S.A. | (8) | (15) | Purchase of goods and/or services |
1 | 1 | Management fees | |
Sociedad Anónima Carnes Pampeanas S.A. (formerly EAASA) | 472 | 425 | Sale of goods and/or services |
Helmir S.A. | 79 | - | Financial operations |
(1) | (118) | Financial operations | |
Total subsidiaries | 525 | 369 | |
Torodur S.A. | (3) | - | Financial operations |
Panamerican Mall S.A. | (2) | (7) | Financial operations |
Yatay Agropecuaria S.A. | (8) | (11) | Financial operations |
Amauta Agro S.A. (formerly FyO Trading S.A.) | (16) | (97) | Purchase of goods and/or services |
5 | - | Sale of goods and/or services | |
IRSA Propiedades Comerciales S.A. | (5) | (7) | Leases and/or rights of use |
223 | 257 | Corporate services | |
(83) | (328) | Financial operations | |
FyO Acopio S.A. | (2) | - | Management fees |
(71) | (60) | Purchase of goods and/or services | |
Total Subsidiaries of the subsidiaries | 38 | (253) | |
Estudio Zang, Bergel & Viñes | (2) | (3) | Legal services |
Hamonet S.A. | (1) | (1) | Leases and/or rights of use |
BNH Vida S.A. | (6) | - | Financial operations |
BACS Administradora de Activos S.A. | (77) | - | Financial operations |
San Bernardo de Córdoba S.A. | - | (1) | Leases and/or rights of use |
Isaac Elsztain e Hijos S.C.A. | (2) | (1) | Leases and/or rights of use |
Other Related parties | (88) | (6) | |
Directores | (22) | (42) | Compensation of Directors |
Senior Management | (12) | (16) | Compensation of Senior Management |
Total Directors and Senior Management | (34) | (58) | |
Inversiones Financieras del Sur S.A. | 4 | 3 | Financial operations |
Total parent company | 4 | 3 | |
Total | 445 | 55 |
The following is a summary of the transactions with related parties for the six-month period ended as of December 31, 2020 and 2019:
Related party | 12.31.20 | 12.31.19 | Description of transaction |
Agropecuarias Santa Cruz de la Sierra S.A. | 1 | 4 | Additional paid-in capital |
Helmir S.A. | - | 223 | Additional paid-in capital |
Futuros y Opciones.Com S.A. | 84 | - | Additional paid-in capital |
Total subsidiary contributions | 85 | 227 | |
IRSA Inversiones y Representaciones Sociedad Anónima | 359 | 438 | Dividends received |
IRSA Propiedades Comerciales S.A. | 350 | 12 | Dividends received |
Brasilagro Companhia Brasileira de Propriedades Agrícolas (“Brasilagro”) | 5 | 71 | Dividends received |
Agro-Uranga S.A. | 26 | 31 | Dividends received |
Uranga Trading S.A. | 11 | - | Dividends received |
FyO Acopio S.A. | 4 | - | Dividends received |
Futuros y Opciones.Com S.A. | 124 | 170 | Dividends received |
Total dividends received | 879 | 722 |
63
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
26.
CNV General Resolution N° 622/13
As required by Section 1°, Chapter III, Title IV of CNV General Resolution N° 622/13, below there is a detail of the notes to the Unaudited Condensed Interim Separate Financial Statements that disclosure the information required by the Resolution in Exhibits.
Exhibit A - Property, plant and equipment | Note 7 – Investment properties | |
Note 8 – Property, plant and equipment | ||
Exhibit B - Intangible assets | Note 9 – Intangible assets | |
Exhibit C - Equity investments | Note 6 - Investments in subsidiaries, associates and joint ventures | |
Exhibit D - Other investments | Note 13 – Financial instruments by category | |
Exhibit E - Provisions | Note 14 – Trade and other receivables | |
Note 17 – Provisions | ||
Exhibit F - Cost of sales and services | Note 27 – Cost of sales and services provided | |
Exhibit G - Foreign currency assets and liabilities | Note 28 – Foreign currency assets and liabilities | |
Exhibit H - Exhibit of expenses | Note 22 – Expenses by nature |
27.
Cost of sales and services provided
Description | Biological assets (1) | Agricultural stock | Services and other operating costs | Total as of 12.31.20 | Total as of 12.31.19 |
Beginning of the period / year | 2,057 | 2,451 | - | 4,508 | 5,303 |
Initial recognition and changes in the fair value of biological assets and agricultural products at the point of harvest | 82 | - | - | 82 | (102) |
Changes in the net realizable value of agricultural products after harvest | - | 291 | - | 291 | 633 |
Increase due to harvest | - | 1,586 | - | 1,586 | 2,404 |
Acquisitions and classifications | 125 | 1,160 | - | 1,285 | 1,712 |
Consume | (5) | (1,420) | - | (1,425) | (1,529) |
Expenses incurred | 586 | - | 20 | 606 | 606 |
Inventories | (2,181) | (1,585) | - | (3,766) | (4,293) |
Cost as of 12.31.20 | 664 | 2,483 | 20 | 3,167 | - |
Cost as of 12.31.19 | 609 | 4,056 | 69 | - | 4,734 |
(1)
Corresponds to breeding cattle movements and other cattle.
64
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
28.
Foreign currency assets and liabilities
Book amounts of foreign currency assets and liabilities as of December 31, 2020 and June 30, 2020 are as follows:
Items | Amount of foreign currency | Prevailing exchange rate (1) | Total as of 12.31.20 | Total as of 06.30.20 |
Assets | ||||
Trade and other receivables | ||||
US Dollar | 19 | 83.950 | 1,623 | 977 |
Receivables with related parties: | ||||
US Dollar | 0.2 | 84.150 | 13 | 308 |
Total trade and other receivables | 1,636 | 1,285 | ||
Investment in financial assets | ||||
US Dollar | 9 | 83.950 | 722 | - |
Total Investment in financial assets | 722 | - | ||
Cash and cash equivalents | ||||
US Dollar | 0.1 | 83.950 | 7 | 318 |
Total Cash and cash equivalents | 7 | 318 | ||
Liabilities | ||||
Trade and other payables | ||||
US Dollar | 11 | 84.150 | 963 | 717 |
Payables with related parties: | ||||
US Dollar | 1 | 84.150 | 103 | 111 |
Brazilian Reais | 0.3 | 17.400 | 5 | 4 |
Bolivian Pesos | 1 | 12.267 | 12 | 12 |
Total trade and other payables | 1,083 | 844 | ||
Derivative financial instruments | ||||
US Dollar | 16 | 84.150 | 1,321 | 28 |
Total derivative instruments | 1,321 | 28 | ||
Lease Liabilities | ||||
US Dollar | 0.01 | 84.150 | 1 | 2 |
Total Lease Liabilities | 1 | 2 | ||
Borrowings | ||||
US Dollar | 396 | 84.150 | 33,337 | 38,973 |
Total Borrowings | 33,337 | 38,973 |
(1) Exchange rate as of December 31, 2020 according to Banco Nación Argentina records.
65
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
29.
CNV General Ruling N° 629/14 – Storage of documentation
On August 14, 2014, the CNV issued General Ruling N° 629 whereby it introduced amendments to rules related to storage and conservation of corporate books, accounting books and commercial documentation. In this sense, it should be noted that the Company has entrusted the storage of certain non-sensitive and old information to the following providers:
Documentation storage provider | Location | |
Bank S.A. | Ruta Panamericana Km 37,5, Garín, Province of Buenos Aires | |
Av. Fleming 2190, Munro, Province of Buenos Aires | ||
Carlos Pellegrini 1401, Avellaneda, Province of Buenos Aires | ||
Iron Mountain Argentina S.A. | Av. Amancio Alcorta 2482, Autonomous City of Buenos Aires | |
Pedro de Mendoza 2143, Autonomous City of Buenos Aires | ||
Saraza 6135, Autonomous City of Buenos Aires | ||
Azara 1245, Autonomous City of Buenos Aires | ||
Polígono industrial Spegazzini, Autopista Ezeiza Km 45, Cañuelas, Province of Buenos Aires | ||
Cañada de Gomez 3825, Autonomous City of Buenos Aires |
It is further noted that a detailed list of all documentation held in custody by providers, as well as documentation required in section 5 a.3) of section I, Chapter V, Title II of the RULES (N.T. 2013 as amended) are available at the registered office.
On February 5, 2014 there was a widely known fire in Iron Mountain’s warehouse, which is a supplier of the Company and where Company’s documentation was being kept. Based on the internal review carried out by the Company, duly reported to CNV on February 12, 2014, the information kept at the Iron Mountain premises that were on fire do not appear to be sensitive or capable of affecting normal operations.
30.
Negative working capital
At the end of the period, the Company carried a working capital deficit of Ps. 22,490, whose treatment is under consideration by the Board of Directors and the respective Management. The Company has issued during the current fiscal year and after December 31, 2020 NCN for a total of US$ 90.1 million.
31.
Economic context in which society operates
See economic context in which society operates in Note 33 to the Unaudited Condensed Interim Consolidated Financial Statements.
32.
Subsequent events
See others subsequent events in Note 34 to the Unaudited Condensed Interim Consolidated Financial Statements.
66
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
Information required by Section 68 of the Buenos Aires Stock Exchange Regulations
and Section 12, Chapter III, Title IV of Resolution 622/13
Unaudited Condensed Interim Separate Statement of Financial Position as of December 31, 2020
Stated in millions of Argentine pesos
Free translation from the original prepared in Spanish for publication in Argentina
1.
Specific and significant legal systems that imply contingent lapsing or rebirth of benefits envisaged by such provisions.
None.
2.
Significant changes in the Company´s activities or other similar circumstances that occurred during the fiscal years included in the financial statements, which affect their comparison with financial statements filed in previous fiscal years, or that could affect those to be filed in future fiscal years.
Are detailed in the Business Review.
3.
Receivables and liabilities by maturity date.
Past due (Point 3 a.) | Without maturity (Point 3.b.) | Without maturity (Point 3.b.) | To be due (Point 3.c.) | |||||||||
Items | 12.31.20 | Current | Non-current | Up to 3 months | From 3 to 6 month | From 6 to 9 months | From 9 to 12 months | From 1 to 2 years | From 2 to 3 years | From 3 to 4 years | Total | |
Accounts receivables | Trade and other receivables | - | - | - | 3,691 | 348 | 14 | - | 620 | 240 | - | 4,913 |
Income tax and minimum presumed income tax and deferred income tax | - | - | 38 | - | - | - | - | - | - | - | 38 | |
Total | - | - | 38 | 3,691 | 348 | 14 | - | 620 | 240 | - | 4,951 | |
Liabilities | Trade and other payables | - | 97 | - | 2,880 | - | - | - | - | - | - | 2,977 |
Borrowings | - | - | - | 6,428 | 6,325 | 5,893 | 7,373 | 6,815 | 9,501 | - | 42,335 | |
Lease liabilities | - | 983 | 447 | - | - | - | - | - | - | - | 1,430 | |
Payroll and social security liabilities | - | - | - | 80 | 55 | - | 77 | - | - | - | 212 | |
Provisions | - | 5 | 8 | - | - | - | - | - | - | - | 13 | |
Deferred income tax liabilities | - | - | 4,759 | - | - | - | - | - | - | - | 4,759 | |
Total | - | 1,085 | 5,214 | 9,388 | 6,38 | 5,893 | 7,45 | 6,815 | 9,501 | - | 51,726 |
67
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
Information required by Section 68 of the Buenos Aires Stock Exchange Regulations
and Section 12, Chapter III, Title IV of Resolution 622/13
Unaudited Condensed Interim Separate Statement of Financial Position as of December 31, 2020
Stated in millions of Argentine pesos
Free translation from the original prepared in Spanish for publication in Argentina
4.a.
Breakdown of accounts receivable and liabilities by currency and maturity.
Items | Current | Non-current | Totals | |||||||
Local Currency | Foreign Currency | Total | Local Currency | Foreign Currency | Total | Local Currency | Foreign Currency | Total | ||
Accounts receivables | Trade and other receivables | 3,023 | 1,030 | 4,053 | 254 | 606 | 860 | 3,277 | 1,636 | 4,913 |
Income tax and minimum presumed income tax and deferred income tax | - | - | - | 38 | - | 38 | 38 | - | 38 | |
Total | 3,023 | 1,030 | 4,053 | 292 | 606 | 898 | 3,315 | 1,636 | 4,951 | |
Liabilities | Trade and other payables | 1,894 | 1,083 | 2,977 | - | - | - | 1,894 | 1,083 | 2,977 |
Borrowings | 9,094 | 16,925 | 26,019 | - | 16,316 | 16,316 | 8,998 | 33,337 | 42,335 | |
Lease liabilities | 982 | 1 | 983 | 447 | - | 447 | 1,429 | 1 | 1,43 | |
Payroll and social security liabilities | 212 | - | 212 | - | - | - | 212 | - | 212 | |
Provisions | 5 | - | 5 | 8 | - | 8 | 13 | - | 13 | |
Deferred income tax liabilities | - | - | - | 4,759 | - | 4,759 | 4,759 | - | 4,759 | |
Total | 12,187 | 18,009 | 30,196 | 5,214 | 16,316 | 21,53 | 17,305 | 34,421 | 51,726 |
68
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
4.b.
Breakdown of accounts receivable and liabilities by adjustment clause.
On December 31, 2020, there are no receivable and liabilities subject to adjustment clause.
69
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
Information required by Section 68 of the Buenos Aires Stock Exchange Regulations
and Section 12, Chapter III, Title IV of Resolution 622/13
Unaudited Condensed Interim Separate Statement of Financial Position as of December 31, 2020
Stated in millions of Argentine pesos
Free translation from the original prepared in Spanish for publication in Argentina
4.c.
Breakdown of accounts receivable and liabilities by interest accrual.
Current | Non-Current | ||||||||||||
Items | Accruing interest | Non-accruing interest | Accruing interest | Non-accruing interest | Accruing interest | Non-accruing interest | Total | ||||||
Fixed | Floating | Subtotal | Fixed | Floating | Subtotal | Fixed | Floating | ||||||
Accounts receivables | Trade and other receivables | 407 | - | 3,646 | 4,053 | 606 | - | 254 | 860 | 1,013 | - | 3,9 | 4,913 |
Income tax and minimum presumed income tax and deferred income tax | - | - | - | - | - | - | 38 | 38 | - | - | 38 | 38 | |
Total | 407 | - | 3,646 | 4,053 | 606 | - | 292 | 898 | 1,013 | - | 3,938 | 4,951 | |
Liabilities | Trade and other payables | - | - | 2,977 | 2,977 | - | - | - | - | - | - | 2,977 | 2,977 |
Borrowings | 19,930 | 4,865 | 1,224 | 26,019 | 15,613 | 613 | 90 | 16,316 | 35,543 | 5,478 | 1,314 | 42,335 | |
Lease liabilities | 983 | - | - | 983 | 447 | - | - | 447 | 1,430 | - | - | 1,43 | |
Payroll and social security liabilities | - | - | 212 | 212 | - | - | - | - | - | - | 212 | 212 | |
Provisions | - | - | 5 | 5 | - | - | 8 | 8 | - | - | 13 | 13 | |
Deferred income tax liabilities | - | - | - | - | - | - | 4,759 | 4,759 | - | - | 4,759 | 4,759 | |
Total | 20,913 | 4,865 | 4,418 | 30,196 | 16,06 | 613 | 4,857 | 21,53 | 36,973 | 5,478 | 9,275 | 51,726 |
70
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
Information required by Section 68 of the Buenos Aires Stock Exchange Regulations
and Section 12, Chapter III, Title IV of Resolution 622/13
Unaudited Condensed Interim Separate Statement of Financial Position as of December 31, 2020
Stated in millions of Argentine pesos
Free translation from the original prepared in Spanish for publication in Argentina
5.
Companies under section 33 of law N°. 19,550 and other related parties.
a.
Interest in companies under section 33 of law N° 19,550. See Note 6.
b.
Companies under section 33 of law N° 19,550 and other related parties debit / credit balances. See Note 25.
6.
Loans to directors.
See Note 25.
7.
Inventories.
The Company conducts physical inventories once a fiscal year in its most significant properties, covering all the assets they possess. There is no relevant immobilization of inventory.
8.
Current values.
See Note 2 to the Consolidated Financial Statements as of June 30, 2020 and 2019.
9.
Appraisal revaluation of property, plant and equipment.
None.
10.
Obsolete unused property, plant and equipment.
None.
11.
Equity interest in other companies in excess of that permitted by section 31 of law N°. 19,550.
None.
12.
Recovery values.
See Note 2 to the Consolidated Financial Statements as of June 30, 2020 and 2019.
71
Cresud Sociedad Anónima,
Comercial, Inmobiliaria, Financiera y Agropecuaria
13.
Insurances.
The types of insurance used by the company were the following:
Insured property | Risk covered | Amount insured Ps. | Book value Ps. |
Buildings, machinery, silos, installation and furniture and equipment | Theft, fire and technical insurance | 3,216 | 7,129 |
Vehicles | Third parties, theft, fire and civil liability | 221 | 54 |
14.
Allowances and provisions that, taken individually or as a whole, exceed 2% of the shareholder´s equity.
None.
15.
Contingent situations at the date of the financial statements which probabilities are not remote and the effects on the Company´s financial position have not been recognized.
Not applicable.
16.
Status of the proceedings leading to the capitalization of irrevocable contributions towards future subscriptions.
Not applicable.
17. Unpaid accumulated dividends on preferred shares.
None.
18. Restrictions on distributions of profits.
According to the Argentine laws, 5% of the profit of the year is separated to constitute legal reserves until they reach legal capped amounts (20% of total capital). These legal reserves are not available for dividend distribution.
72
Free translation from the original prepared in Spanish for publication in Argentina
REVIEW REPORT ON THE UNAUDITED CONDENSED INTERIM SEPARATE FINANCIAL STATEMENTS
To the Shareholders, President and Directors of
Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria
Legal address: Carlos Della Paolera 261, 9° floor
Autonomous City of Buenos Aires
Tax Registration Number: 30-50930070-0
Introduction
We have reviewed the accompanying unaudited condensed interim separate financial statements of Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria (“the Company”), which comprise the unaudited condensed interim separate statement of financial position at December 31, 2020, the unaudited condensed interim separate statements of income and other comprehensive income, of changes in shareholders’ equity and of cash flows for the six and three-month period then ended, and selected explanatory notes.
The balances and other information for the fiscal year ended on June 30, 2020 and its interim periods are an integral part of the financial statements mentioned above; therefore, they must be considered in connection with these financial statements.
Management’s responsibility
The Board of Directors of the Company is responsible for the preparation and presentation of these unaudited condensed interim separate financial statements in accordance with International Financial Reporting Standards, adopted by the Argentine Federation of Professional Councils in Economic Sciences (FACPCE) as professional accounting standards and included by the National Securities Commission (CNV) in its regulations, as approved by the International Accounting Standards Board (IASB), and is therefore responsible for the preparation and presentation of the unaudited condensed interim separate financial statements mentioned in the first paragraph, in accordance with International Accounting Standard 34 Interim Financial Information (IAS 34).
73
Scope of our review
Our review was limited to the application of the procedures established under International Standards on Review Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity, adopted as a review standard in Argentina by Technical Pronouncement No. 33 of the FACPCE and approved by the International Auditing and Assurance Standards Board (IAASB). A review of interim financial information consists of inquiries of Company staff responsible for preparing the information included in the unaudited condensed interim separate financial statements and of analytical and other review procedures. This review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion on the separate statements of financial position, and the separate statements of income and other comprehensive income and of cash flows of the Company.
Conclusion
On the basis of our review, nothing has come to our attention that causes us to believe that the unaudited condensed interim separate financial statements mentioned in the first paragraph of this report have not been prepared, in all material respects, in accordance with International Accounting Standard 34 Interim Financial Reporting.
Report on compliance with current regulations
In accordance with current regulations, we report, in connection with Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria, that:
a) the unaudited condensed interim separate financial statements of Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria are not transcribed into the Inventory and Balance Sheet book and, except for the above mentioned situation, as regards those matters that are within our competence, they are in compliance with the provisions of the General Companies Law and pertinent resolutions of the National Securities Commission;
b) the unaudited condensed interim separate financial statements of Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria arise from accounting records carried in all formal aspects in accordance with legal requirements;
c) we have read the additional information to the notes to the unaudited condensed interim separate financial statements required by section 12, Chapter III, Title IV of the rules of the National Securities Commission, on which we have no observations to make regarding matters that are within our competence;
74
Free translation from the original prepared in Spanish for publication in Argentina
d) at December 31, 2020 the debt of Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria accrued in favor of the Argentine Integrated Social Security System, as shown by the Company’s accounting records, amounted to $ 26,780,414, which is not due at that date.
Autonomous City of Buenos Aires, March 11, 2021
PRICE WATERHOUSE & CO. S.R.L. | |||
C.P.C.E.C.A.B.A. V° 1 F° 17 | |||
By: | /s/ Walter Zablocky | ||
Public Accountant (UNLP) | |||
C.P.C.E.C.A.B.A. V. 340 F. 156 |
75
I. Brief comment on the Company’s activities during the period, including references to significant events occurred after the end of the period.
Economic context in which the Group operates
The Group operates in a complex context both due to macroeconomic conditions, whose main variables have recently experienced strong volatility, as well as regulatory, social, and political conditions, both nationally and internationally.
The results from operations may be affected by fluctuations in the inflation index and the argentine peso exchange rate against other currencies, mainly the dollar, variations in interest rates which have an impact on the cost of capital, changes in government policies, capital control and other political or economic developments both locally and internationally.
In December 2019, a new strain of coronavirus (SARS-COV-2), which caused severe acute respiratory syndrome (COVID-19) appeared in Wuhan, China. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic. In response, countries have taken extraordinary measures to contain the spread of the virus, including imposing travel restrictions and closing borders, closing businesses deemed non-essential, instructing residents to practice social distancing, implementing quarantines, among other measures. The ongoing pandemic and these extraordinary government actions are affecting global economic activity, resulting in significant volatility in global financial markets.
On March 3, 2020, the first case of COVID-19 was registered in the country and until February 28, 2021, more than 2,100,000 cases of infections had been confirmed in Argentina, by virtue of which the National Government implemented a series of health measures of social, preventive and mandatory isolation at the national level that began on March 19, 2020 and extended several times, most recently until November 8, 2020 inclusive in the Metropolitan Area of Buenos Aires although it has been extended in some cities in the interior of the country. Among these measures, that affected the local economy, the following stand out: the extension of the public emergency in health matters, the total closure of borders, the suspension of international and cabotage flights, the suspension of medium and long-distance land transport, the suspension of artistic and sports shows, closure of businesses not considered essential, including shopping malls and hotels.
This series of measures affected a large part of Argentine companies, which experienced a drop in their income and inconveniences in the payment chain. In this context, the Argentine government announced different measures aimed at alleviating the financial crisis of the companies affected by the COVID-19 pandemic. Likewise, it should be noted that, to the stagnation of the Argentine economy, a context of international crisis is added because of the COVID-19 pandemic. In this scenario, a strong contraction of the Argentine economy was evidenced.
Additionally, the government is challenged to achieve a successful debt renegotiation with the IMF. In the event that Argentina achieves a favourable result and agrees to restructure its debt with the IMF, this could have a positive impact on the Argentine economy in the medium and long term.
At the local environment, the following circumstances are displayed:
●
In December 2020, the monthly economic activity estimator (EMAE) reported by the National Institute of Statistics and Censuses (“INDEC”) registered a contraction of 2.2% in the year-on-year comparison, and an increase of 0,9% in relation to November. In 2020, the EMAE accumulated a fall of 10.0%.
●
The annual inflation reached 36.1% in 2020. The survey on market expectations prepared by the Central Bank in December 2020, called the Market Expectations Survey (“REM” in Spanish), estimates a retail inflation of 49.8% for 2021. The analysts who participate in the REM foresee that in 2021 economic activity will rebound in activity, reaching an economic growth of 5.5%.
●
In the period from December 2019 to December 2020, the argentine peso depreciated 40.5% against the US dollar according to the wholesale average exchange rate of Argentine Nation Bank. Given the exchange restrictions in force since August 2019, as of December 31, 2020 there is an exchange gap of approximately 70% between the official price of the dollar and its price in parallel markets, which impacts the level of activity in the economy and affects the level of reserves of the Central Bank of the Argentine Republic. Additionally, these exchange restrictions, or those that may be dictated in the future, could affect the Group's ability to access the Single Free Exchange Market (MULC in Spanish) to acquire the foreign exchange necessary to meet its financial obligations.
75
Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria
Summary as of December 31, 2020
On February 25, 2021, the Central Bank of the Argentine Republic published Communication “A” 7230 which establishes that those companies who register financial debts with capital maturities in foreign currency scheduled between 04.01.2021 and 12.31.2021, must submit a refinancing plan to the BCRA based on the following criteria: (a) that the amount net by which the exchange market will be accessed in the original terms will not exceed 40% of the amount of capital maturing in the period indicated above, and (b) that the rest of the capital is, at least, refinanced with a new external debt with an average life of 2 years, provided that the new debt is settled in the exchange market. In the case of the Company, the maturity of the Class XXV notes due on July 11, 2021 for a nominal value of USD 59.6 million falls within the extended period, as well as other bank debts.
COVID-19 pandemic
As described in the note on the economic context in which the Group operates, the COVID-19 pandemic is adversely impacting both the global economy and the Argentine economy and the Group's business.
The current estimated impacts of the COVID-19 pandemic on the Company as of the date of these financial statements are set out below:
●
The agricultural business of Cresud and its subsidiaries in Brazil, Paraguay and Bolivia continued to operate relatively normally; since the agricultural activity has been considered an essential activity in the countries where the Company operates. In any case, the effect of Covid-19 could cause changes in demand on a global scale and affect the prices of commodities in the international and local markets in the short term.
●
Because of the social, preventive, and obligatory isolation, shopping malls throughout the country were closed since March 20, 2020, leaving exclusively those premises dedicated to items considered essential such as pharmacies, supermarkets and banks. Given the closure of the shopping malls, the Group has decided to condone the billing and collection of the Insured Monthly Value until September 30, 2020, with some exceptions and to subsidize the collective promotion fund during the same period, prioritizing the long-term relationship with its tenants. From October to date, all the Group's shopping malls are open operating with strict protocols that include reduced hours and public restrictions, social distancing, among other safety and hygiene measures.
●
In relation to the offices business, although most of the tenants are working in the home office mode, they are operational with strict safety and hygiene protocols.
●
In the case of hotels, the reopening took place in the months of November and December 2020 under strict protocols. Those located in the city of Buenos Aires are working with low occupancy levels because of foreign tourism restrictions. However, the Llao Llao hotel in Bariloche showed high occupancy in the summer months due to the influx of domestic tourism.
Regarding debt maturities during the second quarter of fiscal year 2021, the Group had notes maturities within the period contemplated by provision “A” 7106 of the BCRA: Cresud Class XXIV for a nominal value of USD 73.6 million due on November 14, 2020 and IRSA Class I for a nominal value of USD 181.5 million due on November 15, 2020, as well as other bank debts. Cresud and IRSA presented a proposal to the Central Bank within the corresponding deadlines and carried out exchange offers for said Notes. Cresud through the cash cancellation of USD 29.2 million and the issuance of two new series of Class XXXI and Class XXXII Negotiable Obligations for a nominal value of USD 1.3 million and USD 34.3 million, respectively. For its part, IRSA did it through the cash cancellation of USD 72.6 million and the issuance of two new series of Class VIII and Class IX Negotiable Obligations for a nominal value of USD 31.7 million and USD 80.7 million (including USD 6.5 million of new subscription).
76
Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria
Summary as of December 31, 2020
Regarding the financial debt of the Group in the next 12 months:
●
Cresud faces the maturity of its Class XXVI Negotiable Obligations in January 2021 for a nominal value of ARS 995 million (approximately USD 11.8 million) totally canceled as of the date of release of these financial statements, Class XXVIII in April 2021 for a nominal value of USD 27.5 million, Classes XXV and XXVII in July 2021 for a nominal value of USD 59.6 million (included in Communication 7,230 of Argentine Central Bank) and USD 5.7 million respectively and Class XXIX in December 2021 for a nominal value of USD 83.0 million. Likewise, Cresud has bank overdrafts for USD 49.9 million and other bank debt for USD 57.5 million. As of December 31, it had a liquidity position of approximately USD 39.2 million. After the end of the quarter, as a result of the capital increase, the company received approximately USD 42.5 million.
●
The subsidiary IRSA faces the maturity of its Class III Negotiable Obligations for a nominal value of ARS 247.8 million (equivalent to USD 2.9 million) maturing on February 21, 2021 totally canceled as of the date of release of these financial statements, Class IV Negotiable Obligations for a nominal value of USD 51.4 million maturing on May 21, 2021, Class VI Negotiable Obligations for a nominal value of ARS 335 million (equivalent to USD 4.0 million) maturing on July 21, 2021, Class VIII Negotiable Obligations for a nominal value of USD 10.5 million (33% of the capital) due on November 12, 2021, bank overdrafts for the equivalent of USD 27.6 million and other bank debt for USD 13.7 million. For its part, IRSA PC has bank debt maturities for the approximate sum of USD 24.6 million.
●
It is important to mention that IRSA has approved with IRSA PC a line of credit for up to the sum of USD 180 million for 3 years, of which as of December 31, 2020 IRSA used approximately USD 62.6 million, leaving the balance available. Likewise, IRSA PC has a cash position and equivalents (including current financial investments) as of December 31, 2020 of approximately USD 84.9 million.
The final extent of the Coronavirus outbreak and its impact on the country's economy is unknown and difficult to fully predict. However, although it has produced significant short-term effects, they are not expected to affect business continuity and the Company’s ability to meet financial commitments for the next twelve months.
The Company is closely monitoring the situation and taking all necessary measures to preserve human life and the Group's businesses.
77
Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria
Summary as of December 31, 2020
Consolidated Results
(In ARS million) | 6M 21 | 6M 20 | YoY Var |
Revenues | 20,168 | 27,760 | (27.3)% |
Costs | (15,509) | (18,421) | (15.8)% |
Initial recognition and changes in the fair value of biological assets and agricultural produce at the point of harvest | 1,679 | 1,700 | (1.2)% |
Changes in the net realizable value of agricultural produce after harvest | 259 | 574 | (54.9)% |
Gross profit | 6,597 | 11,613 | (43.2)% |
Net gain from fair value adjustment on investment properties | 9,023 | 5,156 | 75.0% |
Gain from disposal of farmlands | 91 | 407 | (77.6)% |
General and administrative expenses | (2,295) | (2,491) | (7.9)% |
Selling expenses | (2,314) | (2,499) | (7.4)% |
Other operating results, net | (1,881) | 567 | (431.7)% |
Result from operations | 9,221 | 12,753 | (27.7)% |
Depreciation and Amortization | 1,289 | 1,140 | 13.1% |
EBITDA (unaudited) | 10,510 | 13,893 | (24.4)% |
Adjusted EBITDA (unaudited) | 8,894 | 8,069 | 10.2% |
Loss from joint ventures and associates | (487) | (1,284) | (62.1)% |
Result from operations before financing and taxation | 8,734 | 11,469 | (23.8)% |
Financial results, net | (789) | (15,676) | (95.0)% |
Result before income tax | 7,945 | (4,207) | - |
Income tax expense | (4,089) | (3,707) | 10.3% |
Result for the period from continued operations | 3,856 | (7,914) | - |
Result from discontinued operations after income tax | (7,120) | 10,192 | (169.9)% |
Result for the period | (3,264) | 2,278 | (243.3)% |
Attributable to | |||
Equity holder of the parent | (3,002) | (6,461) | (53.5)% |
Non-controlling interest | (262) | 8,739 | (103.0)% |
Consolidated revenues decreased by 27.3% in first semester of fiscal year 2021 compared to the same period of 2020, while adjusted EBITDA reached ARS 8.894 million, 10.2% higher than in the same period of fiscal year 2020. Agribusiness adjusted EBITDA was ARS 1,354 and urban properties and investments business (IRSA) adjusted EBITDA was ARS 7,540 million.
The net result for the first semester of fiscal year 2021 recorded a loss of ARS 3,264 million compared to a gain of ARS 2,278 million in the same period of 2020. The profit from continuing operations shows a gain of ARS 3,856 million, compared to a loss of ARS 7,914 million in the same period of the previous fiscal year. This significant increase is explained by higher results from changes in the fair value of investment properties from our subsidiary IRSA and lower losses from net financial results. On the other hand, the result of discontinued operations reflects a loss of ARS 7,120 million because of the deconsolidation of the investment in Israel as of September 30, 2020, explained by the operating result for the period and the loss due to the derecognition of remaining assets and associated reserves.
78
Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria
Summary as of December 31, 2020
Description of Operations by Segment
6M 2021 | Agribusiness | Urban Properties and Investments | Total | 6M 21 vs. 6M 20 |
Revenues | 15,795 | 3,854 | 19,649 | (25.4)% |
Costs | (13,353) | (1,422) | (14,775) | (11.2)% |
Initial recognition and changes in the fair value of biological assets and agricultural produce at the point of harvest | 1,647 | - | 1,647 | 9.6% |
Changes in the net realizable value of agricultural produce after harvest | 259 | - | 259 | (54.9)% |
Gross profit | 4,348 | 2,432 | 6,780 | (42.5)% |
Net gain from fair value adjustment on investment properties | 50 | 9,481 | 9,531 | 73.3% |
Gain from disposal of farmlands | 91 | - | 91 | (77.6)% |
General and administrative expenses | (786) | (1,542) | (2,328) | (8.0)% |
Selling expenses | (1,587) | (793) | (2,380) | (4.3)% |
Other operating results, net | (1,780) | (104) | (1,884) | (461.6)% |
Result from operations | 336 | 9,474 | 9,810 | (25.7)% |
Share of profit of associates | (32) | (808) | (840) | (45.6)% |
Segment result | 304 | 8,666 | 8,970 | (23.0)% |
6M 2020 | Agribusiness | Urban Properties and Investments | Total |
Revenues | 17,455 | 8,891 | 26,346 |
Costs | (14,759) | (1,878) | (16,637) |
Initial recognition and changes in the fair value of biological assets and agricultural produce at the point of harvest | 1,503 | - | 1,503 |
Changes in the net realizable value of agricultural produce after harvest | 574 | - | 574 |
Gross profit | 4,773 | 7,013 | 11,786 |
Net gain from fair value adjustment on investment properties | 16 | 5,484 | 5,500 |
Gain from disposal of farmlands | 407 | - | 407 |
General and administrative expenses | (914) | (1,617) | (2,531) |
Selling expenses | (1,757) | (729) | (2,486) |
Other operating results, net | 560 | (39) | 521 |
Result from operations | 3,085 | 10,112 | 13,197 |
Share of profit of associates | 211 | (1,755) | (1,544) |
Segment result | 3,296 | 8,357 | 11,653 |
2021 Campaign
The year 2020 was dominated by the COVID-19 pandemic, which originated in China and subsequently spread to numerous countries, generating uncertainty and volatility in the markets, adversely impacting the global, Argentine and regional economy. Our agricultural operations continued their development normally as agricultural production was an essential activity to guarantee the supply of food.
The 2021 campaign is presented with radical changes from what was observed in the market at the end of the previous year. As of August, the United States reduced its sowing intention on the main crops and South America began to show indicators of lack of water. China activated its demand and this, added to the weakness of the dollar in the world, pushed the international prices of commodities upwards. Soybeans and corn recovered their prices in the last year approximately between 40-50%. The challenge will be in the climatic evolution in the region in the coming months where the harvest will take place given that the crops went through periods of lack of water so far this cycle. If the conditions are good and we achieve good agricultural yields, we expect a campaign with excellent results.
79
Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria
Summary as of December 31, 2020
Our Portfolio
Our portfolio under management, as of December 31, 2020, was composed of 761,792 hectares, of which 296,233 are in operation and 465,559 are land reserves distributed among the four countries in the region where we operate: Argentina, with a mixed model combining land development and agricultural production; Bolivia, with a productive model in Santa Cruz de la Sierra; and through our subsidiary BrasilAgro, Brazil and Paraguay, where the strategy is mainly focused on the development of lands.
Breakdown of Hectares
Own and under Concession (*) (**) (***)
Productive Lands | ||||
Agricultural | Cattle | Reserved | Total | |
Argentina | 60,305 | 144,773 | 331,511 | 536,589 |
Brazil | 60,280 | 7,148 | 88,316 | 155,744 |
Bolivia | 8,858 | - | 1,017 | 9,875 |
Paraguay | 12,382 | 2,487 | 44,715 | 59,584 |
Total | 141,825 | 154,408 | 465,559 | 761,792 |
(*) Includes Brazil, Paraguay, Agro-Uranga S.A. at 35.723% and 132,000 hectares under Concession.
(**) Includes 85,000 hectares intended for sheep breeding
(***) Excludes double crops.
Leased (*)
Agricultural | Cattle | Other | Total | |
Argentina | 57,595 | 12,635 | 450 | 70,680 |
Brazil | 48,516 | - | 2,231 | 50,747 |
Bolivia | 640 | - | - | 640 |
Total | 106,751 | 12,635 | 2,681 | 122,067 |
(*) Excludes double crops.
Segment Income – Agricultural Business
I)
Land Development and Sales
We periodically sell properties that have reached a considerable appraisal to reinvest in new farms with higher appreciation potential. We analyze the possibility of selling based on a number of factors, including the expected future yield of the farmland for continued agricultural and livestock exploitation, the availability of other investment opportunities and cyclical factors that have a bearing on the global values of farmlands.
During the first semester of fiscal year 2021, no farmland sales were made. In Other operating results is observed the effect of the valuation of accounts receivables related to sales made by our subsidiary Brasilagro during fiscal year 2020.
in ARS million | 6M 21 | 6M 20 | YoY Var |
Revenues | - | - | - |
Costs | (15) | (16) | (6.25)% |
Gross loss | (15) | (16) | (6.25)% |
Net gain from fair value adjustment on investment properties | 50 | 16 | 212.50% |
Gain from disposal of farmlands | 91 | 407 | (77.64)% |
General and administrative expenses | (2) | (1) | 100.00% |
Other operating results, net | 1,346 | 289 | 365.74% |
Profit from operations | 1,470 | 695 | 111.51% |
Segment profit | 1,470 | 695 | 111.51% |
EBITDA | 1,472 | 698 | 110.89% |
Adjusted EBITDA | 1,422 | 680 | 109.12% |
II)
Agricultural Production
80
Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria
Summary as of December 31, 2020
The result of the Farming segment decreased by ARS 3,360 million, from ARS 2,100 million gain during the first semester of fiscal year 2020 to a ARS 1,260 million loss during the same period of 2021.
in ARS million | 6M 21 | 6M 20 | YoY Var |
Revenues | 9,866 | 11,364 | (13.2)% |
Costs | (8,391) | (9,669) | (13.2)% |
Initial recognition and changes in the fair value of biological assets and agricultural produce at the point of harvest | 1,647 | 1,477 | 11.5% |
Changes in the net realizable value of agricultural produce after harvest | 259 | 574 | (54.9)% |
Gross profit | 3,381 | 3,746 | -9.7)% |
General and administrative expenses | (467) | (591) | (21.0)% |
Selling expenses | (987) | (1,242) | (20.5)% |
Other operating results, net | (3,179) | 149 | (2,233.6)% |
(Loss) / Profit from operations | (1,252) | 2,062 | (160.7)% |
Profit from associates | (8) | 38 | (121.1)% |
Segment (Loss) / Profit | (1,260) | 2,100 | (160.0)% |
EBITDA | (245) | 2,837 | (108.6)% |
Adjusted EBITDA | (245) | 2,837 | (108.6)% |
II.a) Crops and Sugarcane
Crops
in ARS million | 6M 21 | 6M 20 | YoY Var |
Revenues | 5,820 | 7,202 | (19.2)% |
Costs | (5,162) | (5,920) | (12.8)% |
Initial recognition and changes in the fair value of biological assets and agricultural produce at the point of harvest | 782 | 120 | 551.7% |
Changes in the net realizable value of agricultural produce after harvest | 259 | 574 | (54.9)% |
Gross profit | 1,699 | 1,976 | (14.0)% |
General and administrative expenses | (293) | (346) | (15.3)% |
Selling expenses | (827) | (1,067) | (22.5)% |
Other operating results, net | (3,125) | 147 | - |
(Loss) / Profit from operations | (2,546) | 710 | - |
Share of loss of associates | (8) | 38 | - |
Activity (Loss) / Profit | (2,554) | 748 | - |
Sugarcane
in ARS million | 6M 21 | 6M 20 | YoY Var |
Revenues | 2,818 | 2,968 | (5.1)% |
Costs | (2,201) | (2,776) | (20.7)% |
Initial recognition and changes in the fair value of biological assets and agricultural produce at the point of harvest | 786 | 1,458 | (46.1)% |
Gross profit | 1,403 | 1,650 | (15.0)% |
General and administrative expenses | (88) | (147) | (40.1)% |
Selling expenses | (81) | (83) | (2.4)% |
Other operating results, net | (54) | (1) | 5,300.0% |
Profit from operations | 1,180 | 1,419 | (16.8)% |
Activity profit | 1,180 | 1,419 | (16.8)% |
81
Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria
Summary as of December 31, 2020
Operations
Production Volume1) | 6M21 | 6M20 | 6M19 | 6M18 | 6M17 |
Corn | 185,889 | 286,685 | 108,173 | 257,650 | 227,042 |
Soybean | 10,079 | 14,077 | 13,178 | 11,088 | 4,649 |
Wheat | 35,029 | 35,590 | 31,074 | 31,193 | 29,360 |
Sorghum | 795 | 3,229 | 1,049 | 606 | 732 |
Sunflower | - | (1) | 951 | 2,181 | 55 |
Cotton | 6,818 | 3,237 | - | - | - |
Beans | - | - | - | - | - |
Others | 3,298 | 3,840 | 1,947 | 1,171 | 2,150 |
Total Crops (tons) | 241,908 | 346,657 | 156,372 | 303,889 | 263,988 |
Sugarcane (tons) | 1,679,465 | 1,634,521 | 1,431,109 | 911,759 | 554,260 |
(1)
Includes Brasilagro, Acres del Sud, Ombú, Yatay and Yuchán. Excludes Agro-Uranga.
Volume of | 6M21 | 6M20 | 6M19 | 6M18 | 6M17 | ||||||||||
Sales (1) | D.M | F.M | Total | D.M | F.M | Total | D.M | F.M | Total | D.M | F.M | Total | D.M | F.M | Total |
Corn | 218.9 | 70.0 | 288.9 | 238.4 | 54.3 | 292.7 | 113.0 | - | 113.0 | 206.0 | 6.0 | 212.0 | 196.1 | - | 196.1 |
Soybean | 84.8 | 23.3 | 108.1 | 117.0 | 42.3 | 159.3 | 53.0 | 42.6 | 95.6 | 69.8 | 5.8 | 75.6 | 53.1 | - | 53.1 |
Wheat | 15.9 | 1.3 | 17.2 | 19.7 | - | 19.7 | 13.4 | - | 13.4 | 23.4 | - | 23.4 | 1.2 | 1.0 | 2.2 |
Sorghum | - | - | - | - | - | - | 0.2 | - | 0.2 | - | - | - | 0.7 | - | 0.7 |
Sunflower | - | - | - | 5.8 | - | 5.8 | 2.1 | - | 2.1 | 0.5 | - | 0.5 | 0.6 | - | 0.6 |
Cotton | 2.6 | - | 2.6 | 1.8 | 1.4 | 3.2 | - | - | - | - | - | - | - | - | - |
Beans | 0.3 | 1.0 | 1.3 | - | - | - | - | - | - | - | - | - | - | - | - |
Others | 2.9 | - | 2.9 | 2.1 | - | 2.1 | 0.2 | - | 0.2 | 0.8 | - | 0.8 | 2.1 | - | 2.1 |
Total Crops (thousands of tons) | 325.4 | 95.6 | 421.0 | 384.8 | 98.0 | 482.8 | 181.9 | 42.6 | 224.5 | 300.5 | 11.8 | 312.3 | 253.8 | 1.0 | 254.8 |
Sugarcane (thousands of tons) | 1,560.3 | - | 1,560.3 | 1,414.6 | - | 1,414.6 | 1,234.8 | - | 1,234.8 | 554.1 | - | 554.1 | 827.3 | - | 827.3 |
D.M.: Domestic market
F.M.: Foreign market
(1) Includes Brasilagro, CRESCA at 50%, Acres del Sud, Ombú, Yatay and Yuchán. Excludes Agro-Uranga.
Results from the Grains activity decreased by ARS 3,302 million, from ARS 748 million gain during the first semester of fiscal year 2020 to ARS 2,554 million loss during the same period of 2021, mainly because of:
●
Lower results in Argentina, due to a loss from grain derivatives (mainly soybeans and corn) for upward trend in future prices, and a lower gain in the gross margin of sales and holding results, because of the lower stock left by the 19-20 campaign in comparison to the previous period.
●
Lower results in Brazil, mainly due to the negative result generated by commodity derivatives in IIQ 21, partially offset by higher productive results in grains and cotton.
The result of the Sugarcane activity decreased by ARS 239 million, from a gain of ARS 1,419 million in the first semester of fiscal year 2020 to a gain of ARS 1,180 million in the same period of 2021. This is mainly due to a lower productive result of Brazil, mainly due to higher production costs and less planted area, offset by higher sales results, due to better prices and lower administrative expenses.
Area in Operation (hectares) (1) | As of 12/31/20 | As of 12/31/19 | YoY Var |
Own farms | 111,033 | 103,548 | 7.2% |
Leased farms | 132,056 | 136,997 | (3.6)% |
Farms under concession | 22,324 | 25,609 | (12.8)% |
Own farms leased to third parties | 25,323 | 13,837 | 83.0% |
Total Area Assigned to Production | 290,736 | 279,991 | 3.8% |
(1) Includes Agro-Uranga, Brazil and Paraguay,
The area in operation assigned to the crops and sugarcane activity increased by 3.8% as compared to the same period of the previous fiscal year.
82
Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria
Summary as of December 31, 2020
II.b) Cattle Production
Production Volume (1) | 6M21 | 6M20 | 6M19 | 6M18 | 6M17 |
Cattle herd (tons) | 4,543 | 5,354 | 5,467 | 4,731 | 4,448 |
Milking cows (tons) | - | - | - | 186 | 258 |
Cattle (tons) | 4,543 | 5,354 | 5,467 | 4,917 | 4,706 |
(1)
Includes Carnes Pampeanas
Volume of | 6M21 | 6M20 | 6M19 | 6M18 | 6M17 | ||||||||||
Sales (1) | D.M | F.M | Total | D.M | F.M | Total | D.M | F.M | Total | D.M | F.M | Total | D.M | F.M | Total |
Cattle herd | 8.5 | - | 8.5 | 9.3 | - | 9.3 | 4.9 | - | 4.9 | 5.5 | - | 5.5 | 4.3 | - | 4.3 |
Milking cows (2) | - | - | - | - | - | - | - | - | - | 1.3 | - | 1.3 | 0.7 | - | 0.7 |
Cattle (thousands of tons) | 8.5 | - | 8.5 | 9.3 | - | 9.3 | 4.9 | - | 4.9 | 6.8 | - | 6.8 | 5.0 | - | 5.0 |
D.M.: Domestic market
F.M.: Foreign market
(1)
Includes Carnes Pampeanas
(2)
Milk was discontinued on IIQ 2018
Cattle
In ARS Million | 6M 21 | 6M 20 | YoY Var |
Revenues | 1,113 | 1,043 | 6.7% |
Costs | (881) | (890) | (1.0)% |
Initial recognition and changes in the fair value of biological assets and agricultural produce | 79 | (101) | - |
Gross Profit | 311 | 52 | 498.1% |
General and administrative expenses | (63) | (60) | 5.0% |
Selling expenses | (65) | (76) | (14.5)% |
Other operating results, net | 13 | 3 | 333.3% |
Profit / (Loss) from operations | 196 | (81) | - |
Activity Profit / (Loss) | 196 | (81) | - |
Area in operation – Cattle (hectares) (1) | As of 12/31/20 | As of 12/31/19 | YoY Var |
Own farms | 64,986 | 72,061 | (9.8)% |
Leased farms | 12,635 | 12,635 | - |
Farms under concession | 3,097 | 2,993 | 3.5% |
Own farms leased to third parties | 1,775 | 1,775 | - |
Total Area Assigned to Cattle Production | 82,493 | 89,464 | (7.8)% |
(1) Includes Agro-Uranga, Brazil and Paraguay,
Stock of Cattle Heard | As of 12/31/20 | As of 12/31/19 | YoY Var |
Breeding stock | 71,721 | 85,423 | (16.0)% |
Winter grazing stock | 5,816 | 16,860 | (65.5)% |
Sheep stock | 12,811 | 11,071 | 15.7% |
Total Stock (heads) | 90,348 | 113,354 | (20.3)% |
The result of the Cattle activity increased by ARS 277 million: from a ARS 81 million loss during first semester of fiscal year 2020 to a ARS 196 million gain in the same period of 2021, as a result of a positive variation in the holding result as well as selling results of live cattle, because prices for this fiscal year raised at a higher pace than inflation.
83
Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria
Summary as of December 31, 2020
II.c) Agricultural Rental and Services
In ARS Million | 6M 21 | 6M 20 | YoY Var |
Revenues | 115 | 151 | (23.8)% |
Costs | (147) | (83) | 77.1% |
Gross (loss) / profit | (32) | 68 | - |
General and Administrative expenses | (23) | (38) | (39.5)% |
Selling expenses | (14) | (16) | (12.5)% |
Other operating results, net | (13) | - | - |
(Loss) / Profit from operations | (82) | 14 | - |
Activity (Loss) / Profit | (82) | 14 | - |
The result of the activity was reduced by ARS 96 million, from a gain of ARS 14 million in the first semester of fiscal year 2020 to a loss of ARS 82 million in the same period of 2021.
III) Other Segments
We include within "Others" the results coming from our Agroindustrial activity, developed in our meatpacking facility in La Pampa and our investment in FyO.
The result of the segment decreased by ARS 210 million, going from a gain of ARS 507 million for the first semester of fiscal year 2020 to a gain of ARS 297 million for the same period of 2021, mainly due to:
●
An increase in the operating profit of FyO originated mainly by higher results from commissions of stockpiling operations and consignment of grains, and lower selling expenses due to the context of the pandemic, partially offset by lower margins in grain brokerage commissions, and a decrease in the sale of inputs.
●
A negative variation in associates results corresponding to Agrofy S.A.
●
A loss from Carnes Pampeanas, mainly originated by a decrease in the sales result, lower volume sold in the local market and lower average sales prices, which was partially offset by an increase in the volume of sales to the foreign market, but at lower average prices when compared to the previous period.
In ARS Million | 6M 21 | 6M 20 | YoY Var |
Revenues | 5,929 | 6,091 | (2.7)% |
Costs | (4,947) | (5,074) | (2.5)% |
Initial recognition and changes in the fair value of biological assets and agricultural produce at the point of harvest | - | 26 | (100.0)% |
Gross profit | 982 | 1,043 | (5.8)% |
General and administrative expenses | (185) | (184) | 0.5% |
Selling expenses | (600) | (515) | 16.5% |
Other operating results, net | 53 | 122 | (56.6)% |
Profit from operations | 250 | 466 | (46.4)% |
Profit from associates | (24) | 173 | (113.9)% |
Segment Profit | 226 | 639 | (64.6)% |
EBITDA | 297 | 507 | (41.4)% |
Adjusted EBITDA | 297 | 507 | (41.4)% |
IV) Corporate Segment
The negative result of the segment decreased by ARS 6 million, from a loss of ARS 138 million in the first semester of fiscal year 2020 to a loss of ARS 132 million in the same period of fiscal year 2021.
In ARS Million | 6M 21 | 6M 20 | YoY Var |
General and administrative expenses | (132) | (138) | (4.3)% |
Loss from operations | (132) | (138) | 4.3)% |
Segment loss | (132) | (138) | 4.3)% |
EBITDA | (130) | (137) | (5.1)% |
Adjusted EBITDA | (130) | (137) | (5.1)% |
84
Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria
Summary as of December 31, 2020
Urban Properties and Investments Business (through our subsidiary IRSA Inversiones y Representaciones Sociedad Anónima)
We develop our Urban Properties and Investments segment through our subsidiary IRSA. As of December 31, 2020, our direct and indirect equity interest in IRSA was 62.3% over stock capital.
Consolidated Results of our Subsidiary IRSA Inversiones y Representaciones S,A,
In ARS million | 6M 21 | 6M 20 | YoY Var |
Revenues | 4,944 | 10,899 | (54.6)% |
Profit from operations | 8,875 | 9,658 | (8.1)% |
EBITDA | 9,707 | 10,421 | (6.9)% |
Adjusted EBITDA | 8,141 | 4,615 | 76.4% |
Segment Result | 8,666 | 8,357 | 3.7% |
Consolidated revenues from sales, rentals and services decreased by 54.6% in the first semester of fiscal year 2021 compared to the same period in 2020, while adjusted EBITDA, which excludes the effect of the result from changes in the unrealized fair value of investment properties reached ARS 8,141 million, 76.4% higher than the same period of fiscal year 2020.
Financial Indebtedness and Other
The following tables contain a breakdown of company’s indebtedness:
Agricultural Business
Description | Currency | Amount (USD MM)(2) | Interest Rate | Maturity |
Bank overdrafts | ARS | 49.9 | Variable | < 360 days |
Series XXVI NCN | ARS | 11.8 | Variable | Jan-21 |
Series XVIII NCN | USD | 27.5 | 9.00% | Apr-21 |
Series XXV NCN | USD | 59.6 | 9.00% | Jul-21 |
Series XXVII NCN | USD | 5.7 | 7.45% | Jul-21 |
Series XXIX NCN | USD | 83.0 | 3.50% | Dec-21 |
Series XXXII NCN | USD | 34.3 | 9.00% | Nov-22 |
Series XXIII NCN (1) | USD | 113.0 | 6.50% | Feb-23 |
Series XXX NCN | USD | 25.0 | 2.00% | Ago-23 |
Series XXXI NCN | USD | 1.1 | 9.00% | Nov-23 |
Other debt | 64.4 | - | - | |
CRESUD’s Total Debt (3) | USD | 475.3 | ||
Cash and cash equivalents (3) | USD | 39.2 | ||
CRESUD’s Net Debt | USD | 436.1 | ||
Brasilagro’s Total Net Debt | USD | 75.1 |
(1) Net of repurchases
(2) Principal amount stated in USD (million) at an exchange rate of 84.15 ARS/USD and 5.194 BRL/USD, without considering accrued interest or elimination of balances with subsidiaries.
(3) Helmir & CRESUD stand-alone.
85
Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria
Summary as of December 31, 2020
Urban Properties and Investments Business
The following table describes our total indebtedness as of December 31, 2020:
Description | Currency | Amount (USD MM) (1) | Interest Rate | Maturity |
Bank overdrafts | ARS | 27.6 | Floating | < 360 days |
Series III NCN | ARS | 2.9 | Variable | Feb-21 |
Series IV NCN | USD | 51.4 | 7.0% | May-21 |
Series VI NCN | ARS | 4.0 | Floating | Jul-21 |
Series VII NCN | USD | 33.7 | 4.0% | Jan-22 |
Series V NCN | USD | 9.2 | 9.0% | May-22 |
Series IX NCN | USD | 80.7 | 10.0% | Mar-23 |
Series I NCN | USD | 3.1 | 10.0% | Mar-23 |
Series VIII NCN | USD | 31.7 | 10.0% | Nov-23 |
Loan with IRSA CP(3) | ARS | 62.6 | - | Mar-22 |
Other debt | USD | 16.6 | - | Feb-22 |
IRSA’s Total Debt | USD | 323.5 | ||
Cash & Cash Equivalents + Investments | USD | 0.7 | ||
IRSA’s Net Debt | USD | 322.8 | ||
Bank loans and overdrafts | ARS | 24.6 | - | < 360 days |
PAMSA loan | USD | 25.2 | Fixed | Feb-23 |
IRSA CP NCN Class II | USD | 360.0 | 8.75% | Mar-23 |
IRSA CP’s Total Debt | USD | 409.8 | ||
Cash & Cash Equivalents + Investments (2) | USD | 84.9 | ||
Intercompany Credit | ARS | 62.6 | ||
IRSA CP’s Net Debt | USD | 262.3 |
(1)
Principal amount in USD (million) at an exchange rate of ARS 84.15/USD, without considering accrued interest or eliminations of balances with subsidiaries.
(2)
Includes Cash and cash equivalents, Investments in Current Financial Assets and related companies notes holding.
(3)
Includes amounts taken by IRSA and subsidiaries.
Comparative Summary Consolidated Balance Sheet Data
In ARS million | Dec-20 | Dec-19 |
Current assets | 39,962 | 276,879 |
Non-current assets | 233,520 | 546,412 |
Total assets | 273,482 | 823,291 |
Current liabilities | 67,894 | 207,172 |
Non-current liabilities | 113,989 | 469,720 |
Total liabilities | 181,883 | 676,892 |
Total capital and reserves attributable to the shareholders of the controlling company | 30,015 | 30,153 |
Minority interests | 61,584 | 116,246 |
Shareholders’ equity | 91,599 | 146,399 |
Total liabilities plus minority interests plus shareholders’ equity | 273,482 | 823,291 |
Comparative Summary Consolidated Statement of Income Data
In ARS million | Dec-20 | Dec-19 |
Gross profit | 6,597 | 11,613 |
Profit from operations | 9,221 | 12,753 |
Share of profit of associates and joint ventures | (487) | (1,284) |
Profit from operations before financing and taxation | 8,734 | 11,469 |
Financial results, net | (789) | (15,676) |
Loss before income tax | 7,945 | (4,207) |
Income tax expense | (4,089) | (3,707) |
Result of the period of continuous operations | 3,856 | (7,914) |
Result of discontinued operations after taxes | (7,120) | 10,192 |
Result for the period | (3,264 | 2,278 |
Controlling company’s shareholders | (3,002) | (6,461) |
Non-controlling interest | (262) | 8,739 |
86
Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria
Summary as of December 31, 2020
Comparative Summary Consolidated Statement of Cash Flow Data
In ARS million | Dec-20 | Dec-19 |
Net cash generated by operating activities | 3,252 | 26,500 |
Net cash generated by investment activities | 50,572 | 18,494 |
Net cash used in financing activities | (45,657) | (65,465) |
Total net cash (used in) / generated during the fiscal period | 8,167 | (20,471) |
Ratios
In ARS million | Dec-20 | Dec-19 |
Liquidity (1) | 0.589 | 1.336 |
Solvency (2) | 0.504 | 0.216 |
Restricted capital (3) | 0.854 | 0.664 |
(1) Current Assets / Current Liabilities
(2) Total Shareholders’ Equity/Total Liabilities
(3) Non-current Assets/Total Assets
Material events of the quarter and subsequent events
October 2020: General Ordinary and Extraordinary Shareholders’ Meeting
On October 26, 2020, our General Ordinary and Extraordinary Shareholders’ Meeting was held. The following matters. inter alia, were resolved by majority of votes:
●
Allocation of net income for the fiscal year ended June 30, 2020 to the legal reserve and unappropriated retained earnings.
●
Not to distribute dividends as a result of the absorption of losses.
●
Designation of board members.
●
Compensations to the Board of Directors for the fiscal year ended June 30, 2019
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Incentive plan for employees. management and directors to be integrated without premium for up to 1% of the Capital Stock.
On November 12, 2020, the company carried out an exchange operation of its Series XXIV Notes, for a nominal value of USD 73.6 million
Nominal Value of Existing Notes presented and accepted for the Exchange (for both Series): approximately USD 65.1 million which represents 88.41% acceptance, through the participation of 1,098 orders.
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Series XXXI: Face Value of Existing Notes presented and accepted for the Exchange: approximately USD 30.8 million.
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Nominal Value to be Issued: approximately USD 1.3 million.
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Issuance Price: 100% nominal value.
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Maturity Date: It will be November 12, 2023.
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Consideration of the Exchange Offer: eligible holders whose existing notes have been accepted for the Exchange by the Company, will receive for every USD 1 submitted to the Exchange, the accrued interest of the existing notes until the settlement and issue date and the following:
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A sum of money of approximately USD 29.4 million for repayment of capital of such existing notes presented to the Exchange, in cash, in United States Dollars, which will be equivalent to USD 0.95741755 for each USD 1 of existing notes presented to the Exchange; and
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The remaining amount until completing 1 USD for each 1 USD of existing notes presented to the Exchange, in notes Series XXXI.
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Annual Nominal Fixed Interest Rate: 9.00%.
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Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria
Summary as of December 31, 2020
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Amortization: The capital of the Series XXXI Notes will be amortized in 3 annual installments (33% of the capital on November 12, 2021, 33% of the capital on November 12, 2022, 34% of the capital on the maturity date of Series XXXI).
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Interest Payment Dates: Interest will be paid quarterly for the expired period as of the issue and settlement date.
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Payment Address: Payment will be made to an account at Argentine Securities Commission in the Autonomous City of Buenos Aires
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Series XXXII: Face Value of Existing Notes presented and accepted for the Exchange: approximately USD 34.3 million.
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Nominal Value to be Issued: approximately USD 34.3 million.
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Issuance Price: 100% nominal value.
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Maturity Date: It will be November 12, 2022.
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Consideration of the Exchange Offer: the eligible holders whose existing notes have been accepted for the Exchange by the Company, will receive Series XXXII Notes for 100% of the capital amount presented for exchange and accepted by the Company and the accrued interest of the existing notes until the settlement and issue date.
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Early Bird: will consist of the payment of USD 0.02 for each USD 1 of existing notes delivered and accepted in the Exchange on or before the deadline date to Access the Early Bird. Said consideration will be paid in Pesos on the issue and settlement date according to the exchange rate published by Communication “A” 3500 of the Central Bank of Argentina on the business day prior to the expiration date of the Exchange, which is ARS 79.3433 for each USD 1 of Existing Notes delivered and accepted in the Exchange.
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Annual Nominal Fixed Interest Rate: 9.00%.
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Amortization: The capital of the Series XXXII Notes will be amortized in one installment on the maturity date.
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Interest Payment Dates: Interest will be paid quarterly for the expired period from the issuance and settlement date.
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Payment Address: Payment will be made to an account at Argentine Securities Commission in New York, United States, for which purpose the Company will make US dollars available to an account reported by the Argentine Securities Commission in said jurisdiction.
December 2020: Headquarters Change
The Company has moved its headquarters from Moreno 877 Piso 24 CABA to Carlos Della Paolera 261 Piso 9 CABA.
February 2021: Brasilagro - Capital Increase
On February 3, 2021, Brasilagro has concluded a public share offering for a total amount of approximately BRL 500 million by issuing 20 million shares in a primary offering and 2.73 million in a secondary offering.
The company participated in the primary issuance by acquiring, directly or through subsidiaries, 6,971,229 shares. The consideration for the shares was materialized with the sale, which agreement was informed to the market on December 23, 2020, of 100% of the shares of its indirectly controlled subsidiaries, Agropecuaria Acres del Sud SA, Ombu Agropecuaria SA, Yatay Agropecuaria SA and Yuchan Agropecuaria S.A. owners of approximately 9,900 agricultural hectares in the corn belt of Bolivia.
After this transaction, CRESUD's stake in Brasilagro, net of treasury shares, increased from 33.8% to 34.1% of its capital stock.
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Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria
Summary as of December 31, 2020
February 2021: Sale of meatpacking facility Carnes Pampeanas
On February 24, the Company sold 100% of the shares of Sociedad Anónima Carnes Pampeanas S.A., owner of the Carnes Pampeanas meatpacking facility in the province of La Pampa, Argentina.
The price of the operation was agreed at USD 10 million, which has already been fully paid.
The accounting result of the operation will be a gain of approximately ARS 620 million, which will be recognized in the Company's Financial Statements for the third quarter of fiscal year 2021.
Carnes Pampeanas S.A. was acquired by CRESUD in 2007 in partnership with Tyson Foods and Cactus Feeders. Subsequently we have increased our participation in the business, reaching all the shares of the company since 2011.
March 2021: Capital Increase
On February 17, 2021, the Company announced the launch of its public offering of shares for up to 90 million shares (or its equivalent 9 million ADS) and 90,000,000 warrants to subscribe for new common shares, to registered holders as of February 19, 2021. Each right corresponding to one share (or ADS) allowed its holder to subscribe 0.1794105273 new ordinary shares and receive free of charge an option with the right to subscribe 1 additional ordinary share in the future. The final subscription price for the new shares was ARS 70.31 or USD 0.472 and for the new ADS it was USD 4.72. The new shares, registered, of ARS 1 (one peso) of par value each and with the right to one vote per share gives the right to receive dividends under the same conditions as the current shares in circulation.
On March 5, 2021, having finished the pre emptive rights subscription period, the Company's shareholders have subscribed the amount of 87,264,898 new additional shares, that is 97% of the shares offered, and have requested through the accretion right 26,017,220 additional new shares, for which 2,735,102 new shares will be issued, completing the total issuance of 90,000,000 new shares (or their equivalent in ADSs) offered. Likewise, 90,000,000 options will be issued that will entitle the holders through their exercise to acquire up to 90,000,000 additional new shares.
The exercise price of the warrants will be USD 0.566. The warrants may be exercised quarterly from the 90th day of their issuance on the 17th to the 25th (inclusive) of the months of February, May, September, and November of each year (provided that dates are business days in the city of New York and in the Autonomous City of Buenos Aires) until their expiration 5 years from the date of issue.
As of the date of issuance of these financial statements, the Company received all the funds in the amount of USD 42.5 million and issued the new shares, increasing the capital stock to 591,642,804 million.
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Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria
Summary as of December 31, 2020
EBITDA Reconciliation
In this summary report, we present EBITDA and Adjusted EBITDA. We define EBITDA as profit for the period excluding: (i) result of discontinued operations, (ii) income tax expense, (iii) financial results, net iv) results from participation in associates and joint ventures; and (v) depreciation and amortization. We define Adjusted EBITDA as EBITDA minus net profit from changes in the fair value of investment properties, not realized, excluding barter agreement results.
EBITDA and Adjusted EBITDA are non-IFRS financial measures that do not have standardized meanings prescribed by IFRS. We present EBITDA and adjusted EBITDA because we believe they provide investors supplemental measures of our financial performance that may facilitate period-to-period comparisons on a consistent basis. Our management also uses EBITDA and Adjusted EBITDA from time to time, among other measures, for internal planning and performance measurement purposes. EBITDA and Adjusted EBITDA should not be construed as an alternative to profit from operations, as an indicator of operating performance or as an alternative to cash flow provided by operating activities, in each case, as determined in accordance with IFRS. EBITDA and Adjusted EBITDA, as calculated by us, may not be comparable to similarly titled measures reported by other companies. The table below presents a reconciliation of profit for the relevant period to EBITDA and Adjusted EBITDA for the periods indicated:
For the six-month period ended December 31 (in ARS million) | ||
2020 | 2019 | |
Result for the period | (3,264) | 2,278 |
Result from discontinued operations | 7,120 | (10,192) |
Income tax expense | 4,089 | 3,707 |
Net financial results | 789 | 15,676 |
Share of profit of associates and joint ventures | 487 | 1,284 |
Depreciation and amortization | 1,289 | 1,140 |
EBITDA (unaudited) | 10,510 | 13,893 |
Gain from fair value of investment properties, not realized - agribusiness | (50) | (18) |
Gain from fair value of investment properties, not realized - Urban Properties Business | (1,566) | (5,481) |
Realized sale – Urban Properties and Investments Business | - | (325) |
Adjusted EBITDA (unaudited) | 8,894 | 8,069 |
90
Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria
Summary as of December 31, 2020
Brief comment on future prospects for the Fiscal Year
The year 2020 was dominated by the COVID-19 pandemic, which originated in China and subsequently spread to numerous countries, generating uncertainty and volatility in the markets, adversely impacting the global, Argentine and regional economy. Our agricultural operations continued their development normally as agricultural production was an essential activity to guarantee the supply of food.
The 2021 campaign is presented with radical changes from what was observed in the market at the end of the previous year. As of August, the United States reduced its sowing intention on the main crops and South America began to show indicators of lack of water. China activated its demand and this, added to the weakness of the dollar in the world, pushed the international prices of commodities upwards. Soybeans and corn recovered their prices in the last year approximately between 40-50%. The challenge will be in the climatic evolution in the region in the coming months where the harvest will take place given that the crops went through periods of lack of water so far this cycle. If the conditions are good and we achieve good agricultural yields, we expect a campaign with excellent results.
We also expect good results for the livestock activity driven by the Chinese demand for meat. Although production will also depend on climatic evolution, local farm prices have been growing steadily in recent months. We will continue to focus on improving productivity and controlling costs, working efficiently to achieve the highest possible operating margins. We will continue concentrating our production in our own farms, mainly in the Northwest of Argentina and consolidating our activity in Brazil.
Furthermore, as part of our business strategy, we will continue to sell the farms that have reached their highest level of appreciation in the region.
The urban properties and investments business, which we own through IRSA, presents challenges for the next quarter and fiscal year 2021. The company's shopping malls are working with strict protocols that include social distancing, reduced hours and flow, control of access, among other measures as well as its hotels, whose recovery is slow due to the lack of foreign tourism. IRSA continues to work on reducing and making the cost structure more efficient, hoping that the activity of Shopping malls will evolve in accordance with the economic recovery and the hotels will normalize their activity with the total opening of air flows and the influx of international tourism.
On the national and international framework above mentioned, the Board of Directors of the Company will continue evaluating financial, economic and / or corporate tools that allow the Company to improve its position in the market in which it operates and have the necessary liquidity to meet its obligations. Within the framework of this analysis, the indicated tools may be linked to corporate reorganization processes (merger, spin-off or a combination of both), implementation of financial and / or corporate efficiencies in international companies directly or indirectly owned by the Company through reorganization processes, disposal of assets in public and / or private form that may include real estate as well as negotiable securities owned by the Company, repurchase of shares and instruments similar to those described that are useful to the proposed objectives. All this as described in the Company's Annual Report for the fiscal year ending June 30, 2020.
The Company keeps its commitment to preserve the health and well-being of its clients, employees, tenants and the entire population, constantly reassessing its decisions in accordance with the evolution of events, the regulations that are issued and the guidelines of the competent authorities.
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Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria
Summary as of December 31, 2020
Alejandro Elsztain
CEO
Véase nuestro informe de fecha 09/11/18
PRICE WATERHOUSE & Co. S.R.L.
C.P.C.E.C.A.B.A. T° 1 F° 17
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