SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15b-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of February, 2003
IRSA INVERSIONES Y REPRESENTACIONES SOCIEDAD ANONIMA
(Exact name of Registrant as specified in its charter)
IRSA INVESTMENTS AND REPRESENTATIONS INC.
(Translation of registrant's name into English)
REPUBLIC OF ARGENTINA
(Jurisdiction of incorporation or organization)
BOLIVAR 108
(C1066AAB)
BUENOS AIRES, ARGENTINA
(Address of principal executive offices)
Form 20-F X Form 40-F
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Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes No X
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IRSA INVERSIONES Y REPRESENTACIONES SOCIEDAD ANONIMA
(THE "COMPANY")
REPORT ON FORM 6-K
Attached is an English translation of the press release related to the
quarterly financial statements of the six month period ended on December 31,
2002.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Buenos Aires, Argentina.
IRSA INVERSIONES Y REPRESENTACIONES SOCIEDAD ANONIMA
By: /S/ Saul Zang
Name: Saul Zang
Title: Second Vice Chairman of the Board of Directors
Dated: February 12, 2003
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IRSA INVERSIONES Y REPRESENTACIONES SOCIEDAD ANONIMA
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PRESS RELEASE - IIQ 2003
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PRESS RELEASE
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FOR IMMEDIATE RELEASE
For further information, please contact:
MARCELO MINDLIN - Vice Chairman and CFO
GUSTAVO MARIANI - Financial Manager
+54 11 4323 - 7413
gm@irsa.com.ar
WWW.IRSA.COM.AR
IRSA INVERSIONES Y REPRESENTACIONES SOCIEDAD ANONIMA ANNOUNCES SECOND QUARTER OF
FISCAL YEAR 2003 RESULTS.
HIGHLIGHTS
o Net result for the period ended December 31, 2002 amounted a gain of
Ps.127.0 million as compared to a loss of Ps.119.6 million in the same
period for fiscal year 2002.
o Net consolidated sales for the six-month period totaled Ps.100.7
million as compared to Ps.71.5 million registered in the same period
last year.
o The appreciation of the Peso generated a positive result of Ps.135.4
million douring the six months ended December 31, 2002.
o We returned to the international capital market after the successful
placement of US$ 100 million of Convertible Notes. 74% of the offering
was subscribed by existing shareholders and orders for the allocation
of the remainder doubled the total available units.
o During the last quarter of year 2002, our Company restructured its
debt, extending maturities and fixing very favorable interest rates.
o During the three months ended December 31, 2002, APSA tenants' sales
reached a historical maximum of Ps.271.5 million, measured in nominal
terms, a 51,9% rise over the sales of the same quarter in last fiscal
year.
o Our Company distributed among its shareholders 4,587,285 treasury
shares, proportionally to their holdings. As a consequence, the
conversion price of our Convertible Notes was adjusted.
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BUENOS AIRES, FEBRUARY 11, 2003 - IRSA Inversiones y Representaciones Sociedad
Anonima (NYSE: IRS) (BCBA: IRSA) announces its second quarter fiscal year 2003
results for the period ended on December 31, 2002.
NET INCOME FOR THE SECOND QUARTER OF FISCAL YEAR 2003 registered a gain of
Ps.127.0 million or Ps.5.99 per share (Ps.59.90 per GDS) compared with a loss of
Ps.119.6 million, or Ps.5.64 per share (Ps.56.40 per GDS) for the second quarter
of fiscal year 2002. Results per GDS were calculated using 21.199.927 million
GDSs (outstanding shares), with each GDS representing ten (10) ordinary shares.
CONSOLIDATED NET SALES for the six-month period totaled Ps.100.7 million,
compared with Ps.71.5 million registered in the same period last year.
The breakdown regarding net sales among the Company's various business segments
is as follows: Sales and Developments Ps.21.5 million, Offices and Other Rental
Properties Ps.9.6 million, Shopping Centers Ps.52.7 million and Hotels Ps.16.9
million. Operating income for the period totaled a gain of Ps.1.0 million.
As from January 1, 2002, the Company's financial statements include the
recognition of inflation effects. All of the numbers herein included are
denominated in constant currency as of December 31, 2002, and are thus adjusted
by the wholesale price index , which by that date was of 218.21.
Due to the subscription of the notes convertible into ordinary shares of Alto
Palermo S.A. (APSA), as from the first quarter of fiscal year 2003, our Company
has ceased using the proportional consolidating method for the confection of the
income statements since this method no longer adequately reflects the results of
our operations. We have adopted a method that consolidates our business'
operations under the outlines established by the Resolucion Tecnica No. 4
("RT4") of the F.A.C.P.C.E.. Under this consolidation method, subsidiaries in
which the Company owns more than 50%, are 100% consolidated and those in which
we own less than 50% are not consolidated and its results are reflected in our
income statement as "Net income in affiliated companies". The principal
consequence of this method on our financial statements, is the consolidation of
100% of the revenues from our subsidiaries, Alto Palermo S.A., Inversora Bolivar
S.A. and Hoteles Argentinos S.A. and the non-consolidation of the revenues from
Hotel Llao Llao S.A.
COMMENT ON THE QUARTER'S OPERATIONS
The last quarter of 2002 will be a benchmark for the Company's history. After
one year of recession and instability, we have not only been one of the very few
companies which could avoid a default, but also, in October we returned to the
international capital market and were able to place US$ 100 million Convertible
Notes. The issue was a success; 74% of the offering was subscribed by
shareholders and allocation requests in respect of the remaining balance doubled
the aggregate amount of available units. Further, we have restructured almost
all of the Company's financial debt, by extending maturities and agreeing upon
favorable interest rates. We have become one of the very few Argentine companies
which long-term financial condition is solved.
During December and for the fifth consecutive month, the activity level showed
positive results. Although the levels prevailing before the crisis have not yet
been reached, the figures obtained give rise to favorable expectations.
During January 2003, bank deposits increased like during the period from August
to November 2002. Gradually the private sector is recovering confidence in the
Argentine banking system.
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Finally, an agreement was reached with the IMF. On January 16, 2003 the
Argentine government executed the letter of intent for a stand-by program, which
will enable refinancing all the countries' maturities with international credit
entities until August 2003. This implies an aggregate refinancing of US$ 16.112
million, although no new funds are provided. This agreement will prevent the
next government from assuming in a situation of default with the international
financial entities and may contribute to reduce the economic uncertainty until
the next president takes office. However, the true negotiation to replace
Argentina in the world is left to the next government.
For our Company, the six-month period ended December 31, 2002 evidenced a
Ps.127.0 million profit. This profit is primarily due to the Ps.147.7 million
positive result of the "Financing Effects" item. Such income statement item has
provided a profit, for the second consecutive quarter, due to the 11%
appreciation of the Peso, which accumulated a net result of Ps.135.4 million. In
addition, Ps.26.0 million from discounts obtained from the renegotiation of
liabilities and Ps.8.5 million from interest income are to be added.
The sales of the quarter amounted to Ps.100.7 million, a 40.8% increase as
compared to Ps.71.5 million during the previous fiscal year. This increase is
primarily due to the consolidation, as from this fiscal year, of 100% of APSA
revenues.
The Hotel and Shopping Centers segments have considerably improved their
situation due to the flow of tourists into the country taking advantage of the
benefits derived from the devaluation of the Peso. Further, an improvement in
domestic private consumption has also been noted, which benefits shopping
centers' business. The internationally known Llao Llao hotel, member of the "The
Leading Hotels of the World" has experienced a 66% increase in its average
occupancy level, as compared to 48% during the same quarter of the preceding
fiscal year.
Total assets increased by 32.9% as compared to the previous fiscal year,
reaching Ps.2,080.7 million. The financial debt increased by 90.7%, amounting as
of December 31, 2002 to Ps.874.0 million, as a result of the new consolidation
method, the issuance of US$ 100 million and US$ 50 million Convertible Bonds by
IRSA and APSA, respectively and principally due to the Peso's devaluation
impact. However, it is to be noted that although the total debt has increased
due to the restructuring of our liabilities the short term debt has decreased by
85% as compared to the previous fiscal year. Presently 92% of the Company's
financial debt is long-term.
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EVOLUTION OF CONSOLIDATED DEBT (1)
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DECEMBER 2001 DECEMBER 2002
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US$ % US$ %
SHORT-TERM SHORT-TERM
IRSA FRN due 2002 44 Hoteles Argentinos Loan due 2006 (2) 12
Galicia due 2001 20
BKB due 2002 80
Short-term loans 62
APSA Intercompany 45
Short-term loans 45
TOTAL SHORT-TERM 295 62% TOTAL SHORT-TERM 12 4%
LONG-TERM LONG-TERM
IRSA Hoteles Argentinos Loan due 2006 12 Convertible Noted due 2007 100
Unsecured Loan due 2009 37
Secured Noted due 2009 51
APSA Notes-14.875% - Apr 05 51 Notes-14.875% - Apr 05 (3) 15
FRN - Jan 05 118 FRN - Jan 05 (3) (4) 17
Convertible Notes due 2006 50
TOTAL LARGO PLAZO 181 38% TOTAL LONG-TERM 271 96%
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TOTAL DEBT (IRSA + APSA) 476 282
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(1) The information presented in this chart differs from that presented in
the financial statements since the present information does not include
accrued interests.
(2) Due to the unpaid capital installments, this debt is classified as
short-term.
(3) Debt in Pesos, denominated in dollars at an exchange rate of
Ps.3.35/US$.
(4) Includes CER.
In line with the previous quarter premises, we continue maintaining low overhead
costs. Administrative and marketing expenses again decreased during the quarter
and their purported increase is due to the addition of 100% of APSA in the
consolidation as of December 31, 2002, as compared to the previous fiscal year,
when it was not consolidated.
Selling Expenses for the six-month period ended December 31,
Million Ps. 2002 2001 Change %
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IRSA 17.8 16.8 5.9%
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APSA 8.1 13.5 -40.0%
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Selling Expenses for the six-month period ended December 31,
Million Ps. 2002 2001 Change %
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IRSA
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IRSA 8.3 4.5 84.1%
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APSA 5.4 30.1 -76.3%
The EBITDA for the twelve-month period ended December 31, 2002 was of Ps.91.9
million, an increase of 44% as compared to the twelve-month period ended
December 31, 2001.
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SECOND QUARTER OF FISCAL YEAR 2003 HIGHLIGHTS, INCLUDING SIGNIFICANT OPERATIONS
OCCURRED AFTER THE END OF THE QUARTER.
I. OFFICES AND OTHER RENTAL PROPERTIES
During the six-month period ended December 31, 2002, revenues from the Company's
rental portfolio reached Ps.9.6 million, as compared to Ps.26.8 million in the
same period for fiscal year 2002. The average occupancy rate registered a rise
from 69% as of September 30, 2002, to 72% as of December 31, 2002. Since the
dramatic collapse of our income after the pesification of our leasing agreements
income has remained pretty stable.
During this quarter, the Company sold some of its rental properties with the aim
to concentrate our ownership in whole buildings.
SALE OF LIBERTADOR 498 OFFICES - On November 4, 2002, we sold floor 27, 8
parking spaces and 7 complementary units, located in the office building "El
Rulero" (Libertador 498), for a total of US$ 650,000.
SALE OF MADERO 1020 OFFICES - On October 31, 2002, our Company sold floor 2 and
8 parking spaces located in the office building of "Madero 1020", for US$
370,000.
The chart below presents information on the Company's offices and other rental
properties as of December 31, 2002.
OFFICES AND OTHER RENTAL PROPERTIES
LEASABLE OCCUPANCY MONTHLY TOTAL RENTAL INCOME FOR THE PERIOD BOOK
DATE OF AREA RATE(2) RENTAL ENDED DECEMBER 31, 2002, VALUE
ACQUISITION (m2) INCOME PS.000 (4) PS.000
(1) PS./000(3) 2003 2002 2001 (5)
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OFFICES
Inter-Continental Plaza (6) 18/11/97 22,535 77% 488 3,430 7,600 8,045 63,938
Libertador 498 20/12/95 10,533 62% 213 1,224 3,195 3,600 34,992
Maipu 1300 28/09/95 10,325 73% 192 1,135 3,085 3,247 40,831
Laminar Plaza 25/03/99 6,521 90% 256 1,510 2,867 2,557 28,042
Madero 1020 21/12/95 3,075 74% 75 430 1,434 2,047 7,625
Reconquista 823/41 12/11/93 6,100 0% 0 1,506 1,637 17,480
Suipacha 652/64 22/11/91 11,453 45% 51 296 903 1,569 9,968
Edificios Costeros 20/03/97 6,389 31% 25 220 1,082 1,122 23,488
Costeros Dique IV 29/08/01 5,437 48% 51 392 949 0 17,551
Others (7) - 3,556 45% 54 337 885 936 9,145
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SUBTOTAL 85,924 59% 1,405 8,974 23,506 24,760 253,060
OTHER RENTAL PROPERTIES
Commercial Properties (8) 4,076 98% 5 101 1,973 2,762 1,891
Other Properties (9) 34,015 100% 72 463 1,372 1,662 6,510
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SUBTOTAL 38,091 100% 77 564 3,345 4,424 8,401
RELATED EXPENSES
MANAGEMENT FEES 335 751 707
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TOTAL OFFICES AND OTHER (10) 124,015 72% 1,482 9,873 27,602 29,891 261,461
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Notes:
(1) Total leasable area for each property. Excludes common areas and parking.
(2) Calculated dividing occupied square meters by leasable area.
(3) Agreements in force as of 12/31/02 were computed.
(4) Total consolidated leases, according to the RT4 method, reexpressed as from
12/31/02. Excludes gross income tax deduction.
(5) Cost of acquisition, plus improvements, less accumulated depreciation, plus
adjustment for inflation as of 12/31/02.
(6) Through Inversora Bolivar S.A.
(7) Includes the following properties: Madero 942, Av. de Mayo 595/99, Av.
Libertador 602 y Sarmiento 517 (through our Company).
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Cumulative revenues of fiscal years 2002 and 2001 additionally include the
revenues from Puerto Madero Dock 5 (fully sold). The revenues of fiscal
year 2001 additionally include the revenues from Avenida de Mayo 701 and
Puerto Madero Dock 6 (fully sold).
(8) Includes the following properties: Constitucion 1111 and Alsina 934/44
(through our Company). Cumulative revenues additionally include: In fiscal
years 2002 and 2001, the revenues from Santa Fe 1588 and Rivadavia 2243
(fully sold). In fiscal years 2002 and 2001, the revenues from Rivadavia
2243. In fiscal year 2001 the revenues from Sarmiento 580 and Montevideo
1975 (fully sold).
(9) Includes the following properties: the Santa Maria del Plata facilities
(former Ciudad Deportiva de Boca Juniors, through the Company - only rents
are included since book value is reflected on the Developments table) -
Thames, units in Alto Palermo Plaza and units in Alto Palermo Park (through
Inversora Bolivar S.A). Cumulative revenues include: In fiscal years 2001,
the revenues from Serrano 250 (fully sold).
(10) Corresponds to the "Offices and Other Rental Properties" business unit
mentioned in Note 4 to the Consolidated Financial Statements. Excludes
gross income tax deduction.
II. SHOPPING CENTERS - ALTO PALERMO S.A ("APSA")
As of December 31, 2002, our share in APSA, the leading shopping center company
in Argentina, was 49,9%. Notwithstanding, by the end of the second quarter of
fiscal year 2003, we acquired 3.4 million additional shares of APSA, increasing
our ownership to 54.9%.
As of December 31, 2002, total revenues were Ps.53.2 million, i.e., 56.4% less
than for the same period of the previous year. The net income for the six-month
period was Ps.52.8 million, in contrast to the Ps.47.7 million loss for the same
period of the previous year.
The macroeconomic context has been favorable for APSA during this quarter. The
index measuring consumers' confidence reverted the negative trend shown since
early 2001 to reach a 29.6% increase during the last quarter of 2002. On the
other hand, retail inflation, which, during the first nine months of the year
had seriously undermined consumers with a 39.7% increase during the last three
months of 2002, showed a significant deceleration, reaching an additional
increase of only 0.9%. Another variable which positively affected our business
was the increase of tourism in Argentina. By means of strategic marketing
actions, the Company was able to channel to its Shopping Centers the increased
flow of tourists, a kind of public with higher purchasing power and higher
average consumption.
In this way, our lessees' sales were significantly fostered during the three
months ended December 31, 2002, causing them to reach their highest historic
performance in nominal terms by totaling Ps.271.5 million, equivalent to 51.9%
more than the invoicing during the quarter ended December 31, 2001 and 13.9%
higher than the invoicing during the quarter ended December 31, 2000.
On the other hand, the improvement in our lessees' business caused no allowance
to be created for bad debts (excluding the bad debt allowance provided by
Tarshop transactions) and allowed us to recover Ps.1.7 million of the amount
previously provided for. This represents a considerable contrast with the
Ps.19.0 million loss provided for in the six month period ended December 31,
2001.
In view of our lessees' revenues recovery, during this quarter we continue to
apply the Referential Stabilization Coefficient ("CER") upon "pesified"
agreements and reinstated the key money charge upon execution or renewal of
lease agreements in our shopping centers.
TARJETA SHOPPING
During this quarter, Tarshop S.A., the credit card company in which the Company
holds an 80% interest, had a 26.4% decrease in its credit card portfolio
(including securitized receivables), from Ps. 71.6 million as of December 31,
2001 to Ps. 52.8 million as of December 31, 2002. In addition, the number of
card holders decreased by 1,753 during this period, amounting to 148,619.
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Although Tarjeta Shopping revenues, which were affected by the Argentine
financial crisis, experienced a 57.2% drop during the six month period from Ps.
27.8 million as of December 31, 2001 to Ps. 11.9 million as of December 31,
2002, Tarshop collection evidenced a 22.7% improvement in the bad debt
allowance, from Ps. 7.5 million to Ps. 5.8 million, respectively. In addition,
an improvement of the situation was evidenced in this respect during the last
three months of 2002 as compared to the immediately preceding quarter, as the
charge decreased by 64.2%.
Tarjeta Shopping's share in credit card sales at Alto Palermo, Alto Avellaneda
and Abasto de Buenos Aires as of December 31, 2002 was 4.8%, 29.4% and 16.3%,
respectively. The credit cards activation rate is approximately 59%.
The chart below presents information on the Company's shopping centers as of
December 31, 2002.
SHOPPING CENTERS
TOTAL RENTAL INCOME FOR THE SIX-MONTH
GROSS PERCENTAGE PERIOD ENDED DECEMBER 31, BOOK
DATE LEASABLE LEASED PS./000 (3) VALUE
OF AREA M2 PS./000
ACQUISITION (1) (2) 2003 2002 2001 (4)
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SHOPPING CENTERS (5)
Alto Palermo 23/12/97 18,146 88% 13,454 23,267 27,482 254,874
Abasto 17/07/94 40,476 97% 9,424 21,864 24,479 219,742
Alto Avellaneda 23/12/97 26,701 97% 4,737 15,017 18,447 95,064
Paseo Alcorta 06/06/97 14,909 86% 6,089 11,696 13,673 74,039
Patio Bullrich 01/10/98 11,623 95% 4,927 8,502 8,493 130,085
Alto NOA Shopping 29/03/95 18,876 88% 855 2,911 2,684 21,343
Buenos Aires Design 18/11/97 11,992 92% 1,127 5,931 6,103 23,115
Fibesa and others (6) 2,003 4,155 5,080 -
Revenues Tarjeta Shopping 11,759 28,216 20,230 -
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TOTAL SHOPPING CENTERS (7) 142,723 93% 54,375 121,559 126,671 818,262
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Notes:
(1) Total leasable area in each property. Excludes common areas and parking
spaces.
(2) Calculated dividing occupied square meters by leasable area.
(3) Total consolidated rents, according to RT4 method, reexpressed as of
12/31/02. Excludes gross income tax deduction.
(4) Cost of acquisition plus improvements, less accumulated depreciation,
plus adjustment for inflation as of 12/31/02.
(5) Through Alto Palermo S.A.
(6) Includes revenues from Fibesa S.A. and Alto Invest.
(7) Includes revenues from Fibesa S.A. and Alto Invest.
(8) Corresponds to the "Shopping Centers" business unit mentioned in Note 4
to the Consolidated Financial Statements. Excludes gross income tax
deduction.
III. SALES AND DEVELOPMENTS
Revenues from this segment were of Ps.21.5 million during the six-month period
ended December 31, 2002, as compared to Ps.23.3 million recorded during the same
period of fiscal year 2002. This decrease mainly results from the Company's
reduced stock of units available for sale, because of the interruption in the
launching of new projects.
ABRIL, HUDSON, PROVINCE OF BUENOS AIRES. During the quarter ended December 31,
2002, 13 lots of Abril were sold. 19 of the 20 neighborhoods projected for all
the development were being marketed, with 88% of the lots in such neighborhoods
sold. There were 120 houses under construction and 500 finished houses.
The following chart illustrates IRSA's development properties as of December 31,
2002.
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DEVELOPMENT PROPERTIES
AREA
DATE ESTIMATED COST/ DESTINED TOTAL PERCENTAGE PERCENTAGE ACCUMULATED
OF REAL COST FOR SALES UNITS OR CONSTRUCTED SOLD SALES
ACQUISITION (PS. 000) (1) (M2) (2) LOTS (3) (4) (PS.000) (5)
APARTMENT COMPLEXES
Torres Jardin 18/7/96 56,163 32,244 490 100% 98% 69,469
Torres de Abasto (8) 17/7/94 74,259 35,630 545 100% 99% 108,430
Palacio Alcorta 20/5/93 75,254 25,555 191 100% 100% 76,024
Concepcion Arenal 20/12/96 14,958 6,913 70 100% 97% 11,433
Alto Palermo Park (9) 18/11/97 35,692 10,654 73 100% 90% 42,769
Other (10) 49,827 23,900 184 100% 97% 53,005
SUBTOTAL 306,153 134,896 1,553 N/A N/A 361,130
RESIDENTIAL
COMMUNITIES
Abril/Baldovinos (11) 3/1/95 129,992 1,408,905 1,273 100% 88% 193,998
Villa Celina I, II y III 26/5/92 4,707 75,970 219 100% 99% 13,851
Villa Celina IV y V 17/12/97 2,432 58,480 181 100% 99% 9,413
Other - - - 0% 0% -
SUBTOTAL 137,131 1,543,355 1,673 N/A N/A 217,262
LAND RESERVE
Dique 3 (12) 9/9/99 10,474 0% - -
Puerto Retiro (9) 18/5/97 82,051 0% - -
Caballito 3/11/97 20,968 0% - -
Santa Maria del Plata 10/7/97 715,952 0% - -
Pereiraola (11) 16/12/96 1,299,630 0% - -
Monserrat (9) 18/11/97 3,400 0% 100% 5,478
Dique 4 (ex Soc del Dique) 2/12/97 4,653 0% 50% 12,220
Other (13) 4,439,447 0% -
SUBTOTAL 6,576,575 N/A N/A 17,698
OTHER
Sarmiento 580 12/1/94 11,605 2,635 14 100% 100% 10,758
Santa Fe 1588 2/11/94 8,280 2,713 20 100% 100% 8,107
Rivadavia 2243/65 2/5/94 8,106 2,070 4 100% 100% 3,634
Libertador 498 20/12/95 7,397 2,191 3 100% 100% 5,888
Constitucion 1159 16/09/94 2,297 2,430 1 100% 100% 1,973
Madero 1020 21/12/95 9,823 2,768 5 100% 100% 8,094
Madero 940 31/08/94 2,846 772 1 100% 100% 1,637
Other Properties (14) 81,275 44,207 263 100% 99% 104,690
SUBTOTAL 131,629 59,786 311 N/A N/A 144,781
SUBTOTAL 574,913 8,314,612 3,537 N/A N/A 740,871
INTEREST FOR FINANCING PROPERTY SALES - MANAGEMENT FEES
TOTAL (15) 574,913 8,314,612 3,537 N/A N/A 740,871
AREA
ACCUMULATED SALES FOR THE SIX-MONTH PERIOD BOOK
ENDED DECEMBER 31, (6) (PS. 000) VALUE
02 01 00 (PS. 000)
(PS. 000) (PS. 000) (PS. 000) (7)
APARTMENT COMPLEXES
Torres Jardin 112 1,617 4,980 547
Torres de Abasto (8) 441 4,280 9,553 607
Palacio Alcorta 1 520 - -
Concepcion Arenal - 107 2,782 218
Alto Palermo Park (9) 914 2,598 - 4,171
Other (10) 404 1,418 1,594 2,003
SUBTOTAL 1,872 10,540 18,909 7,546
RESIDENTIAL
COMMUNITIES
Abril/Baldovinos (11) 7,346 4,750 10,327 15,483
Villa Celina I, II y III 28 (51) 57 43
Villa Celina IV y V - 44 2,012 11
Other - - - -
SUBTOTAL 7,374 4,743 12,396 15,537
LAND RESERVE
Dique 3 (12) - - - 25,781
Puerto Retiro (9) - - - 45,899
Caballito - - - 13,516
Santa Maria del Plata - - - 115,133
Pereiraola (11) - - - 21,711
Monserrat (9) - - 1,790 -
Dique 4 (ex Soc del Dique) - - 12,220 6,115
Other (13) - - - 138,447
SUBTOTAL - - 14,010 366,602
OTHER
Sarmiento 580 - - - -
Santa Fe 1588 - 8,107 - -
Rivadavia 2243/65 - - - -
Libertador 498 2,296 - - -
Constitucion 1159 1,973 - - -
Madero 1020 5,585 - - 1,620
Madero 940 1,637 - - -
Other Properties (14) 731 191 3,266 588
SUBTOTAL 12,222 8,298 3,266 2,178
SUBTOTAL 21,468 23,581 48,581 391,863
INTEREST FOR FINANCING PROPERTY
SALES - MANAGEMENT FEES 121 716 1,763
TOTAL (15) 21,589 24,297 50,344 391,863
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Notes:
(1) Cost of acquisition plus total investment made and/or planned if the
project has not been completed, adjusted for inflation as of 12/31/02.
(2) Total area devoted to sales upon completion of the development or
acquisition and before the sale of any of the units (including parking
and storage spaces, but excluding common areas). In the case of Land
Reserves the land area was considered.
(3) Represents the total units or plots upon completion of the development
or acquisition (excluding parking and storage spaces).
(4) The percentage sold is calculated dividing the square meters sold by
the total saleable square meters.
(5) Includes only cumulative sales consolidated by the RT4 method, adjusted
for inflation as of 12/31/02.
(6) Corresponds to the Company's sales consolidated by the RT4 method,
adjusted for inflation as of 12/31/02. Excludes gross income tax
deduction.
(7) Cost of acquisition plus improvement plus activated interest, adjusted
for inflation as of 09/30/02.
(8) Through APSA S.A.
(9) Through Inversora Bolivar S.A.
(10) Includes the following properties: Dorrego 1916 (fully sold through our
Company), Republica de la India 2785 (fully sold), Arcos 2343, Fco.
Lacroze 1732 (fully sold), Yerbal 855, Pampa 2966 J.M. Moreno 285
(through Baldovinos) and units for sale in Alto Palermo Plaza (through
Inversora Bolivar).
(11) Directly through our Company and indirectly through Inversora Bolivar
S.A.
(12) Through Bs As Trade & Finance S.A.
(13) Includes the following land reserves: Torre Jardin IV, Constitucion
1159, Padilla 902, and Terreno Pilar (through our Company), and
Pontevedra, Mariano Acosta, Merlo, Intercontinental Plaza II, Terrenos
Benavidez (through Inversora Bolivar S.A.) and Terrenos Alcorta,
Neuquen, Rosario, Caballito and the Coto project (through APSA S.A.).
(14) Includes the following properties: Sarmiento 517 (through our Company),
Puerto Madero Dock 13, Puerto Madero Dock 5, Puerto Madero Dock 6, Av.
De Mayo 701, Rivadavia 2768, Serrano 250; Montevideo 1975 (Rosario)
(fully sold through our Company).
(15) Corresponds to the "Sales and Developments" business unit mentioned in
Note 4 to the Consolidated Financial Statements. Excludes gross income
tax deduction.
IV. HOTELS
Despite the low income that has been historically generated by this business
segment, the devaluation of the Peso has brought about an increase in the inflow
of tourists in Argentina, turning this segment into a more profitable
alternative. This shift has been more intensely sensed as from the beginning of
fiscal year 2003, with a significant increase in the occupancy rate of all of
our hotels.
The Llao Llao Hotel has undergone a successful winter season and during summer
time the same trend is being observed. Tourists from all over the world visit
our country so as to get to know this famous hotel and the surrounding
landscape. In order to satisfy all of our guests needs we have built an outdoors
swimming pool of gigantic dimensions that has got a heating system, enabling its
use during winter as well.
Total revenues from the hotel segment amounted to Ps.16.9 million over the
six-month period ended December 31, 2002, against Ps.21.4 million recorded over
the same period in fiscal year 2002.
Because of the implementation of the new RT4 consolidation method, as from June
2002, revenues from Llao Llao hotel are no longer consolidated.
The chart below shows information regarding our Company's hotels estimated for
the three-month period ended December 31, 2002.
CONSOLIDATED HOTELS
BOOK VALUE AS
HOTEL DATE OF NUMBER OF AVERAGE AVE. PRICE ACCUMULATED SALES AS OF OF DECEMBER
ACQUISITION ROOMS OCCUPANCY PER ROOM DECEMBER 31, (PS. 000)(2) 31, 2002 (3)
% (1) PS. 2002 2001 2000 (PS. 000)
------------------ --------- ----------- --------- ---------- ------- -------- --------- --------------
Inter-Continental 11/97 312 50 250 10,947 12,984 21,440 58,297
Sheraton Libertador 3/98 200 47 229 5,611 8,404 12,655 40,956
Piscis (4) 9/02 98 N/D N/D - - - 5,139
----------- --------- ---------- ------- -------- --------- --------------
TOTAL 610 N/D N/D 16,558 21,388 34,095 104,392
Notes:
(1) Accumulated average for the period.
(2) Corresponds to our total sales consolidated under the RT4 method
adjusted by inflation as of 12/31/02. It does not include gross income
tax deduction.
(3) Represents 100% of the hotel's book value including facilities and
goodwill.
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(4) The average occupation and the average price per room are not
available to date.
NON CONSOLIDATED HOTELS
HOTEL DATE OF NUMBER OF AVERAGE AVG. ACCUMULATED SALES AS OF BOOK VALUE AS
ACQUISITION ROOMS OCCUPANCY PRICE DECEMBER 31, (PS. 000) (2) OF DECEMBER
PER ROOM 31, 2002 (3)
% (1) PS. 2002 2001 2000 (PS. 000)
---------------- ---------- ------------ ---------- --------- -------- ------- ---------- -------------
Llao Llao 6/97 158 66 416 11,846 9,274 10,200 12,806
TOTAL (4) 768 N/A N/D 28,404 30,622 44,295 117,198
Notes:
(1) Accumulated average in the period.
(2) Although Llao Llao Hotel's sales are no longer consolidated, we
consider it is relevant to include them. It does not represent IRSA's
effective participation.
(3) The book value represents the value of our investment.
(4) It includes the total consolidated hotels plus Llao Llao, which is no
longer consolidated.
V. FINANCIAL TRANSACTIONS AND OTHERS
IMPACT OF EXCHANGE RATE FLUCTUATIONS ON THE COMPANY'S FINANCIAL POSITION - Our
dollar-denominated liabilities have been positively affected by the 11% Peso
appreciation during the six-month period ended December 31, 2002, generating a
positive result for our Company of Ps.157.7 million. The exposure of our assets
to this same macroeconomic indicator during the same period in fiscal year 2002
generated a loss of Ps.22.3 million. The net result generated by the
appreciation of the Peso was of Ps. 135.4 million and is registered under
"Financial Results". It considerably explains the gain for this period.
RESTRUCTURING OF OUTSTANDING DEBT - On November 15, 2002, we signed a
Refinancing Framework Agreement and on November 21, 2002, the operation was
concreted with our six bank creditors (Banca Nazionale del Lavoro, BankBoston,
Banco Ciudad, HSBC, Banco Itau and Banco Nacion) to refinance the Syndicated US$
80 million Loan and the outstanding US$ 37.0 million Floating Rate Notes under
the following scheme:
a. US$ 13.6 million cash down payment reducing the principal;
b. US$ 15.0 million of the 8% Convertible Notes due 2007
subscribed by BankBoston swapping old debt;
c. US$ 37.4 million Secured Floating Rate Notes due 2009 with an
interest rate of 90-day LIBOR plus 200 basic points. These
Notes are secured with a first priority mortgage on some of
our real estate properties for a 50% value of the debt; and
d. US$ 51.0 million Unsecured Credit Facility due 2009. 69% of
the Facility bears an interest rate of 90-day LIBOR plus 200
basic points while the remaining bears a fixed step up rate
ranging from 5.5% to 6.5%.
ISSUE OF BONDS CONVERTIBLE INTO ORDINARY SHARES OF OUR COMPANY - On November 21,
2002, the Company's ended its successful offering of up to US$ 100 million
Convertible Notes. These Convertible Notes are accompanied by non-detachable
warrants that enable the purchase of additional shares of our common stock. They
bear an annual 8% interest and mature in November 2007. The conversion price is
of US$ 0.5450 per share, meaning that every convertible note can be exchanged
for 1.8349 common shares. The proceeds of this offering have been mostly used to
cancel and restructure our liabilities outstanding at that moment, remaining a
US$ 55 million cash position for working capital.
GOLDMAN SACHS DEBT CANCELLATION - On November 4, 2002 we have cancelled our debt
with GSEM/AP Holdings, LP (Goldman Sachs), consisting in US$ 16.3 million of
principal plus accrued interest as of today, for a total of US$ 11.1 million.
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DISTRIBUTION OF TREASURY SHARES - As of December 19, 2002, 4,587,285 treasury
shares of our Company have been distributed among the shareholders,
proportionally to their holdings. This distribution represents a 2.21% of the
outstanding capital stock.
ADJUSTMENT OF CONVERSION PRICE OF CONVERTIBLE NOTES DUE 2007 - As a result of
the distribution of 4,587,285 treasury shares, the Company has adjusted the
conversion price of the Notes according to what has been stipulated in the
Indenture. Due to such adjustment the conversion price of the Convertible Notes
was changed from US$ 0.5571 to US$ 0.5450 and the exercise price for the
warrants was changed from US$ 0.6686 to US$ 0.6541. This adjustment is in force
as from December 20, 2002.
PURCHASE OF APSA'S SHARES AND CONVERTIBLE NOTES - During January 2003, we have
acquired 3.4 million of additional shares of APSA, thus increasing our ownership
to 54.9%. Moreover, we have acquired 2.6 million of APSA's Convertible Notes
that together with the 27,324,848 convertible notes subscribed at the moment of
the issuance, amount to 59.9% of the convertible notes issued by our subsidiary.
HOTELES ARGENTINOS LOAN - Our subsidiary, Hoteles Argentinos, owner of
Libertador Hotel, is engaged in a loan with BankBoston N.A. for US$ 12 million.
As from today, there are principal and interest installments that have matured
and have not been paid. We are negotiating in order to reach an agreement
regarding this liability. This is a no-recourse loan against IRSA.
IMPROVEMENT IN THE RATING OF OUR GLOBAL PROGRAM FOR UP TO US$ 250 MILLION - On
January 28, 2002, Fitch Argentina, raised the rating of our Global Program for
up to US$ 250 million, from C (arg) to B- (arg). This raise is a consequence of
our debt restructuring by which we have extended all maturities on a long-term
basis. Our Secured Floating Rate Notes for US$ 37.4 million have been issued
under this program.
IMPROVEMENT IN OUR INDEPENDENT AUDITORS REPORT - PriceWaterhouseCoopers, our
independent auditors, have, due to the restructuring of our debt, deleted from
their actual report on our financial statements the uncertainty regarding the
fact that our Company will keep on being a going concern, which was being
informed since June 2001.
DESCRIPTION OF DEBT (DOES NOT INCLUDE APSA).
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IRSA'S DEBT PRINCIPAL (MM) INTEREST RATE MATURITY
--------------------------------------------------------------------------------
Unsecured Loan Agreement US$ 51 LIBOR + 200 bps Nov-09
Secured Notes US$ 37 LIBOR + 200 bps Nov-09
Hoteles Argentinos S.A. Loan (1) US$ 12 LIBOR + 500 bps Jan-06
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TOTAL DEBT US$ 100
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CONVERTIBLE NOTES US$ 100 8% Nov-07
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(1) Hoteles Argentinos S.A. is a subsidiary in which IRSA detents an 80%.
This is a non-recourse liability against IRSA.
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MATURITY SCHEDULE (DOES NOT INCLUDE APSA & HOTELES ARGENTINOS)
YEAR US$ MM
---- ------
2003 ...... $0
2004 ...... $0
2005 ...... $9
2006 ...... $9
2007 ...... $118 (Convertible Notes US$ 100 (18))
2008 ...... $18
2009 ...... $35
VII. BRIEF COMMENTS ON PROSPECTS FOR THE ONCOMING QUARTER
We believe that the worst has been overcome and, as evidenced by history, deep
crisis bring about opportunities and growth.
Our Company was able to face the adverse conditions arisen during the Argentine
crisis and was one of the very few companies which avoided a default. The
successful subscription of our Convertible Bonds has evidenced the confidence
place upon us both by the domestic and the international markets. Banks have
also contributed to refinance our debt with longer terms and lower interest
rates.
The proceeds from the Convertible Bonds have placed us in a privileged cash
position, which will enable us to take advantage of the opportunities appearing
in the market, especially at a time when property prices have significantly
dropped.
As regards Argentina, although the refinancing of debt maturities with the IMF
enables to reduce the economic uncertainty, the political-electoral map
continues to be complex, it being the main obstacle to prepare macroeconomic
forecasts.
Luiz Inacio da Silva's administration in Brazil showed a good start, which is
reflected by the improvement of the main financial indicators, but some risks
still continue to exist.
We are optimistic as to the future. Our cautious performance has caused us to
attain an outstanding position in the market and is its confidence what enables
us to keep on growing. The time of adjustment is coming to an end and as soon as
the conditions are given we will put into practice the projects postponed by the
recession.
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This press release contains statements that constitute forward-looking
statements, in that they include statements regarding the intent, belief or
current expectations of our directors and officers with respect to our future
operating performance. You should be aware that any such forward looking
statements are no guarantees of future performance and may involve risks and
uncertainties, and that actual results may differ materially and adversely from
those set forth in this press release. We undertake no obligation to release
publicly any revisions to such forward-looking statements after the release of
this report to reflect later events or circumstances or to reflect the
occurrence of unanticipated events.
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.................................................................................
If you wish to be included or removed from IRSA or APSA's mailing list, please
send a mail with your data to pvilarino@irsa.com.ar.
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IRSA
CONSOLIDATED FINANCIAL HIGHLIGHTS
FOR THE SIX-MONTH PERIOD ENDED
DECEMBER 31, 2002 AND 2001
(In thousands of Argentine Pesos
expressed in constant currency as of 12/31/02)
SIX MONTHS SIX MONTHS
FY 2003 FY 2002 % CHANGE
INCOME STATEMENT
Corresponds to the consolidated income statement
Sales
Sales and Development 21,465 23,346 -8%
Offices and others 9,580 26,796 -64%
Shopping Centers 52,732 0 100%
Hotels 16,904 21,389 -21%
TOTAL SALES 100,681 71,531 41%
Operating cost (72,831) (33,694) 116%
GROSS INCOME 27,850 37,837 -26%
Selling & Administrative Expenses (26,107) (21,322) 22%
Loss on purchasers rescissions of sales contracts 0 0 0%
Results from operations and holding of real estate assets (775) (4,563) -83%
OPERATING INCOME 968 11,952 -92%
Financial results, net 147,676 (96,023) 254%
Net income in affiliated companies (2,976) (28,187) 89%
Other income (expenses), net 10,765 (2,917) 469%
ORDINARY (LOSS)-INCOME BEFORE TAXES 156,433 (115,175) 236%
Minority Interest (26,783) (1,133) 2264%
Income tax (2,601) (3,260) -20%
ORDINARY (LOSS)-INCOME 127,049 (119,568) 206%
Extraordinary losses 0 0 0%
NET (LOSS)-INCOME 127,049 (119,568) 206%
BALANCE SHEET
Corresponds to the consolidated income statement according to the traditional method.
Cash and bank 33,995 11,857 793%
Investments 227,147 49,444 -14%
Mortgages, notes and other receivables 50,314 124,162 -65%
Inventory 16,308 39,675 -47%
TOTAL CURRENT ASSETS 327,764 225,138 -32%
Mortgages and other receivables 50,436 46,195 -45%
Inventory 9,300 59,512 7%
Investments 429,337 765,040 -48%
Fixed assets and intangible assets, net 1,263,881 470,221 161%
NON CURRENT ASSETS 1,752,954 1,340,968 29%
TOTAL ASSETS 2,080,718 1,566,106 20%
Short-Term debt 63,035 431,113 -85%
TOTAL CURRENT LIABILITIES 128,589 493,115 -74%
Long-term debt 810,917 27,204 2881%
TOTAL NON CURRENT LIABILITIES 849,467 34,045 2395%
TOTAL LIABILITIES 978,056 527,160 86%
Minority interest 462,035 87,616 427%
SHAREHOLDERS' EQUITY 640,627 951,330 -33%
SELECTED RATIOS
Debt/Equity Ratio 152.7% 55.4% 176%
Book value per GDS 30.22 44.87 -33%
Net Income per GDS 5.99 (5.64) 206%
EBITDA (000) (period) - See Note 2 55,440 6,562 745%
EBITDA (000) (last 12 months) - See Note 2 91,881 63,700 44%
EBITDA per GDS 2.62 0.31 745%
EBITDA /Net Income 0.44 (0.05) 895%
Weighted Average of GDSs 21,199,927 21,199,927 0%
Note 1: The income statement is consolidated in a proportional basis whereas the
EBITDA is prepared with information that has been consolidated by the RT4
method, which is the one defined in the Company's covenants.
Note 2: The period's EBITDA and the twelve months EBITDA have not been audited.
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IRSA
INFORMATION BY BUSINESS UNIT
FOR THE SIX-MONTH PERIOD ENDED
DECEMBER 31, 2002 AND 2001
(IN THOUSANDS OF ARGENTINE PESOS DENOMINATED
IN CONSTANT CURRENCY AS OF 12/31/02)
SALES AND OFFICES AND SHOPPING
DEVELOPMENTS OTHERS CENTERS
FOR THE SIX-MONTH PERIOD ENDED DECEMBER 31, 2002
Sales 21,465 9,580 52,732
Costs -24,901 -4,369 -34,312
GROSS PROFIT -3,436 5,212 18,420
Administrative Expenses -2,975 -1,370 -8,786
Selling Expenses -1,409 -2 -5,372
Loss on purchasers rescissions of sales contracts - - -
Results from operations and holding of real estate assets -775 - -
OPERATING INCOME -8,595 3,839 4,262
Depreciations and Amortization (b) 1,550 3,055 29,638
FOR THE SIX-MONTH PERIOD ENDED DECEMBER 31, 2001
Sales 23,346 26,796 -
Costs -11,113 -6,464 -
GROSS PROFIT 12,233 20,333 -
Administrative Expenses -6,565 -3,097 -450
Selling Expenses -2,474 -70 -
Loss on purchasers rescissions of sales contracts - - -
Results from operations and holding of real estate assets -4,754 - -
OPERATING INCOME -1,561 17,165 -450
Depreciations and Amortization (b) 629 3,908 -
HOTELS INTERNATIONAL TOTAL
FOR THE SIX-MONTH PERIOD ENDED DECEMBER 31, 2002
Sales 16,904 - 100,681
Costs -9,249 - -72,831
GROSS PROFIT 7,655 - 27,850
Administrative Expenses -4,662 - -17,793
Selling Expenses -1,531 - -8,314
Loss on purchasers rescissions of sales contracts - - -0
Results from operations and holding of real estate assets - - -775
OPERATING INCOME 1,462 - 968
Depreciations and Amortization (b) 2,426 - 36,669
FOR THE SIX-MONTH PERIOD ENDED DECEMBER 31, 2001
Sales 21,389 - 71,531
Costs -16,117 - -33,694
GROSS PROFIT 5,272 - 37,837
Administrative Expenses -6,224 -471 -16,807
Selling Expenses -1,971 - -4,515
Loss on purchasers rescissions of sales contracts - -191 -
Results from operations and holding of real estate assets - -279 -4,563
OPERATING INCOME -2,923 -280 11,953
Depreciations and Amortization (b) 4,006 - 8,543
Notes
(a) Includes offices, retail stores and residential.
(b) Included in the operative result.
For the period ended on December 31, 2002, the RT4 method is being applied,
whereas for the period ended on December 31, 2001, the proportionate
consolidation meted was used.
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IRSA
CONSOLIDATED FINANCIAL HIGHLIGHTS
QUARTERLY INFORMATION
FOR THE SIX-MONTH PERIOD ENDED DECEMBER 2002
(In thousands of Argentine Pesos denominated in
constant currency as of 12/31/02)
I QUARTER II QUARTER FISCAL YEAR
SEP 02 DEC 02 2003
------ ------ ----
INCOME STATEMENT
Corresponds to the proportional consolidated income statement
Sales:
Sales and developments 14,102 7,363 21,465
Offices and other 5,466 4,114 9,580
Shopping Centers 23,005 29,727 52,732
Hotels 7,263 9,641 16,904
International
TOTAL SALES 49,836 50,845 100,681
Operating costs (37,476) (35,355) (72,831)
--------------------------------------------
GROSS INCOME 12,360 15,490 27,850
Selling and administrative expenses (15,782) (10,325) (26,107)
Loss on purchasers rescissions of sales contracts
Results from operations and holding of real
estate assets (775) 0 (775)
OPERATING INCOME (4,198) 5,166 968
Financial result, net 79,524 68,152 147,676
Net income in affiliated companies 344 (3,320) (2,976)
Other income (expenses) 9,448 1,317 10,765
ORDINARY (LOSS)-INCOME BEFORE TAXES 85,118 71,315 156,433
Minority interest (16,791) (9,992) (26,783)
Income tax (1,630) (971) (2,601)
ORDINARY (LOSS)-INCOME 66,697 60,352 127,049
Extraordinary loss
NET (LOSS)-INCOME 66,697 60,352 127,049
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EXECUTIVE OFFICE
Bolivar 108 1o Floor
+(54 11) 4323 7555
Fax +(54 11) 4323 7597
www.irsa.com.ar
C1066AAB - City of Buenos Aires - Argentina
INVESTOR RELATIONS
MARCELO MINDLIN - Vice Chairman y CFO
GUSTAVO MARIANI - Financial Manager
+(54 11) 4323 7513
LEGAL ADVISORS
ESTUDIO ZANG, BERGEL & VINES
+(54 11) 4322 0033
Florida 537 18o Floor
C1005AAK -City of Buenos Aires - Argentina
REGISTER AND TRANSFER AGENT
CAJA DE VALORES S.A.
+(54 11) 4317 8900
25 de Mayo 362
C1002ABH - City of Buenos Aires - Argentina
INDEPENDENT AUDITORS
PRICEWATERHOUSECOOPERS ARGENTINA
+(54 11) 4319 4600
Av. Alicia Moreau de Justo 240 2o Floor
C1107AAF - City of Buenos Aires - Argentina
DEPOSITARY AGENT
BANK OF NEW YORK
+(1 212) 815 2296
101 Barclay Street
10286 - New York, NY - United States of America
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