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 November, 2003
Irsa Inversiones y Representaciones Sociedad Anónima
(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)
Bolívar 108
(C1066AAB)
Buenos Aires, Argentina
(Address of principal executive offices)
Form 20-F þ Form 40-F ¨
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 þ
IRSA INVERSIONES Y REPRESENTACIONES SOCIEDAD ANÓNIMA
(THE “COMPANY”)
REPORT ON FORM 6-K
Attached is the English version of the press release related to the quarterly financial statements of the three-month period ended on September 30, 2003.
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IRSA and APSA cordially invite you to participate in their
First Quarter Fiscal Year 2004 Results Conference Call
Friday, November 14, 2003 at 10:00 am
Eastern Standard Time
The call will be hosted by:
Alejandro Elsztain, Director
Gustavo Mariani, Finance Manager
If you would like to participate, please call:
1-888-792-8459 if you are in the US or
1 (973) 409-9255 for international calls
Preferably 10 minutes before the call is due to begin.
The conference will be in English.
PLAYBACK
Monday, November 17, 2003
Please call: 1-877-519-4471 (US)
1 (973) 341-3080 (International)
With the PIN # 4303409
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FOR IMMEDIATE RELEASE
For further information
Marcelo Mindlin – Vice-President & CFO
Alejandro Elsztain – Director
Gustavo Mariani – Finance Manager
+ (54 11) 4323 7513
gm@irsa.com.ar
www.irsa.com.ar
IRSA Inversiones y Representaciones Sociedad Anónima announces its first quarter fiscal year 2004 results, ended on September 30, 2003.
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Operating income totaled Ps. 8.8 million compared to a loss of Ps. 4.7 million in the previous year. | |
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We have prepaid US$ 16 million of our debt due in 2009, obtaining a 32% discount. | |
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The rate of occupancy at our shopping centers continued to increase, reaching 97%. Our lessees increased their sales during the period by 27% in real terms, with a positive impact on our collections. | |
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During the quarter, the EBITDA of APSA increased by 53% to Ps. 24.2 million as compared to the previous year. | |
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The improved outlook perceived as a consequence of the economic recovery, encourage us to continue to plan the launching of new projects. | |
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Buenos Aires, November 11, 2003—IRSA Inversiones y Representaciones Sociedad Anónima (NYSE: IRS) (BCBA: IRSA), the leading real estate company in Argentina, announces its first quarter fiscal year 2004 results, ended on September 30, 2003.
Comment on the fiscal year operations
The quarter ended on September 30, 2003 was marked by certain stability in the country, both at macroeconomic and political level. Exchange rates and inflation seem to have stabilized while the rate of economic recovery would have accelerated to 2.8%—quarterly rate, indicating a projected 7.1% growth for calendar year 2003.
The prudent short-term economic policy was decisive for this recovery. The proper liquidation of international reserves and the extraordinarily positive trade balance prevented the rampant inflation previously anticipated. In addition, the considerable increase in tax revenues from export withholdings and the tax on financial transfers resulted in a highest historic primary tax surplus of 2.5% of the GDP.
Results for the first quarter of fiscal year 2004 showed a Ps. 15.2 million loss as compared to a Ps. 58.0 million profit during the same quarter of fiscal year 2003. As in the first quarter of the previous fiscal year, these results are mainly due to fluctuations in the peso, which depreciated 4% during the period under review, generating a Ps. 14.1 million net loss in exchange differences. In addition, operating results showed a Ps. 8.8 million profit, as compared to a Ps. 4.7 million loss during the previous period.
Consolidated net sales for the three-month period totaled Ps. 49.1 million, as compared to Ps. 51.1 million during the same period of the previous year.
As announced at the end of the previous quarter on July 23, 2003, and after making a proposal for the repurchase of our debt to all the banks which are holders of such debt, we proceeded to the early repayment of US$ 16 million corresponding to the Syndicated Loan (Loan Agreement US$ 51,000,000) due end of November 2009 to HSBC Bank Argentina S.A. The transaction was settled for a total amount of US$ 10.9 million, 68% of the nominal value of the debt, with a US$ 5.1 million discount.
The strong growth of the Argentine economy has led us to accelerate the launching of new development projects directed to the high-quality residential segment. In addition, we anticipate that the occupancy rate in our office buildings will continue to improve, accompanying the considerable recovery of those sectors of the economy that are based on exports and imports substitution; additionally, we have positive expectations in relation to sustained growth in the tourism industry which will benefit our hotels portfolio and will attract high-income consumers to our shopping centers.
Analysis of results
Net results for the three-month period ended on September 30, 2003 showed a Ps. 15.2 million loss or Ps. 0.07 loss per share, as compared to a Ps. 58.0 million profit, or Ps. 0.28 per share for the same period of fiscal year 2003.
Consolidated net sales for the three-month period totaled Ps. 49.1 million, as compared to Ps. 50.2 million during the same period of the previous year.
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The contribution of the various segments to net sales was as follows: Sales and Developments Ps. 6.0 million, Offices and Other Lease Properties Ps. 3.7 million, Shopping Centers Ps. 31.2 million and Hotels Ps. 8.3 million. The operating profit for the period amounted to Ps. 8.8 million.
The Financial Statements ended on September 30, 2003 show the effects of inflation up to February 28, 2003, the date on which the adjustment for inflation of financial statements was eliminated as established by the Argentine Securities Commission. The corresponding amounts for the period ended on September 30, 2003 have been restated at year-end, adjusted by the 0.9938 wholesale inflation coefficient during September 2002 and February 2003.
EBITDA for the three-month period ended on September 30, 2003 amounted to Ps. 21,4 million, 1% lower than the same quarter of last fiscal year.
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First quarter of fiscal year 2004 highlights, including significant operations occurred after the end of the period.
I. Offices and Other Rental Properties
During the period ended on September 30, 2003, the rent from lease properties totaled Ps. 3.7 million, as compared to Ps. 5.7 million recorded during the same period of fiscal year 2003.
Average occupancy reached 70%, which represents a slight change with respect to the same period of the previous fiscal year. It should be mentioned that the occupancy rate for our properties is above the market average.
Although occupancy rates show slight variations, we consider that they show a favorable trend and are in line with the strong growth indicators of the economy, which suggest a significant increase in the activity over the next months.
The chart below presents information on the Company’s offices and other rental properties as of September 30, 2003.
(In thousands of Argentine Pesos expressed in constant currency as of 02/28/03)
| Date of | Leasable Area (m2) |
Occupancy | Monthly Rental income |
Total rental income for the period ended September 30, Ps. 000 (4) of Fiscal Year |
Book Value Ps. 000 | ||||||||||||
| acquisition | (1) | Rate (2) | Ps./000 (3) | 2004 | 2003 | 2002 | Ps./000 (5) | ||||||||||
| Oficinas |
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| Inter-Continental Plaza (6) |
18/11/97 | 22,535 | 62 | % | 381 | 1.078 | 2.236 | 3.852 | 63,385 | ||||||||
| Libertador 498 |
20/12/95 | 10,533 | 62 | % | 209 | 547 | 635 | 1.656 | 35,295 | ||||||||
| Maipú 1300 |
28/09/95 | 10,325 | 73 | % | 168 | 483 | 567 | 1.541 | 40,592 | ||||||||
| Laminar Plaza |
25/03/99 | 6,521 | 90 | % | 196 | 586 | 781 | 1.462 | 27,916 | ||||||||
| Madero 1020 |
21/12/95 | 1,359 | 16 | % | 2 | 77 | 202 | 888 | 3,809 | ||||||||
| Reconquista 823/41 |
12/11/93 | 6,100 | 0 | % | 0 | 0 | 0 | 758 | 17,000 | ||||||||
| Suipacha 652/64 |
22/11/91 | 11,453 | 45 | % | 46 | 113 | 148 | 543 | 9,897 | ||||||||
| Edificios Costeros |
20/03/97 | 6,389 | 74 | % | 80 | 151 | 97 | 557 | 17,856 | ||||||||
| Costeros Dique IV |
29/08/01 | 5,437 | 48 | % | 50 | 149 | 289 | 272 | 17,498 | ||||||||
| Otros (7) |
— | 3,556 | 45 | % | 46 | 151 | 205 | 446 | 8,730 | ||||||||
| Subtotal |
84,208 | 57 | % | 1.178 | 3.335 | 5.160 | 11.975 | 241,978 | |||||||||
| Other Rental Properties |
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| Commercial Properties (8) |
4,062 | 98 | % | 12 | 33 | 80 | 849 | 1,879 | |||||||||
| Other Properties (9) |
33,329 | 100 | % | 42 | 126 | 247 | 717 | 3,896 | |||||||||
| Subtotal |
37,391 | 100 | % | 54 | 159 | 327 | 1.566 | 5,775 | |||||||||
| Related Expenses |
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| Management Fees |
170 | 171 | 385 | ||||||||||||||
| TOTAL OFFICES AND OTHER (10) |
121,599 | 70 | % | 1,232 | 3,664 | 5,658 | 13,926 | 247,753 | |||||||||
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 09/30/03 were calculated. |
| (4) | Total consolidated leases, according to the RT21 method, restated as of 02/28/03. |
| (5) | Cost of acquisition, plus improvements, less accumulated depreciation, plus adjustment for inflation as of 02/28/03. |
| (6) | Through Inversora Bolívar S.A. |
| (7) | Includes the following properties: Madero 942, Av. de Mayo 595/99, Av. Libertador 602 y Sarmiento 517 (through our Company). Cumulative revenues for fiscal years 2002 additionally include revenues from Puerto Madero Dock 5 (fully sold). |
| (8) | Includes the following properties: Constitución 1111 and Alsina 934/44 (through our Company). Cumulative revenues also include: In fiscal years 2002, the revenues from Santa Fe 1588 and Rivadavia 2243 (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 Park (through Inversora Bolívar S.A). Cumulative revenues include: In fiscal years 2002 and 2003, the revenues from Alto Palermo Plaza (fully sold). |
| (10) | Corresponds to the “Offices and Other Rental Properties” business unit mentioned in Note 4 to the Consolidated Financial Statements. |
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II. Shopping Centers—Alto Palermo S.A (“APSA”).
As of September 30, 2003, we had a 54,95% interest in Alto Palermo S.A. (APSA), the company that operates our shopping centers. Total income at September 30, 2003 amounted to Ps. 31.2 million, that is, 27.2% higher than those in the same period of the previous year. This is mainly attributable to the increase in basic rent charged to our lessees and increased occupancy.
Net Loss for the three-month period was Ps. 3.9 million, as compared to the Ps. 15.3 million profit for the same period of the previous year. The results for the three months ended on September 30, 2002 had been positively affected by the Ps. 27.8 million income from Financial Results and by the Ps. 10.6 million income from the repurchase of Company’s Bonds. In addition, the result for the first quarter of Fiscal Year 2004 was adversely affected by the depreciation of local currency against the U.S. Dollar, from Ps. 2.80 per US$ 1.00 to Ps. 2.915 per US$ 1.00, which gave rise to negative Exchange Differences for Ps. 5.2 million principally on the US$ 49.8 million outstanding debt. After the end of the quarter, the exchange rate has returned to the levels prevailing at the end of Fiscal Year 2003, which would result in a profit for the second quarter of Fiscal Year 2004 if the exchange rate remains at around Ps. 2.80 per U.S. Dollar.
Gross profit for the period showed a significant increase to Ps. 14.3 million, 68.5% higher than gross profit for the same period of the previous year. This result is basically due to the fact that costs did not rise as much as income.
In this way, the consolidated Operating Result for the period was a Ps. 8.1 million profit as compared to a Ps. 2.0 million loss for the same period of the previous year. Additionally, this was the result of a steep drop in bad debt charges, which fell from Ps. 4.5 million in the first quarter of Fiscal Year 2003 to Ps. 0 in the period ended on September 30 of the current year.
APSA Tenenats continued to increase their sales, reaching Ps. 255.1 million in the three-month period ended on September 30, 2003. These sales are 33% higher in nominal terms than those for the same period of the previous year, and 27% higher in real terms1.
| 1 | Deflated by the Consumers’ Price Index prepared by the National Institute of Statistics and Census (“INDEC”). |
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The business success of APSA tenants continues to increase demand for space at APSA Shopping Centers. In this way, we have increased occupancy to 96.7%, surpassing the levels prevailing before the crisis. The evolution of this variable not only shows an improvement in our business, but also the excellent quality of our Shopping Centers portfolio. Competitors’ occupancy in the Metropolitan Area of Buenos Aires only reaches 91.1%2.
Due to the improved situation of our tenants, we continue to apply the Reference Stabilization Coefficient (“CER”) to most “pesified” agreements. Thus, Shopping Centers such as Abasto de Buenos Aires has extended the application of the CER from 10% of their tenants as of November 2002 to 100% of tenants as of September 2003.
Additionally, the current bonanza in the retail sector allows us to enter into new lease agreements under better conditions, e.g. increasing the “goodwill charge” required for the renewal or execution of new agreements at our Shopping Centers.
On the other hand, the improvement in our tenants’ economic and financial situation caused no allowance to be created for bad debts, which as of September 30, 2002 amounted to Ps. 4.5 million. In addition, in accordance to our management reports, the Company’s operating cash flow reached highest historic levels at a monthly average of Ps. 7.5 million. These high levels are partially attributable to the excellent collection of bad debts, as a result of which the Company’s revenues are higher than its invoicing.
Tarjeta Shopping
Tarshop S.A. is the credit card company in which we have an 80% interest Through APSA.
During the quarter ended on September 30, 2003, our credit card business unit reverted the negative results shown on its financial statements during several quarters. In this way, for the first quarter of Fiscal Year 2004, Tarshop S.A. recorded a Ps. 0.5 million profit, as compared to the Ps. 2.8 million loss for the same period of the previous year, a considerable improvement.
This was the result of business restructuring. Our customers’ consumption increased by 66% during the quarter with respect to the same period of the previous year, totaling Ps. 41.8 million. This represents a 58% increase in real terms. The recovery of Tarjeta Shopping as a financial instrument for purchasing is reflected in the fact that the increase in sales made through this payment method is significantly higher than the increase in sales of our Shopping Centers.
Additionally, in relation to collections, short-term bad debts as of September 30, 2003 were even lower than the levels prevailing before the crisis. Bad debts three months past due, which exceeded 11% during 2002, decreased to only 3.1% by the end of the quarter.
At September 30, 2003, the number of members and the credit portfolio, including securitized coupons, totaled 151,350 members and Ps. 48.1 million, respectively. The level of card activation reached 52%.
| 2 | According to company estimates based on information derived from the Shopping Centers Research conducted by the INDEC. |
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The chart below presents information on APSA’s Shopping Centers as of September 30, 2003.
Shopping Centers
| Date of | Gross Area m2 |
Percentage leased |
Total rental income for the ended September 30, of Fiscal Year, Ps./000 (3) |
Book Area m2 | |||||||||||
| Acquisition | (1) | (2) | 2004 | 2003 | 2002 | (4) | |||||||||
| Shopping Centers (5) |
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| Alto Palermo |
23/12/97 | 18,146 | 94 | % | 6,558 | 6,235 | 12,018 | 242,874 | |||||||
| Abasto |
17/07/94 | 40,476 | 99 | % | 6,074 | 4,905 | 10,924 | 217,395 | |||||||
| Alto Avellaneda |
23/12/97 | 28,251 | 100 | % | 3,156 | 2,548 | 7,525 | 103,196 | |||||||
| Paseo Alcorta |
06/06/97 | 14,949 | 92 | % | 3,461 | 2,599 | 6,045 | 71,756 | |||||||
| Patio Bullrich |
01/10/98 | 11,320 | 96 | % | 2,796 | 2,527 | 4,418 | 126,273 | |||||||
| Alto NOA |
29/03/95 | 18,904 | 95 | % | 587 | 488 | 1,650 | 23,488 | |||||||
| Buenos Aires Design |
18/11/97 | 14,975 | 96 | % | 1,318 | 448 | 3,185 | 25,214 | |||||||
| Fibesa and others (6) |
1,065 | 658 | 2,359 | — | |||||||||||
| Revenues Tarjeta Shopping |
6,137 | 3,440 | 15,310 | — | |||||||||||
| TOTAL SHOPPING CENTERS (7) |
147,021 | 97 | % | 31,152 | 23,848 | 63,434 | 810,196 | ||||||||
(In thousands of Argentine Pesos expressed in constant currency as of 02/28/03)
Notes:
| (1) | Total leasable area in each property. Excludes common areas and parking spaces. |
| (2) | Calculated dividing occupied square meters by leaseable area. |
| (3) | Total consolidated rents, according to RT21 method, reexpressed as of 02/28/03. |
| (4) | Cost of acquisition plus improvements, less accumulated depreciation, plus adjustment for inflation as of 02/28/03. |
| (5) | Through Alto Palermo S.A. |
| (6) | Includes revenues from Fibesa S.A. and Alto Invest. |
| (7) | Corresponds to the “Shopping Centers” business unit mentioned in Note 4 to the Consolidated Financial Statements. |
III. Sales and Developments
During the first quarter of fiscal year 2004, net sales for the sales and developments segment decreased to Ps. 6.0 million, as compared to Ps. 14.3 million during the same period of fiscal year 2003.
The improved prospects that can be perceived as a result of the recovery of the Argentine economy encourage us to plan future developments, which, along with our important stock of ideally located land, will permit us to evaluate and launch new projects over the next months.
Sales
Madero 1020—On August 20, 2003, the deed of conveyance for three stories of the Madero 1020 office building was executed. A total of 2,018 square meters were sold for US$ 1,650,000 at an average of US$ 818 per square meter.
Abril, Hudson, Province of Buenos Aires—During the quarter ended on September 30, 2003, 4 lots of Abril country club were sold. All projected neighborhoods are being marketed and 93% of the lots have been sold. There are 566 completed houses, and 73 houses are under construction.
Sarmiento 517—During the quarter ended on September 30, 2003, one office unit with a surface of 151 square meters was sold for Ps. 151,000.
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Developments
Cruceros, Dique 2—This is a unique project in Puerto Madero. The residential building of 6,400 square meters will be constructed next to the “Edificios Costeros” office building. It is intended for the high-income segment and all common areas have spectacular river views. There will be approximately 50 units with two swimming pools, gymnasium and other amenities. The project is at an advanced stage of completion and we estimate it will be launched by the end of 2003.
Purchase of plot of land at San Martín de Tours—During March 2003, we executed an agreement for the purchase of a plot of land at San Martín de Tours street, Barrio Parque sector, the most exclusive residential area of the city of Buenos Aires. Upon the execution of the bill of sale US$ 80,000 were advanced, and upon execution of the deed of conveyance in June 2003, US$ 230,000 were paid. In addition, on that occasion a mortgage was created in favor of Providence for US$ 750,000 in guarantee of 25% of the functional units that IRSA shall deliver when the building is completed. IRSA plans to build a complex of high-quality “house-type” residential units, a different product among the existing offer. The works will begin in December and we plan that the inauguration and launching for sale will take place in October 2004. The project will be financed with working capital and is intended for the high-income segment.
Below is a detail of property being developed by IRSA as of September 30, 2003.
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| Date of | Estimated cost/ real cost |
Area for sales |
Total lotes |
Percentage | Percentage sold |
Accumulated sales |
Accumulated sales as of September 30 of fiscal year, (6) (Ps. 000) |
Book value | ||||||||||||||||
| acquisition | (Ps. 000) (1) | (m2) (2) | (3) | Constructed | (4) | (Ps. 000) (5) | 04 | 03 | 02 | (Ps. 000) (7) | ||||||||||||||
| (Ps. 000) | (Ps. 000) | (Ps. 000) | ||||||||||||||||||||||
| Residential Apartment |
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| Torres Jardín |
18/7/96 | 56,579 | 32.339 | 490 | 100 | % | 98 | % | 70.028 | — | 29 | 881 | 245 | |||||||||||
| Torres de Abasto (8) |
17/7/94 | 74,810 | 35.630 | 545 | 100 | % | 99 | % | 109.245 | — | 411 | 2.551 | 555 | |||||||||||
| Palacio Alcorta |
20/5/93 | 75,811 | 25.555 | 191 | 100 | % | 100 | % | 76.582 | — | 1 | — | — | |||||||||||
| Concepción Arenal |
20/12/96 | 15,069 | 6.913 | 70 | 100 | % | 99 | % | 11.617 | — | — | — | 42 | |||||||||||
| Alto Palermo Park (9) |
18/11/97 | 35,956 | 10.488 | 73 | 100 | % | 100 | % | 47.467 | — | 814 | 3.306 | — | |||||||||||
| Others (10) |
50,196 | 23.900 | 184 | N/A | 99 | % | 56.976 | — | 213 | 1.429 | 307 | |||||||||||||
| Subtotal |
308,421 | 134.825 | 1.553 | N/A | N/A | 371.915 | — | 1.468 | 8.167 | 1.149 | ||||||||||||||
| Residential Communities |
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| Abril/Baldovinos (11) |
3/1/95 | 130.955 | 1.408.905 | 1.273 | 100 | % | 93 | % | 203.106 | 921 | 3.946 | 3.473 | 10.882 | |||||||||||
| Villa Celina I, II y III |
26/5/92 | 4.742 | 75.970 | 219 | 100 | % | 99 | % | 13.952 | — | — | — | 43 | |||||||||||
| Villa Celina IV y V |
17/12/97 | 2.450 | 58.373 | 181 | 100 | % | 100 | % | 9.505 | 23 | — | 44 | — | |||||||||||
| Others Properties |
— | — | — | N/A | 0 | % | — | — | — | — | — | |||||||||||||
| Subtotal |
138.147 | 1.543.248 | 1.673 | N/A | N/A | 226.563 | 944 | 3.946 | 3.517 | 10.925 | ||||||||||||||
| Land Reserve |
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| Dique 3 (12) |
9/9/99 | 10.474 | 0 | % | — | — | — | — | — | 25.973 | ||||||||||||||
| Puerto Retiro (9) |
18/5/97 | 82.051 | 0 | % | — | — | — | — | — | 46.323 | ||||||||||||||
| Caballito |
3/11/97 | 20.968 | 0 | % | — | — | — | — | — | 13.616 | ||||||||||||||
| Santa María del Plata |
10/7/97 | 715.952 | 0 | % | — | — | — | — | — | 124.594 | ||||||||||||||
| Pereiraola (11) |
16/12/96 | 1.299.630 | 0 | % | — | — | — | — | — | 21.875 | ||||||||||||||
| Dique 4 (ex Soc del Dique) |
2/12/97 | 4.653 | 0 | % | 50 | % | 12.310 | — | — | — | 6.160 | |||||||||||||
| Others (13) |
4.730.288 | 0 | % | — | — | — | — | 131.433 | ||||||||||||||||
| Subtotal |
6.864.016 | N/A | N/A | 12.310 | — | — | — | 369.974 | ||||||||||||||||
| Other |
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| Hotel Piscis |
30/09/02 | 5.231 | 1 | 100 | % | 100 | % | 9.912 | — | — | — | — | ||||||||||||
| Sarmiento 580 |
12/1/94 | 11.691 | 2.635 | 14 | 100 | % | 100 | % | 10.837 | — | — | — | — | |||||||||||
| Santa Fe 1588 |
2/11/94 | 8.341 | 2.713 | 20 | 100 | % | 100 | % | 8.166 | — | — | — | — | |||||||||||
| Rivadavia 2243/65 |
2/5/94 | 8.166 | 2.070 | 4 | 100 | % | 100 | % | 3.660 | — | — | — | — | |||||||||||
| Libertador 498 |
20/12/95 | 7.452 | 2.191 | 3 | 100 | % | 100 | % | 5.931 | — | — | — | — | |||||||||||
| Constitución 1159 |
16/6/94 | 2.314 | 2.430 | 1 | 100 | % | 100 | % | 1.988 | — | 1.988 | — | ||||||||||||
| Madero 1020 |
21/12/95 | 16.008 | 5.056 | 8 | 100 | % | 100 | % | 12.928 | 4.774 | 4.335 | — | — | |||||||||||
| Madero 940 |
31/8/94 | 2.867 | 772 | 1 | 100 | % | 100 | % | 1.649 | — | 1.649 | — | — | |||||||||||
| Other Properties (14) |
76.945 | 40.166 | 262 | 100 | % | 99 | % | 96.757 | 233 | 738 | 58 | 9.042 | ||||||||||||
| Subtotal |
139.015 | 58.033 | 314 | N/A | N/A | 151.828 | 5.007 | 8.710 | 58 | 9.042 | ||||||||||||||
| Subtotal |
585.583 | 8.600.122 | 3.540 | N/A | N/A | 762.616 | 5.951 | 14.124 | 11.742 | 391.090 | ||||||||||||||
| Management Fees |
33 | 147 | 786 | — | ||||||||||||||||||||
| TOTAL (15) |
585.583 | 8.600.122 | 3.540 | N/A | N/A | 762.616 | 5.984 | 14.271 | 12.528 | 391.090 | ||||||||||||||
(In thousands of Argentine Pesos expressed in constant currency as of 02/28/03)
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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 02/28/03. |
| (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 RT21 method, adjusted for inflation as of 02/28/03. |
| (6) | Corresponds to the Company’s sales consolidated by the RT21 method, adjusted for inflation as of 02/28/03. Excludes gross income tax deduction. |
| (7) | Cost of acquisition plus improvement plus activated interest, adjusted for inflation as of 2/28/03. |
| (8) | Through APSA S.A. |
| (9) | Through Inversora Bolívar S.A. (“IBSA”). |
| (10) | Includes the following properties: Dorrego 1916 (fully sold through our Company), República de la India 2785, Fco. Lacroze 1732 (fully sold), Arcos 2343, Pampa 2966 and J.M. Moreno (fully sold), Arcos 2343, Yerbal 855 through Baldovinos and Alto Palermo Plaza (fully sold) through IBSA. |
| (11) | Directly through our Company and indirectly through Inversora Bolívar S.A. |
| (12) | Through Bs As Trade & Finance S.A. |
| (13) | Includes the following land reserves : Torre Jardín IV, Constitución 1159, Padilla 902, and Terreno Pilar (through our Company), and Pontevedra, Mariano Acosta, Merlo, Intercontinental Plaza II, Benavidez plots (through Inversora Bolívar S.A.) and Alcorta plots, Neuquén, 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 in the Consolidated Financial Statements. Excludes gross income tax deduction. |
IV. Hotels
Our first-class hotel segment continues to show positive signals; during the first quarter of fiscal year 2004 occupancy rates improved, with price levels being maintained.
Accumulated average occupancy rates for our hotels during this period increased to 58%, as compared to 53% during the previous year. Average prices showed a slight decrease, with an average price per room of Ps. 266, as compared to Ps. 269 during the previous fiscal year. The Llao Llao hotel, which has positioned itself as a first-class resort, the only one in Argentina based both on its services and location, has one of the highest prices per room in the country.
Income from the hotel activity for the year ended on September 30, 2003 totaled Ps. 8.3 million, as compared to Ps. 7.3 million during the same period of fiscal year 2003.
This increase in income reflects the general improvement in the activity as a result of the growing inflow of tourists due to attractive local prices. Consequently, all our hotels are showing good cash inflows.
The chart below shows information regarding our Company’s hotels estimated for the three-month period ended September 30, 2003.
Consolidated Hotels
(In thousands of Argentine Pesos expressed in constant currency as of 02/28/03)
| Date of | Number of | Average occupancy |
Avg. Price per room |
Accumulated sales as of September 30, of Fiscal Year, (Ps. 000) (3) |
Book value as of September 30, 2003 | |||||||||||
| Hotel | acquisition | rooms | % (1) | Ps. (2) | 2004 | 2003 | 2002 | (Ps. 000) | ||||||||
| Inter-Continental |
11/97 | 314 | 51 | 216 | 5.277 | 4.811 | 6.564 | 56.570 | ||||||||
| Sheraton Libertador |
3/98 | 200 | 56 | 194 | 3.061 | 2.505 | 4.342 | 39.179 | ||||||||
| Picis (4) |
||||||||||||||||
| Total |
514 | 53 | 208 | 8.338 | 7.316 | 10.906 | 95.749 | |||||||||
Non Consolidated Hotels
| Date of | Number of | Average occupancy |
Avg. Price per room |
Accumulated sales as of (Ps. 000) (3) |
Book value as of September 30, 2003 | |||||||||||
| Hotel | Acquisition | rooms | % (1) | Ps. (2) | 2004 | 2003 | 2002 | (6) (Ps. 000) | ||||||||
| Llao Llao |
6/97 | 157 | 73 | 455 | 7.201 | 6.338 | 4.224 | 13.974 | ||||||||
| Total (7) |
671 | 58 | 266 | 15.539 | 13.654 | 15.130 | 109.723 | |||||||||
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Notes:
| (1) | Accumulated average in the period. |
| (2) | Accumulated average in the period. |
| (3) | Corresponds to our total sales consolidated under the traditional method adjusted by inflation as of 02/28/03. |
| (4) | The Piscis Hotel was sold on March 19, 2003. See table “Sales and Developments”. |
| (5) | 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. |
| (6) | The book value represents the value of our investment. |
| (7) | It includes the total consolidated hotels plus Llao Llao, which is no longer consolidated. |
V. Financial and other transactions
Impact of exchange difference on the Company’s financial position—Our dollar-denominated liabilities were adversely affected by the 4% depreciation of the Peso during the period ended on September 30, 2003, which resulted in a Ps. 18.9 million loss. Exposure of our assets to this economic variable during the same period resulted in a Ps. 4.8 million profit. The net loss generated by the depreciation of the Peso amounted to Ps. 14.1 million and was shown on the “Effects of financing” line, considerably contributing to the loss shown on that line and for the period.
Replacement of Mortgage Security. In August 2003, the mortgage backing the security for the US$ 37.4 million floating rate Secured Bonds due 2009 was replaced. These Bonds are secured with a first mortgage for a value equal to 50% of the debt originally created on some of our properties, and during August 2003 that mortgage was replaced with first mortgages on the following buildings: Dique IV (Cossentini 340), Prourban (Avda. Del Libertador 498) and Laminar Plaza.
Early repayment of US$ 16 million of debt—On July 23, 2003, we proceeded to the early repayment of US$ 16 million corresponding to the Syndicated Loan (Loan Agreement US$ 51,000,000) due end November 2009 to HSBC Bank Argentina S.A. The transaction was settled for the amount of US$ 10.9 million, 68% of the nominal value of the debt, with a US$ 5.1 million discount. The repurchase was made based on the procedure established in the Syndicated Loan Agreement.
Improvement of the risk rating of our Global Bond Program for up to US$ 250 billion. In October 2003, Fitch Argentina Calificadora de Riesgo S.A. raised the rating of our Global Bond Program for up to US$ 250 billion from B- (arg) to B (arg). This rating improvement is due to the restructuring of our debt, which is in its entirety concentrated in the long term. Our secured debt for US$ 37.4 million has been issued under this program.
Conversion of Bonds. To date, conversion rights have been exercised for 115,322 units. In this regard, 211,598 common shares were issued with par value of Ps. 1.0 each. In this way, the amount of outstanding Convertible Bonds is now U$S 99,884,678 while the number of shares of the Company to date totals 212,210,871.
Distribution of dividends in APSA. On October 31, 2003, the General Ordinary and Extraordinary Shareholders’ Meeting of Alto Palermo S.A. (APSA) approved the cash distribution of Ps. 10.0 million as dividends (Ps. 0.141 per share of US$ 1 par value each, or Ps. 0.5642 per ADR) as one of the uses of the Ps. 77.4 million profit for fiscal year 2003. The above distribution generated at IRSA a Ps. 5.5 million income equivalent to its shareholding in APSA.
Appointment of Directors. The Shareholders’ Meeting resolved to fix the number of full directors at 8, and the number of alternate directors at 5. The following were reelected for the term of three years as Directors: Elsztain, Eduardo Sergio; Zang, Saúl and Bergotto, Pedro Oscar, all of whom are non-independent directors under the terms of Resolution 400 of the Argentine Securities Commission; Messrs. Fishman, Marcos and Bridger, Cedric were appointed directors, and Mr. Cárdenas, Emilio was appointed alternate director for the statutory term, all of whom are independent except for Mr. Fishman.
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VI. Prospects for next quarter
During the second quarter of fiscal year 2004 we will continue to plan the launching of new developments, based on the Company’s strong financial structure, and with a clearly positive view of the future development of the Argentine economy. The projected growth of the GDP for 2003, which would increase by 7.1%, would have a significant effect in 2004. In addition, it is estimated that investments will increase mainly as a result of the recovery of consumption.
The above positive signals present a decidedly favorable scenario for our business, and, accordingly, the slight increase in occupancy rates in our office buildings will continue to grow during next quarters, the sales in our shopping centers, which have already shown considerable growth, are expected to increase even further, and tourism will consolidate its extraordinary performance through the maintenance of very attractive prices for foreign visitors.
We consider that our significant positioning in the Argentine market will allow us to continue to grow in our business areas, accompanying growth in Argentina as one of the leading economic groups in the country.
This Earnings 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.
| n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n |
If you wish to be included or removed from IRSA, Cresud or APSA’s mailing list, please send an e-mail with your information to pvilarino@irsa.com.ar.
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IRSA
Consolidated financial highlights
For the three-month period ended September 30, 2003 and 2002
(In thousands of Argentine Pesos expressed in constant currency as of 02/28/03)
| 3 months FY 2004 |
3 months FY 2003 |
|||||
| Income Statement |
||||||
| Corresponds to the consolidated income statement |
||||||
| Sales |
||||||
| Sales and Development |
5,984 | 14,271 | ||||
| Offices and others |
3,664 | 5,658 | ||||
| Shopping Centers |
31,152 | 23,848 | ||||
| Hotels |
8,338 | 7,316 | ||||
| Total sales |
49,138 | 51,093 | ||||
| Operating cost |
-27,394 | -37,753 | ||||
| Gross Profit |
21,744 | 13,340 | ||||
| Selling & Administrative Expenses |
-12,587 | -16,787 | ||||
| Results from operations and holding of real estate assets |
— | -781 | ||||
| Results from Tarshop trusts |
-336 | -505 | ||||
| Operating Income |
8,821 | -4,733 | ||||
| Amortization of goodwill |
-1,321 | 0 | ||||
| Financial results, net |
-19,367 | 83,261 | ||||
| Net income in affiliated companies |
367 | -55 | ||||
| Other income (expenses), net |
1,133 | 9,519 | ||||
| Ordinary Net Income (Loss) before taxes |
-10,367 | 87,992 | ||||
| Minority Interest |
1,734 | -9,557 | ||||
| Income tax |
-6,533 | -20,474 | ||||
| Income (Loss) |
-15,166 | 57,961 | ||||
| Extraordinary losses |
— | — | ||||
| Net (Loss)-Income |
-15,166 | 57,961 | ||||
| As of September 30, 2003 |
As of June 30, 2003 |
|||||
| Balance sheet |
||||||
| Cash and bank |
90,432 | 87,182 | ||||
| Investments |
132,718 | 139,105 | ||||
| Mortgages, notes and other receivables |
47,524 | 47,741 | ||||
| Inventory |
13,164 | 14,575 | ||||
| Total Current Assets |
283,838 | 288,603 | ||||
| Mortgages and other receivables |
128,463 | 126,703 | ||||
| Inventory |
8,512 | 8,767 | ||||
| Investments |
438,474 | 433,760 | ||||
| Fixed assets and intangible assets, net |
1,180,004 | 1,200,760 | ||||
| Goodwill |
-5,799 | -5,629 | ||||
| Non-Current Assets |
1,749,654 | 1,764,361 | ||||
| Total Assets |
2,033,492 | 2,052,964 | ||||
| Short-Term debt |
66,865 | 87,434 | ||||
| Total Current Liabilities |
149,159 | 172,458 | ||||
| Long-term debt |
612,278 | 592,104 | ||||
| Total Non Current Liabilities |
652,033 | 629,988 | ||||
| Total Liabilities |
801,192 | 802,446 | ||||
| Minority interest |
437,980 | 441,332 | ||||
| Shareholders’ Equity |
794,320 | 809,186 | ||||
| Selected Ratios |
||||||
| Debt/Equity Ratio |
100.9 | % | 99.2 | % | ||
| Book value per GDS |
37.43 | 39.01 | ||||
| Net Income per GDS |
-0.71 | 2.79 | ||||
| Net Imcome per GDS diluted |
0.04 | 2.79 | ||||
| EBITDA (000) (period) (2) |
21,372 | 21,595 | ||||
| EBITDA (000) (last 12 month)—see footnote |
88,975 | 105,853 | ||||
| EBITDA per GDS |
1.01 | 1.04 | ||||
| EBITDA /Net Income |
-1.41 | 0.37 | ||||
| Weighted Average of GDSs |
21,218,129 | 20,741,199 | ||||
| Weighted Average of GDSs diluted |
57,495,564 | 20,741,199 | ||||
| Note 1: | The period’s EBITDA and the twelve months EBITDA have not been audited. |
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IRSA
Information by business Unit
For the three-month period ended September 30, 2003 and 2002
(In thousands of Argentine Pesos denominated in constant currency as of 02/28/03)
| Sales and Developments |
Offices and Others |
Shopping Centers |
Hotels | TOTAL | ||||||
| For the first quarter ended September 30, 2003 |
||||||||||
| Sales |
5,984 | 3,664 | 31,152 | 8,338 | 49,138 | |||||
| Costs |
-3,107 | -2,054 | -17,009 | -5,224 | -27,394 | |||||
| Gross profit |
2,877 | 1,610 | 14,143 | 3,114 | 21,744 | |||||
| Administrative Expenses |
-1,249 | -878 | -4,255 | -2,366 | -8,748 | |||||
| Selling Expenses |
-601 | -163 | -1,779 | -1,296 | -3,839 | |||||
| Results from Fideicomiso Tarshop |
— | — | -336 | — | -336 | |||||
| Results from operations and holding of real estate assets |
— | — | — | — | 0 | |||||
| Operating Income |
1,027 | 569 | 7,773 | -548 | 8,821 | |||||
| Depreciations and Amortization (b) |
-1,763 | 1,535 | 13,581 | 1,579 | 14,932 | |||||
| For the fiscal year ended September 30, 2002 |
||||||||||
| Sales |
14,271 | 5,658 | 23,848 | 7,316 | 51,093 | |||||
| Costs |
-14,827 | -2,134 | -16,716 | -4,076 | -37,753 | |||||
| Gross profit |
-556 | 3,524 | 7,132 | 3,240 | 13,340 | |||||
| Administrative Expenses |
-1,565 | -716 | -4,357 | -2,673 | -9,311 | |||||
| Selling Expenses |
-845 | -151 | -5,667 | -813 | -7,476 | |||||
| Loss on purchasers rescissions of sales contracts |
0 | — | — | — | — | |||||
| Results from Fideicomiso Tarshop |
0 | — | -505 | — | -505 | |||||
| Results from operations and holding of real estate assets |
-781 | — | — | — | -781 | |||||
| Operating Income |
-3,747 | 2,657 | -3,397 | -246 | -4,733 | |||||
| Depreciations and Amortization (b) |
945 | 1,588 | 14,404 | 1,097 | 18,034 | |||||
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Executive Office
Bolívar 108 1° 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
gm@irsa.com.ar
Legal Advisors
Estudio Zang, Bergel & Viñes
+(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 of GDS´s
The Bank of New York
P.O. Box 11258
Church Street Station
New York—NY 10286 1258—Estados Unidos de Norteamérica
Tel (toll free) 1 888 BNY ADRS (269-2377)
Tel (international) 1 610 312 5315
shareowner-svcs@bankofny.com
17
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 Anónima | ||
| By: | /S/ Saúl Zang | |
| Name: Saúl Zang Title: Second Vice Chairman of the Board of Directors | ||
Dated: November 12, 2003