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Segment information

12 Months Ended

Jun. 30, 2022

6. Segment information

IFRS 8 requires an entity to report financial and descriptive information about its reportable segments, which are operating segments or aggregations of operating segments that meet specified criteria. Operating segments are components of an entity about which separate financial information is available that is evaluated regularly by the CODM. According to IFRS 8, the CODM represents a function whereby strategic decisions are made and resources are assigned. The CODM function is carried out by the President of the Group, Mr. Eduardo S. Elsztain.

Segment information is reported from the perspective of products and services, considering separately the various activities being developed, which represent reporting operating segments given the nature of its products, services, operations and risks.

After the merger of the Company with IRSA CP, the structure is made up of the following five segments:

-Shopping Malls

-Offices

-Hotels

-Sales and development

-Others

The “Offices and Other Rental Properties” segment is renamed “Offices” and will exclusively include the results from the company’s six buildings. The other rental properties that were part of this segment were allocated to the “Sales and Developments” segment, which will include the results generated by these assets, as well as those from Land Reserves, Barter Agreements and Properties for Sale. Likewise, the “Others” segment is incorporated, which will group the results from investments in associates and foreign companies that were previously allocated in the “Corporate” and “International” segments. The “Shopping Malls” and “Hotels” segments did not undergo any changes.

Below is the segment information which was prepared as follows:

The Group operates in the following segments:

	o	The “Shopping Malls” segment includes results principally comprised of lease and service revenues related to rental of commercial space and other spaces in the shopping malls of the Group.
	o	The “Offices” segment includes the operating results from lease revenues of offices and other service revenues related to the office activities.
	o	The “Sales and Developments” segment includes the operating results of the development, maintenance and sales of undeveloped parcels of land and/or trading properties. Real estate sales results and other rental spaces are also included.
	o	The "Hotels" segment includes the operating results mainly comprised of room, catering and restaurant revenues.
	o	The “Others” segment includes the entertainment activities through ALG Golf Center S.A., La Rural S.A. and Centro de Convenciones Buenos Aires (concession), We Are Appa investments in associates such as TGLT and the financial activities carried out through BHSA / BACS, as well as other investments in associates.

The CODM periodically reviews the results and certain asset categories and assesses performance of operating segments based on a measure of profit or loss of the segment composed by the operating income plus the share of profit / (loss) of joint ventures and associates. The valuation criteria used in preparing this information are consistent with IFRS standards used for the preparation of the Consolidated Financial Statements, except for the following:

	·	Operating results from joint ventures are evaluated by the CODM applying proportional consolidation method. Under this method the profit/loss generated and assets are reported in the Statement of Income line-by-line based on the percentage held in joint ventures rather than in a single item as required by IFRS. Management believes that the proportional consolidation method provides more useful information to understand the business return. On the other hand, the investment in the joint venture La Rural S.A. is accounted for under the equity method since this method is considered to provide more accurate information in this case.

	·	Operating results from Shopping Malls and Offices segments do not include the amounts pertaining to building administration expenses and collective promotion funds (“FPC”, as per its Spanish acronym) as well as total recovered costs, whether by way of expenses or other concepts included under financial results (for example default interest and other concepts). The CODM examines the net amount from these items (total surplus or deficit between building administration expenses and FPC and recoverable expenses).

The assets’ categories examined by the CODM are: investment properties, property, plant and equipment, trading properties, inventories, right to receive future units under barter agreements, investment in associates and goodwill. The sum of these assets, classified by business segment, is reported under “assets by segment”. Assets are allocated to each segment based on the operations and/or their physical location.

Most revenue from its operating segments is derived from, and their assets are located in, Argentina, except for some share of profit / (loss) of associates included in the “Others” segment located in USA.

Revenues for each reporting segments derive from a large and diverse client base and, therefore, there is no revenue concentration in any particular segment.

Until September 2020 the Group used to report its financial performance separately in two Operations Centers. However, as described in Note 1 to the Consolidated Financial Statements as of June 30, 2020, during September 2020 the Group lost control of IDBD and, then, has reclassified the results of Operations Center in Israel to discontinued operations. As a consequence of the situation described, from October 1, 2020, the Group reports its financial performance through a single Operation Center. Segment information for the previous fiscal years has been recast for the purposes of comparability with the present fiscal year.

Below is a summary of the Group’s lines of business and a reconciliation between the results from operations as per segment information and the results from operations as per the Consolidated Statements of Income and Other Comprehensive Income for the years ended June 30, 2022, 2021 and 2020:

	June 30, 2022
	Total			Joint ventures (1)			Expenses and collective promotion funds			Elimination of inter-segment transactions and non-reportable assets / liabilities (2)			Total as per statement of income / statement of financial position
Revenues		25,593			(233	)		6,725			-			32,085
Costs		(5,333	)		91			(6,874	)		-			(12,116	)
Gross profit / (loss)		20,260			(142	)		(149	)		-			19,969
Net gain from fair value adjustment of investment properties		12,328			1,322			-			-			13,650
General and administrative expenses		(5,327	)		27			-			23			(5,277	)
Selling expenses		(2,242	)		5			-			-			(2,237	)
Other operating results, net		28			-			56			(23	)		61
Profit / (loss) from operations		25,047			1,212			(93	)		-			26,166
Share of profit / (loss) of associates and joint ventures		466			(821	)		-			-			(355	)
Segment profit / (loss)		25,513			391			(93	)		-			25,811
Reportable assets		325,837			(1,939	)		-			48,894			372,792
Reportable liabilities		-			-			-			(203,065	)		(203,065	)
Net reportable assets		325,837			(1,939	)		-			(154,171	)		169,727

	June 30, 2021
	Total			Joint ventures (1)			Expenses and collective promotion funds			Elimination of inter-segment transactions and non-reportable assets / liabilities (2)			Total as per statement of income / statement of financial position
Revenues		16,585			(82	)		4,830			(51	)		21,282
Costs		(5,665	)		115			(5,213	)		-			(10,763	)
Gross profit / (loss)		10,920			33			(383	)		(51	)		10,519
Net (loss) / gain from fair value adjustment of investment properties		(12,542	)		(200	)		-			-			(12,742	)
General and administrative expenses		(5,049	)		22			-			79			(4,948	)
Selling expenses		(2,477	)		34			-			-			(2,443	)
Other operating results, net		(256	)		(33	)		176			(28	)		(141	)
Loss from operations		(9,404	)		(144	)		(207	)		-			(9,755	)
Share of loss of associates and joint ventures		(6,541	)		(641	)		-			-			(7,182	)
Segment loss		(15,945	)		(785	)		(207	)		-			(16,937	)
Reportable assets		335,973			(2,481	)		-			31,833			365,325
Reportable liabilities		-			-			-			(229,672	)		(229,672	)
Net reportable assets		335,973			(2,481	)		-			(197,839	)		135,653

	June 30, 2020
	Total			Joint ventures (1)			Expenses and collective promotion funds			Elimination of inter-segment transactions and non-reportable assets / liabilities (2)			Total as per statement of income / statement of financial position
Revenues		27,434			(150	)		7,638			(54	)		34,868
Costs		(6,725	)		132			(7,956	)		-			(14,549	)
Gross profit / (loss)		20,709			(18	)		(318	)		(54	)		20,319
Net gain from fair value adjustment of investment properties		83,728			(648	)		-			-			83,080
General and administrative expenses		(5,527	)		35			-			79			(5,413	)
Selling expenses		(3,029	)		41			-			-			(2,988	)
Other operating results, net		29			42			149			(25	)		195
Profit / (loss) from operations		95,910			(548	)		(169	)		-			95,193
Share of profit of associates and joint ventures		17,367			420			-			-			17,787
Segment profit / (loss)		113,277			(128	)		(169	)		-			112,980
Reportable assets (3)		1,498,210			(1,704	)		-			48,303			1,544,809
Reportable liabilities (3)		(987,692	)		-			-			(255,011	)		(1,242,703	)
Net reportable assets (3)		510,518			(1,704	)		-			(206,708	)		302,106

(1)	Represents the equity value of joint ventures that were proportionately consolidated for information by segment purposes.
(2)	Includes deferred income tax assets, income tax and minimum presumed income tax 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 ARS 8, ARS 12 and ARS 43, as of June 30, 2022, 2021 and 2020, respectively.
(3)	Includes assets and liabilities from IDBD.

Below is a summarized analysis of the lines of Group business for the fiscal years ended June 30, 2022, 2021 and 2020:

	June 30, 2022
	Shopping Malls			Offices			Sales and developments			Hotels			Others			Total
Revenues		17,334			3,041			746			4,300			172			25,593
Costs		(1,495	)		(293	)		(581	)		(2,456	)		(508	)		(5,333	)
Gross profit / (loss)		15,839			2,748			165			1,844			(336	)		20,260
Net gain / (loss) from fair value adjustment of investment properties		553			(5,391	)		17,106			-			60			12,328
General and administrative expenses		(2,862	)		(341	)		(1,058	)		(730	)		(336	)		(5,327	)
Selling expenses		(847	)		(78	)		(922	)		(340	)		(55	)		(2,242	)
Other operating results, net		(142	)		(23	)		(48	)		(59	)		300			28
Profit / (loss) from operations		12,541			(3,085	)		15,243			715			(367	)		25,047
Share of profit of associates and joint ventures		-			-			-			-			466			466
Segment profit / (loss)		12,541			(3,085	)		15,243			715			99			25,513

Investment properties and trading properties		91,770			68,197			142,511			-			430			302,908
Investment in associates and joint ventures		-			-			-			-			11,578			11,578
Other operating assets		299			2,537			2,984			4,183			1,348			11,351
Reportable assets		92,069			70,734			145,495			4,183			13,356			325,837

From all the revenues corresponding to the segments, ARS 25,579 are originated in Argentina, and ARS 14 in the U.S. No external client represents 10% or more of revenue of any of the reportable segments. From all of the assets corresponding to the segments, ARS 323,901 are located in Argentina and ARS 1,936 in other countries, principally in USA for ARS 296 and Uruguay for ARS 1,630.

	June 30, 2021
	Shopping Malls			Offices			Sales and developments			Hotels			Others (i)			Total
Revenues		8,727			4,401			1,271			1,510			676			16,585
Costs		(1,428	)		(236	)		(1,379	)		(1,746	)		(876	)		(5,665	)
Gross profit / (loss)		7,299			4,165			(108	)		(236	)		(200	)		10,920
Net (loss) / gain from fair value adjustment of investment properties		(33,349	)		9,088			11,658			-			61			(12,542	)
General and administrative expenses		(2,348	)		(685	)		(1,164	)		(699	)		(153	)		(5,049	)
Selling expenses		(740	)		(307	)		(1,145	)		(231	)		(54	)		(2,477	)
Other operating results, net		(207	)		(8	)		(8	)		(20	)		(13	)		(256	)
(Loss) / profit from operations		(29,345	)		12,253			9,233			(1,186	)		(359	)		(9,404	)
Share of loss of associates and joint ventures		-			-			(26	)		-			(6,515	)		(6,541	)
Segment (loss) / profit		(29,345	)		12,253			9,207			(1,186	)		(6,874	)		(15,945	)

Investment properties and trading properties		89,070			119,013			102,415			-			423			310,921
Investment in associates and joint ventures		-			-			-			-			14,609			14,609
Other operating assets		436			1,839			3,271			4,269			628			10,443
Reportable assets		89,506			120,852			105,686			4,269			15,660			335,973

(i)

Includes the result for the investment in TGLT y BHSA for ARS (3,496) and ARS (1,240) respectively, in the line “Share of loss of associates and joint ventures”.

From all the revenues included in the segments ARS 16,557 are originated in Argentina and ARS 28 are originated in USA. No external client represents 10% or more of revenue of any of the reportable segments. From all of the assets included in the segments, ARS 328,863 are located in Argentina and ARS 7,110 in other countries, principally in USA for ARS 5,692 and Uruguay for ARS 1,468.

	June 30, 2020
	Shopping Malls			Offices			Sales and developments			Hotels			Others (i)			Total
Revenues		14,569			5,616			2,025			4,978			246			27,434
Costs		(1,401	)		(192	)		(1,825	)		(3,066	)		(241	)		(6,725	)
Gross profit		13,168			5,424			200			1,912			5			20,709
Net (loss) / gain from fair value adjustment of investment properties		(5,185	)		54,755			34,495			-			(337	)		83,728
General and administrative expenses		(2,044	)		(601	)		(1,217	)		(897	)		(768	)		(5,527	)
Selling expenses		(1,751	)		(185	)		(502	)		(566	)		(25	)		(3,029	)
Other operating results, net		42			(20	)		(111	)		(49	)		167			29
Profit / (loss) from operations		4,230			59,373			32,865			400			(958	)		95,910
Share of profit of associates and joint ventures		-			-			-			-			17,367			17,367
Segment profit		4,230			59,373			32,865			400			16,409			113,277

Investment properties and trading properties		120,956			147,863			89,401			-			942			359,162
Investment in associates and joint ventures		-			-			1,310			-			21,529			22,839
Other operating assets		500			160			1,931			4,527			702			7,820
Reportable assets		121,456			148,023			92,642			4,527			23,173			389,821

(ii)

Includes the result for the investment in New Lipstick for ARS 18,399 in the line “Share of profit of associates and joint ventures”. Such amount under the previous classification was included in the International segment, however the CODM does not analyze it anymore as an independent segment due to the cessation of the activities of Condor and New Lipstick.

From all the revenues corresponding included in the segments ARS 26,221 are originated in Argentina, ARS 1,179 are originated in Uruguay and ARS 34 are originated in USA. No external client represents 10% or more of revenue of any of the reportable segments. From all of the assets included in the segments, ARS 405,499 are located in Argentina and ARS (15,678) in other countries, principally in USA for ARS (17,121) and Uruguay for ARS 1,433.