ALTAREIT
CONSOLIDATED
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
1
CONTENTS
1 | FINANCIAL STATEMENTS | 3 |
2 | NOTES - CONSOLIDATED INCOME STATEMENT BY SEGMENT | 7 |
3 OTHER INFORMATION ATTACHED TO THE CONSOLIDATED fiNANCIAL STATEMENTS8
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 | ||
2 | DECEMBER 2023 | ALTAREIT |
1 | Financial statements | |||
Consolidated balance sheet | ||||
(€ millions) | Note | 31/12/2023 | 31/12/2022 | |
Non-current assets | 737.6 | 816.4 | ||
Intangible assets | 7.1 | 340.2 | 314.2 | |
o/w Goodwill | 218.5 | 197.4 | ||
o/w Brands | 115.0 | 105.4 | ||
o/w Customer relationships | 3.6 | 6.7 | ||
o/w Other intangible assets | 3.1 | 4.6 | ||
Property plant and equipment | 24.0 | 22.4 | ||
Right-of-use on tangible and intangible fixed assets | 7.2 | 123.8 | 137.7 | |
Investment properties | 7.3 | 58.0 | 57.7 | |
o/w Investment properties in operation at fair value | 10.4 | 9.6 | ||
o/w Investment properties under development and under construction at cost | 45.5 | 45.2 | ||
o/w Right-of use on Investment properties | 2.1 | 2.8 | ||
Securities and investments in equity affiliates | 4.5 | 139.9 | 271.2 | |
Non-current financial assets | 4.6 | 28.6 | 13.3 | |
Deferred taxes assets | 5.3 | 23.1 | 0.0 | |
Current assets | 3,015.8 | 3,461.4 | ||
Trade and other receivables | 7.4 | 1,090.9 | 1,116.9 | |
Income credit | 7.4 | 536.0 | 723.1 | |
Current financial assets | 7.4 | 785.3 | 740.2 | |
Net inventories and work in progress | 17.3 | 0.7 | ||
Contract assets | 4.6 | 27.1 | 81.9 | |
Cash and cash equivalents | 6.2 | 559.2 | 798.6 | |
TOTAL ASSETS | 3,753.4 | 4,277.7 | ||
Equity | 807.1 | 1 145.0 | ||
Equity attributable to Altareit SCA shareholders | 776.5 | 1 100.0 | ||
Share capital | 6.1 | 2.6 | 2.6 | |
Other paid-in capital | 76.3 | 76.3 | ||
Reserves | 1,023.2 | 946.7 | ||
Income associated with Altareit SCA shareholders | (325.6) | 74.4 | ||
Equity attributable to non-controlling interests in subsidiaries | 30.6 | 45.0 | ||
Reserves associated with non-controlling interests in subsidiaries | 31.0 | 30.2 | ||
Income associated with non-controlling interests in subsidiaries | (0.4) | 14.8 | ||
Non-current liabilities | 786.2 | 847.9 | ||
Non-current borrowings and financial liabilities | 6.2 | 727.4 | 753.5 | |
o/w Bond issues | 333.6 | 336.9 | ||
o/w Borrowings from credit establishments | 259.8 | 267.5 | ||
o/w Negotiable European Medium-Term Note | - | - | ||
o/w Participating loans and advances from associates | 0.3 | 0.1 | ||
o/w Lease liabilities | 133.8 | 149.0 | ||
Long-term provisions | 6.3 | 56.2 | 18.0 | |
Deposits and security interests received | 1.5 | 0.4 | ||
Deferred tax liability | 5.3 | 1.0 | 76.0 | |
Current liabilities | 2,160.0 | 2,284.9 | ||
Current borrowings and financial liabilities | 6.2 | 337.9 | 553.2 | |
o/w Bond issues | 4.8 | 5.7 | ||
o/w Borrowings from credit establishments | 60.2 | 88.7 | ||
o/w Negotiable European Commercial Paper | - | 222.0 | ||
o/w Bank overdrafts | 47.0 | 23.8 | ||
o/w Advances from Group shareholders and partners | 207.6 | 194.9 | ||
o/w Lease liabilities | 18.4 | 18.1 | ||
Derivative financial instruments | 9 | 0.7 | 0.0 | |
Contract liabilities | 7.4 | 257.0 | 351.4 | |
Trade and other payables | 7.4 | 1,564.1 | 1,374.4 | |
Tax due | 0.4 | 5.8 | ||
TOTAL LIABILITIES | 3,753.4 | 4,277.7 |
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 | ||
ALTAREIT | DECEMBER 2023 | 3 |
Statement of consolidated comprehensive income
(€ millions) | Note | 31/12/2023 | 31/12/2022 |
Net rental income | 5.1 | - | - |
Revenue | 2,413.7 | 2,705.4 | |
Cost of sales | (2,248.6) | (2,389.5) | |
Other income | (89.3) | (104.3) | |
Net charge to provisions for current assets | (239.9) | (33.6) | |
Amortisation of customer relationships | (5.9) | (1.5) | |
Net property income | 5.1 | (170.0) | 176.6 |
External services | 38.3 | 24.4 | |
Own work capitalised and production held in inventory | 152.5 | 236.5 | |
Personnel costs | (177.9) | (199.9) | |
Other overhead expenses | (105.4) | (98.3) | |
Depreciation expenses on operating assets | (23.3) | (22.9) | |
Net overhead expenses | (115.9) | (60.1) | |
Other income and expenses | (4.3) | (3.1) | |
Depreciation expenses | (1.6) | (0.5) | |
Transaction costs | (0.0) | (0.2) | |
Others | (5.9) | (3.9) | |
Change in value of investment properties | - | (0.3) | |
Net impairment losses on investment properties measured at cost | - | (10.3) | |
Net impairment losses on other non-current assets | (54.6) | 0.1 | |
Net charge to provisions | (36.6) | (1.3) | |
OPERATING INCOME BEFORE THE SHARE OF NET INCOME OF EQUITY AFFILIATES | (383.0) | 100.8 | |
Share in earnings of equity affiliates | 4.5 | (3.6) | 42.2 |
OPERATING INCOME AFTER THE SHARE OF NET INCOME OF EQUITY AFFILIATES | (386.6) | 143.0 | |
Net borrowing costs | 5.2 | (13.9) | (8.9) |
Financial expenses | (27.1) | (14.9) | |
Financial income | 13.1 | 5.9 | |
Other financial results | 5.2 | (14.0) | (14.4) |
Change in value and income from disposal of financial instruments | (17.2) | 2.0 | |
Net gain/(loss) on disposal of investments | (3.2) | 0.0 | |
Profit before tax | (434.9) | 121.8 | |
Corporate income tax | 5.3 | 108.9 | (32.5) |
NET INCOME | (325.9) | 89.3 | |
o/w Attributable to shareholders of Altareit SCA | (325.6) | 74.4 | |
o/w Attributable to non-controlling interests in subsidiaries | (0.4) | 14.8 | |
Average number of non-diluted shares | 1,748,351 | 1,748,412 | |
Net earnings per share attributable to shareholders of Altareit SCA (€) | 5.4 | (186.21) | 42.57 |
Diluted average number of shares | 1,748,351 | 1,748,412 | |
Diluted net earnings per share attributable to shareholders of Altareit SCA (€) | 5.4 | (186.21) | 42.57 |
Other comprehensive income
(€ millions) | 31/12/2023 | 31/12/2022 | |||||
NET INCOME | (325.9) | 89.3 | |||||
Actuarial differences on defined-benefit pension plans | 0.5 | 2.0 | |||||
o/w Taxes | (0.2) | (0.7) | |||||
Subtotal of comprehensive income items that may not be reclassified to profit | 0.5 | 2.0 | |||||
OTHER COMPREHENSIVE INCOME | 0.5 | 2.0 | |||||
CONSOLIDATED COMPREHENSIVE INCOME | (325.4) | 91.3 | |||||
o/w Net comprehensive income attributable to Altareit SCA shareholders | (325.0) | 76.4 | |||||
o/w Net comprehensive income attributable to non-controlling interests in subsidiaries | (0.4) | 14.8 |
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 | ||
4 | DECEMBER 2023 | ALTAREIT |
Consolidated cash flows statement
(€ millions) | Note | 31/12/2023 | 31/12/2022 |
Cash flow from operating activities | |||
Total consolidated net income | (325.9) | 89,3 | |
Elimination of income tax expense (income) | 5.3 | (108.9) | 32,5 |
Elimination of net interest expense (income) and dividends | 5.2 | 27.9 | 23,0 |
Net income before tax and before net interest expense (income) | (407.0) | 144,8 | |
Elimination of share in earnings of equity-method affiliates | 4.5 | 3.6 | (42,2) |
Elimination of depreciation and impairment | 123.5 | 26,7 | |
Elimination of value adjustments | 17.2 | 8,6 | |
Elimination of net gains/(losses) on disposals(a) | 3.3 | 1,0 | |
Estimated income and expenses associated with share-based payments | 6.1 | 1.0 | (3,7) |
Net cash flow | (258.4) | 135,1 | |
Tax paid | (21.0) | (25,5) | |
Impact of change in operational working capital requirement (WCR) | 7.4 | 392.0 | (126,2) |
CASH FLOW FROM OPERATIONS | 112.6 | (16,6) | |
Cash flow from investment activities | |||
Net acquisitions of assets and capitalised expenditures | (0.9) | (1,8) | |
Gross investments in equity affiliates | 4.5 | (72.0) | (87,0) |
Acquisitions of consolidated companies, net of cash acquired | 4.3 | 4.8 | (3,7) |
Other changes in Group structure | 0.2 | 6,1 | |
Increase in loans and advances | (28.4) | (13,1) | |
Sale of non-current assets and reimbursement of advances and down payments | 2.6 | 3,5 | |
Disposals of equity affiliates | 4.5 | 50.3 | 52,6 |
Disposals of consolidated companies, net of cash transferred | (0.2) | (0,5) | |
Reduction in loans and other financial investments | 21.9 | 47,6 | |
Net change in investments and derivative financial instruments | 35.5 | (46,9) | |
Dividends received | 33.9 | 16,5 | |
Interest income on loans | 15.8 | 6,1 | |
CASH FLOW FROM INVESTMENT ACTIVITIES | 63.6 | (20,5) | |
Cash flow from financing activities | |||
Share of non-controlling interests in the capital increase of subsidiaries | 0.1 | 0,1 | |
Capital increase | - | - | |
Dividends paid to minority shareholders of subsidiaries | (14.1) | (22,5) | |
Issuance of borrowings and other financial liabilities | 6.2 | 125.9 | 216,4 |
Repayment of borrowings and other financial liabilities | 6.2 | (488.4) | (680,8) |
Repayment of lease liabilities | 6.2 | (19.8) | (17,7) |
Net sales (purchases) of treasury shares | (0.1) | (0,0) | |
Net change in security deposits and guarantees received | 1.1 | (0,2) | |
Interest paid on financial debts | (43.4) | (26,6) | |
CASH FLOW FROM FINANCING ACTIVITIES | (438.8) | (531,2) | |
CHANGE IN CASH BALANCE | (262.6) | (568,3) | |
Cash balance at the beginning of the year | 6.2 | 774.8 | 1,343.1 |
Cash and cash equivalents | 798.6 | 1,355.4 | |
Bank overdrafts | (23.8) | (12.3) | |
Cash balance at period-end | 6.2 | 512.3 | 774.8 |
Cash and cash equivalents | 559.2 | 798.6 | |
Bank overdrafts | (47.0) | (23.8) |
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 | ||
ALTAREIT | DECEMBER 2023 | 5 |
Changes in consolidated equity
Equity attributable | |||||||||||||||
Other | Reserves | Equity attributable | to non-controlling | ||||||||||||
Share | paid-in | and retained | to Altareit SCA | interests in | |||||||||||
(€ millions) | capital | capital | earnings | shareholders | subsidiaries | Equity | |||||||||
As of 1 January 2022 | 2.6 | 76.3 | 947.3 | 1,026.1 | 53.2 | 1,079.3 | |||||||||
Net Income | - | - | 74.4 | 74.4 | 14.8 | 89.3 | |||||||||
Actuarial difference relating to pension obligations | - | - | 2.0 | 2.0 | - | 2.0 | |||||||||
Comprehensive income | - | - | 76.4 | 76.4 | 14.8 | 91.3 | |||||||||
Dividend distribution | - | - | (0.0) | (0.0) | (22.5) | (22.5) | |||||||||
Capital increase | - | - | (0.0) | (0.0) | 0.1 | 0.1 | |||||||||
Equity-based payment valuation for Altarea SCA | - | - | (2.6) | (2.6) | - | (2.6) | |||||||||
Impact of the repurchase of Altarea SCA company shares to be delivered to | - | - | - | - | - | - | |||||||||
employees | |||||||||||||||
Elimination of treasury shares | - | - | - | - | - | - | |||||||||
Transactions with shareholders | - | - | (2.6) | (2.6) | (22.4) | (24.9) | |||||||||
Changes in ownership interests without taking or losing control of subsidiaries | - | - | 0.1 | 0.1 | (0.4) | (0.3) | |||||||||
Changes in ownership interests associated with taking or losing control of | - | - | - | - | - | - | |||||||||
subsidiaries | |||||||||||||||
Others | - | - | (0.1) | (0.1) | (0.3) | (0.4) | |||||||||
As of 31 December 2022 | 2.6 | 76.3 | 1,021.2 | 1,100.0 | 45.0 | 1,145.0 | |||||||||
Net Income | - | - | (325.6) | (325.6) | (0.4) | (325.9) | |||||||||
Actuarial difference relating to pension obligations | - | - | 0.5 | 0.5 | - | 0.5 | |||||||||
Comprehensive income | - | - | (325.0) | (325.0) | (0.4) | (325.4) | |||||||||
Dividend distribution | - | - | - | - | (14.1) | (14.1) | |||||||||
Capital increase | - | - | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||
Measurement of share-based payments | - | - | 0.8 | 0.8 | - | 0.8 | |||||||||
Elimination of treasury shares | - | - | (0.1) | (0.1) | - | (0.1) | |||||||||
Transactions with shareholders | - | - | 0.7 | 0.7 | (14.1) | (13.4) | |||||||||
Changes in ownership interests without taking or losing control of subsidiaries | - | - | 0.2 | 0.2 | 0.1 | 0.3 | |||||||||
Changes in ownership interests associated with taking or losing control of | - | - | - | - | - | - | |||||||||
subsidiaries | |||||||||||||||
Others | 0.0 | 0.0 | 0.7 | 0.7 | (0.0) | 0.7 | |||||||||
As of 31 December 2023 | 2.6 | 76.3 | 697.8 | 776.5 | 30.6 | 807.1 | |||||||||
The notes constitute an integral part of the consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 | ||
6 | DECEMBER 2023 | ALTAREIT |
2 Notes - Consolidated income statement by segment
31/12/2023 | 31/12/2022 | |||||
Changes in | Changes in | Changes in | ||||
value, | value, | value, | ||||
Funds from | estimated | Funds from | estimated | Funds from | estimated | |
(€ millions) | operations | expenses | operations | expenses | operations | expenses |
(FFO) | and | (FFO) | and | (FFO) | and | |
transaction | transaction | transaction | ||||
costs | costs | costs | ||||
Revenue | 2,217.7 | - | 2,217.7 | 2,458.5 | - | 2,458.5 |
Cost of sales and other expenses | (2,092.7) | (297.5) | (2,390.3) | (2,302.8) | (1.5) | (2,304.3) |
Net property income | 124.9 | (297.5) | (172.6) | 155.7 | (1.5) | 154.2 |
External services | 29.1 | - | 29.1 | 11.4 | - | 11.4 |
Production held in inventory | 142.0 | - | 142.0 | 221.0 | - | 221.0 |
Operating expenses | (233.2) | (19.8) | (253.0) | (241.5) | (19.9) | (261.4) |
Net overhead expenses | (62.1) | (19.8) | (81.9) | (9.1) | (19.9) | (28.9) |
Share of equity-method affiliates | (0.0) | (3.7) | (3.7) | 9.2 | (1.0) | 8.2 |
Net depreciation, amortisation and provision | - | (67.5) | (67.5) | - | (23.0) | (23.0) |
Transaction costs | - | (0.0) | (0.0) | - | (0.5) | (0.5) |
OPERATING INCOME - RESIDENTIAL | 62.8 | (388.6) | (325.8) | 155.8 | (45.9) | 110.0 |
Revenue | 196.0 | - | 196.0 | 246.8 | - | 246.8 |
Cost of sales and other expenses | (175.5) | (17.9) | (193.4) | (224.5) | - | (224.5) |
Net property income | 20.5 | (17.9) | 2.6 | 22.4 | - | 22.4 |
External services | 8.0 | - | 8.0 | 11.9 | - | 11.9 |
Production held in inventory | 10.6 | - | 10.6 | 15.4 | - | 15.4 |
Operating expenses | (22.4) | (3.6) | (26.0) | (31.9) | (5.2) | (37.1) |
Net overhead expenses | (3.8) | (3.6) | (7.4) | (4.6) | (5.2) | (9.8) |
Share of equity-method affiliates | (7.6) | 10.1 | 2.5 | 34.2 | 0.2 | 34.4 |
Net depreciation, amortisation and provision | - | (47.1) | (47.1) | - | (1.0) | (1.0) |
Income/loss in the value of investment property | - | - | - | - | (0.3) | (0.3) |
OPERATING INCOME - BUSINESS PROPERTY | 9.1 | (58.5) | (49.3) | 52.0 | (6.3) | 45.7 |
Net overhead expenses | (5.9) | (1.0) | (6.9) | (0.9) | 0.2 | (0.7) |
Share of equity-method affiliates | (0.6) | (1.7) | (2.4) | (0.2) | (0.2) | (0.4) |
Net depreciation, amortisation and provision | - | (1.4) | (1.4) | - | (0.5) | (0.5) |
Income/loss in the value of investment property | - | - | - | - | (10.3) | (10.3) |
OPERATING INCOME - DIVERSIFICATION | (6.5) | (4.1) | (10.7) | (1.1) | (10.8) | (11.9) |
Others (Corporate) | (0.7) | (0.1) | (0.7) | (1.0) | 0.2 | (0.8) |
OPERATING INCOME | 64.7 | (451.3) | (386.6) | 205.8 | (62.7) | 143.0 |
Net borrowing costs | (12.1) | (1.9) | (13.9) | (15.1) | 6.1 | (8.9) |
Other financial results | (14.0) | - | (14.0) | (14.4) | - | (14.4) |
Change in value and income from disposal of financial instruments | - | (17.2) | (17.2) | - | 2.0 | 2.0 |
Net gain/(loss) on disposal of investments | - | (3.2) | (3.2) | - | 0.0 | 0.0 |
PROFIT BEFORE TAX | 38.7 | (473.5) | (434.9) | 176.3 | (54.6) | 121.8 |
Corporate income tax | 0.5 | 108.5 | 108.9 | (23.3) | (9.3) | (32.5) |
NET INCOME | 39.1 | (365.1) | (325.9) | 153.1 | (63.8) | 89.3 |
Non-controlling interests | (16.1) | 16.5 | 0.4 | (14.8) | 0.0 | (14.8) |
NET INCOME, GROUP SHARE | 23.0 | (348.6) | (325.6) | 138.2 | (63.8) | 74.4 |
1,748,412 | 1,748,412 | |||||
Diluted average number of shares | 1,748,351 | 1,748,351 | 1,748,351 | 1,748,412 | ||
NET EARNING PER SHARE (€/SHARE), GROUP SHARE | 13.16 | (199.36) | (186.21) | 79.07 | (36.50) | 42.57 |
In accordance with the principles described in note 2.3.20 "Operating Segments" of the accounting principles and in line with internal reporting, certain expenses, deemed exceptional due to their nature and amount, have been reclassified under the column "Changes in values, calculated charges, transaction fees." These expenses are detailed in note 4.1 « Significant Events ».
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 | ||
ALTAREIT | DECEMBER 2023 | 7 |
3 Other information attached to the consolidated financial statements
Detailed summary of the notes to the consolidated financial statements | ||
Note 1 | Company information | 9 |
Note 2 | Accounting principles and methods | 9 |
2.1 | The Company's accounting framework and presentation of the financial statements | 9 |
2.2 | Main estimations and judgements | 10 |
Note 3 | Information on operating segments | 20 |
3.1 | Balance sheet items by operating segment | 20 |
3.2 | Consolidated income statement by operating segment | 20 |
3.3 Reconciliation of the statement of consolidated comprehensive income and of the consolidated income
statement by segment | 21 | |
3.4 | Revenue by geographical region and operating segment | 22 |
Note 4 | Major events and changes in the scope of consolidation | 23 |
4.1 | Major events | 23 |
4.2 | Scope | 25 |
4.3 | Changes in consolidation scope | 26 |
4.4 | Business combinations | 26 |
4.5 | Securities and investments in equity affiliates | 27 |
4.6 | Current and non-current financial assets | 28 |
Note 5 | Résult | 29 |
5.1 | Marge Net property income | 29 |
5.2 | Cost of net financial debt and other financial items | 29 |
5.3 | Corporate income tax | 30 |
5.4 | Earnings per share | 31 |
Note 6 | Liabilities | 32 |
6.1 | Equity | 32 |
6.2 | Net financial debt and guarantees | 33 |
6.3 | Provisions | 34 |
Note 7 | Assets and impairment tests | 35 |
7.1 | Goodwill and other intangible assets | 35 |
7.2 | Right-of-use on tangible and intangible fixed assets | 36 |
7.3 | Investment properties | 36 |
7.4 | Operational working capital requirement (WCR) | 36 |
Note 8 | Management of financial risks | 39 |
8.1 | Carrying amount of financial instruments by category | 39 |
8.2 | Interest rate risk | 40 |
8.3 | Liquidity risk | 41 |
Note 9 | Related party transactions | 43 |
Note 10 | Group commitments and contingent liabilities | 45 |
10.1 | Off-balance sheet commitments | 45 |
10.2 | Contingent liabilities | 46 |
Note 11 | Post-closing events | 47 |
Note 12 | Appointment of Statutory Auditors | 47 |
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 | ||
8 | DECEMBER 2023 | ALTAREIT |
NOTE 1 COMPANY INFORMATION
Altareit is a Société en Commandite par Actions (a French partnership limited by shares), the shares of which are traded on the Euronext Paris regulated market, Compartment A. The registered office is located at 87 rue de Richelieu in Paris (France).
Altareit is a significant player in the real estate development and corporate real estate promotion sectors, holding 100% ownership of developers such as Cogedim, Pitch Immo, and Histoire & Patrimoine.
Altareit is 99.85% owned by the Altarea group, whose shares are listed on the regulated market Euronext Paris, compartment A.
The consolidated financial statements for the year ended 31 December 2023 were approved by the Management on 27 February 2024 having been examined by the Supervisory Board.
NOTE 2 ACCOUNTING PRINCIPLES
AND METHODS
The Group falls within the scope of application of the new GLOBE rules and the global minimum tax of 15% (Pillar 2) transposed, via a European Union directive (2022/2523) of 14 December 2022, into French law in the French General Tax Code by Article 33 of the Finance Act for 2024. These new rules came into force on 1 January 2024. Preparatory work is under way, in particular to define the legal scope of the new Pillar 2 rules and identify the necessary data points. The Group does not expect any significant impact.
Accounting standards and interpretations adopted early at 31 December 2023, whose application is mandatory for periods starting on or after 1 January 2024 or later:
None
Accounting standards and interpretations published and mandatory after 31 December 2023:
- Amendment to IAS 1 - Classification of liabilities as current or non-current.Non-current liabilities with covenants;
- Amendments to IAS 7 and IFRS 7 - Supplier finance arrangements;
- Amendments to IFRS 16 - Lease liability in a sale and leaseback.
2.1 The Company's accounting framework and presentation of the financial statements
2.1.1 Accounting standards
The accounting principles used in the preparation of the consolidated financial statements for the year are compliant with the IASB's (International Accounting Standards Board) IFRS standards and interpretations as adopted by the European Union as at 31 December 2023 and available on the website of the European Commission.
The accounting principles adopted on 31 December 2023 are the same as those used for the consolidated fifinancial statements at 31 December 2022, with the exception of changes to the standards and interpretations adopted by the European Union applicable at 1 January 2023.
Accounting standards, interpretations and amendments applicable as from the financial year beginning on 1 January 2023:
- IFRS 17 - Insurance contracts (replacing IFRS 4) and amendments to IFRS 17 - Initial application of IFRS 17 and IFRS 9, Comparative Information.
IFRS 17 and its amendments are not applicable to the Group;
- Amendments to IAS 1 - Disclosure of material accounting policy information;
- Amendments to IAS 8 - Definition of accounting estimates;
- amendments to IAS 12 - Deferred tax related to assets and liabilities arising from a single transaction;
These amendments have no significant impact on the Group.
- Amendments to IAS 12 - International Tax Reform - Pillar 2 Model Rules
These amendments are currently being analysed.
Other essential standards and interpretations adopted by the IASB approved in 2023 or not yet approved by the European Union:
- Amendments to IAS 21 - Effects of Changes in Foreign Exchange Rates.
In the absence of foreign currency transactions within the Group, this amendment will have no impact on the Group.
2.1.2 Other principles for presenting the financial statements
Altareit presents its financial statements and accompanying notes in millions of euros, to one decimal point.
Transactions eliminated in the consolidated financial statements
Balance sheet balances and income and expenses arising from intragroup transactions are eliminated when the consolidated financial statements are prepared.
Balance sheet classification
In accordance with IAS 1, the Company presents its assets and liabilities by distinguishing between current and non- current items.
Assets which must be realised, consumed or disposed of within the scope of the normal operating cycle or within 12 months following closure, are classed as "current assets", as well as the assets held with a view to disposal and cash or cash equivalents. All other assets are classified as "non- current assets".
Liabilities which have to be paid within the scope of the normal operating cycle or within 12 months following closure are classified as "current liabilities", as well as the share of
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 | ||
ALTAREIT | DECEMBER 2023 | 9 |
provisions arising from the normal operating cycle of the activity concerned due in less than one year.
Deferred taxes are always shown as non-current assets or liabilities.
2.2 Main estimations and judgements
The preparation of the consolidated financial statements requires the use of estimates and assumptions by the Group's management to determine the value of certain assets and liabilities, and of certain income and expenses, as well as concerning the information given in the notes to the financial statements.
Management reviews its estimates and assumptions on a regular basis using its past experience and various other factors deemed reasonable in the circumstances.
The actual results may differ significantly from these estimates depending on changes in the various assumptions and performance conditions.
The accounting estimates made by the Group were made in the context of the real estate crisis. This crisis triggered by the rise in interest rates marks the end of a cycle that lasted nearly 15 years.
The main estimates made by the Group concerned the following measurements:
-
measurement of net property income and services using the percentage-of-completion method (see Note 2.3.17
"Revenue and revenue-related expenses"); - the valuation of inventories and work-in-progress (see notes 2.3.8 "Inventories" and 7.4.1 "Inventories and work-in-progress"),
- measurement of goodwill and brands (please see Note
2.3.7 "Monitoring the value of non-current assets (excluding financial assets and investment properties) and losses of value" and 7.2 "Goodwill and other intangible assets").
Since June 2022, the rapid rise in interest rates combined with more restrictive policies by banks have radically undermined buyers' solvency. This crisis in demand exacerbated a pre-existing crisis of inflation in costs and regulations, creating the conditions for a major real estate crisis.
2023 saw intense operational activity in Property Development: accelerated sales to rundown the existing offer, drastic reduction in land acquisitions, in-depth review of the portfolio of options on land and balance sheet values.
An exhaustive review of the land bank led to the expensing of almost all research costs carried on the balance sheet and adjustments to the value of the land bank.
In 2023, the Group reorganised its brand portfolio to strengthen their respective positioning.
The Group has, taken into account the reliable information available to it at the date of preparation of the consolidated financial statements regarding the impacts of these situations reflecting its vision of the market.
And less significantly:
-
measurement of share-based payments (see Notes
2.3.12 "Share-based payments" and 6.1 "Equity"), - measurement of financial instruments (see Note 8 "Financial risk management").
-
measurement of investment properties (see Notes 2.3.5
"Investment properties" and 7.1 "Investment properties").
In addition to the use of estimates, the Group's management has applied its judgement in the following cases:
- measurement of rights of use, lease liabilities and contractual fees on investment property (see notes
- "Leases", 7.3 "Right-of-use on tangible and intangible fixed assets" and 7.1 "Investment properties"),
- measurement and use of deferred tax assets (see Notes
- "Taxes" and 5.3 "Corporate income tax"),
- measurement of provisions (see Notes 2.3.15
"Provisions and contingent liabilities" and 6.3 "Provisions"),- whether or not the criteria to identify an asset or group of assets as held for sale or whether an operation is intended to be discontinued in accordance with IFRS 5 (see Note 2.3.6 "Non-current assets held for sale and discontinued operations" and 7.1 "Investment properties").
The Group's financial statements also take into account, based on current knowledge and practices, the issues of climate change and sustainable development.
The budgets used to determine the revenue per percentage- of-completion systematically include the costs related to the improvement of their energy performance in accordance with the regulations in force at the time of filing of the building permits (in particular RE2020).
Regarding the adaptation of constructions to climate change, in 2018, the Group commissioned a study to analyze the exposure of its activities to the effects of climate change, including one dedicated to real estate promotion of housing in France. Several risks were analyzed: Heatwaves, Droughts, Land movements, Floods, Intense precipitation, Storms, and Marine submersion for all regional locations. The conclusions of this study allowed each brand to take specific actions to secure and address the most systematic risks (heat, droughts, intense precipitation & floods, and Clay Shrink-Swell). The costs related to these actions are included in the operation budgets.
Additionally, the Group is also working on constructing buildings that are either more resource-efficient, adaptable, or flexible, or more easily dismantled to facilitate reuse and recycling. The associated costs are also integrated into the real estate margin of the operations.
In addition, all new financing arrangements put in place by the Group in 2023 include a Taxonomy alignment clause
2.3 Accounting principles and methods of the Company
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 | ||
10 | DECEMBER 2023 | ALTAREIT |
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Altareit SCA published this content on 13 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 March 2024 18:25:07 UTC.