10th Mar 2008 11:01
Grupo Clarin S.A.10 March 2008 Grupo Clarin announces its Fourth Quarter and Full Year Results for 2007 Buenos Aires, Argentina, March 10, 2008 - Grupo Clarin S.A. ("Grupo Clarin" orthe "Company" - LSE: GCLA; BCBA: GCLA), the largest media company in Argentina,announced today its Fourth Quarter and full year results for 2007. Figures inthis report have been prepared in accordance with Argentine GAAP as of December31, 2007 and are stated in Argentine Pesos, unless otherwise indicated. Highlights (2007 vs. 2006; 4Q07 vs. 4Q06): • Net Sales reached Ps.4,383.7 million, an increase of 55.9% from 2006 largely due to the acquisition of a controlling (60%) ownership interest in Cablevision S.A. and Holding Teledigital S.A. in September 2006 (the "Cablevision Acquisition") • Adjusted EBITDA(1) increased by 90.3% from 2006 to Ps.1,350.8 million, driven by the Cablevision Acquisition. • As a result, Grupo Clarin's Adjusted EBITDA Margin (3) was 30.8% for 2007, an increase of 22.1% from 25.2% in 2006. • Net Income totaled Ps.209.6 million. In 2006, we reported a net income of Ps.869.7 million, which was driven primarily by the non-recurring gain resulting from the completion of the prepackaged (APE) restructuring of the financial debt of Multicanal S.A. • On December 7th, 2007, regulatory authorities approved the transactions that resulted in the Cablevision Acquisition. Comments from the Vice Chairman of Grupo Clarin: Mr. Jose A. Aranda, Vice Chairman of Grupo Clarin, stated, "We are pleased toreport our first annual results since becoming a publicly-traded company. In2007 we showed strong growth in sales across our segments, increased oursubscriber base and continued improving our profitability. Among other majormilestones for the year was the approval of our acquisition of Cablevision,which has enabled us to consolidate our position as the leading multimediaplayer in Argentina, and strengthened our focus on broadband, digital cable TVand communications as part of our convergence strategy. We have confidence inour ability and scale to continue generating growth in our businesses and valuefor our shareholders". FINANCIAL HIGHLIGHTS (In millions of Ps.) 2007 2006 % Var. 4Q07 4Q06 % Var.Net Sales 4,383.7 2,811.8 55.9% 1,266.2 1,055.7 19.9%Adjusted EBITDA (1) (2) 1,350.8 709.7 90.3% 398.7 296.9 33.3%Adjusted EBITDA Margin % (3) 30.8 25.2 22.1% 31.3 28.1 12.0%Net Income 209.6 869.7 -75.9% 86.7 106.5 -18.6% (1) We define Adjusted EBITDA as net sales minus cost of sales (excluding depreciation and amortization) and selling and administrative expenses (excluding depreciation and amortization). We believe that Adjusted EBITDA is a meaningful measure of our performance. It is commonly used to analyze and compare media companies on the basis of operating performance, leverage and liquidity. Nonetheless, Adjusted EBITDA is not a measure of net income or cash flow from operations and should not be considered as an alternative to net income, an indication of our financial performance, an alternative to cash flow from operating activities or a measure of liquidity. Because Adjusted EBITDA is not an Argentine GAAP measure, other companies may compute Adjusted EBITDA in a different manner. Therefore, Adjusted EBITDA as reported by other companies may not be comparable to Adjusted EBITDA as we report it. (2) Includes approximately Ps.13 million of expenses incurred in connection with the integration of the companies involved in the Cablevision Acquisition which conduct our Cable TV and Internet access business. 3) We define Adjusted EBITDA Margin as Adjusted EBITDA over Net Sales. OPERATING RESULTS Net sales reached Ps.4,383.7 million, an increase of 55.9% from Ps.2,811.8million reported for 2006. This increase was mainly due to the growth in theCable TV and Internet access segment as a result of the Cablevision Acquisition. Following is a breakdown of net sales by business segment: NET SALES(In millions of Ps.) 2007 2006 % Var. 4Q07 4Q06 % Var.Cable TV & Internet access 2,613.0 1,274.8 105.0% 722.1 585.0 23.4%Printing & Publishing 1,173.5 989.4 18.6% 354.4 292.1 21.4%Broadcasting & Programming 784.4 659.5 18.9% 234.4 230.5 1.7%Digital Content & Others 138.1 102.9 34.1% 37.9 39.5 -3.9%Subtotal 4,709.0 3,026.6 55.6% 1,348.9 1,147.1 17.6%Eliminations -325.3 -214.8 51.5% 82.7 -91.4 -9.5%Total 4,383.7 2,811.8 55.9% 1,266.2 1,055.7 19.9% Cost of sales reached Ps.2,127.2 million, an increase of 42.5% from Ps.1,491.6million reported for 2006. This increase was mainly due to growth in the CableTV and Internet access segment, attributable to the Cablevision Acquisition. Selling and Administrative Expenses (Excluding Depreciation and Amortization)reached Ps.907.7 million, an increase of 48.7% from Ps.610.5 million in 2006.This increase was mainly due to the growth in our Cable TV and Internet accesssegment attributable to the Cablevision Acquisition. Financial results net totaled Ps.-448.3 million, mainly generated byliabilities, from Ps.920.0 million for 2006, which reflect the non-recurringgains generated by the completion of Multicanal's debt restructuring. Equity in earnings from unconsolidated affiliates in 2007 totaled Ps.7.2million, compared to Ps.224.7 million for 2006. Gains on account of Equity inearnings from unconsolidated affiliates for 2006 are attributable primarily tothe non-recurrent gain of Ps.246.8 million recorded as a result of the dilutionfor the benefit of existing shareholders (the Company and AGEA), generated bythe capitalization of approximately USD182.0 million of outstanding debt, inexchange for shares representing approximately 35% of Multicanal's total capitalpursuant to the terms of Multicanal's APE in July 2006 Other income (expenses), net reached Ps.-21.4 million, compared to Ps.17.5million in 2006. Adjusted EBITDA reached Ps.1,350.8 million, an increase of 90.3% from Ps.709.7million reported for 2006. This increase was mainly due to the growth in ourCable TV, an Internet access segment attributable to the CablevisionAcquisition, an increase in our ARPU (Average Price per User) and higheradvertising revenues. Following is a breakdown of adjusted EBITDA by business segment: ADJUSTED EBITDA (In millions of Ps.) 2007 2006 % Var. 4Q07 4Q06 % Var.Cable TV & Internet access 889.8 333.2 167.0% 244.3 169.0 44.6%Printing & Publishing 286.1 262.0 9.2% 100.0 85.5 16.9%Broadcasting & Programming 140.4 83.7 67.2% 46.8 30.4 53.7%Digital Content & Others 34.4 35.9 -4.0% 7.6 17.0 -55.3%Subtotal 1,350.8 714.8 89.0% 398.7 301.9 32.1%Eliminations -5.1 -100.0% -5.0 -100.0%Total 1,350.8 709.7 90.3% 398.7 296.9 34.6% Net income totaled Ps.209.6 million, a decrease of 75.9% from Ps.869.7 millionreported for 2006. While our Adjusted EBITDA in the Cable TV and Internet accesssegment grew due to the Cablevision Acquisition, our Net Income for 2006 wasdriven by the non-recurrent gains resulting from the completion of Multicanal'sdebt restructuring in July 2006. Income tax as of December 2007, reached Ps.200.7 million, from Ps.490.7 millionin 2006. This decrease was mainly due to the non-recurrent gains in 2006generated by the completion of Multicanal's debt restructuring. Cash disbursements for Investment (CAPEX) totaled Ps.175.5 million in the fourthquarter and Ps.575.9 million in the full year, an increase of 127.1% fromPs.253.6 million reported for 2006. Of the total CAPEX in 2007, 88.7% wasallocated to the Cable TV and Internet access segment, 7.2% to the Printing andPublishing segment and the remaining 4.1% to other activities. Our Capex in theCable TV and Internet access segment contemplates network upgrades,digitalization and further development of the triple play strategy. Debt profile (1): Debt coverage ratio for the period ended December 31, 2007,was 1.8x, while Net Debt at the end of this period totaled Ps.2452.9 million. (1) Debt Coverage Ratio is defined as Total Financial Debt minus Cash and Equivalents divided by Adjusted EBITDA (last 12 months) RESULTS BY BUSINESS SEGMENT CABLE TV AND INTERNET ACCESS Net Sales Net sales increased by 105.0% to Ps.2,613.0 million for the twelve-month periodended 31 December 2007 compared to Ps.1,274.8 million for the same period of2006. The increase in net sales was principally attributable to theconsolidation of Cablevision in our Cable TV and Internet access segmentfollowing the Cablevision Acquisition. To a lesser extent, it reflects anincrease in the number of subscribers through internal growth, includingadditional Internet subscribers, and in average subscription charges for cabletelevision registered in 2006 and in 2007. Total Cable TV basic subscribersamounted to 3,022,337 as of December 2007 compared to 2,837,448 as of December2006, and Internet subscribers amounted to 758,168 in 2007, compared to 587,704in 2006. Cost of Sales (Excluding Depreciation and Amortization) Cost of sales (excluding depreciation and amortization) increased by 90.8% toPs.1,123.2 million for 2007, compared to Ps.588.7 million for the same period in2006. This increase was mainly due to the Cablevision Acquisition, and to alesser extent, to the increase in our programming costs attributable to internalgrowth in our subscriber base and pricing adjustments linked to basic monthlyfee increases, contemplated in certain programming contracts, and also to theeffect of salary increases. Selling and Administrative Expenses (Excluding Depreciation and Amortization) Selling and administrative expenses (excluding depreciation and amortization)increased by 70.0% to Ps. 599,9 million for 2007, compared to Ps.352.8 millionreported for the same period in 2006. This increase was mainly due to theCablevision Acquisition. The increase in expenses for salaries, wages, socialsecurity charges and other personnel expenses reflects primarily the CablevisionAcquisition and the effect of other salary increases. It also includesapproximately Ps.13 million of expenses related to the integration of our cableTV and Internet access operations following the Cablevision Acquisition. Depreciation and Amortization Depreciation expenses of property, plant and equipment increased by 102.3% toPs.234.1 million for 2007 from Ps.115.7 million reported for the same period in2006. The increase reflects the Cablevision Acquisition, and additions of cableand network equipment during 2006 and 2007. Also, the Company recorded Ps.119.8million in amortization expenses for 2007 compared to Ps.34.8 million in 2006.The increase is mainly attributable to the intangible assets related to thepurchase of Cablevision's and Teledigital's subscriber portfolios in September2006. PRINTING AND PUBLISHING Net Sales Net sales increased by 18.6% to Ps.1,173.5 million in 2007, compared to Ps.989.4million in 2006. The increase was the result of growth in advertising yield, theincrease in sales of optional products, the increase in cover price ofnewspapers, and the proportional consolidation of CIMECO in the last quarter. Cost of Sales (Excluding Depreciation and Amortization) Cost of sales (excluding depreciation and amortization) increased by 14.8% toPs.589.5 million in 2007, compared to Ps.513.3 million in 2006. The increase wasprimarily the result of higher wages and salaries, of an increase of the energycosts of paper production, due to the substitution of gas for fuel oil requiredby the constraints imposed on the supply of energy in Argentina, of an increasein the costs of raw materials, and of the proportional consolidation of CIMECOin the last quarter. Selling and Administrative Expenses (Excluding Depreciation and Amortization) Selling and administrative expenses (excluding depreciation and amortization)increased by 39.2% to Ps.297.9 million in 2007, compared to the Ps.214.0 millionreported for 2006. The increase was primarily the result of an increase inadvertising expenses and in wages and salaries, and, to a lesser extent, it isrelated to the proportional consolidation of CIMECO in the last quarter. Depreciation and Amortization Depreciation and amortization expenses increased by 9.7% to Ps.42.1 million in2007 compared to Ps.38.4 million in 2006. The increase reflects capitalexpenditures made during 2006 and 2007. BROADCASTING AND PROGRAMMING Net Sales Net sales increased by 18.9% to Ps.784.4 million (including Ps.154.9 million toother segments) in 2007, compared to Ps.659.5 million (including Ps.100.1million to other segments) in 2006. The increase was primarily the result of ahigher level of advertising sales and the increases in the pricing of cablesignal and sports programming, attributable to contract formulas that linkpricing to increases in the monthly fees and a larger subscriber base. Cost of Sales (Excluding Depreciation and Amortization) Cost of sales (excluding depreciation and amortization) increased by 10.8% toPs.504.2 million in 2007, compared to Ps.455.0 million in 2006. The increase wasprimarily the result of higher programming costs and salaries and, to a lesserextent, of a larger payroll. Selling and Administrative Expenses (Excluding Depreciation and Amortization) Selling and administrative expenses (excluding depreciation and amortization)increased by 15.7% to Ps.139.8 million in 2007, compared to Ps.120.8 million in2006. The increase was primarily the result of higher salaries and wages. Depreciation and Amortization Depreciation and amortization expenses increased by 11.4% to Ps.19.3 million in2007 compared to Ps.17.3 million reported for 2006. DIGITAL CONTENT AND OTHERS Net sales in this segment are derived from administrative and corporate servicesrendered by the Company and by our subsidiary GC Gestion Compartida S.A. tothird parties as well as to other subsidiaries of the Company (which areeliminated in the consolidation). Additionally, this segment includes theproduction of digital content. Net sales to third parties are largely derivedfrom advertising in our web pages and portals. Cost of sales (excludingdepreciation and amortization) is driven by salaries and professional fees paidto advisers. OPERATING STATISTICS BY BUSINESS SEGMENT ERATING STATISTICS BY BUSINESS SEGMENT CABLE TV AND INTERNET ACCESS 2007 2006 % Var. 4Q07 3Q07 % Var.Homes Passed (1) 6,753.3 6,753.6 -0.0 6,753.6 6,753.6 0.0Bidirectional Homes Passed 47% 42% 11.9 47% 42% 11.9Cable TVTotal Subscribers (1) 3,022.3 2,837.4 6.5 3,022.3 2,969.8 1.8Subscribers - Argentina 2,859.9 2,686.1 6.5 2,859.9 2,808.8 1.8Subscribers - International 162.4 151.3 7.3 162.4 161.0 0.9 Uruguay 80.5 79.2 1.6 80.5 80.3 0.2 Paraguay 81.9 72.1 13.6 81.9 80.7 1.5% over Homes Passed 44.8% 42.0% 6.5 44.8% 44% 1.8Churn Rate % 13.2% 13.3% -0.5 14.1% 12.7% 10.9Digital VideoDigital ready Pay TV Subs (1) 1,381.9 0 NA 1,381.9 1,354.3 2.0Subscribers (1) 221.4 0 NA 221.4 165.0 34.2Penetration over Digital Ready TV Subs 16.0% NA NA 16.0% 12.2% 31.5Internet SubscribersTotal Internet Subscribers (1) 758.2 587.7 29.0 758.2 716.1 5.9Broadband Subscribers (1) 725.5 536.4 35.3 725.5 679.0 6.9% over Bidirectional Homes Passed 22.9 18.9 20.9 22.9 23.9 -4.5Total ARPU(2) 75.3 65.0 15.8 79.8 76.3 4.5 (1) Figures in thousands (2) Average Net Sales/average Pay TV Subscribers PRINTING AND PUBLISHING 2007 2006 % Var. 4Q07 4Q06 % Var.Circulation (1) 442.9 464.2 -4.6 435.6 456.3 -4.5Circulation share (%) (2) 49.6 50.5 -1.8 50.2 50.7 -0.9Advertising pages share %(2) 60.0 60.7 -1.2 60.0 60.5 -0.9 (1) Average number of copies according to IVC (including Diario Clarin and Ole) (2) Share in Buenos Aires and greater Buenos Aires Area (AMBA) Diario Clarin. Company estimates. BROADCASTING AND PROGRAMMING 2007 2006 % Var. 4Q07 4Q06 % Var.Advertising Share % (1) 45.4 42.5 6.8 43.3 44.9 -3.6Audience Share % (2)Prime Time 42.4 39.4 7.6 44.5 42.5 4.7Total Time 34.5 30.4 13.5 35.6 32.9 8.1 (1) Company estimate, over ad spend in Ps. in free TV for AMBA region excluding non-traditional advertising. (2) Share of free TV audience according to IBOPE for AMBA. Prime time is defined as Monday through Friday from 8pm to 12am. Total time is defined as Monday through Sunday from 12 pm to 12 am. DIGITAL CONTENT AND OTHERS Dec-07 Dec-06 % Var.Page Views (1) 569.1 200.1 184.3Unique Visitors (1) 10.5 7.0 50.0 (1) In millions, source IAB DEBT AND LIQUIDITY (In millions of Ps.) 2007 2006 % ChangeShort Term and Long Term DebtCurrent Financial Debt 252.0 453.5 -44.4Financial loans 84.2 300.3 -72.0Negotiable obligations 112.8 59.3 90.2Accrued interest 19.9 52.6 -62.2Acquisition of equipment 3.8 0 NASellers Financing Capital 8.0 15.5 -48.0Sellers Financing accrued interest 23.2 25.7 -9.9Non- Current Financial Debt 2,766.4 3024.1 -8.5Financial loans 79.2 175.0 -54.8Negotiable obligations 1,983.3 1998.6 -0.8Accrued interest 0.7 0 NAAcquisition of equipment 0.0 0 NASellers Financing 703.3 850.6 -17.3Total Financial Debt (A) 3,018.4 3477.6 -13.2Bank overdraft 7.2 5.7 26.8Measurement at fair Value -76.2 -115.7 -34.1Total Short Term and Long Term Debt 2,949.4 3367.6 -12.4 Cash and Cash Equivalents (B) 565.5 381.2 48.3Net Debt (A) - (B) 2,452.9 3096.4 -20.8Net Debt/Adjusted Ebitda (Last 12 Months) 1.8x 4.4x -58.7% USD Debt 80.4% 80.0 0.5% Ar. Ps Debt 19.6% 20.0 -2.0 Negotiable obligations include Cablevision USD114.4 MM notes due October 2012;Cablevision USD235.1 MM notes due October 2015, Multicanal USD105.7 MM notes dueJuly 2013 and Multicanal USD80.3 MM notes due July 2016, and AGEA Ps.300 MMnotes due 2011. Total Financial Debt and Net Debt, were cut from Ps.3,477.6 to Ps.3,018.4million and from Ps.3,096.4 to Ps.2,452.9, respectively, since December 2006.This represents a reduction of 13.2% in the Total Debt and of 20.8% in the NetDebt. Comparing quarters, net debt of Ps.3037.2 reported in last September wasreduced to Ps. 2,452.9 in the last quarter. Debt coverage ratio as of December 31, 2007 was 1.8x in the case of Net Debt andof 2.2x in terms of Total Financial Debt. This reduction reflects thecancellation of debt incurred by our subsidiary Vistone to acquire cable TVsystems, of some seller notes in Cablevision, and also to more cash andequivalents as a consequence of the proceeds from the IPO. RECENT EVENTS Antitrust Commission Approved Cable Television Acquisitions - On December 7,2007, the Secretary of Commerce confirmed a decision rendered by the ArgentineAntitrust Commission and granted administrative approval to a series oftransactions that had taken place on September 26th, 2006, as a result of whichGrupo Clarin holds approximately 60% of the capital stock of Cablevision, andCablevision owns 98.5% of the capital stock of Multicanal and Prima, and 100% ofthe capital stock of Teledigital. The approval was granted without restrictiveconditions and will not demand higher expenditures further the non-recurringexpenses already considered in the Company's business plan. CIMECO - On August 28, 2007, Grupo Clarin increased its 33% stake in CompaniaInversora en Medios de Comunicacion S.A. (CIMECO) to 50%, by acquiring,alongside with S.A. La Nacion, the equity interest held by Vocento. As a resultof such acquisition, Grupo Clarin and La Nacion became the only shareholders ofCIMECO, which currently owns 81.3% of Diario La Voz del Interior (Cordoba) and80% of Diario Los Andes (Mendoza). These are the largest and the fifth regionalnewspapers, respectively, in terms of circulation in Argentina. On the samedate, CIMECO acquired a 12% interest in Papel Prensa from S.A. La Nacion. GrupoClarin holds an option to acquire the remaining 50% interest in CIMECO from LaNacion. Other Acquisitions - As part of a series of strategic acquisitions oriented toincrease our offer in the pay TV signals, in December 2007 Grupo Clarin acquiredan interest in Automoviles Deportivos 2000 S.A. and also, in January 2008, aninterest of Carburando, Mundo Show S.A. and Mundo Show TV S.A. The mainactivities of these companies are the organization, marketing and production ofmedia content related with automobile competition and races. Long-Term Savings Plan - The Company, together with its subsidiaries, startedthe implementation process of a Long-Term Savings Plan (PALP) for certainexecutives initiating in January 2008. Through this plan, participatingexecutive officers commit to contribute regularly a portion of their salary to afund that will allow them to increase their income at the retirement age.Furthermore, each company of the Group where such executive officers renderservices will match such officers' contributions to the fund. The total expensethat the Company will incur in 2008, amounts to Ps.20 million, out of whichapproximately Ps.9 million is related to the initial implementation and theremaining Ps.11 million to the cost of the PALP for 2008. CONFERENCE CALL AND WEBCAST INFORMATION Grupo Clarin will host a conference call and webcast to discuss its fourthquarter and year-end results for 2007, on Monday, March 10, 2008. Presentations by: Alejandro Urricelqui, Chief Financial Officer; Alfredo Marin,Investor Relations Officer. Time: 3:30 pm Buenos Aires Time/ 5:30 pm London Time/ 1:30 pm New York Time To access the conference call, please dial: form within Argentina +0 800 3330050; from within the United Kingdom +44 (800) 092 3582; from within the UnitedStates +1 (800) 351 6807; and from all other countries +1 (334) 323 7224. Thepass code is: 43445. To access the simultaneous webcast presentation, please go to: http://www.grupoclarin.com.ar/ir/ A replay of the conference call will be available one hour after its conclusion,and will remain available for 48 hours. To access the replay, please dial: fromthe within the U.S. + 1-877-919-4059 or from anywhere outside the U.S.+1-334-323-7226. The pass code is: 91814872. The webcast presentation will be archived at http://www.grupoclarin.com.ar/ir/ ABOUT THE COMPANY Grupo Clarin is the largest media company in Argentina and the market leader inthe cable television and Internet access, printing and publishing, andbroadcasting and programming segments. Its cable television network is thelargest in Latin America, with the largest broadband subscriber base inArgentina. Its flagship newspaper -Diario Clarin- is the highest circulationnewspaper in Latin America and the second-highest circulation Spanish-languagenewspaper in the world. Grupo Clarin is the largest producer of media content inArgentina, including news, sports and entertainment and reaches substantiallyall segments of the Argentine population in terms of wealth, geography and age. Disclaimer Some of the information in this press release may contain projections or otherforward-looking statements regarding future events or the future financialperformance of Grupo Clarin. You can identify forward-looking statements byterms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might" the negative of such terms or other similarexpressions. These statements are only predictions and actual events or resultsmay differ materially. Grupo Clarin does not intend to or undertake anyobligation to update these statements to reflect events and circumstancesoccurring after the date hereof or to reflect the occurrence of unanticipatedevents. Many factors could cause the actual results to differ materially fromthose contained in Grupo Clarin's projections or forward-looking statements,including, among others, general economic conditions, Grupo Clarin's competitiveenvironment, risks associated with operating in Argentina a, rapid technologicaland market change, and other factors specifically related to Grupo Clarin andits operations. CONSOLIDATED BALANCE SHEETS As of December 31, 2007 and 2006 In Argentine Pesos (Ps.) December 31, 2007 December 31, 2006 ASSETS CURRENT ASSETS Cash and banks 219,760,595 299,100,551Short-term investments 345,699,907 82,142,004Trade receivables, net 569,117,703 460,608,164Other receivables, net 142,290,047 149,659,483Inventories 168,195,918 151,297,216Other assets 48,419,337 65,235,709 Total current assets 1,493,483,507 1,208,043,127 NON-CURRENT ASSETS Trade receivables, net 10,839,314 9,741,215Other receivables, net 203,134,042 151,084,555Inventories 41,078,789 32,850,180Investment in unconsolidated affiliates 31,132,115 72,521,864Other investments 8,394,731 7,031,748Property, plant and equipment, net 1,665,732,947 1,342,725,846Intangible assets, net 983,230,664 1,086,559,244Other assets 120,007 - Subtotal 2,943,662,609 2,702,514,652Goodwill 2,575,035,311 2,476,156,285 Total non-current assets 5,518,697,920 5,178,670,937 Total assets 7,012,181,427 6,386,714,064 LIABILITIES CURRENT LIABILITIES Accounts payable 516,401,732 437,439,485Long-term debt 228,733,303 431,123,109Salaries and Social Security payable 163,434,344 118,426,541Taxes payable 242,901,986 177,406,201Other liabilities 123,847,203 136,463,000 Total current liabilities 1,275,318,568 1,300,858,336 NON-CURRENT LIABILITIES Accounts payable 9,876,692 10,640,522Long-term debt 1,986,879,514 2,047,243,562Salaries and Social Security payable 163,998 309,668Taxes payable 18,133,529 14,759,728Other liabilities 923,416,255 1,010,446,297Provisions 131,235,431 112,879,172 Total non-current liabilities 3,069,705,419 3,196,278,949 Total liabilities 4,345,023,987 4,497,137,285 MINORITY INTEREST 430,176,380 354,381,111 SHAREHOLDERS' EQUITY 2,236,981,060 1,535,195,668 Total liabilities, minority interest and shareholders' equity 7,012,181,427 6,386,714,064 CONSOLIDATED STATEMENTS OF OPERATIONS For the years ended December 31, 2007 and 2006 In Argentine Pesos (Ps.) December 31, 2007 December 31, 2006 Net sales 4,383,674,687 2,811,793,032Cost of sales (excluding depreciation and amortization) - Exhibit F (2,125,151,223) (1,491,628,105)Consolidated Subtotal 2,258,523,464 1,320,164,927 Expenses (excluding depreciation and amortization)Selling expenses - Exhibit H Consolidated (448,326,882) (289,985,969)Administrative expenses - Exhibit H Consolidated (459,389,151) (320,526,202) Expenses subtotal (907,716,033) (610,512,171) Depreciation of property, plant and equipment (1) (286,314,883) (169,318,902)Amortization of intangible and other assets (127,186,833) (38,882,648)Goodwill amortization (3,982,608) -Depreciation of other investments (144,594) (328,050) Depreciation and amortization subtotal (417,628,918) (208,529,600) Financing and holding resultsGenerated by assetsInterest 26,488,537 28,063,611Other taxes and expenses (62,044,360) (41,541,812)Impairment of inventories and materials (2,663,158) (281,000)Exchange differences 5,430,109 8,174,091Holding gains on inventories 13,161,074 2,014,852Holding (losses) on financial instruments (3,936,105) 366,519Effect of financial discounts on assets 16,735 (1,414,102)Other 651,371 (117,046) Generated by liabilities Interest (282,432,748) (276,480,371)Exchange differences (82,613,175) (16,805,486)Income from repurchase and debt restructuring - 1,249,944,385Effect of financial discounts on liabilities (44,536,919) (708,718)Fees and other financial expenses (694,729) (14,598,181)CER restatement (2,384,288) (13,590,505)Holding (losses) on financial instruments (9,761,301) (2,957,037)Other (3,017,444) (74,217) Equity in (earnings) from unconsolidated affiliates and gain on sale of 7,217,775 224,673,371subsidiaries, netOther (expense) income, net (21,421,239) 17,486,169 Income before income tax, tax on assets and minority interest 470,638,648 1,663,277,679 Income tax and tax on assets (200,749,110) (490,694,643) Minority interest (60,320,897) (302,912,073) Net income for the year 209,568,641 869,670,963 (1) Chargeable to:Cost of sales (259,166,889) (150,223,445)Selling expenses (18,100,281) (9,317,275)Administrative expenses as of (9,047,713) (9,778,182) CONSOLIDATED STATEMENTS OF CASH FLOWs For the years ended December 31, 2007 and 2006 In Argentine Pesos (Ps.) December 31, 2007 December 31, 2006CASH PROVIDED BY OPERATING ACTIVITIES Net income for the year 209,568,641 869,670,963 Income tax and tax on assets 200,749,110 490,694,643Accrued interest 255,944,211 248,416,760 Adjustments to reconcile net income for the year to cash provided byoperating activities:Depreciation of property, plant and equipment 286,314,883 169,318,902Amortization of intangible and other assets 127,186,833 38,882,648Goodwill amortization 3,982,608 -Depreciation of other investments 144,594 328,050Setting up / (Reversal) of allowances for doubtful accounts 24,341,591 (2,296,159)Setting up of provision for contingencies 11,532,628 6,408,564Exchange difference and other financial results 116,391,137 17,034,872Equity in (earnings) from unconsolidated affiliates and gain on sale of (7,217,775) (224,673,371)subsidiaries, netMinority interest 60,320,897 302,912,073Holding (losses) on financial instruments 13,697,406 2,590,518Holding gains on inventories (13,161,074) (2,014,852)(Losses) / Gains on sale of property, plant and equipment (519,461) (24,998)Income from repurchase and debt restructuring - (1,249,944,385)Allowance for impairment in value of inventories and materials 2,663,158 281,000Changes in assets and liabilities:Trade receivables (106,795,320) (125,209,755)Other receivables (17,228,159) (125,737,911)Inventories (7,643,891) 6,721,455Other assets (40,992) 11,425,993Accounts payable 63,310,794 53,086,095Salaries and Social Security payable 41,415,652 17,746,784Taxes payable (28,367,251) 55,947,404Other liabilities 3,611,544 138,914,329Provisions (13,824,286) (17,068,783)Income tax and tax on assets payments (88,665,012) (117,987,226)Cash provided by operating activities 1,137,712,466 565,423,613 CASH USED IN INVESTING ACTIVITIES Acquisition of property, plant and equipment (575,901,342) (253,586,347)Acquisition of intangible assets (20,842,530) (2,882,290)Loans granted (8,525,000) -Payment for the acquisition of subsidiaries, net of cash acquired (72,305,275) 15,945,485Acquisition of other investments - (14,719,018)Collection for proceeds from sale of property, plant and equipment 5,805,794 148,368Restricted cash and guarantees (18,960,000) 45,750,000Collection of interest 8,876,484 754,478Collection of dividends - 548,800Cash used in investing activities (681,851,869) (208,040,524) CONSOLIDATED STATEMENTS OF CASH FLOWs For the years ended December 31, 2007 and 2006 In Argentine Pesos (Ps.) December 31, 2007 December 31, 2006 CASH USED IN FINANCING ACTIVITIES Loans obtained 6,675,136 474,329,218Repayment of loans and financial advances (349,413,684) (706,526,560)Payment of interest (214,019,964) (196,688,824)Net collections (payments) of financial instruments 788,984 (9,431,983)Payment of fees on bank and financial debt restructuring - (32,670,018)Payment of sellers financing (169,934,495) -Reserve account (14,648,966) -Payment of dividends and restatements (18,000,000) -Payments to minority shareholders (3,301,578) (1,256,381)Funds from initial public offering, net of related expenses 470,808,308 - Cash used in financing activities (291,046,259) (472,244,548) FINANCING AND HOLDING RESULTS GENERATED BY CASH AND CASH EQUIVALENTS 19,403,609 9,051,088 Net Increase (decrease) in cash flow 184,217,947 (105,810,371)Cash and cash equivalents at the beginning of the year 381,242,555 487,052,926 Cash and cash equivalents at the end of the year (1) 565,460,502 381,242,555 (1) It includes:Cash and banks 219,760,595 299,100,551Investments with maturities of less than three months 345,699,907 82,142,004 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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