Quarterly Report • Jan 25, 2019
Quarterly Report
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INTERIM REPORT | Q3 2018
| IDENTIFICATION OF THE COMPANY 4 | |
|---|---|
| SUMMARY OF INDICATORS 5 | |
| INTERIM MANAGEMENT REPORT 8 | |
| I – INTRODUCTION 9 | |
| II – OVERVIEW OF THE GROUP'S ACTIVITY 10 | |
| III. EVENTS TAKING PLACE AFTER THE CONCLUSION OF THE THIRD QUARTER OF 2018 19 | |
| IV. OUTLOOK 19 | |
| CONSOLIDATED FINANCIAL STATEMENTS 21 | |
| CONSOLIDATED FINANCIAL POSITION STATEMENTS 22 | |
| CONSOLIDATED INCOME STATEMENTS 23 | |
| CONSOLIDATED INCOME AND OTHER INTEGRAL INCOME STATEMENT 24 | |
| CONSOLIDATED CHANGES IN EQUITY STATEMENTS 25 | |
| CONSOLIDATED CASH FLOW STATEMENTS 26 | |
| NOTES ATTACHED TO THE CONSOLIDATED FINANCIAL STATEMENTS. 27 |
INTERIM REPORT | Q3 2018
TEIXEIRA DUARTE, S.A.
LISTED COMPANY Head office: Lagoas Park, Edifício 2 — 2740-265 Porto Salvo Share Capital: €210,000,000 Single Legal Person and Registration Number at Cascais-Oeiras Commercial Registration Office: 509.234.526
| Q3 | Q3 | Q3 | Q3 | Q3 | Variation | |
|---|---|---|---|---|---|---|
| 2014 | 2015 | 2016 | 2017 | 2018 2018/2017% | ||
| Average no. of workers | 13,165 | 13,691 | 11,534 | 10,618 | 10,383 | (2.2%) |
| Turnover | 1,175 | 1,005 | 828 | 739 | 636 | (14.0%) |
| Operating Income | 1,188 | 1,038 | 863 | 771 | 707 | (8.2%) |
| EBITDA | 165 | 125 | 150 | 123 | 110 | (10.4%) |
| EBITDA Margin/Turnover | 14.0% | 12.5% | 18.1% | 16.6% | 17.3% | + 0.7 p.p. |
| EBIT | 133 | 67 | 99 | 84 | 75 | (10.9%) |
| Net Income Attributable to Equity Holders | 71 | 17 | (26) | (11) | 7 | - |
| Net Debt | 1,293 | 1,253 | 1,166 | 1,085 | 753 | (30.6%) |
| Total Equity Attributable to Equity Holders | 424 | 459 | 345 | 364 | 220 | (39.7%) |
| Total Equity | 461 | 480 | 390 | 412 | 256 | (37.8%) |
| Total Net Assets | 2,987 | 2,819 | 2,477 | 2,427 | 1,722 | (29.0%) |
The accounting amounts are expressed in millions of euros.
The values of the column "Variation 2018/2017%" were calculated based on the amounts without rounding them up.
Total Equity includes non-controlling interests.
Pursuant to the applicable legal and regulatory provisions, TEIXEIRA DUARTE, S.A. ("TD, S.A.") discloses its Interim Report for the first nine months of 2018, as part of which the consolidated financial statements are attached.
In compliance with and under the regulations on the provision of periodic information, the Group confirms that the elements disclosed herein relate only to the consolidated scope and that the consolidated financial statements dated 30 September 2018 were prepared using accounting policies consistent with the International Financial Reporting Standards ("IFRS"), as adopted by the European Union, effective for the periods beginning 1 January 2018 and in accordance with International Accounting Standards ("IAS") norm 34 – Interim Financial Reporting.
Due to the application of IAS 29 – Financial Reporting in Hyperinflationary Economies from 2018 onwards to the Group's companies based in Angola and Venezuela, the income statements for 30 September 2018 and their respective notes are not directly comparable with the financial statements for 30 September 2017. As regards the financial position and the respective notes on the accounts dated 31 December 2017, in compliance with the application of the abovementioned regulation, the Group subsequently restated it.
In view of the 85% devaluation of the Angolan Kwanza in this period, it should be noted that the tangible fixed assets in Angola are recorded at the amortized cost in Kwanzas. This led to a strong devaluation of these assets in the accounts, with a consequent impact on the reduction in Assets and Equity, which manifested itself in the accounting process.
Considering that these assets are dollarised by the market, it should be understood that such devaluations in the Group's accounts do not reflect the preservation of value resulting from said dollarisation.
It should also be noted that within the Teixeira Duarte Group, two of the wholly-owned companies were repositioned. "ANGOPREDIAL – Empreendimentos Imobiliários, Lda." moved from the Real Estate sector to the Hospitality sector and "Global Net Distributors (Pty) Ltd." moved from the Distribution sector to the Construction sector. In this document—only in relation to these four sectors—the notes attached to the 2017 consolidated financial statements were restated to facilitate comparability.
On 31 December 2017, the companies "BONAPARTE – Imóveis Comerciais e Participações, S.A." (owner of "Shopping Cidade do Porto"), TDHOSP - Gestão de Edifício Hospitalar, S.A." and "LAGOAS PARK, S.A." were classified as "Held for Sale" and, as such, have not been consolidated since that date. This has an impact on the comparability of the various indicators presented below, since these companies were part of the scope of consolidation in September 2017 and contributed to these indicators as they were determined at the end of that period last year.
It should be noted that, following the aforementioned events, on May 25, 2018, the Group concluded a contract for the sale of the entire share capital of the company "Lagoas Park, S.A." to a subsidiary of the European private equity fund Kildare.
This operation, together with those related to the sale of 90% of "TDHOSP – Gestão de Edifício Hospitalar, S.A." and 7.5% of "LUSOPONTE – Concessionária da Travessia do Tejo, S.A." has meant that, up until the third quarter of this year, the Teixeira Duarte Group has contracted an overall amount of about 450 million euros out of the 500 million euros that had been announced as assets expected to be sold.
This is another important step in the implementation of the Teixeira Duarte Group's strategy of reducing liabilities, namely bank indebtedness and investment in relevant sectors and markets.
Under the relevant provisions and without prejudice to the regular monitoring of the activity of the Teixeira Duarte Group by its supervisory bodies, as well as the reporting of information provided to them for the purposes of the creation of this document, the elements published herein were not audited.
In addition to the consolidated financial statements and their accompanying annexes, this document will also be presented with a brief overview of the evolution of the Group's activity during the period under review, in relation to the following topics highlighted in advance:
for the periods ending 30 September 2018 and 2017
| Q3 18 | Q3 17 | Var. (%) | Jul-Sep 18 | Jul-Sep 17 | Var. (%) | |
|---|---|---|---|---|---|---|
| Operating income | 707.278 | 770.846 | (8,2%) | 212.625 | 269.861 | (21,2%) |
| Operating costs | (597.153) | (647.962) | 7,8% | (193.675) | (234.823) | 17,5% |
| EBITDA | 110.125 | 122.884 | (10,4%) | 18.950 | 35.038 | (45,9%) |
| Amortisations and depreciations | (31.861) | (42.840) | 25,6% | (10.073) | (13.910) | 27,6% |
| Provisions and impairment losses | (3.649) | 3.678 | - | (745) | 3.457 | - |
| EBIT | 74.615 | 83.722 | (10,9%) | 8.132 | 24.585 | (66,9%) |
| Financial results | (57.000) | (56.768) | (0,4%) | (19.367) | (13.501) | (43,4%) |
| Income before taxes | 17.615 | 26.954 | (34,6%) | (11.235) | 11.084 | - |
| Income tax | (11.874) | (31.334) | 62,1% | 2.066 | (9.451) | - |
| Net income | 5.741 | (4.380) | - | (9.169) | 1.633 | - |
| Attributable to: | ||||||
| Equity holders | 7.094 | (11.066) | - | (10.276) | (1.975) | (420,3%) |
| Non-controlling interests | (1.353) | 6.686 | - | 1.107 | 3.608 | (69,3%) |
(AMOUNTS IN THOUSANDS OF EUROS)
Net Income Attributable to Equity Holders was positive: 7,094,000 euros compared with the 11,066,000 euro negative income recorded in September 2017.
In addition to the normal impact of the development of the Teixeira Duarte Group entities' activities in their different markets, this indicator was also influenced by unfavourable exchange rate differences, which in September 2018 were negative—a value of 60,291,000 euros—while in the same period in 2017 they had been negative 878,000 euros. The indicator was also influenced by the positive impact— 32,373,000 euros—from the net monetary position resulting from the application of IAS 29 to the companies based in Angola and Venezuela.
Net Income Attributable to Equity Holders generated in the third quarter of 2018 alone was influenced by unfavourable exchange rate differences of 21,714,000 euros and positively by the net monetary position resulting from the application of IAS 29: 12,631,000 euros.
Turnover amounted to 635,513,000 euros, which reflects a 14% decrease compared to September 2017, i.e. a decrease of 103,739,000 euros.
In Portugal, there was an increase of 25,326,000 euros compared to September 2017, which is considered positive when paying particular attention to the fact that at the end of that period last year, the companies RECOLTE, S.A. and RECOLTE (Porto), S.A.—sold in July 2017—were still part of the Group's scope of consolidation and had contributed 6,157,000 euros to the turnover for that period.
The other markets fell overall by 21.4%, partly resulting from the lower value in euros of the activity in some non-domestic markets, especially in Angola.
In this context, the non-domestic markets, which accounted for 81.6% of this indicator in June of last year, subsequently represented 74.6% of the Teixeira Duarte Group's total turnover.
(AMOUNTS IN THOUSANDS OF EUROS)
In the charts below are the Turnovers broken down by countries and sectors of activity, with the Group's exposure to more adverse economic contexts—particularly the effects resulting from the devaluation of Kwanza—standing out.
| Q3 18 | Q3 17 | Jul-Sep 18 | Jul-Sep 17 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Countries | Amount | Contribution | Amount | Contribution | Variation | Amount | Contribution | Amount | Contribution | Variation |
| Portugal | 161.376 | 25,4% | 136.050 | 18,4% | 18,6% | 46.772 | 22,6% | 54.320 | 20,6% | (13,9%) |
| Angola | 210.144 | 33,1% | 288.506 | 39,0% | (27,2%) | 70.733 | 34,2% | 95.759 | 36,3% | (26,1%) |
| Algeria | 92.955 | 14,6% | 64.121 | 8,7% | 45,0% | 37.793 | 18,2% | 18.814 | 7,1% | 100,9% |
| Brazil | 99.140 | 15,6% | 158.165 | 21,4% | (37,3%) | 27.171 | 13,1% | 63.837 | 24,2% | (57,4%) |
| Spain | 26.861 | 4,2% | 22.603 | 3,1% | 18,8% | 8.799 | 4,2% | 7.792 | 2,9% | 12,9% |
| Mozambique | 23.072 | 3,6% | 55.761 | 7,5% | (58,6%) | 10.738 | 5,2% | 18.212 | 6,9% | (41,0%) |
| Venezuela | 11.218 | 1,8% | 4.633 | 0,6% | 142,1% | 963 | 0,5% | 2.913 | 1,1% | (66,9%) |
| Others | 10.747 | 1,7% | 9.413 | 1,3% | 14,2% | 4.139 | 2,0% | 2.515 | 1,0% | 64,6% |
| 635.513 | 100,0% | 739.252 | 100,0% | (14,0%) | 207.108 | 100,0% | 264.162 | 100,0% | (21,6%) |
(AMOUNTS IN THOUSANDS OF EUROS)
The rise in Turnover for Venezuela is essentially the result of work taking place at the La Guaira port, an operation that began in the second half of 2017 and that in the first nine months of 2018 amounted to 11,195,000 euros.
It should be noted that in August 2018 the Venezuelan government changed the country's exchange rate, which had a negative impact on the value in euros of the activity recorded by the Group over the first nine months of the year.
| Q3 18 | Q3 17 | Jul-Sep 18 | Jul-Sep 17 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Sector of Activity | Amount | Contribution | Amount | Contribution | Variation | Amount | Contribution | Amount | Contribution | Variation |
| Construction (*) | 370,317 | 58.3% | 373,835 | 50.6% | (0.9%) | 140,399 | 67.8% | 139,714 | 52.9% | 0.5% |
| Concessions and Services | 69,801 | 11.0% | 71,362 | 9.7% | (2.2%) | 21,915 | 10.6% | 19,186 | 7.3% | 14.2% |
| Real Estate (*) | 53,424 | 8.4% | 60,861 | 8.2% | (12.2%) | 1,761 | 0.9% | 20,794 | 7.9% | (91.5%) |
| Hospitality (*) | 28,633 | 4.5% | 36,253 | 4.9% | (21.0%) | 9,352 | 4.5% | 12,461 | 4.7% | (24.9%) |
| Distribution (*) | 90,767 | 14.3% | 146,197 | 19.8% | (37.9%) | 26,538 | 12.8% | 55,414 | 21.0% | (52.1%) |
| Automotive | 22,571 | 3.6% | 50,744 | 6.9% | (55.5%) | 7,143 | 3.4% | 16,593 | 6.3% | (57.0%) |
| 635,513 | 100.0% | 739,252 | 100.0% | (14.0%) | 207,108 | 100.0% | 264,162 | 100.0% | (21.6%) |
(AMOUNTS IN THOUSANDS OF EUROS)
(*) - AMOUNTS FOR 2017 RESTATED AS EXPLAINED ABOVE IN THE INTRODUCTION.
For a more in-depth explanation of the data in the chart above, please find below some notes regarding the activity in the first nine months of the year for each of the Group's operating sectors:
Construction turnover remained the same as the turnover for the same period in 2017, with the domestic market compensating for the reduction in turnover of non-domestic markets.
Portugal recorded a 15% increase over the last year, essentially due to the good performance achieved in the private Construction market.
The Turnover achieved in the non-domestic markets decreased, in total, 5.2% compared to the first nine months of 2017, with a greater impact in Brazil and Mozambique (in the case of the former, also due to the devaluation of the Real). It should also be noted that activity in Angola and Algeria increased (41% and 45%, respectively), but that the value in euros of the turnover achieved at the end of this period in these countries was penalised by the devaluation of the currencies of these markets.
Thus, on 30 September 2018, the non-domestic market accounted for 75.4% of the turnover of the Construction business segment, instead of the 78.8% that it represented in September 2017.
(AMOUNTS IN THOUSANDS OF EUROS)
In the Concessions and Services, Turnover decreased 2.2% compared to September 2017, which equates to a reduction of 1,561,000 euros. This largely resulted from the fact that in September 2018 the Group could no longer count on the contribution of its subsidiaries in the area of the Environment in Portugal (Recolte, S.A. and Recolte (Porto), S.A.), which were sold in July 2017 and which had contributed 6,157,000 euros to this indicator as determined on 30 September 2017.
In Portugal, it is notable that—disregarding the contribution that those subsidiaries made—this market in this sector has recorded an increase of 7,432,000 euros.
In the remaining markets in which the Group operates in this sector, good performances were achieved, with the exception of the Angolan market, which, penalised by the devaluation of Kwanza, recorded a decrease of 28.6% compared to September 2017.
Real Estate Turnover fell by 12.2% compared to the same period last year.
In Portugal, there was an increase of 56.9% compared to September 2017, which is attributed to the fact that this period saw the sale of real estate that was previously on the market.
Nonetheless, it should be noted that this growth in Portugal would have been even greater, had it not been for the fact that the companies BONAPARTE, S.A., TDHOSP, S.A. and LAGOAS PARK, S.A. were classified as "Held for Sale" on 31 December 2017, and as such, since that date, the respective turnovers achieved have not been consolidated. It should also be noted that in 2017—and while those subsidiaries were still part of the Group's scope of consolidation—their contribution to the Turnover of the third quarter of that year amounted to 20,360,000 euros.
In Brazil, the Group experienced a fall of 54.6% compared to the same period last year, to which the devaluation of the Real and the change in the framework of the applicable accounting regulations also contributed.
(AMOUNTS IN THOUSANDS OF EUROS)
Hospitality Turnover experienced a 21% overall decrease compared to the same period of 2017.
In Portugal, activity in this sector decreased by 3.2% when compared to the first nine months of 2017.
In Angola, activity increased by 35.6%. However, due to the devaluation of the Kwanza, this particular indicator for this country ended up recording a reduction of 27.1% compared to September 2017.
In Mozambique, during the first nine months of 2018, this activity experienced a fall of 20.9% compared to the same period last year, mainly due to the reduction of turnover from the Hotel Avenida, upon which the group carried out remodeling works.
The Distribution sector experienced a 37.9% decrease in its turnover compared to the same period last year, penalised by the devaluation of the Kwanza. Disregarding this effect, this reduction would have been 6.9%.
(AMOUNTS IN THOUSANDS OF EUROS)
In the Automotive sector, the Group experienced a reduction in turnover of 55.5% compared to September 2017, essentially due to the devaluation of the Kwanza and the difficulties in importing vehicles and parts to Angola.
(AMOUNTS IN THOUSANDS OF EUROS)
Operating income fell by 8.2% compared to the same period last year, reaching 707,278,000 euros.
In the table below, you can check the performances of the various sectors of activity in which the Group operates.
| Domestic Market | Non-domestic Market | Total | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Sector of Activity | Q3 18 | Q3 17 | Var (%) | Q3 18 | Q3 17 | Var (%) | Q3 18 | Q3 17 | Var (%) |
| Construction (*) | 98,427 | 84,838 | 16.0% | 296,721 | 298,034 | (0.4%) | 395,148 | 382,872 | 3.2% |
| Concessions and Services | 26,970 | 25,120 | 7.4% | 46,270 | 48,862 | (5.3%) | 73,240 | 73,982 | (1.0%) |
| Real Estate (*) | 59,844 | 40,051 | 49.4% | 34,705 | 39,163 | (11.4%) | 94,549 | 79,214 | 19.4% |
| Hospitality (*) | 8,125 | 8,160 | (0.4%) | 21,954 | 28,966 | (24.2%) | 30,079 | 37,126 | (19.0%) |
| Distribution (*) | 325 | 611 | (46.8%) | 89,528 | 145,864 | (38.6%) | 89,853 | 146,475 | (38.7%) |
| Automotive | 3,300 | 2,033 | 62.3% | 21,109 | 49,144 | (57.0%) | 24,409 | 51,177 | (52.3%) |
| Total | 196,991 | 160,813 | 22.5% | 510,287 | 610,033 | (16.4%) | 707,278 | 770,846 | (8.2%) |
(AMOUNTS IN THOUSANDS OF EUROS)
(*) - AMOUNTS FOR 2017 RESTATED AS EXPLAINED ABOVE IN THE INTRODUCTION.
In view of the above developments, the contributions of each of the sectors of activity to the total amount of operating income achieved on 30 September 2018 were as follows:
EBITDA experienced a 10.4% decrease when compared to September 2017, amounting to 110,125,000 euros.
Analysing the following chart will confirm the existence of very disparate behaviours in the different sectors of activity, depending on the characteristics of each one and the respective markets in which they operate.
| Sector of Activity | Q3 18 | Q3 17 | Var. (%) | Jul-Sep 18 | Jul-Sep 17 | Var. (%) |
|---|---|---|---|---|---|---|
| Construction (*) | 48,181 | 35,042 | 37.5% | 17,838 | 7,729 | 130.8% |
| Concessions and Services | 7,189 | 7,050 | 2.0% | 864 | 1,170 | (26.2%) |
| Real Estate (*) | 38,745 | 40,614 | (4.6%) | (1,154) | 10,894 | (110.6%) |
| Hospitality (*) | 8,531 | 10,107 | (15.6%) | 2,247 | 3,223 | (30.3%) |
| Distribution (*) | 5,539 | 16,508 | (66.4%) | (669) | 7,880 | (108.5%) |
| Automotive | 9,253 | 18,601 | (50.3%) | 2,365 | 5,783 | (59.1%) |
| Not included in the segments | (7,311) | (5,272) | (38.7%) | (2,530) | (1,875) | (34.9%) |
| Eliminations | (2) | 234 | - | (11) | 234 | - |
| 110,125 | 122,884 | (10.4%) | 18,950 | 35,038 | (45.9%) |
(AMOUNTS IN THOUSANDS OF EUROS)
(*) - AMOUNTS FOR 2017 RESTATED AS EXPLAINED ABOVE IN THE INTRODUCTION.
In the first nine months of 2018, this indicator was influenced by some aspects that should be highlighted:
| Q3 18 | Q3 17 | Var. (%) | Jul-Sep 18 | Jul-Sep 17 | Var. (%) | |
|---|---|---|---|---|---|---|
| Financial costs and losses: | (131,537) | (175,940) | 25.2% | (44,901) | (11,660) | (285.1%) |
| Interest paid | (20,945) | (50,622) | 58.6% | (7,166) | (14,179) | 49.5% |
| Unfavourable exchange rate differences | (95,798) | (104,358) | 8.2% | (32,219) | 10,437 | - |
| Other financial costs and losses | (14,794) | (20,960) | 29.4% | (5,516) | (7,918) | 30.3% |
| Financial income and gains: | 73,166 | 114,145 | (35.9%) | 25,510 | (4,897) | - |
| Interest earned | 4,776 | 8,770 | (45.5%) | 2,198 | 2,525 | (13.0%) |
| Favourable exchange rate differences | 35,507 | 103,480 | (65.7%) | 10,505 | (8,226) | - |
| Prompt payment discounts obtained | 5 | 3 | 66.7% | - | (2) | - |
| Net monetary position | 32,373 | - | - | 12,631 | - | - |
| Other financial income and gains | 505 | 1,892 | (73.3%) | 176 | 806 | (78.2%) |
| Income related to investment activities: | 1,371 | 5,027 | (72.7%) | 24 | 3,056 | (99.2%) |
| Income related to associated companies and joint ventures | 746 | 2,684 | (72.2%) | 260 | 932 | (72.1%) |
| Dividends | 824 | 2,728 | (69.8%) | - | 2,030 | - |
| Other investments | (199) | 23 | - | (236) | 20 | - |
| Gains/losses on assets available for sale | - | (408) | - | - | 74 | - |
| Financial results | (57,000) | (56,768) | (0.4%) | (19,367) | (13,501) | (43.4%) |
(AMOUNTS IN THOUSANDS OF EUROS)
Despite recording overall results similar to the same period in 2017, this indicator reflects important variations, of which we highlight the positive variation of 29,677,000 euros resulting from the reduction in interest paid;
The Income Tax as determined on 30 September 2018 was a negative amount of 11,874,000 euros, whereas it had stood at negative 31,334,000 euros in the same period the previous year.
| Q3 18 | Q3 17 | Var. (%) | Jul-Sep 18 | Jul-Sep 17 | Var. (%) | |
|---|---|---|---|---|---|---|
| Current tax | (17,570) | (37,233) | 52.8% | 734 | (7,583) | - |
| Deferred tax | 5,696 | 5,899 | (3.4%) | 1,332 | (1,868) | - |
| (11,874) | (31,334) | 62.1% | 2,066 | (9,451) | - |
Total Net Assets decreased 27.6% in relation to 31 December 2017 "Restated", and were set at 1,722,448,000 euros.
(AMOUNTS IN THOUSANDS OF EUROS)
It should be noted that the reduction of assets—with a value of 656,542,000 euros—is essentially due to the sale of the company "Lagoas Park, S.A.," which entailed a reduction of 356,961,000, as well as to the impact of the devaluation of currencies of the various geographical areas in which the Group operates—especially the Angolan Kwanza—against the euro, which has resulted in a reduction of 342,980,000 euros.
However, with the tangible fixed assets concerned being recorded via amortized cost in Kwanzas, these assets are dollarized by the market, so it should be understood that such devaluation does not reflect the value of those assets.
Net debt recorded a decrease of 11.8% in relation to the end of last year, and on 30 September 2018 was set at 753,058,000 euros.
Equity Attributable to Shareholders reduced by 229,628,000 euros, from 449,169,000 euros to 219,541,000 euros, equating to a decrease of 51.1% in relation to 31 December 2017 "Restated".
Total Equity decreased 47.9%, and was set at 256,182,000 euros, essentially influenced by the following factors:
In this respect, it is important to highlight the impact of the reduction of the value of tangible fixed assets in Angola, due to the devaluation of the aforementioned Kwanza, resulting in a strong decline in Equity visible in the accounts.
Financial Autonomy decreased from 20.7% on 31 December 2017 "Restated" to 14.9% on 30 September 2018, to which the significant devaluation of the assets that the Group holds in Angola resulting from the currently applied accounting criteria strongly contributed.
The Average Number of Workers on 30 September 2018 was 10,383, a fall of 1.7% compared to 31 December 2017.
"Teixeira Duarte, S.A." share prices decreased from 0.223 euros on 31 December 2017 to 0.208 euros on 30 September 2018, a price that corresponds to a market capitalisation of 40% of the capital attributable to equity holders.
The chart below shows the evolution of the share prices during the first nine months of this year, varying in this period between a minimum of 0.186 euros and a maximum of 0.32 euros.
In this period, 46,593,921 shares were traded, with a global Turnover of 12,349,292 euros.
TEIXEIRA DUARTE continued its activity in the various markets in which it operates. No relevant events took place beyond 30 September 2018 and the date of issuance of this document.
While overall, the Teixeira Duarte Group Order Book for the construction sector had a decrease of 3.2% compared to the end of 2017, on 30 September 2018 the Order Book reached the overall value of 1,905,756,000 euros, of which 529,850,000 euros are for 2021 and beyond.
For a more detailed analysis of the most recent periods, i.e. for the remaining 1,375,906,000 euros already contracted and planned for execution in the next three months of 2018 and in 2019 and 2020, please consult the chart presented below, with additional elements regarding its distribution by the markets in which it operates:
| Oct to Dec 2018 | 2019 | 2020 | ||||
|---|---|---|---|---|---|---|
| Amount | Contribution (%) | Amount | Contribution (%) | Amount | Contribution (%) | |
| Portugal | 54,435 | 27.6% | 147,260 | 21.3% | 58,664 | 12.1% |
| Other Markets | 142,539 | 72.4% | 545,597 | 78.7% | 427,411 | 87.9% |
| Total | 196,974 | 100.0% | 692,857 | 100.0% | 486,075 | 100.0% |
(AMOUNTS IN THOUSANDS OF EUROS)
It is the Teixeira Duarte Group's view that it should not change the forecast to reach a consolidated operating income of around 1 billion euros in 2018.
Lagoas Park, 30 November 2018
The Board of Directors,
Pedro Maria Calainho Teixeira Duarte
Manuel Maria Calainho de Azevedo Teixeira Duarte
Joel Vaz Viana de Lemos
Carlos Gomes Baptista
Diogo Bebiano Branco de Sá Viana Rebelo
FOR 30 SEPTEMBER 2018 AND 31 DECEMBER 2017 "RESTATED" (AMOUNTS IN THOUSANDS OF EUROS)
| Notes | 30-09-2018 (Unaudited) |
31-12-2017 "Restated" (Unaudited) |
|
|---|---|---|---|
| Non-current assets: | |||
| Goodwill | 12,269 | 12,371 | |
| Intangible assets | 65,157 | 85,094 | |
| Tangible fixed |
13 | 320,328 | 478,758 |
| assets Investment properties |
14 | 177,526 | 217,647 |
| Investments in associated companies and joint ventures | 7 and 15 | 19,925 | 20,296 |
| Financial assets available for sale | 7 and 16 | 1,726 | 1,841 |
| Other investments | 17,937 | 27,413 | |
| Deferred tax assets | 18 | 178,076 | 155,283 |
| Customers | 30,614 | 39,784 | |
| Other debtors | 10,231 | 10,985 | |
| Other non-current assets | 626 | 5,626 | |
| Total non-current assets | 834,416 | 1,055,098 | |
| Current assets: | |||
| Inventories | 210,386 | 245,616 | |
| Customers | 208,805 | 260,407 | |
| Other debtors | 32,389 | 42,805 | |
| Cash and cash equivalents | 20 | 155,238 | 154,265 |
| Other investments | 15,346 | - | |
| Other current assets | 168,359 | 165,819 | |
| 790,523 | 868,912 | ||
| Assets held for sale | 17 | 97,509 | 454,980 |
| Total current assets | 888,032 | 1,323,892 | |
| TOTAL ASSETS | 7 | 1,722,448 | 2,378,990 |
| Equity: | |||
| Equity | 21 | 210,000 | 210,000 |
| Adjustments to shareholdings in associated companies and joint ventures | (126) | 215 | |
| Foreign currency translation adjustments | (301,432) | (67,455) | |
| Reserves and retained earnings | 22 | 304,005 | 311,059 |
| Consolidated net income | 7,094 | (4,650) | |
| Equity attributable to shareholders | 219,541 | 449,169 | |
| Non-controlling interests | 36,641 | 42,980 | |
| TOTAL EQUITY | 256,182 | 492,149 | |
| Non-current liabilities: | |||
| Loans | 23 | 813,858 | 708,718 |
| Provisions | 34,064 | 36,743 | |
| Financial leases | 4,348 | 4,768 | |
| Deferred tax liabilities | 18 | 24,918 | 35,422 |
| Other non-current liabilities | 52,520 | 32,161 | |
| Total non-current assets | 929,708 | 817,812 | |
| Current liabilities: | |||
| Loans | 23 | 94,438 | 299,560 |
| Suppliers | 117,798 | 155,625 | |
| Financial leases | 3,078 | 3,879 | |
| Other creditors | 22,150 | 28,186 | |
| Other current liabilities | 208,389 | 231,903 | |
| 445,853 | 719,153 | ||
| Liabilities held for sale | 17 | 90,705 | 349,876 |
| Total current liabilities | 536,558 | 1,069,029 | |
| TOTAL LIABILITIES | 7 | 1,466,266 | 1,886,841 |
| TOTAL EQUITY AND LIABILITIES | 1,722,448 | 2,378,990 |
The attached notes form an integral part of the consolidated financial position statement for 30 September 2018.
(UNAUDITED)
(AMOUNTS IN THOUSANDS OF EUROS)
| Notes | Q3 18 | Q3 17 | Jul-Sep 18 | Jul-Sep 17 | |
|---|---|---|---|---|---|
| Operating income: | |||||
| Sales and services rendered | 7 and 8 | 635,513 | 739,252 | 207,108 | 264,162 |
| Other operating income | 8 | 71,765 | 31,594 | 5,517 | 5,699 |
| Total operating income | 8 | 707,278 | 770,846 | 212,625 | 269,861 |
| Operating costs: | |||||
| Cost of sales | (175,601) | (211,050) | (62,538) | (82,385) | |
| Variation in production | (18,611) | 7,156 | 1,067 | 1,374 | |
| External supplies and services | (204,707) | (228,367) | (71,590) | (81,890) | |
| Staff costs | (161,361) | (178,751) | (52,738) | (58,195) | |
| Amortisations and depreciations | 7 | (31,861) | (42,840) | (10,073) | (13,910) |
| Provisions and impairment losses on depreciable and amortisable assets and Goodwill | 7 | (3,649) | 3,678 | (745) | 3,457 |
| Other operating costs | (36,873) | (36,950) | (7,876) | (13,727) | |
| Total operating costs | (632,663) | (687,124) | (204,493) | (245,276) | |
| Operating income | 7 | 74,615 | 83,722 | 8,132 | 24,585 |
| Financial costs and losses | 7 and 9 | (131,537) | (175,940) | (44,901) | (11,660) |
| Financial income and gains | 7 and 9 | 73,166 | 114,145 | 25,510 | (4,897) |
| Income related to investment activities: | |||||
| Income related to associated companies and joint ventures | 7 and 9 | 746 | 2,684 | 260 | 932 |
| Others | 7 and 9 | 625 | 2,343 | (236) | 2,124 |
| Financial results | (57,000) | (56,768) | (19,367) | (13,501) | |
| Income before taxes | 7 | 17,615 | 26,954 | (11,235) | 11,084 |
| Income tax | 10 | (11,874) | (31,334) | 2,066 | (9,451) |
| Consolidated net income for the period | 5,741 | (4,380) | (9,169) | 1,633 | |
| Net income attributable to: | |||||
| Equity holders | 11 | 7,094 | (11,066) | (10,276) | (1,975) |
| Non-controlling interests | (1,353) | 6,686 | 1,107 | 3,608 | |
| Income per share: | |||||
| Basic (euros) | 11 | 0.02 | (0.03) | (0.02) | (0.00) |
| Diluted (euros) | 11 | 0.02 | (0.03) | (0.02) | (0.00) |
The attached notes form an integral part of the consolidated income statement for the period ending 30 September 2018.
FOR THE PERIODS ENDING 30 SEPTEMBER 2018 AND 2017
(UNAUDITED)
(AMOUNTS IN THOUSANDS OF EUROS)
| Notes | Q3 18 | Q3 17 | Jul-Sep 18 | Jul-Sep 17 |
|---|---|---|---|---|
| 5,741 | (4,380) | (9,169) | 1,633 | |
| - | (7,207) | - | - | |
| (1,426) | 2,214 | 3,388 | 225 | |
| (1,426) | (4,993) | 3,388 | 225 | |
| 26 | (239,941) | (23,320) | (38,993) | (407) |
| 15 | (341) | (1,154) | (230) | (514) |
| - | 1,576 | - | 232 | |
| (240,282) | (22,898) | (39,223) | (689) | |
| (241,708) | (27,891) | (35,835) | (464) | |
| (235,967) | (32,271) | (45,004) | 1,169 | |
| (229,628) | (30,798) | (44,446) | 219 | |
| (6,339) | (1,473) | (558) | 950 | |
The attached notes form an integral part of the consolidated other income statement for the period ending 30 September 2018.
FOR THE PERIODS ENDING 30 SEPTEMBER 2018 AND 2017
(UNAUDITED)
(UNAUDITED)
(AMOUNTS IN THOUSANDS OF EUROS)
| Notes | Q3 18 | Q3 17 | Jul-Sep 18 | Jul-Sep 17 | |
|---|---|---|---|---|---|
| OPERATING ACTIVITIES: | |||||
| Receipts from customers | 670,466 | 718,037 | 209,547 | 250,322 | |
| Payments to suppliers | (425,459) | (429,613) | (137,388) | (148,973) | |
| Payments to staff | (164,401) | (168,856) | (56,497) | (54,812) | |
| Cash flow generated by operations | 80,606 | 119,568 | 15,662 | 46,537 | |
| Payment/receipt of income tax | (12,894) | (15,430) | (1,816) | (4,469) | |
| Other receipts/payments related to operating activities | (27,085) | (10,135) | 5,395 | 2,827 | |
| Cash flow from operating activities (1) | 40,627 | 94,003 | 19,241 | 44,895 | |
| INVESTMENT ACTIVITIES: | |||||
| Receipts from: | |||||
| Financial investments | 20 | 126,102 | 15,075 | 16,380 | 1,250 |
| Tangible fixed assets and investment properties | 4,859 | 4,222 | 3,144 | 672 | |
| Intangible assets | - | 1 | - | 1 | |
| Interest and similar gains | 5,247 | 9,028 | 2,218 | 2,603 | |
| Dividends | 20 | 1,104 | 2,728 | - | 2,030 |
| 137,312 | 31,054 | 21,742 | 6,556 | ||
| Payments regarding: | |||||
| Financial investments | 20 | - | (215) | - | (210) |
| Tangible fixed assets and investment properties | (24,553) | (18,876) | (8,951) | (4,691) | |
| Intangible assets | (511) | (465) | 29 | (265) | |
| (25,064) | (19,556) | (8,922) | (5,166) | ||
| Cash flow from investment activities (2) | 112,248 | 11,498 | 12,820 | 1,390 | |
| INVESTMENT ACTIVITIES: | |||||
| Receipts from: | |||||
| Obtained loans | 1,377,204 | 1,096,308 | 386,791 | 40,901 | |
| Payments regarding: | |||||
| Obtained loans | (1,477,186) | (1,139,164) | (381,131) | (42,679) | |
| Interest and similar costs | (19,290) | (49,942) | (7,242) | (14,949) | |
| Dividends | 12 | - | (840) | - | - |
| (1,496,476) | (1,189,946) | (388,373) | (57,628) | ||
| Cash flow from investment activities (3) | (119,272) | (93,638) | (1,582) | (16,727) | |
| Cash variations and their equivalents (4) = (1) + (2) + (3) | 33,603 | 11,863 | 30,479 | 29,558 | |
| Effect of exchange rate differences | (32,630) | (6,222) | (6,929) | (2,328) | |
| Cash and cash equivalents at the beginning of the period | 20 | 154,265 | 180,908 | 131,688 | 159,208 |
| Transfer of assets held for sale | - | (111) | - | - | |
| Cash and cash equivalents at the end of the period | 20 | 155,238 | 186,438 | 155,238 | 186,438 |
The attached notes form an integral part of the cash flow statement for the period ending 30 September 2018.
FOR 30 SEPTEMBER 2018
(UNAUDITED)
Teixeira Duarte, S.A. ("The Company" or "TD, SA") has its head office in Porto Salvo and was created on 30 November 2009, with a share capital of 210,000,000 euros, represented by 420,000,000 shares with the nominal value of 0.5 euros (Note 21). Its main activities are implementing and managing investments and coordinating and overseeing other integral companies or companies related to its business Group.
Teixeira Duarte ("The Group") is comprised of the invested companies indicated in Note 4. The Group's main areas of activity are as follows: Construction; Concessions and services; Real Estate; Hospitality; Distribution and Automotive (Note 7).
Due to the application of IAS 29 – Financial Reporting in Hyperinflationary Economies to the companies based in Angola and Venezuela in 2018, the Group subsequently restated its financial position and the respective notes on its accounts for 31 December 2017. As such, the income statements for 30 September 2018 and their respective notes are not directly comparable with the financial statements for 30 September 2017.
It should also be noted that within the Teixeira Duarte Group, two of the wholly-owned companies were repositioned. "ANGOPREDIAL - Empreendimentos Imobiliários, Lda." moved from the Real Estate sector to the Hospitality sector and "Global Net Distributors (Pty) Ltd." moved from the Distribution sector to the Construction sector. In this document—only in relation to these four sectors—the notes attached to the 2017 consolidated financial statements were restated to facilitate comparability.
The values shown will be expressed in thousands of euros, unless expressly stated.
The consolidated financial statements dated 30 September 2018 were prepared using accounting policies consistent with the International Financial Reporting Standards ("IFRS"), as adopted by the European Union, effective for the periods beginning 1 January 2018 and in accordance with IAS 34 – Interim Financial Reporting.
The accounting policies adopted are consistent with those used in the preparation of the financial statements for the year ending 31 December 2017 and described in the attached notes, except for the rules and interpretations the effective dates of which correspond to the financial years beginning or after 1 January 2018.
On 30 September 2018, using the integral method, TEIXEIRA DUARTE, S.A. and the following controlled companies were included in the scope of consolidation:
| Corporate name | Head office | % effective share |
|---|---|---|
| DOMESTIC MARKET | ||
| CONSTRUCTION | ||
| CONSTRUSALAMONDE, A.C.E | Edifício 2, Lagoas Park - Porto Salvo | 92.50% |
| EPOS - Empresa Portuguesa de Obras Subterrâneas, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| SOMAFEL - Engenharia e Obras Ferroviárias, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 67.74% |
| TEIXEIRA DUARTE – Engenharia e Construções, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| CONCESSIONS AND SERVICES | ||
| DPLG - Desenvolvimento do Terminal Especializado de Contentores do Porto |
Rua das Pretas, 4 - Fracção 4 D - Funchal | 100.00% |
| de La Guaira, Sociedade Unipessoal, Lda. | ||
| TDAP - Atividades Portuárias, S.A. | Rua das Pretas, 4 - Fracção 4 D - Funchal | 100.00% |
| TDGI AÇORES, Unipessoal, Lda. | Zona Industrial Chã do Rego d`Agua, Lote 39 - Cabouco, São Miguel Island, The Azores |
100.00% |
| TDGI – Tecnologia de Gestão de Imóveis, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| TDGI Manutenção, A.C.E | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| REAL ESTATE | ||
| BONAPARTE - Imóveis Comerciais e Participações, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| Fundo de Investimento Imobiliário Fechado TDF | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| IMOPEDROUÇOS - Sociedade Imobiliária, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| IMOTD – Sociedade Gestora de Participações Sociais, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| MALANGA – Investimentos Imobiliários, Unipessoal Lda. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| QUINTA DE CRAVEL - Imobiliária, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| TDE - Empreendimentos Imobiliarios, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| TD VIA - Sociedade Imobiliária, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 93.75% |
|---|---|---|
| TDHOSP - Gestão de Edifício Hospitalar, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| TEIXEIRA DUARTE - Gestão de Participações e Investimentos Imobiliários, S.A. |
Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| TRANSBRITAL - Britas e Empreendimentos Imobiliários, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| V8 - Gestão Imobiliária, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| Hospitality | ||
| ESTA - Gestão de Hotéis, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| GO CORP TRAVEL SOLUTIONS – Agência de Viagens, S.A. | Rua Encosta das Lagoas, Nº 8 - Porto Salvo | 100.00% |
| LAGOASFUT - Equipamento Recreativo e Desportivo, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| LAGOAS HOTEL, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| SINERAMA - Organizações Turísticas e Hoteleiras, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| TDH - Sociedade Gestora de Participações Sociais, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| TDHC - Instalações para Desporto e Saúde, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| DISTRIBUTION | ||
| BONAPAPEL - Artigos de Papelaria e Equipamentos Informáticos - Unipessoal, Lda. |
Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| TEDAL – Participações e Distribuição, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| TEDAL II – Distribuição e Investimentos, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| TEIXEIRA DUARTE – Distribuição, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| AUTOMOTIVE | ||
| SMOTORS, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| TDO - Investment e Gestão, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| TEDAL III – Automóveis e Investimentos, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| TEDAL IV – Participações e Automóveis, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| C + P.A. - Cimento e Produtos Associados, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
|---|---|---|
| TDO - Sociedade Gestora de Participações Sociais, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| Tedal - Sociedade Gestora de Participações Sociais, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 100.00% |
| NON-DOMESTIC MARKET | ||
| SOUTH AFRICA | ||
| CONSTRUCTION | ||
| Global Net Distributors (Pty) Ltd. | 10th Ninth Avenue - Northmead, Gauteng 1501 | 100.00% |
| ANGOLA | ||
| CONCESSIONS AND SERVICES | ||
| EDUCARE - Actividades Educativas e Culturais, Lda. | Avenida Pedro de Castro Van-Dúnem, Loy | 100.00% |
| Bairro Morro Bento (Maxipark) | ||
| Edifício Teixeira Duarte, Nº 387 | ||
| Luanda | ||
| TDGI - Tecnologia de Gestão de Imóveis, Lda. | Avenida Pedro de Castro Van-Dúnem, Loy | 42.40% |
| Bairro Morro Bento (Maxipark) | ||
| Edifício Teixeira Duarte, Nº 387 | ||
| Luanda | ||
| REAL ESTATE | ||
| AFRIMO - Empreendimentos Imobiliários, Lda. | Avenida Pedro de Castro Van-Dúnem, Loy | 51.00% |
| Bairro Morro Bento (Maxipark) | ||
| Edifício Teixeira Duarte, Nº 387 | ||
| Luanda | ||
| IMO 1 - Empreendimentos Imobiliários, Lda. | Avenida Pedro de Castro Van-Dúnem, Loy | 100.00% |
| Bairro Morro Bento (Maxipark) | ||
| Edifício Teixeira Duarte, Nº 387 | ||
| Luanda | ||
| TEIXEIRA DUARTE - Engenharia e Construções (Angola), Lda. | Avenida Pedro de Castro Van-Dúnem, Loy | 100.00% |
| Bairro Morro Bento (Maxipark) | ||
| Edifício Teixeira Duarte, Nº 387 | ||
| Luanda |
| ALVALADE - Empreendimentos Turísticos e Hoteleiros, Lda. | Avenida Pedro de Castro Van-Dúnem, Loy | 100.00% |
|---|---|---|
| Bairro Morro Bento (Maxipark) | ||
| Edifício Teixeira Duarte, Nº 387 | ||
| Luanda | ||
| ANGOPREDIAL - Empreendimentos Imobiliários, Lda. | Avenida Pedro de Castro Van-Dúnem, Loy | 100.00% |
| Bairro Morro Bento (Maxipark) | ||
| Edifício Teixeira Duarte, Nº 387 | ||
| Luanda | ||
| HOTEL TRÓPICO, S.A. | Avenida Pedro de Castro Van-Dúnem, Loy | 80.00% |
| Bairro Morro Bento (Maxipark) | ||
| Edifício Teixeira Duarte, Nº 387 | ||
| Luanda | ||
| HOTEL BAÍA, Lda. | Avenida Pedro de Castro Van-Dúnem, Loy | 100.00% |
| Bairro Morro Bento (Maxipark) | ||
| Edifício Teixeira Duarte, Nº 387 | ||
| Luanda |
| CND – Companhia Nacional de Distribuição, Lda. | Avenida Pedro de Castro Van-Dúnem, Loy | 100.00% |
|---|---|---|
| Bairro Morro Bento (Maxipark) | ||
| Edifício Teixeira Duarte, Nº 387 | ||
| Luanda | ||
| COM 1 - Comercio e Distribuição, Lda. | Avenida Pedro de Castro Van-Dúnem, Loy | 100.00% |
| Bairro Morro Bento (Maxipark) | ||
| Edifício Teixeira Duarte, Nº 387 | ||
| Luanda | ||
| DCG – Distribuição e Comércio Geral, Lda. | Avenida Pedro de Castro Van-Dúnem, Loy | 100.00% |
| Bairro Morro Bento (Maxipark) | ||
| Edifício Teixeira Duarte, Nº 387 | ||
| Luanda | ||
| OCC – Operador Central de Comércio, Lda. | Avenida Pedro de Castro Van-Dúnem, Loy | 80.00% |
| Bairro Morro Bento (Maxipark) | ||
| Edifício Teixeira Duarte, Nº 387 | ||
| Luanda |
| AUTO 1 - Comércio Automóvel, Lda. | Avenida Pedro de Castro Van-Dúnem, Loy | 100.00% |
|---|---|---|
| Bairro Morro Bento (Maxipark) | ||
| Edifício Teixeira Duarte, Nº 387 | ||
| Luanda |
| Auto Competição Angola, Lda. | Avenida Pedro de Castro Van-Dúnem, Loy | 100.00% |
|---|---|---|
| Bairro Morro Bento (Maxipark) | ||
| Edifício Teixeira Duarte, Nº 387 | ||
| Luanda | ||
| AUTO 8, Lda. | Avenida Pedro de Castro Van-Dúnem, Loy | 100.00% |
| Bairro Morro Bento (Maxipark) | ||
| Edifício Teixeira Duarte, Nº 387 | ||
| Luanda | ||
| Comércio de Automóveis, Lda. | Avenida Pedro de Castro Van-Dúnem, Loy | 100.00% |
| Bairro Morro Bento (Maxipark) | ||
| Edifício Teixeira Duarte, Nº 387 | ||
| Luanda | ||
| TDA - Comercio e Indústria, Lda. | Avenida Pedro de Castro Van-Dúnem, Loy | 100.00% |
| Bairro Morro Bento (Maxipark) | ||
| Edifício Teixeira Duarte, Nº 387 | ||
| Luanda | ||
| VAUCO - Automóveis e Equipamentos, Lda. | Avenida Pedro de Castro Van-Dúnem, Loy | 51.00% |
| Bairro Morro Bento (Maxipark) | ||
| Edifício Teixeira Duarte, Nº 387 | ||
| Luanda | ||
| OTHER | ||
| Investipart - Participações e Investimentos, S.A. | Avenida Pedro de Castro Van-Dúnem, Loy | 36.00% |
| Bairro Morro Bento (Maxipark) | ||
| Edifício Teixeira Duarte, Nº 387 | ||
| Luanda | ||
| ALGERIA | ||
| CONSTRUCTION | ||
| TEIXEIRA DUARTE ALGERIE, SPA | 8 Roeute Ben Aknoun, Rés de Chanssée | 99.94% |
| El Biar - Algiers | ||
| BELGIUM | ||
| CONCESSIONS AND SERVICES | ||
| TDGI, S.A. | Avenue Jean-Monnet, 1, 1348 | 100.00% |
| Louvain-La-Neuve – RPM Bruxelles |
| EMPA, S.A. - Serviços de Engenharia | Rua Paraíba, 1000, 12º andar - Parte | 100.00% |
|---|---|---|
| Bairro Savassi - Belo Horizonte | ||
| SOMAFEL – Obras Ferroviárias e Marítimas, Ltda. | Rua Iguatemi, No. 448, 6.º andar | 67.74% |
| conjuntos 602, 604, 606, 608 and 610 | ||
| Bairro Itaim Bibi, Sao Paulo | ||
| GONGOJI Montante Energia, S.A. | Rua Paraíba, 1000, 12º andar - Parte | 100.00% |
|---|---|---|
| Bairro Savassi - Belo Horizonte | ||
| PAREDÃO de Minas Energia, S.A. | Rua Paraíba, 1000, 12º andar - Parte | 100.00% |
| Bairro Savassi - Belo Horizonte | ||
| TABOQUINHA Energia, S.A. | Rua Paraíba, 1000, 12º andar - Parte | 100.00% |
| Bairro Savassi - Belo Horizonte | ||
| TDGI FACILITIES E MANUTENCAO DE INSTALACOES LTDA. | Rua Iguatemi, No. 448, 6.º andar | 100.00% |
| Conjunto 602, sala 18 | ||
| Bairro Itaim Bibi, Sao Paulo |
| TDPG - Empreendimentos Imobiliários e Hoteleiros, Ltda. | Rua Irene Ramos Gomes de Matteo, Nº 97 - Casa 097 | 100.00% |
|---|---|---|
| Pina - Recife | ||
| TDSP - Participações, Ltda. | Rua Iguatemi, nº 448, 6º andar | 100.00% |
| Conjunto 602, sala 01 | ||
| Itaim Bibi - Sao Paulo | ||
| TDSP - Elisa de Moraes Empreendimentos Imobiliários SPE, Ltda. | Rua Iguatemi, nº 448, 6º andar | 90.00% |
| Conjunto 602, sala 02 | ||
| Itaim Bibi - Sao Paulo | ||
| TDSP - Bela Vista Empreendimentos Imobiliários, Ltda. | Rua Iguatemi, nº 448, 6º andar | 92.65% |
| Conjunto 602, sala 15 | ||
| Itaim Bibi - Sao Paulo | ||
| TDSP - Galeno de Castro Empreendimentos Imobiliários SPE, Ltda. |
Rua Iguatemi, nº 448, 6º andar | 92.65% |
| Conjunto 602, sala 03 | ||
| Itaim Bibi - Sao Paulo | ||
| TDSP – Maratona Empreendimentos Imobiliários SPE, Ltda. | Rua Iguatemi, nº 448, 6º andar | 92.65% |
| Conjunto 602, sala 10 | ||
| Itaim Bibi - Sao Paulo | ||
| TDSP - Direitos Humanos Empreendimentos Imobiliários SPE, Ltda. |
Rua Iguatemi, nº 448, 6º andar | 92.65% |
| Conjunto 602, sala 12 | ||
| Itaim Bibi - Sao Paulo |
| TDSP – Alta Vista I Empreendimentos Imobiliários SPE, Ltda. | Rua Iguatemi, nº 448, 6º andar | 92.65% |
|---|---|---|
| Conjunto 602, sala 05 | ||
| Itaim Bibi - Sao Paulo | ||
| TDSP – Verum Mooca Empreendimentos Imobiliários SPE, Ltda. | Rua Iguatemi, nº 448, 6º andar | 100.00% |
| Conjunto 602, sala 06 | ||
| Itaim Bibi - Sao Paulo | ||
| TDSP – Gilberto Sabino Empreendimentos Imobiliários, Ltda. | Rua Iguatemi, nº 448, 6º andar | 100.00% |
| Conjunto 602, sala 07 | ||
| Itaim Bibi - Sao Paulo | ||
| TDSP – Alta Vista II Empreendimentos Imobiliários SPE, Ltda. | Rua Iguatemi, nº 448, 6º andar | 92.65% |
| Conjunto 602, sala 08 | ||
| Itaim Bibi - Sao Paulo | ||
| TDSP – Gualaxos Empreendimentos Imobiliários SPE, Ltda. | Rua Iguatemi, nº 448, 6º andar | 100.00% |
| Conjunto 602, sala 09 | ||
| Itaim Bibi - Sao Paulo | ||
| TDSP – Alta Vista III Empreendimentos Imobiliários SPE, Ltda. | Rua Iguatemi, nº 448, 6º andar | 92.65% |
| Conjunto 602 | ||
| Itaim Bibi - Sao Paulo | ||
| TDSP – Zanzibar Empreendimentos Imobiliários SPE, Ltda. | Rua Iguatemi, nº 448, 6º andar | 92.50% |
| Conjunto 602, sala 18 | ||
| Itaim Bibi - Sao Paulo | ||
| TDSP – Dionísio da Costa Empreendimentos Imobiliários SPE, Ltda. |
Rua Iguatemi, nº 448, 6º andar | 92.50% |
| Conjunto 602 | ||
| Itaim Bibi - Sao Paulo | ||
| TDSP – Baceunas Empreendimentos Imobiliários SPE, Ltda. | Rua Iguatemi, nº 448, 6º andar | 100.00% |
| Conjunto 602 | ||
| Itaim Bibi - Sao Paulo | ||
| TDSP – Maria de Jesus Empreendimentos Imobiliários SPE, Ltda. | Rua Iguatemi, nº 448, 6º andar | 95.00% |
| Conjunto 602, sala 04 | ||
| Itaim Bibi - Sao Paulo | ||
| TDSP – Volta Redonda Empreendimentos Imobiliários SPE, Ltda. | Rua Iguatemi, nº 448, 6º andar | 95.00% |
| Conjunto 602, sala 13 | ||
| Itaim Bibi - Sao Paulo | ||
| TDSP – Nilo Empreendimentos Imobiliários, Ltda. | Rua Iguatemi, nº 448, 14º andar | 100.00% |
| Conjunto 1401, sala 14 | ||
| Itaim Bibi - Sao Paulo | ||
| TDSP – Alta Vista IV Empreendimentos Imobiliários SPE, Ltda. | Rua Iguatemi, nº 448, 6º andar | 92.65% |
| Conjunto 602, sala 15 | ||
| Itaim Bibi - Sao Paulo | ||
| TDSP – 16 Empreendimentos Imobiliários SPE, Ltda. | Rua Iguatemi, nº 448, 6º andar | 100.00% |
| Conjunto 602, sala 16 | ||
| Itaim Bibi - Sao Paulo |
| TDSP – Carolina Ribeiro - Empreendimentos Imobiliários SPE, Ltda. |
Rua Iguatemi, nº 448, 6º andar | 95.00% |
|---|---|---|
| Conjunto 602, sala 17 | ||
| Itaim Bibi - Sao Paulo | ||
| DISTRIBUTION | ||
| TDD – Distribuição Brasil, Ltda. | Rua Iguatemi, nº 448, 6º andar | 100.00% |
| Conjunto 602 | ||
| Itaim Bibi - Sao Paulo | ||
| OTHER | ||
| EMES – Participações, Ltda. | Rua Iguatemi, nº 448, 6º andar | 100.00% |
| Conjunto 602, sala 21 | ||
| Itaim Bibi - Sao Paulo | ||
| COLOMBIA | ||
| CONSTRUCTION | ||
| TEIXEIRA DUARTE – Engenharia e Construções (Colômbia) | ||
| S.A.S. | Carrera 11 nº 94 – 02 oficina 201 | 100.00% |
| Centro empresarial Manhattan, Bogotá | ||
| CYPRUS | ||
| OTHER | ||
| LEVENEL, Limited | Irakli, 2, Egkomi, 2413 | 100.00% |
| Nicosia | ||
| SPAIN | ||
| CONSTRUCTION | ||
| UTE DE VIANA | Av. Alberto Alcocer, 24-7 º | 100.00% |
| Madrid | ||
| CONCESSIONS AND SERVICES | ||
| RECOLTE, Servicios Y Medioambiente, S.A. Sociedade Unipersonal. |
Av. Alberto Alcocer, 24-7 º | 100.00% |
| Madrid | ||
| TDGI - Mantenimiento y Servicios Integrales, S.L. | Av. Alberto Alcocer, 24-7 º | 100.00% |
| Madrid | ||
| CONSTRUCTION | ||
|---|---|---|
| CONSORCIO PUENTE DAULE - GUAYAQUIL II | Av. Francisco de Orellana, Kilometro uno e medio (1.5) | 100.00% |
| y Juan Tanca Marengo, Edificio Cofin, Piso seis (6) | ||
| Guayaquil, Ecuador | ||
| UNITED STATES OF AMERICA | ||
| CONSTRUCTION | ||
| TEIXEIRA DUARTE CONSTRUCTION SERVICES, LLC | 1030 Salem Road | 100.00% |
| Union, NJ 07083 | ||
| REAL ESTATE | ||
| TDRE INVESTMENTS, LLC. | 4100 Spring Valley Road, Suite 310, Dallas | 100.00% |
| Texas 75244 | ||
| TDRE LEE PARK, LLC. | 4100 Spring Valley Road, Suite 310, Dallas | 100.00% |
| Texas 75244 | ||
| TDRE HOOD, LLC. | 4100 Spring Valley Road, Suite 300, Dallas | 100.00% |
| Texas 75244 | ||
| MACAU | ||
| CONSTRUCTION | ||
| TEIXEIRA DUARTE - Engenharia e Construções (Macau), Lda. | Av. Dr. Mário Soares, nº 25 | 100.00% |
| Edifício Montepio Apr. 26 e 28 – 3º andar | ||
| Macau | ||
| MOZAMBIQUE | ||
| CONSTRUCTION | ||
| TEIXEIRA DUARTE – Engenharia e Construções (Moçambique), Lda. |
Av. Július Nyerere, nº 130 | 74.46% |
| Maputo | ||
| CONCESSIONS AND SERVICES | ||
| TDGI - Tecnologia de Gestão de Imóveis, Lda. | Av. Július Nyerere, nº 130 | 69.55% |
| Maputo | ||
| REAL ESTATE | ||
| IMOPAR - Centro Comercial de Maputo, S.A. | Av. Július Nyerere, nº 130 | 100.00% |
| Maputo | ||
| MALANGA - Empreendimentos Imobiliários, S.A. | Av. Július Nyerere, nº 4 - R/C | 74.71% |
|---|---|---|
| Maputo | ||
| Hospitality | ||
| AVENIDA - Empreendimentos Turísticos e Hoteleiros, Lda. | Av. Július Nyerere, nº 627 | 100.00% |
| Maputo | ||
| Sociedade Hotel Tivoli, Lda. | Av. 25 de Setembro, 1321 | 65.00% |
| Maputo | ||
| TIVOLI BEIRA - Hotelaria e Serviços, Lda. | Av. Július Nyerere, nº 130 | 100.00% |
| Maputo | ||
| PERU | ||
| CONSTRUCTION | ||
| TEIXEIRA DUARTE PERÚ – Ingeniería y Construcciones, Sociedad Anonima Cerrada |
Avenida Arenales, nº 773 | 100.00% |
| Lima | ||
| RUSSIA | ||
| CONCESSIONS AND SERVICES | ||
| MMK Cement, Limited Liability Company | Tri Rutchia Murmansk | 70.00% |
| VENEZUELA | ||
| CONSTRUCTION | ||
| Consorcio Boyacá – La Guaira | Av. San Juan Bosco, | 57.20% |
| Edifício Centra Altamira | ||
| Piso 5, Oficina 54, Urb. Altamira | ||
| Caracas | ||
| TEGAVEN – Teixeira Duarte y | Av. Venezuela del Rosal con Calle | 100.00% |
| Asociados, C.A. | Mohedano, Torre JWM | |
| Piso 5, Of. 5-2, Urb El Rosal - Caracas |
TDHOSP - Gestão de Edifício Hospital, S.A..
During the period ending 30 September 2018, the following exits were looked at against the scope of consolidation for 31 December 2017:
It should be noted that these companies were classified as "Held for Sale" on 31 December 2017.
In June 2018, the Group sold the wholly-owned subsidiary "LAGOAS PARK, S.A.".
The share prices used to convert the assets and liabilities expressed in foreign currency to euros on 30 September 2018 and 31 December 2017, as well as the income from the transactions carried out in countries with a functional currency other than the Euro in the periods ending on 30 September 2018 and 2017, were as follows:
| Closing exchange rate | Average exchange rate | |||||||
|---|---|---|---|---|---|---|---|---|
| Currency | 30-09-2018 | 31-12-2017 | Var. | 30-09-2018 | 30-09-2017 | Var. | ||
| US Dollar | 1.1576 | 1.1993 | (3.5%) | 1.1932 | 1.1151 | 7.0% | ||
| Macau Pataca | 9.3296 | 9.6532 | (3.4%) | 9.6316 | 8.9430 | 7.7% | ||
| Mozambican Metical | 70.5300 | 70.5700 | (0.1%) | 71.7760 | 71.9570 | (0.3%) | ||
| Venezuelan Bolívar (a) | 113.5400 | 0.0401 | S.S. | 12.2473 | 0.0187 | S.S. | ||
| Angolan Kwanza | 343.5710 | 185.4000 | 85.3% | 277.3888 | 184.7573 | 50.1% | ||
| Algerian Dinar | 136.8376 | 137.6194 | (0.6%) | 138.3363 | 122.3941 | 13.0% | ||
| Emirati Dirham | 4.2520 | 4.4056 | (3.5%) | 4.3851 | 4.0954 | 7.1% | ||
| Moroccan Dirham | 10.9179 | 11.2168 | (2.7%) | 11.1602 | 10.8930 | 2.5% | ||
| Brazilian Real | 4.6535 | 3.9729 | 17.1% | 4.2851 | 3.5506 | 20.7% | ||
| Cape Verdean Escudo | 110.2650 | 110.2650 | - | 110.2650 | 110.2650 | - | ||
| Russian Ruble | 76.1422 | 69.3920 | 9.7% | 72.9057 | 65.1995 | 11.8% | ||
| Tunisian Dinar | 3.2477 | 2.9464 | 10.2% | 3.0502 | 2.6515 | 15.0% | ||
| South African Rand | 16.4447 | 14.8054 | 11.1% | 15.3237 | 14.7852 | 3.6% | ||
| Peruvian Sol | 3.8182 | 3.8846 | (1.7%) | 3.8929 | 3.6431 | 6.9% | ||
| Colombian Peso | 3451.5600 | 3579.3100 | (3.6%) | 3462.6220 | 3298.2740 | 5.0% |
(a) – On 20 August 2018, the revaluation of the Venezuelan bolivar occurred, eliminating five zeros at the time of exchange.
The Group is organised according to the following business segments:
The sales and services rendered and the income for each of the business segments mentioned above, for the periods ending 30 September 2018 and 2017, were as follows:
| Segment | Sales and services rendered | |||||||
|---|---|---|---|---|---|---|---|---|
| Q3 18 | Q3 17 | Operating income | ||||||
| Externa clients l |
Intersegmental | Total | Externa clients l |
Intersegmental | Total | Q3 18 | Q3 17 | |
| Construction (*) | 370,317 | 13,976 | 384,293 | 373,835 | 14,952 | 388,787 | 24,945 | 14,949 |
| Concessions and Services | 69,801 | 10,667 | 80,468 | 71,362 | 15,866 | 87,228 | 5,192 | 3,890 |
| Real Estate (*) | 53,424 | 9,053 | 62,477 | 60,861 | 6,726 | 67,587 | 37,277 | 36,482 |
| Hospitality (*) | 28,633 | 437 | 29,070 | 36,253 | 10,435 | 46,688 | 5,465 | 6,034 |
| Distribution (*) | 90,767 | 987 | 91,754 | 146,197 | 1,735 | 147,932 | 1,347 | 10,216 |
| Automotive | 22,571 | 2,734 | 25,305 | 50,744 | 4,257 | 55,001 | 7,865 | 17,249 |
| Not included in the segments | - | - | - | - | - | - | (7,474) | (5,332) |
| Eliminations | - | (37,854) | (37,854) | - | (53,971) | (53,971) | (2) | 234 |
| 635,513 | - | 635,513 | 739,252 | - | 739,252 | 74,615 | 83,722 | |
| Financial costs and losses (Note 9) | (131,537) | (175,940) | ||||||
| Financial income and gains (Note 9) | 73,166 | 114,145 | ||||||
| Income related to investment activities (Note 9) | 1,371 | 5,027 | ||||||
| Income before taxes | 17,615 | 26,954 |
(*) - AMOUNTS FOR 2017 RESTATED AS EXPLAINED ABOVE IN THE INTRODUCTORY NOTE.
Intersegmental transactions are carried out under market terms and conditions, comparable to transactions made with third-party entities.
Accounting policies in the various segments are consistent with the Group's policies.
Other information:
| Segment | Fixed capital expenditure | Amortisations and Depreciations in Income |
Losses | Provisions and Impairment | ||
|---|---|---|---|---|---|---|
| Q3 18 | Q3 17 | Q3 18 | Q3 17 | Q3 18 | Q3 17 | |
| Construction (*) | 10,540 | 5,197 | 19,461 | 24,025 | 3,775 | (3,932) |
| Concessions and Services | 2,569 | 36,367 | 2,010 | 3,153 | (13) | 7 |
| Real Estate (*) | 5,408 | 5,549 | 1,519 | 3,974 | (51) | 158 |
| Hospitality (*) | 4,126 | 1,687 | 3,066 | 4,073 | - | - |
| Distribution (*) | 6,774 | 3,476 | 4,192 | 6,292 | - | - |
| Automotive | 94 | 444 | 1,450 | 1,263 | (62) | 89 |
| Not included in the segments | 190 | 248 | 163 | 60 | - | - |
| 29,701 | 52,968 | 31,861 | 42,840 | 3,649 | (3,678) |
(*) - AMOUNTS FOR 2017 RESTATED AS EXPLAINED ABOVE IN THE INTRODUCTORY NOTE.
The assets and liabilities of the segments and their respective reconciliations with the consolidated total for 30 September 2018 and 31 December 2017 "Restated" are as follows:
| Assets | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 30-09-2018 | 31-12-2017 "Restated" | Liabilities | ||||||||
| Segment | Investments in Associated Companies and Joint Ventures (Note 15) |
Financial Assets Available for Sale (Note 16) |
Other Assets |
Total | Investments in Associated Companies and Joint Ventures (Note 15) |
Financial Assets Available for Sale (Note 16) |
Other Assets |
Total | 30-09-2018 | 31-12-2017 "Restated" |
| Construction (*) | 2,225 | - | 1,894,676 | 1,896,901 | 2,608 | - | 2,113,883 | 2,116,491 | 1,000,928 | 1,146,142 |
| Concessions and Services | 3,064 | - | 130,140 | 133,204 | 3,113 | - | 180,660 | 183,773 | 55,190 | 76,239 |
| Real Estate (*) | 464 | 1,123 | 1,238,171 | 1,239,758 | 603 | 1,198 | 1,841,519 | 1,843,320 | 543,693 | 970,718 |
| Hospitality (*) | - | - | 116,429 | 116,429 | - | - | 174,830 | 174,830 | 37,749 | 69,046 |
| Distribution (*) | - | - | 176,740 | 176,740 | - | - | 258,149 | 258,149 | 117,547 | 158,868 |
| Automotive | - | - | 137,055 | 137,055 | 24 | - | 173,702 | 173,726 | 67,800 | 72,527 |
| Not included in the segments | 14,172 | 603 | 850,323 | 865,098 | 13,948 | 643 | 901,828 | 916,419 | 775,423 | 759,545 |
| Eliminations | - | - | (2,842,737) | (2,842,737) | - | - | (3,287,718) | (3,287,718) | (1,132,064) | (1,366,244) |
| 19,925 | 1,726 | 1,700,797 | 1,722,448 | 20,296 | 1,841 | 2,356,853 | 2,378,990 | 1,466,266 | 1,886,841 |
(*) - AMOUNTS FOR 2017 RESTATED AS EXPLAINED ABOVE IN THE INTRODUCTORY NOTE.
The sales and services rendered and the information on non-monetary non-current assets by geographic segment are composed as follows for the periods ending 30 September 2018 and 2017 and 30 September 2018 and 31 December 2017 "Restated", respectively:
| Sales and services rendered | Non-monetary non-current assets | |||||
|---|---|---|---|---|---|---|
| Geographic segment | Q3 18 | Q3 17 | 30-09-2018 | 31-12-2017 "Restated" |
||
| Portugal | 161,376 | 136,050 | 191,098 | 215,002 | ||
| Angola | 210,144 | 288,506 | 307,157 | 496,298 | ||
| Algeria | 92,955 | 64,121 | 21,484 | 22,862 | ||
| Brazil | 99,140 | 158,165 | 15,778 | 21,264 | ||
| Spain | 26,861 | 22,603 | 16,116 | 16,372 | ||
| Mozambique | 23,072 | 55,761 | 20,854 | 19,840 | ||
| Venezuela | 11,218 | 4,633 | 234 | 216 | ||
| Others | 10,747 | 9,413 | 2,559 | 2,016 | ||
| 635,513 | 739,252 | 575,280 | 793,870 |
Non-monetary non-current assets, including goodwill, intangible assets, tangible fixed assets and investment properties.
In the periods ending 30 September 2018 and 2017, the operating income was as follows:
| Q3 18 | Q3 17 | Jul-Sep 18 | Jul-Sep 17 | |
|---|---|---|---|---|
| Sales and services rendered: | ||||
| Sales | 355,360 | 405,145 | 109,935 | 130,553 |
| Services rendered | 280,153 | 334,107 | 97,173 | 133,609 |
| 635,513 | 739,252 | 207,108 | 264,162 | |
| Other operating income: | ||||
| Sale of assets a) | 27,301 | 3,817 | 1,373 | 936 |
| Changes in fair value of investment properties b) | 16,856 | 14,747 | 249 | 1,989 |
| Exchange rate differences | 14,721 | - | (2,498) | - |
| Supplementary income | 6,092 | 5,144 | 3,213 | 1,766 |
| Own work capitalised c) | 1,987 | 890 | 752 | 297 |
| Reversal of impairment losses in accounts receivable | 1,725 | 599 | 1,618 | 31 |
| Reversal of impairment losses in inventories | 143 | 243 | (4) | 65 |
| Other operating income | 2,940 | 6,154 | 814 | 615 |
| 71,765 | 31,594 | 5,517 | 5,699 | |
| 707,278 | 770,846 | 212,625 | 269,861 |
(a) In the period ending 30 September 2018, the gains stated were achieved with the sale of tangible fixed assets of 2,403,000 euros (2,922,000 euros in the period ending 30 September 2017).
However, in the 30 September 2018 period, the Group sold the subsidiary "Lagoas Park, S.A.", having recorded an added value of 24,898,000 euros. In the same period in 2017, the Group sold the Energy segment for 7,820,000 euros (Note 20), having recorded an added value of 612,000 euros and having also sold "RECOLTE, Serviços e Meio Ambiente, S.A." and "RECOLTE, Serviços e Meio Ambiente (Porto), S.A." for 1,150,000 euros (Note 20), recording an added value of 283,000 euros.
(b) The valuation of the fair value of the investment properties essentially results from the valuation of investment properties in Angola.
(c) Own work capitalized essentially corresponds to costs associated with the construction of properties.
The financial results for the periods ending 30 September 2018 and 2017 were as follows:
| Q3 18 | Q3 17 | Jul-Sep 18 | Jul-Sep 17 | ||
|---|---|---|---|---|---|
| Financial costs and losses: | |||||
| Interest paid | (20,945) | (50,622) | (7,166) | (14,179) | |
| Unfavourable exchange rate differences | (95,798) | (104,358) | (32,219) | 10,437 | |
| Other financial costs and losses | (14,794) | (20,960) | (5,516) | (7,918) | |
| (131,537) | (175,940) | (44,901) | (11,660) | ||
| Financial income and gains: | |||||
| Interest earned | 4,776 | 8,770 | 2,198 | 2,525 | |
| Favourable exchange rate differences | 35,507 | 103,480 | 10,505 | (8,226) | |
| Prompt payment discounts obtained | 5 | 3 | - | (2) | |
| Net monetary position | 32,373 | - | 12,631 | - | |
| Other financial income and gains | 505 | 1,892 | 176 | 806 | |
| 73,166 | 114,145 | 25,510 | (4,897) | ||
| Income related to investment activities: | |||||
| Income related to associated companies and joint ventures | 746 | 2,684 | 260 | 932 | |
| Dividends b) | 824 | 2,728 | - | 2,030 | |
| Other investments c) | (199) | 23 | (236) | 20 | |
| Gains/losses in the measurement of assets available for sale d) | - | (408) | - | 74 | |
| 1,371 | 5,027 | 24 | 3,056 | ||
| Financial results | (57,000) | (56,768) | (19,367) | (13,501) |
a) The income related to associated companies and joint ventures for the periods ending 30 September 2018 and 2017 includes the effect of applying the equity method to these investments (Note 15).
b) For 30 September 2018 and 2017, the values presented correspond to dividends received from "Other Investments".
c) For 30 September 2018 and 2017, gains and losses and capital gains from the sale of financial assets available for sale are counted under the item "Other Investments".
d) In 30 September 2017, the Group reported impairment losses in its 6,413,000 euro investment in the "Banco Commercial Português, S.A." and it divested its subscription rights in the "Banco Commercial Português, S.A." with an amount of 6,005,000 euros (Note 20).
Net exchange rate differences recorded in the periods ending 30 September 2018 and 2017 are due to payments and receipts, as well as to exchange rate updates on balances, which are recorded on the basis of currencies other than the Euro.
"TD, S.A." is the controlling company of a group of companies taxed in accordance with the Special Taxation Regime for Groups of Companies (RETGS). This covers all the companies in which they are invested, directly or indirectly, with at least 75% of their share capital, provided that such investment provides it with more than 50% of the voting rights, and all companies that, at the same time, have their head office and active management in Portugal and are taxed in accordance with the general Portuguese Standard Corporate Income Tax ("IRC") regime.
The other invested companies, which are not covered by the RETGS, are taxed individually, based on their respective taxable materials and the applicable IRC, Municipal Surtax and State Surtax taxes.
"TD, S.A." and the majority of its subsidiaries based in Portugal are subject to IRC, at a rate of 21% applied to the taxable materials. The entities that determine taxable profit are still subject to Municipal Surtax, the rate of which may vary up to a maximum of 1.5%, as well as the State Surtax, applied to the part of the taxable profit exceeding the amounts of 1,500, 7,500 and 35,000,000 euros, with rates of 3%, 5% and 9% respectively.
These entities are also subject to autonomous taxation and to taxes on the expenses, charges and expenditure provided for in Article 88 of the IRC Code.
In the process of calculating the taxable income, amounts that do not qualify in tax terms are added and subtracted from the accounting income. These differences between accounting and tax income may be temporary or permanent in nature.
According to the legislation in force in Portugal, tax losses are repayable over a period of five (5) years for those generated in the period of taxation of 2018 onwards, being susceptible to a deduction on taxable profits determined aposteriori, such deduction being limited to 70% of the taxable profit calculated in the taxation period in which it is carried out.
According to the legislation in force, tax returns in Portugal are subject to revision and correction by the tax authorities over a period of four (4) years, except where there has been a deduction of tax losses, or where inspections, complaints or challenges are ongoing, where, depending on the circumstances, that deadline may be extended or suspended.
For entities with a presence in other countries, the deadline for reviewing their tax returns varies between three (3) and five (5) years.
The Board of Directors believes that any corrections resulting from tax reviews/inspections to those declarations will not have a significant effect on the consolidated financial statements reported on 30 September 2018.
The Group records deferred taxes corresponding to the temporary differences between the accounting value of the assets and liabilities and the corresponding tax base, as provided for in IAS 12 - Income Tax (Note 18).
Income taxes recognised in the periods ending 30 September 2018 and 2017 are as follows:
| Q3 18 | Q3 17 | Jul-Sep 18 | Jul-Sep 17 | |
|---|---|---|---|---|
| Current tax: | ||||
| Income tax in Portugal | (6,037) | (16,286) | 2,220 | (1,488) |
| Income tax in other jurisdictions | (11,533) | (20,947) | (1,486) | (6,095) |
| Current tax | (17,570) | (37,233) | 734 | (7,583) |
| Deferred tax (Note 18) | 5,696 | 5,899 | 1,332 | (1,868) |
| (11,874) | (31,334) | 2,066 | (9,451) |
In addition to the deferred tax amounts recorded directly in the income statement, they were directly recorded in the deferred capital taxes, amounting to 9,000 euros on 30 September 2018 ((455) thousand euros on 30 September 2017) (Note 18).
The earnings per share in the periods ending 30 September 2018 and 2017 was calculated taking into account the following amounts:
| Q3 18 | Q3 17 | Jul-Sep 18 | Jul-Sep 17 | |
|---|---|---|---|---|
| Income for the calculation of basic net earnings per share (net income for the period) | 7,094 | (11,066) | (10,276) | (1,975) |
| Weighted average number of shares for the purpose of calculating the basic net earnings per share (thousands) | 420,000 | 420,000 | 420,000 | 420,000 |
| Basic net earnings per share | 0.02 | (0.03) | (0.02) | (0.00) |
As there were no dilutive effects on the earnings per share in the periods ending 30 September 2018 and 2017, the diluted earnings per share is equal to the basic earnings per share.
In the General Shareholders' Meeting held on May 26, 2018, the non-distribution of dividends was deliberate, taking into account the Company's separate financial statements on 31 December 2017.
In the period ending 30 September 2017, dividends of 840 thousand euros were settled, referring to the financial year of 2016.
During the periods ending 30 September 2018 and 2017, the changes occurring in tangible fixed assets, as well as their depreciations and accumulated impairment losses, were as follows:
| Land | Buildings and | Other | On-going | Advances on account | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| and natural resources |
constructions other |
equipment Basic |
Transportation equipment |
and instruments Tools |
Administrative equipment |
tangible fixed assets |
tangible fixed assets |
tangible Assets of fixed |
Total | |
| Gross assets: | ||||||||||
| Balance on 1 January 2017 | 31,328 | 483.317 | 388.750 | 85.600 | 41.656 | 36.226 | 10.794 | 15.061 | 1.092.732 | |
| Change of scope | (77) | (7.898) | (2.187) | (265) | (233) | (291) | (10.951) | |||
| Foreign currency translation adjustments | (185) | 109 | (6.808) | (1.299) | (1.220) | (108) | Ξ | $\widehat{\Xi}$ | (9.513) | |
| Additions | 718 | 4.471 | 1.530 | 1,382 | 767 | 8 | 5.427 | 14.394 | ||
| Transfers and write-offs | $\omega$ | (1.037) | (14.937) | (1.461) | (454) | (1.152) | (396) | (5.792) | $\blacksquare$ | (25.226) |
| Divestments | (352) | (6.504) | (1.929) | (492) | (74) | $\widehat{E}$ | $\mathbf{I}$ | (9.352) | ||
| Balance on 30 September 2017 | 31.146 | 482.678 | 357.074 | 80.254 | 40.607 | 35.426 | 10.204 | 14.695 | 1.052.084 | |
| "Restated" balance on 1 January 2018 | 33.501 | 532.871 | 384.855 | 87.054 | 42.126 | 39.119 | 12.134 | 8.368 | $\frac{181}{2}$ | 1.140.209 |
| IAS 29 application effect - Hyperinflation | 884 | 36.681 | 8.515 | 2.778 | 59 | 1.746 | 557 | 3.259 | 13 | 54.492 |
| Foreign currency translation adjustments | (5.991) | (210.006) | (45.889) | (15.612) | (1.916) | (9.692) | (2.653) | (2.330) | (83) | (294.172) |
| Additions | 736 | 7.627 | 3.675 | 2.107 | 621 | 467 | 10.172 | 25,405 | ||
| Transfers and write-offs | (5.377) | $\overline{6}$ | (3.302) | (142) | (797) | (159) | 315 | (3.218) | (12.619) | |
| Divestments | (2.187) | (4.584) | (2.575) | (218) | (700) | (293) | (10.557) | |||
| Balance on 30 September 2018 | 23.017 | 358.156 | 347.222 | 75.178 | 41.361 | 30.935 | 10.527 | 16.251 | 111 | 902.758 |
| Depreciations and accumulated impairment losses: | ||||||||||
| Balance on 1 January 2017 | 164 | 152.005 | 305.377 | 70.009 | 32.222 | 30.879 | 6.289 | 596.945 | ||
| Change of scope | (67) | (7.614) | (1.159) | (262) | (223) | (289) | (9.614) | |||
| Currency conversion effect | $\mathbf{r}$ | 78 | (3.703) | (1.265) | (425) | (68) | $\widehat{z}$ | (5.384) | ||
| Reinforcements | $\cdot$ | 11.713 | 19.944 | 4.502 | 2.463 | 1,385 | 777 | 40.784 | ||
| Transfers and reductions | (397) | (7.733) | (1.577) | (699) | (1.442) | (45) | (11.893) | |||
| Divestments | $\blacksquare$ | (41) | (5.792) | (1.816) | (327) | (68) | $\widehat{z}$ | (8.045) | ||
| Balance on 30 September 2017 | 164 | 163.291 | 300.479 | 68.694 | 32.972 | 30.463 | 6.730 | 602.793 | ||
| "Restated" balance on 1 January 2018 | 164 | 189.062 | 320.562 | 75.606 | 34.162 | 34.303 | 7.592 | 661.451 | ||
| IAS 29 application effect - Hyperinflation | 15.314 | 7.484 | 2.444 | $\frac{49}{5}$ | 1.595 | 330 | 27.216 | |||
| Currency conversion effect | (61.520) | (35.342) | (15.336) | 122 | (8.504) | (1.491) | (122.071) | |||
| Reinforcements | 8.585 | 14,458 | 2.773 | 2.201 | 976 | 593 | 29.586 | |||
| Transfers and reductions | (183) | (3.885) | (138) | (967) | (144) | $\widehat{\mathfrak{G}}$ | (5.320) | |||
| Divestments | $\blacksquare$ | (1.076) | (3.915) | (2.465) | (138) | (583) | (255) | (8.432) | ||
| Balance on 30 September 2018 | 164 | 150.182 | 299.362 | 62.884 | 35.429 | 27.643 | 6.766 | 582.430 | ||
| Net amount: | ||||||||||
| On 30 September 2017 | 30.982 | 319.387 | 56.595 | 11.560 | 7.635 | 4.963 | 3.474 | 14.695 | 449.291 | |
| On 30 September 2018 | 22.853 | 207.974 | 47.860 | 12.294 | 5.932 | 3.292 | 3.761 | 16.251 | Ε | 320.328 |
The additions of tangible fixed assets made in the period ending 30 September 2018 essentially relate to investments made in facilities and equipment.
On 30 September 2018, the current tangible fixed assets include 11,191 thousand euros for buildings and other constructions in progress, of which we highlight the expansion of the network of stores in Angola for the Distribution sector.
During the periods ending 30 September 2018 and 2017, the changes occurring in investment properties were as follows:
| 2018 | 2017 | |
|---|---|---|
| Balance on 1 January | 217,647 | 547,067 |
| Foreign currency translation adjustments | (54,285) | 78 |
| Increases/(Sales) | 3,555 | 2,116 |
| Changes in the fair value | 10,575 | 9,722 |
| Transfers to/from tangible fixed assets | 34 | 6,991 |
| Balance on 30 September | 177,526 | 565,974 |
During the periods ending 30 September 2018 and 2017, the changes in the fair value of the investment properties by geographical area was as follows:
| Q3 18 | Q3 17 | Jul-Sep 18 | Jul-Sep 17 | |
|---|---|---|---|---|
| Portugal | (4,300) | 10,745 | (998) | (194) |
| Angola | 14,875 | (1,023) | (1,108) | - |
| 10,575 | 9,722 | (2,106) | (194) |
It should be noted that the equity was influenced not only by the positive impact of the abovementioned 14,875,000 euros, but also by the change in the fair value of the investment properties in Angola, which had a negative impact of 54,287,000 euros on "Exchange Rate Differences" item. Deferred net taxes and the Group's equity for the period ending 30 September 2018 were compounded by the amount of 37,431,000 euros.
The income obtained with investment properties arising from the existence of operating lease contracts amounted to 4,196 thousand euros in the period ending 30 September 2018 (23,415 thousand euros on 30 September 2017). Direct operating expenses linked to investment properties in the period ending 30 September 2018 amounted to 907 thousand euros (2,690 thousand euros on 30 September 2017).
The associated companies and joint ventures which, for 30 September 2018, were recorded using the equity method, are as follows:
| Corporate name | Head office | % effective share |
|---|---|---|
| ADOQUINES VARGAS, (ADOQUINVAR), C.A. | Instalaciones de Bolivariana de Puertos | 49.00% |
| Puerto de La guaria – Parroquia Maiquetia | ||
| Municipio Vargas del Estado Vargas | ||
| ALVORADA PETRÓLEO, S.A. | Rua Paraíba, nº 1000, sala 1518 | 43.21% |
| 15º andar – Bairro Funcionário | ||
| Belo Horizonte - Minas Gerais - Brazil | ||
| ALSOMA, GEIE. | 3 Av André Malraux - Levallois Peret - France | 30.48% |
| AVIAS - Grupo Ferroviário para a Alta Velocidade, A.C.E | Edifício 1, Lagoas Park - Porto Salvo | 15.92% |
| AVIA Portugal - Produtos Petrolíferos, S.A. | Edifício 2, Lagoas Park - Porto Salvo | 40.00% |
| AK10 - Empreendimentos e Participações SPE Ltda. | Alameda Santos, nº 960, 19º andar, Edifício CYK | 25.00% |
| Cerqueira César – São Paulo | ||
| CAIS DE CRUZEIROS 2ª FASE, ACE | Rua da Tapada da Quinta de Cima - Linhó - Sintra | 16.94% |
| CONBATE, ACE | Edifício 2, Lagoas Park - Porto Salvo | 20.00% |
| Consorcio Minero Luso Vargas C.A. (CONLUVAR) | Av. Venezuela com Calle Mohedano, Torre JWM | 49.00% |
| Piso 5, Of. 5-2, Urb El Rosal - Caracas - Venezuela | ||
| CONSORCIO OPSUT 2010 | Calle 4, Casa nº 4, Urbanizacion Los Laureles | 51.00% |
| Valle de la Pascoa - Venezuela | ||
| DOURO LITORAL, A.C.E | Tower Plaza, Rotunda Edgar Cardoso, nº 23, | 40.00% |
| 12º andar, sala F - Vila Nova de Gaia | ||
| D.L.O.E.A.C.E. – Douro Litoral Obras Especiais, A.C.E | Edifício 2, Lagoas Park - Porto Salvo | 40.00% |
| FERROVIAL/TEIXEIRA DUARTE – Obras Hidráulicas do Alqueva, A.C.E |
Edifício Central Park | 50.00% |
| Rua Alexandre Herculano, Edifício 1 - 4º Piso, Fração B e C - Linda-a-Velha |
||
| IMOC - Empreendimentos Imobiliários, S.A. | Av. Julius Nyerere, 130 - Maputo | 49.92% |
| METROLIGEIRO - Construção de Infraestruturas, A.C.E | Rua Abranches Ferrão, nº 10 – 5º F - Lisbon | 26.80% |
| NOVA ESTAÇÃO, A.C.E | Edifício 6 – Piso 1, Lagoas Park - Porto Salvo | 25.00% |
| RPK Gulfstream, Ltd. | Tri Ruchja str. - 183003, Murmansk | 42.70% |
| TEIXEIRA DUARTE - SOPOL - Metro Superfície, A.C.E | Edifício 2, Lagoas Park - Porto Salvo | 57.30% |
| TDGISERV Services, LLC | Po Box 7098, Doha - Qatar | 49.00% |
| TRÊS PONTO DOIS – Trabalhos Gerais de Construção Civil, Via e Catenária de Modernização da Linha do Norte, ACE |
Av. das Forças Armadas, 125 - 2º C - Lisbon | 50.00% |
The investments in associated companies and joint ventures experienced the following changes in the periods ending 30 September 2018 and 2017:
| Shareholdings Goodwill | |||
|---|---|---|---|
| Total | |||
| Balance on 1 January 2017 | 17,504 | - | 17,504 |
| Effect of the application of the equity method: | |||
| - Effect on income for the financial year (Note 9) | 2,684 | - | 2,684 |
| - Effect on equity | (1,154) | - | (1,154) |
| Increases | 210 | - | 210 |
| Foreign currency translation adjustments | 280 | - | 280 |
| Others | 946 | - | 946 |
| Balance on 30 September 2017 | 20,470 | - | 20,470 |
| Balance on 1 January 2018 | 20,296 | - | 20,296 |
| Effect of the application of the equity method: | |||
| - Effect on income for the financial year (Note 9) | 746 | - | 746 |
| - Effect on equity | (341) | - | (341) |
| Increases (a) | 204 | - | 204 |
| Foreign currency translation adjustments | (62) | - | (62) |
| Others | (918) | - | (918) |
| Balance on 30 September 2018 | 19,925 | - | 19,925 |
(a) – Alvorada Petróleo, S.A. capital increases
The details of investments in associated companies and joint ventures on 30 September 2018 and 31 December 2017 are as follows:
| 30-09-2018 | 31-12-2017 | ||||||
|---|---|---|---|---|---|---|---|
| Associated companies and joint ventures | Shareholdings | Goodwill | Value of the financial position |
Shareholdings | Goodwill | Value of the financial position |
|
| IMOC - Empreendimentos Imobiliários, S.A.R.L. | 14,172 | - | 14,172 | 13,948 | - | 13,948 | |
| TDGISERV Services, LLC (a) | 2,563 | - | 2,563 | 2,563 | - | 2,563 | |
| RPK Gulfstream Ltd. | 501 | - | 501 | 550 | - | 550 | |
| Alvorada Petróleo, S.A. | 440 | - | 440 | 582 | - | 582 | |
| SCP AK-10 Empreendimentos e Participações SPE LTDA. | - | - | - | 21 | - | 21 | |
| Others | 2,249 | - | 2,249 | 2,632 | - | 2,632 | |
| 19,925 | - | 19,925 | 20,296 | - | 20,296 | ||
(A) – ADVANCE PAYMENT OF CAPITAL INCREASE.
These interests are covered by the equity method which, in the periods ending 30 September 2018 and 2017, had the following impacts:
| Q3 18 | ||||||
|---|---|---|---|---|---|---|
| Associated companies | Gains and losses for associated companies and joint ventures (Note 9) |
Adjustments of shareholdings |
Total | |||
| Alvorada Petróleo, S.A. | (109) | (152) | (261) | |||
| IMOC - Empreendimentos Imobiliários, S.A.R.L. | 327 | (111) | 216 | |||
| SCP AK-10 Empreendimentos e Participações SPE LTDA. | (31) | - | (31) | |||
| TDGISERV Services, LLC | 592 | (78) | 514 | |||
| Others | (33) | - | (33) | |||
| 746 | (341) | 405 |
| Q3 17 | |||||
|---|---|---|---|---|---|
| Associated companies | Gains and losses for associated companies and joint ventures (Note 9) |
Adjustments of shareholdings |
Total | ||
| Alvorada Petróleo, S.A. | (13) | 7 | (6) | ||
| IMOC - Empreendimentos Imobiliários, S.A.R.L. | 3,861 | (1,559) | 2,302 | ||
| SCP AK-10 Empreendimentos e Participações SPE LTDA. | 10 | - | 10 | ||
| TDGISERV Services, LLC | (1,361) | 398 | (963) | ||
| Others | 187 | - | 187 | ||
| 2,684 | (1,154) | 1,530 |
For the periods ending 30 September 2018 and 2017, the changes that occurred in the valuation of the financial assets available for sale—valued using their respective fair values—were as follows:
| 2018 | 2017 | |
|---|---|---|
| Fair value on 1 January | 1,841 | 8,318 |
| Decrease in fair value | (115) | (6,413) |
| Fair value on 30 September | 1,726 | 1,905 |
On 30 September 2018 and 31 December 2017, the Group held 6,766,394 shares in Banco Comercial Português, S.A., corresponding to 0.04% of its respective share capital and voting rights, classified as financial assets available for sale.
The financial assets available for sale and their respective cost and market values on 30 September 2018 and 31 December 2017 are as follows:
| 30-09-2018 | 31-12-2017 | ||||
|---|---|---|---|---|---|
| V. Cost | V. Market | V. Cost | V. Market | ||
| Banco Comercial Português, S.A. | 586,331 | 1,726 | 586,331 | 1,841 | |
| 586,331 | 1,726 | 586,331 | 1,841 |
For the periods ending 30 September 2018 and 31 December 2017, the assets and liabilities held for sale are as follows:
| 30-09-2018 | 31-12-2017 | |
|---|---|---|
| Assets held for sale: | ||
| Goodwill | 1,979 | 1,979 |
| Tangible fixed assets | 537 | 28,062 |
| Investment properties | 30,548 | 354,874 |
| Other investments | 6,615 | 7,125 |
| Deferred tax assets | 2,569 | 2,572 |
| Inventories | 199 | 199 |
| Current customers | 2,045 | 6,560 |
| Non-current customers | 40,250 | 40,250 |
| Other debtors | 5 | 5 |
| Cash and cash equivalents | 12,319 | 12,496 |
| Other assets | 443 | 858 |
| Total assets held for sale | 97,509 | 454,980 |
| Liabilities held for sale: | ||
| Loans | 71,556 | 164,886 |
| Deferred tax liabilities | 1,131 | 1,701 |
| Financial leases | 2,417 | 161,808 |
| Suppliers | 223 | 448 |
| Other creditors | 634 | 1,900 |
| Other liabilities | 14,744 | 19,133 |
| Total liabilities held for sale | 90,705 | 349,876 |
| Net total | 6,804 | 105,104 |
For the period ending 30 September 2018, the following companies are classified as "Assets and Liabilities Held for Sale":
In the period ending 30 September 2018, the Group sold the wholly-owned subsidiary "LAGOAS PARK, S.A.," which was classified under "Assets and Liabilities Held for Sale". This subsidiary operates in the Real Estate sector in Portugal and is detailed as follows:
| Assets held for sale: | |
|---|---|
| Tangible fixed assets | 27,525 |
| Investment properties | 324,326 |
| Deferred tax assets | 3 |
| Current customers | 4,515 |
| Cash and cash equivalents | 177 |
| Other assets | 415 |
| Total assets held for sale | 356,961 |
| Liabilities held for sale: | |
| Loans | 93,330 |
| Deferred tax liabilities | 570 |
| Financial leases | 159,391 |
| Suppliers | 225 |
| Other creditors | 1,266 |
| Other liabilities | 4,389 |
| Total liabilities held for sale | 259,171 |
| Net total | 97,790 |
| Realization value | 122,688 |
| Capital gains (Note 8) | 24,898 |
| Amount received (Note 20) | 122,433 |
| Amount receivable | 255 |
All situations that may significantly affect future taxes are affected by the application of deferred tax regulations.
The changes in the deferred tax assets and liabilities for the periods ending 30 September 2018 and 2017, were as follows:
| Deferred tax assets | Deferred tax liabilities |
||||
|---|---|---|---|---|---|
| 2018 | 2017 | 2018 | 2017 | ||
| Balance on 1 January "Restated" | 155,283 | 198,187 | 35,422 | 73,340 | |
| Constitution/Reversal | |||||
| Net income (Note 10) | 5,850 | 5,318 | 154 | (581) | |
| Equity | 9 | (458) | - | (3) | |
| Currency conversion and adjustment effect | 16,934 | (5,535) | (10,658) | (57) | |
| Change of scope | - | (57) | - | - | |
| Balance on 30 September | 178,076 | 197,455 | 24,918 | 72,699 |
As regards deferred tax assets, they are only recorded insofar as they are deemed likely to be taxable profits in future taxation periods that may be used to recover tax losses or tax-deductible differences. This evaluation was based on the business plans of the Group's companies, which are periodically revised and updated, and also on the prospects of generating taxable income.
The transactions and balances between "TD, S.A." and the Group's companies included in the scope of consolidation—which are related parties—were eliminated in the consolidation process, not being the subject of disclosure in this note. The balances and transactions between the Group and the associated companies, joint ventures, related parties and individuals with significant voting power with their own companies are detailed below.
The terms or conditions practiced between them are almost identical to those that would normally be drawn up, accepted and practiced between independent entities in comparable operations.
The main balances with related entities on 30 September 2018 and 31 December 2017 are detailed as follows:
| Balances receivable | Balances payable | Loans | Other debts | |||||
|---|---|---|---|---|---|---|---|---|
| Entities | 30-09-2018 | 31-12-2017 | 30-09-2018 | 31-12-2017 | 30-09-2018 | 31-12-2017 | 30-09-2018 | 31-12-2017 |
| ADOQUINES VARGAS, (ADOQUINVAR), C.A. | - | 2 | - | - | - | - | - | - |
| AEBT - Auto Estradas do Baixo Tejo, S.A. | 7 | 9 | - | - | 1,155 | 1,515 | - | - |
| AVIA PORTUGAL, S.A. | 7 | 15 | - | - | - | - | - | - |
| CINTEL - Construção Interceptor Esgotos, S.A. | 46 | 50 | - | - | 4 | 4 | - | - |
| CONBATE, ACE | 22 | 15 | 1 | 1 | - | - | - | - |
| Consórcio Minero Luso Vargas - CONLUVAR | - | 17 | - | 7 | - | - | - | - |
| Consórcio OPSUT 2010 | - | 7 | - | 1 | - | - | - | - |
| DOURO LITORAL, A.C.E | 12 | 9 | 28 | 55 | - | - | - | - |
| DOURO LITORAL OBRAS ESPECIAIS, A.C.E | - | - | 2 | 2 | - | - | - | - |
| EIA - Ensino de Investigação e Administração, S.A. | 9 | 9 | - | - | - | - | - | - |
| IMOC - Empreendimentos Imobiliários, S.A.R.L. | 45 | 5,454 | 1 | 5 | - | - | - | - |
| LUSOPONTE - Concessionária para a Travessia do Tejo, S.A. | 215 | 43 | - | - | - | 150 | - | - |
| METROLIGEIRO - Construção de Infraestruturas, A.C.E | 32 | 33 | - | - | - | - | - | - |
| MTS - Metro Transportes do Sul, S.A. | - | - | - | - | 740 | 740 | - | - |
| NOVA ESTAÇÃO, A.C.E | 1,023 | 1,023 | 81 | 88 | 13 | 13 | - | - |
| Promociones Inmobiliárias 3003, C.A. | 408 | - | - | - | - | - | (34) | (43) |
| RPK Gulfstream, Ltd. | - | - | - | - | 1,310 | 1,437 | - | - |
| SOMAFEL/FERROVIAS, A.C.E | - | 3 | - | 646 | - | - | - | - |
| TDGISERV Services, LLC | - | - | - | - | 447 | 220 | - | - |
| TEIXEIRA DUARTE - SOPOL - Metro Superfície, A.C.E | 7 | 7 | 55 | 58 | - | - | - | - |
| TRÊS PONTO DOIS - Trabalhos Gerais de Construção Civil, Via e | ||||||||
| Catenária de Modernização da Linha do Norte, ACE | - | - | 35 | 35 | - | - | - | - |
| 1,833 | 6,698 | 203 | 898 | 3,669 | 4,079 | (34) | (43) |
The main transactions carried out in the periods ending 30 September 2018 and 2017 with the related entities were as follows:
| Entities | Sales and services rendered | Purchases and services obtained | |||
|---|---|---|---|---|---|
| Q3 18 | Q3 17 | Q3 18 | Q3 17 | ||
| AEBT - Auto Estradas do Baixo Tejo, S.A. | 18 | 12 | - | - | |
| ADOQUINVAR | - | 63 | - | - | |
| CONBATE, ACE | 72 | 56 | - | - | |
| Consórcio Minero Luso Vargas - CONLUVAR | - | 2 | 1 | - | |
| DOURO LITORAL, A.C.E | 44 | 70 | 9 | 26 | |
| IMOC - Empreendimentos Imobiliários, S.A.R.L. | 134 | 1,633 | 99 | 110 | |
| LUSOPONTE - Concessionária para a Travessia do Tejo, S.A. | 172 | 496 | - | - | |
| SOMAFEL/FERROVIAS, A.C.E | - | 2 | - | - | |
| TEIXEIRA DUARTE - SOPOL - Metro Superfície, A.C.E | - | - | 3 | 13 | |
| TDGISERV Services, LLC | - | 319 | - | - | |
| 440 | 2,653 | 112 | 149 |
The remuneration for the members of the governing bodies of TD, S.A., in the periods ending 30 September 2018 and 2017, was as follows:
| Q3 17 | Jul-Sep 18 | Jul-Sep 17 | |
|---|---|---|---|
| 955 | 618 | 434 | 226 |
| 50 | 50 | 17 | 17 |
| 45 | 45 | 15 | 15 |
| 1,050 | 713 | 466 | 258 |
| Q3 18 |
The remuneration for the members of the TD, S.A senior management, in the periods ending 30 September 2018 and 2017, was as follows:
| Q3 18 | Q3 17 | Jul-Sep 18 | Jul-Sep 17 | |
|---|---|---|---|---|
| Senior management: | ||||
| Short-term benefits | 5,653 | 3,736 | 2,316 | 1,227 |
| 5,653 | 3,736 | 2,316 | 1,227 |
On 30 September 2018 and 31 December 2017, this item was composed as follows:
| 30-09-2018 | 31-12-2017 | |
|---|---|---|
| Sight deposits | 120,650 | 87,219 |
| Time deposits | 23,055 | 34,667 |
| Other treasury investments | 9,568 | 29,599 |
| Cash | 1,965 | 2,780 |
| 155,238 | 154,265 |
The item Cash and cash equivalents includes cash, sight deposits, time deposits and short-term treasury investments with a maturity of less than three months, and which can be withdrawn on demand with an insignificant risk of changes in value.
Receipts from financial investments in the periods ending 30 September 2018 and 2017 reflect the sale of equity shares in the following entities:
| Q3 18 | Q3 17 | Jul-Sep 18 | Jul-Sep 17 | |
|---|---|---|---|---|
| Lagoas Park, S.A. | 122,433 | - | 12,973 | - |
| Treasury Bonds - Angola | 3,407 | - | 3,407 | - |
| LUSOPONTE - Concessionária para a Travessia do Tejo, S.A. | 150 | - | - | - |
| Avia Internacional | 112 | - | - | - |
| TDARCOL - Sociedade Gestora de Participações Sociais, S.A. | - | 7,820 | - | - |
| Banco Comercial Português, S.A. (a) | - | 6,005 | - | - |
| Recolte, Serviços e Meio Ambiente, S.A. | - | 1,150 | - | 1,150 |
| Moreira & Cunha, Lda. | - | 100 | - | 100 |
| 126,102 | 15,075 | 16,380 | 1,250 |
The payments from financial investments in the periods ending 30 September 2018 and 2017 reflect the acquisition of equity shares in the following entities:
| Q3 18 | Q3 17 | Jul-Sep 18 | Jul-Sep 17 | ||
|---|---|---|---|---|---|
| TDGISERV Services, LLC | - | 210 | - | 210 | |
| Others | - | 5 | - | - | |
| - | 215 | - | 210 |
The dividends received in the periods ending 30 September 2018 and 2017 were as follows:
| Q3 18 | Q3 17 | Jul-Sep 18 | Jul-Sep 17 | |
|---|---|---|---|---|
| Macau CPM Holdings | 823 | 1,351 | - | 653 |
| LUSOPONTE - Concessionária para a Travessia do Tejo, S.A. | - | 1,377 | - | 1,377 |
| Others | 281 | - | - | - |
| 1,104 | 2,728 | - | 2,030 |
For the periods ending 30 September 2018 and 2017, the subscribed and paid-up capital was represented by 420,000,000 shares with the nominal value of 0.50 euros each.
On 30 September 2018, TEIXEIRA DUARTE – Sociedade Gestora de Participações Sociais, S.A. directly held 202,380,000 shares, representing the capital of Teixeira Duarte, S.A., equating to 48.19% of the respective share capital (202,740,000 shares representing the capital of Teixeira Duarte, S.A., equating to 48.27% of the respective share capital on 30 September 2017).
Statutory Reserve: According to the legislation in force, the company is obliged to transfer at least 5% of its annual net income to statutory reserve, until it reaches at least 20% of the capital. This reserve is not distributable to shareholders, but can be used to absorb losses, after all other reserves are exhausted, or it can be incorporated in the capital.
Fair Value Reserve: The fair value reserve results from the difference between the cost value and the market value of the financial assets available for sale which are not yet recognised in the income statement.
Unrestricted Reserves: Unrestricted reserves are available for distribution in accordance with and within the limits of the Portuguese Commercial Companies Code.
Hedging Transaction Reserves: The hedging transaction reserves reflect the effective component (net fiscal impact) of changes in the fair value of derivative financial instruments designated as cash-flow hedging.
For the periods ending 30 September 2018 and 31 December 2017, the loans obtained were as follows:
| 30-09-2018 | 31-12-2017 | |
|---|---|---|
| Non-current liabilities: | ||
| Bank loans a) | 404,480 | 369,191 |
| Commercial paper b) | 399,350 | 324,600 |
| Bond loans c) | 10,028 | 14,927 |
| 813,858 | 708,718 | |
| Current liabilities: | ||
| Bank loans a) | 89,453 | 188,700 |
| Commercial paper b) | - | 110,860 |
| Bond loans c) | 4,985 | - |
| 94,438 | 299,560 | |
| 908,296 | 1,008,278 |
On 30 September 2018, internal bank loans, bank overdrafts and current accounts earned interest at the weighted annual average rate of 2.49% (3.52% on 30 September 2017).
On 30 September 2018, the most significant bank loans contracted by the Group, essentially correspond to:
| Geographical area | Bank | Type of Financing | Contract Date | Expiry Date | Currency | Currency Amount | Amount (€) |
|---|---|---|---|---|---|---|---|
| Portugal | Banco Santander Totta | Loan | 13-12-2012 | 13-12-2019 | EUR | 697 | 697 |
| Portugal | Banco Atlântico Europa | Invoice Discount Line | 08-04-2013 | 08-01-2019 | EUR | 3,129 | 3,129 |
| Venezuela | BOD - Banco Occidental de Descuento (Venezuela) | Loan | 29-07-2013 | 31-12-2018 | VES | 3,500 | 31 |
| Venezuela | Banco Mercantil (Venezuela) | Loan | 26-11-2013 | 31-12-2018 | VES | 1,017 | 9 |
| Portugal | Caixa Geral de Depósitos | Invoice Discount Line | 27-01-2014 | 15-12-2020 | EUR | 4,321 | 4,321 |
| Angola | BCGA - Banco Caixa Geral Angola (Angola) | Loan | 30-04-2014 | 30-04-2021 | AON | 861,111 | 2,506 |
| Portugal | Caixa Geral de Depósitos | Loan | 22-09-2014 | 15-12-2033 | EUR | 83,000 | 83,000 |
| Portugal | Novo Banco | Loan | 26-01-2015 | 15-12-2021 | EUR | 32,144 | 32,144 |
| Brazil | Banco Bradesco (Brazil) | Loan | 20-03-2015 | 20-02-2019 | BRL | 15,746 | 3,384 |
| Portugal | Caixa Geral de Depósitos | Loan | 04-04-2015 | 15-12-2019 | USD | 369 | 319 |
| Spain | Banco Caixa Geral (Spain) | Recourse factoring | 17-06-2015 | 31-12-2018 | EUR | 663 | 663 |
| Portugal | Banco do Brasil | Loan | 22-01-2016 | 10-01-2019 | EUR | 1,167 | 1,167 |
| Spain | Banco Sabadell (Spain) | Loan | 21-04-2016 | 20-05-2019 | EUR | 184 | 184 |
| Portugal | Caterpillar | Loan | 02-06-2016 | 07-06-2020 | EUR | 571 | 571 |
| Portugal | Banco BPI | Loan | 05-07-2016 | 05-11-2021 | EUR | 11,418 | 11,418 |
| Portugal | Caterpillar | Loan | 11-07-2016 | 07-07-2020 | EUR | 265 | 265 |
| Portugal | Caterpillar | Loan | 19-07-2016 | 07-08-2020 | EUR | 73 | 73 |
| Spain | Bankinter (Spain) | Loan | 22-07-2016 | 22-07-2020 | EUR | 469 | 469 |
| Spain | Banco Santander Central Hispano (Spain) | Recourse factoring | 26-07-2016 | 31-12-2018 | EUR | 153 | 153 |
| Portugal | Banco Comercial Português | Loan | 12-08-2016 | 31-12-2033 | EUR | 10,628 | 10,628 |
| Portugal | Caixa Geral de Depósitos | Loan | 12-08-2016 | 31-12-2033 | EUR | 7,524 | 7,524 |
| Portugal | Novo Banco | Loan | 12-08-2016 | 31-12-2033 | EUR | 10,100 | 10,100 |
| Portugal | Banco BAI Europa | Loan | 22-09-2016 | 30-09-2019 | USD | 2,124 | 1,835 |
| Portugal | Caterpillar | Loan | 12-12-2016 | 22-12-2020 | EUR | 142 | 142 |
| Portugal | Caixa Económica Montepio Geral | Recourse factoring | 17-01-2017 | 31-12-2018 | EUR | 1,713 | 1,713 |
| Spain | Banco Popular (Spain) | Loan | 16-06-2017 | 20-07-2021 | EUR | 1,449 | 1,449 |
| Spain | España Duero (Spain) | Loan | 16-06-2017 | 16-12-2018 | EUR | 110 | 110 |
| Portugal | Banco BAI Europa | Pre-financing of export refunds | 04-09-2017 | 02-02-2019 | EUR | 1,550 | 1,550 |
| Spain | Banco Santander Central Hispano (Spain) | Loan | 16-10-2017 | 12-10-2018 | EUR | 150 | 150 |
| Spain | Banco Caixa Geral (Spain) | Loan | 26-10-2017 | 30-01-2019 | EUR | 560 | 560 |
| Spain | Banco Santander Central Hispano (Spain) | Loan | 22-11-2017 | 22-11-2022 | EUR | 567 | 567 |
| Portugal | Banco Comercial Português | Loan | 27-11-2017 | 31-12-2033 | EUR | 38,000 | 38,000 |
| Spain | Abanca (Spain) | Recourse factoring | 21-12-2017 | 30-11-2018 | EUR | 210 | 210 |
| Portugal | Caixa Geral de Depósitos | Invoice Discount Line | 12-01-2018 | 31-12-2033 | EUR | 4,439 | 4,439 |
| Portugal | Novo Banco | Invoice Discount Line | 12-01-2018 | 31-12-2033 | EUR | 8,750 | 8,750 |
| Portugal | Banco Comercial Português | Invoice Discount Line | 16-01-2018 | 31-12-2033 | EUR | 2,302 | 2,302 |
| Portugal | Banco Comercial Português | Loan | 30-01-2018 | 15-06-2021 | EUR | 13,650 | 13,650 |
| Portugal | Caixa Geral de Depósitos | Loan | 30-01-2018 | 15-06-2021 | EUR | 2,600 | 2,600 |
| Portugal | Banco Comercial Português | Loan | 10-05-2018 | 09-05-2021 | EUR | 5,638 | 5,638 |
| Brazil | Banco Renner (Brazil) | Loan | 16-07-2018 | 10-10-2018 | BRL | 979 | 210 |
As of 30 September 2018 and 31 December 2017, the bank loans also included accounts of 236,866 and 350,679 thousand euros, respectively.
As of 30 September 2018, the Group has negotiated the following commercial paper programs:
| Geographical area | Bank | Type of Financing | Contract Date | Expiry Date | Spread | Currency Amount (€) | |
|---|---|---|---|---|---|---|---|
| Portugal | Novo Banco | Commercial paper | 16-12-2005 | 15-12-2023 | 1.60% | EUR | 42,500 |
| Portugal | Caixa Geral de Depósitos | Commercial paper | 07-07-2010 | 31-12-2033 | 2.50% | EUR | 28,500 |
| Portugal | Novo Banco | Commercial paper | 30-12-2013 | 31-12-2033 | 2.00% | EUR | 191,250 |
| Portugal | Banco Finantia | Commercial paper | 02-05-2014 | 02-05-2020 | 4.75% | EUR | 2,250 |
| Portugal | Banco BIC Português | Commercial paper | 18-11-2014 | 02-01-2020 | 3.25% | EUR | 5,000 |
| Portugal | Novo Banco | Commercial paper | 28-12-2015 | 15-06-2027 | 1.95% | EUR | 95,000 |
| Portugal | Novo Banco | Commercial paper | 14-01-2016 | 31-12-2033 | 1.55% | EUR | 30,350 |
| Portugal | Banco BPI | Commercial paper | 30-01-2018 | 30-01-2021 | 2.90% | EUR | 4,500 |
| 399,350 |
TEIXEIRA DUARTE – Engenharia e Construções S.A. and TEIXEIRA DUARTE – Gestão de Participações e Investimentos Imobiliários, S.A. signed with Banco Comercial Português, S.A. a Service Agreement Contract for the Assistance and Placing of Private Offering of Issuance of Bonds, as well as a Paying Agent's Contract for the Issuance of Private Subscription Rights for Bonds amounting to 15,300,000 euros (1,500,000 euros in TEIXEIRA DUARTE – Engenharia e Construções S.A. and 13,800,000 euros in TEIXEIRA DUARTE – Gestão de Participações e Investimentos Imobiliários, S.A.) named "TEIXEIRA DUARTE - Engenharia e Construções, S.A. / TEIXEIRA DUARTE – Gestão de Participações e Investimentos Imobiliários, S.A. – 2014/2021". Interest is settled quarterly at the rate of 4.57% and the reimbursement will be made in three equal instalments on 2 April 2019, 2 April 2020 and 2 April 2021.
As of 30 September 2018 and 31 December 2017, non-current bank loans have the following reimbursement plan defined:
| 30-09-2018 | 31-12-2017 | |
|---|---|---|
| 2019 | 55,135 | 19,151 |
| 2020 | 57,336 | 47,529 |
| 2021 | 57,683 | 42,832 |
| 2022 | 34,587 | 41,354 |
| 2023 and beyond | 609,117 | 557,852 |
| 813,858 | 708,718 |
For the periods ending 30 September 2018 and 31 December 2017, foreign currency funds were expressed in the following currencies:
| Currency | 30-09-2018 | 31-12-2017 | ||||
|---|---|---|---|---|---|---|
| Currency | Euros | Currency | Euros | |||
| Venezuelan Bolívar | 4,418 | 39 | 15,403,809 | 3,840 | ||
| US Dollar | 14,254 | 12,313 | 5,935 | 4,949 | ||
| Angolan Kwanza | 3,573,827 | 10,402 | 1,197,014 | 6,456 | ||
| Colombian Peso | 2,729 | 1 | 6,402 | 2 | ||
| Brazilian Real | 16,725 | 3,594 | 111,171 | 27,982 |
Loans expressed in foreign currency gain interest at the market rate and were converted to euros based on the exchange rate on the date of the financial position statement.
Following several inspections to the financial years extending from 2007 to 2013 carried out by the Tax and Customs Authority (AT) on the accounts of TEIXEIRA DUARTE - Gestão de Participações e Investimentos Imobiliários, S.A., a company the share capital for which is under the direct and full ownership of "TD, S.A.", the following corrections were made to the tax losses initially determined by this invested company:
| Financial Year | Tax loss determined |
Tax and Customs Authority (AT) Correction |
|---|---|---|
| 2007 | 42,088 | 29,331 |
| 2008 | 36,573 | 45,938 |
| 2009 | 46,203 | 24,807 |
| 2010 | 5,123 | 6,467 |
| 2011 | 12,779 | 3,213 |
| 2012 | 13,294 | 2,299 |
| 2013 | 26,221 | 5,000 |
With the exception of the situations listed in the following paragraphs, the corrections result from the disregard—as a tax expense—of the financial costs incurred on the investment made in invested companies in the form of additional contributions subject to the supplementary capital contributions regime.
Since TEIXEIRA DUARTE - Gestão de Participações e Investimentos Imobiliários, S.A. is taxed in accordance with the Corporate Income Tax (IRC) according to the Special Taxation Scheme for Groups of Companies (Article 69 and following of the IRC Code), corrections to the tax losses in the financial years extending from 2007 to 2011 were the subject of IRC Payment Assessments and compensatory interest issued to the controlling company in those financial years – TEIXEIRA DUARTE – Engenharia e Construções, S.A.. In accordance with the law, this company contested the corrections made by the Tax and Customs Authority (AT) to the financial years extending from 2007 to 2011.
After the end of 2017, as the controlling company in the 2007 financial year, TEIXEIRA DUARTE – Engenharia e Construções, S.A., was notified of a judgment delivered by the Supreme Administrative Court (STA), ordering the additional tax assessment issued by the Tax and Customs Authority (AT)—which was the subject of an appeal by the Tax and Customs Authority (AT)—to be eliminated, deemed unfounded by the STA in the course of the second quarter of 2018.
The correction concerning the 2012 financial year was the subject of an additional tax assessment for the controlling company in that financial year—"TD, S.A."—having contested it within the legal deadlines.
The correction to the tax loss calculated in the 2013 financial year includes the amount of 5,000,000 euros, accounting for the incorrect application—according to the Tax and Customs Authority (AT)—of Article 51 of the IRC Code. This correction was subject to judicial challenge by "TD, S.A.", as the controlling company.
In the tax loss correction for 2008, the amount of 611,000 euros is included, which—according to the Tax and Customs Authority (AT)—accounts for the incorrect application of Article 22 (10) of the Portuguese Tax Incentives Statute (EBF) to the distribution of income by the Real Estate Investment Fund (Fundo de Investimento Imobiliário) TDF.
In accordance with the law, TEIXEIRA DUARTE – Engenharia e Construções, S.A., acting as the controlling company, contested this correction.
In addition to the corrections described above regarding the invested company TEIXEIRA DUARTE – Gestão de Participações e Investimentos Imobiliários, S.A., the Tax and Customs Authority (AT) made the following correction to TEIXEIRA DUARTE – Engenharia e Construções, S.A.:
Correction to the taxable profit calculated in the 2008 period, amounting to 35,467,000 euros, of which the company contested 32,595,000 euros, in relation to tax credit, the reinvestment of capital gains and the incorrect application of Article 22 (10) of the Portuguese Tax Incentives Statute (EBF).
The Tax and Customs Authority (AT) made two corrections to the tax payable by "TD, S.A.", as the controlling company, with reference to the 2014 financial year.
The correction, amounting to 1,209,000 euros, results from the Tax and Customs Authority (AT) considering that—for various reasons—the State and Municipal Surtaxes calculated using the RETGS are not deductible credits held by the RETGS, namely tax credit on international juridical double taxation.
In accordance with the law, TEIXEIRA DUARTE – Engenharia e Construções, S.A., as the controlling company, will be contesting these corrections.
On 30 September 2018 and 31 December 2017, the Group of companies included in the consolidation had provided guarantees to third parties as follows:
| 30-09-2018 | 31-12-2017 | |
|---|---|---|
| Bank guarantees provided | 273,909 | 325,889 |
| Guarantee insurance | 286,554 | 230,177 |
| 560,463 | 556,066 |
The bank guarantees were provided primarily for the purposes of contests, advances received and as a guarantee of good execution of the works.
TEIXEIRA DUARTE - Engenharia e Construções, S.A., EPOS - Empresa Portuguesa de Obras Subterrâneas, S.A., SOMAFEL - Engenharia e Obras Ferroviárias, S.A., RECOLTE, Servicios y Medioambiente, S.A.U., EMPA - Serviços de Engenharia, S.A. and Consórcio Boyacá - La Guaira have guarantee insurance provided as a performance guarantee for the works and provision of services.
For the purpose of suspending two tax enforcement procedures brought against the invested company TEIXEIRA DUARTE – Engenharia e Construções, S.A., and in relation to the Corporate Income Tax debt of the 2008 financial year—the taxes for which were contested—overall bank guarantees in excess of 27,546,000 euros were issued to the Tax and Customs Authority (AT). Following a favourable decision regarding the Corporate Income Tax in 2007, with a direct impact on the tax losses for the 2008 financial year, the invested company TEIXEIRA DUARTE – Engenharia e Construções, S.A. requested that the Tax and Customs Authority (AT) return a bank guarantee of 12,794,000 euros.
For the purpose of suspending a tax enforcement procedure brought against the invested company TEIXEIRA DUARTE – Engenharia e Construções, S.A. in relation to the Corporate Income Tax debt of the 2010 financial year, "TD, S.A." posted a guarantee amounting to 10,139,000 euros, which was accepted by the Tax and Customs Authority (AT).
For the purpose of suspending a tax enforcement procedure brought against "TD, S.A.", and in relation to the Corporate Income Tax debt of the 2013 financial year, a total of 1,125,000 euros in bank guarantees were issued to the Tax and Customs Authority (AT). Also, in relation to the Corporate Income Tax for the 2013 taxation period—that was to be paid in installments—a bank guarantee was issued amounting to 582,000 euros, the cancellation of which was however required by the Tax and Customs Authority (AT) as the tax was then fully settled.
For the purpose of suspending a tax enforcement procedure brought against the invested company TEIXEIRA DUARTE – Engenharia e Construções, S.A., and in relation to an Corporate Income Tax withholding debt in the 2014 financial year—that is to be paid in installments— a total of 4,038,000 euros in bank guarantees were issued to the Tax and Customs Authority (AT). The amount of these guarantees has been reduced based on the payments made by the abovementioned invested company.
During the third quarter of 2018, a total amount of 1,529,000 euros in bank guarantees were provided to suspend a tax enforcement procedure brought against "TD, S.A.", as the controlling company, in relation to the Corporate Income Tax of the 2014 financial year.
On 30 September 2018, the Group's collateral is detailed as follows:
| Geographical area | Bank | Type of Financing | Contract Date | Expiry Date | Collateral |
|---|---|---|---|---|---|
| Portugal | Novo Banco | Leasing | 21-06-2005 | 31-12-2018 | 561 Fractions - Car Parks - Shopping Bom |
| Sucesso Trade Center | |||||
| Portugal | Novo Banco | Commercial paper | 16-12-2005 | 15-12-2023 | Pledge for 4,760,000 BCP Shares |
| Portugal | Caixa Geral de Depósitos | Loan | 21-02-2008 | 31-12-2018 | Pledge for 1,540,000 TDHOSP Shares |
| Portugal | Caixa Geral de Depósitos | Commercial paper | 07-07-2010 | 31-12-2033 | Pledge for 4,675,000 Fundo TDF Share units |
| Portugal | Banco Santander Totta | Loan | 13-12-2012 | 13-12-2019 | 65 Mortgage Fractions - Santa Marinha - Vila Nova de Gaia |
| Venezuela | BOD - Banco Occidental de Descuento Venezuela |
Loan | 29-07-2013 | 31-12-2018 | Collateral - USD 420,325.66 in Banco Orinoco |
| Venezuela | Banco Mercantil (Venezuela) | Loan | 26-11-2013 | 31-12-2018 | Collateral - USD 125,000.00 in Mercantil Bank Panama |
| Portugal | Novo Banco | Commercial paper | 30-12-2013 | 31-12-2033 | 12,500,000 Pledge for EPOS Shares and for 200,000,000 C + PA Shares + Pledge for 1,325,000 Fundo TDF Share units + Mortgage |
| Pólo Operacional TD Montijo + Mortgage for 9 Lots in Mafamude + Mortgage for 10 Lots on the Santa Marinha Design District Development - |
|||||
| Santa Marinha | |||||
| Angola | BCGA - Banco Caixa Geral Angola (Angola) | Loan | 30-04-2014 | 30-04-2021 | Mortgage for Hotel Trópico (Building Nº 1826) - Ingombotas |
| Portugal | Novo Banco | Loan | 26-01-2015 | 15-12-2021 | Pledge for 2,006,396 BCP Shares |
| Brazil | Banco Bradesco (Brazil) | Loan | 20-03-2015 | 20-02-2019 | Condomínio Alta Vista Unique Real Estate Development - São Paulo/Brazil (168 Separate Units) |
| Portugal | Banco BIC Português | Escrow Account | 06-08-2015 | 05-08-2019 | BIC AO (23,000,000 euros) Bank Guarantee to BIC PT/Mortgage for Building No. 2254 - Shopping Complex and Polo Automóvel Workshop - Talatona |
| Portugal | Novo Banco | Commercial paper | 28-12-2015 | 15-06-2027 | Mortgage for Land in Pedregueiras - (14 + 10) Rural Property + |
| Pledge for 1,045,610 Recolte Spain Shares | |||||
| Portugal | Novo Banco | Commercial paper | 14-01-2016 | 31-12-2033 | Pledge for 1,000,000 TDGI Shares |
| Portugal | Caterpillar | Loan | 02-06-2016 | 07-06-2020 | Respective equipment |
| Portugal | Banco Comercial Português | Loan | 17-06-2016 | 31-12-2018 | Pledge for 375,000 Lusoponte Shares |
| Portugal | Caixa Geral de Depósitos | Loan | 17-06-2016 | 31-12-2018 | Pledge for 375,000 Lusoponte Shares |
| Portugal | Novo Banco | Loan | 17-06-2016 | 31-12-2018 | Pledge for 375,000 Lusoponte Shares |
| Portugal | Caterpillar | Loan | 11-07-2016 | 07-07-2020 | Respective equipment |
| Portugal | Caterpillar | Loan | 19-07-2016 | 07-08-2020 | Respective equipment |
| Portugal | Banco Comercial Português | Loan | 12-08-2016 | 31-12-2033 | Mortgage for the Magnolia and Coina + Vale Figueira, Lezíria |
| Park 2, Villa Rio, Jardins da Póvoa and Parque Logistico da Póvoa Developments | |||||
| Portugal | Caixa Geral de Depósitos | Loan | 12-08-2016 | 31-12-2033 | Mortgage for the Magnolia and Coina + Vale Figueira, Lezíria Park 2, Villa Rio, Jardins da Póvoa and Parque Logistico da Póvoa Developments |
| Portugal | Novo Banco | Loan | 12-08-2016 | 31-12-2033 | Mortgage for the Magnolia and Coina + Vale Figueira, Lezíria Park 2, Villa Rio, Jardins da Póvoa and Parque Logistico da Póvoa Developments |
| Portugal | Caterpillar | Loan | 12-12-2016 | 22-12-2020 | Respective equipment |
| Portugal | Banco Comercial Português | Escrow Account | 18-08-2017 | 31-03-2019 | Banco BIM Bank Guarantee to BCP valid until 30.04.2019 / Time Deposit Pledge in EUR and MZN (Degree of Coverage: 130%) |
| Spain | RCI Banque (Spain) | Loan | 20-12-2017 | 20-06-2021 | Respective equipment |
| Spain | RCI Banque (Spain) | Loan | 20-12-2017 | 20-06-2021 | Respective equipment |
| Spain | RCI Banque (Spain) | Loan | 30-01-2018 | 25-07-2021 | Respective equipment |
| Portugal | Banco Comercial Português | Loan | 10-05-2018 | 09-05-2021 | Mortgage for 4 Lots/Plots for Construction - Bairro Rosário |
| (Cascais) |
On 30 September 2018 and 31 December 2017, the comfort letters provided by TEIXEIRA DUARTE, S.A. and its subsidiaries amounted to 350,778,000 and 372,200,000 euros, respectively.
On 30 September 2018 and 31 December 2017, non-recourse factoring agreements were in effect. These were recorded as a reduction on accounts receivable, amounting to 2,704 and 6,037,000 euros, respectively. According to the conditions of the agreements, the Group's liability is essentially restricted to the guarantee on the customers' acceptance of the factoring invoices.
The following table shows the Group's assets and liabilities measured at fair value on 30 September 2018, according to the following fair value hierarchy:
-Level 1: The fair value of the financial instruments is based on the net market prices for the assets on the reference date of the financial position statement;
-Level 2: The fair value of the financial instruments is not determined based on the net market prices for the assets, but rather with the use of assessment models;
-Level 3: The fair value of the financial instruments is not determined based on the net market prices for the assets, but rather with the use of assessment models, whose main inputs are not observable on the market.
| Category | Item | Level 1 | Level 2 | Level 3 |
|---|---|---|---|---|
| Assets: | ||||
| Financial assets available for sale | Shares | 1,726 | - | - |
| Investment properties | Buildings and land | - | 177,526 | - |
Except for non-current loans, the majority of the financial assets and liabilities have short-term maturities, so their fair values are considered identical to their accounting values.
As regards loans, the majority of them are contracted at variable interest rates. As such, it is understood that the corresponding accounting value (amortized cost) does not differ significantly from the corresponding market value.
In the periods ending 30 September 2018 and 2017, the exchange rate adjustments calculated in the conversion of the financial statements of companies outlined in foreign currency, by geographical area, were as follows:
| Q3 18 | Q3 17 | Jul-Sep 18 | Jul-Sep 17 | |
|---|---|---|---|---|
| Angola | (214,509) | (2,295) | (49,764) | 794 |
| Algeria | (6,583) | (762) | (1,899) | (868) |
| Brazil | (24,946) | (19,470) | (3,807) | 636 |
| Mozambique | 3,543 | 8,494 | 2,998 | 3,235 |
| Venezuela | 1,678 | (2,988) | 13,203 | (2,318) |
| Other Markets | 876 | (6,299) | 276 | (1,886) |
| Total | (239,941) | (23,320) | (38,993) | (407) |
During the year 2018, the Group considered the Angolan and Venezuelan economies to be hyperinflationary economies. As such, the companies of the Group whose functional currencies are Kwanza and Bolívar restated their financial statements using the updated measurement units.
On 30 September 2018, the impact on the attached consolidated financial statements—taking into account the application of IAS 29 to the companies of Angola and Venezuela—can be summarised as follows:
| Q3 18 (Before applying IAS 29) |
IAS 29 Impact | Q3 18 (After applying IAS 29) |
|
|---|---|---|---|
| Operating income: | |||
| Sales and services rendered | 663,670 | (28,157) | 635,513 |
| Other operating income | 155,183 | (83,418) | 71,765 |
| Total operating income | 818,853 | (111,575) | 707,278 |
| Operating costs: | |||
| Cost of sales | (181,475) | 5,874 | (175,601) |
| Variation in production | (18,611) | - | (18,611) |
| External supplies and services | (217,726) | 13,019 | (204,707) |
| Staff costs | (163,546) | 2,185 | (161,361) |
| Amortisations and Depreciations | (32,087) | 226 | (31,861) |
| Provisions and impairment losses on depreciable and amortisable assets and Goodw ill |
(3,804) | 155 | (3,649) |
| Other operating costs | (59,362) | 22,489 | (36,873) |
| Total operating costs | (676,611) | 43,948 | (632,663) |
| Operating income | 142,242 | (67,627) | 74,615 |
| Financial costs and losses | (143,409) | 11,872 | (131,537) |
| Financial income and gains | 45,213 | 27,953 | 73,166 |
| Income related to investment activities: | |||
| Income related to associated companies and joint ventures | 746 | - | 746 |
| Others | 625 | - | 625 |
| Financial results | (96,825) | 39,825 | (57,000) |
| Income before taxes | 45,417 | (27,802) | 17,615 |
| Income tax | (12,429) | 555 | (11,874) |
| Consolidated net income for the period | 32,988 | (27,247) | 5,741 |
| Net income attributable to: | |||
| Equity holders | 33,754 | (26,660) | 7,094 |
| Non-controlling interests | (766) | (587) | (1,353) |
| 30-09-2018 | Impact | 30-09-2018 | |
|---|---|---|---|
| (Before applying IAS 29) |
IAS 29 | (After applying IAS 29) |
|
| Non-current assets: | |||
| Goodwill | 12,220 | 49 | 12,269 |
| Intangible assets | 58,633 | 6,524 | 65,157 |
| Tangible fixed |
254,684 | 65,644 | 320,328 |
| assets Investment properties |
177,526 | - | 177,526 |
| Investments in associated companies and joint ventures | 19,925 | - | 19,925 |
| Financial assets available for sale | 1,726 | - | 1,726 |
| Other investments | 17,937 | - | 17,937 |
| Deferred tax assets | 177,515 | 561 | 178,076 |
| Customers | 30,614 | - | 30,614 |
| Other debtors | 10,231 | - | 10,231 |
| Other non-current assets | 626 | - | 626 |
| Total non-current assets | 761,637 | 72,778 | 834,416 |
| Current assets: | |||
| Inventories | 205,200 | 5,186 | 210,386 |
| Customers | 208,805 | - | 208,805 |
| Other debtors Cash and cash equivalents |
32,389 155,238 |
- - |
32,389 155,238 |
| Other investments | 15,346 | - | 15,346 |
| Other current assets | 168,359 | - | 168,359 |
| 785,337 | 5,186 | 790,523 | |
| Assets held for sale | 97,509 | - | 97,509 |
| Total current assets | 882,846 | 5,186 | 888,032 |
| TOTAL ASSETS | 1,644,483 | 77,965 | 1,722,448 |
| Equity: | |||
| Equity | 210,000 | - | 210,000 |
| Adjustments to shareholdings in associated companies and joint ventures | (126) | - | (126) |
| Foreign currency translation adjustments | (322,894) | 21,462 | (301,432) |
| Reserves and retained earnings | 222,402 | 81,603 | 304,005 |
| Consolidated net income | 33,754 | (26,660) | 7,094 |
| Equity attributable to shareholders | 143,136 | 76,405 | 219,541 |
| Non-controlling interests | 36,341 | 300 | 36,641 |
| TOTAL EQUITY | 179,477 | 76,705 | 256,182 |
| Non-current liabilities: | |||
| Loans | 813,858 | - | 813,858 |
| Provisions | 33,130 | 934 | 34,064 |
| Financial leases | 4,348 | - | 4,348 |
| Deferred tax liabilities | 24,592 | 326 | 24,918 |
| Other non-current liabilities | 52,520 | - | 52,520 |
| Total non-current assets | 928,448 | 1,260 | 929,708 |
| Current liabilities: | |||
| Loans | 94,438 | - | 94,438 |
| Suppliers | 117,798 | - | 117,798 |
| Financial leases | 3,078 | - | 3,078 |
| Other creditors | 22,150 | - | 22,150 |
| Other current liabilities | 208,389 | - | 208,389 |
| 445,853 | - | 445,853 | |
| Liabilities held for sale | 90,705 | - | 90,705 |
| Total current liabilities | 536,558 | - | 536,558 |
| TOTAL LIABILITIES | 1,465,006 | 1,260 | 1,466,266 |
| TOTAL EQUITY AND LIABILITIES | 1,644,483 | 77,965 | 1,722,448 |
58
TEIXEIRA DUARTE
The Group adopted IAS 29 within its companies in Angola and Venezuela in 2018, having restated the financial statements of 31 December 2017, with the following impact on the attached consolidated financial statements:
Financial Position
| 31-12-2017 "Restated" (Unaudited) |
Impact IAS 29 |
31-12-2017 (Audited) |
|
|---|---|---|---|
| Non-current assets: | |||
| Goodwill | 12,371 | 55 | 12,316 |
| Intangible assets | 85,094 | 7,585 | 77,509 |
| Tangible fixed |
478,758 | 72,181 | 406,577 |
| assets Investment properties |
217,647 | - | 217,647 |
| Investments in associated companies and joint ventures | 20,296 | - | 20,296 |
| Financial assets available for sale | 1,841 | - | 1,841 |
| Other investments | 27,413 | - | 27,413 |
| Deferred tax assets | 155,283 | 251 | 155,032 |
| Customers | 39,784 | - | 39,784 |
| Other debtors | 10,985 | - | 10,985 |
| Other non-current assets | 5,626 | - | 5,626 |
| Total non-current assets | 1,055,098 | 80,072 | 975,026 |
| Current assets: | |||
| Inventories | 245,616 | 4,559 | 241,057 |
| Customers | 260,407 | - | 260,407 |
| Other debtors | 42,805 | - | 42,805 |
| Cash and cash equivalents | 154,265 | - | 154,265 |
| Other current assets | 165,819 | - | 165,819 |
| 868,912 | 4,559 | 864,353 | |
| Assets held for sale | 454,980 | - | 454,980 |
| Total current assets | 1,323,892 | 4,559 | 1,319,333 |
| TOTAL ASSETS | 2,378,990 | 84,631 | 2,294,359 |
| Equity: | |||
| Equity | 210,000 | - | 210,000 |
| Adjustments to shareholdings in associated companies and joint ventures | 215 | - | 215 |
| Foreign currency translation adjustments | (67,455) | - | (67,455) |
| Reserves and retained earnings | 311,059 | 81,603 | 229,456 |
| Consolidated net income | (4,650) | - | (4,650) |
| Equity attributable to shareholders | 449,169 | 81,603 | 367,566 |
| Non-controlling interests | 42,980 | 1,703 | 41,277 |
| TOTAL EQUITY | 492,149 | 83,306 | 408,843 |
| Non-current liabilities: | |||
| Loans | 708,718 | - | 708,718 |
| Provisions | 36,743 | 946 | 35,797 |
| Financial leases | 4,768 | - | 4,768 |
| Deferred tax liabilities | 35,422 | 379 | 35,043 |
| Other non-current liabilities | 32,161 | - | 32,161 |
| Total non-current assets | 817,812 | 1,325 | 816,487 |
| Current liabilities: | |||
| Loans | 299,560 | - | 299,560 |
| Suppliers | 155,625 | - | 155,625 |
| Financial leases | 3,879 | - | 3,879 |
| Other creditors | 28,186 | - | 28,186 |
| Other current liabilities | 231,903 | - | 231,903 |
| 719,153 | - | 719,153 | |
| Liabilities held for sale | 349,876 | - | 349,876 |
| Total current liabilities | 1,069,029 | - | 1,069,029 |
| TOTAL LIABILITIES | 1,886,841 | 1,325 | 1,885,516 |
| TOTAL EQUITY AND LIABILITIES | 2,378,990 | 84,631 | 2,294,359 |
The financial statements for the period ending 30 September 2018 were approved by the Board of directors on November 30, 2018.
TEIXEIRA DUARTE continued its activity in the various markets in which it operates. No relevant events took place beyond 30 September 2018 and the date of issuance of this document.
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