UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
6-K
REPORT
OF FOREIGN PRIVATE ISSUER
PURSUANT
TO RULE 13a-16 OR 15d-16
UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For
the month of August 2024
Commission
File Number: 001-41995
Logistic
Properties of the Americas
(Exact
name of registrant as specified in its charter)
601
Brickell Key Drive
Suite
700
Miami,
FL 33131
(Address
of principal executive office)
Indicate
by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form
20-F ☒ Form 40-F ☐
EXPLANATORY
NOTE
The
following documents attached as exhibits to this Form 6-K: Exhibit 99.1, the unaudited condensed consolidated interim financial statements
as of June 30, 2024 and December 31, 2023 and for the three and six months ended June 30, 2024 and 2023; and Exhibit 99.2, Logistic Properties
of the Americas’ Management’s Discussion and Analysis for the period ended June 30, 2024, shall be deemed to be filed and
incorporated by reference herein.
EXHIBIT
INDEX
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
|
Logistic
Properties of the Americas |
|
|
|
|
By: |
/s/
Esteban Saldarriaga |
|
Name: |
Esteban
Saldarriaga |
|
Title: |
Chief
Executive Officer |
Date:
August 14, 2024
Exhibit 99.1
![](https://www.sec.gov/Archives/edgar/data/1997711/000149315224032314/ex99-1_001.jpg) |
|
Logistic
Properties of the Americas |
|
Condensed
Consolidated Interim Financial Statements (Unaudited) |
|
As
of June 30, 2024 and December 31, 2023, and for the three and six months ended June 30, 2024 and 2023 |
LOGISTIC
PROPERTIES OF THE AMERICAS AND SUBSIDIARIES
LOGISTIC
PROPERTIES OF THE AMERICAS AND SUBSIDIARIES
CONDENSED
CONSOLIDATED INTERIM STATEMENTS OF PROFIT OR LOSS
AND
OTHER COMPREHENSIVE INCOME (LOSS)
FOR
THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023
(in
U.S. Dollars)
| |
| | |
For the Three Months Ended June 30, | | |
For the Three Months Ended June 30, | |
| |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| |
Notes | | |
(Unaudited) | | |
(Unaudited) | | |
(Unaudited) | | |
(Unaudited) | |
REVENUES | |
| | |
| | |
| | |
| | |
| |
Rental revenue | |
| | | |
$ | 10,947,094 | | |
$ | 9,981,395 | | |
$ | 21,373,343 | | |
$ | 19,203,738 | |
Other | |
| | | |
| 39,842 | | |
| 8,377 | | |
| 97,055 | | |
| 36,020 | |
Total revenues | |
| 4 | | |
| 10,986,936 | | |
| 9,989,772 | | |
| 21,470,398 | | |
| 19,239,758 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Investment property operating expense | |
| 5 | | |
| (1,708,096 | ) | |
| (1,282,788 | ) | |
| (3,239,890 | ) | |
| (2,639,587 | ) |
General and administrative | |
| | | |
| (4,556,683 | ) | |
| (1,076,238 | ) | |
| (6,250,780 | ) | |
| (2,197,893 | ) |
Listing expense | |
| 3 | | |
| — | | |
| — | | |
| (44,469,613 | ) | |
| — | |
Investment property valuation gain | |
| 9 | | |
| 4,550,714 | | |
| 305,441 | | |
| 9,749,988 | | |
| 10,276,377 | |
Interest income from affiliates | |
| 17 | | |
| - | | |
| 158,113 | | |
| 302,808 | | |
| 314,488 | |
Financing costs | |
| 11 | | |
| (5,808,977 | ) | |
| (12,134,876 | ) | |
| (11,371,356 | ) | |
| (17,636,918 | ) |
Net foreign currency (loss) gain | |
| | | |
| (158,361 | ) | |
| 64,474 | | |
| (176,605 | ) | |
| 229,772 | |
Gain on sale of asset held for sale | |
| 9 | | |
| — | | |
| 1,022,853 | | |
| — | | |
| 1,022,853 | |
Other income | |
| 6 | | |
| 10,837,729 | | |
| 52,917 | | |
| 11,148,259 | | |
| 99,510 | |
Other expenses | |
| 6 | | |
| (1,172,442 | ) | |
| (54,225 | ) | |
| (7,344,817 | ) | |
| (138,422 | ) |
Profit (loss) before taxes | |
| | | |
| 12,970,820 | | |
| (2,954,557 | ) | |
| (30,181,608 | ) | |
| 8,569,938 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
INCOME TAX EXPENSE | |
| 14 | | |
| (539,160 | ) | |
| (1,807,943 | ) | |
| (3,846,518 | ) | |
| (2,759,558 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
PROFIT (LOSS) FOR THE PERIOD | |
| | | |
$ | 12,431,660 | | |
$ | (4,762,500 | ) | |
$ | (34,028,126 | ) | |
$ | 5,810,380 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
OTHER COMPREHENSIVE INCOME (LOSS): | |
| | | |
| | | |
| | | |
| | | |
| | |
Items that may be reclassified subsequently to profit or loss: | |
| | | |
| | | |
| | | |
| | | |
| | |
Translation (loss) gain from functional currency to reporting currency | |
| | | |
| (7,125,921 | ) | |
| 7,132,959 | | |
| (7,695,204 | ) | |
| 9,727,869 | |
TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD | |
| | | |
$ | 5,305,739 | | |
$ | 2,370,459 | | |
$ | (41,723,330 | ) | |
$ | 15,538,249 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
PROFIT (LOSS) FOR THE PERIOD ATTRIBUTABLE TO: | |
| | | |
| | | |
| | | |
| | | |
| | |
Owners of the Company | |
| | | |
$ | 9,907,633 | | |
$ | (4,762,860 | ) | |
$ | (38,123,976 | ) | |
$ | 2,628,360 | |
Non-controlling interests | |
| | | |
| 2,524,027 | | |
| 360 | | |
| 4,095,850 | | |
| 3,182,020 | |
Total profit (loss) for the period | |
| | | |
$ | 12,431,660 | | |
$ | (4,762,500 | ) | |
$ | (34,028,126 | ) | |
$ | 5,810,380 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO: | |
| | | |
| | | |
| | | |
| | | |
| | |
Owners of the Company | |
| | | |
$ | 2,781,712 | | |
$ | 2,370,099 | | |
$ | (45,819,180 | ) | |
$ | 12,356,229 | |
Non-controlling interests | |
| | | |
| 2,524,027 | | |
| 360 | | |
| 4,095,850 | | |
| 3,182,020 | |
Total comprehensive income (loss) for the period | |
| | | |
$ | 5,305,739 | | |
$ | 2,370,459 | | |
$ | (41,723,330 | ) | |
$ | 15,538,249 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Weighted average number of shares – basic | |
| 13 | | |
| 31,709,747 | | |
| 28,600,000 | | |
| 30,223,220 | | |
| 28,600,000 | |
Weighted average number of shares – diluted | |
| 13 | | |
| 31,863,168 | | |
| 28,600,000 | | |
| 30,223,220 | | |
| 28,600,000 | |
Earnings (loss) per share attributable to owners of the Company – basic | |
| 13 | | |
| 0.31 | | |
| (0.17 | ) | |
| (1.26 | ) | |
| 0.09 | |
Earnings (loss) per share attributable to owners of the Company – diluted | |
| 13 | | |
| 0.31 | | |
| (0.17 | ) | |
| (1.26 | ) | |
| 0.09 | |
The
accompanying notes are an integral part of these condensed consolidated interim financial statements.
LOGISTIC
PROPERTIES OF THE AMERICAS AND SUBSIDIARIES
CONDENSED
CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
AS
OF JUNE 30, 2024 AND DECEMBER 31, 2023
(in
U.S. Dollars)
| |
| | |
As of
June 30, 2024 | | |
As of
December 31, 2023 | |
| |
Notes | | |
(Unaudited) | | |
| |
ASSETS | |
| | | |
| | | |
| | |
CURRENT ASSETS: | |
| | | |
| | | |
| | |
Cash and cash equivalents | |
| | | |
$ | 48,173,742 | | |
$ | 35,242,363 | |
Due from affiliates | |
| 17 | | |
| — | | |
| 9,463,164 | |
Lease and other receivables, net | |
| 8 | | |
| 3,384,827 | | |
| 3,557,988 | |
Receivables from the sale of investment properties - short term | |
| 9 | | |
| 5,751,931 | | |
| 4,072,391 | |
Prepaid construction costs | |
| | | |
| 298,223 | | |
| 1,123,590 | |
Restricted cash equivalent - short term | |
| | | |
| 2,000,000 | | |
| 2,000,000 | |
Prepaid income taxes | |
| | | |
| 1,009,808 | | |
| 651,925 | |
Other current assets | |
| 10 | | |
| 3,276,935 | | |
| 2,791,593 | |
Total current assets | |
| | | |
| 63,895,466 | | |
| 58,903,014 | |
| |
| | | |
| | | |
| | |
NON-CURRENT ASSETS: | |
| | | |
| | | |
| | |
Investment properties | |
| 9 | | |
| 525,862,522 | | |
| 514,172,281 | |
Tenant notes receivables - long term, net | |
| 8 | | |
| 5,565,780 | | |
| 6,002,315 | |
Receivables from the sale of investment properties - long term | |
| 9 | | |
| — | | |
| 4,147,507 | |
Restricted cash equivalent - long term | |
| | | |
| 2,739,916 | | |
| 681,110 | |
Property and equipment, net | |
| | | |
| 329,868 | | |
| 354,437 | |
Deferred tax asset | |
| | | |
| 312,378 | | |
| 1,345,859 | |
Other non-current assets | |
| | | |
| 5,483,834 | | |
| 5,218,787 | |
Total non-current assets | |
| | | |
| 540,294,298 | | |
| 531,922,296 | |
| |
| | | |
| | | |
| | |
TOTAL ASSETS | |
| | | |
$ | 604,189,764 | | |
$ | 590,825,310 | |
| |
| | | |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |
| | | |
| | | |
| | |
CURRENT LIABILITIES: | |
| | | |
| | | |
| | |
Accounts payable and accrued expenses | |
| | | |
$ | 10,544,627 | | |
$ | 13,127,502 | |
Income tax payable | |
| | | |
| 1,760,485 | | |
| 2,024,865 | |
Retainage payable | |
| | | |
| 1,558,684 | | |
| 1,737,805 | |
Long term debt - current portion | |
| 11 | | |
| 12,287,698 | | |
| 16,703,098 | |
Other current liabilities | |
| | | |
| 790,547 | | |
| 959,539 | |
Total current liabilities | |
| | | |
| 26,942,041 | | |
| 34,552,809 | |
| |
| | | |
| | | |
| | |
NON-CURRENT LIABILITIES: | |
| | | |
| | | |
| | |
Long term debt | |
| 11 | | |
| 263,590,781 | | |
| 253,151,137 | |
Deferred tax liability | |
| | | |
| 37,805,728 | | |
| 37,451,338 | |
Security deposits | |
| | | |
| 2,500,277 | | |
| 1,790,554 | |
Other non-current liabilities | |
| | | |
| 4,137,761 | | |
| 2,936,555 | |
Total non-current liabilities | |
| | | |
| 308,034,547 | | |
| 295,329,584 | |
| |
| | | |
| | | |
| | |
TOTAL LIABILITIES | |
| | | |
| 334,976,588 | | |
| 329,882,393 | |
| |
| | | |
| | | |
| | |
EQUITY: | |
| | | |
| | | |
| | |
Ordinary Shares | |
| 12 | | |
| 3,171 | | |
| 168,142,740 | |
Additional Paid-in Capital | |
| | | |
| 216,229,708 | | |
| — | |
Retained earnings | |
| | | |
| 29,754,669 | | |
| 67,878,645 | |
Foreign currency translation reserve | |
| | | |
| (21,390,187 | ) | |
| (13,694,983 | ) |
Equity attributable to owners of the Company | |
| | | |
| 224,597,361 | | |
| 222,326,402 | |
Non-controlling interests | |
| | | |
| 44,615,815 | | |
| 38,616,515 | |
Total equity | |
| | | |
| 269,213,176 | | |
| 260,942,917 | |
| |
| | | |
| | | |
| | |
TOTAL LIABILITIES AND EQUITY | |
| | | |
$ | 604,189,764 | | |
$ | 590,825,310 | |
The
accompanying notes are an integral part of these condensed consolidated interim financial statements.
LOGISTIC
PROPERTIES OF THE AMERICAS AND SUBSIDIARIES
CONDENSED
CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY
FOR
THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023
(in
U.S. Dollars)
| |
| | |
Ordinary
Shares | | |
| | |
| | |
Foreign
| | |
Equity
attributable
| | |
| | |
| |
| |
Notes | | |
Number of shares | | |
Share capital | | |
Additional
paid-in
capital | | |
Retained
earnings | | |
currency
translation
reserve | | |
to owners of
the
Company | | |
Non—
controlling
interests | | |
Total equity | |
BALANCE AS OF DECEMBER 31, 2023 | |
| | | |
| 168,142,740 | | |
$ | 168,142,740 | | |
$ | — | | |
$ | 67,878,645 | | |
$ | (13,694,983 | ) | |
$ | 222,326,402 | | |
$ | 38,616,515 | | |
$ | 260,942,917 | |
Profit (loss) for the period | |
| | | |
| — | | |
| — | | |
| — | | |
| (38,123,976 | ) | |
| — | | |
| (38,123,976 | ) | |
| 4,095,850 | | |
| (34,028,126 | ) |
Other comprehensive income (loss) | |
| | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (7,695,204 | ) | |
| (7,695,204 | ) | |
| — | | |
| (7,695,204 | ) |
Total comprehensive income (loss)for the period | |
| | | |
| — | | |
| — | | |
| — | | |
| (38,123,976 | ) | |
| (7,695,204 | ) | |
| (45,819,180 | ) | |
| 4,095,850 | | |
| (41,723,330 | ) |
Impact of reverse capitalization | |
| 3 | | |
| (141,830,740 | ) | |
| (168,140,109 | ) | |
| 168,140,109 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Issuance of shares to TWOA shareholders upon reverse capitalization | |
| 3 | | |
| 3,897,747 | | |
| 390 | | |
| (2,754,110 | ) | |
| — | | |
| — | | |
| (2,753,720 | ) | |
| — | | |
| (2,753,720 | ) |
Issuance of shares to PIPE Investor | |
| 3 | | |
| 1,500,000 | | |
| 150 | | |
| 14,999,850 | | |
| — | | |
| — | | |
| 15,000,000 | | |
| — | | |
| 15,000,000 | |
Foreclosure of the collateralized LLP Shares held by LLI upon Closing | |
| 3 | | |
| — | | |
| — | | |
| (9,765,972 | ) | |
| — | | |
| — | | |
| (9,765,972 | ) | |
| — | | |
| (9,765,972 | ) |
Listing expense | |
| 3 | | |
| — | | |
| — | | |
| 44,469,613 | | |
| — | | |
| — | | |
| 44,469,613 | | |
| — | | |
| 44,469,613 | |
Share-based payments | |
| 16 | | |
| — | | |
| — | | |
| 1,140,218 | | |
| — | | |
| — | | |
| 1,140,218 | | |
| — | | |
| 1,140,218 | |
Capital contributions | |
| | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 2,403,450 | | |
| 2,403,450 | |
Distributions paid to non-controlling interests | |
| | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (500,000 | ) | |
| (500,000 | ) |
BALANCE AS OF JUNE 30, 2024 (Unaudited) | |
| | | |
| 31,709,747 | | |
$ | 3,171 | | |
$ | 216,229,708 | | |
$ | 29,754,669 | | |
$ | (21,390,187 | ) | |
$ | 224,597,361 | | |
$ | 44,615,815 | | |
$ | 269,213,176 | |
| |
| | |
Ordinary Shares | | |
| | |
| | |
Foreign | | |
Equity attributable | | |
| | |
| |
| |
Notes | | |
Number of Shares | | |
Share capital | | |
Additional paid-in Capital | | |
Retained earnings | | |
currency translation reserve | | |
to owners of the Company | | |
Non— controlling interests | | |
Total equity | |
BALANCE AS OF DECEMBER 31, 2022 | |
| | | |
| 168,142,740 | | |
$ | 168,142,740 | | |
$ | — | | |
$ | 64,739,312 | | |
$ | (32,068,047 | ) | |
$ | 200,814,005 | | |
$ | 33,252,465 | | |
$ | 234,066,470 | |
Profit for the period | |
| | | |
| — | | |
| — | | |
| — | | |
| 2,628,360 | | |
| — | | |
| 2,628,360 | | |
| 3,182,020 | | |
| 5,810,380 | |
Other comprehensive income (loss) | |
| | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 9,727,869 | | |
| 9,727,869 | | |
| — | | |
| 9,727,869 | |
Total comprehensive income (loss) for the period | |
| | | |
| — | | |
| — | | |
| — | | |
| 2,628,360 | | |
| 9,727,869 | | |
| 12,356,229 | | |
| 3,182,020 | | |
| 15,538,249 | |
Capital contributions | |
| | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,000,000 | | |
| 1,000,000 | |
Distributions paid to non-controlling interests | |
| | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (4,522,937 | ) | |
| (4,522,937 | ) |
BALANCE AS OF JUNE 30, 2023 (Unaudited) | |
| | | |
| 168,142,740 | | |
$ | 168,142,740 | | |
$ | — | | |
$ | 67,367,672 | | |
$ | (22,340,178 | ) | |
$ | 213,170,234 | | |
$ | 32,911,548 | | |
$ | 246,081,782 | |
The
accompanying notes are an integral part of these condensed consolidated interim financial statements.
LOGISTIC
PROPERTIES OF THE AMERICAS AND SUBSIDIARIES
CONDENSED
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
FOR
THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023
(in
U.S. Dollars)
| |
| | |
For the six months ended June 30 | |
| |
| | |
(Unaudited) | |
| |
Notes | | |
2024 | | |
2023 | |
Cash flows from operating activities: | |
| | | |
| | | |
| | |
Profit (loss) for the period | |
| | | |
$ | (34,028,126 | ) | |
$ | 5,810,380 | |
Adjustments: | |
| | | |
| | | |
| | |
Share-based payments | |
| 16 | | |
| 1,140,218 | | |
| — | |
Depreciation and amortization | |
| | | |
| 55,534 | | |
| 54,205 | |
Adjustment for expected credit losses | |
| 8 | | |
| 24,081 | | |
| (99,776 | ) |
Net foreign currency loss (gain) | |
| | | |
| 48,866 | | |
| (337,471 | ) |
Amortization of right-of-use assets | |
| | | |
| 34,047 | | |
| 26,999 | |
Investment property valuation gain | |
| 9 | | |
| (9,749,988 | ) | |
| (10,276,377 | ) |
Financing costs | |
| 11 | | |
| 11,371,356 | | |
| 17,636,918 | |
Gain on sale of asset held for sale | |
| 9 | | |
| — | | |
| (1,022,853 | ) |
Loss on disposition of property and equipment | |
| 6 | | |
| — | | |
| 82,465 | |
Straight-line rent | |
| | | |
| (463,318 | ) | |
| (1,413,168 | ) |
Interest income | |
| 9 | | |
| (424,155 | ) | |
| — | |
Interest income from affiliates | |
| 17 | | |
| (302,808 | ) | |
| (314,488 | ) |
Income from lock-up release (net), classified as financing cash flow | |
| 6 | | |
| (8,695,972 | ) | |
| — | |
Listing expense | |
| 3 | | |
| 44,469,613 | | |
| — | |
Income tax expense | |
| 14 | | |
| 3,846,518 | | |
| 2,759,558 | |
Working capital adjustments | |
| | | |
| 3,783,436 | | |
| (761,046 | ) |
Income tax paid | |
| | | |
| (3,900,763 | ) | |
| (3,842,718 | ) |
Net cash provided by operating activities | |
| | | |
$ | 7,208,539 | | |
$ | 8,302,628 | |
| |
| | | |
| | | |
| | |
Cash flows from investing activities: | |
| | | |
| | | |
| | |
Capital expenditure on investment properties | |
| 9 | | |
$ | (11,681,535 | ) | |
$ | (10,672,226 | ) |
Purchase of property and equipment | |
| | | |
| (19,886 | ) | |
| (107,305 | ) |
Proceeds from sale of investment properties | |
| 9 | | |
| 2,361,010 | | |
| — | |
Proceeds from sale of asset held for sale | |
| 9 | | |
| — | | |
| 1,600,000 | |
Repayments on loans to tenants | |
| 8 | | |
| 397,844 | | |
| 371,703 | |
Restricted cash | |
| | | |
| (2,058,806 | ) | |
| 1,957,953 | |
Net cash used in investing activities | |
| | | |
$ | (11,001,373 | ) | |
$ | (6,849,875 | ) |
| |
| | | |
| | | |
| | |
Cash flows from financing activities: | |
| | | |
| | | |
| | |
Long term debt borrowing | |
| 11 | | |
$ | 13,091,001 | | |
$ | 113,971,395 | |
Long term debt repayment | |
| 11 | | |
| (3,250,201 | ) | |
| (98,400,674 | ) |
Cash paid for raising debt | |
| 11 | | |
| (59,975 | ) | |
| (394,686 | ) |
Debt extinguishment cost paid | |
| 11 | | |
| — | | |
| (1,552,683 | ) |
Interest and commitment fee paid | |
| 11 | | |
| (11,686,352 | ) | |
| (11,779,772 | ) |
Capital contributions from non-controlling partners | |
| | | |
| 2,403,450 | | |
| 1,000,000 | |
Distributions to non-controlling partners | |
| | | |
| (500,000 | ) | |
| (4,522,937 | ) |
Proceeds from Business Combination, net of transaction costs paid | |
| 3 | | |
| 8,174,119 | | |
| — | |
Proceeds from lock-up release, net of transaction costs paid | |
| 6 | | |
| 8,695,972 | | |
| — | |
Repayment of office lease liabilities | |
| | | |
| (30,224 | ) | |
| (16,284 | ) |
Net cash provided by (used in) financing activities | |
| | | |
$ | 16,837,790 | | |
$ | (1,695,641 | ) |
| |
| | | |
| | | |
| | |
Effects of exchange rate fluctuations on cash held | |
| | | |
| (113,577 | ) | |
| 139,193 | |
Net increase (decrease) in cash and cash equivalents | |
| | | |
| 12,931,379 | | |
| (103,695 | ) |
Cash and cash equivalents at the beginning of period | |
| | | |
| 35,242,363 | | |
| 14,988,112 | |
Cash and cash equivalents at the end of period | |
| | | |
$ | 48,173,742 | | |
$ | 14,884,417 | |
| |
| | | |
| | | |
| | |
Supplemental disclosure of noncash investing and financing activities: | |
| | | |
| | | |
| | |
Forgiveness of loans receivable from Latam Logistics Investments, LLC (“LLI”) | |
| 3 | | |
$ | (9,765,972 | ) | |
$ | — | |
Assumption of net liabilities from TWOA as a result of the Business Combination | |
| 3 | | |
$ | 3,874,870 | | |
$ | — | |
Increase in accrued payables for investment properties | |
| | | |
$ | — | | |
$ | 1,970,512 | |
New lease liabilities in exchange for lease right-of-use assets | |
| | | |
$ | — | | |
$ | 2,507,992 | |
The
accompanying notes are an integral part of these condensed consolidated interim financial statements.
LOGISTIC
PROPERTIES OF THE AMERICAS AND SUBSIDIARIES
NOTES
TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(in
U.S. Dollars)
Logistic
Properties of the Americas (“LPA”) is a Cayman Islands exempted company formed on October 9, 2023. The registered office
is located in Plaza Tempo, Edificio B Oficina B1, Piso 2, San Rafael de Escazú, San José, Costa Rica.
Logistic
Properties of the Americas, through its affiliates and subsidiaries (jointly referred to as the “Company”) is a fully integrated,
internally managed real estate company that develops, owns and manages a diversified portfolio of warehouse logistics assets in Central
and South America.
On
March 27, 2024, LPA consummated the previously announced business combination pursuant to the business combination agreement, dated as
of August 15, 2023 (“Business Combination Agreement”), with two, a Cayman Islands exempted company (“TWOA”),
LatAm Logistic Properties, S.A., a company incorporated under the laws of Panama (“LLP”), Logistic Properties of the Americas
Subco, a Cayman Islands exempted company and a wholly-owned subsidiary of LPA (“SPAC Merger Sub”), and LPA Panama Group Corp.,
a company incorporated under the laws of Panama and a wholly-owned subsidiary of LPA (“Company Merger Sub”) (the “Business
Combination”).
As
a result of the Business Combination, TWOA and LLP became wholly-owned subsidiaries of LPA, and LPA ordinary shares (“Ordinary
Shares”) were listed on the New York Stock Exchange (“NYSE”) under the symbol “LPA”. Refer to Note 3 for
more details.
Since
TWOA did not meet the definition of a business under the guidance of International Financial Reporting Standards as issued by the International
Accounting Standards Board (“IASB”) (“IFRS”) 3, the Business Combination was accounted for as a share-based payment
transaction in accordance with IFRS 2, Share-Based Payment (IFRS 2), and the Business Combination was accounted for as a reverse capitalization
in accordance with IFRS. Under this method of accounting, TWOA was treated as the acquired company for financial reporting purposes and
LLP was treated as the accounting acquirer. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent
of LLP issuing shares for the net assets of TWOA.
The
unaudited condensed consolidated interim financial statements were prepared as a continuation of LLP and its subsidiaries as LLP is considered
the accounting predecessor. Accordingly, all historical financial information presented in these condensed consolidated interim financial
statements represents the accounts of LLP. The comparative financial information in relation to the shares and basic and diluted earnings
(loss) per share attributable to equity holders of the Company, prior to the Business Combination, have been retroactively restated as
shares reflecting the exchange ratio established in the Business Combination.
These
unaudited condensed consolidated interim financial statements should be read in conjunction with LLP’s most recent audited consolidated
financial statements and notes.
2. |
MATERIAL
ACCOUNTING POLICY INFORMATION |
|
a. |
Basis
of Accounting – The condensed consolidated interim financial statements have been prepared in accordance with International
Accounting Standard (“IAS”) 34 as issued by IASB. |
The
condensed consolidated interim financial statements have been prepared on the historical cost basis except certain investment properties
that are measured at fair value as of end of each reporting period, as explained in the accounting policies included in LLP’s most
recent audited consolidated financial statements and notes. Historical cost is generally based on the fair value of the consideration
given in exchange for goods and services.
These
condensed consolidated interim financial statements follow the same significant accounting policies as those included in LLP’s
most recent audited consolidated financial statements. Management believes that all adjustments that are required for a proper presentation
of the financial information are incorporated in these condensed consolidated interim financial statements.
|
b. |
Going
Concern – The accompanying unaudited condensed consolidated financial statements are prepared on a going concern basis
in accordance with IAS 1, Presentation of Financial Statements (“IAS 1”), which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business. |
As
described further in Note 11, the Company obtained a waiver relating to compliance with the debt service coverage ratio as required by
its loan covenants with Bancolombia, S.A. (“Bancolombia”) for the assessment on June 30, 2024 and December 31, 2024. The
next testing period for the covenants will occur on June 30, 2025. The outstanding Bancolombia loan balance as of June 30, 2024 was $38.0
million, with $1.6 million classified within current liabilities on the condensed consolidated statement of financial position.
The
Company’s lending agreements with Bancolombia are only collateralized by four Colombian investment properties, which were valued
at $88.8 million and $90.3 million as of June 30, 2024 and December 31, 2023, respectively. No other guarantees have been provided by
the Company’s other subsidiaries that would put the Company’s operations outside of Colombia at risk in event of foreclosure.
While the $4.4 million in revenue generated by the Company’s Colombian operations for the six months ended June 30, 2024 represents
approximately 20.3% of the Company’s consolidated revenues for the period, the Company’s operations outside of Colombia are
expected to be profitable and generate adequate liquidity to provide for continued operations. In the event that the Company is unable
to obtain further debt waivers, restructure the debt, or otherwise repay the Bancolombia loan, there is a possibility Bancolombia may
initiate proceedings to foreclose on its Colombian properties without further recourse. However, this would not create material uncertainty
as to the Company’s ability to continue as a going concern in regards to its operations outside of Colombia. Additionally, with
the consummation of the Company’s Business Combination with TWOA on March 27, 2024, the Company had gained access to additional
capital which further supports the Company’s ability to finance ongoing operations. The Company believes that the capital raised
coupled with the current cash projections created enough resources to prevent a foreclosure scenario. Refer to Note 3 for additional
information on the Business Combination.
|
c. |
Share-based
Payment – Certain employees and board of directors of the Company receive remuneration in the form of share-based payments
whereby they render services in exchange for equity instruments (equity-settled transactions). |
Equity-settled
share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the
grant date. The fair value excludes the effect of non-market-based vesting conditions.
The
fair value determined at the grant date of the equity-settled share-based payments is expensed ratably over the period in which the service
and, where applicable, the performance conditions are fulfilled (the vesting period) with a corresponding increase in equity. The cumulative
expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting
period has expired and the Company’s best estimate of the number of equity instruments that will eventually vest. For awards with
graded vesting, the fair value determined at the grant date is expensed on a tranche-by-tranche basis using the accelerated attribution
method. At each reporting date, the Company revises its estimate of the number of equity instruments expected to vest pursuant to service
and non-market-based vesting conditions. The impact of the revision of the original estimates, if any, is recognized in the condensed
consolidated interim statement of profit or loss and other comprehensive income (loss) such that the cumulative expense reflects the
revised estimate, with a corresponding adjustment to additional paid-in capital.
Service
and non-market performance conditions are not taken into account when determining the grant date fair value of awards. Market conditions
are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement,
are considered to be non-vesting conditions, which are reflected in the fair value of an award.
Equity-settled
share-based payment transactions with parties other than employees are measured at the fair value of the goods or services received,
except where that fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments
granted, measured at the date the entity obtains the goods or the counterparty renders the service.
|
● |
Functional
and Presentation Currency - The consolidated financial statements are presented in U.S. dollars (USD), which is the functional
currency of Logistic Properties of the Americas and its subsidiaries, except for the Colombian subsidiaries of Latam Logistic COL
OpCo, S.A. and Latam Logistic COL PropCo Cota I, S.A.S, for which the functional currency is the Colombian Peso. As of June 30, 2024
and 2023, the sell-exchange rates for a USD to relevant currencies were the following: |
| |
| 2024 | | |
| 2023 | |
Costa Rican Colones (“CRC”) | |
| CRC 530 | | |
| CRC 549 | |
Peruvian Soles (“PEN”) | |
| PEN 3.84 | | |
| PEN 3.64 | |
Colombian Pesos (“COP”) | |
| COP 4,148 | | |
| COP 4,191 | |
The
average rates for a USD to relevant currencies for the Company’s $1.00 were the following for the three months ended June 30, 2024
and 2023:
| |
| 2024 | | |
| 2023 | |
Costa Rican Colones (“CRC”) | |
| CRC 516 | | |
| CRC 544 | |
Peruvian Soles (“PEN”) | |
| PEN 3.75 | | |
| PEN 3.71 | |
Colombian Pesos (“COP”) | |
| COP 3,926 | | |
| COP 4,415 | |
The
average rates for a USD to relevant currencies for the Company’s $1.00 were the following for the six months ended June 30, 2024
and 2023:
| |
| 2024 | | |
| 2023 | |
Costa Rican Colones (“CRC”) | |
| CRC 517 | | |
| CRC 556 | |
Peruvian Soles (“PEN”) | |
| PEN 3.75 | | |
| PEN 3.76 | |
Colombian Pesos (“COP”) | |
| COP 3,920 | | |
| COP 4,587 | |
|
● |
Foreign
Currency Transactions - Transactions in foreign currencies are translated into the respective functional currencies of the Company
entities at exchange rates at the dates of the transactions. |
Monetary
assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting
date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency
at the exchange rate when the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency
are translated at the exchange rate at the date of the transaction. Foreign currency differences are generally recognized in profit or
loss.
Foreign
Operations - The assets and liabilities of foreign operations, for which the functional currency is other than the USD are translated
into USD at exchange rates in effect at the date of the consolidated statement of financial position. The income and expenses of foreign
operations are translated at exchange rates at the dates of the transactions. Components of equity are translated into USD at the historical
exchange rates.
Foreign
currency differences are recognized in other comprehensive income (OCI) and accumulated in a separate line item in the Company’s
consolidated statements of changes in equity under “Foreign currency translation reserve”, except to the extent that the
translation difference is allocated to non-controlling interests (NCI). When a foreign operation is disposed of in its entirety or partially
such that control, significant influence or joint control is lost, the cumulative amount in the foreign currency translation reserve
account related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. If the Company disposes
of part of its interest in a subsidiary but retains control, then, the relevant proportion of the cumulative amount is reattributed to
non-controlling interests. When the Company disposes only part of an associate while retaining significant influence, the relevant proportion
of the cumulative amount is reclassified to profit or loss.
|
e. |
Basis
of Consolidation - The consolidated financial statements incorporate the financial statements of the Company and entities
controlled by the Company (its subsidiaries) at the end of each reporting period. Control is achieved when the Company: |
|
● |
Has
the power over the investee; |
|
|
|
|
● |
Is
exposed, or has rights, to variable returns from its involvement with the investee; and |
|
|
|
|
● |
Has
the ability to use its power to affects its returns. |
The
Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of
the three elements of control listed above.
When
the Company has less than a majority of the voting rights of an investee, it considers that it has power over the investee when the contractual
rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers
all relevant facts and circumstances in assessing whether or not the Company’s voting rights in an investee are sufficient to give
it power, including:
|
● |
The
size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders; |
|
|
|
|
● |
Exposure,
or rights, to variable returns from its involvement with the investee |
|
|
|
|
● |
Any
additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant
activities at the time that decisions need to be made including the ability to use its power over the investee to affect the amount
of the investor’s returns |
Consolidation
of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control. Specifically,
the results of subsidiaries acquired or disposed of during the year are included in profit or loss from the date the Company gains control
until the date when the Company ceases to control the subsidiary. Profit or loss and each component of other comprehensive loss are attributed
to owners of the Company and to the non-controlling interests. Total comprehensive income of the subsidiaries is attributed to the owners
of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
Where
necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with the
Company’s accounting policies.
All
intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members of the Company
are eliminated upon consolidation.
Non-controlling
interests in subsidiaries are identified separately from the Company’s equity therein. Those interests of non-controlling shareholders
that are present ownership interests entitling their holders to a proportionate share of net assets upon liquidation may initially be
measured at fair value or at the non-controlling interests’ proportionate share of the fair value of the acquiree’s identifiable
net assets. The choice of measurement is made on an acquisition-by-acquisition basis. Other non-controlling interests are initially measured
at fair value. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial
recognition plus the non-controlling interests’ share of subsequent changes in equity. Total comprehensive income is attributed
to non-controlling interests even if this results in the non-controlling interests having a deficit balance.
Changes
in the Company’s interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. The
carrying amount of the Company’s interests and the non-controlling interests are adjusted to reflect the changes in their relative
interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value
of the consideration paid or received is recognized directly in equity and attributed to the owners of the Company.
When
the Company loses control of a subsidiary, the gain or loss on disposal recognized in profit or loss is calculated as the difference
between (i) the aggregate of the fair value of the consideration received and the fair value, as of the date control is lost, of any
retained interest in the subsidiary and (ii) the previous carrying amount of the assets (including goodwill), less liabilities of the
subsidiary and any non-controlling interests. All amounts previously recognized in other comprehensive loss in relation to that subsidiary
are accounted for as if the Company had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to
profit or loss or transferred to another category of equity as required/permitted by applicable IFRS Standards). The fair value of any
investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for
subsequent accounting under IFRS 9 Financial Instruments when applicable, or the cost on initial recognition of an investment in an associate
or a joint venture.
The
condensed consolidated financial statements include the financial information of Logistic Properties of the Americas (parent entity)
and its subsidiaries:
| |
| |
Ownership Interest | | |
Non-controlling Interests | |
Entities | |
Country | |
June 30,
2024 | | |
December 31, 2023 | | |
June 30,
2024 | | |
December 31, 2023 | |
Latam Logistic Properties S.A. | |
Panamá | |
| 100 | % | |
| N/A | | |
| | | |
| | |
two | |
Cayman Islands | |
| 100 | % | |
| N/A | | |
| | | |
| | |
Latam Logistic Property Holdings, LLC | |
United States | |
| 100 | % | |
| 100 | % | |
| | | |
| | |
LPA Corporate Services Inc. | |
United States | |
| 100 | % | |
| N/A | | |
| | | |
| | |
Latam Logistic COL HoldCo I, S de R.L. | |
Panamá | |
| 100 | % | |
| 100 | % | |
| | | |
| | |
Latam Logistic CR HoldCo I, S de R.L. | |
Panamá | |
| 100 | % | |
| 100 | % | |
| | | |
| | |
Latam Logistic Pan HoldCo S de R.L. | |
Panamá | |
| 100 | % | |
| 100 | % | |
| | | |
| | |
Latam Logistic Pan Holdco El Coyol II S de R.L. | |
Panamá | |
| 50 | % | |
| 50 | % | |
| 50 | % | |
| 50 | % |
Latam Logistic Pan Holdco Cedis Rurales S de R.L. | |
Panamá | |
| 100 | % | |
| 100 | % | |
| | | |
| | |
Latam Logistic Pan HoldCo San Joaquin I S de R.L. | |
Panamá | |
| 100 | % | |
| 100 | % | |
| | | |
| | |
Latam Logistic Pan Holdco Verbena I S de R.L. (1) | |
Panamá | |
| 47.6 | % | |
| 47.6 | % | |
| 52.4 | % | |
| 52.4 | % |
Latam Logistic Pan Holdco Verbena II S, S.R.L. (2) | |
Panamá | |
| 47.6 | % | |
| 47.6 | % | |
| 52.4 | % | |
| 52.4 | % |
Logistic Property Asset Management, S de R.L. (3) | |
Panamá | |
| 100 | % | |
| 100 | % | |
| | | |
| | |
Latam Logistic Pan Holdco Verbena Fase II, S de R.L. (4) | |
Panamá | |
| 100 | % | |
| 100 | % | |
| | | |
| | |
Latam Logistic Pan Holdco Medellin I, S.R.L. | |
Panamá | |
| 100 | % | |
| 100 | % | |
| | | |
| | |
LatAm Logistic Pan HoldCo Bodegas los Llanos, S.R.L. | |
Panamá | |
| 100 | % | |
| 100 | % | |
| | | |
| | |
Latam Logistic PER OpCo, S.R.L. | |
Perú | |
| 100 | % | |
| 100 | % | |
| | | |
| | |
Latam Logistic PER PropCo Lurin I, S. de R.L. | |
Perú | |
| 100 | % | |
| 100 | % | |
| | | |
| | |
Latam Logistic PER PropCo Lurin II, S. de R.L. | |
Perú | |
| 100 | % | |
| 100 | % | |
| | | |
| | |
Latam Logistic PER PropCo Lurin III, S. de R.L. | |
Perú | |
| 100 | % | |
| 100 | % | |
| | | |
| | |
Parque Logístico Callao, S.R.L. | |
Perú | |
| 40 | % | |
| 40 | % | |
| 60 | % | |
| 60 | % |
Latam Logistic COL OpCo, S.A. (5) | |
Colombia | |
| 100 | % | |
| 100 | % | |
| | | |
| | |
Latam Logistic COL PropCo Cota I, S.A.S. | |
Colombia | |
| 100 | % | |
| 100 | % | |
| | | |
| | |
Latam Logistic CR OpCo, S.R.L. | |
Costa Rica | |
| 100 | % | |
| 100 | % | |
| | | |
| | |
Latam Logistic CR PropCo Alajuela I, S.R.L. | |
Costa Rica | |
| 100 | % | |
| 100 | % | |
| | | |
| | |
Latam Propco El Coyol Dos S de R.L. | |
Costa Rica | |
| 50 | % | |
| 50 | % | |
| 50 | % | |
| 50 | % |
Latam Logistic Propco Bodegas San Joaquín S de R.L. | |
Costa Rica | |
| 100 | % | |
| 100 | % | |
| | | |
| | |
Latam Logistic Propco Cedis Rurales Costa Rica S de R.L. | |
Costa Rica | |
| 100 | % | |
| 100 | % | |
| | | |
| | |
3101784433, S.R.L. | |
Costa Rica | |
| 23.6 | % | |
| 23.6 | % | |
| 76.4 | % | |
| 76.4 | % |
Latam Logistic PropCo Bodegas los Llanos S de R.L. | |
Costa Rica | |
| 100 | % | |
| 100 | % | |
| | | |
| | |
Latam Logistic CR Zona Franca, S. de R.L. | |
Costa Rica | |
| 100 | % | |
| 100 | % | |
| | | |
| | |
Latam Logistics SLV OpCo S.A. de C.V. | |
El Salvador | |
| 100 | % | |
| 100 | % | |
| | | |
| | |
| (1) | Formerly
known as Latam Logistic Propco Pedregal Panamá S de R.L. |
| (2) | Formerly
known as Latam Logistic Pan Holdco Pedregal Panamá S de R.L. |
| (3) | Formerly
known as Latam Logistic Pan Holdco Santiago I, S de R.L. |
| (4) | Formerly
known as Latam Logistic Pan Holdco Santo Domingo, S de R.L. |
| (5) | Formerly
known as Latam Logistic COL OpCo, S.A.S. |
| f. | New
and amended IFRS accounting standards that are effective for the current year |
The
condensed consolidated interim financial statements and notes are based on accounting policies consistent with those described in Note
2 to the LLP’s most recent audited consolidated financial statements and notes. All the new and amended IFRS accounting standards
effective as of June 30, 2024 that are relevant to the Company have already been early adopted before January 1, 2024. See details below:
Amendments
to IAS 1 - Presentation of Financial Statements - Classification of Liabilities as Current or Non-Current (“2020 Amendment”)
- The amendments clarify that the classification of liabilities as current or non-current is based on rights that are in existence at
the end of the reporting period, specify that classification is unaffected by expectations about whether an entity will exercise its
right to defer settlement of a liability, explain that rights are in existence if covenants are complied with at the end of the reporting
period, and introduce a definition of “settlement” to make clear that settlement refers to the transfer to the counterparty
of cash, equity instruments, other assets or services. The amendment is effective for annual reporting periods beginning on or after
January 1, 2024. The Company has early adopted the amendment as of January 1, 2023 together with the 2022 Amendment mentioned below.
Amendments
to IAS 1 - Presentation of Financial Statements - Non-Current Liabilities with Covenants (“2022 Amendment”) - The amendments
specify that only covenants that an entity is required to comply the end of the reporting period affect the entity’s right to defer
settlement of a liability for at least twelve months after the reporting date (and therefore must be considered in assessing the classification
of the liability as current or non-current). Such covenants affect whether the right exists at the end of the reporting period, even
if compliance with the covenant is assessed only after the reporting date (e.g., a covenant based on the entity’s financial position
at the reporting date that is assessed for compliance only after the reporting date).
The
IASB also specifies that the right to defer settlement of a liability for at least twelve months after the reporting date is not affected
if an entity only has to comply with a covenant after the reporting period. However, if the entity’s right to defer settlement
of a liability is subject to the entity complying with covenants within twelve months after the reporting period, an entity discloses
information that enables users of financial statements to understand the risk of the liabilities becoming repayable within twelve months
after the reporting period. This would include information about the covenants (including the nature of the covenants and when the entity
is required to comply with them), the carrying amount of related liabilities and facts and circumstances, if any, that indicate that
the entity may have difficulties complying with the covenants.
The
amendment is effective for annual reporting periods beginning on or after January 1, 2024. The Company early adopted the amendment as
of January 1, 2023.
|
g. |
New
and amended IFRS Accounting Standards issued but not yet effective |
At
the date of authorization of these financial statements, the Company has not applied the following new IFRS Accounting Standards that
have been issued but are not yet effective:
IFRS
18 Presentation and Disclosure in Financial Statements – On April 9, 2024, the IASB issued IFRS 18 Presentation and Disclosure
in Financial Statements to improve reporting of financial performance. IFRS 18 replaces IAS 1 Presentation of Financial Statements while
carrying forward many of the requirements in IAS 1. The new Accounting Standard introduces significant changes to the structure of a
group’s income statement and new principles for aggregation and disaggregation of information. IFRS 18 applies for annual reporting
periods beginning on or after January 1, 2027. Earlier application is permitted. The Company is currently evaluating the impact from
the adoption of IFRS 18 on its consolidated financial statements.
3. |
REVERSE
CAPITALIZATION |
On
August 15, 2023, the Company entered into a Business Combination Agreement with LLP, TWOA, SPAC Merger Sub, and Company Merger Sub, for
a proposed Business Combination. Under the Business Combination Agreement, at the closing of the transactions contemplated by the Business
Combination Agreement (the “Closing”), among other matters, (a) SPAC Merger Sub merged with and into TWOA, with TWOA continuing
as the surviving company, and, in connection therewith, each issued and outstanding security of TWOA immediately prior to the effective
time of the Business Combination was no longer outstanding and was automatically canceled, in exchange for the right of the holder thereof
to receive a substantially equivalent security of LPA; (b) Company Merger Sub merged with and into LLP, with LLP continuing as the surviving
company, and, in connection therewith, the ordinary shares of LLP (“LLP Shares”) issued and outstanding immediately prior
to the Business Combination were canceled in exchange for the right of the holders thereof to receive ordinary shares of LPA (“LPA
Ordinary Shares”); and (c) as a result of the mergers, TWOA and LLP each became wholly-owned subsidiaries of LPA, and LPA Ordinary
Shares were listed on NYSE, all upon the terms and subject to the conditions set forth in the Business Combination Agreement.
On
February 16, 2024, TWOA entered into a subscription agreement (the “Subscription Agreement”) with certain subscriber (“PIPE
Investor”) to purchase 1,500,000 TWOA Class A ordinary shares at a price of $10.00 per share, for an aggregate purchase price of
$15,000,000, in a private placement to be consummated simultaneously with the Closing.
The
Business Combination was unanimously approved by the board of directors of TWOA and was approved at the Extraordinary General Meeting
on March 25, 2024. TWOA’s shareholders also voted to approve all other proposals presented at the Extraordinary General Meeting.
As a result of the Business Combination, LLP and TWOA became wholly-owned direct subsidiaries of the Company. On March 28, 2024, the
LPA Ordinary Shares commenced trading on the NYSE under the symbol “LPA”.
As
a result of the Business Combination:
|
● |
All
outstanding TWOA Class A and Class B shares were canceled in exchange for 3,897,747 LPA Ordinary Shares, not including the shares
held by the PIPE Investor; |
|
|
|
|
● |
1,500,000
Class A TWOA shares held by the PIPE Investor were converted to 1,500,000 LPA Ordinary Shares; |
|
|
|
|
● |
All
outstanding LLP shares were cancelled in exchange for 26,312,000 LPA Ordinary Shares. |
The
Business Combination was consummated on March 27, 2024. Following the Business Combination, the ownership structure of LPA was as follows:
| |
Number of
Ordinary
Shares | | |
% of
Ownership | |
LPA Ordinary Shares issued to TWOA shareholders | |
| 3,897,747 | | |
| 12.3 | % |
LPA Ordinary Shares converted from legacy LLP equity holders | |
| 26,312,000 | | |
| 83.0 | % |
LPA Ordinary Shares issued to PIPE Investor | |
| 1,500,000 | | |
| 4.7 | % |
Total | |
| 31,709,747 | | |
| 100.0 | % |
The
proceeds from Business Combination (net of transaction costs paid) are summarized below:
| |
Amount | |
Proceeds from PIPE Investor | |
$ | 15,000,000 | |
Proceeds from TWOA trust | |
| 1,121,150 | |
Transaction costs paid | |
| (7,947,031 | ) |
Proceeds from Business Combination, net of transaction costs paid | |
$ | 8,174,119 | |
Reverse
capitalization
As
discussed in Note 1, the Business Combination was accounted for as a reverse capitalization in accordance with IFRS. The consolidated
assets, liabilities and results of operations are those of LLP for all periods presented. As such, the basic and diluted earnings (loss)
per share related to LLP prior to the Business Combination have been retroactively recast based on shares reflecting the exchange ratio
established in the Business Combination.
Share
listing expenses under IFRS 2
As
further discussed in Note 1, since the Business Combination was accounted for in accordance with IFRS 2, the difference in the fair value
of the shares deemed to have been issued by the accounting acquirer and the fair value of the accounting acquiree’s identifiable
net assets represented a service received by the accounting acquirer, and thus was recognized as an expense upon consummation of the
Business Combination.
Upon
Closing, the excess fair value of the equity interests deemed to have been issued to TWOA as consideration over the fair value of TWOA’s
identifiable net assets was recognized as listing expense in the amount of $44,469,613 in the condensed consolidated interim statements
of profit or loss and other comprehensive income (loss) for the three and six months ended June 30, 2024. The fair value of the equity
interests was measured at the closing market price of TWOA’s publicly traded shares on March 26, 2024, which was $10.70 per share.
See below for details.
Fair value of TWOA public shares (103,813 shares at $10.70) (A) | |
$ | 1,110,799 | |
Fair value of TWOA sponsor shares (3,793,934 shares at $10.70) (B) | |
| 40,595,094 | |
I: Total deemed fair value of consideration issued to TWOA shareholders: (A+B) | |
| 41,705,893 | |
| |
| | |
Cash and cash equivalents | |
| 1,121,150 | |
Accounts payable | |
| (3,884,870 | ) |
II: Net liabilities of TWOA | |
| (2,763,720 | ) |
| |
| | |
Total share listing expense (I-II) | |
$ | 44,469,613 | |
Other
transaction-related costs in connection with the Business Combination
For
the three and six months ended June 30, 2024, the Company incurred transaction-related costs in connection with the Business Combination
of $6,804 and $6,179,179, respectively (excluding the share listing expenses under IFRS 2 discussed above). For the three and
six months ended June 30, 2023, the Company incurred transaction-related costs in connection with the Business Combination of $53,342
and $55,074, respectively. These transaction-related costs were recorded in other expenses in the condensed consolidated interim statements
of profit or loss and other comprehensive income (loss), primarily consisting of professional service fees such as legal and accounting
services pertinent to the Business Combination. Through June 30, 2024, cumulative transaction-related costs of $16,183,014 were incurred
by the Company and TWOA (prior to the Closing) in connection with the Business Combination, of which $5,722,342 has not yet been paid
as of June 30, 2024. As of June 30, 2024, $3,800,000 of the amount not yet paid is recorded within accounts payable and accrued expenses
and $1,922,342 is recorded within other current and non-current liabilities in the condensed consolidated interim statements of financial
position. For the six months ended June 30, 2024, the Company has paid $7,947,031 for transaction-related costs in connection with the
Business Combination of which $4,858,225 was paid with transaction proceeds.
Cash
bonus to management
In
connection with the Business Combination, certain executives were granted a one-time cash bonus totaling $285,000 at Closing, recorded
in general and administrative expense in the condensed consolidated interim statements of profit or loss and other comprehensive income
(loss). As of June 30, 2024, all of the bonus was paid. See Note 17 for more details.
Restricted
Stock Units (RSUs)
In
connection with the Business Combination, certain executives and board of director members were granted service-based and performance-based
RSUs. For the three and six months ended June 30, 2024, the Company incurred share-based payment expenses of $1,140,218. See Note 16
for more details.
Loan
receivable from Latam Logistics Investments, LLC (“LLI”)
As
of January 1, 2024, LLP’s loans to LLI, which held a minority equity interest of LLP before Closing, were in default status due
to non-payment following the maturity date of December 31, 2023. LLP subsequently provided notice of the default to LLI.
On
March 12, 2024, LLI entered into an assignment agreement (“Assignment Agreement”) with LLP, pursuant to which LLI unconditionally
and irrevocably assigned in favor of LLP the right to receive the LPA Ordinary Shares upon the closing of the Business Combination. As
part of the Assignment Agreement, LLP agreed to waive its right to receive the corresponding LPA Ordinary Shares. Upon Closing, the loans
receivables from LLI of $9,765,972 were considered settled through the foreclosure of the collateralized LLP Shares held by LLI.
The
Company’s revenue was as follows:
| |
Three months ended
June 30, | | |
Six months ended
June 30, | |
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| |
| | |
| | |
| | |
| |
Non-lease components of rental arrangements | |
$ | 1,216,441 | | |
$ | 1,076,001 | | |
$ | 2,329,795 | | |
$ | 2,045,773 | |
Other | |
| 39,842 | | |
| 8,377 | | |
| 97,055 | | |
| 36,020 | |
Revenue from contracts with customers (IFRS 15) | |
| 1,256,283 | | |
| 1,084,378 | | |
| 2,426,850 | | |
| 2,081,793 | |
Rental income | |
| 9,730,653 | | |
| 8,905,394 | | |
| 19,043,548 | | |
| 17,157,965 | |
Total revenue | |
$ | 10,986,936 | | |
$ | 9,989,772 | | |
$ | 21,470,398 | | |
$ | 19,239,758 | |
Note
7 contains further information of the Company’s revenue based on segment and geography.
The
Company, through its subsidiaries, had entered into various operating leases agreements with customers for the rental of its investment
properties. Most of the Company’s lease agreements associated with the investment properties contain an initial lease term from
5 to 10 years and generally include renewal options for one or more additional terms of varying lengths. The Company’s weighted
average lease term remaining on leases in the operating properties and properties under development, based on the square footage of the
leases in effect as of June 30, 2024 and 2023 was 5.8 years and 5.7 years, respectively.
These
leases were based on a minimum rental payment in USD for properties located in Costa Rica and Peru, and COP for properties in Colombia,
plus maintenance fees and recoverable expenses, and guarantee deposits associated with the agreements, which are commonly used for covering
any repair, improvement tasks or as a final payment when the lease agreement ends.
5. | INVESTMENT
PROPERTY OPERATING EXPENSES |
Rental
property operating expenses were as follows:
| |
Three months ended June 30, | | |
Six months ended June 30, | |
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
Repair and maintenance | |
$ | 759,555 | | |
$ | 604,040 | | |
$ | 1,446,463 | | |
$ | 1,215,237 | |
Utilities | |
| 98,550 | | |
| 98,705 | | |
| 281,403 | | |
| 216,240 | |
Insurance | |
| 118,265 | | |
| 88,512 | | |
| 222,475 | | |
| 173,138 | |
Property management | |
| 71,881 | | |
| 59,178 | | |
| 134,067 | | |
| 113,800 | |
Real estate taxes | |
| 237,500 | | |
| 218,257 | | |
| 390,834 | | |
| 429,350 | |
Expected credit loss adjustments | |
| 13,112 | | |
| (46,818 | ) | |
| 24,081 | | |
| (99,776 | ) |
Other property related expenses | |
| 409,233 | | |
| 260,914 | | |
| 740,567 | | |
| 591,598 | |
Total | |
$ | 1,708,096 | | |
$ | 1,282,788 | | |
$ | 3,239,890 | | |
$ | 2,639,587 | |
6. | OTHER
INCOME AND OTHER EXPENSES |
Other
income was as follows:
| |
Three months ended June 30, | | |
Six months ended June 30, | |
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
Interest income | |
$ | 369,956 | | |
$ | 52,917 | | |
$ | 680,446 | | |
$ | 93,373 | |
Income in connection to the LR Agreements (defined below) | |
| 9,844,894 | | |
| — | | |
| 9,844,894 | | |
| — | |
Other | |
| 622,879 | | |
| — | | |
| 622,919 | | |
| 6,137 | |
Total | |
$ | 10,837,729 | | |
$ | 52,917 | | |
$ | 11,148,259 | | |
$ | 99,510 | |
Other
expenses were as follows:
| |
Three months ended June 30, | | |
Six months ended June 30, | |
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
Transaction-related costs in connection with the Business Combination | |
$ | 6,804 | | |
$ | 53,342 | | |
$ | 6,179,179 | | |
$ | 55,074 | |
Fees in connection to the LR Agreements (defined below) | |
| 1,148,922 | | |
| — | | |
| 1,148,922 | | |
| — | |
Loss on disposition of property and equipment | |
| — | | |
| 883 | | |
| — | | |
| 83,348 | |
Other | |
| 16,716 | | |
| — | | |
| 16,716 | | |
| — | |
Total | |
$ | 1,172,442 | | |
$ | 54,225 | | |
$ | 7,344,817 | | |
$ | 138,422 | |
| |
| | | |
| | | |
| | | |
| | |
Transaction-related
costs in connection with the Business Combination primarily consisted of professional service fees including legal and accounting services
pertinent to the Business Combination. See Note 3 for more details relating to transaction-related costs.
On
June 5, 2024, and June 6, 2024, the Company, certain Investors (the “Investors”) and certain Shareholders (the “Shareholders”
and together with the Investors, the “Released Parties”) entered into a non-affiliate lock-up release agreement (as amended,
each an “LR Agreement” and collectively, the “LR Agreements”), pursuant to which the Company and each Released
Party agreed to waive certain lock-up restrictions provided for in (i) the letter agreement dated March 29, 2021 by and among TWOA and
other relevant parties thereto and by a joinder agreement, the Investors or (ii) the letter agreement dated March 29, 2021 by and among
TWOA and other relevant parties thereto and the Shareholders, as amended on August 15, 2023 and March 27, 2024, as applicable (the “Lock-up
Release”, and the shares released pursuant to such Lock-up Release, the “Released Shares”). In exchange, each Released
Party agreed to pay a cash fee to the Company equal to a certain percentage of the sale price received for each Released Share sold by
such Released Party until September 27, 2025.
As
of June 30, 2024, the total number of Released Shares was 911,885, of which 651,586 shares were sold by the Released Parties. For the
three months and six months ended June 30, 2024, the Company recorded receipt of $9,844,894 in cash related to the sale of the Released
Shares with an offsetting amount recorded in other income in the condensed consolidated interim statements of profit or loss and other
comprehensive income (loss). In connection with the sale of the Released Shares, the Company incurred transaction costs of $1,148,922
for the three months and six months ended June 30, 2024, which were recorded in other expenses in the condensed consolidated interim
statements of profit or loss and other comprehensive income (loss).
The
Company has three operating segments, based on geographic regions consisting of Colombia, Peru, and Costa Rica. Operating segments are
defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision
maker (“CODM”), the Company’s Chief Executive Officer, in deciding how to allocate resources and assess the Company’s
financial and operational performance. The CODM receives information and evaluates the business from a geographic perspective and reviews
the Company’s internal reporting by geography in order to assess performance and allocate resources. As a result, the Company has
determined the business operates in three distinct operating segments based on geography.
The
three geographic segments, Colombia, Peru, and Costa Rica primarily derive revenue from various operating lease agreements with customers
for the rental of warehouses. Each of these locations and corresponding operations are presented and managed and separately. The operating
segments are each reportable segments, and aggregation of segments is not applied. Unallocated revenue consists of other revenue streams
earned by operating subsidiaries that are not allocated to segments for CODM’s review. Unallocated expenses consist of certain
corporate general and administrative expenses and financing costs for the bridge loan held by the parent entity that are not allocated
to segments for CODM’s review.
There
was no inter-segment revenue for the three and six months ended June 30, 2024 and 2023.
The
tables below present information by segment presented to the CODM and reconciliations to the Company’s consolidated amounts.
The
Company evaluates the performance of its reportable segments based on net operating income. Segment net operating income consists of
segment investment property rental revenue less segment investment property operating expense.
The
tables below present information by segment presented to the CODM and reconciliations to the Company’s consolidated amounts for
the three months ended June 30, 2024, and 2023.
| |
Three months ended
June 30, | |
| |
2024 | | |
2023 | |
Revenue: | |
| | |
| |
Colombia | |
$ | 2,019,177 | | |
$ | 2,066,829 | |
Peru | |
| 2,934,997 | | |
| 2,432,604 | |
Costa Rica | |
| 5,992,920 | | |
| 5,481,962 | |
Unallocated revenue | |
| 39,842 | | |
| 8,377 | |
Total | |
$ | 10,986,936 | | |
$ | 9,989,772 | |
| |
| | | |
| | |
Investment property operating expense: | |
| | | |
| | |
Colombia | |
$ | (291,240 | ) | |
$ | (258,873 | ) |
Peru | |
| (544,610 | ) | |
| (483,077 | ) |
Costa Rica | |
| (872,246 | ) | |
| (540,838 | ) |
Total | |
$ | (1,708,096 | ) | |
$ | (1,282,788 | ) |
| |
| | | |
| | |
Net operating income | |
| | | |
| | |
Colombia | |
$ | 1,727,937 | | |
$ | 1,807,956 | |
Peru | |
| 2,390,387 | | |
| 1,949,527 | |
Costa Rica | |
| 5,120,674 | | |
| 4,941,124 | |
Total | |
$ | 9,238,998 | | |
$ | 8,698,607 | |
| |
| | | |
| | |
General and administrative: | |
| | | |
| | |
Colombia | |
$ | (317,328 | ) | |
$ | (250,761 | ) |
Peru | |
| (363,426 | ) | |
| (64,928 | ) |
Costa Rica | |
| (724,167 | ) | |
| (571,752 | ) |
Corporate | |
| (3,151,762 | ) | |
| (188,797 | ) |
Total | |
$ | (4,556,683 | ) | |
$ | (1,076,238 | ) |
| |
| | | |
| | |
Financing costs | |
| | | |
| | |
Colombia | |
$ | (1,619,037 | ) | |
$ | (1,804,661 | ) |
Peru | |
| (1,311,360 | ) | |
| (839,287 | ) |
Costa Rica | |
| (2,878,580 | ) | |
| (9,155,482 | ) |
Corporate | |
| — | | |
| (335,446 | ) |
Total | |
$ | (5,808,977 | ) | |
$ | (12,134,876 | ) |
The
following table reconciles segment net operating income to profit before taxes for the three months ended June 30, 2024 and 2023:
| |
Three months ended June 30, | |
| |
2024 | | |
2023 | |
Net operating income | |
$ | 9,238,998 | | |
$ | 8,698,607 | |
Unallocated revenue | |
| 39,842 | | |
| 8,377 | |
General and administrative | |
| (4,556,683 | ) | |
| (1,076,238 | ) |
Investment property valuation gain | |
| 4,550,714 | | |
| 305,441 | |
Interest income from affiliates | |
| — | | |
| 158,113 | |
Financing costs | |
| (5,808,977 | ) | |
| (12,134,876 | ) |
Net foreign currency (loss) gain | |
| (158,361 | ) | |
| 64,474 | |
Gain on sale of asset held for sale | |
| — | | |
| 1,022,853 | |
Other income | |
| 10,837,729 | | |
| 52,917 | |
Other expenses | |
| (1,172,442 | ) | |
| (54,225 | ) |
Profit (loss) before taxes | |
$ | 12,970,820 | | |
$ | (2,954,557 | ) |
The
tables below present information by segment presented to the CODM and reconciliations to the Company’s consolidated amounts for
the six months ended June 30, 2024, and 2023.
| |
Six months ended June 30, | |
| |
2024 | | |
2023 | |
Revenue: | |
| | | |
| | |
Colombia | |
$ | 4,358,549 | | |
$ | 3,781,404 | |
Peru | |
| 5,366,057 | | |
| 4,688,955 | |
Costa Rica | |
| 11,648,737 | | |
| 10,733,379 | |
Unallocated revenue | |
| 97,055 | | |
| 36,020 | |
Total | |
$ | 21,470,398 | | |
$ | 19,239,758 | |
| |
| | | |
| | |
Investment property operating expense: | |
| | | |
| | |
Colombia | |
$ | (533,765 | ) | |
$ | (469,376 | ) |
Peru | |
| (997,766 | ) | |
| (939,292 | ) |
Costa Rica | |
| (1,708,359 | ) | |
| (1,230,919 | ) |
Total | |
$ | (3,239,890 | ) | |
$ | (2,639,587 | ) |
| |
| | | |
| | |
Net operating income | |
| | | |
| | |
Colombia | |
$ | 3,824,784 | | |
$ | 3,312,028 | |
Peru | |
| 4,368,291 | | |
| 3,749,663 | |
Costa Rica | |
| 9,940,378 | | |
| 9,502,460 | |
Total | |
$ | 18,133,453 | | |
$ | 16,564,151 | |
| |
| | | |
| | |
General and administrative: | |
| | | |
| | |
Colombia | |
$ | (553,486 | ) | |
$ | (463,038 | ) |
Peru | |
| (605,220 | ) | |
| (314,615 | ) |
Costa Rica | |
| (1,476,846 | ) | |
| (1,080,710 | ) |
Corporate | |
| (3,615,228 | ) | |
| (339,530 | ) |
Total | |
$ | (6,250,780 | ) | |
$ | (2,197,893 | ) |
| |
| | | |
| | |
Financing costs | |
| | | |
| | |
Colombia | |
$ | (3,518,830 | ) | |
$ | (3,364,448 | ) |
Peru | |
| (2,424,049 | ) | |
| (1,774,096 | ) |
Costa Rica | |
| (5,428,477 | ) | |
| (11,787,327 | ) |
Corporate | |
| — | | |
| (711,047 | ) |
Total | |
$ | (11,371,356 | ) | |
$ | (17,636,918 | ) |
The
following table reconciles segment net operating income to profit before taxes for the six months ended June 30, 2024 and 2023:
| |
Six months ended June 30, | |
| |
2024 | | |
2023 | |
Net operating income | |
$ | 18,133,453 | | |
$ | 16,564,151 | |
Unallocated revenue | |
| 97,055 | | |
| 36,020 | |
General and administrative | |
| (6,250,780 | ) | |
| (2,197,893 | ) |
Listing expense | |
| (44,469,613 | ) | |
| — | |
Investment property valuation gain | |
| 9,749,988 | | |
| 10,276,377 | |
Interest income from affiliates | |
| 302,808 | | |
| 314,488 | |
Financing costs | |
| (11,371,356 | ) | |
| (17,636,918 | ) |
Net foreign currency (loss) gain | |
| (176,605 | ) | |
| 229,772 | |
Gain on sale of asset held for sale | |
| — | | |
| 1,022,853 | |
Other income | |
| 11,148,259 | | |
| 99,510 | |
Other expenses | |
| (7,344,817 | ) | |
| (138,422 | ) |
Profit (loss) before taxes | |
$ | (30,181,608 | ) | |
$ | 8,569,938 | |
Segment
Assets and Liabilities
For
the purposes of monitoring segment performance and allocating resources between segments, the CODM monitors select assets and liabilities
attributable to each segment. The following table summarizes the Company’s total assets and liabilities by reportable operating
segment as of June 30, 2024 and December 31, 2023:
| |
June 30, 2024 | | |
December 31, 2023 | |
Segment investment properties | |
| | | |
| | |
Colombia | |
$ | 129,074,360 | | |
$ | 131,057,446 | |
Peru | |
| 139,293,029 | | |
| 127,350,614 | |
Costa Rica | |
| 257,495,133 | | |
| 255,764,221 | |
Total | |
$ | 525,862,522 | | |
$ | 514,172,281 | |
| |
| | | |
| | |
Reconciling items: | |
| | | |
| | |
Cash and cash equivalents | |
| 48,173,742 | | |
| 35,242,363 | |
Due from affiliates | |
| — | | |
| 9,463,164 | |
Lease and other receivables, net | |
| 3,384,827 | | |
| 3,557,988 | |
Receivables from the sale of investment properties - short term | |
| 5,751,931 | | |
| 4,072,391 | |
Receivable from the sale of investment properties - long term | |
| — | | |
| 4,147,507 | |
Prepaid construction costs | |
| 298,223 | | |
| 1,123,590 | |
Prepaid income taxes | |
| 1,009,808 | | |
| 651,925 | |
Other current assets | |
| 3,276,935 | | |
| 2,791,593 | |
Tenant notes receivables - long term, net | |
| 5,565,780 | | |
| 6,002,315 | |
Restricted cash equivalent | |
| 4,739,916 | | |
| 2,681,110 | |
Property and equipment, net | |
| 329,868 | | |
| 354,437 | |
Deferred tax asset | |
| 312,378 | | |
| 1,345,859 | |
Other non-current assets | |
| 5,483,834 | | |
| 5,218,787 | |
Total assets | |
$ | 604,189,764 | | |
$ | 590,825,310 | |
| |
| | | |
| | |
Segment debt | |
| | | |
| | |
Colombia | |
$ | 43,148,658 | | |
$ | 47,654,090 | |
Peru | |
| 59,867,406 | | |
| 61,260,237 | |
Costa Rica | |
| 172,862,415 | | |
| 160,939,908 | |
Total | |
$ | 275,878,479 | | |
$ | 269,854,235 | |
| |
| | | |
| | |
Reconciling items: | |
| | | |
| | |
Accounts payable and accrued expenses | |
| 10,544,627 | | |
| 13,127,502 | |
Income tax payable | |
| 1,760,485 | | |
| 2,024,865 | |
Retainage payable | |
| 1,558,684 | | |
| 1,737,805 | |
Other current liabilities | |
| 790,547 | | |
| 959,539 | |
Deferred tax liability | |
| 37,805,728 | | |
| 37,451,338 | |
Security deposits | |
| 2,500,277 | | |
| 1,790,554 | |
Other non-current liabilities | |
| 4,137,761 | | |
| 2,936,555 | |
Total liabilities | |
$ | 334,976,588 | | |
| 329,882,393 | |
Geographic
Area Information
| |
June 30, 2024 | | |
December 31,
2023 | |
Long-lived assets | |
| | | |
| | |
Colombia | |
$ | 129,101,519 | | |
$ | 131,147,272 | |
Peru | |
| 139,358,727 | | |
| 127,416,698 | |
Costa Rica | |
| 257,732,144 | | |
| 256,000,132 | |
Total | |
$ | 526,192,390 | | |
$ | 514,564,102 | |
8. |
LEASE
AND OTHER RECEIVABLES, NET |
As
of June 30, 2024 and December 31, 2023, lease and other receivables, net were as follows:
| |
June 30, 2024 | | |
December 31, 2023 | |
| |
| | |
| |
Lease receivables, net | |
$ | 2,472,738 | | |
$ | 2,703,760 | |
Tenant notes receivables - short term, net | |
| 850,406 | | |
| 804,749 | |
Others | |
| 61,683 | | |
| 49,479 | |
Sub-total | |
| 3,384,827 | | |
| 3,557,988 | |
Tenant notes receivable - long term, net | |
| 5,565,780 | | |
| 6,002,315 | |
Lease and other receivables, net | |
$ | 8,950,607 | | |
$ | 9,560,303 | |
The
expected credit loss allowance provision for lease receivables and tenant notes receivables as of June 30, 2024 and June 30, 2023 reconciled
to the opening loss allowance for that provision as follows:
| |
June 30, 2024 | | |
June 30, 2023 | |
| |
Lease
Receivables | | |
Tenants
Notes
Receivables | | |
Total | | |
Lease
Receivables | | |
Tenants
Notes
Receivables | | |
Total | |
| |
| | |
| | |
| | |
| | |
| | |
| |
Beginning balance | |
$ | 831,805 | | |
$ | 114,201 | | |
$ | 946,006 | | |
$ | 2,646,337 | | |
$ | 126,640 | | |
$ | 2,772,977 | |
Adjustments in loan loss allowance recognized in profit or loss during the period | |
| 30,640 | | |
| (6,559 | ) | |
| 24,081 | | |
| (99,377 | ) | |
| (399 | ) | |
| (99,776 | ) |
Receivables written-off during the period as uncollectible | |
| — | | |
| — | | |
| — | | |
| (1,733,404 | ) | |
| (5,734 | ) | |
| (1,739,138 | ) |
Ending balance | |
$ | 862,445 | | |
$ | 107,642 | | |
$ | 970,087 | | |
$ | 813,556 | | |
$ | 120,507 | | |
$ | 934,063 | |
As
of June 30, 2024, the Company obtained a valuation from independent appraisers in order to determine the fair value of its investment
properties. Gains and losses arising from changes in the fair values are included in the condensed consolidated interim statements of
profit or loss and other comprehensive income (loss) in the period in which they arise.
In
addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which
the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety,
which are described as follows:
|
● |
Level
1 - Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date. |
|
● |
Level
2 - Inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly
or indirectly; and |
|
● |
Level
3 - Inputs are unobservable inputs for the asset or liability, among others, statistics information, and own Company’s information,
in some instances based on the information provided by some independent experts. |
As
of June 30, 2024 and December 31, 2023, all owned investment properties are guaranteeing the Company’s debt.
As
of June 30, 2024 and December 31, 2023, investment properties were as follows:
| |
Fair Market Value
(“FMV”) as of | | |
FMV as of | |
| |
June 30, | | |
December 31, | |
| |
2024 | | |
2023 | |
| |
| | |
| |
Land bank: | |
| | | |
| | |
Land bank under right-of-use | |
| | | |
| | |
Peru | |
$ | 1,811,991 | | |
$ | 619,976 | |
Sub-total | |
| 1,811,991 | | |
| 619,976 | |
Owned land bank | |
| | | |
| | |
Colombia | |
| 23,130,348 | | |
| 24,100,446 | |
Sub-total | |
| 23,130,348 | | |
| 24,100,446 | |
Total Land Bank | |
$ | 24,942,339 | | |
$ | 24,720,422 | |
Properties under development: | |
| | | |
| | |
Properties under right-of-use | |
| | | |
| | |
Peru | |
$ | 16,510,000 | | |
$ | 12,260,000 | |
Sub-total | |
| 16,510,000 | | |
| 12,260,000 | |
Owned properties | |
| | | |
| | |
Peru | |
| - | | |
| 22,230,781 | |
Costa Rica | |
| 15,398,000 | | |
| 10,891,000 | |
Sub-total | |
| 15,398,000 | | |
| 33,121,781 | |
Total properties under development | |
$ | 31,908,000 | | |
$ | 45,381,781 | |
Operating Properties | |
| | | |
| | |
Owned properties | |
| | | |
| | |
Colombia | |
$ | 105,944,012 | | |
$ | 106,957,000 | |
Peru | |
| 120,971,038 | | |
| 92,239,857 | |
Costa Rica | |
| 242,097,133 | | |
| 244,873,221 | |
Sub-total | |
| 469,012,183 | | |
| 444,070,078 | |
Total operating properties | |
| 469,012,183 | | |
| 444,070,078 | |
Total operating properties and properties under development | |
| 500,920,183 | | |
| 489,451,859 | |
Total | |
$ | 525,862,522 | | |
$ | 514,172,281 | |
Disclosed
below is the valuation technique used to measure the fair value of investment properties, along with the significant unobservable inputs
used.
Valuation
Techniques - This fair value measurement is considered Level 3 of the fair value hierarchy, except where otherwise noted below.
|
– |
Operating
Properties - The valuation model considers a combination of the present value of net cash flows to be generated by the property,
the direct capitalization of the net operating income, and the replacement cost to construct a similar property. |
|
i. |
The
present value of net cash flows generated by the property takes into account the expected rental growth rate, vacancy periods, occupancy
rate, lease incentive costs such as rent-free periods and other costs not paid by tenants. The expected net cash flows are discounted
using risk adjusted discount rates. Among other factors, the discount rate estimation considers the quality of a building and its
location, tenant credit quality and lease terms. |
|
|
|
|
ii. |
The
direct capitalization method. This method involves capitalizing a fully leased net operating income estimate by an appropriate yield.
This approach is best utilized with stabilized assets, where there is little volatility in the net income and the growth prospects
are also stable. It is most commonly used with single tenant investments or stabilized investments. involves capitalizing the property
net operating income at a market capitalization rate. The net operating income is determined by using the property Effective Gross
Income (EGI) net of operating expenses. The EGI is determined by the property’s Potential Gross Income (PGI) through analysis
of the property actual historic income and an analysis of competitive current market income rates and deducting the PGI with an estimate
for vacancy and collection. |
|
|
|
|
iii. |
The
cost approach. The cost approach involves the estimation of the replacement cost of the building and site improvements that a prudent
and rational person would pay no more for a property than the cost to construct a similar and competitive property - assuming no
undue delay in the process. |
|
– |
Properties
Under Development - The valuation model considers the present value of net cash flows, direct capitalization, and the cost approaches
adjusted by the net present value of the cost to complete and vacancy in the properties under construction. |
|
|
|
|
– |
Land
Bank - The valuation model used for the land portfolio is a combination of sales comparison approach (or market approach), cost
approach, residual land value approach and the discounted cash flow method. For undeveloped land, the market approach is used. For
land that is under development, the market approach is used in conjunction with the cost approach and residual land value approach,
and the discounted cash flow approach, to determine the fair value of the finished lots. |
|
i. |
The
sales comparison approach. This approach compares sales or listing of similar properties with the subject property using the price
per square feet (Level 2 input). This approach is given supporting weight in this analysis because of the well-supported range of
value within this approach and the likelihood that the subject could be purchased by an owner-user. |
|
|
|
|
ii. |
The
cost approach. This approach is based on the principle of substitution that a prudent and rational person would pay no more than
the cost to construct a similar property. This approach generally considers estimated replacement cost of the land and the site improvements
(e.g., infrastructure) and estimated depreciation accrued to the improvements (Level 2 input). |
|
iii. |
The
residual land value approach. This approach involves residual amount after deducting all known or anticipated costs required to complete
the development from the anticipated value of the project when completed after consideration of the risks associated with the completion
of the project (Level 2 input). |
Significant
Inputs as of June 30, 2024 and December 31, 2023 —
Property |
|
Fair
value
hierarchy |
|
Valuation
techniques |
|
Significant
unobservable
inputs |
|
Value |
|
Relationship
of
unobservable
inputs to
fair
value |
|
|
|
|
Discounted
cash flows |
|
Risk
adjusted residual capitalization rate |
|
2024:
7.9%
2023:
7.9% |
|
The
higher the risk adjusted residual rate, the lower the fair value. |
Operating
Properties |
|
Level
3 |
|
|
|
Risk
adjusted discount rate |
|
2024:
10.6%
2023:
10.8% |
|
The
higher the risk adjusted discount rate, the lower the fair value. |
|
|
|
|
Direct
capitalization method |
|
Occupancy
rate |
|
2024:
98.2%
2023:
98.2% |
|
The
higher the occupancy rate, the higher the fair value. |
|
|
|
|
|
|
Going
in stabilized capitalization rate |
|
2024:
7.8%
2023:
7.9% |
|
The
higher the stabilized capitalization rate, the lower the fair value |
|
|
|
|
Discounted
cash flows |
|
Risk
adjusted residual capitalization rate |
|
2024:
8.1%
2023:
8.1% |
|
The
higher the risk adjusted residual rate, the lower the fair value. |
Properties
Under Development |
|
Level
3 |
|
|
|
Risk
adjusted discount rate |
|
2024:
10.4%
2023:
10.8% |
|
The
higher the risk adjusted discount rate, the lower the fair value. |
|
|
|
|
Direct
capitalization method |
|
Occupancy
rate |
|
2024:
96.9%
2023:
97.7% |
|
The
higher the occupancy rate, the higher the fair value. |
|
|
|
|
|
|
Going
in stabilized capitalization rate |
|
2024:
8.1%
2023:
8.0% |
|
The
higher the stabilized capitalization rate, the lower the fair value |
Land
Bank |
|
Level
3 |
|
Discounted
cash flows |
|
Risk
adjusted residual capitalization rate |
|
2024:
7.8%
2023:
7.8% |
|
The
higher the risk adjusted residual rate, the lower the fair value. |
|
|
|
|
|
|
Risk
adjusted discount rate |
|
2024:
11.8%
2023:
11.8% |
|
The
higher the risk adjusted discount rate, the lower the fair value. |
The
reconciliation of investment properties for the six months ended June 30, 2024 and year ended June 30, 2023, were as follows:
| |
June 30, 2024 | | |
June 30, 2023 | |
| |
| | |
| |
Beginning balance | |
$ | 514,172,281 | | |
$ | 449,036,633 | |
Additions | |
| 12,661,512 | | |
| 15,046,916 | |
Foreign currency translation effect | |
| (10,721,259 | ) | |
| 16,043,694 | |
Gain on valuation of investment properties | |
| 9,749,988 | | |
| 10,276,377 | |
Ending balance | |
$ | 525,862,522 | | |
$ | 490,403,620 | |
Investment
Properties Dispositions —
Sale
of Latam Parque Logistico Calle 80 Building 500A
On
November 24, 2023, the Company closed the sale of its investment property, Latam Parque Logistico Calle 80 Building 500A (with a carrying
value of USD 17,634,208 as of closing), to a third party for consideration of COP 79,850,000,000 (equivalent of USD 19,512,112 as of
closing). Of the total consideration, COP 33,829,392,065 (equivalent of USD 8,266,536 as of closing) was transferred directly to ITAU
to settle the liabilities directly associated with the investment property. The remaining consideration is expected to be received within
fifteen months after closing, through six installment payments. The Company had received the first upfront installment payment of COP
11,505,151,984 (equivalent of USD 2,778,063 as of the payment date) in October 2023. As of closing, the total future installments were
discounted by an implicit rate estimated based on certain Level 2 inputs discussed above. The discount on total installments would be
subsequently accreted back over the time over the remaining payment term.
During
the three and six months ended June 30, 2024, the Company recognized interest income of $195,039 and $424,155, respectively, included
in other income in the condensed consolidated interim statements of profit or loss and other comprehensive income (loss). The Company
received the second and third installment payment for total of COP 9,204,121,586 (equivalent of USD 2,361,010 as of the payment date)
in February 2024 and May 2024, respectively. The Company expects to receive the remaining installment payments in 2024 and 2025. The
carrying amount of the receivables from the sale of investment properties is $5,751,931 and $8,219,898 as of June 30, 2024 and December
31, 2023, respectively.
In
accordance with the purchase and sale agreement, as of June 30, 2024, the deferred cash payments will be paid to the Company in the upcoming
three installments based on the following schedule:
Consideration | |
| |
Installment Payment due in August 2024 | |
| 1,109,454 | |
Installment Payment due in November 2024 | |
| 1,109,454 | |
Installment Payment due in February 2025 | |
| 3,883,090 | |
Discount on future payments | |
| (350,067 | ) |
Receivables from the sale of investment properties - short term | |
$ | 5,751,931 | |
Sale
of certain land lot in Latam Logistic Park San José – Verbena
During
the year ended December 31, 2021, the Company engaged in an active sale negotiation for the sale of certain land lot with a third-party
buyer. The land lot held for sale is part of a land lot that is owned by LatAm Parque Logistico San José - Verbena partnership,
within the Costa Rica segment.
On
May 21, 2021, the Company signed on behalf of LatAm Parque Logistico San José - Verbena partnership, the purchase and sale agreement
for the sale of the fully serviced land parcel for $4,000,000. In accordance with the purchase and sale agreement, the sale will be paid
in three installments based on the following schedule:
| |
Amount | | |
|
| |
| | |
|
1st Installment Payment | |
$ | 1,200,000 | | |
Upon the signing of the Purchase and Sale Agreement. |
2nd Installment Payment | |
| 1,200,000 | | |
Upon conclusion of land infrastructure work. |
3rd Installment Payment | |
| 1,600,000 | | |
Upon title transfer of the property to the buyer. |
| |
$ | 4,000,000 | | |
|
On
May 24, 2021, the Company, through LatAm Parque Logistico San José - Verbena partnership, received the first installment payment
of $1,200,000 from the buyer. The Company received the second installment of $1,200,000 on January 27, 2022 upon the conclusion of the
land infrastructure work. The sale closed on April 23, 2023 upon the transfer of the property title and the receipt of the third installment
payment of $1,600,000. The Company recognized a gain on sale of asset held for sale of $1,022,853 during the three and six months ended
June 30, 2023.
The
detail of other current assets as of the June 30, 2024 and December 31, 2023 were as follows:
| |
June 30, 2024 | | |
December 31, 2023 | |
Value added tax receivable | |
$ | 1,434,913 | | |
$ | 2,207,983 | |
Prepaid insurance | |
| 1,190,240 | | |
| 181,528 | |
Other | |
| 651,782 | | |
| 402,082 | |
Total | |
$ | 3,276,935 | | |
$ | 2,791,593 | |
As
of June 30, 2024 and December 31, 2023, the debt of the Company was as follows (all loans are USD denominated, except loans in Colombia
are COP denominated):
Financial
Institution | |
Type | |
Expiration | | |
Annual Interest Rate | |
Restricted
Cash at
June 30,
2024 | | |
Restricted
Cash at
December
31, 2023 | | |
Remaining
Borrowing
Capacity at
June 30,
2024 | | |
Amount
Outstanding
at June 30,
2024 | | |
Amount Outstanding at
December 31,
2023 | |
Costa Rica (USD denominated) | |
| |
| | | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
BAC Credomatic, S.A. | |
Mortgage Loan | |
| Refinanced | | |
3Mo SOFR + 378 bps, no min. rate (except for the fixed rate of 8.1% from March 2023 to March 2024) | |
| — | | |
| — | | |
| — | | |
| — | | |
| 46,908,999 | |
BAC Credomatic, S.A. | |
Mortgage Loan | |
| April 2039 | | |
3Mo SOFR + 200 bps, no min. rate | |
| — | | |
| — | | |
| — | | |
| 59,934,509 | | |
| — | |
Banco Davivienda Costa Rica, S.A. | |
Mortgage Loan | |
| Nov 2038 | | |
Year 1: 7.0% Year 2: 7.3% Thereafter: 3Mo SOFR + 240 bps | |
| 72,346 | | |
| — | | |
| — | | |
| 7,821,650 | | |
| 7,974,306 | |
Banco Nacional de Costa Rica, S.A. | |
Mortgage Loan | |
| April 2048 | | |
Year 1: 5.9% Year 2: 6.2% Thereafter: 3Mo SOFR+140 bps | |
| — | | |
| — | | |
| — | | |
| 65,111,489 | | |
| 65,727,171 | |
Banco Nacional de Costa Rica, S.A. | |
Mortgage Loan | |
| April 2048 | | |
Year 1: 5.9% Year 2: 6.2% Thereafter: 3Mo SOFR+140 bps | |
| 480,000 | | |
| 480,000 | | |
| — | | |
| 18,113,690 | | |
| 18,285,023 | |
Banco Nacional de Costa Rica, S.A. | |
Mortgage Loan | |
| April 2048 | | |
Year 1: 5.9% Year 2: 6.2% Thereafter: 3Mo SOFR+140 bps | |
| — | | |
| — | | |
| — | | |
| 15,022,127 | | |
| 15,164,206 | |
Banco Nacional de Costa Rica, S.A. | |
Mortgage Loan | |
| April 2048 | | |
Year 1: 6.4% Year 2: 7.3% Thereafter: 3Mo SOFR + 280 bps | |
| 140,485 | | |
| 140,485 | | |
| — | | |
| 6,858,951 | | |
| 6,918,421 | |
Total Costa Rica Loans | |
| |
| | | |
| |
$ | 692,831 | | |
$ | 620,485 | | |
$ | — | | |
$ | 172,862,416 | | |
$ | 160,978,126 | |
| |
| |
| | | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Peru (USD denominated) | |
| |
| | | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
BBVA Peru Tranche 1 | |
Mortgage Loan | |
| March 2053 | | |
8.50% | |
| 1,614,732 | | |
| — | | |
| — | | |
| 47,596,844 | | |
| 48,670,000 | |
BBVA Peru Tranche 2 | |
Mortgage Loan | |
| March 2053 | | |
8.40% | |
| 371,728 | | |
| — | | |
| — | | |
| 10,957,270 | | |
| 11,330,000 | |
BBVA Peru | |
Mortgage Loan | |
| July 2024 | | |
8.35% | |
| 2,000,000 | | |
| 2,000,000 | | |
| — | | |
| 2,000,000 | | |
| 2,000,000 | |
| |
| |
| | | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Total Peru Loans | |
| |
| | | |
| |
$ | 3,986,460 | | |
$ | 2,000,000 | | |
| — | | |
$ | 60,554,114 | | |
$ | 62,000,000 | |
Colombia (COP denominated) | |
| |
| | | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Bancolombia, S.A. | |
Mortgage Loan | |
| January 2036 | | |
IBR +327 bps no min. rate | |
| — | | |
| — | | |
| — | | |
| 20,988,185 | | |
| 23,087,020 | |
Bancolombia, S.A. | |
Mortgage Loan | |
| May 2036 | | |
IBR +365 bps no min. rate | |
| — | | |
| — | | |
| — | | |
| 16,969,122 | | |
| 18,738,132 | |
BTG | |
Secured Bridge Loan | |
| November 2025 | | |
IBR +695 bps no min. rate | |
| — | | |
| — | | |
| — | | |
| 6,026,943 | | |
| 6,540,992 | |
| |
| |
| | | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Total Colombia Loans | |
| |
| | | |
| |
| — | | |
| — | | |
| — | | |
$ | 43,984,250 | | |
$ | 48,366,144 | |
Total | |
| |
| | | |
| |
$ | 4,679,291 | | |
$ | 2,620,485 | | |
$ | — | | |
$ | 277,400,780 | | |
$ | 271,344,270 | |
| |
| |
| | | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Accrued financing costs | |
| | | |
| |
| | | |
| | | |
| | | |
| 827,501 | | |
| 752,874 | |
Debt issuance costs, net | |
| | | |
| |
| | | |
| | | |
| | | |
| (2,349,802 | ) | |
| (2,242,909 | ) |
| |
| |
| | | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Total Debt | |
| |
| | | |
| |
| | | |
| | | |
| | | |
$ | 275,878,479 | | |
$ | 269,854,235 | |
Less: Current portion of long-term debt | |
| | | |
| |
| | | |
| | | |
| | | |
| (12,287,699 | ) | |
| (16,703,098 | ) |
Total Long-term debt | |
| | | |
| |
| | | |
| | | |
| | | |
$ | 263,590,780 | | |
$ | 253,151,137 | |
Debt
Agreements
IFC
The
IFC secured credit facility includes full development of Latam Logistic Lima Sur through a two-tranche facility. Latam Logistic Lima
Sur is a total of six buildings development divided in two phases. The loan has an aggregate borrowing capacity of $53,000,000 and is
divided in two tranches corresponding to each development phase.
|
● |
Tranche
1 – The loan is for the financing of the development of phase 1. The loan has a total borrowing capacity of $27,100,000
and is interest only until January 15, 2020, with a balloon payment of $6,865,611 at expiration on July 15, 2028. As of December
31, 2022, the Company had disbursed all of the tranche. |
|
● |
Tranche
2 – The loan is for the financing of the development of phase 2. The loan has a total borrowing capacity of $25,900,000
and is interest only until January 15, 2022, with a balloon payment of $6,475,000 at expiration on July 15, 2030. As of December
31, 2022, the Company had disbursed $15,607,323. |
The
loan bears a commitment fee over unborrowed amounts until January 15, 2022, as follows:
|
– |
June
16, 2019 – December 31, 2019 – 0.50% over unborrowed amount. |
|
– |
January
1, 2020 – June 30, 2021 – 1.00% over unborrowed amount. |
|
– |
July
1, 2021 – January 15, 2022 – 1.50% over unborrowed amount. |
On
March 14, 2022, the Company negotiated a new interest rate on the IFC Tranche 1, reducing the spread by 100 basis points, to 425 basis
points, effective July 15, 2022. All the other terms and conditions of the loan with IFC remained the same. A gain of $351,503 was recognized
as financing costs in the first quarter of 2022 as part of modification of this debt facility.
On
October 26, 2023, the Company drew on its debt facilities with IFC for a total of $10,292,677 to finance the construction of the Lurin
I project in Peru. The related interest expense directly attributable to the construction is capitalized.
On
December 15, 2023, the Company refinanced the debt outstanding with IFC Tranche 1 and Tranche 2 for a total amount of $46,973,443 with
a mortgage loan denominated in USD with Banco Bilbao Vizcalla (“BBVA”) for an aggregate amount of $60,000,000. An extinguishment
loss of $1,651,793 was recognized as financing costs during the fourth quarter of 2023 as part of the extinguishment of this debt facility.
ITAU
On
January 6, 2021, the Company entered into a COP denominated secured construction loan facility with ITAU for a total borrowing capacity
of COP$35,000 million ($10.1 million as of closing). Proceeds were used for the financing of the construction of building 500 in Latam
Logistic Park Calle 80 in Bogota, Colombia. The loan matures on July 6, 2033. The loan bears an annual interest rate of IBR (a short-term
interest rate for the Colombian Peso determined by the board of directors of Colombia’s Central Bank) plus 447 basis points and
has an annual commitment fee of 0.50% of the undrawn amount of the credit line. The loan was interest only until April 20, 2022, and
was fully drawn in October 2021. The debt facility with ITAU was paid in full through a sale of the mortgaged property to a third-party
buyer. The buyer provided an advance of the payment directly to ITAU on August 31, 2023, in order to settle the outstanding debt. An
extinguishment loss of $118,073 was recognized as financing costs during the third quarter of 2023 as part of the extinguishment of this
debt facility.
Bancolombia
On
January 22, 2021, the Company entered into a COP denominated financing agreement of COP44,500 million ($12.8 million as of the transaction
date) with Bancolombia, S.A. for the financing of the construction of building 300 in Latam Logistic Park Calle 80 in Bogota, Colombia.
As of December 31, 2021, the financing was fully disbursed. This financing agreement was further increased by COP$30,000 million ($7.0
million of extension). The financing bears an interest rate of IBR plus 365 basis points, commitment fees of 0.1% per month of the undrawn
amount of the loan and has a 15-year term with a balloon payment of 40% at expiration (COP$29,901 million, or $6.9 million as of extension).
The Company began to make principal payments in November 2021. On January 19, 2022, the Company increased by COP$34,000 million ($8.4
million per the transaction date exchange rate, same applies to hereafter) its existing financing facilities denominated in COP with
Bancolombia from COP$57,810 million ($14.3 million) to COP$91,810 million ($22.7 million). The financing has a fourteen-year term with
a balloon of COP$42,866 million ($11.4 million) at expiration. The interest accrues at Colombian IBR plus 327 basis points.
On
September 22, 2023, the Company negotiated a deferral of principal with Bancolombia, deferring all principal payments for seven months,
beginning on October 1, 2023. All the other terms and conditions of the loan with Bancolombia remained the same. A modification gain
of $70,058 was recognized as financing costs during the third quarter of 2023 as part of the modification of this debt facility.
BAC
Credomatic
In
March 2021, the Company entered into two U.S. dollar denominated mortgage loan facilities with BAC Credomatic, S.A. for an aggregate
amount of $10.0 million for the financing of the acquisition of two operating properties in San José, Costa Rica. The loans have
a fifteen-year term and bear an annual interest rate of three-month LIBOR plus 423 basis point with a minimum interest rate of 5.0%.
This loan was refinanced to Banco Nacional de Costa Rica on April 28, 2023.
On
July 7, 2021, the Company entered into a U.S. dollar denominated mortgage loan facility of up to $45.5 million with Banco BAC San José,
S.A. (“BAC”) on behalf of Latam Parque Logístico San José - Verbena partnership. Proceeds will be used to finance
the construction of Latam Parque Logístico San José - Verbena, a five-building class-A master-planned logistic park totaling
829,898 square feet of net rentable area, in the Alajuelita submarket in San José, Costa Rica. The loan can be drawn in multiple
disbursements up to approximately 60% of the total investment of the project. The mortgage loan has a term of 10 years with a 15-year
amortization profile. The stated interest rate is the three-month LIBOR plus 423 basis points. In October 2022, the stated interest rate
on the debt facility changed to the three-month SOFR plus 378 basis points. The debt facility has an amortization grace period of 30
months and does not accrue any commitment fees.
On
February 16, 2022, the Company repaid one of the loans with BAC Credomatic due to the sale of the underlying property. The loan outstanding
balance at the time of the sale was $2,868,155 and an extinguishment loss of $586 was recognized as financing costs during the first
quarter of 2022 as part of the extinguishment of this debt facility. On March 1, 2023, the Company negotiated a reduced interest rate
with BAC Credomatic, S.A. reducing the interest rate from 3-month SOFR plus 378 basis points to 8.12% for six months. All the other terms
and conditions of the loan with BAC remained the same. A gain of $121,038 was recognized as financing costs during the first quarter
of 2023 as part of the modification of this debt facility. On October 5, 2023, the Company negotiated to keep the reduced interest rate
of 8.12% for six more months. All the other terms and conditions of the loan with BAC remained the same. A modification loss of $47,466
was recognized as financing costs in the third quarter of 2023 as part of the modification of this debt facility.
As
of December 31, 2022, the Company had borrowed $1.0 million of a U.S. dollar denominated mortgage loan facility of up to $1.0 million
with Banco BAC San José, S.A. for the financing of the renovations in Latam Bodegas San Joaquin. The loan would have matured on
June 24, 2032. The loan had an annual interest rate set at the U.S. Prime Rate plus 110 basis points with no minimum interest rate. This
loan was refinanced with Banco Nacional de Costa Rica on April 28, 2023.
On
April 30, 2024, the Company refinanced its secured loans of $46.6 million with BAC with a new secured facility of $60.0 million with
the same lender. The new secured loan has a term of 15 years, scheduled to mature in May 2039. The interest rate for the new loan is
structured to be 2% above SOFR, which, as of the issuance date of the loan, equates to an effective annual rate of 7.33%. This rate is
subject to quarterly review and subsequent adjustment based on the prevailing SOFR and the rate shall not fall below a floor of 5.50%
per annum. An extinguishment loss of $38,219 was recognized as financing costs in the second quarter of 2024 as part of the refinancing
of the debt facility.
Banco
Promerica
On
August 16, 2021, the Company entered into a U.S. dollar denominated mortgage loan of $7.0 million with Banco Promerica de Costa Rica,
S.A. for the purchase of a 118,403 square feet logistic facility located in the Coyol submarket in San José, Costa Rica. The loan
has a fifteen-year term. The stated interest rate is the U.S. Prime Rate plus 475 basis points. This loan was refinanced to Banco Nacional
de Costa Rica on April 28, 2023.
Banco
Davivienda
On
January 6, 2022, the Company negotiated a new interest rate on the Davivienda de Cosa Rica loans 3-month LIBOR plus 475 basis points
and eliminated the interest rate floor, all the other terms and conditions of the loans with Davivienda de Costa Rica remained the same.
A modification gain of $4,077,399 was recognized as financing costs during the first quarter of 2022 as part of the modification of this
debt facility.
Banco
Nacional
On
April 28, 2023, the Company refinanced all outstanding loans with Banco Davivienda de Costa Rica, Banco Promerica de Costa Rica, S.A.
and all loans except one with BAC Credomatic, S.A., with Banco Nacional de Costa Rica, S.A. An extinguishment loss of $6,555,113 was
recognized as financing costs during the second quarter of 2023 as part of the extinguishment of these debt facilities. The Company entered
into four U.S. dollar denominated mortgage loans with Banco Nacional de Costa Rica for an aggregate amount of $107,353,410. The loans
have a twenty-five-year term. The loans bear a fixed annual interest rate for the first two years and a variable rate thereafter.
On
November 1, 2023, the Company refinanced a debt outstanding with Banco Nacional de Costa Rica, S.A. ($7,373,460) with a mortgage loan
denominated in USD with Davivienda de Costa Rica for an aggregate amount of $8,000,000. The new mortgage loan matures in 15 years. The
loan is subject to a fixed interest rate of 7.00% in the first year, and a rate of 6-month SOFR plus 2.4% adjustable monthly from the
second year onwards.
BTG
On
August 25, 2023, and August 30, 2023, the Company entered into two new line of credit agreement with BTG Pactual Colombia S.A. for COP
15,000,000,000 and COP 10,000,000,000, respectively (approximately $3,679,266 and $2,433,042, respectively, at the date the transactions
were initiated). Interest is calculated and paid monthly at the rate of a one-month Colombian IBR plus 720 basis points. Principal repayment
is due at maturity, on August 25, 2024, and August 30, 2024, respectively. This debt agreement is guaranteed by the trust established
for Latam Logistic Col Propco Cota 1, where Banco BTG Pactual Colombia S.A is established as a guaranteed creditor, with three underlying
properties defined as guarantees.
On
May 27, 2024, the Company restructured its two loans with BTG Pactual Colombia S.A. into a single loan with the same lender. The new
loan maintains the same outstanding principal amount of COP 25,000,000,000 (approximately $6,446,506 as of the restructuring date) and
bears an interest rate of three-month Colombian IBR plus 695 basis points. This loan is set to mature in November 2025. A modification
gain of $208,799 was recognized as financing costs during the second quarter of 2024.
BBVA
On
October 19, 2023, the Company entered into a new line of credit agreement with El Banco BBVA Peru for $2,000,000. The line of credit
agreement has a nominal rate of 14.45% fixed and an annual effective rate of 8.35%. The line of credit agreement matures in 9 months
and follows a monthly repayment schedule. This debt agreement is a senior unsecured loan and is not guaranteed by any of the properties
of the Company. As of the issuance date, the Company has fully drawn the line of credit.
On
December 15, 2023, the Company entered into a mortgage loan with El Banco BBVA Peru for a total of $60,000,000. The mortgage loan consists
of two components: Tranche A and Tranche B. The Tranche A totaling $48,670,000 was used to refinance the Company’s existing debt
with IFC. The Tranche B totaling $11,330,000 is expected to finance the Company’s other real estate projects. Tranche A and B will
mature in 10 years (with a 35% balloon payment for Tranche A) and carry a fixed interest rate of 8.5% and 8.4%, respectively.
LIBOR
Rate – The Company modified all of it Costa Rican loans from LIBOR rate to SOFR by December 31, 2022. In July 2023, the
Company modified the rate for IFC loans from 6-month LIBOR to 6-month SOFR. No further modifications from LIBOR to SOFR have been made
as of June 30, 2024.
Long-Term
Debt Maturities – Scheduled principal and interest payments due on the Company’s debt as of June 30, 2024, are as
follows:
| |
Mortgage Loan | | |
Secured Bridge Loan | | |
Total | |
Maturity: | |
| | | |
| | | |
| | |
Remainder of 2024 | |
$ | 6,036,525 | | |
$ | 1,004,491 | | |
$ | 7,041,016 | |
2025 | |
| 8,370,124 | | |
| 5,022,452 | | |
| 13,392,576 | |
2026 | |
| 8,955,841 | | |
| - | | |
| 8,955,841 | |
2027 | |
| 9,694,303 | | |
| - | | |
| 9,694,303 | |
2028 | |
| 10,416,046 | | |
| - | | |
| 10,416,046 | |
2029 | |
| 11,237,596 | | |
| - | | |
| 11,237,596 | |
Thereafter | |
| 216,663,402 | | |
| - | | |
| 216,663,402 | |
Accrued and deferred financing cost, net | |
| (1,328,310 | ) | |
| (193,991 | ) | |
| (1,522,301 | ) |
Total | |
$ | 270,045,527 | | |
$ | 5,832,952 | | |
$ | 275,878,479 | |
Financing
Cost – The following table summarizes the components of financing cost including the deferred financial cost amortization
for the three and six months ended June 30, 2024 and 2023:
| |
Three months ended June 30, | | |
Six months ended June 30, | |
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
Gross interest expense | |
$ | 5,912,315 | | |
$ | 5,770,045 | | |
$ | 11,755,397 | | |
$ | 11,372,049 | |
Gross commitment fees | |
| — | | |
| 39,027 | | |
| — | | |
| 77,805 | |
Amortization of debt issuance cost | |
| 49,580 | | |
| 212,398 | | |
| 83,122 | | |
| 508,552 | |
Debt modification gain | |
| (208,799 | ) | |
| — | | |
| (208,799 | ) | |
| (121,038 | ) |
Debt extinguishment loss | |
| 38,219 | | |
| 6,201,589 | | |
| 38,219 | | |
| 6,201,589 | |
Other financing cost | |
| 17,662 | | |
| 14,112 | | |
| 33,540 | | |
| 38,671 | |
Total financing cost before capitalization | |
| 5,808,977 | | |
| 12,237,171 | | |
| 11,701,479 | | |
| 18,077,628 | |
Capitalized amounts into investment properties | |
| — | | |
| (102,295 | ) | |
| (330,123 | ) | |
| (440,710 | ) |
Net financing cost | |
| 5,808,977 | | |
| 12,134,876 | | |
| 11,371,356 | | |
| 17,636,918 | |
Total cash paid for interest and commitment fees | |
$ | 5,843,654 | | |
$ | 5,444,455 | | |
$ | 11,686,352 | | |
$ | 11,779,772 | |
Debt
Reconciliation – The reconciliation of the Company’s debt as of June 30, 2024 and 2023 were as follows:
| |
Six months ended June 30, | |
| |
2024 | | |
2023 | |
Beginning balance | |
$ | 269,854,235 | | |
$ | 209,326,775 | |
Secured bank debt borrowings | |
| 13,091,001 | | |
| 113,971,395 | |
Secured bank debt repayments | |
| (3,250,201 | ) | |
| (98,400,674 | ) |
Borrowing cost incurred | |
| — | | |
| (5,213 | ) |
Transfer to liabilities associated with HFS | |
| — | | |
| (7,775,210 | ) |
Deferred financing cost amortization | |
| 83,122 | | |
| 508,552 | |
3,965,585Debt modification gain | |
| (208,799 | ) | |
| (121,038 | ) |
Debt extinguishment loss | |
| 38,219 | | |
| 6,201,589 | |
Foreign currency translation effect | |
| (3,729,098 | ) | |
| 3,965,584 | |
Ending balance | |
$ | 275,878,479 | | |
$ | 227,671,760 | |
Financial
Debt Covenants – The loans described above are subject to certain affirmative covenants, including, among others, (i) reporting
of financial information; and (ii) maintenance of corporate existence, the security interest in the properties subject to the loan and
appropriate insurance for such properties; and (iii) maintenance of certain financial ratios. In addition, the loans are subject to certain
negative covenants that restrict Latam Logistic Properties ability to, among other matters, incurs in additional indebtedness under or
create additional liens on the properties subject to the loans, change its corporate structure, make certain restricted payments, enter
into certain transactions with affiliates, amend certain material contracts.
The
loans contain, among others, the following events of default: (i) non-payment; (ii) false representations; (iii) failure to comply with
covenants; (iv) inability to generally pay debts as they become due; (v) any bankruptcy or insolvency event; (vi) disposition of the
subject properties; or (vii) change of control of the subject properties.
As
of June 30, 2024 and December 31, 2023, the Company was compliant with, or otherwise had waivers for all debt covenants with its lenders.
The
Company received waivers for the requirement to comply with Bancolombia financial covenants on June 26, 2024. The Bancolombia waiver
was effective through the testing period of June 30, 2024 and December 31, 2024, and ratio compliance testing will next be applicable
for this loan in June 2025. The outstanding Bancolombia loan balance as of June 30, 2024 was $38.0 million, with $1.6 million classified
within current liabilities on the condensed consolidated interim statement of financial position. The Company was in compliance with
all the other debt covenants as of June 30, 2024 and December 31, 2023.
As
described in Note 3, on March 27, 2024, the Company consummated the Business Combination. As a result of the Business Combination, LPA
issued 31,709,747 Ordinary Shares with a par value of $0.0001 per share. The same number of shares are outstanding as of June 30, 2024.
The Company is authorized to issue 450,000,000 Ordinary Shares and 50,000,000 Preference Shares, each with a par value of $0.0001. The
specific designations, voting rights, and other preferences of these shares can be established as needed by the Company’s board.
There were no Preference Shares issued during the periods presented.
Retained
earnings consist of legal reserves and accumulated earnings. According to the legislation in effect in several countries in which the
Company operates, the Company’s subsidiaries must appropriate a portion of each year’s net earnings to their respective legal
reserve. The legal reserve amount varies by jurisdiction and ranges from 5% to 10% of the net earnings generated by operating entities,
up to a cap of 10% to 50% of that entity’s capital stock.
13. |
EARNINGS
(LOSS) PER SHARE |
The
Company determines basic earnings (loss) per share by dividing the profit (loss) for the period attributable to ordinary equity holders
of the Company by the weighted average number of shares of ordinary shares outstanding during the period. The Company computes diluted
earnings (loss) per share by dividing the profit (loss) for the period attributable to ordinary equity holders of the Company by the
weighted average number of ordinary shares outstanding combined with plus the incremental weighted average number of ordinary shares
outstanding that would be issued on conversion or settlement of all outstanding potentially dilutive instruments. There were 416,500
RSUs excluded from the diluted weighted average number of ordinary shares calculation for the six months ended June 30, 2024 as their
inclusion would be antidilutive. There were no potentially dilutive instruments for the three and six months ended June 30, 2023, respectively.
The
calculated basic and diluted earnings (loss) per share for the three and six months ended June 30, 2024 and 2023, were as follows:
| |
Three months ended June 30, | | |
Six months ended June 30, | |
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| |
| | |
| | |
| | |
| |
Earnings (loss) per share – basic | |
$ | 0.31 | | |
$ | (0.17 | ) | |
$ | (1.26 | ) | |
$ | 0.09 | |
Earnings (loss) per share - diluted | |
$ | 0.31 | | |
$ | (0.17 | ) | |
$ | (1.26 | ) | |
$ | 0.09 | |
Net earnings (loss) attributed to owner(s) of the Company | |
$ | 9,907,633 | | |
$ | (4,762,860 | ) | |
$ | (38,123,976 | ) | |
$ | 2,628,360 | |
Weighted average number of shares – basic | |
| 31,709,747 | | |
| 28,600,000 | | |
| 30,223,220 | | |
| 28,600,000 | |
Weighted average effect of dilutive securities: | |
| | | |
| | | |
| | | |
| | |
RSUs | |
| 153,421 | | |
| - | | |
| - | | |
| - | |
Weighted average number of shares – diluted | |
| 31,863,168 | | |
| 28,600,000 | | |
| 30,223,220 | | |
| 28,600,000 | |
As
discussed in detail in Note 3, the Company’s basic and diluted earnings (loss) per share related to LLP prior to the Business Combination
have been retroactively recast based on shares reflecting the exchange ratio established in the Business Combination.
There
have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of authorization
of these financial statements.
LPA
is a foreign corporation organized in accordance with the laws of Cayman Islands and is not subject to income tax in the United States.
LPA has a diversified portfolio, operating in Costa Rica, Colombia and Peru through various subsidiaries located in the local countries.
The income tax rates applicable to the LPA in Costa Rica, Colombia and Peru are 30.0%, 35.0% and 29.5%, respectively.
The
Company’s effective tax rates for the three months ended June 30, 2024 and 2023 were 4.2% and (61.2)%, respectively. The Company’s
effective tax rates for the six months ended June 30, 2024 and 2023 were (12.7)% and 32.2%, respectively. The effective income tax rates
for the three and six months ended June 30, 2024 and 2023 were different than the local statutory income tax rates primarily due to the
change in deferred tax assets or liabilities related to fluctuations in currency translation for investment properties and debt, movement
in unrecognized deferred tax assets, foreign tax rate differential, alternative minimum tax in Colombia, and current income tax on intercompany
dividends.
Employee
benefits are recognized in general and administrative expense in the condensed consolidated interim statements of profit or loss and
other comprehensive income (loss), and for the three and six months ended June 30, 2024 and 2023, consisted of the following:
| |
Three months ended June 30, | | |
Six months ended June 30, | |
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
Short-term employee benefits | |
$ | 2,438,663 | | |
$ | 688,925 | | |
$ | 3,530,427 | | |
$ | 1,360,248 | |
In
March 2024, the Company established the Logistic Properties of the Americas 2024 Equity Incentive Plan (“2024 Plan”) for
all employees of the Company whereby LPA may grant options, restricted stock, restricted stock units, stock appreciation rights and other
equity-based awards to attract and maintain key company personnel including directors, officers, employees, consultants, and advisors.
Restricted
Stock Units (“RSUs”)
Under
the 2024 Plan, the Company granted RSUs to certain senior executives and board of directors who were previously employed by LLP and continued
employment with LPA after the Business Combination, certain departing board of directors of LLP and certain newly hired senior executives
and board of directors at LPA.
Each
RSU represents the right for the employee to receive one LPA ordinary share upon vesting and settlement. No amounts are paid or payable
to LLP by the recipient on the receipt of the RSUs. The RSUs carry neither rights to dividends nor voting prior to vesting or delivery
of the underlying LPA ordinary shares. The Company’s board has a discretion to settle the RSUs in cash or shares but the Company
has no intention of settling the RSUs in cash, and given that this is the first time the Company has granted RSUs, the Company does not
have a past practice of cash settlement. The Company accounts for the RSUs as equity-settled awards.
The
Company granted a total of 97,500 RSUs to former LLP and current LPA board of directors that were fully vested upon grant; however, the
delivery of the underlying ordinary shares will occur at a future date based solely on the passage of time. The grant date fair value
of these awards accounts for the impact of the delayed delivery schedules and compensation cost for these awards recognized immediately
upon grant. The Company also granted 319,000 RSUs to former LLP and current LPA senior executives. Of those RSUs, 198,000 shares shall
vest in equal annual increments over a 3-year service vesting period and compensation cost is recognized using the accelerated attribution
method. The remaining 121,000 RSUs shall cliff vest at the end of a three-year service vesting period, and compensation cost is recognized
ratably over the vesting period.
RSUs
are measured at grant date fair value by reference to the traded price of LPA’s ordinary shares. The Company does not expect to
declare any dividends in the near future. Therefore, no expected dividends were incorporated into the measurement of the grant date fair
value. The RSUs have a grant date of May 12, 2024, with a weighted average grant date fair value of $9.70 with a total grant date fair
value of $1,140,218 for all RSUs. For the three and six months ended June 30, 2024, the Company recognized share-based payment expense
related to the RSUs of $1,140,218 in the condensed consolidated interim statements of profit or loss and other comprehensive income (loss).
Details
of the RSUs outstanding during the period are as follows:
| |
| |
Number of RSUs | |
| |
| |
| |
| |
Non-vested at December 31, 2023 | |
| — | |
| |
Granted | |
| 416,500 | |
(a) | |
Vested | |
| (97,500 | ) |
| |
Forfeited | |
| — | |
| |
Non-vested at June 30, 2024 | |
| 319,000 | |
|
(a) |
Director
Transaction and Retention RSUs – 97,500 RSUs granted to former LLP and current LPA board of directors were legally
vested upon grant. However, the delivery of the underlying ordinary shares is subject to delayed delivery schedules, and therefore,
these RSUs remain unsettled as of June 30, 2024. As the grantees do not have any shareholder rights until the ordinary shares are
physically delivered, the shares shall be excluded from the basic earnings per share denominator. |
There
was no RSU activity under the 2024 Plan in prior periods and the Company did not enter into any other types of share-based payment arrangements.
17. |
RELATED
PARTY TRANSACTIONS |
Transactions
between the Company and its related parties are made on terms equivalent to those that prevail in arm’s length transactions.
Subsidiaries
Transactions
between the Company and its subsidiaries are eliminated upon consolidation and therefore are not disclosed. Details of the principal
group companies and partnerships the Company enters into that are fully consolidated are disclosed in LLP’s most recent audited
consolidated financial statements and notes.
Key
Management Personnel Compensation
The
amounts disclosed in the table represent the amounts recognized in general and administrative expense on the condensed consolidated interim
statements of profit or loss and other comprehensive income (loss) related to key management personnel for the three and six months ended
June 30, 2024 and 2023.
| |
Three months ended June 30, | | |
Six months ended June 30, | |
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
Salaries | |
$ | 391,165 | | |
$ | 202,673 | | |
$ | 590,486 | | |
$ | 387,781 | |
Cash performance bonus | |
| 248,076 | | |
| 113,600 | | |
| 374,445 | | |
| 232,697 | |
Statutory bonus | |
| 14,829 | | |
| 9,736 | | |
| 27,921 | | |
| 24,771 | |
One-time cash bonus related to Business Combination (refer to Note 3) | |
| — | | |
| — | | |
| 226,000 | | |
| — | |
Non-executive director’s fees | |
| 176,484 | | |
| 41,500 | | |
| 229,290 | | |
| 41,500 | |
Non-cash benefits | |
| 9,723 | | |
| 7,480 | | |
| 18,207 | | |
| 14,861 | |
Share-based payment expense (refer to Note 16) | |
| 1,140,218 | | |
| — | | |
| 1,140,218 | | |
| — | |
Total | |
$ | 1,980,495 | | |
$ | 374,989 | | |
$ | 2,606,567 | | |
$ | 701,610 | |
Due
from affiliates – On June 25, 2015, LLP entered into a loan agreement with LLI, pursuant to which LLP issued a loan
of $3,015,000 to LLI. In July 2020, the loan receivable from LLI was increased to $4,165,000 from $3,015,000 and the maturity date was
extended to December 31, 2023. The loan receivable from LLI was further increased to $4,850,000 from $4,165,000 in June 2021, and then
to $6,950,000 in May 2022.
The
principal amount of $6,265,000 of this loan receivable bore an annual interest rate of 9.0% and the remaining principal amount of this
loan receivable did not bear any interest. Principal and interest was due at maturity. In the event of a default, the interest rate increased
to an annual rate of 20% until the amount was settled. For the three and six months ended June 30, 2024, the Company recognized interest
income of $0 and $302,808 respectively, in interest income from affiliates in the condensed consolidated interim statements of profit
or loss and other comprehensive income (loss). For the three and six months ended June 30, 2023, the Company recognized interest income
of $158,113 and $314,488, respectively, in interest income from affiliates in the condensed consolidated interim statements of profit
or loss and other comprehensive income (loss).
As
discussed in Note 3, as of January 1, 2024, the loans to LLI were in default status due to non-payment following the maturity date of
December 31, 2023. Pursuant to the Assignment Agreement, upon Closing, the loans receivables from LLI of $9,765,972 were considered settled
through the foreclosure of the collateralized LLP Shares held by LLI.
As
of June 30, 2024 and December 31, 2023, the loan receivable from affiliates balances outstanding were as follows:
| |
June 30, 2024 | | |
December 31, 2023 | |
| |
| | |
| |
Interest receivable: | |
| | | |
| | |
Latam Logistics Investments, LLC | |
$ | — | | |
$ | 2,324,041 | |
Loan receivable: | |
| | | |
| | |
Latam Logistics Investments, LLC | |
| — | | |
| 7,139,123 | |
Total due from affiliates | |
$ | — | | |
$ | 9,463,164 | |
Refer
to detailed discussion around the impact of Business Combination on the loan receivable in Note 3.
Additional
transactions with key management personnel – A related party entity provided $289,982 and $111,376 of management and advisory
services to the Company for the three months ended June 30, 2024 and 2023, respectively, and $477,845 and $249,004 of management and
advisory services to the Company for the six months ended June 30, 2024 and 2023, respectively.
18. |
FINANCIAL
RISK MANAGEMENT |
Interest
rate risk - Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes
in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to its long-term
debt obligations with floating interest rates. Therefore, variations in interest rates at the reporting date would affect profit or loss.
Liquidity
Risk – Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with
financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity
is to ensure, to the extent possible, that it will have sufficient liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring in unacceptable losses or risking damage to the Company’s reputation, and to maintain a
balance between continuity of funding and flexibility through the use of bank deposits and loans.
Exposure
to Liquidity Risk – The following tables detail the remaining contractual maturities of financial liabilities at the end
of reporting period. The amounts are gross and undiscounted cash flows and include contractual interest payments.
June 30, 2024 | |
On demand | | |
Less than 3 months | | |
3 to 12 months | | |
1 to 5 years | | |
Thereafter | | |
Total | |
| |
| | |
| | |
| | |
| | |
| | |
| |
Accounts payable and accrued expenses | |
$ | 1,224,663 | | |
$ | 3,104,396 | | |
$ | 6,215,568 | | |
$ | — | | |
$ | — | | |
$ | 10,544,627 | |
Lease liability | |
| 68,837 | | |
| 84,502 | | |
| 255,966 | | |
| 1,157,129 | | |
| 6,567,504 | | |
| 8,133,938 | |
Income tax payable | |
| — | | |
| 481,972 | | |
| 1,278,513 | | |
| — | | |
| — | | |
| 1,760,485 | |
Retainage payable | |
| — | | |
| — | | |
| 1,558,684 | | |
| — | | |
| — | | |
| 1,558,684 | |
Security deposits | |
| 195,000 | | |
| 92,727 | | |
| 48,074 | | |
| 2,164,476 | | |
| — | | |
| 2,500,277 | |
Long and short-term debt | |
| — | | |
| 4,491,594 | | |
| 7,773,656 | | |
| 42,772,305 | | |
| 222,363,225 | | |
| 277,400,780 | |
Total | |
$ | 1,488,500 | | |
$ | 8,255,191 | | |
$ | 17,130,461 | | |
$ | 46,093,910 | | |
$ | 228,930,729 | | |
$ | 301,898,791 | |
December 31, 2023 | |
On demand | | |
Less than 3 months | | |
3 to 12 months | | |
1 to 5 years | | |
Thereafter | | |
Total | |
| |
| | |
| | |
| | |
| | |
| | |
| |
Accounts payable and accrued expenses | |
$ | 764,016 | | |
$ | 4,472,279 | | |
$ | 7,891,207 | | |
| — | | |
$ | — | | |
$ | 13,127,502 | |
Lease liability | |
| 8,530 | | |
| 33,060 | | |
| 238,423 | | |
| 1,199,059 | | |
| 6,703,328 | | |
| 8,182,400 | |
Income tax payable | |
| — | | |
| 2,024,865 | | |
| — | | |
| — | | |
| — | | |
| 2,024,865 | |
Retainage payable | |
| — | | |
| 155,207 | | |
| 1,582,598 | | |
| — | | |
| — | | |
| 1,737,805 | |
Security deposits | |
| — | | |
| 83,234 | | |
| 287,727 | | |
| 1,790,554 | | |
| — | | |
| 2,161,515 | |
Long and short-term debt | |
| — | | |
| 1,624,415 | | |
| 15,078,681 | | |
| 43,032,169 | | |
| 211,609,005 | | |
| 271,344,270 | |
Total | |
$ | 772,546 | | |
$ | 8,393,060 | | |
$ | 25,078,636 | | |
$ | 46,021,782 | | |
$ | 218,312,333 | | |
$ | 298,578,357 | |
Fair
Values – Management of the Company assessed the fair value of its financial assets and liabilities and concluded
that their carrying value approximates their fair value.
19. |
COMMITMENTS
AND CONTINGENCIES |
Commitments
As
of June 30, 2024, the Company had agreed construction contracts with third parties and is consequently committed to future capital in
respect to investment property under development of $3,862,785. There are no contractual commitments in respect of completed investment
property.
Legal
Proceedings
In
the ordinary course of business, the Company may be party to legal proceedings. On September 13, 2023, the Company had become aware that
a lawsuit was filed against a subsidiary of the Company by a construction company for services rendered prior to the reporting date.
The Company had recorded a provision in relation to this matter prior to January 1, 2024. On February 29, 2024, the Company settled with
the counterparty for a total settlement amount of $237,226.
On
November 30, 2023, the Company became aware that a lawsuit was filed against them by a former employee of the Company who rendered services
for the Company prior to the reporting date. The Company is currently vigorously defending this lawsuit and believes the claims are without
merit. The Company is in the process of analyzing this matter but currently does not have a sufficient basis for concluding whether any
loss is probable.
As
of June 30, 2024, the Company is not involved in any other litigation or arbitration proceedings for which the Company believes it is
not adequately insured or indemnified, or which, if determined adversely, would have a material adverse effect on the Company’s
condensed consolidated interim financial statements.
New
directors
On
July 15, 2024, LPA announced that Françoise Lavertu and Javier Marquina had been appointed as independent directors increasing
the Company’s board to a total of seven members and the number of independent directors to six.
21. |
APPROVAL
OF THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS |
The
condensed consolidated interim financial statements were authorized for issue by the Company’s board of directors on August 14,
2024.
*
* * * *
Exhibit
99.2
MANAGEMENT’S
DISCUSSION AND ANALYSIS
OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
For
purposes of this section, “we,” “our,” “us”, “LPA” and the “company” refer
to Logistic Properties of the Americas and all of its subsidiaries. The following discussion and analysis (“MD&A”) of
the financial condition and results of operations should be read together with our unaudited condensed consolidated interim financial
statements as of June 30, 2024 and December 31, 2023 and for the three and six months ended June 30, 2024 and 2023, together with related
notes thereto, (the “Unaudited Condensed Consolidated Interim Financial Statements”). The Unaudited Condensed Consolidated
Interim Financial Statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”),
as issued by the International Accounting Standards Board (“IASB”). This MD&A should also be read together with our Annual
Report on Form 20-F for the year ended December 31, 2023, as filed with the U.S. Securities and Exchange Commission. The following discussion
contains forward-looking statements and should be read in conjunction with the section titled “Cautionary Note Regarding Forward-Looking
Statements” included in this MD&A and the section titled “Risk Factors” included in our Annual Report on Form 20-F
for the year ended December 31, 2023.
Overview
LPA
was incorporated as an exempted company with limited liability under the laws of the Cayman Islands on October 9, 2023. LPA is a fully-integrated,
internally managed real estate company that develops, owns and manages a diversified portfolio of warehouse logistics assets in Central
and South America. We focus on modern Class A logistics real estate in high growth and high barrier-to-entry markets that are undersupplied
and have low penetration rates. We believe we are a leading institutional development, industrial and logistics platform operating in
our three countries of operation today — Costa Rica, Colombia and Peru – which correspond to our reportable segments. We
have significant expertise in designing and developing logistics assets, which we own, manage and lease on a long-term basis. Our strategic
footprint and operational expertise enable us to provide our tenants with “last mile” distribution capabilities that are
critical to logistics infrastructure and well located to leverage strong e-Commerce and “nearshoring” trends.
Our
business model is designed to generate recurring revenue from long-term leases with creditworthy tenants, which we believe drives attractive
unit economics. We believe our corporate structure provides us with the following advantages:
| ● | Investment
focus: We have designed our business model to participate across the real estate value
creation chain including (i) structuring and financing, (ii) development, (iii) lease-up
and (iv) asset management, as opposed to REITs that are generally required to focus on stabilized
or near stabilized properties; |
| ● | Management
fee structure: We manage our properties internally and do not charge management fees,
which we believe better aligns our interests with investors, as opposed to the externally
managed REIT model; and |
| ● | Long
term value creation: We develop and manage our assets with a focus on the quality of
our real estate and maximizing its long-term value, as opposed to managing our development,
operations and maintenance activities to achieve shorter term dividend targets. |
As
of June 30, 2024, our operating portfolio was comprised of 29 properties with a Gross Leasable Area (“GLA”) of approximately
five million square feet, a stabilized occupancy rate of 94.6% and weighted average remaining lease term of 5.3 years on our current
leases. For the six months ended June 30, 2024, our revenue was $21.5 million and our loss was $34.0 million. For the three months ended
June 30, 2024, our revenue was $11.0 million and our profit was $12.4 million. For the six months ended June 30, 2023, our revenue was
$19.2 million and our profit was $5.8 million. For the three months ended June 30, 2023, our revenue was $10.0 million and our loss was
$4.8 million.
For
a reconciliation of Cash NOI to the nearest IFRS measure, see “– Non-IFRS Financial Measures and Other Measures and Reconciliations”.
Our
portfolio is comprised of Class A industrial warehouses that are well positioned to serve the key logistical functions of the growing
e-Commerce market and nearshoring trade. Our properties are certified by EDGE Certified Foundation, a green building certification system
sponsored by the IFC (International Finance Corporation), a member of the World Bank Group, and administered by GBCI (Green Business
Certification Inc.), which promotes the development of sustainable buildings — both internally, with expansive floor capacity,
natural light and sufficient height clearance levels, as well as externally, with shared truck maneuvering yards, optimized platforms
and container parking. These modern specifications enable our tenants to drive operational efficiencies for timely delivery of their
goods and implement highly advanced operational and logistics processes that enhance their ability to compete.
Our
high quality and diversified tenant base is comprised of leading multinational companies that operate primarily in the manufacturing,
consumer retail, e-Commerce, consumer packaged goods, and business-to-business distribution sectors, including Alicorp, Kuehne &
Nagel, PriceSmart, Pequeño Mundo, Natura & Co, Rex Cargo, Samsung, Ceva, Indurama, IKEA.
The
following table presents a summary of our aggregate real estate portfolio as of June 30, 2024, December 31, 2023, and June 30, 2023:
| |
As
of June
30,
2024 | | |
As
of
December 31, 2023 | | |
As
of June
30, 2023(3) | |
Number of operating
real estate properties | |
| 29 | | |
| 28 | | |
| 28 | |
Operating GLA (sq. ft)
(1) | |
| 4,965,171 | | |
| 4,618,806 | | |
| 4,615,743 | |
Leased Area (sq. ft) (2) | |
| 4,996,538 | | |
| 5,308,454 | | |
| 4,681,774 | |
Number of tenants | |
| 50 | | |
| 53 | | |
| 53 | |
Average rent per square
foot | |
$ | 7.87 | | |
$ | 7.80 | | |
$ | 7.07 | |
Weighted average remaining
lease term | |
| 5.3
years | | |
| 5.3
years | | |
| 5.1
years | |
Stabilized occupancy rate
(% of GLA) | |
| 94.6 | % | |
| 100.0 | % | |
| 99.4 | % |
(1) |
“Operating
GLA” refers to the GLA in operating properties. Operating properties are investment properties that have achieved a state of
stabilization. We define stabilization as the earlier of the point at which a developed property has been completed for one year,
or when it reaches a 90% occupancy rate. |
(2) |
“Leased
Area” refers to the area in operating properties and properties under development that are subject to a lease. |
(3) |
Excludes
a held-for-sale investment property in Colombia with a Leased Area of 289,000 square feet and which was occupied by one tenant. |
Our
portfolio is well located and highly diversified, as shown below:
| |
As
of June 30, 2024 | |
| |
Total Operating GLA | | |
% of
Portfolio
GLA | | |
Number
of Buildings | |
Costa
Rica | |
| 2,358,693 | | |
| 48 | % | |
| 18 | |
Colombia | |
| 1,255,404 | | |
| 25 | % | |
| 5 | |
Peru | |
| 1,351,074 | | |
| 27 | % | |
| 6 | |
Total | |
| 4,965,171 | | |
| 100 | % | |
| 29 | |
| |
As
of December 31, 2023 | |
| |
Total Operating GLA | | |
% of
Portfolio
GLA | | |
Number
of Buildings | |
Costa
Rica | |
| 2,358,702 | | |
| 51 | % | |
| 18 | |
Colombia | |
| 1,255,409 | | |
| 27 | % | |
| 5 | |
Peru | |
| 1,004,695 | | |
| 22 | % | |
| 5 | |
Total | |
| 4,618,806 | | |
| 100 | % | |
| 28 | |
| |
As
of June 30, 2023 | |
| |
Total Operating GLA | | |
% of
Portfolio
GLA | | |
Number
of Buildings | |
Costa
Rica | |
| 2,355,647 | | |
| 51 | % | |
| 18 | |
Colombia | |
| 1,255,404 | | |
| 27 | % | |
| 5 | |
Peru | |
| 1,004,692 | | |
| 22 | % | |
| 5 | |
Total | |
| 4,615,743 | | |
| 100 | % | |
| 28 | |
Our
rental income for the six months ended June 30, 2024 and 2023, is summarized below:
| |
For
the Six Months Ended June
30, 2024 | | |
For
the Six Months Ended June
30, 2023 | |
| |
Rental
Income(1) | | |
%
of Rental Income | | |
Rental
Income(1) | | |
%
of Rental Income | |
| |
(U.S.
$) | |
Costa
Rica | |
$ | 11,648,737 | | |
| 54.5 | % | |
$ | 10,733,379 | | |
| 55.9 | % |
Colombia | |
$ | 4,358,549 | | |
| 20.4 | % | |
$ | 3,781,404 | | |
| 19.7 | % |
Peru | |
$ | 5,366,057 | | |
| 25.1 | % | |
$ | 4,688,955 | | |
| 24.4 | % |
Total | |
$ | 21,373,343 | | |
| 100.0 | % | |
$ | 19,203,738 | | |
| 100.0 | % |
(1) | All
leases in Costa Rica and Peru are denominated in U.S. Dollars while leases in Colombia are
denominated in Colombian Pesos. |
Our
rental income for the three months ended June 30, 2024 and 2023, is summarized below:
| |
For
the Three Months Ended June
30, 2024 | | |
For
the Three Months Ended June
30, 2023 | |
| |
Rental
Income(1) | | |
%
of Rental Income | | |
Rental
Income(1) | | |
%
of Rental Income | |
| |
(U.S.
$) | |
Costa
Rica | |
$ | 5,992,920 | | |
| 54.7 | % | |
$ | 5,481,962 | | |
| 54.9 | % |
Colombia | |
$ | 2,019,177 | | |
| 18.4 | % | |
$ | 2,066,829 | | |
| 20.7 | % |
Peru | |
$ | 2,934,997 | | |
| 26.9 | % | |
$ | 2,432,604 | | |
| 24.4 | % |
Total | |
$ | 10,947,094 | | |
| 100.0 | % | |
$ | 9,981,395 | | |
| 100.0 | % |
(1) | All
leases in Costa Rica and Peru are denominated in U.S. Dollars while leases in Colombia are
denominated in Colombian Pesos. |
Business
Combination
On
March 27, 2024, LPA consummated the business combination pursuant to the business combination agreement, dated as of August 15, 2023,
with two, a Cayman Islands exempted company (“TWOA”), LatAm Logistic Properties, S.A., a company incorporated under the laws
of Panama (“LLP”), Logistic Properties of the Americas Subco, a Cayman Islands exempted company and a wholly-owned subsidiary
of LPA, and LPA Panama Group Corp., a company incorporated under the laws of Panama and a wholly-owned subsidiary of LPA(the “Business
Combination”). As a result of the Business Combination, TWOA and LLP have each become wholly-owned subsidiaries of LPA, and LPA’s
ordinary shares were listed on NYSE American under the symbol “LPA”. See Note 3 of the Unaudited Condensed Consolidated Interim
Financial Statements for more details.
Factors
Affecting Our Results of Operations
Macroeconomic
Conditions
Our
business is significantly influenced by the general economic conditions in Costa Rica, Colombia, and Peru, which in turn affect our financial
performance, portfolio value, and strategy execution. Changes in national, regional and global economic conditions can significantly
impact us. Real estate markets are cyclical and are driven by investor perceptions of the overall economic outlook. Rising interest rates,
reduced real estate demand, economic slowdowns, or recessions influence the real estate markets and any occurrence of these conditions
could lead to weakened demand for our properties, decreased revenues, increased costs and lower asset values for us.
Factors
such as currency devaluation, price instability, inflation, interest rate fluctuations, regulatory changes, taxation shifts, social and
political unrest, and other economic developments can influence our outcomes, despite being beyond our control. Economic slowdowns, negative
growth periods, increased inflation, or interest rates could reduce demand for our assets, lower their real value, or prompt a shift
toward lower-quality assets.
Rental
Income
Our
primary revenue stream comes from investment property rental income. The rental income from our property portfolio depends on our ability
to maintain high occupancy rates and grow by acquiring, developing, or expanding properties.
As
of June 30, 2024, December 31, 2023, and June 30, 2023, the occupancy rates for our operating properties were 94.6%, 100.0%, and 99.4%,
respectively. The rental income generated from our leased properties is influenced by our ability to collect rent payments according
to lease agreements and our ability to raise rental rates. The growth in rental income also relies on our ability to acquire suitable
properties meeting our investment criteria, develop them, and expand the GLA of existing properties where feasible. Future rental income
could be affected by positive or negative trends in our tenants’ businesses and the regions where we operate.
Lease
Expirations
Our
results of operations are influenced by our ability to re-lease space before leases expire or promptly upon the expiration of a lease.
Results are also affected by economic and competitive conditions in the markets where we operate as well as the desirability of our individual
properties. We utilize a proactive leasing strategy, maintaining regular communication with tenants to understand the needs of their
respective operations and frequently visiting properties. Continuous discussions with tenants involve their plans for existing space
and potential expansions. Our senior management team uses their market insights to establish connections with potential local, regional,
and national tenants that may complement our current tenant base. As of June 30, 2024, our existing asset lease contracts scheduled to
expire in 2025 and 2026 represented 7.9% and 6.5%, respectively, of our Leased Area.
Competition
We
face local competition from other buyers, developers, and operators of industrial properties in Costa Rica, Colombia, and Peru. Some
of these competitors strive to provide similar products and pursue properties in our target markets. Increased competition in the future
could limit our ability to develop and acquire desired properties on favorable terms. Furthermore, increased competition might impact
the occupancy rates of our properties, influencing our financial results. We could also face pressure to lower our rental rates or offer
rent reductions, improvements, early termination privileges, or favorable lease renewal options to tenants in order to retain them upon
lease expiration due to competitive pressures.
Property
Operating Costs
Our
property operating costs consist mainly of repairs and maintenance, property management, utility charges, property taxes, and other property-related
costs. Most property operating costs are recovered through rental recovery fees charged to tenants. All of our leases are classified
as operating leases. Furthermore, a significant portion of our leases are modified gross leases, which is a type of rental agreement
where the tenant pays the base rent and a proportional share of certain investment property operating expenses. Although we can recover
most of the investment property operating expenses, it is ultimately our responsibility to pay for the operating expenses.
Inflation
Most
of our leases contain provisions designed to mitigate the adverse impact of inflation. Rental income is typically adjusted annually and
is contractually indexed for inflation based on local or US CPI. In addition, some contracts contain a fixed increase amount, which may
differ from inflation. Furthermore, our leases could expose us to potential rises in non-reimbursable property operating expenses, which
includes potential costs linked to vacant premises. Additionally, we believe that certain current rental rates within our leases due
for renewal are below the current market rates for similar spaces. Upon renewal or re-leasing, adjustments to these rates to align with
or approach current market levels may counterbalance the impact of inflationary expense pressures associated with our leased properties.
We also have exposure to inflation with respect to our development portfolio, as increases in materials and other costs related to our
development activities might make it more expensive to develop properties. In addition, an increase in inflation may increase the replacement
value of our real estate assets, and as such, the development of new assets may be adversely impacted if corresponding rental rates do
not have a similar increase.
Nearshoring
Trends
Global
events, such as the war in Ukraine as well as lingering effects of the COVID-19 pandemic, have led companies to rethink their supply
chains and explore ways to expand or relocate production facilities that are closer to U.S. headquarters and end markets. As a result,
the countries in which we operate might be positioned to benefit from strengthening nearshoring dynamics. This would result in greater
supply chain security and reduce long shipping routes while minimizing sensitivities to global disruptions in trade linkages.
Development
Our
business relies in part on the successful, on-time and on-budget development of new properties in order to increase GLA. We have a proven
track record of executing our development strategy, however, our operations could be impacted by construction work delays, increased
supply chain costs, shortage of qualified labor in our geographies or changes or difficulties in the permitting and regulatory environment.
Key
Components of Operating Results
Revenue
LPA
generates revenue through investment property rental income and development fees.
Investment
property rental income primarily consists of rental payment from tenants through operating lease agreements. LPA’s leases qualify
as operating leases, and LPA recognizes rental income on a straight-line basis. This is included as rental revenue on LPA’s condensed
consolidated interim statements of profit or loss and comprehensive loss.
Development
fees are determined in accordance with the terms specified on each arrangement with tenants. The fees are recognized as revenue when
they are earned under the agreement with tenants. This is included in other revenue in LPA’s condensed consolidated interim statements
of profit or loss and comprehensive loss.
Investment
property operating expense
Investment
property operating expense primarily includes the direct operating expenses of the property such as repairs and maintenance, property
taxes, insurance, and utilities, among others. Property operating expenses are mostly recovered through the rental recoveries charged
to the tenants.
General
and administrative expense
General
and administrative expenses include personnel costs (e.g., salaries, bonuses, share-based payments, etc.) and related operating costs
of the business support functions, including finance and accounting, legal, human resources, administrative, as well as services and
professional fees, office expenses, and bank service charges.
Listing
expense
Listing
expense is recognized upon consummation of the Business Combination in accordance with IFRS 2, representing the difference in the fair
value of the shares deemed to have been issued by the accounting acquirer and the fair value of the accounting acquiree’s identifiable
net assets, which represents a service received by the accounting acquirer. See Note 3 of the Unaudited Condensed Consolidated Interim
Financial Statements.
Investment
property valuation gain
Investment
property valuation gain is the investment properties’ change in fair value. The valuation analysis is performed by an external
firm, which determines the fair market value of the investment properties. The fair market value of an investment property depends on
the type of property. LPA holds operating properties, properties under development, and land.
Interest
income from affiliates
Interest
income from affiliates mainly consists of interest generated by issuing notes to related parties and key personnel. The main terms of
the notes are payment of the balance at maturity including interest receivable, the possibility of early payments without penalty, guarantees
over ordinary shares, and promissory notes.
Financing
costs
Financing
costs consist of interest expense, debt modification or extinguishment costs, costs of raising debt, and amortization expense of deferred
financing costs. These costs include various fees and charges associated with the process of issuing debt, refinancing the debt, and
other fees and commissions paid to third parties involved in the financing process. Debt modification or extinguishment gain or loss
is incurred when a company modifies or terminates its debt terms before the scheduled maturity date. Interest expense represents the
interest costs incurred through mortgage loans and bridge loans.
Net
foreign currency gain (loss)
Net
foreign currency consists of the net profit or loss generated through the settlement of monetary items or the translation of monetary
items at rates different from those at which they were translated upon initial recognition.
Gain
on sale of asset held for sale
Gain
on sale of investment property consists of profit or loss recognized through disposal of LPA’s held-for-sale investment properties.
The properties are carried at fair value prior to disposal. Disposals of LPA’s properties require a deduction of the cost of selling
the property from the fair value price, which may result in a gain on the sale.
Other
income
Other
income consists of interest income from certificates of deposit accounts and installment payment receivables from the sale of
investment properties, income in connection with certain lock-up release agreements that we entered into with certain non-affiliated
shareholders in June 2024 (the “Lock-Up Release Agreements”), and other miscellaneous income.
Other
expenses
Other
expenses consist of transaction-related costs in connection with the Business Combination, fees in connection with the Lock-Up Release
Agreements, loss on disposition of property and equipment and other miscellaneous expenses.
Income
tax expense
Income
tax expense refers to the amount of tax owed to the relevant tax authority. Income tax on the profit comprises current and deferred tax.
Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted or substantively enacted as of
the reporting date, and any adjustments to tax payable in respect of previous periods. Deferred tax is recognized using the balance sheet
liability method in accordance with IAS 12 on taxable temporary differences between the tax base and the accounting base of items included
in the condensed consolidated interim statement of financial position of LPA.
LPA’s
segments
LPA’s
three reportable segments are the geographic regions LPA operates in, Colombia, Peru and Costa Rica. The three geographic segments primarily
derive revenue from various operating lease agreements with tenants for the rental of investment properties. LPA’s portfolio is
strategically located within key trade and logistics corridors in the capital cities of Costa Rica, Colombia and Peru to conduct commercial
operations.
Costa
Rica: As of June 30, 2024, Costa Rica is LPA’s largest reportable segment, with 18 buildings and an Operating GLA of 2.4 million
square feet.
Colombia:
As of June 30, 2024, Colombia has 5 buildings with an Operating GLA of 1.3 million square feet and a land reserve of 50.6 acres.
Peru:
As of June 30, 2024, Peru has 6 buildings with an Operating GLA of 1.4 million square feet and a land reserve of 39.2 acres.
Revenue
by segment
LPA
management analyzes revenue by comparing actual monthly revenue to internal projections and prior periods across the operating segments
in order to assess performance, identify potential areas for improvement, and determine whether the segments are meeting management’s
expectations.
Segment
Net Operating Income (NOI)
LPA
management uses net operating income (“NOI”) by segment (“Segment NOI”) to assess financial performance at the
segment level. Please see “Non-IFRS Financial Measures and Other Measures and Reconciliations” for more information around
NOI and the reconciliation of NOI to the nearest IFRS measure.
Results
of operations for the three months ended June 30, 2024, compared to the three months ended June 30, 2023
The
results of operations presented below should be reviewed in conjunction with the Unaudited Condensed Consolidated Interim Financial Statements.
The following table presents information from our condensed consolidated interim statements of profit or loss and comprehensive income
(loss) for the three months ended June 30, 2024 and 2023:
| |
For
the three months ended June
30, | | |
| | |
| |
| |
2024 | | |
2023 | | |
$
Change | | |
%
Change | |
REVENUE | |
| | |
| | |
| | |
| |
Colombia | |
$ | 2,019,177 | | |
$ | 2,066,829 | | |
$ | (47,652 | ) | |
| (2.3 | )% |
Peru | |
| 2,934,997 | | |
| 2,432,604 | | |
| 502,393 | | |
| 20.7 | % |
Costa
Rica | |
| 5,992,920 | | |
| 5,481,962 | | |
| 510,958 | | |
| 9.3 | % |
Unallocated
revenue | |
| 39,842 | | |
| 8,377 | | |
| 31,465 | | |
| 375.6 | % |
Total
revenues | |
| 10,986,936 | | |
| 9,989,772 | | |
| 997,164 | | |
| 10.0 | % |
| |
| | | |
| | | |
| | | |
| | |
Investment property operating
expense | |
| | | |
| | | |
| | | |
| | |
Colombia | |
| (291,240 | ) | |
| (258,873 | ) | |
| (32,367 | ) | |
| 12.5 | % |
Peru | |
| (544,610 | ) | |
| (483,077 | ) | |
| (61,533 | ) | |
| 12.7 | % |
Costa
Rica | |
| (872,246 | ) | |
| (540,838 | ) | |
| (331,408 | ) | |
| 61.3 | % |
Total
investment property operating expense | |
| (1,708,096 | ) | |
| (1,282,788 | ) | |
| (425,308 | ) | |
| 33.2 | % |
General
and administrative | |
| (4,556,683 | ) | |
| (1,076,238 | ) | |
| (3,480,445 | ) | |
| 323.4 | % |
Investment
property valuation gain | |
| 4,550,714 | | |
| 305,441 | | |
| 4,245,273 | | |
| NM | |
Interest
income from affiliates | |
| — | | |
| 158,113 | | |
| (158,113 | ) | |
| NM | |
Financing
costs | |
| (5,808,977 | ) | |
| (12,134,876 | ) | |
| 6,325,899 | | |
| (52.1 | )% |
Net foreign
currency (loss) gain | |
| (158,361 | ) | |
| 64,474 | | |
| (222,835 | ) | |
| (345.6 | )% |
Gain on
sale of asset held for sale | |
| — | | |
| 1,022,853 | | |
| (1,022,853 | ) | |
| NM | |
Other
income | |
| 10,837,729 | | |
| 52,917 | | |
| 10,784,812 | | |
| NM | |
Other
expenses | |
| (1,172,442 | ) | |
| (54,225 | ) | |
| (1,118,217 | ) | |
| NM | |
Profit
(loss) before taxes | |
| 12,970,820 | | |
| (2,954,557 | ) | |
| 15,925,377 | | |
| NM | |
Income
tax expense | |
| (539,160 | ) | |
| (1,807,943 | ) | |
| 1,268,783 | | |
| (70.2 | )% |
PROFIT(LOSS)
FOR THE PERIOD | |
$ | 12,431,660 | | |
$ | (4,762,500 | ) | |
$ | 17,194,160 | | |
| NM | |
Revenue:
Revenue increased by $1.0 million, or 10.0%, to $11.0 million for the three months ended June 30, 2024 from $10.0 million for
the three months ended June 30, 2023. This was primarily attributable to an increase of investment properties rental revenue of $0.9
million, and rental recoveries of $0.2 million. The $0.9 million increase in investment properties rental revenue is primarily attributable
to the growth in Leased Area, which expanded from 4.6 million square feet as of June 30, 2023, to 5.0 million square feet as of June
30, 2024, representing an 8.7% increase.
Colombia
– Revenue in Colombia decreased by less than $0.1 million, or 2.3%, to $2.0 million for the three months ended June 30, 2024 from
$2.1 million for the three months ended June 30, 2023. This was primarily attributable to a decrease of approximately 289,000 square
feet of Leased Area due to the sale of a building in Colombia during the fourth quarter of 2023. The decrease is partially offset by
market increase in average rental price per square feet of 44.8% to existing tenants’ rent for properties in Colombia during the
three months ended June 30, 2024 compared to June 30, 2023.
Peru
– Revenue in Peru increased by $0.5 million, or 20.7%, to $2.9 million for the three months ended June 30, 2024 from $2.4 million
for the three months ended June 30, 2023. This was primarily attributable to a total Leased Area increase of approximately 324,000 square
feet or 24.4% due to one building becoming operational and another building becoming partially leased during the three months ended June
30, 2024. The average rental price per square feet also increased by 3.2% during the three months ended June 30, 2024 compared to June
30, 2023. Such increase is partially offset by a termination of a lease in a building driving a vacancy of 66,000 square feet of GLA
during the three months ended June 30, 2024 compared to June 30, 2023.
Costa
Rica – Revenue in Costa Rica increased by $0.5 million, or 9.3%, to $6.0 million for the three months ended June 30, 2024 from
$5.5 million for the three months ended June 30, 2023. This was primarily attributable to a total Leased Area increase due to one building
becoming operational in May 2023 and another building becoming partially leased during the three months ended June 2024.
Investment
property operating expense: Investment property operating expense increased by $0.4 million, or 33.2%, to $1.7 million for the
three months ended June 30, 2024 from $1.3 million for the three months ended June 30, 2023. This was primarily attributable to an increase
of repair and maintenance expenses of $0.2 million, expected credit loss of $0.1 million, and other property related expenses of $0.1
million resulting from the increase in Operating GLA.
Colombia
– Investment property operating expense in Colombia increased by less than $0.1 million, or 12.5%, to $0.3 million for the three
months ended June 30, 2024, from $0.3 million for the three months ended June 30, 2023. This was primarily attributable to an increase
in repair and maintenance expenses, property management expenses, and other property related expenses related to the incremental costs
from two additional buildings during the three months ended June 30, 2024 compared to June 30, 2023.
The
investment property operating expense was 14.4% of revenue for the three months ended June 30, 2024, compared to 12.5% of revenue for
the three months ended June 30, 2023. The Segment NOI was $1.7 million for the three months ended June 30, 2024, as compared to $1.8
million for the three months ended June 30, 2023. The increase in investment property operating expense as a percentage of revenue and
the decrease in Segment NOI is primarily due to the sale of a building in Colombia during the fourth quarter of 2023, whose impact is
partially offset by the market increase in rent for existing tenants during the three months ended June 30, 2024.
Peru
– Investment property operating expense in Peru increased by less than $0.1 million, or 12.7%, to $0.5 million for the three months
ended June 30, 2024, from $0.5 million for the three months ended June 30, 2023. This was primarily attributable to an increase in repair
and maintenance expenses, property management expenses, and other property related expenses related to the incremental costs from two
additional buildings during the three months ended June 30, 2024 compared to June 30, 2023.
The
investment property operating expense was 18.6% of revenue for the three months ended June 30, 2024, compared to 19.9% of revenue for
the three months ended June 30, 2023. The Segment NOI increased to $2.4 million for the three months ended June 30, 2024 from $1.9 million
for the three months ended June 30, 2023. The decrease in investment property operating expense as a percentage of revenue was primarily
due to the increase in revenue being higher than the increase in expenses associated with two additional properties during the three
months ended June 30, 2024. The Segment NOI increase was also attributable to new revenues resulting from one building becoming operational
and one building becoming partially leased during the three months ended June 30, 2024.
Costa
Rica – Investment property operating expense in Costa Rica increased by $0.4 million, or 61.3%, to $0.9 million for the three months
ended June 30, 2024, from $0.5 million for the three months ended June 30, 2023. This was primarily attributable to an increase in repair
and maintenance expenses, property management expenses, and other property related expenses related to the incremental costs from two
additional buildings during the three months ended June 30, 2024 compared to 2023.
The
investment property operating expense was 14.6% of revenue for the three months ended June 30, 2024, compared to 9.9% of revenue for
the three months ended June 30, 2023. The Segment NOI was $5.1 million for the three months ended June 30, 2024, as compared to $4.9
million for the three months ended June 30, 2023. The increase in investment property operating expenses as a percentage of revenue is
primarily due to the increased property costs associated with the incremental costs from two additional buildings, along with the partial
vacancy of one building during the three months ended June 30, 2024.
General
and administrative: General and administrative increased by $3.5 million, or 323.4%, to $4.6 million for the three months ended
June 30, 2024, from $1.1 million for the three months ended June 30, 2023. This was primarily attributable to the share-based payment
compensation of $1.1 million related to the Restricted Stock Units (“RSUs”) issued to certain executives and directors in
connection with the Business Combination. Additionally, we have incurred additional personnel costs of $0.6 million from the three months
ended June 30, 2023 to the three months ended June 30, 2024 due to the employee headcount increase to 30 employees as of June 30, 2024
from 26 employees as of June 30, 2023. Further, we have incurred additional general and administrative expenses of $1.8 million related
to legal and other professional services as a public company in the United States after the consummation of the Business Combination
from the three months ended June 30, 2023 to the three months ended June 30, 2024.
Investment
property valuation gain: Investment property valuation gain increased by $4.2 million to $4.6 million for the three months ended
June 30, 2024, from $0.3 million for the three months ended June 30, 2023. The increase in the investment property valuation was primarily
attributable to one building in Peru becoming operational and another building in Peru being partially leased during the three months
ended June 30, 2024. Additionally, the market increases in rent for the Colombian properties has driven an increase in the fair value
of the Colombian properties for the three months ended June 30, 2024. There were no significant changes in the properties during the
three months ended June 30, 2023.
Interest
income from affiliates: Interest income from affiliates decreased by $0.2 million to zero for the three months ended June 30,
2024, from $0.2 million for the three months ended June 30, 2023. The decrease is due to the settlement of the loan receivable from Latam
Logistics Investments, LLC upon the closing of the Business Combination in March 2024.
Financing
costs: Financing costs decreased by $6.3 million, or 52.1%, to $5.8 million for the three months ended June 30, 2024, from $12.1
million for the three months ended June 30, 2023. This is primarily attributable to the refinancing of all outstanding loans with Banco
Davivienda de Costa Rica, Banco Promerica de Costa Rica, S.A. and all loans except one with BAC Credomatic, S.A. (“BAC”),
with Banco Nacional de Costa Rica, S.A. during the second quarter of 2023, which resulted in a loan extinguishment loss of $6.5 million
in the three months ended June 30, 2023. Additionally, the decrease in financing costs was driven by the lowered interest rate following
the refinancing of existing loans with BAC. The reduction was partially offset by an increase in the loan balance during the refinancing
process.
Net
foreign currency gain (loss): Net foreign currency gain (loss) decreased by $0.2 million or 345.6% to a $0.2 million loss for
the three months ended June 30, 2024, from a less than $0.1 million gain for the three months ended June 30, 2023. This is related to
the exchange rate fluctuations for the Colombian Pesos, Peruvian Soles, and Costa Rican Colones period over period.
Gain
on sale of asset held for sale: Gain on sale of asset held for sale decreased by $1.0 million to zero for the three months ended
June 30, 2024 from $1.0 million for the six months ended June 30, 2023. This was primarily attributable to one property that was sold
during the three months ended June 30, 2023.
Other
income: Other income increased by $10.8 million to $10.8 million for the three months ended June 30, 2024 from less than $0.1
million for the three months ended June 30, 2023. This was primarily attributable to the income of $9.8 million related to the Lock-Up
Release Agreements. Additionally, there was an increase in interest income of $0.3 million related to the interest earned from installment
payment receivables from the sale of a building in Colombia and certificates of deposit accounts. There was also an increase in other
income of $0.6 million related to an adjustment in transaction costs in connection with the Business Combination in the three months
ended June 30, 2024.
Other
expense: Other expense increased by $1.1 million to $1.2 million for the three months ended June 30, 2024 from less than $0.1
million for the three months ended June 30, 2023. This was primarily attributable to fees in connection with the Lock-Up Release Agreements
of $1.1 million for the three months ended June 30, 2024.
Income
tax expense: Income tax expense decreased by $1.3 million, or 70.2%, to $0.5 million for the three months ended June 30, 2024
from $1.8 million for the three months ended June 30, 2023. This was primarily attributable to the change in deferred tax assets and
liabilities related to fluctuations in currency translation for investment properties and debt, a movement in unrecognized deferred tax
assets, alternative minimum tax in Colombia, and tax on intercompany dividends.
Results
of operations for the six months ended June 30, 2024, compared to the six months ended June 30, 2023
The
results of operations presented below should be reviewed in conjunction with our Unaudited Condensed Consolidated Interim Financial Statements.
The following table presents information from our condensed consolidated interim statements of profit or loss and comprehensive income
(loss) for the six months ended June 30, 2024 and 2023:
| |
For
the six months ended June
30, | | |
| | |
| |
| |
2024 | | |
2023 | | |
$
Change | | |
%
Change | |
REVENUE | |
| | |
| | |
| | |
| |
Colombia | |
$ | 4,358,549 | | |
$ | 3,781,404 | | |
$ | 577,145 | | |
| 15.3 | % |
Peru | |
| 5,366,057 | | |
| 4,688,955 | | |
| 677,102 | | |
| 14.4 | % |
Costa
Rica | |
| 11,648,737 | | |
| 10,733,379 | | |
| 915,358 | | |
| 8.5 | % |
Unallocated
revenue | |
| 97,055 | | |
| 36,020 | | |
| 61,035 | | |
| 169.4 | % |
Total
revenues | |
| 21,470,398 | | |
| 19,239,758 | | |
| 2,230,640 | | |
| 11.6 | % |
| |
| | | |
| | | |
| | | |
| | |
Investment property operating
expense | |
| | | |
| | | |
| | | |
| | |
Colombia | |
| (533,765 | ) | |
| (469,376 | ) | |
| (64,389 | ) | |
| 13.7 | % |
Peru | |
| (997,766 | ) | |
| (939,292 | ) | |
| (58,474 | ) | |
| 6.2 | % |
Costa
Rica | |
| (1,708,359 | ) | |
| (1,230,919 | ) | |
| (477,440 | ) | |
| 38.8 | % |
Total
investment property operating expense | |
| (3,239,890 | ) | |
| (2,639,587 | ) | |
| (600,303 | ) | |
| 22.7 | % |
General
and administrative | |
| (6,250,780 | ) | |
| (2,197,893 | ) | |
| (4,052,887 | ) | |
| 184.4 | % |
Listing
expense | |
| (44,469,613 | ) | |
| — | | |
| (44,469,613 | ) | |
| 100.0 | % |
Investment
property valuation gain | |
| 9,749,988 | | |
| 10,276,377 | | |
| (526,389 | ) | |
| (5.1 | )% |
Interest
income from affiliates | |
| 302,808 | | |
| 314,488 | | |
| (11,680 | ) | |
| (3.7 | )% |
Financing
costs | |
| (11,371,356 | ) | |
| (17,636,918 | ) | |
| 6,265,562 | | |
| (35.5 | )% |
Net foreign
currency (loss) gain | |
| (176,605 | ) | |
| 229,772 | | |
| (406,377 | ) | |
| (176.9 | )% |
Gain on
sale of asset held for sale | |
| — | | |
| 1,022,853 | | |
| (1,022,853 | ) | |
| (100.0 | )% |
Other
income | |
| 11,148,259 | | |
| 99,510 | | |
| 11,048,749 | | |
| NM | |
Other
expenses | |
| (7,344,817 | ) | |
| (138,422 | ) | |
| (7,206,395 | ) | |
| NM | |
Profit
(loss) before taxes | |
| (30,181,608 | ) | |
| 8,569,938 | | |
| (38,751,546 | ) | |
| (452.2 | )% |
Income
tax expense | |
| (3,846,518 | ) | |
| (2,759,558 | ) | |
| (1,086,960 | ) | |
| 39.4 | % |
PROFIT
(LOSS) FOR THE PERIOD | |
$ | (34,028,126 | ) | |
$ | 5,810,380 | | |
$ | (39,838,506 | ) | |
| (685.6 | )% |
Revenue:
Revenue increased by $2.2 million, or 11.6%, to $21.5 million for the six months ended June 30, 2024 from $19.3 million for the
six months ended June 30, 2023. This was primarily attributable to an increase of investment properties rental revenue of $2.0 million,
and rental recoveries of $0.3 million. The $2.0 million increase in investment properties rental revenue is primarily attributable to
the growth in Leased Area, which expanded from 4.6 million square feet as of June 30, 2023 to 5.0 million square feet as of June 30,
2024, representing an 8.7% increase.
Colombia
– Revenue in Colombia increased by $0.6 million, or 15.3%, to $4.4 million for the six months ended June 30, 2024 from $3.8 million
for the six months ended June 30, 2023. This was primarily attributable to a market increase in average rental price per square feet
of 44.8% to existing tenants’ rent for properties in Colombia during the six months ended June 30, 2024 compared to June 30, 2023.
Such increase was partially offset by a decrease of approximately 289,000 square feet of Leased Area due to the sale of a building in
Colombia during the fourth quarter of 2023.
Peru
– Revenue in Peru increased by $0.7 million, or 14.4%, to $5.4 million for the six months ended June 30, 2024 from $4.7 million
for the six months ended June 30, 2023. This was primarily attributable to a total Leased Area increase of approximately 324,000 square
feet or 24.4% due to one building becoming operational and another building becoming partially leased during the six months ended June
30, 2024. The average rental price per square feet also increased by 3.2% as of June 30, 2024 compared to June 30, 2023. Such increase
is partially offset by the termination of a lease, resulting in a vacancy of 66,000 square feet of GLA during the six months ended June
30, 2024 compared to June 30, 2023.
Costa
Rica - Revenue in Costa Rica increased by $0.9 million, or 8.5%, to $11.6 million for the six months ended June 30, 2024 from $10.7 million
for the six months ended June 30, 2023. This was primarily attributable to a total Leased Area increase due to one building becoming
operational in May 2023 and another building becoming partially leased during the six months ended June 2024.
Investment
property operating expense: Investment property operating expense increased by $0.6 million, or 22.7%, to $3.2 million for the
six months ended June 30, 2024, from $2.6 million for the six months ended June 30, 2023. This was primarily attributable to an increase
of repair and maintenance expenses of $0.2 million, property management expenses of $0.1 million, expected credit loss of $0.1 million,
and other property related expenses of $0.2 million resulting from the increase in operating properties.
Colombia
– Investment property operating expense in Colombia increased by less than $0.1 million, or 13.7%, to $0.5 million for the six
months ended June 30, 2024, from $0.5 million for the six months ended June 30, 2023. This was primarily attributable to an increase
in repair and maintenance expenses, property management expenses, and other property related expenses related to the incremental costs
from two additional buildings during the six months ended June 30, 2024 compared to June 30, 2023.
The
investment property operating expense was 12.2% of revenue for the six months ended June 30, 2024, compared to 12.4% of revenue for the
six months ended June 30, 2023. The Segment NOI was $3.8 million for the six months ended June 30, 2024, as compared to $3.3 million
for the six months ended June 30, 2023. The decrease in investment property operating expense as a percentage of revenue and the increase
in Segment NOI is primarily due to the market increase in rent for existing tenants during the six months ended June 30, 2024, and partially
offset by a decrease in NOI from the sale of a building in Colombia during the fourth quarter of 2023.
Peru
– Investment property operating expense in Peru increased by less than $0.1 million, or 6.2%, to $1.0 million for the six months
ended June 30, 2024, from $0.9 million for the six months ended June 30, 2023. This was primarily attributable to an increase in repair
and maintenance expenses, property management expenses, and other property related expenses related to the incremental costs resulting
from two additional buildings becoming operational during the six months ended June 30, 2024 compared to June 30, 2023.
The
investment property operating expense was 18.6% of revenue for the six months ended June 30, 2024, compared to 20.0% of revenue for the
six months ended June 30, 2023. The Segment NOI was $4.4 million for the six months ended June 30, 2024, as compared to $3.7 million
for the six months ended June 30, 2023. The decrease in investment property operating expenses as a percentage of revenue is primarily
due to one building becoming operational and another building becoming partially leased during the six months ended June 30, 2024.
Costa
Rica - Investment property operating expense in Costa Rica increased by $0.5 million, or 38.8%, to $1.7 million for the six months ended
June 30, 2024, from $1.2 million for the six months ended June 30, 2023. This was primarily attributable to an increase in repair and
maintenance expenses, property management expenses, and other property related expenses related to the incremental costs from two additional
buildings during the six months ended June 30, 2024 compared to 2023.
The
investment property operating expense was 14.7% of revenue for the six months ended June 30, 2024, compared to 11.5% of revenue for the
six months ended June 30, 2023. The Segment NOI was $9.9 million for the six months ended June 30, 2024, as compared to $9.5 million
for the six months ended June 30, 2023. The increase in investment property operating expenses as a percentage of revenue is primarily
due to the increased property costs associated with the incremental costs from two additional buildings, along with the partial vacancy
of one building during the six months ended June 30, 2024.
General
and administrative: General and administrative increased by $4.1 million, or 184.4%, to $6.3 million for the six months ended
June 30, 2024 from $2.2 million for the six months ended June 30, 2023. This was primarily attributable to the share-based payment compensation
of $1.1 million related to the RSUs issued to certain executives and directors in connection with the Business Combination as well as
the one-time cash bonus of $0.3 million granted to certain employees in connection with the Business Combination. Additionally, we have
incurred additional personnel costs of $1.0 million from the six months ended June 30, 2023 to the six months ended June 30, 2024 due
to the employee headcount increase to 30 employees as of June 30, 2024 from 26 employees as of June 30, 2023. Further, we have incurred
additional general and administrative expenses of $1.7 million related to legal and other professional services as a public company in
the United States after the consummation of the Business Combination from the six months ended June 30, 2023 to the six months ended
June 30, 2024.
Listing
expense: Listing expense increased by $44.5 million, or 100.0%, to $44.5 million for the six months ended June 30, 2024 from
zero for the six months ended June 30, 2023. Such listing expense was recognized upon consummation of the Business Combination in accordance
with IFRS 2, representing the difference in the fair value of the shares deemed to have been issued by the accounting acquirer and the
fair value of the accounting acquiree’s identifiable net assets represents a service received by the accounting acquirer. See Note
3 of the Unaudited Condensed Consolidated Interim Financial Statements.
Investment
property valuation gain: Investment property valuation gain decreased by $0.5 million, or 5.1%, to $9.7 million for the six months
ended June 30, 2024 from $10.3 million for the six months ended June 30, 2023. The greater investment property gain during the six months
ended June 30, 2023 was primarily attributable to two buildings in Costa Rica becoming operational during the period. During the six
months ended June 30, 2024, the investment property gain was driven by one building in Peru becoming operational and another building
being partially leased during the period.
Interest
income from affiliates: Interest income from affiliates decreased by less than $0.1 million, or 3.7%, to $0.3 million for the
six months ended June 30, 2024 from $0.3 million for the three months ended June 30, 2023. The decrease was due to the settlement of
the loan receivable from Latam Logistics Investments, LLC upon the closing of the Business Combination in March 2024.
Financing
costs: Financing costs decreased by $6.3 million, or 35.5%, to $11.4 million for the six months ended June 30, 2024 from $17.6
million for the six months ended June 30, 2023. This was primarily attributable to the refinancing of all outstanding loans with Banco
Davivienda de Costa Rica, Banco Promerica de Costa Rica, S.A. and all loans except one with BAC, with Banco Nacional de Costa Rica, S.A.
during the second quarter of 2023, which resulted in a loan extinguishment loss of $6.5 million in the six months ended June 30, 2023.
Additionally, the decrease in interest expense was driven by the lowered interest rate following the refinancing of existing loans with
BAC. The reduction was partially offset by an increase in the loan balance during the refinancing process.
Net
foreign currency gain (loss): Net foreign currency gain (loss) decreased by $0.4 million, or 176.9%, to a $0.2 million loss for
the six months ended June 30, 2024 from a $0.2 million gain for the six months ended June 30, 2023. This was related to the exchange
rate fluctuations for the Colombian Pesos, Peruvian Soles, and Costa Rican Colones period over period.
Gain
on sale of asset held for sale: Gain on sale of asset held for sale decreased by $1.0 million, or 100.0%, to zero for the six
months ended June 30, 2024 from $1.0 million for the six months ended June 30, 2023. This was primarily attributable to one property
that was sold during the six months ended June 30, 2023.
Other
income: Other income increased by $11.0 million to $11.1 million for the six months ended June 30, 2024 from $0.1 million for
the six months ended June 30, 2023. This was primarily attributable to the income of $9.8 million related to the Lock-Up Release Agreements.
Additionally, there was an increase in interest income of $0.6 million related to the interest earned from installment payment receivables
from the sale of a building in Colombia and certificates of deposit accounts. There was also an increase in other income of $0.6 million
related to an adjustment in transaction costs in connection with the Business Combination in the six months ended June 30, 2024.
Other
expense: Other expense increased by $7.2 million to $7.3 million for the six months ended June 30, 2024 from $0.1 million for
the six months ended June 30, 2023. This was primarily attributable to transaction-related costs in connection with the Business Combination
(excluding the listing expenses described above) of $6.2 million for the six months ended June 30, 2024, the fees in connection with
the Lock-Up Release Agreements of $1.1 million for the six months ended June 30, 2024.
Income
tax expense: Income tax expense increased by $1.1 million, or 39.4%, to $3.8 million for the six months ended June 30, 2024 from
$2.8 million for the six months ended June 30, 2023. This was primarily attributable to the change in deferred tax assets and liabilities
related to fluctuations in currency translation for investment properties and debt, a movement in unrecognized deferred tax assets, alternative
minimum tax in Colombia, and tax on intercompany dividends.
Non-IFRS
Financial Measures and Other Measures and Reconciliations
In
addition to LPA’s financial results reported in accordance with IFRS, it also reports Adjusted EBITDA, NOI, Same Property NOI,
Cash NOI, Same Property Cash NOI, FFO, FFO (as defined by LPA), Adjusted FFO, Net Debt to NOI, Net Debt to Adjusted EBITDA, and Net Debt
to Investment Properties, all of which are non-IFRS measures. LPA’s management believes these measures are useful to investors
as they provide additional insight into how LPA assesses its performance and financial position. These non-IFRS financial measures should
not be considered as a substitute for, or superior to, similar financial measures calculated in accordance with IFRS. These non-IFRS
financial measures may differ from the calculations of other companies and, as a result, may not be comparable to similarly titled measures
presented by other companies.
Use
of Constant Currency
As
exchange rates are an important factor in understanding period-to-period comparisons, we believe the presentation of certain financial
metrics and results on a constant currency basis in addition to the IFRS reported results helps improve investors’ ability to understand
our operating results and evaluate our performance in comparison to prior periods. Constant currency information is non-IFRS financial
information that compares results between periods as if exchange rates had remained constant period-over-period. We use results on a
constant currency basis as one measure to evaluate our performance. We currently present Same Property NOI and Same Property Cash NOI
on a constant currency basis. We calculate constant currency by calculating prior-period results using current-period average foreign
currency exchange rates. We generally refer to such amounts calculated on a constant currency basis as excluding the impact of foreign
exchange. These results should be considered in addition to, not as a substitute for, results reported in accordance with IFRS. Results
on a constant currency basis, as we present them, may not be comparable to similarly titled measures used by other companies and are
not measures of performance presented in accordance with IFRS.
Reconciliations
of non-IFRS Measures
Adjusted
EBITDA – LPA defines Adjusted EBITDA as profit (loss) for the period excluding (a) interest income from affiliates, (b) financing
costs, (c) income tax expense, (d) depreciation and amortization, (e) investment property valuation gain, (f) gain or loss on disposition
of asset held for sale, (g) share-based payment, (h) one-time cash bonus related to the Business Combination, (i) listing expense, (j)
other income, (k) other expenses, and (l) net foreign currency gain or loss. Management uses Adjusted EBITDA to measure and evaluate
the operating performance of LPA’s business, which consists of developing, leasing and managing industrial properties, before LPA’s
cost of capital and income tax expense. Adjusted EBITDA is a measure commonly used in LPA’s industry, and it presents Adjusted
EBITDA to supplement investor understanding of its operating performance. LPA’s management believes that Adjusted EBITDA provides
investors and analysts with a measure of operating results unaffected by differences in capital structures, capital investment cycles
and fair value adjustments of LPA’s assets. The table below includes reconciliations of Adjusted EBITDA to the most directly comparable
IFRS measure, profit (loss) for the respective periods:
| |
For the three months ended June 30, | | |
For the six months ended June 30, | |
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
(USD in thousands) | |
| |
Profit (loss) for the period | |
$ | 12,432 | | |
$ | (4,763 | ) | |
$ | (34,028 | ) | |
$ | 5,810 | |
Interest income from affiliates | |
| — | | |
| (158 | ) | |
| (303 | ) | |
| (314 | ) |
Financing costs | |
| 5,809 | | |
| 12,135 | | |
| 11,371 | | |
| 17,637 | |
Income tax expense | |
| 539 | | |
| 1,808 | | |
| 3,847 | | |
| 2,760 | |
Depreciation and amortization (1) | |
| 46 | | |
| 40 | | |
| 90 | | |
| 81 | |
Investment property valuation gain | |
| (4,551 | ) | |
| (305 | ) | |
| (9,750 | ) | |
| (10,276 | ) |
Gain on disposition of asset held for sale | |
| — | | |
| (1,023 | ) | |
| — | | |
| (1,023 | ) |
Share-based payment (2) | |
| 1,140 | | |
| — | | |
| 1,140 | | |
| — | |
One-time cash bonus related to the Business Combination (3) | |
| — | | |
| — | | |
| 285 | | |
| — | |
Listing expense (4) | |
| — | | |
| — | | |
| 44,470 | | |
| — | |
Other income (5) | |
| (10,838 | ) | |
| (53 | ) | |
| (11,148 | ) | |
| (100 | ) |
Other expenses (6) | |
| 1,172 | | |
| 54 | | |
| 7,345 | | |
| 138 | |
Net foreign currency loss (gain) | |
| 158 | | |
| (64 | ) | |
| 177 | | |
| (230 | ) |
Adjusted EBITDA | |
$ | 5,907 | | |
$ | 7,671 | | |
$ | 13,496 | | |
$ | 14,483 | |
(1) |
Depreciation
and amortization included depreciation of non-real estate property and equipment and amortization of right-of-use assets. The amounts
were included within general and administrative expense within the condensed consolidated interim statements of profit or loss and
other comprehensive income (loss) included in the Unaudited Condensed Consolidated Interim Financial Statements. |
(2)
|
In
connection with the Business Combination, certain executives and directors were granted various RSUs. The associated share-based
payment expenses were included within general and administrative expense in the condensed consolidated interim statements of profit
or loss and other comprehensive income (loss) included in the Unaudited Condensed Consolidated Interim Financial Statements. |
(3) |
In
connection with the Business Combination, certain employees were granted a one-time cash bonus. The associated expenses were included
within general and administrative expense in the condensed consolidated interim statements of profit or loss and other comprehensive
income (loss) included in the Unaudited Condensed Consolidated Interim Financial Statements. |
(4) |
In
connection with the Business Combination, a listing expense of $44.5 million was recognized under IFRS 2, Share-Based Payment, as
the difference between the fair value of the shares deemed to have been issued by LPA and the fair value of the TWOA’s identifiable
net assets. See Note 3 of the Unaudited Condensed Consolidated Interim Financial Statements. |
(5) |
Other
income primarily included income related to the Lock-Up Release Agreements , of $9.8 million for the three and six months ended June
30, 2024, respectively. Other income also included certain miscellaneous income of $0.6 million in the three and six months ended
June 30, 2024, associated with an adjustment in transaction costs in connection with the Business Combination. Additionally, other
income included interest income of $0.4 million and $0.7 million for the three and six months ended June 30, 2024, respectively,
and less than $0.1 million for the three and six months ended June 30, 2023, from the installment payment receivables from sale of
investment properties and certificates of deposits accounts. |
(6) |
Other
expenses primarily included transaction-related costs in connection with the Business Combination of less than $0.1 million and $6.2
million for the three and six months ended June 30, 2024, respectively, and less than $0.1 million for the three and six months ended
June 30, 2023. Other expenses also included fees in connection with the Lock-Up Release Agreements of $1.1 million for the three
and six months ended June 30, 2024. Additionally, other expenses included loss on disposition of property and equipment and other
miscellaneous capital raising costs. |
Net
Operating Income, or NOI – LPA defines NOI as profit for the period excluding (a) other revenue (which primarily relates to
development fee revenue), (b) general and administrative expenses, (c) listing expense, (d) investment property valuation gain, (e) interest
income from affiliates, (f) financing costs, (g) net foreign currency gain or loss, (h) other income, (i) gain on disposition of asset
held for sale, (j) other expenses, and (k) income tax expense. NOI, Same Property NOI, Cash NOI, and Same Property Cash NOI are supplemental
industry reporting measures used to evaluate the performance of our investments in real estate assets and its operating results. Same
Properties refers to properties that LPA has owned and that have been operating for the entirety of the applicable period and the comparable
period. LPA’s management believes that these metrics are useful for investors as performance measures and that they provide useful
information regarding LPA’s results of operations because, when compared across periods, they reflect the impact on operations
from trends in occupancy rates, rental rates, operating costs and acquisition and development activity on an unlevered basis, providing
perspectives that may not be immediately apparent from a review of LPA’s financial statements.
LPA
defines Same Property NOI as NOI less non same-property NOI and adjusted for constant currency. LPA evaluates the performance of the
properties it owns using a Same Property NOI, and LPA’s management believes that Same Property NOI is helpful to investors and
management as a supplemental performance measure because it includes the operating performance from the population of properties that
is consistent from period-to-period, thereby eliminating the effects of changes in the composition of LPA’s portfolio on performance.
When used in conjunction with IFRS financial measures, Same Property NOI is a supplemental measure of operating performance that LPA’s
management believes is a useful measure to evaluate the performance and profitability of LPA investment properties. Additionally, Same
Property NOI is a key metric used internally by LPA’s management to develop internal budgets and forecasts, as well as to assess
the performance of LPA’s investment properties relative to budget and against prior periods. LPA’s management believes presentation
of Same Property NOI provides investors with a supplemental view of LPA’s operating performance that can provide meaningful insights
to the underlying operating performance of LPA’s investment properties, as these measures depict the operating results that directly
result from LPA’s investment properties, is consistent period-over-period, and excludes items that may not be indicative of, or
are unrelated to, the ongoing operations of the properties.
LPA
defines Cash NOI as NOI adjusted for straight-line rental revenue during the relevant period. LPA defines Same Property Cash NOI as Cash
NOI less non same-property cash NOI and adjusted for constant currency. The same property population for a given period includes the
operating properties that were owned during the entirety of that period and the corresponding prior year period. Properties developed
or acquired are excluded from the same property population until they are held in the operating portfolio for the entirety of both such
periods, and properties that sold during such periods are also excluded from the same property population. As of June 30, 2024 and December
31, 2023, the same property population consisted of 27 and 22 buildings, aggregating approximately 72% and 64% of LPA’s total square
feet owned during such period, respectively.
The
table below reconciles these measures to the most directly comparable IFRS financial measure, profit (loss) for the respective periods:
| |
For the three months ended
June 30, | | |
For the six months ended June 30, | |
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
(USD in thousands) | |
| |
Profit (loss) for the period | |
$ | 12,432 | | |
$ | (4,763 | ) | |
$ | (34,028 | ) | |
$ | 5,810 | |
Other revenue | |
| (40 | ) | |
| (8 | ) | |
| (97 | ) | |
| (36 | ) |
General and administrative | |
| 4,557 | | |
| 1,076 | | |
| 6,251 | | |
| 2,198 | |
Listing expense | |
| — | | |
| — | | |
| 44,470 | | |
| — | |
Investment property valuation gain | |
| (4,551 | ) | |
| (305 | ) | |
| (9,750 | ) | |
| (10,276 | ) |
Interest income from affiliates | |
| — | | |
| (158 | ) | |
| (303 | ) | |
| (314 | ) |
Financing costs | |
| 5,809 | | |
| 12,135 | | |
| 11,371 | | |
| 17,637 | |
Net foreign currency loss (gain) | |
| 158 | | |
| (64 | ) | |
| 177 | | |
| (230 | ) |
Other income (1) | |
| (10,838 | ) | |
| (53 | ) | |
| (11,148 | ) | |
| (100 | ) |
Gain on disposition of asset held for sale | |
| — | | |
| (1,023 | ) | |
| — | | |
| (1,023 | ) |
Other expenses (2) | |
| 1,172 | | |
| 54 | | |
| 7,345 | | |
| 138 | |
Income tax expense | |
| 539 | | |
| 1,808 | | |
| 3,847 | | |
| 2,760 | |
NOI | |
$ | 9,238 | | |
$ | 8,699 | | |
$ | 18,135 | | |
$ | 16,564 | |
Constant currency impact | |
| — | | |
| 268 | | |
| — | | |
| 550 | |
Less: non same-property NOI | |
| 1,067 | | |
| 576 | | |
| 1,428 | | |
| 728 | |
Same-Property NOI | |
$ | 8,171 | | |
$ | 8,391 | | |
$ | 16,707 | | |
$ | 16,386 | |
Same-Property NOI year-over-year growth | |
| (2.6 | )% | |
| N/A | | |
| 2.0 | % | |
| N/A | |
| |
| | | |
| | | |
| | | |
| | |
NOI | |
$ | 9,238 | | |
$ | 8,699 | | |
$ | 18,135 | | |
$ | 16,564 | |
Straight-line rental revenue | |
| (587 | ) | |
| (757 | ) | |
| (463 | ) | |
| (1,413 | ) |
CASH NOI | |
$ | 8,651 | | |
$ | 7,942 | | |
$ | 17,672 | | |
$ | 15,151 | |
Constant currency impact | |
| — | | |
| 243 | | |
| — | | |
| 496 | |
Less: non same-property cash NOI | |
| 198 | | |
| 395 | | |
| 405 | | |
| 550 | |
Same-Property Cash NOI | |
$ | 8,453 | | |
$ | 7,790 | | |
$ | 17,267 | | |
$ | 15,097 | |
Same-Property Cash NOI year-over-year growth | |
| 8.5 | % | |
| N/A | | |
| 14.4 | % | |
| N/A | |
(1) |
Other
income primarily included income related to the Lock-Up Release Agreements, of $9.8 million for the three and six months ended June
30, 2024. Other income also included interest income from certificates of deposit accounts, interest income from installment payment
receivables from sale of investment properties, and other miscellaneous income. |
(2) |
Other
expenses primarily included transaction-related costs in connection with the Business Combination of less than $0.1 million and $6.2
million for the three and six months ended June 30, 2024, respectively, and less than $0.1 million for the three and six months ended
June 30, 2023. Other expenses also included fees in connection with the Lock-Up Release Agreements of $1.1 million for the three
and six months ended June 30, 2024. Additionally, other expenses also included loss on disposition of property and equipment and
other miscellaneous capital raising costs. |
Funds
From Operations, or FFO – LPA calculates FFO as profit (loss) for the period, excluding (a) investment property valuation gain
and (b) gain on disposition of asset held for sale. LPA calculates FFO (as defined by LPA) as FFO, excluding (a) share-based payment,
(b) one-time cash bonus related to the Business Combination, (c) listing expense, (d) other income and (e) other expenses. LPA defines
Adjusted FFO as FFO (as defined by LPA), excluding (a) depreciation and amortization, (b) non-cash financing costs, (c) interest income
from affiliates, (d) unrealized foreign currency gain or loss and (e) straight-line rental revenue.
LPA
uses FFO, FFO (as defined by LPA) and Adjusted FFO (collectively, “FFO Measures”) to help analyze the operating results of
LPA’s assets and operations. LPA’s management believes that FFO Measures are useful to investors as supplemental performance
measures because they exclude the effects of certain items which can create significant earnings volatility, as well as certain noncash
items, but which do not directly relate to LPA’s ongoing business operations or cash flow generation. LPA’s management believes
FFO Measures can facilitate comparisons of operating performance between periods, while also providing an indication of future earnings
potential. However, since FFO Measures do not capture the level of capital expenditures or maintenance and improvements required to sustain
the operating performance of properties, which has a material economic impact on operating results, LPA’s management believes the
usefulness of FFO Measures as measures of performance may be limited. LPA’s computation of FFO Measures may not be comparable to
FFO measures reported by other real estate companies that define or interpret the FFO definition differently.
The
table below includes reconciliations of FFO, FFO (as defined by LPA) and Adjusted FFO to the most directly comparable IFRS financial
measure, profit (loss) for the respective periods:
| |
For the three months ended June 30, | | |
For the six months ended June 30, | |
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
(USD in thousands) | |
| | | |
| | | |
| | | |
| | |
Profit (loss) for the period | |
$ | 12,432 | | |
$ | (4,763 | ) | |
$ | (34,028 | ) | |
$ | 5,810 | |
Investment property valuation gain | |
| (4,551 | ) | |
| (305 | ) | |
| (9,750 | ) | |
| (10,276 | ) |
Gain on sale of asset held for sale | |
| — | | |
| (1,023 | ) | |
| — | | |
| (1,023 | ) |
FFO | |
$ | 7,881 | | |
$ | (6,091 | ) | |
$ | (43,778 | ) | |
$ | (5,489 | ) |
Share-based payment (1) | |
| 1,140 | | |
| — | | |
| 1,140 | | |
| — | |
One-time cash bonus related to the Business Combination (2) | |
| — | | |
| — | | |
| 285 | | |
| — | |
Listing expense (3) | |
| — | | |
| — | | |
| 44,470 | | |
| — | |
Other income (4) | |
| (10,697 | ) | |
| — | | |
| (10,892 | ) | |
| (6 | ) |
Other expenses (5) | |
| 1,172 | | |
| 54 | | |
| 7,345 | | |
| 138 | |
FFO (as defined by LPA) | |
$ | (504 | ) | |
$ | (6,037 | ) | |
$ | (1,430 | ) | |
$ | (5,357 | ) |
Depreciation and amortization (6) | |
| 46 | | |
| 40 | | |
| 90 | | |
| 81 | |
Financing costs (7) | |
| (121 | ) | |
| 6,414 | | |
| (87 | ) | |
| 6,589 | |
Interest income from affiliates | |
| — | | |
| (158 | ) | |
| (303 | ) | |
| (314 | ) |
Unrealized foreign currency loss (gain) (8) | |
| 217 | | |
| (74 | ) | |
| 49 | | |
| (337 | ) |
Straight-line rental revenue | |
| (587 | ) | |
| (757 | ) | |
| (463 | ) | |
| (1,413 | ) |
Adjusted FFO | |
$ | (949 | ) | |
$ | (572 | ) | |
$ | (2,144 | ) | |
$ | 751 | |
(1)
|
In
connection with the Business Combination, certain executives and directors were granted various RSUs. The associated share-based
payment expenses were included within general and administrative expense in the condensed consolidated interim statements of profit
or loss and other comprehensive income (loss) included in the Unaudited Condensed Consolidated Interim Financial Statements. |
(2) |
In
connection with the Business Combination, certain employees were granted a one-time cash bonus. The associated expenses were included
within general and administrative expense are included within general and administrative expense in the condensed consolidated interim
statements of profit or loss and other comprehensive income (loss) included in the Unaudited Condensed Consolidated Interim Financial
Statements. |
(3) |
In
connection with the Business Combination, a listing expense of $44.5 million was recognized under IFRS 2, Share-Based Payment, as
the difference between the fair value of the shares deemed to have been issued by LPA and the fair value of the TWOA’s identifiable
net assets. This amount was included within other expense in the condensed consolidated interim statements of profit or loss and
other comprehensive income (loss). See Note 3 of the Unaudited Condensed Consolidated Interim Financial Statements. |
(4) |
Other
income primarily included income related to the Lock-Up Release Agreements, of $9.8 million for the three and six months ended June
30, 2024. Other income also included certain miscellaneous income of $0.6 million in the three and six months ended June 30, 2024,
associated with an adjustment in transaction costs in connection with the Business Combination. Additionally, other income included
non-cash interest income from the installment payment receivables from the sale of investment properties, of $0.2 million and $0.4
million for the three and six months ended June 30, 2024, respectively. Interest income settled in cash of $0.3 million and $0.1
million for the three and six months ended June 30, 2024, and $0.1 million for the three and six months ended June 30, 2023 was excluded
from this reconciliation. |
(5) |
Other
expenses primarily included transaction-related costs in connection with the Business Combination of less than $0.1 million and $6.2
million for the three and six months ended June 30, 2024, respectively, and less than $0.1 million for the three and six months ended
June 30, 2023. Other expenses also included fees in connection with the Lock-Up Release Agreements of $1.1 million for the three
and six months ended June 30, 2024. Additionally, other expenses included loss on disposition of property and equipment and other
miscellaneous capital raising costs. |
(6) |
Depreciation
and amortization included depreciation of non-real estate property and equipment and amortization of right-of-use assets. The amounts
were included within general and administrative expense in the condensed consolidated interim statements of profit or loss and other
comprehensive income (loss) included in the Unaudited Condensed Consolidated Interim Financial Statements. |
(7) |
The
adjustment related to financing costs included the one-time debt extinguishment or modification gain or loss, amortization of debt
issuance cost and accrued interest, and exclude the cash settled interest expense. |
(8) |
Unrealized
foreign currency loss (gain) was included within net foreign currency gain (loss) in the condensed consolidated interim statements
of profit or loss and other comprehensive income (loss) included in the Unaudited Condensed Consolidated Interim Financial Statements. |
Net
Debt — Net Debt is defined as LPA’s total debt (defined as long term debt plus long-term debt—current portion)
less cash, cash equivalents and restricted cash. Net Debt to Profit (Loss) represents Net Debt divided by Profit (Loss) for the period.
Net Debt to Adjusted EBITDA represents Net Debt divided by Adjusted EBITDA. LPA’s management believes that these two ratios are
useful because they provide investors with information on LPA’s ability to repay debt, compared to LPA’s performance as measured
using Adjusted EBITDA. Net Debt to Investment Properties represents Net Debt divided by Investment Properties (end of period value).
LPA believes that this ratio is useful because it shows the degree in which Net Debt has been used to finance LPA’s assets. The
table below includes reconciliations of Net Debt to the most directly comparable IFRS financial measures:
| |
As of and for the six months ended June 30, | | |
As of and for the year ended December 31, | |
(USD in thousands except for ratio data) | |
2024 | | |
2023 | |
Long term debt | |
$ | 263,591 | | |
$ | 253,151 | |
Long term debt—current portion | |
| 12,288 | | |
| 16,703 | |
Cash and equivalents(1) | |
| (52,914 | ) | |
| (37,923 | ) |
Net Debt | |
$ | 222,965 | | |
$ | 231,931 | |
Net Debt to NOI(2) | |
| 6.1x | | |
| 6.8x | |
Net Debt to Adjusted EBITDA(2) | |
| 8.3x | | |
| 8.9x | |
Net Debt to Investment Properties | |
| 42.4 | % | |
| 45.1 | % |
(1) |
Cash
and cash equivalents included $4.7 million and $2.7 million of restricted cash associated with the total debt as of June 30, 2024,
December 31, 2023, respectively. |
(2) |
Net
Debt related multiples were calculated using the annualized year-to-date NOI and Adjusted EBITDA in their respective calculations |
The
following table presents a summary of LPA’s non-IFRS measures for the periods presented:
| |
For the three months ended June 30, | | |
For the six months ended June 30, | |
(USD in thousands) | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
Adjusted EBITDA | |
$ | 5,907 | | |
| 7,671 | | |
| 13,496 | | |
| 14,483 | |
NOI | |
| 9,238 | | |
| 8,699 | | |
| 18,135 | | |
| 16,564 | |
Same-Property NOI | |
| 8,171 | | |
| 8,391 | | |
| 16,707 | | |
| 16,386 | |
Same-Property NOI year-over-year growth | |
| (2.6 | )% | |
| N/A | | |
| 2.0 | % | |
| N/A | |
Cash NOI | |
| 8,651 | | |
| 7,942 | | |
| 17,672 | | |
| 15,151 | |
Same Property Cash NOI | |
| 8,453 | | |
| 7,790 | | |
| 17,267 | | |
| 15,097 | |
Same-Property Cash NOI year-over-year growth | |
| 8.5 | % | |
| N/A | | |
| 14.4 | % | |
| N/A | |
FFO | |
| 7,881 | | |
| (6,091 | ) | |
| (43,778 | ) | |
| (5,489 | ) |
FFO (as defined by LPA) | |
| (504 | ) | |
| (6,037 | ) | |
| (1,430 | ) | |
| (5,357 | ) |
Adjusted FFO | |
| (949 | ) | |
| (572 | ) | |
| (2,144 | ) | |
| (751 | ) |
The
following table presents a summary of LPA’s non-IFRS multiples for the periods presented:
| |
As of and for the six months ended
June 30, | | |
As of and for the
year ended
December 31, | |
(USD in thousands) | |
2024 | | |
2023 | |
Net Debt to NOI (1) | |
| 6.1x | | |
| 6.8x | |
Net Debt to Adjusted EBITDA(1) | |
| 8.3x | | |
| 8.9x | |
Net Debt to Investment Properties | |
| 42.4 | % | |
| 45.1 | % |
(1) |
Net
Debt related multiples were calculated using the annualized year-to-date NOI and Adjusted EBITDA in their respective calculations |
Liquidity
and Capital Resources
As
of June 30, 2024 and December 31, 2023, LPA had cash and cash equivalents of $48.2 million and $35.2 million, respectively. LPA requires
significant cash resources to, among other things, fund its working capital requirements, increase its headcount, make capital expenditures,
and expand its business through acquisitions. LPA’s future capital requirements will depend on many factors, including the cost
of future acquisitions, the scale of increases in headcount, its revenue mix, incremental costs relating to the implementation of new
contracts, and the timing and extent of spending to support investment properties development efforts.
If
LPA were to require additional funding, seek additional sources of financing or desire to refinance its debt, LPA believes that its historical
ability to raise and deploy capital to fund the development of its logistic warehouse facilities and expansion of its operations would
enable it to access financing on reasonable terms. However, there can be no assurance that such financing would be available to LPA on
favorable terms or at all. If financing is not available, or if the terms of such financing are not acceptable to LPA, it may be forced
to decrease the level of investment in its logistic warehouse facilities, scale back its operations, defer investments to execute on
its growth strategy or execute a combination of these cost management strategies, which could have an adverse impact on LPA’s business
and financial prospects. The profits in current and prior periods LPA have recognized are consistent with its strategy and plans for
continued growth and expansion. LPA expects to continue to recognize profits as it executes on its operating plan and expands its warehouse
offerings in the near term.
As
described further in Note 11 of the Unaudited Condensed Consolidated Interim Financial Statements, we obtained a waiver relating to compliance
with the debt service coverage ratio as required by its loan covenants with Bancolombia, S.A. (“Bancolombia”) for the assessments
on June 30, 2024 and December 31, 2024. The next testing period for the covenants will occur on June 30, 2025. The outstanding Bancolombia
loan balance as of June 30, 2024 was $38.0 million, with $1.6 million classified within current liabilities on the condensed consolidated
interim statement of financial position.
LPA’s
lending agreements with Bancolombia are collateralized by four Colombian investment properties. No other guarantees have been provided
by our other subsidiaries that would put our operations outside of Colombia at risk in event of foreclosure. Furthermore, our operations
outside of Colombia are expected to be profitable and generate adequate liquidity to provide for continued operations. Therefore, in
the event that we are unable to obtain further debt waivers, restructure the debt, or otherwise repay the Bancolombia loan, a foreclosure
by Bancolombia on the Colombian properties would not create material uncertainty as to our ability to continue as a going concern in
regard to our operations outside of Colombia. Accordingly, our plan for mitigating actions is sufficient to alleviate the significant
doubt about our ability to continue as a going concern.
Debt
As
of June 30, 2024, LPA’s total outstanding debt was $275.9 million, of which $263.6 million, or 95.5%, consists of long-term debt.
As of December 31, 2023, LPA’s total outstanding debt was $269.9 million, of which $253.2 million, or 93.8%, consists of long-term
debt.
As
of June 30, 2024 and December 31, 2023, all of LPA’s outstanding debt was secured by its investment properties.
Please
refer to more information around our debt agreements, including our compliance with debt covenants in Note 11 of the Unaudited Condensed
Consolidated Interim Financial Statements.
Capital
Expenditures
For
the six months ended June 30, 2024 and 2023, we incurred capital expenditures totaling $11.7 million and $10.7 million, respectively,
in connection with construction projects to develop investment properties in Colombia, Peru, and Costa Rica.
Cash
Flows
The
following table summarizes our condensed consolidated interim cash flows provided by (used in) operating, investing, and financing activities
for the six months ended June 30, 2024 and 2023:
| |
For the six months ended June 30, | | |
| | |
| |
| |
2024 | | |
2023 | | |
$ Change | | |
% Change | |
Net cash provided by operating activities | |
$ | 7,208,539 | | |
$ | 8,302,628 | | |
$ | (1,094,089 | ) | |
| (13.2 | )% |
Net cash used in investing activities | |
| (11,001,373 | ) | |
| (6,849,875 | ) | |
| (4,151,498 | ) | |
| (60.6 | )% |
Net cash provided by (used in) financing activities | |
| 16,837,790 | | |
| (1,695,641 | ) | |
| 18,533,431 | | |
| NM | |
Effects of exchange rate fluctuations on cash held | |
| (113,577 | ) | |
| 139,193 | | |
| (252,770 | ) | |
| (181.6 | )% |
Net increase (decrease) in cash and cash equivalents | |
| 12,931,379 | | |
| (103,695 | ) | |
| 13,035,074 | | |
| NM | |
Cash and cash equivalents at the beginning of the period | |
| 35,242,363 | | |
| 14,988,112 | | |
| 20,254,251 | | |
| 135.1 | % |
Cash and cash equivalents at the end of the period | |
$ | 48,173,742 | | |
$ | 14,884,417 | | |
$ | 33,289,325 | | |
| 223.7 | % |
Cash
flows from operating activities
Cash
flows generated by operating activities for the six months ended June 30, 2024 amounted to $7.2 million, a decrease of $1.1 million,
or 13.2%, compared to $8.3 million for the six months ended June 30, 2023. In the six months ended June 30, 2024, net cash provided by
operating activities primarily reflected LPA’s net loss net of operating cash flow adjustment items of $7.7 million, the changes
in working capital of $3.8 million and offset by income tax paid of $3.9 million. In the six months ended June 30, 2023, net cash used
in operating activities primarily reflected LPA’s net loss net of operating cash flow adjustment items of $12.9 million, offset
by changes in working capital of $0.8 million and income tax paid of $3.8 million.
Cash
flows from investing activities
Cash
flows used in investing activities for the six months ended June 30, 2024 amounted to $11.0 million, an increase of $4.2 million, or
60.6%, compared to $6.8 million for the six months ended June 30, 2023. The increase was primarily driven by the increase in restricted
cash of $4.0 million, proceeds from sale of asset held for sale of $1.6 million in the six months ended June 30, 2023, and an increase
in capital expenditure on investment properties of $1.0 million, offset by the proceeds from sale of investment properties of $2.4 million
in the six months ended June 30, 2024.
Cash
flows from financing activities
Cash
flows generated by financing activities for the six months ended June 30, 2024 amounted to $16.8 million, an increase of $18.5 million
compared to cash flows of $1.7 million used in financing activities for the six months ended June 30, 2023. The increase was primarily
due to a decrease in long term debt repayment of $95.2 million, proceeds related to the Lock-Up Release Agreements (net of transaction
costs) of $8.7 million in the six months ended June 30, 2024, the proceeds from the Business Combination (net of transaction costs) of
$8.2 million in the six months ended June 30, 2024, a decrease in distributions to non-controlling partners of $4.0 million, a decrease
in debt extinguishment costs of $1.6 million, an increase in capital contributions from non-controlling partners of $1.4 million, and
a decrease in cash paid for interest and commitment fee of $0.1 million, offset by a decrease in long-term debt borrowings of $100.9
million.
Critical
Accounting Estimates
LPA’s
Unaudited Condensed Consolidated Interim Financial Statements have been prepared in accordance with IFRS as issued by the IASB. The preparation
of the Unaudited Condensed Consolidated Interim Financial Statements in accordance with IFRS requires the use of estimates and assumptions
that affect the value of assets and liabilities — as well as contingent assets and liabilities — as
reported on the statements of financial position, and revenues and expenses arising during the periods presented. LPA evaluates its assumptions
and estimates on an ongoing basis. LPA bases its estimates on historical experience and on various other assumptions that it believes
to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions
or conditions.
For
more information, see Note 2 of the Unaudited Condensed Consolidated Interim Financial Statements.
Valuation
of Investment Properties
Investment
properties are initially recognized at cost and are subsequently measured at fair value. LPA engages external appraiser in order to obtain
an independent opinion on the market value of all LPA’s investments properties, including operating properties, properties under
development and land bank. LPA’s management submits an updated rent roll of the investment property portfolio to the appraiser
and provides them access to the properties, leasing contracts and specific operating details of the portfolio.
The
independent appraiser uses a combination of valuation techniques such as the discounted cash flow approach, sales comparison approach,
and direct capitalization approach to value the investment properties. The valuation techniques used to estimate the fair value of LPA’s
investment properties rely on assumptions, which are not directly observable in the market, including discount rates, occupancy rates,
net operating income, and market rents. LPA’s operating properties are primarily appraised using the discounted cash flows method
and direct capitalization method. LPA’s properties under development are primarily appraised using discounted cash flows and direct
capitalization methods, adjusted by the net present value of the cost to complete and vacancy in the properties under construction. LPA’s
land bank is primarily appraised using a combination of direct capitalization, discounted cash flow, sales comparison approach (or market
approach).
To
review the appraiser’s valuations, LPA leverages its familiarity with individual properties and regional portfolios, coupled with
insights in evaluating factors like interest rate fluctuations, turnover rates, and other judgment factors used in the valuation process.
LPA then evaluates the reasonableness of the results based on these criteria and compare the reported values to those from the previous
period to monitor changes. As part of the review process, LPA offers feedback concerning inconsistencies in factual information and inaccurate
statements, before the appraisal reports are finalized.
For
more information, see Note 9 of the Unaudited Condensed Consolidated Interim Financial Statements and Note 12 of our audited consolidated
financial statements as of and for the year ended December 31, 2023. LPA management believes that the chosen valuation methodologies
are appropriate for determining the fair value of the types of investment properties LPA owns.
| |
Fair Value as of June 30, 2024 | | |
# of Buildings | | |
NRA(1) (sq ft) | | |
Leased % | | |
Occupied % | |
Land bank: | |
| | | |
| | | |
| | | |
| | | |
| | |
Owned properties | |
| | | |
| | | |
| | | |
| | | |
| | |
Colombia | |
$ | 23,130,348 | | |
| N/A | | |
| 1,090,215 | | |
| 15.0 | (2)% | |
| N/A | |
Sub-total | |
| 23,130,348 | | |
| N/A | | |
| 1,090,215 | | |
| 15.0 | % | |
| N/A | |
Properties under right-of-use(3) | |
| | | |
| | | |
| | | |
| | | |
| | |
Peru | |
| 1,811,991 | | |
| N/A | | |
| 878,025 | | |
| 28.7 | (2)% | |
| N/A | |
Sub-total | |
| 1,811,991 | | |
| N/A | | |
| 878,025 | | |
| 28.7 | % | |
| N/A | |
Total land bank | |
| 24,942,339 | | |
| N/A | | |
| 1,968,240 | | |
| 21.1 | % | |
| N/A | |
Properties under development: | |
| | | |
| | | |
| | | |
| | | |
| | |
Owned properties | |
| | | |
| | | |
| | | |
| | | |
| | |
Costa Rica | |
| 15,398,000 | | |
| 1 | | |
| 157,444 | | |
| 100.0 | % | |
| 58.9 | % |
Sub-total | |
| 15,398,000 | | |
| 1 | | |
| 157,444 | | |
| 100.0 | % | |
| 58.9 | % |
Properties under right-of-use | |
| | | |
| | | |
| | | |
| | | |
| | |
Peru | |
| 16,510,000 | | |
| 1 | | |
| 165,915 | | |
| 85.0 | % | |
| 85.0 | % |
Sub-total | |
| 16,510,000 | | |
| 1 | | |
| 165,915 | | |
| 85.0 | % | |
| 85.0 | % |
Total properties under development | |
| 31,908,000 | | |
| 2 | | |
| 323,359 | | |
| 92.3 | % | |
| 72.3 | % |
Operating properties: | |
| | | |
| | | |
| | | |
| | | |
| | |
Owned properties | |
| | | |
| | | |
| | | |
| | | |
| | |
Colombia | |
| 105,944,012 | | |
| 5 | | |
| 1,255,404 | | |
| 90.0 | % | |
| 90.0 | % |
Peru | |
| 120,971,038 | | |
| 6 | | |
| 1,351,074 | | |
| 89.9 | % | |
| 89.9 | % |
Costa Rica(4) | |
| 242,097,133 | | |
| 18 | | |
| 2,358,693 | | |
| 99.8 | % | |
| 99.8 | % |
Total operating properties | |
| 469,012,183 | | |
| 29 | | |
| 4,965,171 | | |
| 94.6 | % | |
| 94.6 | % |
Total operating and properties under development | |
| 500,920,183 | | |
| 31 | | |
| 5,288,530 | | |
| 94.5 | % | |
| 93.3 | % |
Total | |
$ | 525,862,522 | | |
| 31 | | |
| 7,256,770 | | |
| n/a | | |
| n/a | |
| |
Fair Value as of December 31, 2023 | | |
# of Buildings | | |
NRA(1) (sq ft) | | |
Leased % | | |
Occupied % | |
Land bank: | |
| | | |
| | | |
| | | |
| | | |
| | |
Owned properties | |
| | | |
| | | |
| | | |
| | | |
| | |
Colombia | |
$ | 24,100,446 | | |
| N/A | | |
| 1,090,211 | | |
| 15.0 | (2)% | |
| N/A | |
Sub-total | |
| 24,100,446 | | |
| N/A | | |
| 1,090,211 | | |
| 15.0 | % | |
| N/A | |
Properties under right-of-use(3) | |
| | | |
| | | |
| | | |
| | | |
| | |
Peru | |
| 619,976 | | |
| N/A | | |
| 878,025 | | |
| N/A | | |
| N/A | |
Sub-total | |
| 619,976 | | |
| N/A | | |
| 878,025 | | |
| N/A | | |
| N/A | |
Total land bank | |
| 24,720,422 | | |
| N/A | | |
| 1,968,240 | | |
| 8.3 | % | |
| N/A | |
Properties under development: | |
| | | |
| | | |
| | | |
| | | |
| | |
Owned properties | |
| | | |
| | | |
| | | |
| | | |
| | |
Peru | |
| 22,230,781 | | |
| 2 | (5) | |
| 346,384 | | |
| 79.8 | % | |
| 15.6 | % |
Costa Rica | |
| 10,891,000 | | |
| 1 | | |
| 157,692 | | |
| 68.6 | % | |
| 0.0 | % |
Sub-total | |
| 33,121,781 | | |
| 3 | | |
| 504,076 | | |
| 76.3 | % | |
| 10.7 | % |
Properties under right-of-use | |
| | | |
| | | |
| | | |
| | | |
| | |
Peru | |
| 12,260,000 | | |
| 1 | | |
| 165,915 | | |
| 85 | % | |
| 0.0 | % |
Sub-total | |
| 12,260,000 | | |
| 1 | | |
| 165,915 | | |
| 85 | % | |
| 0.0 | % |
Total properties under development | |
| 45,381,781 | | |
| 4 | | |
| 666,991 | | |
| 78.5 | % | |
| 8.0 | % |
Operating properties: | |
| | | |
| | | |
| | | |
| | | |
| | |
Owned properties | |
| | | |
| | | |
| | | |
| | | |
| | |
Colombia | |
| 106,957,000 | | |
| 5 | | |
| 1,255,409 | | |
| 100 | % | |
| 100 | % |
Peru | |
| 92,239,857 | | |
| 5 | (5) | |
| 1,004,695 | | |
| 100 | % | |
| 100 | % |
Costa Rica(4) | |
| 244,873,221 | | |
| 18 | | |
| 2,358,702 | | |
| 100 | % | |
| 100 | % |
Total operating properties | |
| 444,070,078 | | |
| 28 | | |
| 4,618,806 | | |
| 100 | % | |
| 100 | % |
Total operating and properties under development | |
| 484,451,859 | | |
| 32 | | |
| 5,288,797 | | |
| 97.3 | % | |
| 88.4 | % |
Total | |
$ | 514,172,281 | | |
| 32 | | |
| 7,257,037 | | |
| n/a | | |
| n/a | |
|
(1) |
Square
feet included estimated potential building area in the land bank, buildings under development and operating. |
|
(2) |
We
had entered into lease agreements with certain tenants for investment properties that are expected to be constructed in the land
bank. |
|
(3) |
Properties
under right-of-use are mainly related to the investment properties developed on leased land. More specifically, they were associated
with a land lease agreement the Parque Logistic Callao S.R.L. (Parque Logistic), a partnership entity controlled by LPA, entered
into with Lima Airport Partners S.R.L. (“LAP”) whereas Parque Logistic committed to lease a land parcel for a period
of 30 years, with the intention of developing investment properties on the leased land. The amount included the right-of-use asset
associated with LPA’s access to a piece of land lot, as well as the capitalized construction costs. |
|
(4) |
As
of June 30, 2024 and December 31, 2023, the operating properties in Costa Rica included patios and open-air rentable land totaling
521,275 square feet for both periods for the use of trailer parking and open-air warehousing. As of June 30, 2024 and December 31,
2023, the patios and open-air rentable land had a fair value of $6.1 million, with a weighted average capitalization rate of 7.8%.
The Net Rentable Area (“NRA”) included in the table above excluded NRA of the patios or the open-air rentable land. |
|
(5) |
As
of December 31, 2023, a building located in Peru was in a mixed phase, with parts in operational stage and others under development.
Consequently, we reported the building as being in both stages. By June 30, 2024, the entire building had transitioned to the operational
phase, and thus, was considered as a single, fully operational building. |
Quantitative
and Qualitative Disclosures about Market Risk
LPA
is exposed to a variety of market and other risks, including the effects of changes in interest rates and foreign currency risk.
Interest
Rate Risk
LPA
holds financial liabilities (e.g., Long-term debt) subject to interest rate. Changes in interest rates as of the reporting date would
affect profit or loss and cash flows. As of June 30, 2024 and December 31, 2023 the debt balances that were subject to variable rates
were $103.1 million and $94.5 million, respectively.
Liquidity
Risk
Liquidity
risk is the risk that LPA will encounter difficulty in meeting the obligations associated with financial liabilities that are met by
delivering cash or another financial asset. LPA’s approach to managing liquidity is to ensure, to the extent possible, that it
will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable
losses or risking damage to LPA’s reputation, and to maintain a balance between continuity of funding and flexibility through the
use of bank deposits and loans.
Typically,
LPA ensures that it has sufficient cash on demand, including deposits at banks and the balances of short-term credit facilities with
diverse funding resources and committed borrowing facilities, to meet expected operating expenses for a period of 90 days, including
the servicing of financial obligations. This excludes the potential impact of extreme circumstances that cannot be reasonably predicted,
such as natural disasters.
LPA
has access to a sufficient variety of sources of funding to repay debt maturing within 12 months in the normal course of business. See
Notes 2 and 11 of the Unaudited Condensed Consolidated Interim Financial Statements for more information on the covenant waiver LPA obtained
on June 26, 2024. LPA remains in compliance with all covenants as of the date the financial statements were issued.
Foreign
Currency Risk
LPA
is exposed to market risk from changes in foreign currency exchange rates primarily in connection with all of its subsidiaries. LPA is
subject to fluctuations in the Costa Rican Colones, Peruvian Soles and Colombian Pesos to U.S. Dollars currency exchange rates. LPA attempts
to mitigate its net exposure to the changes in interest rates by ensuring its debt and revenue are denominated in the same currencies.
In addition, LPA keeps minimal cash in local currencies and holds the majority of cash in its functional currency of U.S. dollar.
Market
Risk
LPA
is exposed to market risks primarily from changes in interest rates and foreign currency exchange rates. LPA does not use derivatives
for trading purposes to generate income or to engage in speculative activity.
Recent
Accounting Pronouncements
For
information about recent accounting pronouncements that have been adopted or will apply to LPA in the future, see Note 2 of the Unaudited
Condensed Consolidated Interim Financial Statements.
JOBS
Act
LPA
is an “emerging growth company” under the JOBS Act. The JOBS Act provides that an emerging growth company can delay adopting
new or revised accounting standards until such time as those standards apply to private companies. LPA has elected to use this extended
transition period for complying with new or revised accounting standards that have different effective dates for public and private companies
until the earlier of the date that it is (i) no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the
extended transition period provided by the JOBS Act.
Additionally,
subject to certain conditions set forth in the JOBS Act, if, as an emerging growth company, LPA chooses to rely on those exemptions,
LPA may not be required to, among other things: (i) provide an auditor’s attestation report on the system of internal controls
over financial reporting pursuant to Section 404; (ii) provide all of the compensation disclosure that may be required of non-emerging
growth public companies; (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or
a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion
and analysis); and (iv) disclose certain executive compensation related items such as the correlation between executive compensation
and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period
of five years following the completion of our initial public offering or until LPA is no longer an emerging growth company, whichever
is earlier.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
MD&A contains forward-looking statements, which statements involve substantial risks and uncertainties. Forward-looking statements
relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning
matters that are not historical facts. Forward-looking statements reflect LPA’s current views, as applicable, with respect to,
among other things, its capital resources, performance and results of operations. Likewise, all of LPA’s statements regarding anticipated
growth in operations, anticipated market conditions, demographics, reserves, results of operations, projections, forecasts or other characterizations
of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are
typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,”
“outlook,” “estimate,” “forecast,” “project,” “continue,” “could,”
“may,” “might,” “possible,” “potential,” “predict,” “should,”
“would,” “will,” “seek,” and other similar words and expressions, but the absence of these words
does not mean that a statement is not forward-looking.
These
forward-looking statements are based on information available as of the date of this MD&A and on the current expectations, forecasts
and assumptions of the management of LPA, involve a number of judgments, risks and uncertainties and are inherently subject to changes
in circumstances and their potential effects and speak only as of the date of such statements. There can be no assurance that future
developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties or other
assumptions that may cause actual results or performance to be materially different from those expressed, contemplated or implied by
these forward-looking statements. The forward-looking statements contained in this MD&A include, but are not limited to, statements
about:
| ● | expectations
(and LPA’s ability to meet expectations) regarding LPA’s strategies and future
financial performance, including LPA’s future business plans or objectives, operating
expenses, market trends, revenues, liquidity, cash flows and uses of cash, capital expenditures; |
| ● | LPA’s
ability to invest in growth initiatives; |
| ● | the
outcome of any legal proceedings that may be instituted against LPA; |
| ● | the
ability of LPA to raise financing in the future and comply with restrictive covenants related
to indebtedness; |
| ● | the
ability to fully realize the benefits of the Business Combination, which may be affected
by, among other things, competition, LPA’s ability to grow and manage growth and profitability,
maintain relationships with customers and suppliers and retain its management team and key
employees; |
| ● | the
projected financial information, anticipated growth rate, and market opportunity for LPA,
and its estimates of expenses and profitability; |
| ● | LPA’s
ability to maintain its listing on NYSE American following the Business Combination; |
| ● | geopolitical
risk, including the impacts of the ongoing conflict between Russia and Ukraine, and changes
in applicable laws or regulations; |
| ● | anticipated
economic, business, and/or competitive factors; |
| ● | anticipations
regarding the impact of any major disease or epidemic that disrupts LPA’s business; |
| ● | litigation
and regulatory enforcement risks, including the diversion of management time and attention
and the additional costs and demands on LPA’s resources; |
| ● | exchange
rate instability; |
| ● | the
possibility that expansion of LPA’s customer offerings or certain operations may subject
it to additional legal and regulatory requirements, including tort liability; |
| ● | LPA’s
ability to retain and grow its customer base; |
| ● | LPA’s
success in finding and maintaining future strategic partnerships and inorganic opportunities; |
| ● | the
potential liquidity and trading of public securities of LPA; |
| ● | the
ability of LPA to respond to general economic conditions; |
| ● | expansion
and other plans and opportunities of LPA; |
| ● | any
downturn in the real estate industry; |
| ● | the
ability of LPA to manage its growth effectively; |
| ● | the
ability of LPA to develop and protect its brand; and |
| ● | the
ability of LPA to compete with competitors in existing and new markets and offerings. |
Forward-looking
statements are provided for illustrative purposes only and are not guarantees of performance. You should understand that the factors
discussed under the heading “Risk Factors” in our Annual Report on Form 20-F for the year ended December 31, 2023, could
affect the future results of LPA, and could cause those results or other outcomes to differ materially from those expressed or implied
in the forward-looking statements in this MD&A.
Moreover,
the risks described under the heading “Risk Factors” in our Annual Report on Form 20-F for the year ended December 31, 2023,
are not exhaustive. Other sections of this MD&A describe additional factors that could adversely affect the businesses, financial
conditions, or results of operations of LPA. New risk factors emerge from time to time and it is not possible to predict all such risk
factors, nor can LPA assess the impact of all such risk factors on our businesses, or the extent to which any factor or combination of
factors may cause actual results to differ materially from those contained in any forward-looking statements. LPA undertakes no obligations
to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except
as required by law.
In
addition, this MD&A contains statements of belief and similar statements that reflect the beliefs and opinions of LPA on the relevant
subject. These statements are based upon information available to LPA as of the date of this MD&A, and while LPA believes such information
forms a reasonable basis for such statements, such information may be limited or incomplete, and statements should not be read to indicate
that LPA has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are
inherently uncertain and you are cautioned not to unduly rely upon these statements.
Logistic Properties of t... (AMEX:LPA)
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Logistic Properties of t... (AMEX:LPA)
過去 株価チャート
から 8 2023 まで 8 2024