IRSA Inversiones Y Representaciones Q2 2026 Earnings Call Transcript

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February 5, 2026

Key Takeaways

  • Positive Sentiment: Shopping malls at ~98% occupancy with revenues +4% and adjusted EBITDA +2% year‑to‑date, helped by an inflation‑linked, fixed‑rent structure that insulated cash income despite lower tenant real sales.
  • Positive Sentiment: Offices and hotels performing: offices ~100% occupied with stable rents (~ARS $25–$26/sqm) and hotels recovering to 69% occupancy and ADR of $227, improving margins.
  • Positive Sentiment: Development pipeline accelerating — Distrito Diagonal ~23% complete targeting May‑2027; Ramblas del Plata ~20% sold/activated with ~$93M in swaps/sales and new land acquisitions (including the former Hospital Israelita).
  • Positive Sentiment: Balance sheet and financing strengthened: $180M bond reopening at 8.25%, cash of about $300M, conservative metrics (net debt/rental EBITDA 1.6x, LTV 13%) and a paid 10% dividend for 2025.
  • Negative Sentiment: FX and valuation volatility materially swung reported results — the company recorded an ARS 248.8bn net gain this semester largely from peso revaluation of investment properties, while debt re‑expression contributed a ARS 15.9bn net financial loss and higher deferred tax, creating earnings volatility.
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Earnings Conference Call
IRSA Inversiones Y Representaciones Q2 2026
00:00 / 00:00

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Santiago Donato
Investor Relations Officer at IRSA

Good morning, everyone. I'm Santiago Donato, Investor Relations Officer of IRSA, and I welcome you to the second quarter of fiscal year 2026 results conference call. First of all, I would like to remind you that both audio and slideshow may be accessed through company's investor relations website at www.irsa.com.ar by clicking on the banner webcast link. The following presentation and the earnings release are also available for download on the company website. After management remarks, there will be a question and answer session for analysts and investors. If you want to make a question, please use the chat. Before we begin, I would like to remind you that this call is being recorded and that information discussed today may include forward-looking statements regarding the company's financial and operating performance. All projections are subject to risk and uncertainties, and actual results may differ materially.

Santiago Donato
Investor Relations Officer at IRSA

Please refer to the detailed note in the company's earnings release regarding forward-looking statements. I will now turn the call over to Mr. Matías Gaivironsky, CFO.

Matías Gaivironsky
CFO at IRSA

Good morning, everybody. We are finishing this semester with a net gain of ARS 248.8 billion, compared with a loss during the same period last year. That was mainly driven by gaining fair value of our investment properties. About the operational side, we have good numbers in malls, in offices, and hotels. Malls have grown in terms of revenues and EBITDA. Offices also remain fully occupied with an increase in the EBITDA, and we have a recovery in the hotels' rates and margins. About Ramada La Plata, we will see later with deeper analysis. We have very good progress in development and the commercialization. We signed, during the period, two additional swaps agreements with different developers. Jorge will enter in more details later.

Matías Gaivironsky
CFO at IRSA

Also, during the quarter, we issued an additional $180 million in the existing notes maturing 2035. The company today has some strong cash position to take advantage of opportunities and also to finance our growth. Finally, during the quarter also, we finished the payment of the dividends of the year. We paid a dividend yield of 10% during 2025. With this, let me introduce Santiago Donato, our IRO, to follow the presentation.

Santiago Donato
Investor Relations Officer at IRSA

Thank you, Matías. Moving to page 3, to the shopping malls segment. Here we can see our GLA slightly increased during this quarter. We have done some small expansion in Alto Avellaneda. Last year, we bought Terrazas de Mayo, so we did a big increase. We are also working in some new development in La Plata, and we are also working in Al Oeste Shopping, doing some development there. We're gonna have the mall close. We are growing in stock in shopping malls in recent years. Occupancy have reached almost 98%, so very, very strong occupancy. Regarding consumption, over the last two quarters, we have seen a decline in our tenant real sales, -7% last quarters, -9% this quarters.

Santiago Donato
Investor Relations Officer at IRSA

What we are seeing, there was some impact of all the electoral context during October, September, October, but we are also seeing now currently some pressure on prices. Prices are going a little bit down while volumes continue to grow. Also, we are seeing a strong consumer traffic in our malls. We hope we can increase at the level of the economic activity our sales. In general, you know, shopping sales follows inflation plus GDP, and the economy is expected to grow in this 2026 in Argentina. Despite these lower sales in real terms, our revenues and our EBITDA are growing, +4% revenues in the six months compared period, and +2% EBITDA, the adjusted EBITDA, in the compared six months period. This is basically because of our inflation-linked fixed lease structure.

Santiago Donato
Investor Relations Officer at IRSA

As you can see on the right, almost 84% of our components of revenues in the malls are fixed or, well, you have the monthly based rents and then some other concepts like IMANI, parking, I mean, generally adjusted by inflation. The variable today is just 16% of the total structure. In the next page, we can see our office evolution. This segment, we have maintained a small portfolio. Today, we currently manage 58,000 sq m. This is mostly A and A+. We have just one building that is B category, that is Philips. Today's transformed in a kind of co-working in the Workplace by IRSA.

Santiago Donato
Investor Relations Officer at IRSA

In occupancy, we are in 100% of our portfolio and rents are stable, in levels of $25-$26 per sq m per month. Hotels, we have seen this quarter's, the gradual recovery, main improvements in occupancy that reached 69% in the three hotels in the total portfolio. Average rates at $227 per room and slight increase also in margins. This has mainly it's been explained by good performance in our hotels in Buenos Aires, which benefits from stronger activity in its sports and corporate related events. In the case of the Llao Llao, the occupancy was a little bit affected by renovation works in one section of the hotel. If you exclude the rooms that are currently under construction, occupancy shows a more stable trend.

Santiago Donato
Investor Relations Officer at IRSA

This is the rental portfolio of the three segments that have shown strong results. I will introduce Jorge Cruces, our CIO for all the CapEx and the development projects.

Jorge Cruces
CIO at IRSA

Thank you, Santiago. Good morning. Distrito Diagonal. In the city of La Plata, construction works are gaining momentum. Overall progress currently stands at around 23%, and close to 78% of the contracts have already been awarded. We remain on track to open in May 2027, and it will become a milestone for being La Plata's first and only shopping mall. This new project will add 22,000 sq m of GLA to our shopping portfolio, including the acquisitions of additional shopping centers. In expansions projects we have mentioned lately, our GLA is expected to reach 458,000 sq m over the next years. Ramblas del Plata. Recently, we added several new plots to our commercialization pipeline. Now we have a total of 26 plots, representing almost 207,000 sellable square meters.

Jorge Cruces
CIO at IRSA

We signed swaps for plots L-1 and J-1 for a total amount of $11.7 million. These two transactions represent almost 4,000 sellable square meters for IRSA. To date, we've sold two lots and swapped another 13, and the combined value of these deals stands at $93 million, covering over 124,000 sellable square meters to be developed. Looking ahead, we are planning to implement early activation programs in the future development of area of phase three. These initiatives may include a golf driving range and practice areas, paddle courts, a gym, driving test circuits, as well as food trucks. To support these temporary uses, up to 20 parcels scheduled for development in the final phase may be leased in a short-term basis. This approach will allow us to create an on-site destination, encouraging the public to discover Ramblas del Plata.

Jorge Cruces
CIO at IRSA

Construction is progressing in line with schedule currently at 20%. The consolidation works of the central bay and the riverfront along the future access boulevard have been completed totally. We have nearly finished the planting of the buffer forest of phase one, along with its irrigation system. To date, more than 1,900 trees have been planted. At the same time, construction of roadworks, sewers, and drainage infrastructure for phase one is progressing well and has now reached 60%. Through a public auction, we acquired the former Hospital Israelita, an emblematic property located in Flores neighborhood of the city of Buenos Aires. Our plan is to transform this iconic asset into a mixed-use development. The property sits on a land of approximately 8,850 sq m and includes an existing developed area of about 17,000 sq m.

Jorge Cruces
CIO at IRSA

The acquisition was completed for a total purchase price of $6.8 million, which has been fully paid. In Uruguay, Distrito Calcagno is a unique urban development located along the shores of Lake Calcaño. Another swap agreement was signed in October at $9.3 million. Back in Argentina, in the province of Córdoba last week, we signed a new swap for tower three at Córdoba Shopping. IRSA will receive around 1,000 sq m on GLA, the whole 3rd floor and 146 parking spaces. The agreement also includes an option for 4th floor at a cost price plus a 12.5% of development fee. Now I'll give the floor back to our CFO, Mr. Matías Gaivironsky. Thank you.

Matías Gaivironsky
CFO at IRSA

Thank you, Jorge. About the results of the semester, we have to understand what happened on the variables of FX and inflation. During this semester, we have a real devaluation of the peso compared with our appreciation of the peso last year. That generated that during the last year, we have losses in our investment properties, since the value are mostly related to dollars. This semester we have significant gains. Also, when we reexpress our debt in pesos term, the devaluation this year generate a negative result compared with a positive result last year. We will see

Matías Gaivironsky
CFO at IRSA

In the next pages. About the operational side first, page 12, we have good results in the rental segment with a 4.9% increase in ARS, in real ARS term, compared with the previous year, 2% increase in shopping malls, 15% increase in offices, and 44.8% increase in hotels. When we see margins, we see a slight decrease in shopping malls related to one short event during the quarter. We expect the recovery in the coming quarters. In offices in line with the previous year, and hotels an increase as Santi mentioned. About the fair value of the investment properties, that was the most important change.

Matías Gaivironsky
CFO at IRSA

As I said, last year we posted a significant loss, ARS 306 billion compared with ARS 185 billion gain this year. If we analyze numbers in dollar terms, we will see that during this year, prices or value of our properties remain stable. This is only the effect of the evaluation of the pesos that when we re-express the dollars into pesos, generate a higher gain than the inflation effect. About the net financial results, as I said, you can see in the table below, the first line, the net effects results that during this year we are generating a loss of ARS 15.9 billion compared with a gain last year of ARS 28 billion. That is basically the main important effect.

Matías Gaivironsky
CFO at IRSA

About the net interest remain stable compared with the previous year. Probably for the rest of the year we'll increase a little since we increased our debt as we can see later. We expect that to pay higher the interest compared with the previous year. The income tax, here we are giving effect on the deferred tax on the investment properties. You know that every time that we generate a gain in the investment properties, we have to post a deferred tax in this line. Last year we generated losses. Because of that we generated gains in the income tax. This year is the opposite.

Matías Gaivironsky
CFO at IRSA

Although the company started to pay income tax again last year, we started to pay, so that has a cash effect on the current tax. We expect that going forward the company will keep paying income tax again after consuming all the credits, the tax credits that we used to have. Finally we finished the quarter or the semester with a net income of ARS 248 billion compared with the loss last year. About the evolution of the rental segment, the EBITDA, the adjusted EBITDA in dollar terms, we can see that the progress remained positive. We are finishing the semester with $102 million. If we continue with this trend, we anticipate very good numbers compared with the previous year.

Matías Gaivironsky
CFO at IRSA

Company remain strong in the cash generation. About the debt, the news is that the company tapped the international market again during December. We closed, we do the reopening of the existing bond that we issued in March 2025. We issued an additional $180 million at a yield of 8.25. Remember that the bond has a coupon of 8%. You can see on the bottom right that the debt amortization schedule, we almost don't have any debt in the short term.

Matías Gaivironsky
CFO at IRSA

With the proceeds and the cash position that we have, we will cancel the 226 amortizations, most of the debt today starting then expire during 2023, 2034, and 2035. With this the ratios remain very conservative with a net debt to rental EBITDA of 1.6x, LTV of only 13%, and coverage ratio of almost 7x. Remember that only 60% of our assets today are generating EBITDA. The other 40 are land reserves or other assets that are not generating EBITDA. We believe that we have a very conservative debt structure. Finally, we saw that during the last quarter, but we finished the payment of the dividend of the year.

Matías Gaivironsky
CFO at IRSA

We paid a dividend yield of 10%, $116 million that were paid during November and October. That was it. The yes. With this, we finish the formal presentation. Now we open the line to receive your questions.

Santiago Donato
Investor Relations Officer at IRSA

Well, now is the time for the Q&A session. If you have a question, please click the bottom label Raise Hand or use the chat. We will take the questions in the order we receive them. Okay, here we have the first questions regarding tenant sales that were impacted by softer consumptions in the second half of the year. What are your expectations for consumption trends this year?

Matías Gaivironsky
CFO at IRSA

There is a big debate these days in Argentina about the prices of clothing. What we saw and probably if you visit Argentina for the locals, price of clothes were expensive in dollar terms compared with other countries. What happened in the last, I would say, year, that if you compare prices of clothes compared with the CPI, the clothes increased much lower than inflation. When we show our consumption or tenant sales, we are doing the fee per by queue, no. If we see the quantity, the tickets that we are generating in the malls, this has remained in good levels. When we compare with the previous year, are at very good levels.

Matías Gaivironsky
CFO at IRSA

Also in terms of traffic, the public that enter in the malls remains stable compared with the previous year. Probably what is happening, the price of the clothes start to reduce compared with the previous year. When you do the, the equation, that result in lower consumption or in lower, pesos compared with the previous year. Going forward, as I always said, the company will be tied to the evolution of the economy. If we see Argentina growing, probably we will grow in terms of consumption, and we will have the volatility according what happen in the economy of Argentina. This trend of reducing prices is something that is happening. Probably it's a new trend in Argentina.

Santiago Donato
Investor Relations Officer at IRSA

There is a question here from Lorena Reich that is in that direction. Given the impact on consumption and prices in the textile sector in Argentina, do you expect this to impact rental income? Do you expect more tenants to base rents instead of percentage of sales?

Matías Gaivironsky
CFO at IRSA

This also was new for the company in the last years, no. You know that in the past, we were not allowed to adjust rents by CPI, no. We always include a step-up clause in our agreements, putting like some estimation of the inflation, but we always misestimate inflation. Unfortunately, inflation were much higher than what we expected. That means that the base rent was lower than we expected, and then we compensated our revenues by the variable part. After the change in the law, we started to adjust all the agreements by CPI. Today, all the agreements are adjusted on a monthly basis by CPI. We captured that part.

Matías Gaivironsky
CFO at IRSA

That means that in terms of percentage, today, the base rent is much higher or is more important than what it was in the last years. That is a protection for the company when you have a slowdown in consumption. Also what we see is that if that is sustainable or not, no. Of course, we can't charge in the long term an occupancy cost to our tenants that are not sustainable for them. That is the equation. We will see that in renovations and in negotiation with tenants every time that the agreements expire.

Santiago Donato
Investor Relations Officer at IRSA

I will give the word to Gordon Lee from BTG Pactual. probably wants to ask. Gordon, are you there?

Gordon Lee
Research Analyst at BTG Pactual

Yes. Can you hear me?

Santiago Donato
Investor Relations Officer at IRSA

It worked. Yeah. Yes.

Gordon Lee
Research Analyst at BTG Pactual

Great. Thank you. Thanks. Good morning. A couple of questions. The first, I guess, is a follow-up to the previous one, which is more specifically whether you've had requests from tenants to rebalance the structure of the contracts or whether your new contracts are seeing a different balance between base and variable or overage. This was just a question on the lease-up of the Philips Building, which was significant during the quarter. The workspace that you're referring to, just to confirm, that's being leased to a third-party provider of these services. You're not doing the workspace management yourself. The second question, if you are leasing it to third parties. Does IRSA underwrite any of their releasing risk, or is that completely absorbed by the tenant? Thank you.

Matías Gaivironsky
CFO at IRSA

Thank you, Gordon. The first part of the, of the question.

Santiago Donato
Investor Relations Officer at IRSA

Sorry, the H one. Given the weakness in transactions, request from existing tenants.

Matías Gaivironsky
CFO at IRSA

sorry. The balance. Typically, Gordon, what you have to analyze to see the shape of the industry is some drivers. First of all, occupancy. Second, delinquency. Third, consumption. Fourth, the prices that you are able to sign with the tenants, no? All the variables are okay today. We see good levels of occupancy, good levels of traffic, good levels of renovations. Delinquency remain very low. We haven't seen yet any signal that force us or make us to think that we should change some of our drivers in commercialization. So far, all the renovations were good. Something else that is happening is that it's a new trend that we have more demand for international brands coming to Argentina. That probably is give us sustainability in demand for new spaces.

Matías Gaivironsky
CFO at IRSA

No, today, all the signals are good. Regarding the second part about the workplace, if I understood well, the question. No, IRSA is managing everything. It's a property that is under the control of IRSA, and we have the operations. We operate directly. We are in charge of the services and everything. It's a new segment for offices that is performing very well. What is happening there is amazing, and the community that we are building there is great. It's a new business for IRSA. So far, the performance we compare with what happened if we just rent to a traditional tenant, the results so far are good. We are happy on this new business line.

Gordon Lee
Research Analyst at BTG Pactual

If I could follow up. Is that a business line that is, let's say, uniquely intended to address the vacancy at Philips? Or is this something that you could see reproducing by maybe looking at B class properties?

Matías Gaivironsky
CFO at IRSA

Yes. It's something that we will try to replicate in other locations. We are thinking probably to launch the second Workplace soon. Yes, it's something that we will try to replicate.

Gordon Lee
Research Analyst at BTG Pactual

Perfect. Thank you.

Matías Gaivironsky
CFO at IRSA

Thank you.

Santiago Donato
Investor Relations Officer at IRSA

There is a question related to the sector in general. How do you see the sector? I imagine, in general, real estate sectors going forward from sales. Well, to experience across shopping malls, you have talked about retail, so perhaps Jorge can give some color on the real estate sector. How do you see it going forward?

Jorge Cruces
CIO at IRSA

Well, actually, going forward, we're very optimistic. It's about the time, no? It's about when actually, the things that are happening to the country, is, people are gonna be able to get a credit, buy an apartment in the middle class. That sooner or later is gonna happen. The demand, it's fantastic. It should be incredible. It's gonna be a thing of pricing. We have a lot of land reserve. We have a lot of products. I'm very optimistic. The thing is, it's about time. It should take some time, we're gonna get there. That's residential. Well, we talked about the retail.

Jorge Cruces
CIO at IRSA

Office buildings, we're optimistic regarding mixed uses close to our shopping malls, residential office buildings. We've been selling office buildings in these late years. We're looking at office buildings to develop and to have some more spaces in office buildings, in good locations. Generally, we're optimistic. We're even, I think we told this before, we're looking at maybe logistics or maybe warehouses. We've been shopping around and sooner or later we're gonna get there with warehouses also. We're very optimistic. The real estate in general and especially here in Argentina.

Santiago Donato
Investor Relations Officer at IRSA

There is a question here regarding Ramblas, Jorge. How much is already sold of the total project? I think it's around 20% now, approximately.

Jorge Cruces
CIO at IRSA

We had that in the presentation.

Santiago Donato
Investor Relations Officer at IRSA

Yeah. I think it's approximately 20%. That is the big part of the stage one over the total project. If prices are ahead of the expectation compared to your initial plans.

Jorge Cruces
CIO at IRSA

Prices.

Santiago Donato
Investor Relations Officer at IRSA

Of the land and what, the prices of the residential apartments that you could sell if you are ahead of the first plans.

Jorge Cruces
CIO at IRSA

Well, our balance sheet is very conservative. We talked about that before, but we have to be conservative. So in our balance sheet, you're gonna see Ramblas and everything that we. All our, all.

Santiago Donato
Investor Relations Officer at IRSA

Yeah. It is at $600 the sq m of the land.

Jorge Cruces
CIO at IRSA

It's really all the swaps.

Jorge Cruces
CIO at IRSA

The price of the subs are $3,000 for each square meter. Well, that's I believe that's very, very cheap. I believe the residential is gonna be over I think it's or it should be already $4,500, but Well, it's gonna be more than $5,000 for each square meter residential. When the buildings are finished, it'll be more than $5,000. Well, we do have a lot of commercial area. Commercial area is gonna be a little bit cheaper, but it should be more than $4,000 anyway. I think the prices in residential is gonna be higher than $5,000 average when the buildings are finished.

Santiago Donato
Investor Relations Officer at IRSA

Thanks, Jorge. I have two questions on the financial front. With the deterioration of the net leverage from 1.2x to 1.6x, what is the maximum level of net leverage that you feel confident? Any targets?

Matías Gaivironsky
CFO at IRSA

Well, I don't, I don't see this as a deterioration of the leverage. Probably we increased a little the, the debt was ridiculous low during the last years. Remember that the company were not executing any CapEx during the last year, so we feel very, very comfortable with the, with the cash position before. Now that the company is entering a more aggressive expansion plan, we decided to increase a little the debt. Remember that this company with an EBITDA margin of around 80% is a cash machine. After you open the, the properties that we are developing, then the leverage will go very fast down if we don't execute new CapEx or pay dividends, no?

Matías Gaivironsky
CFO at IRSA

With the plans that we have going forward, we believe that we have enough cash to finance all the expansions and acquisitions. The company is not expecting to raise more debt. Probably the net debt will increase because we will use the cash. We will lose part of the cash. Today the company has more than $300 million in cash. Part of that will definitely we will use it in the expansion. For that reason, the leverage will go up. I would say that, I don't know, 2x EBITDA is probably the possible outcome during the year. I feel comfortable with probably less than 3x EBITDA.

Matías Gaivironsky
CFO at IRSA

I feel very comfortable, but will be tough to see the company with that leverage because we should increase significantly the acquisitions or the developments or take into consideration that any development for real estate will take, like, three years. If we, I don't know, launch $100 million projects, the cash that we will need per year is $30 million per year. The free cash flow of the company today is more than $100 million. We have enough cash generation to finance in the future the expansion, so we don't expect to see much more leverage going forward.

Santiago Donato
Investor Relations Officer at IRSA

Also all those projects that we are putting into production will bring additional EBITDA.

Matías Gaivironsky
CFO at IRSA

Of course.

Santiago Donato
Investor Relations Officer at IRSA

In the next years.

Matías Gaivironsky
CFO at IRSA

Of course.

Santiago Donato
Investor Relations Officer at IRSA

A question regarding the dividend that we paid to ADR holders in December, if it was net of the 7% Argentine tax retention?

Matías Gaivironsky
CFO at IRSA

Yes.

Santiago Donato
Investor Relations Officer at IRSA

Yes.

Matías Gaivironsky
CFO at IRSA

Yes, it was.

Santiago Donato
Investor Relations Officer at IRSA

I think we covered all the questions. I give some minutes more. There is one related to, if you could give, some details on Golden Junior's segregated portfolio.

Matías Gaivironsky
CFO at IRSA

Yes. That is a fund that we created last year, to put some of our liquidity, with a diversification. Most of our liquidity was, is in dollars or, or dollar-related instruments. That was a way to diversify the liquidity. The company has a strong liquidity of, as I said, $300 million. We invested $6.5 million in that, in that fund, that basically invest in companies or in gold and silver. The performance of that fund was very good during the last six months, but it's a small part of the liquidity of the company.

Santiago Donato
Investor Relations Officer at IRSA

Thank you, Matías. Well, if there are no more questions, we conclude the session and the presentation. We thank you all. I would like to turn back to Matías for his ending or final remarks.

Matías Gaivironsky
CFO at IRSA

Thank you, Santi. Finally, what we see here at your side is that we are entering in a new expansion phase for the company. We were very conservative during the last years about growth, we changed that during the probably last years. The company is trying to execute a lot of projects. Probably we will launch new projects in the coming quarter or in the coming the rest of the year, we will announce new developments that the company is planning to execute. Also we are working in different M&A transactions, hopefully we will announce some acquisitions also going forward. The company is very concentrated trying to speed up the process of growth.

Matías Gaivironsky
CFO at IRSA

We hope to see that happening during the rest of the year. The rest of the operational segments remain in good shape with very good levels of cash generation and good drivers. We are very confident for the rest of the year. Thank you very much and see you next quarter.

Analysts
    • Gordon Lee
      Research Analyst at BTG Pactual
    • Jorge Cruces
      CIO at IRSA
    • Matías Gaivironsky
      CFO at IRSA
    • Santiago Donato
      Investor Relations Officer at IRSA
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