IRSA Inversiones Y Representaciones Q3 Earnings Call Highlights

Key Points

• IRSA posted a much stronger nine-month profit for fiscal 2026, with net income rising to ARS 239.7 billion from ARS 46.5 billion a year earlier. Management said the improvement was driven by better rental-business performance and favorable inflation and currency effects in Argentina.
• Shopping malls remained resilient despite weaker consumer spending, with occupancy near 98% and mall revenue up about 2.5% even as tenant sales fell 10% in real terms. IRSA said fixed-income sources like base rent, advertising and parking are helping cushion the segment.
• IRSA is pushing ahead with major development projects, including the Zetta office expansion with Mercado Libre and the Ramblas del Plata master plan. The company also highlighted conservative leverage, with net debt at 1.4x rental EBITDA and loan-to-value at 11.3%.

IRSA Inversiones Y Representaciones NYSE: IRS reported a sharply higher net result for the first nine months of fiscal 2026, supported by stronger performance across its rental businesses and positive accounting impacts tied to inflation and currency movements in Argentina, executives said on the company’s third-quarter results call.

Chief Financial Officer Matías Gaivironsky said IRSA posted a gain of ARS 239.7 billion for the nine-month period, compared with ARS 46.5 billion a year earlier. He said adjusted EBITDA improved across the company’s three primary rental segments: shopping centers, offices and hotels.

“We are happy so far with the results,” Gaivironsky said, adding that the company remains focused on expansion opportunities and expects to communicate additional transactions in coming quarters.

Shopping Malls Show Resilience Despite Weaker Consumption

Investor Relations Officer Santiago Donato said IRSA’s shopping mall gross leasable area rose to 373,000 square meters, mainly due to a small expansion at Alto Avellaneda. Occupancy remained close to 98%.

Tenant sales declined 10% in real terms in the latest quarter, Donato said, citing weaker consumption and pressure on prices amid “retail reconfiguration” tied to Argentina’s economic opening and the entry of international brands. However, he said customer traffic and volumes remained strong.

Despite the drop in tenant sales, shopping mall revenue increased about 2.5% and adjusted EBITDA rose 2.2%. Donato said fixed revenue components—including base rent, key money, advertising and parking—now account for nearly 87% of mall revenue, helping to cushion the segment during slower consumption periods.

During the question-and-answer portion of the call, management said April trends were similar to the first calendar quarter, with continued declines in consumption. Gaivironsky said the weakness appeared more related to pricing than traffic or transaction levels, noting that clothing prices had risen faster than Argentina’s broader inflation index in prior years but have recently been pressured by imports and new brands.

He said the company has not seen payment delays from tenants and continues to collect key money on lease renewals. “We don’t believe that we have to change our strategy,” Gaivironsky said, while acknowledging that weak consumption would not be a positive signal if it persists.

International Brands Expand in IRSA Malls

Donato said IRSA is seeing increased interest from international retailers seeking to enter or expand in Argentina through the company’s mall portfolio. He cited brands including Dolce & Gabbana, Decathlon and Victoria’s Secret, which is already present at Alto Palermo and Abasto and is planning further expansion.

IRSA is also in discussions with other major foreign retailers, Donato said. He described the trend as positive for the company because it diversifies the tenant mix and strengthens the retail offering in its shopping centers.

Offices Fully Occupied; Zetta Expansion Moves Forward

IRSA’s office portfolio totals about 58,000 square meters and is fully occupied, Donato said. The company’s premium office portfolio is generating rent of about $26 per square meter, and management said demand for high-quality offices is increasing as office work gradually returns.

Chief Investment Officer Jorge Cruces discussed the company’s expansion of the Zetta office building, which is part of the Polo DOT mixed-use development in Buenos Aires. The existing Zetta property totals about 32,000 square meters of gross leasable area and is mostly occupied by Mercado Libre. In December, IRSA signed an amendment with Mercado Libre to expand its leased space.

After completion, the building is expected to exceed 47,500 square meters of gross leasable area, with Mercado Libre occupying about 72%. Cruces said initial works, site preparation and earthworks have begun, and IRSA is tendering the concrete structure.

The broader Polo DOT master development includes DOT Baires Shopping, office buildings, residential space, entertainment, dining and retail. Cruces said future phases include the Giga office building, with close to 16,000 square meters of gross leasable area, and the EXA residential building, with 19,000 sellable square meters. The Philips Building redevelopment is also expected to complete the master development.

Asked whether the Zetta expansion was a one-off driven by Mercado Libre or a sign of broader opportunity in offices, Cruces said both factors are relevant. He said occupancy is improving and there are few new office developments, but added that IRSA must be selective about locations and projects.

Hotels Improve, Led by Buenos Aires

Donato said IRSA’s hotel segment is performing well after a challenging period caused in part by the appreciation of the peso against the dollar. Buenos Aires hotels benefited from tourism and corporate events, with occupancy reaching about 74%.

At the Llao Llao Resort in Bariloche, occupancy has been affected over the past two and a half years by renovation work in one section of the hotel. Donato said that excluding rooms under construction, the hotel shows a positive and stable occupancy trend.

Ramblas Project Advances; Debt Metrics Remain Conservative

Cruces said Ramblas del Plata remains IRSA’s most significant development project. The riverfront master plan includes an open metropolitan park, 36,000 square meters of retail space, a 2-kilometer pedestrian promenade and a 7-hectare central bay.

IRSA recently signed swaps for plots M1 and K3 totaling $11.3 million. To date, the company has sold two lots and swapped 15 others, with the combined value of those transactions totaling $105 million. Cruces said IRSA expects to receive almost 25,000 sellable square meters from swap agreements already executed.

Overall construction progress at Ramblas is about 23%, while phase one is 52% complete. Cruces said sheet piling around the central bay has been completed, tree buffer planting and bay remediation are in the maintenance phase, and work has begun on water, sewer and electrical duct networks. Paving work also started during the week of the call.

Gaivironsky said Argentina’s inflation and currency movements created volatility in reported results. During the nine-month period, the peso appreciated in real terms, with nominal devaluation of 15% versus inflation of 25%. He said this affected dollar-denominated asset valuations and the peso re-expression of debt.

Rental adjusted EBITDA reached $151 million for the nine-month period, and Gaivironsky said the company may finish the fiscal year with record-high rental EBITDA in dollar terms. Net debt to rental EBITDA stood at 1.4 times, with loan-to-value at 11.3%. He said net debt may rise as IRSA funds new developments and capital expenditures, but he characterized leverage as conservative.

In the Q&A, management said IRSA is analyzing opportunities in logistics but does not expect to enter the data center business in the near future. Gaivironsky also declined to predict whether the company would launch a share repurchase program, saying IRSA would communicate any decision if one is made and noting that audited accumulated results would be needed after the fiscal year ends.

Management also said the refurbishment of the Haedo shopping center remains on schedule, with a potential opening around the end of the year or beginning of the following year.

About IRSA Inversiones Y Representaciones NYSE: IRS

IRSA Inversiones y Representaciones SA NYSE: IRS is Argentina’s leading real estate company, specializing in the development, acquisition and management of commercial, office, residential and hospitality properties. The company’s core operations encompass the planning and operation of shopping centers, premium office towers in Buenos Aires, urban residential complexes and full-service hotels. IRSA leverages its extensive land bank and development expertise to create mixed-use destinations that cater to evolving urban lifestyles.

IRSA’s shopping center division features a portfolio of flagship malls in Argentina, complemented by its Mall Plaza platform, which develops and operates retail destinations in Chile, Peru and Colombia.

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