IRSA Inversiones Y Representaciones Q4 Earnings Call Highlights

Key Points

• Record fiscal 2026 performance: IRSA’s net income rose to ARS 420.9 billion from ARS 261.9 billion, supported by higher property valuations, foreign-exchange gains and stronger recurring operations. Rental EBITDA approached $200 million, while the company ended the year with $390 million in cash and net debt-to-EBITDA of 1.4 times.
• Shopping-center portfolio expanded despite weaker consumption: Mall tenant sales declined 8.5% in real terms, but occupancy held at 97%, revenue increased 1.5% and dollar EBITDA reached a record level. IRSA added 20% to gross leasable area through acquisitions and projects including Al Oeste, Los Gallegos and Distrito Diagonal.
• Development and capital spending remain priorities: Ramblas del Plata infrastructure was 77% complete, with 20 land transactions worth about $130 million finalized. IRSA expects approximately $150 million in fiscal 2027 capital expenditures and is considering further acquisitions, hotel sales, dividends and another share-repurchase program.

IRSA Inversiones Y Representaciones NYSE: IRS reported fiscal 2026 net income of ARS 420.9 billion, up from ARS 261.9 billion a year earlier, as the company posted record rental EBITDA and continued expanding its shopping center, office and mixed-use development pipeline.

Chief Financial Officer Matías Gaivironsky said the company generated a net gain of ARS 421 billion during the year, which ended in June, while rental-segment EBITDA approached $200 million. The result reflected improved shopping mall valuations, foreign-exchange gains and growth in recurring operations, though the company also recorded ARS 150 billion in income-tax expense.

“We are very happy with the results,” Gaivironsky said, citing an active year for acquisitions and development projects, including the purchases of Al Oeste Shopping and Los Gallegos Shopping Mall and the launch of Distrito Diagonal in La Plata.

Shopping malls remain resilient amid softer consumption

Management said the company’s shopping mall business remained resilient despite weaker consumer spending in Argentina. Tenant sales fell 8.5% in real terms during the year, primarily due to lower prices, while ticket volumes and visitor traffic remained stable and were positive in some months.

Shopping mall revenue increased 1.5%, supported by the company’s lease structure. Santiago Donato said 87% of mall revenue comes from fixed components that adjust with inflation, providing insulation during periods of softer demand. Mall occupancy remained stable at 97%, while segment EBITDA in dollar terms reached a record level comparable with 2013 and was nearly 4% above the prior year.

IRSA added 20% to its gross leasable area during the year and expects to operate 19 shopping centers with 432,000 square meters of mall space next fiscal year. The company said international retailers including Decathlon, Victoria’s Secret, Mango and Dolce & Gabbana have entered its malls, but available space has been limited, prompting expansions at existing properties.

Gaivironsky said new international leases are generally being signed at rental levels similar to those in the existing portfolio. Any improvement in revenue-sharing components would depend on the retailers’ sales performance.

• Al Oeste: The Morón property is being repositioned as an outlet center and is expected to relaunch before the end of calendar 2026. The project was 70% complete and is expected to provide 24,000 square meters of gross leasable area.
• Los Gallegos: IRSA acquired the Mar del Plata shopping center for $13.5 million. The property includes about 10,400 square meters of leasable area, and the company expects to invest about $5 million to reposition it.
• Distrito Diagonal: Construction on La Plata’s first large-scale mall was more than 50% complete. The 22,000-square-meter project is expected to be completed in May or June 2027.

Office and hotel operations

The office portfolio reached 100% occupancy, according to management. IRSA owns five office buildings totaling 58,000 square meters, with average rents holding at about $25 per square meter per month.

The company is expanding the Zetta building in the Polo Dot mixed-use complex in northern Buenos Aires. The expansion is expected to add more than 15,000 square meters of leasable area with an estimated $35 million investment. Mercado Libre is expected to occupy approximately 72% of the expanded 47,500-square-meter building following an amendment to its lease signed in December.

Hotels also produced solid operating results. Portfolio occupancy rose to nearly 65%, with an average daily rate of $218. Buenos Aires hotels benefited from growing corporate events and conventions, management said, with occupancy around 70% and rates near $150 per room. The Llao Llao property was affected by room renovations.

Chief Investment Officer Jorge Cruces said IRSA could consider selling its two Buenos Aires hotels, while indicating that the company does not envision selling Llao Llao in Bariloche. He said the hotel operation is a relatively small business for IRSA and is managed by partners.

Ramblas del Plata advances as development spending rises

At Ramblas del Plata, IRSA said infrastructure work is progressing and contracted work was 77% complete at fiscal year-end. The riverfront mixed-use project is planned to include residential and retail development alongside public green spaces.

The company completed transactions for 18 of 26 lots in the expanded first stage and signed two additional swap agreements after year-end. In total, IRSA has completed 20 transactions, including 18 land swaps and two sales, with an aggregate value of about $130 million. Less than 40,000 square meters of sellable area remained available in the expanded first stage.

Cruces said construction of the project’s buildings could begin late in 2026 or in February or March, subject to city-related processes. He added that IRSA expects to pursue additional swaps in later phases while also considering direct development and potential partnerships with international investors.

Capital position and outlook

IRSA raised $230 million during the year, including $180 million through retapping international notes and $50 million in the local market. The company ended the year with $390 million in cash, net debt-to-EBITDA of 1.4 times, and a loan-to-value ratio of 10%.

Gaivironsky said the company accumulated cash to cover expansion needs during what it expects could be a volatile election year in Argentina. Management estimated fiscal 2027 capital expenditures of approximately $150 million, including recurring spending and current development projects but excluding potential acquisitions.

The company also said it distributed a dividend equivalent to a 10% yield during the year and expects to announce a new dividend proposal in the following week. Gaivironsky said IRSA has no fixed dividend policy but has historically distributed dividends when its financial condition and capital-spending needs permit. Management is also discussing the possibility of another share-repurchase program.

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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