IRS-WT — IRSA Inversiones y Representaciones Sociedad Anónima WT

Summary of IRSA Earnings Call (Q2 2026)

1. Key Financial Results and Metrics

• Net Income: ARS 248.8 billion, a significant recovery from a loss in the same period last year, primarily due to gains in fair value of investment properties.
• Revenue Growth:
  • Shopping Malls: +4%
  • Offices: +15%
  • Hotels: +44.8%
• EBITDA: Adjusted EBITDA increased by 2% year-over-year, with total EBITDA reaching $102 million for the semester.
• Debt: Issued an additional $180 million in bonds maturing in 2035. Net debt to rental EBITDA ratio stands at 1.6x, with a conservative LTV of 13% and coverage ratio of almost 7x.
• Dividend: Paid a dividend yield of 10% for the year, totaling $116 million.

2. Strategic Updates and Business Highlights

• Malls: Occupancy rates are nearly 98%, with revenue growth driven by inflation-linked leases. New developments in La Plata and Oeste Shopping are underway.
• Offices: 100% occupancy maintained in the portfolio, with stable rental rates.
• Hotels: Recovery in occupancy to 69% and average rates at $227 per room, bolstered by events in Buenos Aires.
• Development Projects: Progressing on multiple projects, including Distrito Diagonal in La Plata, expected to open in May 2027, and Ramblas del Plata, with a total of 26 plots added to the commercialization pipeline.

3. Forward Guidance and Outlook

• Economic Context: Anticipation of economic growth in Argentina, which is expected to positively influence consumption and tenant sales.
• Expansion Plans: The company is entering a new phase of growth with plans for new projects and potential M&A transactions. Management is optimistic about future cash generation and the ability to finance expansions without significantly increasing leverage.

4. Bad News, Challenges, or Points of Concern

• Tenant Sales: Notable decline in real sales for tenants, with a drop of 9% in the latest quarter, attributed to economic pressures and a decline in clothing prices relative to inflation.
• Consumer Behavior: Concerns over the sustainability of reduced prices impacting rental income and potential requests from tenants to rebalance contracts towards more base rents.
• Market Risks: The company faces uncertainties related to the broader economic environment in Argentina, which could affect consumption trends and tenant performance.

5. Notable Q&A Insights

• Tenant Requests: Management noted no significant requests from tenants to change the balance of contracts yet, but acknowledged the potential for future negotiations.
• Workspace Management: Clarified that the Philips building will be managed directly by IRSA, marking a new business line that is performing well.
• Sector Outlook: Management expressed optimism about the real estate sector, particularly regarding residential and mixed-use developments, despite current economic challenges.
• Leverage Concerns: CFO Matias Gaivironski reassured that the increase in leverage is manageable and that the company has sufficient cash flow to support its expansion plans without excessive debt accumulation.

Overall, IRSA demonstrated strong recovery and growth in Q2 2026, with strategic initiatives aimed at capitalizing on market opportunities while navigating challenges in tenant sales and economic fluctuations.