IRS — IRSA Inversiones y Representaciones Sociedad Anónima

Summary of IRSA Q2 2026 Earnings Call

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: 4% increase in revenues and 2% increase in adjusted EBITDA over the six-month period.
• Rental Segment Performance:
  • Shopping Malls: 2% revenue increase, occupancy at nearly 98%.
  • Offices: 15% revenue increase, 100% occupancy.
  • Hotels: 44.8% revenue increase, with occupancy at 69%.
• Debt Position: Issued an additional $180 million in bonds, with a net debt to rental EBITDA ratio of 1.6x and a conservative loan-to-value (LTV) ratio of 13%.

2. Strategic Updates and Business Highlights:

• Continued expansion in the Shopping Malls segment with new developments in La Plata and Oeste Shopping.
• Successful signing of additional swap agreements for land development.
• Progress on construction projects, including Distrito Diagonal, expected to open in May 2027, and Ramblas del Plata.
• Focus on mixed-use developments and potential entry into logistics and warehouse sectors.

3. Forward Guidance and Outlook:

• Management remains optimistic about the economic recovery in Argentina, anticipating growth in consumption tied to economic activity.
• Expected continued cash generation and a strong cash position to support future expansions and acquisitions.
• Plans to maintain a conservative debt structure while pursuing new growth opportunities.

4. Bad News, Challenges, or Points of Concern:

• Decline in real sales for tenants, with a reported drop of 9% in the latest quarter, attributed to economic pressures and price reductions.
• Concerns over the textile sector's crisis potentially impacting rental income and tenant stability.
• Management acknowledged potential risks associated with economic volatility in Argentina, which could affect consumption and rental agreements.

5. Notable Q&A Insights:

• Management addressed concerns about tenant sales and indicated that while prices for clothing have decreased relative to inflation, traffic and occupancy levels remain stable.
• There were no significant requests from tenants to alter contract structures, indicating confidence in the current rental agreements.
• The new workspace initiative at the Philips building is managed by IRSA, with plans to replicate this model in other properties.
• Management expressed optimism about the real estate sector's future, particularly in residential and mixed-use developments, despite current economic challenges.

Overall, IRSA is positioned for growth with a solid financial foundation, though it faces challenges related to tenant performance and broader economic conditions in Argentina.