• Adjusted EBITDA: ARS 46.9 billion, 8.8% decrease from the previous quarter.
• Net Income: Loss of ARS 109 billion, mainly due to non-cash effects related to investment property valuations.
• Tenant Sales: 7% recovery from the previous quarter, but 12% below the same period last year.
• Office Occupancy: 98% occupancy rate.
• Shopping Mall Occupancy: 97% occupancy rate.
• Dividend Payment: ARS 90 billion, approximately 8% dividend yield.
• Hotel Segment: Occupancy decreased from 66% to 55%.
• Debt Issuance: New debt issued with a five-year tranche at 7.25% interest and a three-year tranche at 5.75% interest.
• Net Debt: $297 million, with a net debt to rental EBITDA ratio of 1.8 times.
• Dividend Payments (Last Three Years): Approximately $250 million.
• Share Repurchase Program: Completed in September, acquiring 1.6% of shares at an average price of $9.94 per ADR.

• Warning! GuruFocus has detected 5 Warning Signs with IRS.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• IRSA Inversiones y Representaciones SA achieved an adjusted EBITDA of ARS 46.9 billion, indicating strong operational performance despite a slight decrease from the previous quarter.
• The company reported high occupancy rates in its shopping malls and office spaces, with shopping malls at 97% and offices at 98%, showcasing effective property management.
• IRSA Inversiones y Representaciones SA successfully acquired a plot of land adjoining the Alto Avellaneda shopping mall, positioning itself for future expansion.
• The company announced and paid dividends amounting to ARS 90 billion, reflecting a robust dividend yield of approximately 8%.
• IRSA Inversiones y Representaciones SA maintains a conservative financial structure with a net debt to rental EBITDA ratio of 1.8 times, indicating strong financial health and stability.

Negative Points

• The company posted a net loss of ARS 109 billion, primarily due to non-cash effects related to the valuation of investment properties.
• Tenant sales showed only a slight recovery, remaining 12% below the numbers from the previous year, indicating challenges in retail performance.
• The hotel segment faced challenges with a decrease in occupancy from 66% to 55% and a drop in rates, impacting overall revenue from this segment.
• IRSA Inversiones y Representaciones SA experienced a 10% decrease in adjusted EBITDA compared to the previous year, with significant drops in the hotel segment.
• The appreciation of the Argentine peso led to valuation losses in investment properties when converted to peso terms, affecting the company's financial results.

Q & A Highlights

Q: With the next quarter being seasonally strong for shopping malls, do you expect tenant sales to show a further recovery compared to the same period of last year? Also, given the significant reduction in office assets in recent years, are there plans to rebuild or expand the office portfolio, or is exiting from this segment a possibility? A: Matias Ivan Gaivironsky, CFO, responded that they expect to see a recovery in tenant sales compared to the previous quarter, although comparisons with last year might show weaker numbers due to a change in administration and economic environment. Regarding the office portfolio, they do not have a specific target to rebuild or expand but will consider opportunities to acquire or develop if they arise.

Q: How is the processing of Ramblas del Plata progressing, and what are the next steps? What has changed since the last earnings in September? A: Jorge Cruces, Chief Investment Officer, mentioned that there is strong commercial interest from developers, and they are about to start signing barter and selling agreements. They are also close to obtaining the environmental approval certificate, which will allow them to begin construction works.

Q: Can you provide more details on the environmental processing for Ramblas del Plata, particularly regarding the recent public hearing? A: Jorge Cruces explained that the recent public hearing was part of the normal process for the first stage of the project. They do not anticipate significant issues, as the project is aligned with government expectations, and they expect to receive the environmental certificate soon to start the first stage of development.

Q: What are the implications of the recent changes in the real estate market, particularly regarding the residential sector? A: Jorge Cruces highlighted a positive shift in the residential market, with increased leasing activity and a rise in property purchases due to changes in leasing laws and mortgage availability. This has led to a momentum in the residential market, with prices starting to rise as demand increases.

Q: How does the current financial environment affect IRSA's strategy for future developments and investments? A: Matias Ivan Gaivironsky stated that the company is in a strong financial position with a conservative debt structure, allowing them to be more aggressive in development. They are ready to capitalize on good opportunities by monetizing part of their portfolio and launching new projects, driven by positive trends in the real estate market.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.