Good afternoon, everyone. I'm Santiago Donato, Investor Relations Officer of IRSA, and I welcome you to the third quarter of 2026 results conference call. First of all, I would like to remind you that both audio and slideshow may be accessed through the company's investor relations website at www.irsa.com.ar by clicking on the banner webcast link. The following presentation and the earnings release are also available for download on the company website. After management remarks, there will be a question and answer session for analysts and investors.
Before we begin, I would like to remind you that this call is being recorded and that information discussed today may include forward-looking statements regarding the company's financial and operating performance. All projections are subject to risks and uncertainties, and actual results may differ materially. Please refer to the detailed note in the company's earnings release regarding forward-looking statements.
I will now turn the call over to Mr. Matias Gaivironsky, CFO.
Thank you, Santi. Good afternoon, everybody. We are glad to present our 9-month period results of the fiscal year 2026. We saw during the 9-month period a gain of ARS 239 billion, an increase in shopping mall revenues and EBITDA. Good results also in the office portfolio with 100% occupancy and a slight increase in rents and EBITDA. Also an improvement in rents, occupancy margins in hotels and EBITDA as well. Regarding the expansion plan, we also announced a new building, an office building, adjacent to our existing building Zetta. We already signed an agreement with Mercado Libre to expand their offices. Mercado Libre will rent most part of the new building. And there is development and commercialization progress in Ramblas, our main project, with two additional lots that were swapped for $11.3 million. Let me introduce Santiago again. He will continue with the presentation.
Thank you. We move to Page #3, to the shopping malls segment. As you can see here, GLA increased to 373,000 square meters. This was mainly due to a small expansion in Alto Avellaneda mall. Occupancy remained very high at levels of close to 98%. Regarding tenant sales and consumption over the last quarters, we have seen a decline in our tenant sales in real terms, the last quarter by 10%. Consumption is a little bit weak. We are seeing mainly a pressure on prices within a process of retail reconfiguration driven by the opening of the economy and the entry of new international brands that I will show you on the next page. While volumes and customer traffic continue to be strong, quite good. Despite these lower sales, in the third graph, our revenues and our adjusted EBITDA grew by close to 2.5% in revenues and 2.2% in adjusted EBITDA for the segment. This is mainly explained by our fixed components: the base rent plus the key money, the nontraditional advertising, the parking. All the fixed components today account for almost 87% of our revenues. This shows the resiliency of our business, of the shopping centers, even in a slowdown of consumption. We hope to be recovering in line with the economic activity in the next quarters. Moving to the next page. Here we can see the growing interest that I mentioned before of international brands across our malls looking to enter Argentina and expanding through our malls. These are some examples of brands already operating in our portfolio as well as others that are under development and expected to open in the coming quarters. This is Dolce & Gabbana, Decathlon in some of our malls. Victoria's Secret, we have already set in Alto Palermo, in Abasto and is planning to expand. We are also having conversations and negotiations with very important retailers from abroad that are willing to come to Argentina. This is really positive news for IRSA. We'll diversify our tenant mix and bring very good proposals for our shopping malls. Here we have the performance of the office buildings. This is more stable. We have today a small portfolio of 58,000 square meters. It's going to be increased a little bit with this new development that Jorge will give you some color on later. Rents of our premium portfolio today, almost all of our portfolio is A+ or A, except for the Philips Building that today is a workplace. It's like a co-working. Today we have a rent of around $26 per square meter, and it's fully occupied. We are seeing a gradual return to the office; office work is coming back, and we are seeing huge demand in our premium offices. Finally, the hotel segment, which is our third rental segment, is performing very well. We come from a year, a year and a half with some challenge due to the appreciation of the peso against the dollar. We are seeing very good performance, mainly in Buenos Aires. Tourism is coming to Buenos Aires. Occupancy reached around 74%. It's a combination between tourism and corporate events that are doing very well in the city. The Llao Llao Resort, our exclusive hotel in Bariloche, occupancy was mainly affected this last 1.5 years because of renovation works in one section of the hotel. If we exclude those rooms that are under construction, the hotel occupancy shows a positive and a stable trend. So very good numbers in the three segments and the rental adjusted EBITDA increased in the three segments in real terms and in dollars as well. I will give the word now to Jorge Cruces, our CIO for the projects under development.
Thank you, Santiago. Good evening, everybody. Well, we're moving forward with a new office expansion project at our Zetta building. The property currently totals around 32,000 square meters of GLA. It's mostly occupied by Mercado Libre. In December, we signed an amendment to our lease with Mercado Libre, agreeing to expand the leased space. Upon completion, the building will exceed 47,500 square meters of GLA. Around 72% will be occupied by Mercado Libre. We've already kicked off the initial works, site preparation, and earthworks. We are now in the process of tendering the concrete structure. The Zetta building expansion is part of the Polo DOT mixed-use master development, which already features DOT Baires Shopping as a key anchor, along with DOT building offices and the existing Zetta building. The whole project is located within the city of Buenos Aires, in the northern part of the city, and stands at one of the most important highway intersections of Buenos Aires. Polo DOT brings together a dynamic mix of businesses, offices, residential spaces, entertainment, dining, and top retail brands. In the near future, our plan is to move forward with the next phases of the development, including the Giga office building with close to 16,000 square meters of GLA and the EXA residential building, 19,000 sellable square meters. Last but not least, the Philips Building redevelopment will complete the master development. Ramblas del Plata is our most significant project to date. It is strategically located along the riverfront in a natural setting. The master plan features an open metropolitan park and 36,000 square meters of retail spaces, all connected by a 2-kilometer pedestrian promenade. The neighborhood also includes a 7-hectare central bay. Within it, there is a 1,600 square meter covered space delivered in April, formerly a hangar used by the company that operated on the site, which we now plan to transform into Ramblas multipurpose event building. Recently, we signed swaps for plots M1 and K3 for a total amount of $11.3 million. These two transactions represent over 13,000 sellable square meters. That's around 3,700 sellable square meters for IRSA. To date, we've sold two lots and swapped another 15, and the combined value of these deals totals $105 million, covering over 137,000 sellable square meters to be developed. So far, IRSA will receive almost 25,000 sellable square meters from the swaps agreements already executed. As happened in Phase 1, the environmental public hearing for Phase 2 will soon be taking place. Overall construction progress is around 23%, with an average of 72 people currently working on site and around 12 units of heavy equipment in operation. To date, 52% of the works for Phase 1 has already been constructed. All sheet piling works around the central bay have been completed. Tree buffer planting and bay remediation are now in the maintenance phase. Last month, we kicked off work on water, sewer, electrical duct networks, and we also awarded the contract for the gas network. This week, we started paving works.
Thank you, Jorge. To understand the figures during this period, also we have to understand what happened with inflation and the currency, since, as you know, in Argentina, we have to adjust our balance sheet by inflation. During the 9-month period, there was an appreciation of the peso. The nominal devaluation of the exchange rate was 15%, while the inflation index in the same period was 25%. That generates negative results when we have to value assets in dollar terms and post the results in pesos, as well as generates gains when we have to re-express our debt in peso terms. That generates some volatility in the results. Going to the next page, we can see first on the adjusted EBITDA, there were positive numbers in the three main business lines, shopping centers growing at 2% in peso terms. That number in dollars is around 6%. Offices growing at 15% and hotels at 37%. Keeping margins in line with the last year and a slight increase in hotels. About the change in the fair value of the investment properties, as I said, this generates volatility. Last year that was an important loss in the 9-month period. For this 9-month period it generated positive numbers. When we have a breakdown between malls and land bank and offices, we see negative numbers in offices and land bank in peso terms because we maintain the same value in dollars. We value the properties once a year when we engage a third party appraisal to do the work. And in shopping malls, we are adjusting in this quarter valuation in dollar terms from $1.2 billion to—sorry, during the quarter it was almost $1.3 billion to $1.4 billion. That was a result of using in the DCF the current exchange rate and the projected numbers. And also as I said in the net financial results that you can see in the table in the first line that the devaluation of our debt in peso terms generated positive numbers. The net effect result is mainly the conversion of our debt in pesos, so that generated an ARS 90.7 billion gain. In net interest, we have a higher gross debt than the previous year, which generated more interest to pay, and part was compensated in the line of fair value of financial assets and other financial results that is the result of the investment of our cash. Also, it's important to mention that the income tax starts to be representative again. After many years that IRSA used to have a tax loss carryforward, we already consumed all that tax carryforward. Now, we will see probably more representative numbers in this line that IRSA has to afford. So with all these numbers, we are finishing the net result for the 9-month period with a net result of ARS 239.7 billion compared with the previous year that was ARS 46.5 billion. If we go to next page, the adjusted EBITDA, the rental adjusted EBITDA, in dollar terms, we see the evolution. We finished this period with $151 million. Probably when we finish this fiscal year, we will have a record high rental EBITDA in dollar terms. We are happy for that. About the debt, during the quarter there was no significant news. Remember that we tapped the international capital market in December last year, so we raised $180 million additional notes of the existing 235 notes. During the quarter, there was no news about that. The net debt to rental EBITDA remains at 1.4x EBITDA with an LTV very low of 11.3%. Probably we will see an increase in the net debt going forward since we have plans of new developments and CapEx. We will start to use more of our cash so that will result in a higher debt but with very conservative numbers anyway. With this we finish the formal presentation. Now we open the line to receive your questions.
Here we have some. The first ones, for Jorge. Any plans to enter into logistics and into the data center business?
Data center business—we've been analyzing that and in the near future, that's not something we think is going to happen. We are analyzing the possibility of going into logistics. We're very confident that in the near future we should be starting a long road on logistics and maybe someday we can be a strong player, a strong local player in Argentina in logistics, hopefully. Yes, we are analyzing becoming a real estate logistics player.
Good. Second question, on the mall segment. How are you seeing consumption trends in malls for April and May? There was someone else asking for this quarter, the one that we are entering now, in April. And with this new pricing dynamic mentioned, at what point could you expect tenants to begin pushing for contract revisions? What is IRSA's strategy for that scenario?
Let me add something else, Santi. When we analyze consumption, the shape of our shopping malls, of course we see weaker sales. We have to do a deeper analysis on that. First of all, as we saw during the last years, the inflation in the clothing sector was much higher than the CPI of Argentina. What happened last year, since there was an opening in the economy and more international brands and more goods imported, we started to see a lower evolution on prices in the clothing segment. That means that first when we have to compare last year numbers, we are adjusting by CPI while the comparison of the new sales during this year are at a lower pace than inflation. When we do an analysis on tickets, sales, and traffic, we see a good evolution. Probably in tickets we are similar to the previous year. Probably more of the pressure is on prices. We are probably maintaining similar numbers in terms of amount of sales. Second, on the shape of the industry, you have to analyze occupancy. Occupancy is very high in our malls. Third is delinquency—if we have delays in payments. We don't have delayed payments at all; that indicator is normal, completely normal. And fourth is the renovation of new leases. And we keep collecting good numbers on key money. In fact, when we adjust base rent, although we are adjusting the base rent by inflation, every time that we have to renew agreements, we see some increase in value. All the numbers are the triggers that you saw during the period—that we keep increasing EBITDA in real pesos compared with the previous year. We don't believe that we have to change our strategy. Of course, if the trend on consumption is weak, of course that is not a good signal for us. As we can see for the recent trend in the market, mainly from the government, we start to see an increase in collection of taxes on VAT and also in the tax on bank debits and credits (banking transactions tax). Those are positive numbers that the government is starting to show. We hope to see that trend as well in our shopping malls.
Good. Next question. The Polo DOT launch is your first new office development in some time. Is this a one-off driven especially by Mercado Libre as a high-quality tenant, or are you seeing something different, a potential in the office sector going forward?
We are seeing something different in the office sector. The occupancy is doing better year by year. There are not so many new developments. In the question you're right because it's DOT, we are very confident with Polo DOT as a master development. Mercado Libre is a very important tenant for us also. It's going to be very important for us to finish the Polo DOT, and it's one of the necessary steps to continue with our master development. I would say yes to all of the above. Yes, we're seeing that the office market is doing better. If you have to be selective—it's very specific where—you have to be very careful. Two, yes, Mercado Libre is a very important tenant for us and it's very helpful to make this decision. Yes, Polo DOT is part of a master development that we were planning to do anyway in some time, and well, the time is—we got to that point that it's a very good business for us to continue with office space in Polo DOT.
Let me add something else, Jorge. As we always said, we don't have any specific target on weight in our portfolio regarding shopping malls, offices, hotels or even logistics that we want to enter. We will analyze each project like a unique project, and if we believe that it is a good return, we will move forward. We are not here trying to balance the portfolio or change the strategy. We always said that IRSA is a diversified real estate company between rental real estate, but also with Ramblas, that with all the projects that we have in residential, the residential part will be important for IRSA going forward. Although IRSA is not developing directly, so far the strategy is doing swap agreements with developers where IRSA is buying the land and then entering into agreements with developers. They develop and pay us with finished units. But IRSA has a tremendous portfolio of units to be received in the future. We calculate that between now until the next three to four years, IRSA will have more than $300 million of units to be sold. If you compare that with our existing rental EBITDA, it is much lower, but it will be an important business line as well for IRSA in the future.
A financial question here. It's in Spanish, we're going to translate. Due to the ample cash that IRSA has today and the recent drop in IRSA shares, do you expect to implement a new share repurchase program?
Well, the formal answer is that we never anticipate what we're going to do. We will communicate when we do it. If you analyze our behavior in the past, we launched many buyback programs and buyback plans in the past. So this is part of what we like to do when we see an opportunity in our shares. The analysis is, first of all, we need accumulated results, audited accumulated results. We used most of the results in the last dividend payment in October last year. So, we need to finish the fiscal year to have the audited financial statements. After that, we can decide what to do with the results—if we distribute as dividends and any shareholder can buy shares or if we will buy back shares. I can't anticipate what we're going to do.
I have one more here. Any update on the progress of Al Oeste development? The shopping mall that we are refurbishing…
Well, the refurbishment of the Haedo shopping center is on schedule. That's regarding construction, and we're doing great with the tenants. There's a lot of expectation. Yes, what I would say is it's on schedule. I can't say exactly the month we're going to start; it's going to be public, but we are on schedule as we thought.
Yes, it's a one-year development.
We planned for the end of the year, and we can make it. We're still on schedule, but we're deciding if finally it's going to be at the end of this year or the beginning of the next. It should be at the end of this year, maybe.
Good. Well, I don't see more questions, but I give you one minute more. Okay, I don't see more questions. I will now give back to Matias Gaivironsky for his closing remarks.
Thank you, Santi. Thank you everyone for participating in the call. We are happy so far with the results. We are confident in this new trend of four years of new expansions. So we hope to communicate many of the negotiations that we are trying to close soon, that we are in different transactions acquiring more land or entering logistics or new expansions that we hope to announce in the next quarter. The rest, we hope to see a recovery in the economy after what happened last year because of the elections and the constraint on the monetary side, the lack of credit in Argentina and the interest rates that were very high. We hope to see that consumption has already touched the floor and that we start to see better numbers in the coming quarters. Thank you very much and we will see you for our fiscal year end in September. Thank you very much.
Have a nice afternoon. Bye-bye.