IRSA Inversiones y Representaciones Sociedad Anónima Q4 FY2025 earnings call

• Financial Results: Delivered a net gain of ARS 196 billion compared to a significant loss in the previous year. Shopping Malls showed solid recovery with adjusted EBITDA growing 10% y-o-y. Acquisitions/developments: Acquired Terrazas de Mayo from Carrefour, adjoining land of Alto Avellaneda, and launched La Plata shopping center. Office rents stable, Hotel challenged by peso appreciation. Ramblas del Plata had 13 transactions. Returned to international capital market with $300 million in Series XXIV notes and executed exchange of Series XIV notes. Distributed an 8% dividend and treasury shares equivalent to 3.6% of capital stocks.
• ESG Progress: Over 90% of malls transitioned to LED lighting, solar panels in 3 malls, completed third carbon balance measurement, IRSA Foundation invested ARS 500 million benefiting 70,000 people, and a contact center serving over 400,000 customers in malls.
• Real Estate Projects: Added 16th shopping center Terrazas de Mayo (34,000 sqm), developed La Plata shopping mall (22,000 sqm GLA, opening in May 2027), Del Plata Building Trust with 720 residential units sold 76 units for $11.4 million, Nuevo Quilmes II 41 lots sold for $6.3 million, Coto Abasto towers 8 units sold for $1.1 million, and Ramblas del Plata 13 transactions totaling 111,000 sellable sqm.

Shopping Malls: Adjusted EBITDA grew 10% year-over-year. Tenant sales grew 2.8% below inflation for the fiscal year, with 3.2% growth in Q4. EBITDA and revenues in the segment grew by 10% and 8% respectively in fiscal year '25 compared to 2024. Added Terrazas de Mayo (34,000 square meters) and 32,700 square meters of land next to Alto Avellaneda. Occupancy close to 98% (excluding Terrazas de Mayo which was 89% at acquisition). Office: Rents remained stable, occupancy of the premium portfolio reached almost 100%, and the portfolio size is 58,000 square meters. Hotel: Challenged by the appreciation of the Argentine peso against the U.S. dollar, with lower revenues and occupancy. Occupancy decreased from 66% to 61%, and margins were lower. Others: Ramblas del Plata had 13 transactions, totaling approximately 111,000 sellable square meters. ESG progress included over 90% of malls transitioned to LED lighting, solar panels in 3 malls, third carbon balance measurement, and IRSA Foundation investing ARS 500 million benefiting 70,000 people.

• Shopping Malls expected to continue recovery with ongoing developments. - Office segment expects stable rents and occupancy. - Hotel segment may face challenges but will monitor macro situation. - Residential project La Plata shopping mall expected to open in May 2027. - Dividend expected to continue as planned, with proposal to be submitted to shareholders' meeting by end of the month.

• Volatility in the Argentine peso and inflation impacting the Hotel segment's revenues and occupancy. - Uncertainty from the electoral climate in Argentina potentially affecting major business decisions. - Lack of funding for banks could limit the mortgage market's growth and impact consumption.

Q: With inflation coming down and early signs of mortgage market reemerging in Argentina, how do you see this impacting demand for residential projects and your broader land bank monetization strategy? And on the supply side, how do you see the construction activity responding in the upcoming months?

A: Jorge Cruces said mortgages helped move apartment stock in Buenos Aires, prices up 20%-50% depending on neighborhoods. Construction may be less than last year due to higher labor costs in dollars, but expected to pick up next year. Eduardo Elsztain added banks are providing mortgages but limited by lack of funding, and securitization market needed for a real market.

Q: How important is the electoral climate for IRSA and expectations of political economic stability in the coming months?

A: Eduardo Elsztain said elections generate uncertainty and volatility. IRSA has a resilient business with dollar-denominated assets and hedged revenues against inflation, but needs a stable economy for growth.

Q: If we are considering tapping the domestic or international markets to fund projects, how do you see volatility and interest rates in the coming quarters?

A: Eduardo Elsztain said with current capital structure and cash position, no immediate need to tap markets for organic growth. Hopes for normalization of peso curve after elections to affect consumption positively.

Q: How do you see the pace of future sales in Ramblas evolving from here?

A: Jorge Cruces said sales are going faster than expected, started with The Bay, went from 14 to 20 lots, and expects to sell all 20 lots in next 6-8 months. Prices and swaps expected to increase.

Q: If we expect to divest our small position in Hotels or join with partners?

A: Eduardo Elsztain said they always analyze opportunities, haven't grown in Hotel segment for years, and will analyze divestment or partnership opportunities if they appear.

Q: Questions regarding Manzana 35 project in Caballito?

A: Jorge Cruces said planning to launch one of the towers between March and May next year, depending on elections and country situation.

Q: Questions regarding dividends, are we expecting to pay this year?

A: Eduardo Elsztain said yes, expecting to pay like last years, proposal to be submitted to shareholders' meeting by end of the month.

Q: Do you plan to build new offices as rental properties?

A: Jorge Cruces said thinking about it, very concentrated near Dot shopping mall, may start construction of more office buildings next year adding around 15,000 square meters of GLA.