IRSA(IRS) - 2021 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a net loss of ARS1.2 billion for the first half of 2021, compared to a gain of ARS6.6 billion in the previous year, indicating a significant decline in financial performance [5] - The adjusted EBITDA for the real estate segment increased by 77% from ARS4.5 billion last year to almost ARS8 billion this year [6] - The company experienced a loss of ARS17.5 billion in fair value of investment properties during the quarter, while the total gain for the semester was ARS9.2 billion [23] Business Line Data and Key Metrics Changes - The shopping malls segment saw a drop of 76.2% in adjusted EBITDA compared to the previous year, with a 47.1% drop during the quarter [28] - Office buildings occupancy reached close to 80%, with an average rent slightly lower than last year at around $26 per square meter [12] - Hotel occupancy was severely affected, with an average of 8% occupancy, although the Llao Llao hotel performed better with occupancy levels around 80% during the summer [14] Market Data and Key Metrics Changes - The company’s shopping malls faced challenges due to the exit of major tenants, such as Falabella, leading to a decrease in occupancy rates [10] - The overall market environment in Argentina remains challenging, with the stock price of the company remaining low compared to the previous year [21] Company Strategy and Development Direction - The company is focusing on liquidity and solvency, particularly in its banking operations, and has successfully restructured its debt, achieving a reduction of $200 million [19] - The strategy includes potential asset sales, particularly in the hotel and land bank segments, to improve liquidity [46] Management Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the recovery of shopping center sales post-lockdown, which are performing better than expected [52] - The company anticipates that the financial position for the year will be much better than last year, provided that COVID-19 does not lead to further restrictions [53] Other Important Information - The company completed a successful debt exchange with a 98% acceptance rate, which will help in managing future liabilities [34] - The net asset value is reported at $1.1 billion, with a loan-to-value ratio of 22% [33] Q&A Session Summary Question: Current cash balance and dividend distribution - The company confirmed that IRSA Commercial Properties distributed dividends of ARS9.7 billion in November, which were used to cancel intercompany loans, reducing exposure [39][40] Question: Sources of liquidity and asset sales - Management indicated that they are considering selling certain assets, including some hotels and land banks, to improve liquidity [46] Question: Revaluation and markdown details - The company explained that the volatility in asset values is primarily due to macroeconomic factors, with the blue-chip swap being used for valuation adjustments [48]