IRSA(IRS) - 2020 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company achieved a net gain of ARS 11 billion, a 21% increase compared to the previous year, primarily due to the deconsolidation of Gav-Yam [4] - The net gain attributable to the company was ARS 3.3 billion, with adjusted EBITDA for the period at ARS 5.3 billion, reflecting a 28% increase year-over-year [5] - The net income of the company was ARS 10.983 billion, compared to ARS 9 billion last year [30] Business Line Data and Key Metrics Changes - In the Argentinian shopping centers, adjusted EBITDA was ARS 1.1 billion, a 14.5% decrease year-over-year, with tenant sales dropping by 5.1% [8] - The office segment saw a significant gain of 62% in adjusted EBITDA, reaching ARS 424 million, driven by dollar-denominated rents and the opening of the Zetta Building [11] - The hotel segment's EBITDA was ARS 94 million, a 33% decrease compared to last year, primarily due to the deflagging of one hotel [13] - The sales and development segment reported a loss of ARS 75 million, compared to a loss of ARS 47 million last year [16] Market Data and Key Metrics Changes - In Israel, the company reported a gain of ARS 3.8 billion, a 51% increase year-over-year, attributed to the positive effects of IFRS 16 on Cellcom's sales [6] - The overall real estate segment in dollar terms increased by 3%, while telecommunications grew by 55% [27] Company Strategy and Development Direction - The company is focused on monetizing assets that are well-valued and simplifying its structure, particularly in light of the new scenario in Argentina [47] - The company is actively selling low cap rate assets and reinvesting in more strategic opportunities [50] - The company plans to continue developing new buildings and sites, maintaining a strategy of buying when others are not [54] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the macroeconomic volatility in Argentina, which has affected the valuation of shopping malls [32] - The company is navigating new capital controls in Argentina, which have complicated the transfer of funds abroad [39] - Management expressed confidence in the company's ability to manage debt and maintain liquidity despite the challenging environment [29] Other Important Information - The company approved a dividend representing 1.85% of the shares of IRSA Commercial Properties, aimed at providing liquidity [54] - The company has committed additional investments in IDB, totaling ILS 210 million, to be deployed over the next two years [28] Q&A Session Summary Question: Is there anything worth monetizing or simplifying in the Argentine or Israeli business units? - Management indicated that they are actively looking to realize value from well-valued assets and are in the process of closing a transaction involving a shopping center in Israel [47][49] Question: What is the company's strategy regarding low cap rate assets? - The company is focused on selling low cap rate assets and reinvesting in more strategic opportunities, including new developments [50]