IRSA Inversiones y Representaciones S.A. (NYSE: IRS; BYMA: IRSA), the leading real estate company in Argentina, announces today its results for the third quarter of the Fiscal Year 2024 ended March 31, 2024
IRSA Inversiones y Representaciones S.A. (NYSE: IRS; BYMA: IRSA) reported a loss of ARS 111,728 million for the nine-month period of fiscal year 2024, influenced by inflation exposure on investment properties. However, the rental adjusted EBITDA increased by 9.1%, reaching ARS 112,911 million. Real tenant sales in shopping malls dropped by 18.5% due to inflation acceleration. The company maintained high occupancy rates across its rental segments. IRSA approved a cash dividend of ARS 55,000 million.
Rental adjusted EBITDA increased by 9.1% to ARS 112,911 million.
High occupancy rates were maintained in shopping centers, premium offices, and the hotel portfolio.
Approved a cash dividend of ARS 55,000 million.
Reported a loss of ARS 111,728 million for the nine-month period of fiscal year 2024.
Real tenant sales in shopping malls declined by 18.5%.
Insights
The reported net loss of ARS 111,728 million by IRSA Inversiones y Representaciones S.A. represents a significant decline from the previous year's gain of ARS 123,217 million. This stark contrast is primarily attributed to the valuation changes in investment properties, which are affected by rampant inflation. The company's balance sheet exhibits an increase in current liabilities and a reduction in total assets, indicating potential liquidity pressures and asset devaluation over time.
Despite the challenging macroeconomic environment suggested by the net loss, the company's rental segments are showing resilience, with a notable 9.1% increase in rental adjusted EBITDA. This suggests that the core business operations, particularly in the Shopping Malls segment, are still generating cash flows. However, this positive aspect is overshadowed by a concerning 18.5% drop in real tenant sales in shopping malls during the third quarter, signaling weakening consumer demand.
For a retail investor, the mixed results—with operational strengths on one hand and macroeconomic vulnerabilities on the other—present a nuanced picture. The high occupancy rates mentioned could provide some reassurance about asset quality and demand for space. Nonetheless, the broader economic context in Argentina, particularly with inflation, may continue to pose risks to the company's profitability and asset valuations.
IRSA's exposure to various real estate segments has traditionally been an advantage, providing diversification benefits. However, the reported decline in sales and the adverse effects of inflation create a challenging backdrop for the real estate market in Argentina. The retail sector, as evident from the report, is experiencing a contraction in consumption, which could lead to reduced rental income and property valuations in the future.
The investor sentiment towards the Argentine market and by extension to IRSA, could be affected by the macroeconomic instability, thus potentially impacting the stock's market capitalization, which currently stands at approximately USD 692 million. Considering the broader market dynamics, investors would need to weigh the company's operational strengths against systemic economic risks. Additionally, the high dividend payout in the context of reported losses may raise questions about the sustainability of such a financial strategy.
HIGHLIGHTS
- The net result for the nine-month period of fiscal year 2024 recorded a loss of
ARS 111,728 million compared to a gain ofARS 123,217 million in the same period of the previous year, mainly explained by the impact of inflation exposure on the fair value of investment properties. - The rental adjusted EBITDA reached
ARS 112,911 million in the nine months of fiscal year 2024,9.1% higher than the same period of the previous year,ARS 86,475 million coming from the Shopping Malls segment,ARS 8,776 million from the office segment andARS 17,660 million from the Hotels. Total adjusted EBITDA reachedARS 128,826 million , increasing6.3% compared to the same period of the previous year. - Real tenant sales in shopping malls fell
18.5% in the third quarter of fiscal year 2024 as a result of the acceleration of inflation and a drop in consumption. In the accumulated nine-month period of the year, sales grew by0.9% compared to the same period in 2023. - We maintained high occupancy rates in the three rental segments:
97.9% in shopping centers,92.8% in our premium offices and68.7% in the hotel portfolio. - During the quarter and subsequently, we repurchased approximately
1.7% of the stock capital and in May 2024, we approved a new cash dividend forARS 55,000 million (ARS/share 76.1457 and ARS/GDS 761.4575), which will be distributed since May 9.
Financial Highlights | ||
Income Statement | 03/31/2024 | 03/31/2023 |
Revenues | 213,565 | 208,970 |
Consolidated Gross Profit | 144,424 | 137,387 |
Net result from changes in the fair value of investment properties | (385,848) | (135,403) |
Consolidated Profit / (Loss) from Operations | (275,902) | (56,661) |
Result for the Period | (111,728) | 123,217 |
Attributable to: | ||
IRSA's Shareholders | (104,926) | 119,339 |
Non-Controlling interest | (6,802) | 3,878 |
EPS (Basic) | (140.84) | 159.33 |
EPS (Diluted) | (140.84) | 145.89 |
Balance Sheet | 03/31/2024 | 06/30/2023 |
Current Assets | 213,194 | 220,054 |
Non-Current Assets | 1,606,100 | 2,009,794 |
Total Assets | 1,819,294 | 2,229,848 |
Current Liabilities | 256,486 | 237,277 |
Non-Current Liabilities | 630,651 | 788,102 |
Total Liabilities | 887,137 | 1,025,379 |
Non-Controlling Interest | 59,637 | 69,973 |
Shareholders' Equity | 932,157 | 1,204,469 |
The Company's market capitalization as of March 31, 2024, was approximately
IRSA Inversiones y Representaciones S.A. (NYSE: IRS, BYMA: IRSA), the
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FAQ
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