Business Context and Reporting Period
Company: IRSA Inversiones y Representaciones Sociedad Anónima (IRSA Investments & Representations Inc.)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Three months ended September 30, 2025 (Q1 Fiscal 2026)
Business Overview: IRSA is Argentina's leading real estate company, operating in five segments: Shopping Malls, Offices, Hotels, Sales and Developments, and Others (including financial investments and entertainment). The company is listed on the NYSE (GDS) and the Buenos Aires Stock Exchange (ByMA).
Accounting Basis: Financial statements are prepared in Argentine Pesos (ARS) and adjusted for hyperinflation in accordance with IAS 29 and IAS 34. USD figures are provided for convenience at the exchange rate of ARS 1,380.00 per USD 1.00 as of September 30, 2025.
Key Financial Metrics
| Metric (in millions) | USD (Sep 30, 2025) | ARS (Sep 30, 2025) | ARS (Sep 30, 2024) |
|---|---|---|---|
| Revenues | 94 | 129,259 | 118,414 |
| Gross Profit | 58 | 79,356 | 75,648 |
| Net Gain/(Loss) on Fair Value Adjustment | 160 | 219,935 | (297,111) |
| Profit from Operations | 199 | 274,272 | (247,156) |
| Net Profit/(Loss) for the Period | 118 | 163,438 | (143,662) |
| Net Profit Attributable to Equityholders | 111 | 153,846 | (139,197) |
| Operating Cash Flow | 60 | 82,248 | 62,993 |
| Investing Cash Flow | (84) | (115,350) | (27,198) |
| Financing Cash Flow | (44) | (61,166) | (36,379) |
| Cash and Cash Equivalents (End of Period) | 67 | 92,343 | 39,847 |
| Total Assets | 2,770 | 3,823,123 | 3,012,630 |
| Total Liabilities | 1,368 | 1,888,125 | 1,476,974 |
| Total Shareholders' Equity | 1,402 | 1,934,998 | 1,535,656 |
Debt Profile: Total borrowings as of September 30, 2025, were ARS 690,997 million (approx. USD 501 million). This includes ARS 675,516 million in non-convertible notes (mostly USD-denominated) and ARS 2,374 million in bank loans. Current borrowings are ARS 104,618 million; non-current are ARS 586,379 million.
Material Changes vs. Prior Period
- Profitability Turnaround: The company reported a net profit of ARS 163,438 million, a significant reversal from a net loss of ARS 143,662 million in the same period of 2024. This shift is primarily driven by a massive swing in the fair value adjustment of investment properties, which moved from a loss of ARS 297,111 million to a gain of ARS 219,935 million.
- Revenue Growth: Total revenues increased by 9.2% (ARS 10,845 million) year-over-year.
- Shopping Malls: Revenues rose 6.6% to ARS 72,823 million, driven by base rent increases and the inclusion of the newly acquired Terrazas de Mayo mall.
- Offices: Revenues increased 12.6% to ARS 6,085 million, aided by higher occupancy and USD-denominated rental adjustments.
- Sales and Developments: Revenues surged 110.4% to ARS 4,052 million due to property sales (e.g., Nuevo Quilmes 2, Human Abasto Tower).
- Hotels: Revenues declined 2.3% to ARS 17,787 million due to lower occupancy and reduced international tourism.
- Portfolio Expansion: IRSA completed the acquisition of the "Al Oeste" shopping mall in September 2025 (20,000 sqm GLA), planned for conversion into an outlet center. The company also acquired the "Terrazas de Mayo" mall in December 2024.
- Financial Results: Net financial results swung from a gain of ARS 19,782 million in 2024 to a loss of ARS 23,954 million in 2025, largely due to foreign exchange losses on USD-denominated non-convertible notes where devaluation exceeded inflation.
Guidance, Outlook, and Risks
Management Commentary & Outlook:
- Macroeconomic Context: Argentina's GDP grew 6.3% interannually in Q2 2025. Inflation (CPI) for the three months ended September 2025 was 6.0%, significantly lower than the 12.2% recorded in the prior year. The exchange rate appreciated (ARS weakened) against the USD, impacting financial results but increasing the ARS value of real estate assets.
- Segment Outlook:
- Shopping Malls: Tenant sales decreased 7.0% in nominal terms compared to the prior year, though base rents increased. The company expects continued growth from new acquisitions and outlet conversions.
- Offices: Premium office vacancy in Buenos Aires remained stable at 12.79%. Rental prices in USD terms remain strong in key submarkets (e.g., Plaza San Martín, Catalinas).
- Hotels: Occupancy rates are slightly below prior year levels due to reduced currency competitiveness affecting international tourism.
Risks and Contingencies:
- Hyperinflation & Currency: Continued volatility in the Argentine Peso and inflation rates affects operating costs, tenant sales, and the valuation of investment properties.
- Debt Service: A significant portion of debt is USD-denominated. Further devaluation of the Peso increases debt service obligations in local currency terms.
- Regulatory Environment: Changes in foreign exchange regulations, tax laws, and urban lease regulations in Argentina pose ongoing risks.
- Market Conditions: Competition in the shopping mall and office sectors, as well as shifts in consumer purchasing habits, could impact occupancy and rental rates.
Key Facts for Investor Verification
- Valuation Sensitivity: Verify the assumptions used in the fair value adjustment of investment properties (discount rates, projected cash flows, and exchange rate projections), as this line item drove the entire profit/loss swing for the quarter.
- Currency Exposure: Confirm the extent of USD-denominated debt versus ARS-denominated revenue streams and the company's hedging strategies against further Peso devaluation.
- Acquisition Integration: Monitor the performance and conversion timeline of the newly acquired "Al Oeste" shopping mall and the "Terrazas de Mayo" mall.
- Liquidity Position: Review the maturity schedule of the non-convertible notes (Series XIV, XVII, XVIII, XX, XXII, XXIII, XXIV) to assess near-term refinancing needs.
- Real Estate Sales: Track the execution of the "Ramblas del Plata" project and other land sales, which contributed significantly to the "Sales and Developments" segment revenue.