Alejandro Elsztain – Second Vice-Chairman Daniel Elsztain – Chief Real Estate Business Officer Matias Gaivironsky – Chief Financial Officer.

Federico Rey – Raymond James Alejandra Aranda – Itau Nicolas Forrindo – Cohen.

Good morning everyone and welcome to IRSA Second Quarter 2015 Results Conference Call. Today's live webcast, both audio and slide show, may be accessed through. The Company's Investor Relations website at www.irsa.com.ar/ir by clicking on the banner, conference call.

The following presentation and earnings release issued last week are available for download on the Company's website. After management's remarks, there will be a question-and-answer session for analysts and investors. At that time further instruction will be given.

[Operator Instructions] You will also have the possibility of sending a question via webcast by clicking on the question to host tool. Before we begin, I would like to remind you that this call is being recorded. And that information discussed today may include forward-looking statements regarding the Company's financial and operating performance.

All projections are subject to risk and uncertainty, and actual results may differ materially. Please refer to the detailed note in the Company's earnings release regarding forward-looking statements. I would now like to turn the call over to Mr. Alejandro Elsztain, Second Vice President. Please go ahead, sir..

Hello, good morning, everybody. We are beginning our conference call, second quarter of 2015.

And if we go to page number 2 and we see the main highlights of the quarter, the semester, the two quarters, we can see a summary that, in this semester, we created a few commercial real estate vehicles called IRSA Commercial Properties that we did at the end of December.

And at the same time, close to those dates, we opened our 14th shopping center mall, called Distrito Arcos, that was done on December 18, 2014, after fighting a lot in court. We are in working progress in Neuquen project. We are going to open this very soon. We are expecting to do that for March of 2015.

We had the first semester a solid tenant growth, and we are going to show how good were the results of the second quarter at the shopping center level. We had a good result in office and hotels too in these two segments on the rental - sorry, hotel is not in the rental, in office and hotels, sorry.

The sales of investment properties, we had a lot of that. We have ARS800 million during the semester of the investment properties. We recognized a loss in IDBD investment because we are valuing at market value and there was a drop on the share price.

In the financial results of the six months, revenues, when we include not only the rental but the sales of investment properties and sales and development, we achieved ARS380,000 million [ph]. That is 177% comparing to last year's numbers.

If we take the investment properties, we achieved a revenue of ARS1,700 million, a growth of 35.2% comparing to last year. And the EBITDA for this period was ARS1,787 million that is 179% growth comparing to last year.

If we deduct the Madison and the sales of investment properties, this EBITDA, the adjusted EBITDA, would be ARS789 million that is 26.1% comparing to six months of last year. We had a net income of almost ARS47 million comparing to a loss of ARS26 million of last year.

Our net income is including the effect that we recognized in this case, ARS877 million for this period, for the investment in IDBD. In the operating result for the quarter was tenant of the same store sales, that represent the same shopping centers, grew 35.1% with vacancy of 1.5% in malls and 1.6% in office at the end of the period.

Here are some pictures in the next page, showing what was the creation of Commercial Properties, a unique commercial real estate in the country. This is the transference of office portfolio from IRSA to APSA and changing of the name of IRSA Commercial Properties.

So we named and it was approved recently on February 5, the change of name to IRSA Commercial Properties with the ticker of IRCP in the NASDAQ and Buenos Aires Stock Exchange. We have not, today, the same shopping centers and the office building at the same vehicle.

With this transference of almost 84,000 square meters across the scenario with 97.8% occupied at a lease of $24.5 per square meter, we did almost $35 million revenue. And land reserved to make a new building beside Intercontinental – sorry, we are transferring the portfolio of office to IRSA Commercial Property.

And we can see on Page number 5 how IRSA today is organized, owning almost 96% of Commercial Properties, 95.7% to be perfectly right.

And the hotel companies running the three hotels, the land bank of the company including Santa Maria and other land banks in the country, the international investments due in the States and in Israel and Uruguay and Banco Hipotecario, almost 30%.

And IRSA Commercial Properties, including the two business, having almost 429 square meters of rental gross leasable area. Having a lot of potential to develop in the shopping center, 240,000 square meters and in the office, 79,000 square meters of office premium. Now I will introduce to Daniel Elsztain.

Please?.

Thank you, Alejandro. On page number 6, we can see that we finally were able to open our 14th shopping center by December 18 of 2014. We got permission from court to open, so a week after we got the permits we opened the shopping center. By then we open, only 51%, 52% of the stores were open.

As of today, I mean we have almost 40 stores open and, in a couple of weeks, we will have all the first stage completely open. The shopping is fully occupied but it took some time for the stores to get on time and bring the product after being a year, a full year, closed.

We are very happy and the sales on the stores that are open are doing very, very well, even ahead of our estimation. On page number 7, we can see the progress we are having on Alto Comahue, so we start in the province of Neuquen. This shopping is projected to open by mid March this year.

We have now 90% of the contracts already signed and the stores are doing the work in the stores - I mean, the stores are getting ready for the opening. Everything is as budget and the supermarket that it was sold and it's open is doing very well. The hotel is sold and they're about to start the construction.

The new owner of this land told us that it will start construction by somewhere between the end of March or April. We still have the 18,000 square meters to see what we're going to do in the next future next to this shopping center. There's a lot of expectations, as you know, because we have this shopping center in our portfolio.

This is now in our portfolio for years and years, I think 1998, and so there's a big expectation in the Company, and a huge expectation in the city of Neuquen, because the location is fantastic and everyone can see the advance on the construction.

On page number 8, we can see how we are doing on the rental segment, specifically talking about shopping centers. As Alejandro mentioned, on this quarter ending December 2014, we see a big bump on the tenant sales. We had on the previous quarter, 27% increase in sales and by this quarter 35.6% increase in sales.

The difference basically is due to the previous quarter, as we mentioned, we had many things on the country that were worrying the people; we had also the World Cup.

By the last quarter, ending on December, nothing really strange happened, and also the prices went up a little bit more than they were going up on the previous quarter, so that we will see this big increase in the tenant sales.

If we see as the summary, the stock went up by the inclusion of Arcos, Distrito Arcos, so we went for a total of 324,276 square meters of GLA. Occupancy remains very stable at the levels of 98.5% in this case, 98%, 99%.

Sales in pesos went up, and we also had an increase in visitors because opening of this new shopping center and the consolidation of the others. In the figures of occupancy we excluded Arcos, but Arcos is also at the same level and we'll see in the next quarter. On the office segment, we see that the stock went a little bit down, on page number 9.

So on this quarter, we ended with a total of 112,925 square meters, about 9,000 below that we had in the previous quarter. The average lease price in pesos went up, but we can also see a little increase in the prices in terms of dollars.

And this trend, I can tell you, we can see that this trend of going a little bit up continue for the following months. And the offices that we renewed on the past months after the closing of the quarter also allow us to see that we are going a little bit up, little bit higher from this $25.4 per square meters.

Occupancy remains also very stable at 98.4%. And we can see a trend of prices going a little bit up and some companies looking for potential expansion, at the same time that some offices are reducing. So occupancy is a one-by-one case and we can see that prices might be going up a little bit.

On page number 10, we can see that we finally sold all the last units that we have on the building Bouchard Plaza. This is a building that we acquired in 2007, a total leasable area of 33,000 square meters. We acquired 2007, we rented the space and we were selling since 2008 and we finally sold on 2014 the last unit we have.

We acquired this building at a price of $2,550 approximately and the average sale price that we had in total, the final sale it was $5,000. The last one, the sale that we have during this last quarter of – sorry, the second quarter of 2015, is 7,475 square meters or $61.7 million.

That's an average of $8,250 a square meter or a cap rate approximately between 4% I mean, all the sales were between 4% and 5% which is a record cap rate for Argentina in this kind of asset. Doing an IRR of these investments was approximately 21%. We have no longer any office unit on this building.

We still have 116 parking spaces that we are collecting rent every month and we will see what happens in next future. So now I introduce you Matias Gaivironsky, CFO of the Company.

Matias?.

Good morning, everybody. Thank you, Daniel. Going to Page 11, here we can see our investment in IDB. IDB today, we control, together with Extra Holdings, 62.5%, and the rest of the shareholders, the free float, is around 37.5%.

IDB is a holding company with a conglomerate in different industries, different companies, including the real estate, agrichemicals, venture capital, telecommunications, supermarket, insurance companies, among the main companies of the Group. The latest developments on IDB, the Board of Directors of IDB approved a rights offering.

IRSA approved recently an additional investment of $105 million in IDB, so we will participate in the rights offering for up to NIS400 million. The total amount of the rights offering will be NIS800 million. And Dolphin committed to participate for the NIS400 million so IRSA will participate as well.

As well with the NIS800 million, the Company will issue three new series of warrants for up to NIS1.2 billion, with maturity in 2016, 2017 and 2018 each of the series will be one-third of the NIS1.2 billion. Use of proceed of this offering will be to reduce leverage and to comply with the amortization that the Company had this year.

Going to next page, in page 12, here we include a graph of the performance of the shares since the closing of this transaction. Remember that we closed this deal in May last year, and since that, the performance of the shares was not good. The price has reduced 61.1%.

And we decided at the beginning of the investment to recognize the value of IDB at market price. So each quarter, we have to mark to market our position and recognize gain or losses. Since that, we have recognized losses in this semester for ARS877 million, according to our participation in the company.

Here you can see since the closing, we did a first rights offering in June 2014. And then, we are doing a new one this month that probably will close today or tomorrow, then we will see the results.

Going to page 13, regarding our investment in Banco Hipotecario, this quarter we received gains from Banco Hipotecario of a total amount of ARS70.6 million, compared with ARS86.3 million last year. That is mainly because of the performance of the portfolio of bonds, and there were financial margins in Banco Hipotecario.

We also received this quarter dividends from Banco Hipotecario. Banco Hipotecario paid ARS42 million in dividend and IRSA received ARS12.6 this quarter. The market value at the bottom of the graph of our stake in Banco Hipotecario today represent $228 million, compared with the previous year that was ARS121.9 million.

Remember that here we don't recognize gains regarding the appreciation of Banco Hipotecario. We recognize results at the equity measures. Going to page 14, here we can see the evolution of the different segments of the Company and EBITDA. We had good results in all the rental segments.

We have an increase of 27% revenues in shopping and 29% in EBITDA in shopping centers. Revenues in the offices increased 34%, including the decrease in square meters that we sold this year. So the performance was better, mainly because of the devaluation of the peso.

Remember that here we collect revenues in dollar terms, tied to the official exchange rate, and we received 34% more than the previous year. Sales and development, in terms of revenue, was 84% lower than the previous year; that is mainly because of the reduction in stock.

In the last year, we have been delivering the units of Horizons, and this quarter the stock is much lower. Hotels, 33% increase, a good performance. In terms of margin, we remain in very good levels. Shopping centers remain close to 80%. In offices, we increased to 73.1% in margin and hotels in the same level.

Regarding the breakdown of the EBITDA, this quarter - this semester, we have one-shot effect, or non-recurrent effect, because of the sales of the investment properties, and also because of the sale of Madison that generate - that in the five on the bottom of the graph, you can see that international in this quarter is higher than what used to be.

Taking in consideration the shift of EBITDA, or leaving aside those effect shopping centers remain the main segment, with 83% of the EBITDA and 15% in offices. Going to page 16, here we include the main variations on the financial statements.

Starting with the last quarter, with a profit or loss of ARS26.1 million, the main effects were the increase in shopping centers by ARS168 million. That is mainly because of the increase in revenues of 27%, we have a decrease of ARS66 million in offices.

And here it's important to mention that regarding the creation of IRSA Commercial Properties, we incurred in costs that were allocated to the office segment, so the cost of transfer was ARS110 million. So that ARS66 million of reduction includes the cost of the transfer.

So leaving aside the cost of the transfer, in offices we have an increase in 53% in EBITDA and 34% in revenues. In terms of the sales and development segment, we have an increase of ARS477.5 million. That is mainly because of the sales of investment properties, the sales of offices that were included in this segment. Hotels increased ARS3.6 million.

The international segment here we have a reduction, or a decrease of ARS257.6 million that here we include two main effects. One is the sale of Madison that was positive and the loss of IDB that were part include in this segment and part include in the financial results. So IDB in the international affected by ARS692 million.

The rest are stable in the same line that the previous year. Net financial results we have an increase; the difference is positive ARS126.7 million. Remember that the last year the net financial results was ARS611 million compared with this quarter or this semester that was ARS484 million.

Last semester, we have one important effect that was the devaluation that the peso, or the exchange rate, were passed from ARS5.388/$1 to ARS6.521; that represents 21% devaluation compared with this semester that we had 5% devaluation. So that is the main effect.

In the previous semester we have financial losses due to the exchange rate of ARS496 million compared with this semester that was ARS178 million.

The other effects here were, one, is the mark-to-market of Supertel, the shares of Supertel, since there was a reduction in the conversion price of our preferred shares that generate an increase in the mark-to-market of that position.

Also, we have a negative effect of IDB here due to the obligations we have under IDB that we recognize a loss of ARS192 million. With that, we have the other important effect was the taxes, an increase of ARS386 million in taxes. That is mainly explained by the sale of Madison.

So going to page 16, here we include the two debts, one at the IRSA stand-alone basis, and the other at the IRSA Commercial Properties. With the creation of the vehicle, we transfer, not physically because we still have the bonds at the IRSA level, but IRSA Commercial Properties has a debt to IRSA stand-alone.

So with that credit, IRSA remained with a net debt of minus $43.5 million. We end with this figure summing the $46.6 million of debt plus the $300 million that we have in bonds, minus the cash and short-term investment of $129 million.

And also, we include the credit of IRSA Commercial Properties of $246.4 million, and the debt that we have in portfolio of $14.5 million of bond repurchase that we did in the past. So IRSA will have a very conservative debt structure, no debt. And that the IRSA Commercial Properties' total debt, net debt will be $384.5 million.

With an EBITDA here we don't release estimations of our EBITDA, but we should include the figures of the last year and summing the office portfolio, that is approximately $170 million. And that gives us a net debt to EBITDA ratio of only 2.3 times. So also very conservative, and with a strong cash generation, with amortizations not in the short term.

So we have a very comfortable debt situation. We finish the presentation, so now we open for your questions..

[Operator Instructions] Your first question is from the line of Federico Rey with Raymond James..

[Indiscernible] for sale, I would like to know if you have any idea of when do you plan to sell these remaining assets? Thanks..

Federico, what do you refer with remaining assets?.

You still have close to 18,000 square meters available for sale in those assets or buildings that were not transferred to IRSA Commercial Properties..

We have that stock, we split when we expected that it was closed and they probably sell, but up to now was not sold. But maybe soon can be sell, so we - because of we put this in the market and we decided not to transfer it. When it is going to happen really it's tough to say.

But because of our decision to put it in the market, we decided not to put in the transference of the portfolio that we did in the rest..

Okay. Thank you. I have an additional question regarding [multiple speakers].

There is a land bank on the Company. There is a land bank on the Company that could be on sale, or could be transferred if we begin decide to do it. So if we decide in Catalinas that it going to be a building under construction, probably it will be transferred to Commercial Properties. And if it's going to be sell, it's going to be sold through IRSA..

Okay, great. Thank you. I have an additional question regarding Neuquen.

If you can give us an idea of what is the expected sale per square meter in that new shopping mall?.

We are estimating that we will have something close to the average that we have in the interior of the country. But it's difficult to say because this might be even better because that province of Neuquen has wages that are a little above the average of the country.

So we were very cautious when we did our estimations, but we expect that to be in line with the rest of the shopping centers..

Okay, thank you..

[Operator Instructions] The next question is from Alejandra Aranda with Itau..

Hi, good morning, thank you for the call Alejandra Aranda from Itau.

I would like to know, could you give us more color on where you're standing at on IDBD and what we should expect from that on the following months?.

The main issue is what we describe it in the presentation. We are doing a rights offering now, so that we believe that the Company will have the money that it needs for the next month. Regarding the rest of this strategic approach on IDB, I think it will take some time.

It is a very big conglomerate of companies and we believe that we can unlock value from the underlying assets that each company will have to implement, changing the strategy. And we are doing some of that, but will take time.

Each of the companies there are public companies, so we need to be very cautious on the information that we give to our shareholders. So each of the companies will disclose on an appropriate way in each of the decisions that we have to take in IDB. So for that reason, I can't give you more color on that.

But as we did in the past, and you know that our track record investing in distressed assets were very successful in the past. And we hope that we can replicate our track record in Israel. The story is not for the short run, it will take some time.

We are not expecting results for the coming month, so we are still very confident that mainly the underlying assets that we bought are very solid and very good quality of assets, and we hope that we can unlock value from there..

Okay.

And on the Argentina front, could you tell us a little bit more on what's the strategy to follow for 2015, and maybe looking at the beginning of 2016? What you're aiming at on the shopping mall side regarding possible new developments?.

You saw that we finished Arcos, we have lot of stuff to keep doing in both side in the shopping and the office building. We’re now discussing this is an election time and these days of Argentina are times of thinking, and that's what we are doing, keeping with that idea of doing one or two per year, we like that.

But really, we are not launching, we are not showing, but we are now preparing the plans and the maps of the shoppings, and like the San Martin project, Nobleza Picardo, or the Tucuman project, or the Catalinas office. So with the Dot building office we are now discussing, we have a lot of land to do, office buildings in Dot 2.

So we are now in times of preparation of a lot of plans, and we are going to launch, but we are not up to now decided none of this. But probably you are going to see some of that launches on the company level..

Okay.

But if I just may ask one more question? Regarding the debt at now IRSA real estate, the former APSA?.

Commercial property.

Thank you, what's your plan over there? I have to get used to the new name, what's your plan over there [multiple speakers].

The plan is what you said, the things we are going to launch, are going to be commercial properties. .

And regarding the structure of the debt, Alejandra, we will see the market. Today, we don't have any urgency to change the structure. We have the debt that the main amortization will be 2017, so we have time to decide what to do, in terms of refinancing or repaying the debt. So we will see.

If we see good financial conditions in the market that we hope that, in the coming month, we will see - or that is - we hope that Argentina will be in a better situation for the coming month. And if the market give us the opportunity, we will replace those bonds for a more liquid bond for IRSA Commercial Properties.

But if not we will wait, and we will see in the next years. .

Okay. Thank you very much..

[Operator Instructions] And your next question comes from Nicolas Forrindo of Cohen..

Hello, how are you everybody? I had a question regarding the warrants on IDB.

Do you have an indication of the price of those warrants?.

Yes. The warrants - the shares - the rights offering is at a price of NIS1.51 per share. And the warrants, each is 10% more than the price. So the first one is 10% more than the NIS1.51, and the second is 20%, and the third is 30%..

There is 20% and 30%? Or it's 10% [multiple speakers] 21%?.

10% of over NIS1.51, 20% of over NIS1.51 and 30% of over NIS1.51..

Okay.

And the reason why the net debt of IRSA Holding is so small is because you're not considering the use of $105 million that are going to be invested in IDB, right?.

That is true. That is the position as of December. If you exclude the $105 million that we decided to invest, it's a positive by $100 million. So the total, it will be negative and the net debt will be $100 million..

Okay. Thank you very much..

And your next question is from the line of David Wong [ph]..

I was just curious about the tender offer.

Can you just explain a little bit more about it, and when we might expect that it might occur?.

Sorry, I couldn't hear your name, and the question is regarding IDB?.

Yes. This is David Wong..

Okay, David. The tender offer is described; you have the whole explanation in our financial statement. You have there all the details regarding all our commitments and obligations.

The fact is that we have under the arrangement that we enter in IDB, we have the obligation to launch a tender offer by the end of 2015, and by the end of 2016, for the total amount of NIS512 million. So part will be by the end of this year, and part will be by the end of the next year.

Price of the tender offer today is much higher than the price of the shares. To give you an idea for this year, the tender offer is at the price of $7.90 something and today the shares are much lower than that. But you have all the details in the financial statement..

Got it. Thank you..

And this concludes the question-and-answer section. At this time, I would like to turn the floor back to Mr. Alejandro Elsztain for any closing remarks..

I would like to thank everybody. And let’s keep in next quarter, and we are very strong on assets, but the Company is showing that everything that's put on the market, it has a lot of clients. And the rental is working very well, and the international investments too.

So we thank everybody for their participation on the conference call, and have a very good day. Thanks a lot..

Thank you. This does conclude today's presentation. You may disconnect your line at this time, and have a nice day..