Good afternoon everyone. I'm Santiago Donato, Investor Relations Officer of IRSA, and I welcome you to the first quarter of fiscal year 2022 results conference call.

First of all, I would like to remind you that both audio and a slide show may be accessed through company's Investor Relations website at www.irsa.com.ar by clicking on the banner webcast link. The following presentation and the earnings release are also available for download on the company website.

After management remarks, there will be a question-and-answer session for analysts and investors. 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 risks and uncertainties and actual results may differ materially. Please refer to the detailed note in the company's earnings release regarding forward-looking statements. I will now turn the call over to Mr. Matias Gaivironsky, CFO. Please go ahead, sir. .

Thank you, Santiago, and good afternoon everybody. So, we began the fiscal year 2022 with good results. We start to see the rental segment recovery in shopping malls and hotels. Regarding the offices, we see a slight decrease in rent and occupancy, but very high liquidity and strong sale prices.

We announced this week that we sold some floors of 200 Della Paolera building that we will see later. Regarding our development segment, we received the first approval of Costa Urbana or Solares or Santa Maria del Plata, our biggest land bank. So, we need to receive the second approval yet, but the first step is very important.

Regarding the international segment, Condor, our investment in the US, the REIT announced a sale of the portfolio to an affiliate of Blackstone. They hope to close the transaction soon. It's subject to the approval of the shareholders of Condor. That should take place in the coming months.

Regarding our quarterly EBITDA, we have full rental operations, compared with the previous year that was affected by the pandemic, but no asset sales. During the last year, we sold some floors. During this quarter, we haven't sold any properties. So, the result is lower than the previous quarter.

Regarding the rental EBITDA, it is still below the pre-pandemic levels, 36.5% below, but is recovering at good levels. During the quarter, we have a net loss, mainly explained by a change in the fair value of our investment properties. The result attributable to our controlling company was ARS 600 million.

Also, as an important development, we announced during the quarter, a merger proposal with IRCP that was approved by the Board of Directors of the two companies and is still pending of the shareholder meeting that will take place in the coming months. So, if we go to the next page, we have the evolution in the different segments.

On the operational side, shopping malls that we can see that we have more or less the same amount of square meters. We have a slight increase because the opening of the first stage of the development in Alto Palermo. The occupancy was more or less in line with the previous quarter, 89.6%.

If we exclude the impact of Falabella that leave the country, that occupancy will go to 94.3% that after the effect of the pandemic is very good levels. We expect our team is focused on occupy the remaining space. So, we hope to see better results going forward.

Regarding the real -- the sales of our tenants, we can see an evolution increase that is 322% above last year, but last year was really very affected by the pandemic. Some of our operation was closed. So if we compare with the 2020 -- the fiscal year 2020 pre-pandemic levels that level -- that number is 10.7%, below in real terms.

And if we see the trend when we compare the fourth quarter against the first quarter of this fiscal year, we saw last year or the last quarter at levels -- the evolution was levels of 55% below. Now it's only 10% below. And if we see what happened after the end of this quarter, we see better results.

So we are optimistic that we can recover faster than what we expected. In terms of the office buildings, the portfolio remained stable compared with the previous year where we sold two buildings but we incorporated the new building 200 Della Paolera. So we remain with a portfolio of 114,000 square meters.

Occupancy we have a slight decrease to levels of 78.9% and the average trend also a slight decrease to the levels of $25 per square meter. We see companies returning to the office maybe in a new modality, in a hybrid modality with more home office but also they need more space to maintain the social distancing.

So on the operational side companies that are coming back are very happy with the use of the office. Regarding the hotels, still Argentina has just opened the frontiers this month since November. So before all the industry was really affected by the pandemic and the lack of foreigners coming to Argentina.

Only the Llao Llao hotels has a very good performance. It's in the south of the country and many people -- Argentinians are going there. But leaving aside that hotel the rest really was affected by the pandemic. So we hope to see much better results going forward after the frontiers open.

In the next page, we just announced the disposal of three floors of the 200 Della Paolera building. We sold 3,582 square meters at level -- at very good levels. We sold at the official exchange rate at $8,950 per square meter. We collected $32 million. That was already collected.

So this -- we saw during the last year that we sold a lot of square meters of offices. And this really shows the liquidity of our portfolio that, if we want to monetize there is liquidity.

So we will keep doing this strategy of flight to quality and sometimes selling floors and developing new buildings that the equation -- or the financial equation of that is very profitable. So we will keep doing this going forward. In the next page, we have the -- some pictures of Costa Urbana or Solares or Santa Maria del Plata.

Costa Urbana is the new name that we are using. The very good news that we already spoke in the last conference call, was the approval in the first stage from the city Congress. This is the first time ever that the Congress approved the project.

So after that that was take place in August, there was the obligation to do a public audience of the project. That took place during the last two weeks, so that already finished. And now the city Congress should approve again in the Congress. So we are awaiting that approval. That will be the final stage for the approval. Now after that it's final.

So we are -- we hope to receive approval soon on the project. This is our dream. Now we have been dealing with this approval for the last 20 years. And definitely this will boost construction and economy activity will generate plenty of direct and indirect shops and housing for more than 6,000 people.

So we dream to develop this project and really change part of the city of Buenos Aires. Going to the financial part. And if we see the financial results of this quarter, we see -- we finished the first Q with a loss of ARS1 billion attributable to our controlling interest ARS600 million compared with last year with a gain of ARS12.7 billion.

And with the first Q of 2020, that we will incorporate during this year that comparison in order to compare apple-with-apples, because last year was very affected by the pandemic. So, all the numbers at the operational side, doesn't make sense to compare with this year that is normal or almost normal so far. So, we included the 2020 figures.

So if we compare -- or if we analyze the main effects on this quarter, we can see first of all line four, the change in the fair value that we posted a loss of ARS6.5 billion compared with a important gain during the last year of ARS36.7 billion or during fiscal year 2020 of ARS18.8 billion.

The main reason this quarter is related to the macro variables of Argentina. We are adjusting by inflation all the pesos number at the rate during the quarter of 9%.

If we compare that 9% with the devaluation of the official exchange rate, remember that our properties in the case of the malls, we are using the official exchange rate, the devaluation was only 3% compared with a 9% inflation. So we are recognizing losses at the real terms.

And regarding the offices and the land bank, we are using the blue-chip swap and the blue-chip swap devaluation during the quarter was 7% against the 9% inflation. So we also posted losses on the offices and land bank. If you analyze in dollar terms, we maintain same levels than the end of fiscal year 2021.

The other important effect is in line nine that we will -- I will comment later, the net financial results that we see again against a loss last year.

The income tax we see for the first time during the last years, the current tax that is related to our subsidiary IRSA Commercial Properties that if we approve the merge, this will disappear, because IRCP will use tax grades of IRSA, so we won't have to pay taxes. And also, in line 12 we have the deferred tax related to the change in the fair value.

So we are recognizing a loss in the fair value and we recognized a gain of the deferred tax related to the valuation of our properties. If we move to the next page, we can see the adjusted EBITDA by segment. So in shopping malls, we posted a gain of ARS1.5 billion against a loss.

This was the -- only the company lose money in shopping malls at the EBITDA level only twice in the history. This was one of the quarters last year, because the operation was completely closed.

But if we compare with the previous year, adjusted by inflation we are 35% below in this quarter -- of the first quarter of fiscal year 2022, we still have some concessions to our tenants because of the pandemic. But now we are running all the operation in normal terms and conditions so we hope to see much better results going forward.

Regarding the offices, it's very similar than the previous year. And compared with 2020, we are 35% below. But this is more related to the amount of square meters that we used to have than we sold and also the adjustment by inflation that -- remember that our offices we collect rents at the official exchange rate.

So we are -- we receive pesos at the official exchange rate. And if the inflation is higher than the devaluation we will see lower results, when we compare the numbers. In terms of the hotel ARS79 million positive. That is good news that we started to generate cash again in the hotels, but still very affected by the pandemic.

And sales and development, there is no major news during this quarter. Going to the next page we can enter more details on the shopping malls and the offices. In the malls, we can see on the left part of the graph that the operation is running at 100% levels, so without any closure. And we can see on dollar terms, how the EBITDA is recovering.

So we're still below pre-pandemic levels, but we had the best quarter since the beginning of the pandemic. In the office revenues evolution this graph shows what the impact of the offices were. And so we see that we finished the last year with $6.6 million of revenues. We sold some square meters that used to generate $1.4 million.

We incorporated Della Paolera that generated $2.2 million. And the effect of the vacancy has an impact of $1 million and the rent price just $0.1 million. So when we compare the $6.6 million we finished with $6.3 million because of these reasons.

If we go to page 10, here we have the breakdown of the financial -- net financial results that we see a gain of ARS1.3 billion against a loss of ARS1.4 billion. The main reason here is in the line two the net foreign exchange gains that this year we have ARS2.8 billion against a slight loss last year of ARS13 million.

The reason here is the evolution of the official exchange rate. We can see here that last year we have a real devaluation of 0.4%. And in this quarter we have an appreciation of the currencies. The devaluation was only 3.2% and inflation was 9%. So we have a real appreciation of the currency that generates gains in the line of net foreign exchanges.

So when we enter -- when we analyze the evolution of our NAV, we can see here that net asset value at the book level so how we are recognizing in our books is still -- or is almost $1.2 billion, compared with our debt that give us an LTV of 21.9%.

So moving to our debt structure, we can see now that the debt amortization scale remains more atomized in the different years in the next four years. We have a net debt today of $331.6 million. Part of this debt is with IRSA Commercial Properties with the market is around $180 million.

The rest is between IRSA through the IRSA Commercial Properties through the intercompany debt that at September used to be $41.4 million and other bonds that IRCP acquired from IRSA. So finally, regarding the merger proposal there was some news. We submitted the prospectus therefore with the SEC.

During October, we already received a No-Common Letter from the SEC. So we are asking for effectiveness. And after that we can call to our shareholders' meeting. That should take place in the next days. And we are planning to have the shareholders meeting to approve the merger during December.

So we will announce probably during this week the exact date of the shareholders' meeting. So now we already submitted the prospectus also with the CMB. So we are -- we have to wait their -- also their green light to confirm the date of our shareholders' meeting. So with this, we finished the formal presentation.

Now we open the line to receive your questions..

We'll start with the Q&A session. Yeah.

We have the first one, how much money did the company save after the merge? Is the company still invested in Israel, or do you expect to invest out of the country?.

So the merge rationale has many implication. We believe that we will really simplify our corporate structure. We will gain liquidity. Our shares are not very liquid and we believe that if we merge the two companies, we will increase liquidity.

Also, we will eliminate potential conflict of interest between the two companies and maybe land bank that are at one of the two levels. Maybe we could have conflict of interest. So we believe that this merge solve all this kind of potential conflict. And also, there is synergies and cost efficiencies.

We have a hard cost more or less $1 million of different costs that we will save because of the merge; plus, tax efficiencies that today we have tax credits at IRSA level and in IRCP normal scenario. And we saw during this quarter that we started to recognize losses on taxes. So IRCP one of the main cost of the company is taxes.

So we believe that this merge could create good synergies to all our stakeholders. Regarding the second part of the question, regarding the Israel, yes, we announced it in September last year the deconsolidation of our investments. So there is no more interest in IDB.

And if we plan to invest in abroad Argentina that was part of our strategy to -- more an opportunistic approach trying to find good opportunities abroad Argentina. So if we see some, we can try to take advantage of that.

But today because of the current -- or the situation of Argentina and the capital contours of Argentina, it's not efficient to export capital from here to the world. The cost of capital in Argentina probably is one of the -- or the most expensive country today in the world.

So to find good opportunities using money from Argentina, today is almost impossible. So it's very unlikely that in the short term we can take -- find any opportunity abroad. .

Okay. If there are no more questions, we turn back to Matias Gaivironsky for his closing remarks..

Well, thank you very much. We closed the first quarter really happy that -- without the effects of the pandemics or the closure of our operations. So people are going back to the malls. We see an increase in traffic, an increase in interest to rent new spaces in our malls. Tourism will hopefully come back to Argentina today.

Argentina is really cheap in dollar terms. So we hope to see a lot of tourism that will boost malls and hotel activity. And we are optimistic on the future of the company. We hope to get approved the merger proposal with IRCP.

We believe this will reduce cost and making the structure more efficient and more simple and consolidating all our real estate assets in only one vehicle. So we hope to see you again in the next quarter. And thank you very much and have a very good day..