Good morning, everyone. I'm Santiago Donato, Investor Relations Officer of IRSA, and I welcome you to the Second Quarter 2023 Results Conference Call. First of all, I would like to remind you that both audio and 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. If you want to make a question, please click the bottom labeled, raise hand or use the tap.

Before we begin, I would like to remind you that this call is being recorded, and the 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..

To start, I would like to summarize the main events of the period of the second quarter of 2023 and subsequent events. The Company closes a very good quarter with a strong financial and operational figures, shopping malls kept growing in terms of sales, visitors and margins despite the December that was partially affected by the World Cup.

But then January and February, we are seeing very good figures in whole, relevant events that after the closing of the period, we reached 100% occupancy in our office -- in our latest development [indiscernible] in Catalinas. Remember that we opened a building in the middle of the pandemic.

We sold approximately half of the building at very big prices, and now what we have is approximately 48% stake in the building is fully leased. The third rental segment, hotels are booming.

They are showing record occupancy and EBITDA, mainly Llao Llao that we have seen in the last quarter, a very strong recovery in Buenos Aires hotels, that's the corporate events and the international inflows of tourism is growing in Argentina. So., the three segments are very good.

Of course, in offices, we are showing a little lower results because of the assets sold during the last year. On the financial matter, we -- after the closing, IRSA issued Series XV and XVI notes for a total amount of $90 million to cancel short-term liabilities.

And the Company redeemed Series II and IX and kept deleveraging the Company that today shows a net debt that is very, very low and very, very, very conservative capital structure and debt ratios. On November last year, November 22, IRSA dividend of ARS4.3 billion, this was a dividend yield of 4.5%.

And also, we've seen a share price recovery in the second quarter. We are optimistic on that. We think there is a lot of value to unlock achieves shares. And you know we have a good year, good prospects for the next year in terms of share performance. Moving to the next page, we can see the operational figures for shopping malls.

Stock increased slightly to 336,000 square meters of gross leasable area, while occupancy reached almost 94%. We are still replacing the vacant services that big tenants at Llao Llao and Garbarino lag during the pandemic. This takes some time because we are replacing with small stores.

Sales keeps going up, as you can see on the right, 20.9% versus pre-pandemic levels in the second quarter of 2023 and 12.4% comparing to last quarter of -- the same quarter of last year. On the office portfolio, you see figures are quite stable comparing to the previous quarter, but improving when you compare to the second quarter of fiscal year '22.

After the sales of buildings and floors made in the last years, we currently manage 82,000 square meters portfolio, mainly premium office, mostly A+ and A buildings. Over the six, we have just two that are B category that when you see occupancy, the premium buildings are showing much more -- much better occupancy. It's going up.

We are at levels of 84%, and next quarter, we are going to increase that figure when the impact of the full year occupancy the Central Della Paolera reflects. In the B category, we have building the issue pattern -- we have been showing in the downtown Buenos Aires that is empty.

And the other one is Philips building in the North area of Buenos Aires City, that's half occupied. So there you see the impact of just 20% of that class. Lease remains quite stable in levels of $25 per meter of our portfolio. So, it's a segment that remains quite stable, a little bit up in terms of occupancy in the premium class.

Here, you can see the lease agreements signed after the closing of the period, at Central Della Paolera building where IRSA has its headquarters. We have leased five floors and with the remaining that we have vacant up for almost 6,000 square meters, and we reached 100% occupancy.

With this, we conclude a process that we began on December 2020 when we opened the building in the middle of the pandemic with almost 75% occupancy. In the middle, we have sold some floors that were occupied. This is why you see some reduction in occupancy between the second quarter of '22 and the last quarter.

And now with these five floors in the pro forma or in the forecast of the third quarter, we reached 100%. The building has around 30 floors. We have just 14 today owned.

This is -- accounts for almost 17,000 square meters of gross leasable area, almost 47% ownership and the average rent of the portfolio of the whole building -- sorry, of our own floors is $28 per square meter per month. In hotels, well, here we can see a great evolution of the portfolio, reaching 71.4% occupancy at an average rate of $208 per room.

This is record historical records. Remember that this segment was very, very affected during the pandemic, almost a year, the hotels closed.

At the very beginning, we saw a strong recovery of the Llao Llao, our exclusive resort in the south of Argentina in Patagonia, because of the tourist -- the domestic tourism and international tourism that today, Argentina is really attractive in terms of prices and also in terms of hotel Llao Llao that is the best result in Latin America and in South America for sure.

BAE hotels are recovering, have been increased due to corporate events segment recovery and also the international tradition. So -- and when you see the rates and the levels of $135 per room, the hotel in Buenos Aires and almost $400 in Llao Llao that increased its rates comparing to previous years.

I will now turn to Matias Gaivironsky, CFO for financial results..

Thank you, Santiago. Good morning, everybody. So, to understand our financial results during the semester, first, it's important to see what happened with inflation and devaluation.

In the center of the graph, we can see that the inflation during the semester was 43% and the valuation was 41%, means that the real FX evolution was an appreciation of the peso of 1%. And during the last year, the inflation was 20% and the valuation was 7%. That means that the real appreciation was 11%.

On the blue chip swap and the dollar map, the devaluation was 31%. So we have an appreciation of 8%. And during the last year was almost flat 1%. Remember that our liabilities expressed in dollars if we have an appreciation of the pesos generate gains and the assets that we have in dollar terms if we have an appreciation to generate losses.

That will explain part of the results of the semester. Going to next page, we can see what happened with our adjusted EBITDA. We have excellent results during the semester. We can see shopping malls growing by 50%. Hotels growing by 150%, and office is decreasing 14% mainly because of the asset disposals that we did during the year.

We are very happy with the performance. We can see part of the work that we did before or during the pandemic that is generating now results and is expressed in the increase in margins. You can see the shopping malls with a much better margin than the last year, 78.6% and 70.7% last year.

In the office, the same, 81.2% compared with 65.7% and the hotels as well as 34.7% against 25.8% during the last year. If we jump to the next page, the evolution of the operating income, excluding the effect in the fair value was 53% increase.

So to analyze one of the main impacts on this semester, that is more accounting than real is the fair value of our investment properties that we can see that during the last year, we generated a gain of ARS43.7 billion -- sorry, and this year was ARS29.5 billion loss.

This is when we see the numbers in dollars, we see the valuation of the properties is exactly the same or more or less flat, but when we expressed this in real pesos, this generate losses because the appreciation of the peso in real terms during the semester.

Now if we go to Page 11, the net financial results during the semester generated a gain, a smaller gain than last year, 26.8% below but still a gain, it's important here, I think, two lines, the interest -- net interest that we can see a reduction of around 50% from ARS4.4 billion against ARS6.4 billion last year that is related to the deleverage of the Company during the year.

And also the net FX resulted last year generated a very important gain of ARS11.7 billion, and this semester generated ARS1.8 billion. This is related also with the appreciation of the peso. So finally, we are finishing this semester with a gain of ARS15.4 billion compared with a gain of ARS49.7 billion last year. Going to Page 12.

We are proud of this graph and what we saw during the last quarters that the increase in our EBITDA, after the pandemic, we are growing and growing and the business is recovering, good levels of occupation and sales of our tenants are very good. That has generated very good rental for us.

So, we posted an EBITDA of $51 million, during the last quarter, and we can see that we are surpassing in the last 12 months the levels of -- the levels of 2019 pre-pandemic levels. So, we are now $156 million EBITDA. Going to Page 13, we can see the last issuance that we did of bonds in the local market.

Remember that in June last year, we did an exchange offer for our main liability, an international bond of $360 million. At that time, 66% of the people accepted the exchange and $121 million did accepted. So we had the challenge to pay that debt with the restrictions of the Central Bank.

Remember that the Central Bank will only sell 40% of the dollars that expire, and unlike the companies to refinance the rest. So, we have been working with the Central Bank and ask for permission to do this new issuance in the local market. The issuances were very successful.

We offer two classes of bonds, one in dollar map and the other in dollar blue chip swap, so dollars abroad Argentina and the dollars in Argentina, real dollars. So, we received offers for $114 million. Finally, we decided to take $90 million in the two classes. One was at 8% interest rate. The other was at 7% interest rate, both with expiration in 2025.

So with this issuance, we reduced the cost of our financing in dollar terms and also solved the problem of the lack of dollars to pay our debt. So after this, we decided to redeem the total amount of our Class II bonds, the remaining $121 million, so we already paid 100% of that.

We also decided to call the other series that expired in March, the Series IX for $80.7 million. So, we will pay during the next week. So after this, we solved all the issues with the debt, and we fulfill all the regulation with the Central Bank.

So, we are very happy that the performance that we have and the support from our bondholders that keep investing in our bonds in the local market. So after the issuance we can see in Page 14, what was the debt amortization schedule before the new issuance and after.

And we can see that the remaining debt for the year is $100 million that we have the cash to pay. And then, the debt is divided in the next year. So probably there is no more liquidity risk because we will generate more or less the same cash each year. So, it's much tied to our cash generation, now the debt amortization has scaled.

On Page 15, this is impressive was -- this is the evolution of our leverage, and we can see that after 2020, we started the process of deleveraging. And now, the net debt is $285 million. It's a reduction of 62.2%. In terms of the ratios, the net debt to EBITDA today is 1.8x and LTV, very low 12% and a coverage ratio of more than 8 times.

So, our debt structure today is very conservative. So with this, we finished the formal presentation. Now, we invite you to ask questions. Thank you very much..

Thank you. Now, it's the time for Q&A session. If you have a question, please use the chat or raise hands, I remind you that questions will be taken in the order we will receive them. Please proceed. Thank you.

The first question comes from Luciano Boselli, if the $50 million quarterly EBITDA level is a sustainable one?.

Thank you, Luciano. Well, this will depend in different variables. I think regarding the operation, we are seeing a good trend, good levels of sales from our tenants. So, our budget is in line with last quarter. So, the answer is yes then will depend also on the evolution of the FX, right? If there is -- the trend is similar in the recent events.

I believe that, that won't affect the EBITDA in dollar terms, but if we have a bigger devaluation than the immediate effect of that is a reduction in dollar terms, basically in the malls, in the offices. I mean the hotels since the tariff is more related to dollars won't have an effect, but in the malls, yes.

But our budget, I will say, that is in line on the previous one..

Next question comes from [indiscernible].

In order to pay to hold outs due to access to official FX markets?.

Yes. All the cancellations that we did during the last years were all done at the official FX fulfill in the regulation with the Central Bank. There is restrictions that the rule established that we -- the Company has to refinance 60% of the principal amount and 40% we are allowed to pay.

Last year, when we did the negotiation with the Central Bank in order to do the exchange in advance, we had access at that moment to pay only up to 30% of the principal amount and the remaining we have to refinance.

And at that moment, we created a structure to give two bonds, in one bond, the people receive cash and the other bonds just received only bonds. So that way, we maximize the cash of the people that wanted cash. But the good news is that after the last redemptions that we did, today, we don't have any more or any restrictions with our debt.

The principal amount that would expire in the hard-dollar notes will expire in the next year. So, we hope that will be a different regime regarding the cancellations at that moment. But for the near future, we don't have any more -- any restrictions to serve our debt..

Give more details on the sales and development during the quarter.

Well, EBITDA from the quarter from sales on six months were just $11.1 million, so together with a rental of 87.3, reached an adjusted EBITDA -- were some losses from others, that you get to almost $80 million EBITDA comparing to last year that was much higher because we had sales for almost $100 million or $95 million that we did more asset sales..

Next question comes from [indiscernible]. In other operating results in the first half of 2023 consolidated statements of income, the recent operating expense for legal matters for ARS3.7 billion.

Could you give us more details?.

Yes. This is related to a claim that we have regarding our investment in Israel. There is a claim that we receive a demand a couple of weeks ago in Argentina. I mean that -- is a contingency for up to ILS140 million.

The Company decided to create a provision of 50% of that no matter our legal advisers will -- and all the legal work that we will present to defend ourselves, we decided to make these provisions to be conservative..

Next question comes from [indiscernible] from Latin Securities.

Can you provide an update on the Company's plans for its office portfolio, including any future changes that are being considered? Also, could you give us an update on the current status of the Costa Urbana development? I mean when we can expect to hear more news on that front? I will introduce for this question, at least for the part of question Jorge Cruces, our CIO.

So Jorge, can you give us more color on the Costa Urbana development? And what can we expect to be more news on that front?.

Good morning, everybody. First of all, regarding the office space, we have a great land next to the -- our shopping mall that we're still analyzing. There's going to be a mixed use. It's going to be residential, but there's going to be office space there also.

I can recall that we do have and that building, right, and near to the shopping mall, and we should have more square meters during the near future.

And regarding Costa Urbana, there's -- first of all, we have on approval from the project a preliminary design and is completed as well as the Company's and utilities that we're working with the engineers at the moment. The only thing we don't have yet, we're working on it is the electricity.

The rest of the utilities, we have all the utilities right at the moment. And Costa Urbana is we -- as somebody know, we have a legal situation going at the moment. There's been a rule in favor of the city of Buenos Aires, and that's our same position that was on February 8. And we're waiting for the ruling from the court.

So that's good news, and we continue working as a result..

Thank you, Jorge. I will give one minute more for any additional question that you may have. Okay. If there are no more questions, we conclude the presentation and the Q&A session. I will return back to Mr. Matias Gaivironsky, CFO, for his closing remarks..

Thank you, Santiago. I see here one more question before the closing remarks regarding the short-term debt that is related to amortizations for $99 million. This is more short-term debt. You can see that the cash position of the Company today is more than $160 million, and we have $99 million in short-term debt.

This is more a liquidity management for the cancellations. When we show this $99 million is a pro forma numbers on February. So what we believe is more a liquidity management. So using our draft to cancel instead of our own liquidity, but in the near future, that will be different. So we will cancel that $99 million or most part of that.

So, to finish the presentation, first, thank you for the participation, we are very happy with the results. The Company is generating good results in all the business lines. We clear during the last year all the liquidity risk and the short-term debt was canceled.

So, now we are very well prepared for a new cycle of more growing and we have plenty of projects to launch in the near future. And the cash generation in each of the business lines is very good. So we are ready to keep growing. So we hope to see announcements in the short term. Thank you very much, and have a good day..