Good morning, everyone. I'm Santiago Donato, Investor Relations Officer of IRSA, and I welcome you to the First Quarter 2023 Results Conference Call. First of all, I would like to remind you that both audio and slideshow 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 button labeled Raise Hand or use the chat. 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 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. Matías Gaivironsky, CFO. Please go ahead, sir.
Good morning, everybody. We have finished our first Q to 2023 with excellent results. We are very happy with the operational performance in all the lines. Our mall tenant sales are growing. We are achieving higher margins, achieving levels of pre-pandemic. We are very happy with that. Regarding our hotels, we posted during the quarter a record EBITDA, mainly boosted by Llao Llao Hotel that we will see later. Also, we keep selling office floors at very attractive prices. We sold one floor in 200 Della Paolera building that we will see later. Using those funds to deleverage the company, we continue with the process of deleveraging, and we will see the reduction in our debt during the last years. As we mentioned before, we finished the exchange offer of our 2023 notes with around 67% acceptancy.
That was a major event for the company. During the quarter, we finished our shares buyback program and also announced the dividend payment that we paid since yesterday. With this, I will turn the call to Santiago Donato, our IRO, to see the operating performance of the company.
Thank you, Matías. Starting with shopping malls, we had a great quarter for shopping malls. Strong performance showed during this first quarter of 2023. The portfolio increased a little bit in the last years, as you can see in the graph, reaching 336,000 square meters of gross leasable area, mainly due to Alto Palermo and Alto Avellaneda expansions, completely under operation today. Occupancy increased to almost 94%. We expect to keep increasing to pre-pandemic levels during the whole year on the vacant areas that was mainly liberated by Falabella exit during the pandemic. A very good figure is the tenant sales in real terms that increased by 22% compared to first quarter of 2020, that was not affected by the pandemic.
EBITDA, and EBITDA margins of this segment also recovers to pre-pandemic levels. On the office segment, portfolio stock reduced by 30,000 square meters comparing first quarter 2022 and first quarter 2023, mainly due to some sales of floors of 200 Della Paolera, one that was sold in this quarter, that Jorge will explain better, and República building that was sold some quarters ago. Portfolio occupancy reduced slightly in this year and this quarter, mainly explained by the B category, the B class. A plus and A occupancy reached 82%, while the average rental price stood at levels of $25 per square meter per month. We are optimistic on the evolution of this segment in the future.
We have been observing a greater return to office from companies in recent months, and together with that, an increase in demand for our, for our rental spaces. The third segment, rental segment of our portfolio, the hotels, have experienced a great quarter. We are reaching record EBITDA in the hotels, boosted by Llao Llao, as Matías mentioned at the very beginning. The hotel segment continued to recover very strongly with higher rates and occupancy, taking advantage of the boom of the tourism post-pandemic, the attractiveness of the country as well, and the FX positive impact. The exclusive resort, Llao Llao, in the city of Bariloche that you have in the south of Argentina, continues to register historical record incomes and occupancy levels. The hotels in Buenos Aires, they had a really good quarter.
They are evolving favorably, but they still expect greater influx of international tourism and the full recovery of the conventions and the corporate events activity to recover their levels of income and occupancy pre-pandemic. We are very happy and glad on the evolution of our rental segment this quarter, and we are optimistic on the future evolution by this year.
I will now give the word to Jorge Cruces, our Chief Investment Officer, to explain some real estate transactions that we did during this quarter.
Thank you, Santiago. Good morning, everybody. Our the most important thing that we sold during the quarter it was already mentioned, it was in 200 Della Paolera building. We sold the fifth floor for $12.6 million. That's a very good sale for us. $10,600 for each square meter, and we and there's still a lot of interest and demand for more floors in this building. We still have 14 floors remaining. Regarding Costa Urbana, that's our main project that we're developing. Since December 21st of 2021, we have been working in the approving of the new zoning regulations.
With all that we have to be doing regarding the law. We have during this last month, we made the preliminary design phase. We're waiting for the city to response regarding the design. We also managed to pay the $2 million in cash and the $3 million in sovereign bonds, and we have already completed that process. At the moment, we're submitted to a cadastral survey plan that's gonna allow us, when it's already approved by the government, that's gonna allow us to be owners of each of the plots, and that's gonna allow us to pay the three plots that we owe the government regarding the law.
As I said before, we needed to pay in cash $2 million, in sovereign bonds $3 million, and we need to pay 3 plots, and that's what we're waiting for for the government to approve the survey plan. Last but not least, regarding the collective legal protection action that we received on October 29, 2021, the court is currently analyzing the parties' arguments, and the decision is expected soon. In Córdoba, right beside our Córdoba Shopping, we made a borrower agreement. It's worth $2 million, we're gonna be receiving in the next 36 month, the 16% of the selling departments in the building.
This is a residential neighborhood, so it's gonna be a curtain wall building, and it's gonna be a very upscale residential building. It's gonna be very convenient for even for the shopping mall. Santiago.
Going back to our financial numbers. On page eight, we can see the main drivers on the macroeconomic side, what happened with the inflation and the valuation that affect our financial. We can see that the inflation accelerated during the quarter. This quarter, the inflation was around 22% compared with 9% in the previous year. The evolution of the FX was only 18% compared with 3% last year. That means that in real terms, the peso appreciated against the dollar by 4% this year and 6% last year. Regarding the blue chip swap, in real terms was stable. Remember that this has an effect in several lines of our financial statements. In regarding the FX evolution has an impact on our debt.
We have to value in real terms, the dollar denominated debt into pesos. If we have an appreciation, we have a gain. If we have a depreciation, of course, we will have a loss. This year we generated a gain because of that. And also has an effect on the valuation of our investment properties that we do in peso term. Going to each of the lines of our financial statement, we will start with the adjusted EBITDA. We can see a jump of 93.8% this year compared with the previous one. We see an excellent recover in shopping malls. Although last year, all our operation was fully open. Remember that was the first quarter after the pandemic, so the last year was not the best year for us.
This year we are recovering to the pre-pandemic levels, and we are very happy on that. Offices, we have a decrease by around 50%. Part of that is explained by a lower stock because we sold floors. Also has an effect of the effects when we are comparing the previous year numbers, adjusted by inflation. Since the valuation this year was lower, that has an impact of around 12% of decrease. The hotels an excellent recovery to levels of 659. You can see better number than our office portfolio. This first time ever. On top of that, we have, let's say, some development that generated around ARS 1.1 billion of cash, of profit, sorry.
Regarding the margins, we can see on the right part, the shopping malls achieving almost 76% EBITDA margin. Office is 82%, and hotels 33%. These are very good levels compared with our history. Regarding the operating income, as a result on good increasing in revenues and in margins, we see a recovery of 88.6% compared with the previous year. This is excluding the investment properties valuation. On the right part, we have the fair value of the investment properties that we are generating a loss of ARS 6.6 billion. When we see this number in dollar terms, it's stable. The portfolio in dollar terms remain stable against the previous quarter.
This effect is related to the macroeconomic situation and the valuation and the inflation. In page 11, we see the net financial results that are positive. Positive in both year. This year has an impact of the FX. You can see in the table in the line three, the net FX result that is positive by ARS 2.1 billion this year. Last year was higher, the appreciation of the peso. That generated a more debt in dollar terms. That generated ARS 5.2 billion against ARS 2.1 billion this year.
For me, the most relevant here is the line two, the net interest that you can see that almost really we reduce it by half of the amount that we had last year, achieving ARS 1.6 billion against ARS 3 billion during the last year. This is the result of the deleverage process that we did during the last two years in IRSA. Finally, the net result of this quarter, we posted a gain of ARS 1.3 billion. Attributable to our controlling shareholders is ARS 1.2 billion. Something relevant to mention is the evolution in dollar terms of our rental EBITDA. On the left part, we can see the quarterly evolution, using the pre-pandemic quarters, the worst quarter of the pandemic, and what happened after.
The blue line, the blue bar is the shopping malls. On top of that, you have the offices and the hotels. We can see the strong recovery of our shopping malls, reaching this quarter $31.1 million of EBITDA. That are very, very good levels, even more than 2019 numbers. When we see on the right part the evolution of the last fiscal years, and compare with these last 12 months using the last quarter, we already surpassed the levels of 2019. That was our target during the last year. We believe that we can surpass that figures because of the malls and because of the hotels as well. In the office portfolio will remain stable.
Probably we will see better numbers going forward because of occupation that we expect to occupy more. The main drivers will be the malls and the hotels. Going to the debt profile of the company, we are proud of this evolution. We continue the process of deleveraging, probably lower than what we expected at the beginning when we merged IRSA with IRSA Propiedades Comerciales. At that moment, we estimated a net debt of around $470 million. Today, we are much lower than that. It's $300 million. The company is generating around $134 million in the last 12 months and probably more during the year. It's around 2 times our EBITDA. In terms of LTV, it's around 12%.
We are very conservative numbers on our debt. The debt amortization schedule remain with important amortizations during the first quarter of the calendar year next year in March. We have some amortizations. The holdouts of the exchange offer that we did, that is $120 million, and another bond of $80 million that expire in March. We already have cash for $154 million, so it's not a, we don't have any issue on liquidity. Here, the main challenge is the regulation and what the Central Bank will allow us if they're gonna allow to pay or to buy the dollars or if we have to do other transactions.
Leaving aside that part, if we cancel that debt, then the rest of the debt of the company will remain in $200 million or $300 million, and with amortizations during the next five years. We are very happy on this evolution as well. Well, also, we were very active on the operational side. We were active on the real estate side. We were active on the financial side, canceling debt. For us was, also an excellent year to start seeing the company buying back shares and paying dividends. You know that IRSA Propiedades Comerciales S.A. was a company that always paid dividends in the past. We started to do the same in IRSA, after seeing the evolution of our debt and we feel comfortable with our liquidity situation.
We announced that the first dividend payment for ARS 4.3 billion that we started to pay it that last two days ago. For our local shareholders, registered in Caja de Valores, they already collected the money. For our ADR shareholders, we estimate that during the next 15 days, they should collect the dollars abroad, the dollars abroad in the accounts abroad Argentina. With this, we finish the formal presentation. Now we open the line to receive your questions. Thank you very much. We start with a Q&A session. If you have a question, you can use the chat or click the bottom label Raise Hand. We will take the questions in the order we receive them.
Here we have the first regarding the rates at the hotels, if they are official dollars or Dólar MEP. These are official dollars, and all the information that we expressed here in the presentation is at the official FX.
Regarding the hotels, and not only regarding the currency and the rate. In the hotels, it's very possible to have the rest of the fiscal year should be very good for the hotels. Not only because Argentina is a very nice place to visit, but it's very cheap in dollars at the moment, and the government is working on and making it possible for the tourists to visit the country easier than before with a new law that's gonna benefit the tourism.
It's gonna benefit the tourists in Argentina and in the near future with this new law, it's possible that we might have more flights in Argentina. If we have more flights in Argentina, that's for our five-star hotels, that's gonna be very beneficial.
Also there was a positive deal regarding the regulation that now the money that was collected abroad Argentina, for instance, all the booking companies that pay dollars abroad now, the company is not forced anymore to enter those dollars at the official exchange rate. That is also positive for the hotels.
Here is another question. What is your net debt level that you're planning to reach?
Today, we don't have a, an specific target. I would say that if I will put a target probably is higher than what we have today. But we see an opportunity to keep canceling debt. If the Central Bank will allow us to pay in March all the proceeds, probably we will do that. Maybe we will see the company keep de-leveraging. But I feel very comfortable with the current levels. I would say that it's under leverage. When we compare this kind of company with other real estate companies around the world in terms of LTV, it's much higher the debt. In terms of net debt to EBITDA, probably the company's, the average is in levels of 3x . We are below that.
Maybe we will see a reduction in debt, but not because we are worried about the debt.
Is there any additional question? Yeah, we have one more. Do you have plans to refinance the short-term maturities?
Well, we have the $121 million of the holdouts of the exchange offer that we did, our notes, our international notes. From that $121 million, according to the current regulation, the Central Bank will only sell around 40%, up to 40% of that. That is around $88 million. We will need to find other sources to generate the dollars for $70 million, more or less. It's not allowed to the companies just to buy in the blue chip swap. This is not allowed by the regulation. It's not a question of price or effects, it's just a question of regulation. We will use all our creativity to fulfill the regulation and try to pay.
It's not 100% in our hands, unfortunately. We will work on that and maybe we will announce some transactions in the near future.
Here a question on the cash level shown in the presentation. This $150 million is mostly pesos, right? Can you give us some color on how you invest this cash position? Would you avoid default at any cost if central bank does not let you buy official dollars?
Well, the cash position, we have different securities. It's mainly in pesos, it's true. We have, since we have to, at the end of the day, pay dollars with that cash, so we try to hedge part of the pesos buying dollar-linked notes or futures, to hedge the cash position. Also we have some securities on our liquidity position. Regarding the second part of the question, unfortunately, as I said, it's not 100%. The question was, if we will avoid the default at any cost. I would like to say yes because the company paid me for that. Unfortunately, it's not 100% in our hands.
We need to fulfill the regulation and it's clear what we can do and what we can't do. We will work hard and negotiate with the central bank. Unfortunately, it's not on our control 100%.
Good. I have two more on the operational. One for Jorge. Any update on the Suipacha building? I think we answered that in the last quarter. Do you have any update this quarter? Are there any plans?
Not really. Not really. We're studying to make apartments to try to convert the office building. Taking the advantage that today it's empty. We're thinking and we're analyzing if we reconvert that building in residential. We're studying the numbers. We have already the cost of the reconversion. There's a law in the City of Buenos Aires that helps us with that investment. It's under study at the moment, but we haven't made our decisions yet if we're developing or not. Not yet.
The last one here regarding what level do you expect to achieve in the mall occupancy during the course of the year? In general, we do not give any guidance on the future. We are having closer conversations, and we expect to increase occupancy by the rest of 2023. More close to the numbers pre-pandemic, to the levels pre-pandemics as well.
We separate the vacancy in two. We have the small spaces. I would say that the level is already in historical levels, around 98% occupancy in the small spaces. What we had, the main vacancy that we had during the pandemic was big surfaces, mainly generated by two tenants, Walmart and Falabella, that left the country and leave us important sized stores. There is no one tenant for that kind of service, surfaces. What we did is to divide those surfaces in small pieces and start to rent in small pieces. We are happy with that. The evolution was good.
Well, we give one minute more if there is any additional question. Okay, we conclude with this, the presentation and the Q&A. I will give back to Matías Gaivironsky for his closing remarks.
Thank you very much to participate in this call. We are very happy on the evolution of all the business lines, on the operational, on the financial, on real estate. The company will be very active going forward in the next quarters. Our focus is to keep strengthening the operation in our malls, in our hotels and the office building. We are working hard with Costa Urbana and trying to have everything ready to start the project. We have to work during the quarter, during the next quarter in the refinancing or the resolution of our remaining debt. We have the cash to pay, but we need the tools to pay. We will work hard on that.
Thank you very much to join this conference, see you in the next one. Thank you very much.