Good afternoon, everyone. I'm Santiago Donato, Investor Relations Officer of IRSA, and I welcome you to the third quarter of 2026 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 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.
Thank you, Santi. Good afternoon, everybody. We are glad to present our nine-month period results of the fiscal year 2026. We saw during the nine-month period a gain of ARS 239 billion, an increase in shopping mall revenue and EBITDA. Good results also in the office portfolio with 100% occupancy and slight increase in rents and EBITDA. Also an improvement in rents occupancy margins in hotels and EBITDA as well. Regarding the expansion plan, we also announced a new building, an office building, adjacent to our existing building Zetta. We already signed an agreement with Mercado Libre to expand their offices. Mercado Libre will rent most part of the new building.
There is a development and a commercialization progress in Ramblas, our main project, with two additional lots that were swapped for $11.3 million. Let me introduce Santiago again. He will continue with the presentation.
Thank you. We move to page number three, to the shopping malls segment. As you can see here, GLA increased to 373,000 sq m. This was mainly due to a small expansion in Alto Avellaneda mall. Occupancy remained very high at levels of close to 98%. Regarding tenant sales and consumptions over the last quarters, we have seen a decline in our tenant sales in real terms, the last quarter by 10%. Consumption is a little bit weak. We are seeing mainly a pressure on prices within a process of retail reconfiguration driven by the opening of the economy and the entry of new international brands that I will show you in the next page. While volumes and customer traffics continue to be strong, quite good.
Despite these lower sales, in the third graph, our revenues and our adjusted EBITDA grew by close to 2.5% the revenues, 2.2% the adjusted EBITDA of the segment. This is mainly explained by our fixed components, the base rent plus the key money, the nontraditional advertising, the parking. All the fixed components today account for almost 87% of our revenues. This shows the resiliency of our business, of the shopping centers, even in a slowdown of consumption. We hope to be recovering in line with the economic activity in the next quarters. Moving to the next page. Here we can see the growing interest that I mentioned before of international brands across our malls looking to enter Argentina and expanding through our malls.
These are some examples of brands already operating in our portfolio as well as others that are under development and expected to open in the coming quarters. This is Dolce & Gabbana, the Decathlon in some of our malls. Victoria's Secret, we have already set in Alto Palermo, in Abasto and is planning to expand. We are also having conversations and negotiations with very important retailers from abroad that will that are willing to come to Argentina. This is really positive news for IRSA. We'll diversify our tenant mix and bring very good proposals for our shopping malls. Here we have the performance of the office buildings. This is more stable. We have today we have a small portfolio of 58,000.
It's gonna be increased a little bit with this new development that Jorge will give you some color later. Rents of our premium portfolio today, almost all of our portfolio is A+ or A, except for the Philips Building that today is a workplace. It's like a co-working. That today we have a rent of around $26 per sq m, and it's fully occupied. We are seeing a gradual, the office work is coming back, and we are seeing huge demand in our offices, in our premium offices. Finally, the hotel segment, which is our third rental segment, is performing very well. We come from a year, a year and a half with some challenge due to the appreciation of the peso against the dollar.
We are seeing very good performance, mainly in Buenos Aires. Tourism is coming to Buenos Aires. Occupancy reached, like, 74%. It's a combination between tourism and corporate events that are doing very well in the city. The Llao Llao Resort, our exclusive hotel in Bariloche, occupancy was mainly affected this last two year and a half because of renovation works in one section of the hotel. If we exclude those rooms that are under construction, the hotel and the occupancy shows a positive and a stable trend. Very good numbers in the three segments. The rental adjusted EBITDA increased in the three segments in real terms and in dollars as well. I will give the word now to Jorge Cruces, our CIO for the projects under development.
Thank you, Santiago. Good evening, everybody. Well, we're moving forward with a new office expansion project at our Zetta building. The property currently totals around 32,000 sq m of GLA. It's mostly occupied by Mercado Libre. In December, we signed an amendment to our lease with Mercado Libre, agreeing to expand the leased space. Upon completion, the building will exceed 47,500 sq m of GLA. Around 72% will be occupied by Mercado Libre. We've already kicked off the initial works, site preparation, and earthworks. We are now in the process of tendering the concrete structure. The Zetta building expansion is part of the Polo DOT mixed-use master development, which already features DOT Baires Shopping as a key anchor, along with DOT building offices and the existing Zetta building.
The whole project is located within the city of Buenos Aires, in the northern part of the city, and stands at one of the most important highway intersections of Buenos Aires. Polo DOT brings together a dynamic mix of businesses, offices, residential spaces, entertainment, dining, and top retail brands. In the near future, our plan is to move forward with the next phases of the development, including the Giga office building with close to 16,000 sq m of GLA and the EXA residential building, 19,000 sellable sq m . Last but not least, the Philips Building redevelopment will complete the master development. Ramblas del Plata is our most significant project to date. It is strategically located along the riverfront in a natural setting. The master plan features an open metropolitan park and 36,000 sq m of retail spaces, all connected by a 2 km pedestrian promenade.
The neighborhood also includes a 7 ha central bay. Within it, there is a 1,600 sq m covered space delivered in April, formerly a hangar used by the company that operated on the site, which we now plan to transform into Ramblas multipurpose event building. Recently, we signed swaps for plots M1 and K3 for a total amount of $11.3 million. These two transactions represent over 30, 13,000 sellable sq m. That's around 3,700 sellable sq m for IRSA. To date, we've sold two lots and swapped another 15, and the combined value of these deals totals $105 million, covering over 137 sellable sq m to be developed. So far, IRSA will receive almost 25,000 sellable sq m from the swaps agreed, agreements already executed. As happened in phase one, the environmental public hearing for phase II will soon be taking place.
Overall construction progress is around 23%, with an average of 72 people currently working on site and around 12 units of heavy equipment in operation. To date, 52% of the works for phase I is already been constructed. All sheet piling works around the central bay have been completed. Tree buffer planting and bay remediation are now in the maintenance phase. Last month, we kicked off work on water, sewer, electrical duct networks, and we also awarded the contract for the gas network. This week, we started paving works. Now I'll give the floor back to Mati, our CFO.
Thank you, Jorge. To understand the figures during this period, also we have to understand what happened with inflation and the currency, since, as you know, in Argentina, we have to adjust our balance sheet by inflation.
During the nine-month period, there was an appreciation of the peso. The nominal devaluation of the exchange rate was 15%, while the inflation index in the same period was 25%. That generates negative results when we have to value assets in dollar terms and post the results in pesos, as well as generates gain when we have to re-express our debt in pesos term. That generate some volatility in the results. Going to the next page, we can see first on the adjusted EBITDA, there was a positive numbers in the three main business lines, shopping centers growing at 2% in pesos term. That number in dollars is around 6%. Offices growing at 15% and hotels at 37%.
Keeping margins in line with the last year and a slight increase in hotels. About the change in the fair value of the investment properties, as I said, this generate volatility. Last year that was an important loss in the nine-month period. For this nine-month period generated positive numbers. When we have a breakdown between malls and land bank and offices, we see a negative numbers in offices and land bank in pesos term because we maintain the same value in dollars. We value the properties once a year that we engage a third party appraisal to do the work.
In shopping malls we are adjusting in this quarter valuation in dollar terms from almost $1.3 billion to $1.4 billion. That was a result of using in the DCF, the current exchange rate and the projected numbers. As I said in the net financial results that you can see in the table in the first line that the devaluation of our debt in pesos term generate positive numbers. The net effects result is mainly the conversion of our debt in pesos, so that generate ARS 90.7 billion gain.
In the net interest, we have a higher gross debt than the previous year, that generate more interest to pay, and part was compensated in the line of fair value of financial assets and other financial results that is the result of the investment of our cash. Also, it's important to mention that the income tax start to be representative again. After many years that IRSA used to have a tax grade, we already consume all that tax grade. Now, we will see probably more stable numbers in this line that IRSA has to afford. With all these numbers, we are finishing the net result the nine-month period with a net result of ARS 239.7 billion compared with the previous year that was ARS 46.5 billion.
If we go to next page, this, the adjusted EBITDA, the rental adjusted EBITDA, in dollar terms, we see the evolution. We finished this period with $151 million. Probably when we finish this fiscal year, we will have a record high rental EBITDA in dollar terms. We are happy for that. About the debt, during the quarter there was no significant news. Remember that we tapped the International Capital Market in December last year, so that we raised it $180 million additional notes of the existing 235 notes. During the quarter, there was no news about that. The net debt to rental EBITDA remains at 1.4x EBITDA with an LTV very low of 11.3%.
Probably we will see an increase in the net debt going forward since we have plans of new developments and CapEx. We will start to use more our cash so that will result in a higher debt but with very conservative numbers anyway. With this we finish the formal presentation. Now we open the line to receive your questions.
If you have a question, please use the chat. We will take the questions in the order we receive them. Here we have some. The first ones, for Jorge. Any plans to enter into logistics and into data center business?
Data center business, we've been analyzing that and in the near future, that's not We don't think that's going to happen. We are analyzing the possibility of going into logistics. We're very confident that in the near future we should be one of starting a long road on logistics and maybe in Maybe someday we can be a strong player, a strong local player in Argentina in logistics, hopefully. Yes, we are analyzing becoming in real estate logistics.
Good. Second question, on the mall segment. How are you seeing consumption trends in shoppings for April and May? There was someone else asking for this quarter, the one that we are entering now, or we enter in April. With this new pricing dynamic mentioned, at what point could you expect tenants Give me one second. Would you expect tenants to begin pushing for contract revisions? Which is IRSA strategy for that scenario? Regarding this is the fourth quarter that we have just April, we are seeing similar trend than on the first quarter of the calendar year. Similar decline. The second question, the strategy of pricing coming forward.
Let me add something else, Santi. When we analyze consumption, the shape of our shopping malls, of course we see weaker sales, no? We have to do a deeper analysis on that. First of all, as we saw during the last years, the inflation on the clothing sector was much higher than the CPI of Argentina. What happened last year, since there is an open in the economy and more international brands and more goods imported, we start to see a lower evolution on prices in the clothing segment. That means that first when we have to compare last year numbers, we are adjusting by CPI while the compensation of the new sales during this year are in a lower pace than inflation.
When we do an analysis on tickets, sales, and traffic, we see a good evolution. Probably in tickets we are similar than the previous year. Probably more the push is on prices. We probably in terms of amount of sales, we are maintaining similar numbers. Second, on shape of the industry, you have to analyze occupancy. Occupancy is very high in our malls. Third is delinquency. If we have delayed in payments. We don't have delayed in payments at all, that driver is normal, completely normal. Fourth is the renovation of new leases. We keep collecting good numbers on key money.
In fact, when we adjust base rent, although we are adjusting the base rent by inflation, every time that we have to renew agreements, we have some increase in value. All the numbers are the triggers that you saw during the period that we keep increasing EBITDA in real pesos compared with the previous year. We don't believe that we have to change our strategy. Of course, if the trend on consumption is weak, of course that is not a good signal for us. As we can see for the recent trend in the market, mainly from the government, we start to see an increase in collection of taxes on IVAs, VAT and also in the tax on movements of money, [Non-English content]
That's are positive numbers that the government start to show. We hope to see that trend as well in our shopping malls.
Good. Next question. The Polo DOT launch is your first new office development in some time. Is this a one-off driven especially by Mercado Libre high quality as tenant, or you are seeing something different, a potential in the office sector going forward?
We are seeing something different in the office sector. The occupancy is doing better year by year. There's not so many new developments. In the question you're right. Because it's Polo DOT, we are very confident with Polo DOT as a master development. Mercado Libre is a very important tenant for us also. It's very, it's gonna be very important for us to finish the Polo DOT, and it's one of the necessary steps to continue with our master development. I would say, yes to all of above. Yes, we're seeing that the office is doing better.
It's very specific where, you have to be very careful. Two, yes, Mercado Libre is a very important tenant for us and it's very helpful to make this decision. Yes, Polo DOT is part of a master development that we were planning to do it anyways in some time, and well, the time is, well, we got to that point that it's a very good business for us to continue with office space in Polo DOT.
Let me add something else, Jorge. As we always said, we don't have any specific target on weight on our portfolio regarding shopping malls, office, hotels or even logistics that we want to enter. We will analyze each project like a unique project, and if we believe that is a good return, we will move forward. We are not here trying to, I don't know, balance the portfolio or change the strategy. We always said that IRSA is a diversified real estate company between rental real estate, but also with Ramblas, that with all the projects that we have in residential, the residential part will be important for IRSA going forward.
Although IRSA is not developing directly, we are doing, so far the strategy is doing swaps agreements with developers when IRSA is buying the land and then entering in agreements with developers. They develop and pay us with finished units. IRSA has a tremendous portfolio of units to be received in the future. We calculate that between now until, I don't know, the next three, four years, IRSA will have, like, more than $300 million of units to be sold. If you calculate, compare with our existing rental EBITDA, is much lower, but will be an important business line as well for IRSA in the future. A financial question here. It's in Spanish, we're gonna translate.
Due to the enough cash that IRSA has today and the recent drop in IRSA shares, do you expect to implement a new share repurchase program? Well, the formal answer is that we never anticipate what we're gonna do. We will communicate when we do it, no? If you analyze our behavior in the past, we launched many buyback projects, buyback plans in the past. This is part of what we like to do when we see an opportunity in our shares. There is always the analysis is, first of all, we need accumulated results, audited accumulated results. If we use most part of the results in the last dividend payment in October last year. We need to finish the fiscal year to have the audit financial statement.
After that, we can decide what to do with the results. If we distribute as dividends and any shareholder can buy shares or if we will buy back shares, no. I can't anticipate what we're going to do. I have one more here. Any update on the progress of Al Oeste development? The shopping mall that we are.
Well, the refurbish of the shopping of Haedo, it's on schedule. That's regarding the construction, and we're doing great with the tenants. There's a lot of expectations. It's, yeah, what I would say, it's on schedule. I can't say exactly the month we're gonna start with, it's gonna be public, but we are on a schedule as we thought so.
Yeah, it's a one-year development.
Exactly.
By the end of the year is according to what we originally planned.
We planned for the end of the year, and we can make it. We're still on schedule, but we're deciding if finally it's gonna be at the end of this year or beginning of the other. It should be the, at the end of this year, maybe.
Good. Well, I don't see more questions, but I give you one minute more. If you have any additional question, you can use the chat. Also, you can raise your hand. Okay, I don't see more questions. I will now give back to Matías Gaivironsky for his closing remarks.
Thank you, Santi. Thank you everyone to participate in the call. We are happy so far with the results. We are confident in this new trend of four years of new expansions. We hope to communicate many of the negotiations that we are trying to close soon, that we are in different transactions acquiring more land or entering to logistics or new expansions that we hope to announce in the next quarter. The rest, we hope to see that a recovery in the economy after what happened last year because of the elections and the constraint on the monetary side, the lack of credit in Argentina and the interest rate that were very high.
We hope to see that the, already touched the floor regarding consumption and start to see better numbers in the coming quarters. Thank you very much and then see you in for our fiscal year end in September. Thank you very much.
Have a nice afternoon. Bye-bye.