Results: IRSA 3q26
Building momentum
Original review: IRSA - cheap Argentine property
Tag for finding my other articles on this stock: IRSA
Key takeaways
The two segments that matter are malls and Ramblas del Plata. Malls is generating consistent ebitda. A positive here is international brands coming to Argentina. RdP is progressing well and will become a significant cashflow generator over the next 3-4 years.
Thesis and valuation update
No change to thesis. Still priced to compound at +/- 20% in a bull case. I plan to publish a detailed valuation update in the next few weeks.
Notes
Y/Y figures are in inflation-adjusted pesos. Because I did not publish 2q26 results, my notes for those are included at the bottom.
3q26:
Malls
Occupancy 98%. EBITDA -1% y/y for the q and +2% for 9 months.
Tenant sales down 9% (9m/9m) on weak consumption and falling prices. However
87% of IRSA revenues are fixed.
One reason is clothing inflation has exceeded inflation for several years - this is reversing as the economy reopens and imports compete.
No sign of tenant stress - number of transactions is stable, defaults are normal, rate of signing new leases is normal, fixed rents on new leases rising slightly higher than inflation.
International brands coming to Argentina as the economy opens. Positive for tenant mix and traffic.
RdP
2 more plots swapped for $11.3m - over 13,000 sellable m2, 3700 net to IRSA (implied % >27.4%).
Total now swapped or sold is 137k sellable m2 for $105m. The swaps account for 97k sellable m2, “nearly 25k” is net to IRSA, implying 25.5% IRSA share. This is inline with expectation that the initial plots would be at the low end of the 25-30% guide, and it is good to see IRSA’s share of the most recent swaps higher.
Expect over $300m of revenue from selling units received under swap agreements over the next 3-4 years.
52% of the horizontal infrastructure for Phase 1 is complete and 23% of the total.
Other
Offices fully occupied with small rent increases. Expanding one site with 72% already leased to Mercado Libre. Positive on office with strong demand and fewer new projects.
Hotels doing well on inbound tourism.
Net debt/ebitda 1.4x, LTV 11%. Will rise as they spend cash to accelerate developments.
Unlikely to enter the datacentre business but likely to build a significant logistics business over time.
2q26:
Malls
Over time mall sales should rise with nominal GDP.
Recently traffic and volumes have been strong but prices weak, so tenant sales are down 9% y/y.
Ebitda +2% for the half though on inflation-linked fixed leases. Distrito
Diagonal mall on track for May 2027 opening - adds 22k GLA and first mall in La Plata city.
Ramblas del Plata
Signed 2 more swaps for $12m. Total now 2 plots sold, 13 swapped, $93m, 124k sellable m2.
Expect sales prices of over $5000 per square metre for residential over the life of the project. Commercial, over $4000.
Other
Launching coworking at the underutilised Philips building. Going well and will expand.
Issued another $180m of the 2035 bond at 8.25% (8% coupon).
ND/rental ebitda 1.6x, LTV 13%.
Now have enough cash on hand to finance all planned capex and acquisitions; debt ratio will rise as they spend the cash, then fall as they complete the projects.
Thanks for reading - if you enjoyed reading this please like and restack, and do get in touch if you have questions.
Pete
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