IRSA INVESTMENTS & REPRESENTATIONS INC

IRSA INVESTMENTS & REPRESENTATIONS INC Annual Report - 2024 Investor Summary

Hey there! Let’s break down IRSA’s year in plain terms—no jargon, just the key stuff you need to know.

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1. What does IRSA do, and how was their year?

IRSA is Argentina’s real estate giant, owning shopping malls, offices, apartments, and farmland. This year was a mixed bag:

• Recovery mode: Malls and offices bounced back post-pandemic.
• Economic chaos: Argentina’s inflation hit 211.4% in 2023, and the peso kept losing value. The government cut spending to stabilize things, but uncertainty remains.

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2. Financial Performance: Growth or Decline?

• Revenue: Up 15% from last year (rents and farmland drove this).
• Profit: Fell 10% due to inflation squeezing margins.
• Inflation update: Dropped to 117.8% in 2024, with monthly rates as low as 1.5% by May 2025. The government hopes for 29.5% annual inflation in 2025—but that’s not guaranteed.
• Growth moves: Sold older properties to fund upgrades, but rents and soybean-driven farmland profits did most of the work.

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3. Wins vs. Challenges

Wins:

• Mall sales jumped 22% (people returned to in-person shopping).
• Farmland profits skyrocketed (thank you, global food demand!).
• Government hit a 1.8% budget surplus in 2024—a positive sign for stability.

Challenges:

• Peso crash reduced dollar-based profits.
• Inflation-linked debt (CER index) got pricier.
• New price deregulations spiked utility costs in late 2023.

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4. Financial Health Check

• Debt: High and partially tied to inflation (CER index), which could balloon payments if prices surge again.
• Cash: Enough to cover short-term needs, but asset sales aren’t a long-term fix.
• Red flag: The company didn’t provide detailed debt breakdowns, making it harder to assess full risk.

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5. Risks to Watch

• Inflation relapse: If government reforms fail, 2025 inflation could spike.
• Currency chaos: New exchange rate rules could destabilize the peso overnight.
• Debt trap: Every 1% inflation increase = bigger debt payments.

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6. Competition Check

IRSA remains Argentina’s real estate leader, but rivals are attracting trendier tenants. Their farmland division is a standout—efficient operations and soybean demand give them an edge.

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7. Leadership & Strategy Shifts

• New CFO: Focused on managing inflation-linked debt.
• Strategy: Shorter leases (to adjust rents with inflation) and selling older properties to fund mall upgrades.

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8. What’s Next?

• If inflation cools: Property values and rents could stabilize, boosting predictability.
• Farmland upside: Global food demand = long-term growth, but new export taxes could hurt.
• Mall reinvention: Adding restaurants and events to fight remote work and e-commerce threats.

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9. Market Trends Impacting IRSA

• Government discipline: Can they keep the budget surplus?
• Inflation math: CER-linked debt remains a ticking clock.
• Peso stability: Will Argentina unify its messy exchange rates?

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Bottom Line for Investors

High-risk, high-reward play:

• 👍 Bull case: If Argentina’s reforms stick, IRSA’s property values and farmland could soar.
• 👎 Bear case: Inflation relapse or political chaos could crush profits and spike debt.

Best for: Investors comfortable with volatility and bullish on Argentina’s turnaround. Not for the risk-averse.

Have questions? Think we missed something? Reach out—we’re happy to chat! ☕️