IRSA Inversiones y Representaciones Sociedad Anónima (IRSA) Earnings Call Transcript & Summary

Good morning, everyone. I'm Santiago Donato, Investor Relations Officer of IRSA, and I welcome you to the fiscal year 2024 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. [Operator Instructions] 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. I will now turn the call over to Mr. Matias Gaivironsky, CFO.

Thank you, Santi. Good morning, everyone, and thank you for joining us today. This was a special year with 2 different, very different moments. The first one was from July to December with a very high levels of consumption and acceleration of the inflation. And the second, since Milei took office with a radical change in all the government policies where we saw this acceleration of consumption. Although the volatility of the year, we were able to achieve very good numbers, basically, in our rental adjusted EBITDA, we reached a level of ARS 171 billion, that was 8.8% above the same numbers of the previous year. Regarding our net income, we posted a loss of ARS 23 billion that I will explain later, but it's mainly related to the exposure of the fair value of our investment properties is a noncash effect that the change in the macroeconomic generated, so the volatility and losses in that line. Also, we saw the year with very good levels of occupancy in both offices, malls and hotels. There was a strong activity in real estate projects and transactions during the year where we sold some projects, and we acquired and launched new projects that Jorge will explain later. And also during the year, we were very aggressive distributing dividends and buying back shares. We paid ARS 119 billion in 2 tranches. The first tranche represented a yield of 13% and the second one, a dividend yield of 7%. And also during the year, we bought shares for 4% of the total outstanding shares. Now let me introduce Santiago Donato, our IRO, to follow the presentation.

Thank you, Matias. Well, here, we can see some figures, some indicators for the shopping malls during the last year and evolution of our tenant real sales and occupancy as well. Well, fiscal year '24 ended slightly below 2023. This is in local currency adjusted by inflation, just 4.5% below, mainly due to a first half of consumption growth, followed by a second half of contraction due to the acceleration of inflation and its impact on real wages and economic activity. This was driven by the change of government in the middle of the fiscal year in December. But we are closing a good year. When last year was a record in sales, remember that there was a boost of -- well, the inflation generates an acceleration of consumption as well. So 2023 was a record, and we are almost in the same levels adjusted by inflation. So the year ended very well, and we are at a start to see some signs of a slight recovery in recent months in August, mainly. So we hope in 2025, we can keep growing in terms of sales in shoppings, capturing inflation and maintaining occupancy and also growing in terms of flow of visitors. 98% occupancy is our historical record levels. So we could -- even in these 6 months of this acceleration or contraction of consumption in Argentina, we kept the shoppings with all the brands and full occupied. Moving to offices. Well, we kept selling some additional assets during the last fiscal year, as we have been doing in the last 4 since 2020. This year, we sold Suipacha Building. This was in the first quarter of the year and 3 floors of the Central Della Paolera. So we currently manage almost 59,000 square meter. We sold 15 during the period, and we consolidate in -- mostly in the A+ and A category. Occupancy increased to almost 96% in the premium buildings above the average of the sector in Buenos Aires, while the average rent of the portfolio remained quite stable at levels of $25 per square meter per month. In the case of the hotels, we maintain good rates per room and occupancy levels during the year, during fiscal '24. Although we have seen in the last quarter, a decline in international tourism mainly due to lower FX competitiveness in Argentina, that is a challenge for the next year not to keep maintaining these levels of occupancy and rates. But the Hotel [indiscernible] has been very -- has been a major attraction for the high-income segment in Argentina. And the 2 hotels in Buenos Aires, Libertador and Intercontinental, are working to give new proposals and also waiting for the full recovery of the corporate event segments that still has margin to fully recover to pre-pandemic levels. Occupancy remained stable at levels of 64%, average of the year. And rates increased to $243 from $217 per room, and this is mainly because of the increase in [indiscernible] that is charging approximately $450 per room. Here, we are adding some other assets or other investments that IRSA owns. This is the entertainment exposure. We have a stake in La Rural and the convention centers, Buenos Aires and Punta del Este of approximately 35%. This is a sector that it took more time to recover from the pandemic. You can see in 2020, it was fully closed the whole year. It took like 2 or 3 years to recover to historical levels of occupancy in the case of La Rural, where we have fair and event activity. This year, La Rural could maintain the fair calendar and the number of visitors, but there was a reduced investment from exhibitors and a contraction in public consumption in stands and services due to the deceleration of the activity, mainly in the second half. In the case of the convention center, Buenos Aires increased its number -- its occupancy to a level of 36%, but it's still in the process of full recovery in this segment. It's not still fully recovered. We hope Argentina can be a good place for this -- for international and local congresses and corporate events, now that we are in a change of economic cycle, more opening to the world for the coming years. Something important is that this year, La Rural, we obtained an extension of the concession. This is a concession until 2037, with an option to extend it for 4 years more until 2041. So good news for this investment, which is generating very good EBITDA this year and in the last year as well. Regarding ESG, we have advanced this year in the 3 lines in environmental, social and governance matters. We were included once again in the Sustainability Index of Buenos Aires stock market of BYMA that highlights the 20-best-performing listed Argentine companies in terms of ESG. We obtained this year the Leed Gold Core & Shell Certification of the Central Della Paolera, our latest development and many companies, tenants are certifying its interiors as well. This adds to Salta building that had obtained the certification in 2029 -- 2019, sorry. So 72% of our premium buildings are Leed certified. And then we are working with a seal -- a green seal that is for waste management practices in our shoppings in Buenos Aires City. This is a program from BA City. We have already obtained the green seal for Alto Palermo, Patio Bullrich and Alcorta. On the social side, we have done many volunteer programs and social activities in our malls and in our offices. A lot of people pass through our shopping malls in a year, more than 100 million visitors. So they are a very good place to set these type of activities and actions. We invested around ARS 500 million in different activities in our assets. And something important is that we -- last year, we -- it was our anniversary of 75 years listed in Buenos Aires. This year by -- in December, we are going to celebrate the 30th anniversary in New York Stock Exchange. So the company continues working with high standards of corporate governance and is listed in the 2 markets, Buenos Aires and New York. And this is our investment in APPA. We have almost full -- almost 99% stake here in APPA. This is our loyalty app that enhance the shopping experience of our visitors, offering discounts, benefits, linked to their preferences. And we can see the figures is growing in terms of registered users, in terms of accumulated transactions. So we will keep complementing the plan of APPA and the idea is to keep complementing the physical retail with the digitalization in order to offer all the solutions to visitors in our shopping malls through this app, that is the app of Argentina that is connecting this retail, both virtually and physically. So now we will give the word to Jorge Cruces, our CIO, for the real estate activity and prospects for the coming years.

Well, good morning, everybody. It's been an intensive year regarding acquisitions and swaps and sales. On July 24th, we sold the Maple building, which was vacant at the time. It's a Class B building acquired by IRSA in 1991, 7 office floors and 62 parking spaces with a gross leasable area of around 11,500 square meters. The price was $6.750 million, $3 million were paid in cash and $750,000 in office units in a building nearby on [indiscernible] Avenue right in front of our hotel [indiscernible]. Gross leasable area of what we have received is around 150 square meters. Then we sold -- on August 31st, we sold our 50% of our shareholding in Quality Invest. Quality Invest owns a property located in the city of San Martin, which was formerly the site of American British Tobacco, the industrial plant. It has a total area of 160,000 square meters and a current built-up area of around 80,000 square meters. Though transaction amount was $22.9 million, of which $21.5 million was collected upon the transfer of shares and the balance of $1.4 million will be paid in 3 years. We had acquired a land in Ezpeleta when we sold the Republic Building. We acquired that land for $60 million, and now we made a better agreement for $16.4 million with the people who have developed [indiscernible] and this is -- now it's going to be [indiscernible]. Through this barter, we are receiving 125 single-family lots and 40% of the multifamily lots. The construction works have started. The trust has sold most of its single-family lots. So we are starting to sell family lots next October. Del Plata building, well, we were part of the investors who -- we were part of the trust. Most of the investors are first close by to IRSA. So we made this trust, and we acquired the building that belonged to Banco Hipotecario. We did it through a barter also. Banco Hipotecario is receiving 28.5 of the selling meters of the building. And we are going to be the developers of the trust. We're not the trustees, but we are the developers. And well, it's a downtown only a block away from the [indiscernible]. It's next to the theaters, it's a great location, and it's the whole city block. Regarding acquisitions. We made a great acquisition lately in Alto Avellaneda, right beside our shopping mall, we acquired most of the property beside it. There's only a little part that we didn't acquire yet. We're trying to acquire that. But regarding the acquisition, the price was $12.2 million. We paid $9.2 million and the $3 million will be canceled with the transfer of the deal, which is still pending. The transfer includes an existing leak contracts until the original term, and we will be renting to the supermarket for the next 3 years. The supermarket actually were the ones who sold the property, so that's like a sell and leaseback regarding the supermarket. The square -- the total square area is almost 87,000 square meters, and we acquired more than 32,000 built square meters. I think this is a great acquisition. And this allows us to make decisions regarding the parking. This allows us in the future to build unique -- to unify on both lots and make a lot of development because both lots have a lot of squares -- more squares to be developed -- square meters. Regarding Ramblas Del Plata, well, actually, there's been -- there's been an event in the Hilton, where we renamed what used to be -- had another name announced we're calling it, Ramblas Del Plata. Ramblas Del Plata today, we have the [indiscernible] already signed, transferring ownership to the city of 4 plots of the land, 3 lots along [indiscernible] and creating the 61 lots for user to sell. With this act, we fulfilled the process of creating the land registrations in the industrial database of the city. We're showing the titles of ownership and enable user to transfer the plots. Environmental public hearing is starting today. It will last 3 days in a row because there's 128 registered speakers. And as soon as we get relay through the environmental permits, we will be breaking ground. As I said before, today, it's called Ramblas Del Plata, it used to be called Costa Urbana. And we are -- we have a lot of residential projects to launch in the near future. One, as I said before, is the Del Plata Propiedades through the trust, we have a development of 720 apartments. There's going to be an event in October that's called [indiscernible] we will be launching the brand. I mean, the apartments through the exhibition. Nexo Dot. The project is located between the Dutch shopping center and the Salta building. The program includes 2 towers with 5 levels of housing, 2 levels of office space and a commercial esplanade that links the shopping with the Salta building. It's going to have 7,000 of house square meters to sell. We talked about the project in La Plata. There's going to be a mall in La Plata, but there's also going to be 15 lots to be sold. The block is located in a large block of about 8 hectares in the most important supplies center of the city of La Plata. In the area, there's 2 large supermarkets and home center. The program is -- of the block was subdivided in 18 lots, of which 2 of them will be public squares, the largest for the shopping center and the rest of the 15 lots will have of 78 square -- 78,000 square meters to be developed, to be mostly residential, but also it allows hotels, office buildings and medical centers. We also have [indiscernible] are 3 towers. There are going to be 500 apartments, which are 31,500 selling square meters. We completed the concrete of the tower called Tower #3, and we're continuing with construction. Now I'm going to give the floor back to our CFO, Mr. Matias Gaivironsky.

Thank you, Jorge. Regarding our investment in Banco Hipotecario, remember that we control 29% of the shares. And we have a very good year. The results that Banco Hipotecario generated 2 years reached almost ARS 30 billion compared with ARS 11 billion last year. We saw a very good evolution of the shares in the market from ARS 46.9 last September to the current ARS 407. The market cap or the market value of Banco Hipotecario 2 years, today, it's around $138 million, so recovered significantly since last year. Also, the bank distributed dividends for first time in the last several years. We received [indiscernible] ARS 13.6 billion. Banco Hipotecario distributed a total amount of ARS 45.6 billion. The bank is in very good shape, very good numbers, reaching good levels of return on equity or return on assets. The liquidity levels are in very good levels, the nonprofitable losses -- sorry, the nonperforming losses also are in very low numbers, so we are very happy with the evolution of operations of Banco Hipotecario. And also, there is something that was a game-changer for real estate this year, that was the launching of new mortgages, mortgage loans to the public. The Banco Hipotecario was the first bank to launch lines of -- new lines of grade, then around most of the banks in Argentina also followed Banco Hipotecario and started to announce new lines. That has started to happen. It's still some process and it's not so fast. But there are many banks that today are offering mortgages to the public that we believe that, that together with the fiscal amnesty that the government is implementing that can boost real estate definitely. If you go to the next page, we can see regarding our financial results that always we started to see what happened with the main variables on the macro side was a very volatile year with an acceleration of inflation and devaluation. You can see on the left part, that the nominal FX. There was a devaluation of 255% with an inflation in the center that was 272%, that means that the real FX appreciated 4% during the year, 5% last year, but the evolution during the quarter was completely different, that generate volatility in our results and that we can see later. Also, regarding the blue-chip swap, the dollar MAP. Also, there was a devaluation of 179% compared with the inflation of 272%. That means that was an appreciation also of 25% in this year compared with the previous year, 10%. So if we go to the next page, we can see on the adjusted EBITDA side, as I mentioned, very positive numbers surpassing last year by 8.8% on the rental EBITDA. 4.6% was our shopping malls, 4.1% our offices and 52% of our hotels. Now hotels are significantly compared with the offices. Used to be our third segment, today is our second segment in terms of cash generation. Also, we can see an improvement in margins reaching shopping malls, 76.4%, office is 81.7% and hotels 34.4%. The operating income also improved significantly by 87%. And then when we see the main driver of the losses this year is the line of the change in the fair value of the investment properties. This is a noncash line, you know that under IFRS, we would recognize the fair value of our investment properties. For shopping malls, we are using a DCF model. Since there are not comparables in the market, there are no transactions of shopping malls in the market, so we use a DCF model. And for offices and the land bank, we are using comparables, since we can see comparable transactions for the kind of assets that we have. And that since we value that in -- at -- in pesos at the blue-chip swap and we saw in the last slide that was an appreciation in real terms, that generate losses. If we see the numbers in dollar terms, the number is probably the same than the previous year. There are no appreciation or impairments in our offices and land bank. But when we convert that in real pesos, we see a significant loss. Regarding our shopping malls, when we see the evolution, there was an appreciation in dollar terms compared with March and with June last year that is basically related to a better performance in pesos terms and lower exchange rate going forward, that means that we are generating more dollars and that improve the DCF model, that improve the value of our assets. But again, it's a noncash effect that we will post every quarter according to the evolution of the inflation and the valuation. Regarding our net financial results, we are posting a gain of ARS 93 billion compared with ARS 57.7 billion last year. You see the table below, the fair value of financial assets and liabilities, we are posting an important gain. This is related to the liquidity -- our cash liquidity that we invested in securities and improved significant evaluation. So we are posting an important gain. Net interest. We are seeing a reduction. There, we have some accounting effects. If we see the evolution of the net debt, net debt is similar than the year ago. Interest payments are slightly below. So we are having some reduction on interest. But when you see the comparison with the last year of 41.1% against this 5.4% is related more with the evolution of the interest rates and the inflation that generate that we are paying less interest payments or less coupons than inflation and that generate gains in accounting treatment. The net FX result is positive because our dollar-denominated debt we are converting that into pesos and the pesos suffer an appreciation during the year, so that generates gains that has the other important effect. Regarding the income tax line. Here, we have, again, some noncash FX last year, according to some ruling of the Supreme Court that allow some of the companies in Argentina to adjust tax credits by inflation. Last year, that generated an important gain. That was a one-shot effect. This year, the gain is more related to the fair value of our investment properties that every time that we post losses, we post a gain on deferred taxes, and that is the ARS 57 billion is related to that. We are paying income taxes in some of our subsidiaries, but still at IRSA level this year, we haven't paid income tax since we have tax credits. Well, with all of that, we finished the year with a net result that posted losses of ARS 23 billion attributable to our controlling interest is ARS 18.4 billion negative. If we see the evolution in dollar terms of our rental EBITDA, we see that we are in very good levels, $163 million of cash generation that you see the year what happened that we were very aggressive in dividend payments and buybacks. So we have a very conservative debt structure with very low leverage and still generating very good levels of cash. And during the year, we haven't been aggressive on CapEx plan on new projects. So the CapEx was very limited. So that was almost all free cash flow for the company. About the net debt evolution. We have been talking about this. When we compare the last year with this year, almost the same, but having paying around $117 million of dividends. So we used most of the cash to pay dividends and the debts are in very low, low levels. Regarding the debt amortization schedule going forward. We have some debt during the year, $184 million. We feel very comfortable with our existing cash levels and liquidity and also with the low leverage and access for credit. IRSA has plenty of credit lines today available in the local market and also good news that we start to see some activity in the international market for some of the major companies of Argentina, so we feel very comfortable to manage the debt situation going forward. During the year, we issued some bonds in the local market. In June, we issued $42 million in 2 tranches, one in pesos, one in dollars, at a very convenient interest rate of 6%. So we will be active also in the market going forward. As I mentioned, the dividends -- sorry, the dividend payments. The last year during fiscal year '23, we paid $64 million, this is at the blue-chip swap. This year was $117 million. Dividend yield of 12% at the beginning of the year and 7% in May. We will announce the dividend proposal to our shareholders' meeting probably next week. So we expect to keep paying dividends. Next week, we will announce the amount that we will suggest to our shareholders' meeting that will be in October. And about -- finally about our share repurchase programs. During the year, we launched 3 different programs. Altogether, we bought 4% of our shares that represent an investment of $38 million at the official exchange rate, $23 million at the blue-chip swap. The average purchase price so far was $8.88 per GDS. So we are very happy to allocate part of our liquidity to keep buying back shares. So with this, we finish the formal presentation. Now we open the line to receive your questions. Thank you very much.

[Operator Instructions] Yes, we have some questions in the chat. The first one from [indiscernible] Securities. The urban planning coach in the city of Buenos Aires is currently being reviewed. How do you think this situation will develop and what impact could it have on your projects? I think this is for you, Jorge.

Well, the Mayor -- well, when he was in -- during the election, he talked a lot about this. So I believe there should be some changes in the future. Now the changes he mentioned during the election and the changes we're seeing in the dress are certain parts of the city that we don't have projects or it shouldn't be a problem for us. But then again, not only that, I don't think that's going to affect us, when most of our projects are already approved. So these are for new projects. The changes are going to be for the new projects, and most of our projects are already approved, so it shouldn't be a problem for us. But I do believe there's going to be a new city plan -- program.

Good. Here, we have another question regarding Costa Urbana. If IRSA will join in national investors or foreign investors or IRSA will look for financing for development alone or...

First of all, we have to change the name. Now we are confusing a little investors. We used to call Costa Urbana and today is Ramblas. Ramblas Del Plata is the final commercial name of the project. So we are very happy to announce the name and start the commercialization. As we always mentioned, this is a huge project. It's not today a single project. Today is like, as Jorge mentioned, 61 plot of land, different plot of land that we can do different transactions. We can develop ourselves or we can do swap transactions, so we can sell units, so we can presell units from final clients. So there are many different sources of financing, probably the most likely that you will see in the coming weeks or months is that IRSA will try to start doing some swap transactions with developers. In that regards, IRSA has not obliged or we don't have to put money because the developers will do the investment and we will receive units as part of the payment. So it's like we will swap the land for final units. We don't think that we will finance this as project finance is much more likely that we will finance each plot of land if we need the resources. Definitely, we will invest in the infrastructure of the project. At the beginning, we committed to the city to deploy around $40 million in infrastructure and that we need to start commercializing the different plot of lands. But then I imagine that the financing will be at IRSA level and not at the project level, at least at the beginning. And as I mentioned, we are not thinking in a high exposure in the -- at the beginning of the project since developers will do the work. I don't know, Jorge, if you want to add something else?

Well, in a commercial point of view, we -- at the expo real estate at the Hilton, when we launched the project, it was very successful. People were very interested, mostly local developers. And we are talking with those -- with most of the Argentinian developers at the moment for this first stage, and we are very confident that this first stage is going to be very successful. And some regional investors are also starting to get interest. So I believe, regarding the question, if we're going to have foreign investors or developers, I do believe, but maybe in the near future. In the meantime, we're mostly speaking with local developers, and we're very happy regarding how the real estate expo worked out. So we have a lot of expectations. And we think that in our next webcast we can be starting to give good news regarding the -- regarding this project.

There were some additional questions regarding Ramblas Del Plata here. If you could repeat the amount of investment of infrastructure in the short term. I think Matias mentioned that.

$40 million.

It's -- but it's $40 million total investment. It's not in the short term. Because we have like 3 big stages of the development. So $40 million is for all 3 stages, it's not only for the first, so it's not in the short term, okay?

And here, there is a question from George Burmann that what kind of total development capital is needed for the whole Ramblas Del Plata project and the time involved? Difficult to answer, but...

Well, it's very difficult to answer. Cost in Argentina and construction has changed a lot lately. So we don't know. It's going to be a project that's going to take more than 15 years probably. So the investment in infrastructure is going to take -- it's going to be in those 3 stages, and we're going to have developers -- as master developers, we are going to have developers developing buildings in our land, and we're going to be doing developments of ourselves. So I think that number is very difficult to say at the moment because we don't know exactly how many developments we're going to do by ourselves. But we're going to have a lot of partners. So as Matias said before, we're going to be having different interest in the different buildings with different partners. And -- so we can't answer that question at the moment. I don't know if Matias, if you have anything more intelligent to say than what I answered.

No, to give some sort of size, this 900,000 square meters, cost of construction today, it's hard to say because it is not just a photo, not it's a picture when you start, when you finish, but roughly today in Argentina, we are talking about $1,500 per square meter of construction, that gives you a sense of the total size of the project. But as we mentioned, we won't invest all the money, will be a combination of different players, but roughly it's a project of more than $1.3 billion, $1.4 billion.

One more question regarding projects, [indiscernible] when do you expect to initiate to begin the construction works.

Construction? As I said before, we already finished the concrete of Tower #3. Well, actually, we started with Tower #3, but that's the way it's in the plans of the -- the city plans. It's called #3. So we already started -- we already finished the concrete, and we're continuing with Tower #3. #1 and 2, we didn't start yet. So we're continuing with that construction.

Perfect. Then there is a question related to sales. If you -- the company intends to continue selling down the office portfolio? And a question, if we plan to hold Banco Hipotecario stake, as well? So I think that's a mixed answer.

Regarding the office buildings, actually, one of the projects that we have that I said, it's mostly residential, we're planning and building office buildings continuing in Salta. So we're going to have more office buildings in Salta. So we're going to be construction -- doing new constructions. Maybe in La Plata, we're going to have some office buildings also. But -- we have only 3 floors in Intercontinental Plaza. So we're willing to sell those 3 floors. We still have floors here in Catalina. So I don't think it makes sense to have only 4 floors. So we should be selling the floors we have in these 2 buildings. But we don't have the attention in the meantime when the short term to be selling Salta. We have the whole building. So I would say that selling office space should be what we have left in Intercontinental and right here in Catalinas. Regarding Banco Hipotecario, Matias, I don't know if you want to answer that question.

Can you repeat the question, Santi?

If we expect to keep that investment, the stake in Banco Hipotecario?

Yes, we have it since 1997. Yes, but the late 90s.

Good. Then there are some questions coming from an anonymous attendee. I would ask for the future, if you can register. So we have your name to be able to answer, but they all are around -- related to capital allocation, perhaps Matias can give you some color on what the company expects in terms of future dividends, deleverage, buyback programs, how do you think to allocate that? I think that summarize all these questions.

Okay. I believe that the last 3 years were very extraordinary years in terms of the capital allocation. If you analyze, we haven't launched new projects during those years, so we haven't started any significant development. The last one was in 2020 -- we finished in 2020, that was the Catalina project. Since then, we were buying some opportunities in the market. So we bought some projects, but a very opportunistic prices, but we haven't launched a new project that need CapEx or capital allocation. So the last 3 years, we were very focused on our own capital structure, allocating a lot of cash to reduce debt. We saw a huge opportunity to reduce debt in -- since 2020. Today, we think -- I think that we are very unlevered. So probably going forward, we will have a little higher level of debt. And also regarding dividends and buybacks. The buybacks, we are limited by law that we can buy up to a certain level of the liquidity in the market. So we have been implementing different programs during the year, but having in mind that restriction. But then we pay dividends to give the opportunity to our shareholders if they believe that there is a good opportunity to buy shares as well they combine with the liquidity that we are paying. And again, we feel very comfortable with the level of debt today. The company keeps generating very good levels of cash and the CapEx need are not so significant today, probably going forward and something that we start to communicate is that the IRSA probably will start again in a new stage of development, and we have plenty of land available and different projects to launch. But we are conservative in terms of offer and demand. So if we see good demand, we can accelerate. And if we see good results with deals, we will accelerate. But if not, we are -- we won't run and be aggressive on the CapEx if we are not sure about the profitability of the projects. But if I have to separate, I would say that probably the last 3 years were very exceptional in terms of capital allocation that were 100% allocated to our own capital structure. Going forward, I believe that we see again, IRSA investing in new projects. But keeping -- paying dividends, we like to pay dividends every year. So if we have the liquidity and the results to do it, we will keep paying. And also the buybacks is something that if we see like today, we believe that there is a huge discount in our shares against NAV, we will keep buying shares as well.

Perfect. Well, here there is a question, I think Matias has already answered from [indiscernible] financing and expansion, do you plan to tap the global debt market or more or less to refinance debt and accelerate your development projects?

I don't think that we will tap the international capital market in the near future. We don't need the size of that kind of financing, the international capital market at least you need to issue $300 million of debt. We don't need that. So probably, we will continue in the local market. But structurally, always our structural debt was always in the international market. So we will see in the future if we see an opportunity. But today, we don't need it. And we believe that there are lower interest rate in Argentina rather than the international market compared with the size of the debt that we need. Now we don't need $300 million, we need transaction of $30 million, $40 million so we can manage with the banks and the local market debt. But having in mind that IRSA has access if we need to the international market, our bonds in the international market are trading very well. That means that the people like our credit.

Yes. Well, there are some additional relationship with Cresud. George Cresud is the controlling shareholder of IRSA today has a stake of 55.4%. It's an agribusiness company operating in the region that -- and the controlling shareholder of IRSA. And one, the last one from George Burmann is related to the political outlook. How do we see or think Milei will -- if it will -- he will be able to bring Argentina back to the forefront where Argentina belongs. That's more subjective, but...

It's a more personal opinion than a company opinion. I hope to see good environment in Argentina. I hope to see new receiving investment [indiscernible], I don't know, other kind of macroeconomic situation. Last year, the last many years in Argentina were very volatile and very chaotic and taking decisions to invest long-term capital in that environment is very complicated. That is the reason why a company like IRSA is the main real estate company of a country where it was conservative launching new projects. So we hope to see good performance of the new administration. They are putting effort, trying to order the economy -- to put in order the economy, reducing inflation, reducing the deficit that is significant new and a significant achievement for the country. So we hope to see that to continue and I am very -- have a lot of faith in Milei, so at least my personal opinion.

Thank you. Thank you, Matias, and thank you all for joining and for all the questions. We like to be again in the map in the world and having a lot of questions and participation from investors and analysts. So we conclude this fiscal year presentation. We see you next quarter, and I will give some -- the word to Matias again for his last closing remarks.

Well, thank you, and not so many more to add. We are very happy with the results. There was good numbers in all the operations and real estate transactions, new projects to launch, very healthy in the financial situation, very active executing all kind of financial transactions, so we are happy with the performance so far and we hope to continue on this trend and see Argentina in a good trend as well. So thank you very much again for your participation. I hope to see you soon. Thank you very much.

See you all. Bye-bye.