Good morning, everyone, and welcome to the IRSA Second Quarter 2016 Results Conference Call. Today's live webcast of both audio and slide show may be accessed through the Company's Investor Relations website at www.irsa.com.ar/ir by clicking on the banner Conference Call. The following presentation and the earnings release issued last week are also available for download on the Company website. After management's remarks, there will be a question-and-answer session for analysts and investors. At that time, further instructions will be given [Operator Instructions]. You will have also the possibility of sending your question via webcast by clicking on the Question to Host tool. Before we begin, I would like to remind you that this call is being recorded, and that 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. Alejandro Elsztain, Second Vice President. Please go ahead, sir.

Thank you very much. Good morning, everybody. We are beginning our second quarter 2016 conference call. If you go to Page No. 2, you can see some of the main highlights for the six months of this year. And you know that in October 11 of this year, we took control over IDB Development Corporation. We started the consolidation of these assets in this balance sheet and next quarter, the third quarter of 2016, we are going to be consolidating the results. If we talk about the financial consolidation results for the six months, we see that the revenue from sales, lease and service grew up to ARS1.6 billion, almost 25% comparing to last year. The EBITDA for the period was ARS2.054 billion a 15% increase comparing to last year. The net income made a loss for this period of ARS910 million. From that ARS487 million are for IRSA shareholders and the main explanation for that was the decrease in the stock price of IDB plus insurance company and some lower results in the financial results and higher exchange rate and cost devaluation that came to Argentina. We hedged this portion of our denominated debt and we had the positive result in the quarter, in the first semester of ARS911 million. So if you move to next page, the Page No. 3, we can see the main highlights for the two companies; IRSA Commercial Properties and IRSA Holdings[ph]. In Commercial Properties, we can see that the EBITDA for malls was almost ARS940 million, a growth of 36% comparing to last year numbers. The EBITDA of office buildings is ARS87 million, more than 300%. Remember that last year, we made a [Indiscernible] growth. The malls' tenant sales increased by almost 40%. In comparison of the same store sales, we had a…

Thank you, Alejandro. Good morning, everyone. In Page No. 5, on the bottom right side of the page, we can see a summary of the main figures. Our stock in shopping centers grew up little bit because incorporation of the Alto Comahue compared to the previous six months of the previous year. Occupancy is high. We are talking about figures on the 99% which is very high for all standards. Sales went up about 32% on the last quarter same stores, but the total number is 35.7% increase in sales and we also increased our visitors, compared that now we have two shopping centers that are new to the portfolio and becoming more relevant in the trade areas. On Page No. 6, we can see some numbers on the office segment for IRSA Commercial Properties. The total stock of office building right now at the end of December, this was almost 80,000 square meters. That's something important to mention. The monthly lease is $25.6 per square meters and this didn't change. As you remember, we've always been talking about the office segments, the price it's in dollars and even without a big devaluation of 40%, almost 50%. The price we're collecting here is the same $25.6 per square meter. On occupancy, we had a negative effect. Now, we are 94%. This is basically framed by two effects. One is the price on oil. We lost two tenants on the segment of oil and building. And second, because we reduced a little bit the portfolio. All the occupancy has a major effect at the expenditure. This is just the picture, the 94%. As a whole, the average for the whole year is 96%, the average and we believe we will now get soon new tenants at the same level of rent…

Thank you, Daniel. Good morning, everybody. So going to Page 14, here we have the description of our investment in IDB. The main investment highlights for the semester was that finally we finished the partnership with our former partner. So now IFISA acquired the share from Mordechay Ben Moshe, reaching 31.7% stake and Dolphin that is the vehicle that we are using for our investment through IRSA has 49%. During December, we also agreed with the existing minority shareholders to postpone the launching of the first tender offer. Remember that we have remaining two obligations towards the Company. So you have the description in the bottom right of the page. So we have two tender offers. The first one is to launch a tender offer by March 2016 now, so is via December. So we postponed three months. And we have the remaining for the end of 2016. After the cancellation of the partnership, we are starting to change management. So now we appointed a new acting CEO for IDB and DAC and a new CFO for DAC. We start to change directors in the subsidiaries. So we start to make changes on the managerial levels. During December 2015, also was canceled the sale of Clal is to read a process of an action on Clal and finally that was cancelled, generating a weak decrease in the shares of Clal that I will comment later. On a subsequent event, as Alejandro mentioned, Dolphin signed with IFISA an option to acquire the same shares that IFISA acquired from Mordechay Ben Moshe. So the same shares at the same price. We have an option for two years plus an interest rate of 8.5%. The tender offer obligation, we recorded 100% that are recorded with a loss of ARS1.6 billion, that was already…

Thank you. The floor is now open for questions. [Operator Instructions] Your first question is from Joel Galoti [ph] with Morgan Stanley.

I was wondering, now that you've gone through the consolidation of IDBD, how you were seeing the long-term structure of the group? In the sense, would you see separate parts of the company within different structures? Would it be separated by real estate and different parts? So I just want to get a sense of how the Company is going to look like in the future?

It's difficult to predict how will be the final structure. The current structure is what it is. So we will consolidate under the IRSA level all the assets and companies of IDB. So for the near term, we don't expect that to change. I don't know, finally, how much will be our stake and if we will have to remain consolidating IDB or not. That will depend on our effective control of the company. So since we have the effective control of the Company, we will keep consolidating. If that changed, we will change.

Okay. And specifically on IDBD, as far as we understand, there is about ILS800 million due in debt amortizations in 2016. Would you be able to discuss, what are the possible ways for IDBD to pay for this amortization?

There are different discussions today in the company. So I can't comment now any development on that because it's not public information. There was a Board of Directors of IDBD that approved a capital increase in the company under other negotiations around our obligation of the tender offers to replace part of the tender offer into a different structure that can add inflow to the Company. There are another possibility to sell assets. So that will be the main tools that the Company will have to pay the amortization of this year.

Okay. And then, you spoke at length about expansions that are being planned for the near term. I was just wondering about demand from international tenants. Are you seeing a lot of demand coming in from international tenants, and is that driving these expansion opportunities?

There are two drivers here to think about international companies. The first is that we're looking -- now it's in the office segment. We are looking, for example JPMorgan and others that say they will increase operations here. So in the office segment, we see some increase on demand from international companies. And at the shopping center level, we have been receiving many different brands that are looking at the market, interested in knowing what kind of places they can get, what the markets look like. But, there's nothing yet confirmed as there is something going on the office segment. We do expect that all the brands that are near in Brazil, Uruguay, and Chile will disembark turning Buenos Aires and we're preparing, but it's not the only driver to grow in our shopping centers. We still have demand from local tenants. And when we have such a big demand is where we are making the decision of expanding. And the same on the office segment. For example, the [Indiscernible] order that we mentioned, it's not all international demand. It's also some local office demand.

Your next question comes from the line of Jorge Mauro with SPX Capital.

Related to this divestment of Propiedades Comerciales of 0.7%, what was the rationale behind that and can you give us some color was this a related-party transaction, and what was the average price?

Well, the rationale is when we transferred the office portfolio to Alto Palermo last year and we renamed into IRSA Commercial Properties, once we start creating a vehicle that concentrates all the rental real estate of the Company in a single vehicle and a pure business in the commercial side idea. At that moment -- and we announced that at this moment the idea to start giving liquidity to this vehicle. This will be the vehicle that we will use to expand our rental real estate in Argentina. And, we want to have access to financing to finance our future expansions. So the idea is to start giving liquidity to these vehicle, and we sold shares in the market. It was not a related party transaction and we did it at market price. So all our transactions were in the market at the price in the market.

Okay. And on the accounts receivables for Propiedades Comerciales, we saw also that there was a loan of $56 million to Real Estate Investment Group. What was this loan from the shopping to this group?

This is a related party transaction between IRSA Commercial Properties and IRSA. There was a loan of $60 million if I not wrong from IRSA Commercial Properties to IRSA. That is the loan.

What is this for? Because you have actually -- IRSA Propiedades Comerciales owes money to IRSA. So, now it is the other way around. IRSA is owing money to Propiedades Comerciales.

Yes, we believe this is more efficient in terms of our tax structure. So this we plan to refinance the $240 million in the market, and then this $60 million probably will go through the payment of dividends.

Your next question comes from the line of Federico Rey with Raymond James.

Okay, good morning everybody. Thank you for the call. I have some general questions regarding the [Indiscernible] projects and the Catalinas project. The first one is related to this holding permits. If you can give us some color about what's the status of that? And secondly, how do you plan to finance this project? If you are planning some presales or if you are planning to use some internal cash or raise debt or selling other properties. Thank you.

First, about permits, different situations. On the Catalinas, we already have the stoning permits. Now we are getting final permits for construction permits, which should be simple and we don't expect any kind of delay from that. In the case of Alto Palermo, we have the stoning permit and the same we are looking now for construction. Construction permits can take a little bit longer because this is going to be the connection of an existing building with a new building. Might require a little bit more work in the shopping center, but as far as we are now, everything we requested in terms of permits has been giving us the positive approvals. So we will think that we can do it. In terms of financing, definitely for the shopping center, we have our own cash producing. And in the case of Catalinas, we're thinking which one is the best structure, whether to keep reselling as we did with Globant, whether to use our own money, do a potential transfer from IRSA to IRSA Commercial Properties. That will be -- we're analyzing, which is the best structure in terms of tax and all the issues and we will soon announce the way it is done. Now we have to start construction soon anyway.

Okay. So it wasn't clear for me if in the [Indiscernible] project, what's the status of the stoning permit? Do you already have them and working for the construction?

I forgot. Stoning planning, we have the stoning and again, we don't expect any kind of delays on the permits here because the stoning is there and we're working on the construction plans and so far, everything is okay. We do not expect any kind of delays in this project and that's why we're talking about them. I mean of course.

This concludes the questions and answers section at this.

If there are no more questions, I would like to make the final remarks, please. Operator?

This concludes the questions-and-answer section at this time. I would like to turn the floor back to Mr. Alejandro Elsztain for any closing remarks.

Thank you very much. As you probably know, it was the change of government at the end of the semester. The country is now expecting the flow of a lot of capital coming to the country, a decrease in the cost of the capital. We are seeing now the bulk of the countries decreasing their yields. So we expect a lot of investments coming to the region and we're beginning, as we were doing the last two shopping centers that we did the last year, that we were still opening but no one was doing, commercial properties we're doing. We're launching some new projects in the adjustment of a dot. We're doing the new office building in Catalinas, planning the next shopping centers. We expect big growth in the country. So our real estate portfolio and our land bank will permit to do that. So we thank you very much. We see you next quarter, and have a very, very good day. Thanks a lot.

Thank you. This does conclude today's presentation. You may disconnect your line at this time and have a nice day.