Irsa Inversiones y Representaciones : Earnings Release IRSA 4Q16

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Torre Boston - City of Buenos Aires (Argentina)

The call will be hosted by: Alejandro Elsztain, IIVP Daniel Elsztain. COO Matias Gaivironsky, CFO

To participate, please call:

In addition, you can access through the following webcast:

http://webcast.neo1.net/Cover.aspx?PlatformId=U1gYlVOtgxew%2BOQ0wD3%2FJw%3D%3D

Preferably 10 minutes before the call is due to begin.

The conference will be in English.

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Please call:

Access Code: 10091000

For further information Alejandro Elsztain - IIVP Matías Gaivironsky - CFO

+ (5411) 4323 7449

finanzas@irsa.com.arwww.irsa.com.ar

Follow us on Twitter @irsair

Highlights

• During fiscal year 2016, we started to consolidate the results of our investment in IDB Development Corporation.

• EBITDA for fiscal year 2016 was ARS 6,178 million (ARS 2,974 million from Argentina and ARS 3,204 million from Israel) and we recorded a net loss of ARS 1,872 million, mainly explained by non-cash items such as exchange rate differences and the fair market valuation of Clal, owned by IDBD.

• Sales in our shopping centers grew 34% in fiscal year 2016 (30% in the same shopping centers) and EBITDA from this segment rose 36%, reaching ARS 1,810 million.

• During fiscal year 2016 we sold investment properties, at a gain of ARS 1,113 million.

• In connection with our investment in IDBD, during this year we satisfied all our agreed commitments, and IDBD used such funds to reduce its debt from NIS 4,814 million to NIS 2,785 million.

• After year-end, IRSA issued a bond in the local market for USD 184.5 million, accruing interest at 7%, and for ARS 384.2 million, accruing interest at Badlar + 299 bps, due in 2019, and used its proceeds to repay almost all its short term debt.

Letter to Shareholders

Dear shareholders,

Fiscal year 2016 was marked by significant developments. Nation-wise, the new administration has brought about a change of cycle, in the framework of a favorable scenario, clear rules and great interest by international investors in Argentina. In this sense, we have launched an ambitious plan of investment in real estate projects in Argentina to be carried into execution over the next fiscal periods. Moreover, we have increased our investment in the Israeli company IDBD, acquiring effective control over it, and consolidating its results in our financial statements.

In terms of results of operations, although we recorded a loss of ARS 1,872 million during this fiscal year, explained by higher financial expenses and exchange rate differences, operating results from our main business lines exhibited a sound performance.

As concerns our rental segments, we are highly satisfied with the operating results posted by our shopping centers and office buildings during the course of 2016. Our shopping center tenants' sales rose by 34% during the year (30% for the same shopping centers), and occupancy reached optimum levels, at 98.4%, while office rental income was US$ 26.9 per square meter on average, with almost full occupancy (98.7%). Taking advantage of the growing demand and sustained prices, during this fiscal year we sold office assets at very attractive cap rates, expecting to recover the square meters sold in new projects to be developed over the next fiscal periods. The three hotels in our portfolio recorded stable rates per room in US$ and occupancy levels comparable to those in 2015.

With over 400,000 square meters of Gross Leasable Area ("GLA") and a potential of approximately 340,000 square meters among expansion projects and new shopping center and office building developments, amidst an industry scenario that is still not mature and has a great potential, we believe that IRSA Propiedades Comerciales is in a sound position to leverage on the various opportunities that may arise in Argentina in the future.

In this regard, IRSA Propiedades Comerciales has launched an investment plan of approximately US$ 400 million (combining the company's contributions and funds committed by lessees and tenants) to be rolled out over the next fiscal periods. The projects include 290,000 sqm of offices, residential properties and shopping centers, and we estimate that 4,000 jobs will be created, including both construction workers and future employees in the new stores and buildings, apart from the multiplying effect these projects will have on the real estate-related industries in terms of investment, creation of job opportunities, and economic recovery.

One of the main projects launched for the next fiscal year is the expansion of our Alto Palermo shopping center, which is located in a unique setting in the heart of the city and is the shopping center with highest sales per square meter in Latin America. The project will add approximately 4,000 sqm of gross leaseable area to the shopping center, and it consists of moving the food court to a third level and using the area of the adjoining property, purchased last year, to make the project feasible. We expect construction works to last from 18 to 24 months.

We are also launching the "Polo Dot" project in the commercial complex adjoining our Dot Baires shopping center, which has grown extensively since we made our first investments in the area. The total project will consist of 3 office buildings (possibly including a hotel in one of them) in land reserves owned by the company, and the future expansion of the shopping center by adding approximately 15,000 sqm of GLA. In a first stage we will develop an 11-floor office building, with approximately 30,000 sqm, on top of an existing building, and we have already executed a lease agreement for more than half the leasable footage even before starting the works. Construction will commence during the next fiscal period, and we estimate that the building will become operational in 18 to 24 months. The second stage of the project consists of two office/hotel buildings that will add 38,400 sqm of GLA to the complex. We have had great demand for premium office spaces in this new commercial hub, and we trust that we will be able to inaugurate these buildings with attractive income levels and high occupancy.