Irsa Inversiones y Representaciones : Earnings Release Third Quarter of FY 2016

IRSA Inversiones y Representaciones Sociedad Anónima

Summary as of March 31, 2016

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For further information Alejandro Elsztain - IIVP Matías Gaivironsky - CFO

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IRSA Inversiones y Representaciones Sociedad announces its results for the Third Quarter of Fiscal Year 2016:

Highlights for the period

• During this third quarter of 2016, we started to consolidate the results of our investment in IDB Development Corporation.
• Operating income for the nine-month period of 2016 was ARS 3,146 million, and a net loss of ARS 1,039 million was recorded.
• Sales in our shopping centers grew by 36.3% in the 9-month period (30% in the same shopping centers) and EBITDA from this segment rose 34.7%, up to ARS 1,338 million.
• During the 9-month period we sold investment properties, at a gain of ARS 1,068 million.
• As concerns our investment in IDB, we acquired the minority interest, increasing our indirect equity interest to 68.3% and delisting the company.
• During the third quarter of fiscal year 2016, we launched a tender offer for our bonds and our subsidiary IRSA Propiedades Comerciales issued a new bond for USD 360 million, accruing interest at 8.75%, and falling due in 2023.

Buenos Aires, May 12, 2016 - IRSA Inversiones y Representaciones Sociedad Anónima (NYSE: IRS) (BASE: IRSA), Argentina's leading real estate company, announces today the results of its operations for the nine month period of FY 2016 ended March 31, 2016.

I. Brief comment on the Company's activities during the period, including references to significant events occurred after the end of the period.

Consolidation of IDB Development Corporation

On October 11, 2015, the Group obtained control of the Israeli company IDB Development Corporation Ltd. ("IDBD"). During the past quarter, the investment was consolidated in the balance sheet, and as from this third quarter of fiscal year 2016, it is also disclosed at income statement level. IDBD's fiscal year-end is on December 31 of each year, whereas the Company's is on June 30. Moreover, in compliance with Israeli regulations, IDBD reports its quarterly and annual results after the expiration of the Argentine statutory terms. For such reasons, the Company will be unable to have available IDBD's quarterly results as and when due in order to report them to the CNV in its financial statements for the period ended March 31, 2016. Thus, the Company will consolidate results from IDBD's operations with a three-month mismatch adjusted for the effects of material transactions occurred during the reported period. In this way, the results of IDBD's operations for the period running from October 11, 2015 (date of acquisition) until December 31, 2015 are included in the interim comprehensive results of the Group for the nine-month period ended on March 31, 2016, except for material transactions considered. The Company estimates a similar mismatch in obtaining IDBD's results in the succeeding periods.

IDBD is one of the largest and most diversified holding companies in Israel. Through its subsidiaries, associates, joint ventures and other investments, IDBD is engaged in numerous markets and industry sectors in Israel and other countries, including real estate (Property & Building Corporation), supermarkets (Shufersal), agroindustry (Adama), insurance (Clal Holdings Insurance Enterprises, hereinafter Clal), and telecommunications (Cellcom). After the closing of this quarter, IDBD's shares were delisted from the Tel Aviv Stock Exchange ("TASE"). However, the company will continue to be registered with the TASE as a "Debentures Company" pursuant to Israeli law, as it has bonds listed in such exchange.

Significant assets have been added in various industries in which the Group did not have investments until to date, as well as liabilities for loans taken by IDBD and its subsidiaries.

The company is conducting the "Purchase Price Allocation" process, which is expected to be completed on June 30, 2016.

We have decided to break down reporting into an Argentine Operating Center and an Israeli Operating Center. From the Argentine Operating Center, the Group, through IRSA and its subsidiaries, manages the businesses in Argentina and the international investments in the Lipstick Building in New York and the Condor Hospitality Trust hotel REIT. From the Israeli Operating Center, the Group manages IDBD.