IRSA Navigates Hyperinflation, Political Uncertainty in 20-F Filing

TL;DR

**IRSA's 20-F screams 'Argentina risk' with hyperinflation and political uncertainty making it a high-stakes bet for investors.**

AI Summary

IRSA Inversiones y Representaciones S.A. (IRS-WT) filed its 20-F for the fiscal year ended June 30, 2025, with its financial statements prepared in Argentine Pesos under IFRS Accounting Standards. The company's functional and presentation currency is the Argentine Peso, and its financial statements reflect adjustments for hyperinflation as per IAS 29, given Argentina's cumulative three-year inflation rate exceeding 100% as of July 1, 2018. The filing indicates 762,520,793 outstanding shares of common stock as of the close of the period. Key risks highlighted include changes in Argentina's economic, financial, and political conditions, particularly regarding the national mid-term legislative elections expected on October 26, 2025, and the policies of the current administration. Fluctuations in exchange rates, inflation, interest rates, and governmental intervention in the private sector also pose significant threats. The strategic outlook is focused on navigating these macroeconomic challenges while managing its real estate portfolio, which includes shopping malls, offices, and other commercial properties.

Why It Matters

This 20-F filing is crucial for investors as it details IRSA's financial health and operational environment in a hyperinflationary economy, a unique challenge that significantly impacts asset valuation and profitability. The upcoming national mid-term legislative elections on October 26, 2025, introduce substantial political risk, potentially altering economic policies and foreign exchange regulations that directly affect IRSA's real estate holdings and access to capital. For employees and customers, the company's ability to manage these risks will dictate its stability and growth, influencing job security and service quality. In a competitive real estate market, IRSA's strategic responses to these macroeconomic pressures will determine its market position and long-term viability.

Risk Assessment

Risk Level: high — The risk level is high due to Argentina's hyperinflationary economy, with a cumulative three-year inflation rate exceeding 100% as of July 1, 2018, as stated in the filing. This significantly distorts financial reporting and operational stability. Furthermore, the filing explicitly mentions risks from 'changes in general economic, financial, business, political, legal, social or other conditions in Argentina,' including the impact of national mid-term legislative elections expected on October 26, 2025, and 'governmental intervention in the private sector and in the economy.'

Analyst Insight

Investors should exercise extreme caution and thoroughly analyze IRSA's exposure to Argentine macroeconomic and political volatility. Consider hedging strategies against currency depreciation and inflation, and monitor the outcomes of the October 26, 2025, national mid-term legislative elections closely for policy shifts.

Financial Highlights

debt To Equity

X.X

revenue

$X

operating Margin

X%

total Assets

$X

total Debt

$X

net Income

$X

eps

$X

gross Margin

X%

cash Position

$X

revenue Growth

+X%

Key Numbers

• 762,520,793 — Outstanding shares of common stock (As of the close of the period covered by the Annual Report)
• 100% — Cumulative three-year inflation rate in Argentina (Exceeded as of July 1, 2018, triggering IAS 29 hyperinflation accounting)
• $750,000,000 — Maximum outstanding amount for Global Note Program (Approved by shareholders' meeting dated March 20, 2019)

Key Players & Entities

• IRSA Inversiones y Representaciones S.A. (company) — Registrant
• Matías Iván Gaivironsky (person) — Chief Financial and Administrative Officer
• The Bank of New York (company) — GDS Depositary
• Price Waterhouse & Co S.R.L. (company) — Independent registered public accounting firm
• SEC (regulator) — United States Securities and Exchange Commission
• IASB (regulator) — International Accounting Standards Board
• CNV (regulator) — The Argentine National Securities Commission
• Argentine Government (regulator) — Federal government of Argentina
• IMF (company) — International Money Fund
• New York Stock Exchange (company) — Exchange for GDSs

FAQ

Risk Factors

• Argentine Macroeconomic Instability [high — market]: Significant risks stem from Argentina's economic, financial, and political conditions. The upcoming national mid-term legislative elections on October 26, 2025, and the policies of the current administration are key uncertainties. Fluctuations in exchange rates, inflation, and interest rates, alongside potential governmental intervention, pose substantial threats to operations and profitability.
• Hyperinflation Accounting Impact [high — market]: Argentina's cumulative three-year inflation rate exceeded 100% as of July 1, 2018, mandating IAS 29 hyperinflation accounting. This requires financial statements to be presented in terms of the current unit of measurement at the reporting year's end, impacting comparability and potentially distorting financial metrics if not carefully analyzed.
• Exchange Rate Volatility [high — financial]: The company's financial statements are prepared in Argentine Pesos, but it operates in an environment with significant currency fluctuations. The translation of Peso amounts into U.S. dollars for convenience purposes highlights the sensitivity to exchange rate movements, which can affect reported values and the real economic value of assets and liabilities.

Industry Context

IRSA operates within Argentina's real estate sector, focusing on shopping malls, offices, and other commercial properties. The industry is heavily influenced by the broader macroeconomic environment, including inflation, interest rates, and consumer spending power. Competition exists from other domestic and potentially international real estate developers and operators, but the primary challenge is navigating the volatile Argentine market.

Regulatory Implications

The company must comply with Argentine regulations and IFRS Accounting Standards, particularly IAS 29 due to hyperinflation. Changes in government policies, economic regulations, and tax laws in Argentina can significantly impact its operations and profitability. Adherence to disclosure requirements for foreign private issuers (20-F) is also critical.

What Investors Should Do

1. Monitor Argentine political and economic developments closely, especially post-election, as they directly impact IRSA's operating environment and asset valuations.
2. Analyze financial statements with a strong understanding of IAS 29 hyperinflation accounting adjustments to discern underlying operational performance from inflation effects.
3. Evaluate the company's real estate portfolio performance against inflation-adjusted metrics and consider the impact of currency fluctuations on reported USD equivalents.

Key Dates

• 2018-07-01: Argentina's cumulative three-year inflation rate exceeded 100% — Triggered the mandatory application of IAS 29 hyperinflation accounting standards for financial reporting.
• 2019-03-20: Shareholders' meeting approved Global Note Program — Authorized a maximum outstanding amount of $750,000,000 for the Global Note Program, indicating potential future debt financing.
• 2025-10-23: Board of Directors approved Audited Consolidated Financial Statements — Formal approval of the financial statements for the fiscal year ended June 30, 2025, prior to their filing.
• 2025-10-26: National mid-term legislative elections in Argentina — A key political event that could lead to significant changes in economic and financial policies, posing a risk to the company.

Glossary

IAS 29

International Accounting Standard 29, which requires financial statements to be adjusted for inflation in hyperinflationary economies. (Crucial for understanding how IRSA's financial statements are presented, as Argentina is classified as a hyperinflationary economy.)

Functional Currency

The currency of the primary economic environment in which an entity operates. (IRSA's functional currency is the Argentine Peso, which dictates the basis for its financial reporting before hyperinflation adjustments.)

Presentation Currency

The currency in which the financial statements are presented. (IRSA's presentation currency is also the Argentine Peso, meaning its consolidated financial statements are displayed in this currency, adjusted for inflation.)

Hyperinflationary Economy

An economy characterized by an accumulated inflation rate of approximately or exceeding 100% over three years. (Argentina's classification as hyperinflationary necessitates the application of IAS 29, significantly impacting financial statement preparation and interpretation.)

Year-Over-Year Comparison

This analysis is based on the 20-F for the fiscal year ended June 30, 2025. Specific comparative metrics to the previous year (June 30, 2024) such as revenue growth, margin changes, and detailed financial performance are not available within the provided text. New risks highlighted include the specific timing of the 2025 legislative elections and their potential policy implications, building upon the ongoing challenges of hyperinflation and economic instability.

Filing Documents

• irsa_20f.htm (20-F) — 8647KB
• irsa_ex11.htm (EX-1.1) — 72KB
• irsa_ex25.htm (EX-2.5) — 798KB
• irsa_ex420.htm (EX-4.20) — 67KB
• irsa_ex81.htm (EX-8.1) — 15KB
• irsa_ex121.htm (EX-12.1) — 12KB
• irsa_ex122.htm (EX-12.2) — 12KB
• irsa_ex131.htm (EX-13.1) — 6KB
• irsa_ex132.htm (EX-13.2) — 6KB
• irsa_ex991.htm (EX-99.1) — 3KB
• irsa_ex992.htm (EX-99.2) — 253KB
• 0001654954-25-012190.txt ( ) — 27979KB
• irsa-20250630.xsd (EX-101.SCH) — 282KB
• irsa-20250630_lab.xml (EX-101.LAB) — 944KB
• irsa-20250630_cal.xml (EX-101.CAL) — 95KB
• irsa-20250630_pre.xml (EX-101.PRE) — 806KB
• irsa-20250630_def.xml (EX-101.DEF) — 512KB
• irsa_20f_htm.xml (XML) — 6268KB

Identity of Directors, Senior Management, Advisers and Auditors

ITEM 1. Identity of Directors, Senior Management, Advisers and Auditors 1

Offer Statistics and Expected Timetable

ITEM 2. Offer Statistics and Expected Timetable 1

Key Information

ITEM 3. Key Information 1 A. Reserved 1 A.1. Local Exchange Market and Exchange Rates 1 B. Capitalization and Indebtedness 1 C. Reasons for the Offer and Use of Proceeds 1 D. Risk Factors 2

Information on the Company

ITEM 4. Information on the Company 41 A. History and Development of the Company 41 B. Business Overview 47 C. Organizational Structure 102 D. Property, Plant and Equipment 103

Unresolved staff comments

ITEM 4A. Unresolved staff comments 104

Operating and Financial Review and Prospects

ITEM 5. Operating and Financial Review and Prospects 104 A. Operating Results 104 B. Liquidity and Capital Resources 132 C. Research and Development, Patents and Licenses, Etc. 138 D. Trend Information 138 E. Critical Accounting Estimates 140

Directors, Senior Management and Employees

ITEM 6. Directors, Senior Management and Employees 142 A. Directors and Senior Management 142 B. Compensation 148 C. Board Practices 151 D. Employees 151 E. Share Ownership 151 F. Disclosure of Registrant's Action to Recover Erroneously Awarded Compensation 152

Major Shareholders and Related Party Transactions

ITEM 7. Major Shareholders and Related Party Transactions 152 A. Major Shareholders 152 B. Related Party Transactions 154 C. Interests of Experts and Counsel 157

Financial Information

ITEM 8. Financial Information 157 A. Consolidated Statements and Other Financial Information 157 B. Significant Changes 163

The Offer and Listing

ITEM 9. The Offer and Listing 164 A. Offer and Listing Details 164 B. Plan of Distribution 165 C. Markets 166 D. Selling Shareholders 168 E. Dilution 168 F. Expenses of the Issue 168

Additional Information

ITEM 10. Additional Information 169 A. Share Capital 169 B. Memorandum and Articles of Association 169 C. Material Contracts 176 D. Exchange Controls 176 E. Taxation 190 Table of Contents F. Dividends and Paying Agents 198 G. Statement by Experts 198 H. Documents on display 198 I. Subsidiary Information 198

Quantitative and Qualitative Disclosures About Market Risk

ITEM 11. Quantitative and Qualitative Disclosures About Market Risk 199

Description of Securities Other than Equity Securities

ITEM 12. Description of Securities Other than Equity Securities 199 A. Debt Securities 199 B. Warrants and Rights 199 C. Other Securities 200 D. American Depositary Shares 200 Part II 201

Defaults, Dividend Arrearages and Delinquencies

ITEM 13. Defaults, Dividend Arrearages and Delinquencies 201

Material Modifications to the Rights of Security Holders and Use of Proceeds

ITEM 14. Material Modifications to the Rights of Security Holders and Use of Proceeds 201 A. Fair Price Provision 201 B. This section is not applicable 203 C. This section is not applicable 203 D. This section is not applicable 203 E. This section is not applicable 203

Controls and procedures

ITEM 15. Controls and procedures 203 A. Disclosure Controls and Procedures 203 B. Management's Annual Report on Internal Control Over Financial Reporting 203 C. Attestation Report of the Registered Public Accounting Firm 204 D. Changes in Internal Control Over Financial Reporting 204

Reserved

ITEM 16. Reserved 204 A. Audit Committee Financial Expert 204 B. Code of Ethics 204 C. Principal Accountant Fees and Services 205 D. Exemption from the Listing Standards for Audit Committees 206 E. Purchase of Equity Securities by the Issuer and its Affiliates 206 F. Change in Registrant's Certifying Accountant 209 G. Corporate Governance 209 H. Mine Safety Disclosures 211 I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 211 J. Insider Trading Policies 211 K. Cybersecurity 211 Part III 214

Financial Statements

ITEM 17. Financial Statements 214

Financial Statements

ITEM 18. Financial Statements 214

Exhibit

ITEM 19. Exhibit 214 Table of Contents GLOSSARY Glossary of certain terms used in this Annual Report Unless the context indicates otherwise, the following terms have the meanings shown below: "ADS": American Depositary Shares; "AFIP": Federal Administration of Public Revenue ( Administracin Federal de Ingresos Pblicos) currently replaced by "ARCA" as defined below; "Annual Report": this annual report; "ANSES": National Social Security Agency ( Administracin Nacional de la Seguridad Social ); "ARCA": Revenue and Customs Control Agency (Agencia de Recaudacin y Control Aduanero) "ARS, Pesos or Peso": Argentine Pesos; "Anti-Money Laundering Law": Law No. 25,246, subsequently amended by, among others, Laws No. 26,087, 26,119, 26,268, 26,683, 26,733, 26,734 and Decree No. 27/2018; "Argentine Government": Federal government of Argentina; "Audited Consolidated Financial Statements": audited Consolidated Financial Statements as of June 30, 2025 and 2024 and for the years ended June 30, 2025, 2024 and 2023, and the notes thereto; "A3 Mercados": A3 Mercados S.A. (formerly Mercado Abierto Electrnico S.A. ) "BACS": Banco de Crdito y Securitizacin S.A.; "Banco Hipotecario": Banco Hipotecario S.A.; "BASE": Buenos Aires Stock Exchange; "Board of Directors": the board of directors of IRSA Inversiones y Representaciones S.A.; "BOPREAL": Bonds for the Reconstruction of a Free Argentina ("Bonos para la Reconstruccin de una Argentina Libre"); "BrasilAgro": BrasilAgro Companhia Brasileira de Propriedades Agricolas Ltda; "ByMA": Argentine stock exchange and markets ( Bolsas y Mercados Argentinos S.A. ); "Caja de Valores": Argentine depositary authorized to act in accordance with the CML (Caja de Valores S.A.) ; "CCI": Consumer Confidence Index; "Central Bank": The Argentine Central Bank ( Banco Central de la Repblica Argentina ); "CML": Capital Markets Law No. 26,831, as amended by, among others, Law 27,440; "CNDC": National Competition Authority (Comisin

Financial Statements

Financial Statements We prepare and maintain our financial books and records in Pesos (as defined below in section "—Currency") and in accordance with IFRS Accounting Standards, as issued by the IASB and the CNV Rules. Our fiscal year begins on July 1 of each year and ends on June 30 of each year thereafter. Our Audited Consolidated Financial Statements as of June 30, 2025 and 2024 and for the years ended June 30, 2025, 2024 and 2023, and the notes thereto are set forth on pages F-1 through F-83 of this Annual Report. Our Audited Consolidated Financial Statements have been approved by resolution of the Board of Directors' meeting held on October 23, 2025 and have been audited by Price Waterhouse & Co S.R.L., Argentina, member of PricewaterhouseCoopers International Limited, an independent registered public accounting firm whose report is included herein. Functional and Presentation Currency; Adjustment for Inflation Our functional and presentation currency is the Argentine Peso, and our Audited Consolidated Financial Statements included in this Annual Report are presented in Argentine Pesos. IAS 29 requires that the financial statements of any entity whose functional currency is one of a hyperinflationary economy be measured in terms of the current unit of measurement at the closing date of the financial statements, regardless of whether they are based on the historical cost method or the current cost method. This requirement also includes the comparative information of the financial statements. In order to conclude that an economy is "hyperinflationary," IAS 29 outlines a series of factors, including the existence of an accumulated inflation rate in three years that is approximately or exceeds 100%. As of July 1, 2018, Argentina reported a cumulative three-year inflation rate greater than 100% and therefore financial information published beginning on that date should be adjusted for inflation in accordance with IAS 29. Therefore, our Audited Consolidated

Identity of Directors, Senior Management and Advisers

ITEM 1. Identity of Directors, Senior Management and Advisers This item is not applicable.

Offer Statistics and Expected Timetable

ITEM 2. Offer Statistics and Expected Timetable This item is not applicable.

Key Information

ITEM 3. Key Information A. Reserved A.1. Local Exchange Market and Exchange Rates The Argentine Government has established a series of exchange control measures that restrict the free flow of currency and the transfer of funds abroad. These measures significantly curtail access to the MULC by private sector entities. This makes it necessary, among other things, to obtain prior approval from the Central Bank to enter into certain foreign exchange transactions such as payments relating to royalties, services or fees payable outside Argentina. For more information about exchange controls see, "Item 10. Additional Information—D. Exchange Controls". The following table shows the maximum, minimum, average and closing exchange rates for each applicable period to purchases of U.S. dollars. Maximum (1) (2) Minimum (1) (3) Average (1) (4) At closing (1) Fis

View Full Filing

View this 20-F filing on SEC EDGAR