IRSA Inversiones y Representaciones SA (IRS) 2009 Q2 法說會逐字稿

Good morning, my name is Collia, and I will be your conference operator today. At this time I would like to welcome everyone to the earning release second quarter fiscal year 2009 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks there will be a question-and-answer session. (Operator Instructions) Thank you.

I would now like to turn the call over to your presenters, Mr. Alejandro Elsztain, Second Vice President; Gabriel Blasi, CFO; and David Perednik, CAO. Thank you. You may begin your conference.

Thank you very much. Please if there is any participant that has trouble, I would like to make a second that he can ask the operator about the problem in the system. Please, if there is someone do it now.

And everything is fine.

Okay. That's better. So good morning everybody. We are going to talk about the first half of year of 2009 where the results for these six months reflect the impact that the financial market volatility made, mainly in our consumer finance business that was driven -- affected like in 2001. In this case in 2008 we are going to talk about what happened in the Tarshop, our company, subsidiary company that Alto Palermo controls.

Apart of that, the exchange rate that is affecting -- that -- in this case changed like $0.30, and David will explain this later, affected our stock of debt, results that affected Banco Hipotecario. So we can see that the real estate operation is healthy, and was very -- working very well in all of the segments, and we are going to enter later. But the net income at the end is affected by mainly the financial troubles of the world and Argentineans.

In Offices we came with a very good income, and we began the leasing of the Republica building. And this -- two-thirds of that is just -- we just list. With Dique IV, we completed, and we sold some of the office that we had in the stock, and we are going to explain later which of them we sold and why.

The revenues for the six months rose 9%, and the operating income decreased 65%, and this is mainly due to the losses recorded in the consumer finance segment. If we exclude that, and we took that from the real estate, we see that we had an increase of 17% in revenues and 24% in the operating income.

In the Sales and Development, IRSA-CYRELA is making progress with the Horizon project, and we began to sell the barter agreement that we had in Caballito Nuevo, not with IRSA-CYRELA, with other clients we are receiving the apartments, so we are beginning to sell those apartments.

In Shopping Centers we have a very good occupancy, 98.4%. We are concluding the PAMSA project. And today we are going to talk about Dot Baires. We decided the name is Dot, Dot Baires Shopping. And this is launched -- is going to be launched in April, end of April of 2009. And in the consumer finance we -- in the -- this semester we had contributed ARS165 million to Tarshop to give a broader capital base to gear with the current market condition, and is being accompanied by actions that later Gabriel Blasi is going to describe.

So Gabriel, yours.

Okay. Thank you, Alejandro. Good morning, everybody. Regarding a couple of comments on Argentine financial market, as you can see from the graph on the upper left, the reserves of Central Bank keep a steady pace in spite of the recent interventions in terms of providing liquidity to regular market to control the foreign exchange rate.

On the other side, on the upper right we can see that the pace of devaluation has increased. In a way that is likely to think that the outlook for the foreign exchange rate according to the BCRA Monetary Program shows an expected rate of 3.9 for the end of this calendar year.

Concurrently we have the BADLAR special interest rate which is -- which has began to decrease after the hike at the end of last year, providing additional liquidity in the local financing market. And at the same time as you can see from the lower right graph, the downtown trend of the time deposits is likely recovering in the last day, providing, I will say, a more comfortable present situation on the financial, although the strong impact of the crisis on the liquidity of the local market has been very significant.

Moving to the next page, page 4, there we have the sales evolution in pesos. For the last four years we continued to have a good compound growth of 43%, 47% for the last fiscal year. And important to address the difference of the consideration as Alejandro has stated regarding the effect of the consumer finance and excluding that segment where the total sales increased by 9%, and excluding that the increase in sales has been 17%.

As of EBITDA we can see that on the low left the combined rate of growth has been 25% for the last four periods, and 25% for the last one. And there we have the significant impact of the financial crisis in our consumer financing business where we see a significant drop in EBITDA generation of the business, 43%. But if we exclude that we have an increase of 19% on the EBITDA generation, showing that the rest of the businesses are healthy, and in very good shape in terms of the cash generation.

If we move to the next page, on page 5, there we have the EBITDA for the period for the Shopping Center together with the consumer financing, showing that 2% of total growth, and there we have -- that's the sales evolution. And EBITDA has gone from 145 for the comparable period of last year to ARS35 million for this year.

If we make the same analysis on the right side, excluding the consumer financing, we see that the EBITDA has increased by 10% on the period from year to year, and 13% the sales. And the Company is getting still a very positive EBITDA margin generation with a very slight drop from 76% to 74%.

On the tenant sales we see that the three last years the compound growth continues to be very positive, 26%, and 18% for the comparable period (inaudible).

It is important to address that this year we are increasing significantly the GLA with the [Lo Baikas] deal of 1.6%. If we add on April as Alejandro has mentioned the surface of Dot Baires, 37,000 square meters, we will have a total GLA increase of 16%. And that's without considering Soleil which is intended to reopen also during this year. But we haven't yet established a definitive date for that.

Moving to next page, page 6, we have a couple of considerations about Tarshop, our consumer finance segment. On the upper left we have the monthly sales of the business, and the delinquency rate, which has increased significantly as an effect of the prices. There we have can see rapidly the decrease in the portfolio that we made as a combination of a more focused and more tight credit policies in terms of the new generation of credit, and also an increase on the provisions on the loan.

On the low left we can see the effect of the capitalization that we made in the Company where we can find out that the leverage of 16 times that we used to have, assets compared to the equity of the Company, we have decreased that to six times to a more suitable situation considering the present situation of the market, and the market prospective.

What are the main actions that we have taken at Tarshop level? It's important to address that we -- a new general manager of the company has been appointed; Mr. Mauricio Wior is in charge as Mr. [Izal Malsvania] left the company. Mauricio Wior was the former responsible of Bellsouth -- in the regional Bellsouth operation related to the cellular phone market during the '90s as his last most significant appointment. He has a very extensive experience as manager. Besides this, we have contributed, as we have already published, ARS155 million of financing to the company with a capitalization of ARS105 million of the total.

We have made a significant overhead on point of sale optimization, closing 17 point of sales with a significant reduction of the corporate structure. We have also (inaudible) distribution channel structure. We have tightened and allocated to the new environment the cash lending plans and the merchant financing. We have -- we're going to renegotiate all the conditions with the merchants and streamlining the lending and collection policies. And we have revisioned the provision policies establishing a stricter criteria other than the one established by our Central Bank, which was the former criteria that we used, and which is the general standard in the industry.

As a comment on the evolution of the results breakdown for the Company for the last two quarters, as a comparison on peso million, we can see that the revenues of the first quarter 2009 compared to the second one have increased about 53%. The operating costs have decreased from ARS44 million to ARS31 million with a very significant improvement. The expenses have also -- have a positive outlook on the structure as I mentioned. But the impact of the difference in the provisions have -- shows here the increase is 15%. The result of financial trusts shows an enhancement too. The operating results as a whole has also shown significant improvement. And the net loss is decreasing.

The most significant issue here is to mention that we consider that the worst of the situation of the Company has been already transit and that we are expecting improvement. It's significant to mention that the six-months plan that we established to get the Company outside of the -- of their financing shortage has been completely fulfilled, achieving all the objectives, and we are confident that we are pursuing to [lead] the near future. If we look at the last graph we can see the impact of the last charge-off, and the breakdown on -- as I mentioned -- of the decrease on the general expenses of the Company.

We continue to work steadily in the different alternatives that we have considered to strengthen the Company and to complete its new position in the market, considering the mergers, acquisitions, and selling of the business as part of these alternatives with a strategic investment.

If we move to page 7, we can see some recent pictures of the construction of the new shopping center, the Dot Baires. And you will see in the -- at the left --

Low left. Low left.

Low left which is the house being finished. At the right we see -- low left -- right we see how it will be, this is an image that is not finished, but let's say that it's near finishing. We are in February, and we are expecting the opening at the end of April. So it's near ended and we have signed contracts for almost 130 tenants, from the 150 that there are going to be. And we are deciding the last 20, but really there is a lot of enthusiasm to enter to the shopping center that we are seeing. It will be one of the best malls, the best of Buenos Aires.

And so this is opening for next quarter -- not next, the last quarter of the year. And the plans of the building are on time, and the costs are on -- are just out on the budget too.

If we go to page 8 we can see that the vacancy of the office is very small. We are really today near zero. Vacancy on the Company's only building we have is the Republica that was received recently and we have leased two-thirds of the building. We have here the market price; that is about $34 per square meter and we have our portfolio having -- bringing all contracts at levels of 24. But recently, for example in the Bank Boston Tower we leased at the level of 38, up to the extent that it took 2,600 square meters. So we have a big room to increase the average price of the Company.

If we go to next page, in page 9, we can see the real picture of the building we finished, the 31 of December of 2008, the Dique IV, and this is an 11,000 square meters of construction. And we have the good news that we leased last week -- this week, sorry, this week, this building. And this was leased to Exxon almost whole. From the 11,000 square meters 10,000 were rented to the Exxon company paying $30 per square meter, and this cost us ARS50 million, so it was a very profitable business adding to our portfolio. We are near achieving 170,000 square meters of office building apart of the office building that we are going to add with the Dot project, the one that has the shopping center.

So at the same time we were selling 4,300 square meters, we were selling from offices that we didn't have the full buildings like the del Plata, or the [Rolero], the Puerto IV [Nomentiocho] or Madero 942, so we're selling units at very high prices levels for more than $3,000. And we were taking that money to the cash of the Company. We were net lower, but the ones we said we had not the control of the building, we were selling.

As a quick comment on the hotel, their rates have increased slightly in the period, and at the same time the rooms, the occupancy rates has decreased showing the first symptoms of the slower pace of the economy, both internationally with the impact on the tourism, and locally. On the low parts of the information we have the prices of -- for the previous, the average price per room, and the average occupancy rate for each one of the hotels where we can see some type of decrease at [just now] levels.

In the next page, page 11 we have the features of the actual situation of the work of our project together with CYRELA where we have completed almost 9% of the construction. And remember that these buildings have been all sold, and the project is completely on track as (inaudible).

Next page, we have the render for Santa Maria Plaza and a description of the rest of the land reserves of the Company. For information purposes, regarding the project, as we have already disclosed, this render includes the real volumes of the project as they have been approved on the technical studies, and we -- together with the city authorities; not the final shape of the buildings, but the volumes are exactly the ones, and the heights of the land are exactly the ones that have been approved in the final project.

If we move to page 13, we have the breakdown of sales evolution by segment showing as we have already mentioned, the good result in all the business lines, but the Credit Card operations showing the impact of what we have already described, we have a decrease of 4%, confirming the good moment of the shopping and the hotel operations, the very positive result of the Offices, and the increasing result of sales and development of property.

At level of EBITDA, exactly same situation, good movement in Sales and Development, which is recovering momentum. The Offices confirming its excellent pace, and good -- very good figures for the shopping malls, has a strong impact of the losses of the credit card operation mentioning that we're going to see that this has been the biggest part of the hit, and we think that the result is going to be milder in the next quarters, and the slow decrease on the hotel operation.

Regarding the EBITDA margins breakdown, in the low left we can see that the Sales and Development has improved very significantly, Offices is on the same pace as we already have, nearly 70%, Shopping Center nearly 70% to 73%, and the Credit Card operation we see the impact as described. And the Hotels, in the low 20 figures, as mentioned. And the breakdown by segment on the low right as already described, showing the very significant impact of the consumer financing.

Now, David is going to explain the income statement.

Good morning. With respect to the sales of the Company we had an increase of 9% between the first semester of this year compared to last year from ARS496.6 million to ARS541.3 million. The cost of sales increased 22% from ARS200 million to ARS244 million. And our gross profit was almost the same with a slow increase from ARS296.3 million to ARS297 million. With respect to the operating profits, it had a decrease of 65.5% from ARS141.9 million last year to ARS48.8 million this year. And I am going to explain the breakdown of the operating profit among the different segment lines of the Company.

Operating profit from our development and sales of property increased 145.6% from a gain of ARS4.2 million in 2007 to a gain of ARS10.2 million in 2008. As a part of our portfolio management strategy, we have sold certain lease office property that we consider non-strategic.

With respect to the operating profit arising from the Offices and non-shopping centers, rental properties, it increased 106.2% from ARS17.5 million in 2007 to ARS36 million in 2008. This was due to the reason that Gabriel and Alejandro were explaining some minutes ago.

With respect to the operating result from the Shopping Center segment, it increased 8.2% from ARS94.8 million in 2007 to ARS102.6 million in 2008. The operating profit of hotel operations decreased 15.6% from ARS11.5 million in 2007 to ARS9.7 million in 2008. The operating profit -- the operating loss, sorry, of the consumer financing segment through our company -- relative company, Tarshop, decreased ARS124.6 million from a gain of ARS13.8 billion in 2007 to a loss of ARS110.8 million in 2008.

The financial results, we had higher losses from ARS54.8 million in 2007 to ARS138.9 million in 2008. This was mainly driven by the depreciation of the US dollar, our peso towards the US dollar. The exchange rate as of June 30th of 2007 was ARS3.025 while the exchange rate as 2008 was ARS3.453. So we had almost $0.43 per peso devaluation that -- on our debt of ARS350 million -- $350 million, sorry; we had an impact of ARS81.4 million difference. The difference of exchange last year in the first semester in 2007 was ARS5.9 million loss, and difference of -- the exchange difference of this year, as of December 2008 for six months, was ARS87.3 million loss.

With respect to the interest and the financial operation results, they decreased by ARS29.6 million because last year, as of December 2007, we had a gain of ARS6.8 million while in the first semester of 2008, as of December 2008, the result was ARS22.8 million loss. With respect to the purchase of our own negotiable papers we had ARS41.1 million gain. And we had the financial cost of the debt, an increase of ARS14 million from ARS55.9 million last year to ARS69.9 million this year for the semester ended in 2008, December 2008.

With respect to the related companies, the losses from our related companies increased ARS38.2 million from a loss of ARS9 million in 2007 to a loss of ARS47 million due to our losses in the Banco Hipotecario. The -- I wanted to explain that with respect to the GAAP that the Banco Hipotecario is accounting, the bank is using the Central Bank for their accounting. They are using the Central Bank principle, accounting principles, and they are accounting the public bonds at their full value, 100%, while we have to make a change, we have to make the depreciation to take them into the accounting GAAP for commercial societies. So we are accounting them as -- at the currently market price. So due to the financial crisis of last semester in Argentina and also in the rest of the world, the bonds, the public bonds had a depreciation. So we had to reflect that in our related Company results.

With respect to the income tax we had an increase of ARS60 million from a loss of ARS46.5 million in 2007 to a gain of ARS13.6 million in 2008. And that was mainly driven by the loss carry-forward that our related company, Tarshop, is having as deferred tax due to the loss in their financial statements.

With respect to the minority interest, it increased by ARS47.3 million from a loss of ARS21.9 million in 2007 to a gain of ARS25.4 million, and this is also driven by the loss that Tarshop had in their financial statements.

Therefore, in the net loss we had our increase -- sorry, we had an increase of the loss from a gain of ARS5.8 billion last year as December 31st of 2007 to ARS99 million loss in the -- as of December 31, 2008.

Thank you, David. Moving to page 15, a quick wrap-up on the debt of the Company consolidated with Alto Palermo S.A., you see there the short-term debt of -- equivalent of $6 million. The seller's note -- the balance of the seller's note of acquisitions of Palermo Invest, $3 million. The seller's note of (inaudible) el rancho land that we acquired as a land reserve, the guarantee loans for Argentine hotels, $5.5 million.

The balance of the finances related to the acquisition of Edificio Republica, $33.5 million and $150 million for the note, against the cash of $21 million. That means a net debt of $180 million. At Alto Palermo's level, a shortened debt of $30 million equivalent in pesos. Remember that this is probably from now to the next quarter, the peak of debt of the Company as we are in the process of finalizing our strong investment in PAMSA but we are still -- we are not getting the full cash flow from that investment until the last quarter as Alejandro has mentioned.

The Tarshop debt of -- total of $20 million in pesos is -- its dollar equivalent. The acquisition of Beruti, the seller note of $8 million, and the notes of $120 million and $44.9 million -- dollar equivalent. Remember that this is a peso-linked note and the effect of the foreign exchange devaluation acts favorably here.

Regarding the total debt of $222 million, regarding the convertible notes, we already are considering here as a consolidation the net that are not held by IRSA, $15 million equivalents. This can be turned into equity at will, prior to its maturity in 2014. And the cash of $25 million is considering that on a net base that cash includes the bond purchases made both by IRSA and Alto Palermo as mentioned below on the Alto Palermo bonds, meaning that Alto Palermo has acquired nearly 10% of the 2012 note. 4% of the 2017 and 11% of IRSA level of the Alto Palermo bonds have been already acquired. The net effect of that increase in the cash means that the total net debt is $212 million.

At the end of if you go to next page, page 16, we see there the breakdown of the debt for the next year showing each one of the debts already mentioned. Most affected by the Republica repurchase, the balance of the note of the $150 million note and at the Alto Palermo's level we have the short-term debt related to the investment that we are concurrently doing, the Tarshop loans, and the rest of the effect of the maturity of the two notes that we have.

Saying that we invite you to make your questions, please. Operator.

(Operator Instructions) We will pause for just a moment to compile the Q-and-A roster. Your first question comes from the line of Ed Kurzman.

Yes, well, I had a couple of questions on Tarshop. I don't have the slides in front of me. I couldn't download them, but could you just give me a little color on what you see in terms of non-performing loans? Where are they now, and where do you think they will peak? That's my first question. My second question is what kind of a net interest margin are you earning on this business? And my third question is do you think you will need to make another capital injection, as the year goes on, into Tarshop?

Okay. I'll try to answer. The first one is that regarding our expectancies to what level can the bad credit grow, it's difficult to say because of the very, very difficult environment as we know. It really -- today it's difficult to really make a strong statement on these as for instance the strategies will be completely different if we go continuously on an deflation environment where the impact of liquidity or the preference for liquidity would be much stronger that it will go to a bigger inflationary process. And this will be strongly reflected in the figures of the Company and its financing strategy.

Just so -- what's like some of the scenarios you are running? What's like a best-case scenario and a worst-case scenario?

Okay. As I mentioned, the Company is completely on track on the figures that we have stated, and we are expecting to have to pour additional money, additional money in the Company; we consider that what we have already put there must be enough to overcome the situation. The -- really I will say probably the worst-case scenario in Argentina can be really very bad. But as you must know, our total exposure is the capital that we have deployed. And the best that is consolidated in Alto Palermo is the (inaudible) against Tarshop. The rest of the portfolio of Tarshop is guaranteed directly with the receivables of the grade that we generate.

So the Company is really on the -- the ARS800 million of exposure as non-recourse on the Company. That will be, if I -- I will say, a really stressed, really crisis, major crisis stress test, meaning that that will be really worst scenario. What is likely is that if you guess -- if you consider the experience on this company the credits are (inaudible).

The problem is that under this type of environment, not the ones that we have today, but when the interest rates goes over 25% on a nominal base, not only delinquency rate, but really the collections, last three years in a row, meaning that you collect the money about three year later. So you really receive almost half of the money that you establish. So really the gap, the equity gap that the Company suffers is very significant. Something that you must take in consideration is that we are working completely changing the structure of financing of the company, because what we use up (inaudible) almost disappear from the market because of the transformation of the local pension system with the closing of the major pension fund, meaning that those trustees almost no longer exist.

What we are working now in terms of changing that we are working in a club deal with a group of funds who continue to support the Company, and make same type of financing, this is the same type of guarantee, but extending very significantly (inaudible) and establishing an adequate margin for the Company.

Regarding the total margin that the Company is receiving today, as you see for operations they -- up to the period and their disclosure here the margin -- the Company was not yet making money, end of the line. The margin has recovered slightly, and we continue to think of that trend is going to recover.

It's not a margin issue here, the problem is that they rely on the collection, as I mentioned, of the delinquency that moved to three years. Because on the securitization you are getting like four times coverage, meaning that you -- if you have the funds to support the delay in the collection which is what we are building here for the rest of the year, you are completely covered with the subordination that we have in the process.

Okay, and just another question, if I may on the shopping mall position and with your -- the new project that you have, the Dot, I believe you said that you have 130 of the possible 150 spaces sold. Have you seen any cancellations there, anyone trying to back out of those contracts?

Yes, that's where we [play]. The few that decided that we're not on shape of doing, we replaced. We have enough clients to enter. So they are few companies, that they are afraid of the future. They don't want to go to debt and the banker is asking their money back. So in those cases they want -- they left. We put the new tenants. But we have a lot of tenants waiting to enter.

Thank you.

Your next question comes from the line of [Conrado Vergner].

Yes, hello, good morning. I have two questions, one regarding the Caballito Nuevo project. If you can give us some -- well, some feeling on how sales are going, how the different branches of real estate market is performing in Buenos Aires early this year. And also in the hotel segment apparently there was an increase in cost this quarter, and I'd like to know of the recurrence of this increase, if we may expect EBITDA margins below 20% going forward.

About Caballito the -- it was -- it is very recent that we began to sell, and we are beginning now -- from now -- from January to the future. So it's -- and we -- so we are receiving the apartments to begin to sell. So it's -- up to now we cannot say to you about the big sales. We are seeing the free market in the office buildings where we are selling [on] Renoir, the stocks that we had like a barter in Renoir in Puerto Madero, we sold all.

So in the case of -- in the sales of assets, I think Argentineans doubting about the environment -- the financial market environment, they are buying assets, real assets. So what the residential apartments are talking about is there is a small delay about the -- it's not our case because the one we sold, that was the Horizons we sold in a month period.

But the market is talking about, not the dropping prices, but the delay on reaching more sales, but the market, it's still going to there because in Argentina you know that there are not mortgages in the market, it is cash basis. The (inaudible) are still the way of keeping the money outside this volatility of the market. And about the Hotels you want to answer?

Would you please repeat the question on the Hotels?

Yes, sure. Apparently there was an increase in the costs of the hotel division this quarter, and I'd like to know if the -- well, there are recurring increases, and if we might expect, well, EBITDA margins below the 20% level for the next quarters?

I think that the (technical difficulty) in cost a few years ago was recovered by the increase on tariffs. But today I think the tariffs won't go up at the level of the costs. So maybe we'll be all keeping the EBITDA, or dropping. I'm -- for example, I am not confident of -- in the case of the intercontinental, keeping the EBITDA that generate last year. In the case of Llao Llao it's dropping because of increase of cost that we are not being able to charge to increase the tariff of the rooms.

Okay, fine, thank you.

Your next question comes from the line of [Adrian Patterson].

Yes, hi, good morning. A couple of questions on your debt structure please. Firstly, what are the covenants, the most effective covenants you currently have on your debt loads? And secondly, are you considering buying back debt given the current discount phase in the secondary market?

Okay. Well, regarding the covenants, the covenants are pretty standard for this type of a structure (inaudible). Probably I will say the coverage and the debt to equity ratio which are publicly disclosed in the prospectus of the two (technical difficulty). Are they more restrictive? I will say neither covenant today means a very significant restriction for our operations. Of course it's something that we continuously review. I will say probably the most significant risk to that is the impact of a strong devaluation against the peso generation of the Company. Now, that will be the most significant issue to consider.

Regarding the buying back debt, we've been making some marginal acquisitions of funds. It's something that we might consider if the opportunity comes, but on the other hand we must have the availability of free dollars to do that. That's -- and remember that we have very tight foreign exchange rules, meaning that we might consider that upon the generation of what we call [here-free] dollars, that -- meaning that those are dollars that according to the local regulations can be used for any purpose that you want or specifically for buying back debt.

Thank you. What are those covenants exactly, please? Are they loans of value and cash flow coverage covenants set in US dollars?

EBITDA -- the interest charged against EBITDA, that's the most sensible, and also a debt level against the equity of the Company, the net worth of the Company.

And what are those two ratios that the covenants prescribe?

Because we have three different notes, I would suggest to go to the prospectus. If you send me an e-mail, I will --

Okay.

-- mail you the prospectus to be absolutely clear, and not make any type of mistakes.

Okay. Thank you very much. Thank you.

And your next question comes from the line of Jose Hernao.

Hello. Good morning everybody. I have a couple of questions. First one is regarding your revenues for the three businesses; Shopping Center, Offices and Hotels. And I was wondering if you have estimation of the occupancy rate. Obviously you already mentioned the occupancy rate declined for the hotels, and what do you expect for 2009, this occupancy rate is going to be for the three main businesses?

And the second question is regarding debt, but I will -- if you can answer first the question. Thank you.

We are seeing the movement. We have a lot of interest in shopping, so we don't expect to have vacancy. The same in the office buildings; they are almost full and the one we are opening, we finish in December. We sign the paper the same week that we finish. So we are seeing that the movement can be marginal. We don't expect a big drop -- big change in the other two segments.

Okay. Thank you. And regarding the debt, I estimate, calculate debt service for 2009 around -- over $90 million. And I was wondering if -- how much of your short-term debt is bank debt that the Company can roll over?

Well, all the short-term debt of the Company (inaudible) what is stated in the presentation.

Our short-term debt is bank debt and we have availability of credit to replace the debt. And on the other hand, we also have a strong cash position as it is disclosed.

Okay. Thank you.

There are no further questions.

Okay. Thank you very much. We think that we were showing that we are finishing the buildings that we were trying to finish on time. We have good tenancy on each of them and so we think that IRSA is on -- has a big portfolio, a very valuable portfolio with the volatility of the market. This is a very strong, the generation of cash. And then we think in this environment we have a very good stake of what we think is the biggest and the best portfolio of real estates in Argentina. And we are going to keep working, finishing the projects. So we hope next quarter we are going to talk about the opening of Dot. That is a special event. It is at May 11th. But it is more than the 10% of the Company. And so we are very optimistic on the cash generation of the Company.

So we thank you very much for this conference call and let's talk next quarter. Bye-bye. Have a good day.

Thank you. This concludes today's conference call. You may now disconnect.