CRESY — Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria

Cresud Q3 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Net Income: Cresud reported a gain of ARS 57.9 million for the nine-month period, a turnaround from a loss of ARS 39.9 billion in the previous year.
• Operating Results: There was an 83% drop in operating results attributed to inflation-adjusted comparisons and some operational challenges.
• FyO Performance: FyO experienced a decline from ARS 29.8 billion to a loss of ARS 19.9 billion, influenced by seasonality and the previous year's special dollar incentives for farmers.
• Sugarcane and Cattle: Positive performance in sugarcane with higher prices and productivity, and a 24% increase in cattle production compared to last year.

2. Strategic Updates and Business Highlights

• Agricultural Campaign: The current agricultural campaign is larger than last year, with increased planted areas in Argentina and Brazil, despite some drought impacts in northern Argentina and Paraguay.
• Commodity Prices: Stable commodity prices with a rebound observed in corn and some recovery in soybean prices, influenced by international trade dynamics.
• Real Estate: IRSA, in which Cresud holds a 55% stake, reported a profit of ARS 35 billion, with a notable recovery in mall tenant sales, although hotel occupancy has declined due to reduced tourism inflows.
• Capital Controls: The removal of capital controls in Argentina is expected to positively impact commodity pricing and land values.

3. Forward Guidance and Outlook

• Agricultural Yield Forecast: Cresud anticipates a year-over-year increase of 23% in yields across the region, driven by improved climate conditions and recovery in productivity.
• Investment in Farmland: Management expressed optimism about increasing farmland prices in Argentina and indicated intentions to acquire new farmland assets.
• FyO Projections: Expected recovery in FyO's performance with positive EBITDA projections for the year.

4. Bad News, Challenges, or Points of Concern

• Drought Impact: Significant drought conditions in northern Argentina and Paraguay have negatively affected soybean and corn yields, leading to mixed results in agricultural performance.
• Declining Metrics: The substantial drop in operating results and FyO's losses highlight operational challenges and the impact of inflation on financial reporting.
• Tourism Decline: The hotel segment of IRSA has suffered due to decreased tourism, impacting occupancy rates and revenues.
• Debt Maturity: Cresud faces a $200 million debt maturity next year, with plans to navigate this through local markets rather than international capital markets.

5. Notable Q&A Insights

• Dividends: The decision regarding dividends will be made in October, with no current commitments.
• IRSA Transactions: The strategy behind swap agreements instead of direct development is to expedite projects without upfront investment.
• Capital Allocation: Management indicated a flexible approach to capital allocation, including potential share buybacks, investments in farmland, and debt reduction.
• Debt Management: Cresud plans to leverage local market opportunities for refinancing and expects proceeds from an outstanding warrant to provide additional liquidity.

Overall, Cresud's Q3 2025 earnings call highlighted a mixed performance with positive developments in certain areas, while also addressing significant challenges in agriculture and real estate segments. The outlook remains cautiously optimistic, particularly with anticipated improvements in commodity prices and agricultural yields.