Cresud Sociedad Anónima Comercial Inmobiliaria Financiera y Agropecuaria : Earnings Release | IIIQ 2021

Earnings Release

IIIQ FY 2021

CRESUD invites you to participate in its third quarter of the Fiscal Year 2021 Conference Call

Thursday, May 13, 2021 04:00 PM BA (03:00 PM US EST)

The call will be hosted by:

Alejandro Elsztain, CEO

Carlos Blousson, General Manager of Argentina

Matías Gaivironsky, CFO

To participate, please access through the following link:

https://irsacorp.zoom.us/j/83252953882?pwd=dWx2enlybC9oNVl5ZXBIYjlOdDNWQT09

Webinar ID: 832 5295 3882

Password: 621782

In addition, you can participate communicating to this numbers:

Argentina: [phone] or [phone] or [phone] or [phone]

Israel: [phone] or [phone]

Brazil : [phone] or [phone] or [phone] or [phone]

US: [phone] or [phone] or [phone] or [phone] or [phone] Chile: [phone] or [phone] or [phone] or [phone] or [phone]

UK: [phone] or [phone] or [phone] or [phone] or [phone]

Preferably, 10 minutes before the call is due to begin. The conference will be held in English.

Contact Information	Tel: [phone]
Alejandro Elsztain - CEO	E-mail:[e-mail]
Matías Gaivironsky - CFO	Website:http://www.cresud.com.ar
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Main Highlights

• The net result for the nine-month period of fiscal year 2021 recorded a loss of ARS 9,231 million compared to a gain of ARS 10,589 million in the same period of 2020. The result from continuing operations recorded a loss of ARS 1,129 million mainly due to negative results from changes in the fair value of the investment properties from our subsidiary IRSA.
• Adjusted EBITDA reached ARS 20,705 million, 40.5% higher than in the same period of fiscal year 2020. Agribusiness adjusted EBITDA was ARS 9,215 million, 15.4% higher than in the same period of fiscal year 2020, and urban properties and investments business (IRSA) adjusted EBITDA was ARS 11,482 million, 70,1% higher than the compared period.
• During 2021 Campaign, that is developing with high international commodity prices and under "Niña" weather conditions from moderate, we planted 259,000 hectares in the region and we expect to produce the historical record of 850,000 tons of grains.
• During the quarter, we have sold our lands in Bolivia to our subsidiary Brasilagro for an amount of USD 31 million and we subscribed 6.9 million shares within the framework of its capital increase for BRL 440 million, increasing our participation in Brasilagro, net of treasury shares, from 33.8% to 34.1%.
• In February 2021, we sold 100% of Sociedad Anónima Carnes Pampeanas S.A., owner of a meatpacking facilities plant in La Pampa, Argentina, for the sum of USD 10 million.
• In financial matters, during the quarter we issued 90 million shares for the sum of USD 42.5 million and after the end of the period, our subsidiary IRSA issued 80 million shares for the sum of USD 28.8 million.

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

Economic context in which the Group operates

The Group operates in a complex context both due to macroeconomic conditions, whose main variables have recently experienced strong volatility, as well as regulatory, social, and political conditions, both nationally and internationally.

The results from operations may be affected by fluctuations in the inflation and the exchange rate of the Argentine peso against other currencies, mainly the dollar, changes in interest rates which have an impact on the cost of capital, changes in government policies, capital controls and other political or economic events both locally and internationally.

In December 2019, a new strain of coronavirus (SARS-COV-2), which caused severe acute respiratory syndrome (COVID-19) appeared in Wuhan, China. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic. In response, countries have taken extraordinary measures to contain the spread of the virus, including imposing travel restrictions and closing borders, closing businesses deemed non-essential, instructing residents to practice social distancing, implementing quarantines, among other measures. The ongoing pandemic and these extraordinary government measures are affecting global economic activity, resulting in significant volatility in global financial markets.

On March 3, 2020, the first case of COVID-19 was registered in the country and as of today, more than 3,000,000 cases of infections had been confirmed in Argentina, by virtue of which the Argentinian Government implemented a series of health measures of social, preventive and mandatory isolation at the national level with the closure of non-essential activities, including shopping centers, as well as the suspension of flights and border closures, for much of the year 2020. Since October 2020, a large part of the activities began to become more flexible, in line with a decrease in infections, although as of April 16, 2021, because of the sustained increase in the cases registered, the National Government, through Decrees 241/2021 and 287/2021, established restrictions on night activity and the closure of shopping centers in Buenos Aires Metropolitan Área until May 21 inclusive, keeping 44% of the Company's portfolio operative in GLA terms.

This series of measures affected a large part of Argentine companies, which experienced a drop in their income and inconveniences in the payment chain. In this context, the Argentine government announced different measures aimed at alleviating the financial crisis of the companies affected by the COVID-19 pandemic. Likewise, it should be noted that, to the stagnation of the Argentine economy, a context of international crisis is added because of the COVID-19 pandemic. In this scenario, a strong contraction of the Argentine economy was evidenced.

At the local environment, the following circumstances are displayed:

• In February 2021, the Monthly Economic Activity Estimator ("EMAE" in Spanish) reported by the National Institute of Statistics and Censuses ("INDEC" in Spanish), registered a variation of (2.6%) compared to the same month of 2020, and (1.0%) compared to the previous month.
• The annual retail inflation reached 42.65% in the last 12 months. The survey on market expectations prepared by the Argentine Central Bank in March 2021, called the Market Expectations Survey ("REM" in Spanish), estimates a retail inflation of 46.0% for 2021. Analysts participating in the REM forecast a rebound in economic activity in 2021, reaching an economic growth of 6.7%.
• In the period from March 2020 to March 2021, the argentine peso depreciated 42.7% against the US dollar according to the wholesale average exchange rate of Banco de la Nación Argentina. Given the exchange restrictions in force since August 2019, as of March 31, 2021 there is an exchange gap of approximately 60% between the official price of the dollar and its price in parallel markets, which impacts the level of activity in the economy and affects the level of reserves of the Argentine Central Bank. Additionally, these exchange restrictions, or those that may be dictated in the future, could affect the Group's ability to access the Single Free Exchange Market (MULC in Spanish) to acquire the necessary currencies to meet its financial obligations.

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On February 25, 2021, the Central Bank of the Argentine Republic published Communication "A" 7230 which establishes that those companies who register financial debts with capital maturities in foreign currency scheduled between 04.01.2021 and 12.31.2021, must submit a refinancing plan to the BCRA based on the following criteria: (a) that the amount net by which the exchange market will be accessed in the original terms will not exceed 40% of the amount of capital maturing in the period indicated above, and (b) that the rest of the capital is, at least, refinanced with a new external debt with an average life of 2 years, provided that the new debt is settled in the exchange market. In the case of the Company, the maturity of the Class XXV notes due on July 11, 2021 for a nominal value of USD 59.6 million falls within the extended period, as well as other bank debts.

COVID-19 pandemic

As described in the note on the economic context in which the Group operates, the COVID-19 pandemic is adversely impacting both the global economy and the Argentine economy and the Group's business. The current estimated impacts of the COVID-19 pandemic on the Company as of the date of these financial statements are set out below:

• Cresud and its subsidiary BrasilAgro continued to operate normally during the pandemic as it was the essential agricultural activity in the provision of food.
• During the third quarter of fiscal year 2021, the Group's shopping malls have operated under strict protocols and a gradual, although sustained, recovery of activity was evidenced since the reopening in October 2020. After the closing, by Decrees 241 / 2021 and 287/2021 of the National Executive Power, the shopping malls of the Metropolitan Area of Buenos Aires suspended their operations from April 16 to May 21, inclusive, operating only those activities considered essential such as pharmacies, supermarkets and banks.
• Regarding the offices business, although most of the tenants are working in the home office mode, they are operating with strict safety and hygiene protocols. To date, we have registered a slight increase in vacancies, although we have not evidenced a deterioration in collections.
• The Libertador and Intercontinental hotels in Buenos Aires City have been operating since December 2020 with low occupancy levels. Llao Llao Resort, in Bariloche City, was able to operate during the quarter with average occupancy levels because of domestic tourism.

Regarding the financial debt of the Group in the next 12 months:

• Cresud faces the maturity of its Class XXVIII in April 2021 for a nominal value of USD 27.5 million, Classes XXV and XXVII in July 2021 for a nominal value of USD 59.6 million (included in Communication 7230 of Argentine Central Bank) and USD 5.7 million respectively and Class XXIX in December 2021 for a nominal value of USD 83.0 million. Likewise, Cresud has bank overdrafts for USD 23.2 million and other bank debt for USD 38.3 million. As of March 31, it had a liquidity position of approximately USD 38.3 million.
• The subsidiary IRSA faces the maturity of its Class IV notes for a nominal value of USD 46.5 million due on May 21, 2021 (net of repurchases), Class VI notes for a nominal value of ARS 335 million (equivalent to USD 3.7 million) due July 21, 2021, Class VIII notes for a nominal value of USD 10.5 million (33% of the capital) maturing on November 12, 2021, Class VII notes for a nominal value of USD 33.7 million due on January 21, 2022, Class X notes for a nominal value of ARS 701.5 million (equivalent to USD 7.6 million) due March 31, 2022, bank overdrafts for an equivalent of USD 4.0 million and other banking debt for USD 13.7 million. For its part, IRCP does not have short-term debt maturities, except bank overdrafts for an equivalent of USD 62.5 million and other banking debt for USD 11.7 million.
• It is important to mention that IRSA has approved with IRSA PC a line of credit for up to the sum of USD 180 million for 3 years, of which as of March 31, 2021 IRSA used approximately USD 72.1 million, leaving the balance available. Likewise, IRCP has a cash position and equivalents (including financial investments) as of March 31, 2021 of approximately USD 95.5 million.

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