Cresud Sociedad Anónima Comercial Inmobiliaria Financiera y Agropecuaria : Earnings Release | IIIQ 2024

Anuncio de resultados

THIRD QUARTER OF FISCAL YEAR

2024

EARNINGS RELEASE

Período Fiscal 2023 / 0 »

CRESUD INVITES YOU TO PARTICIPATE IN ITS THIRD QUARTER OF THE FISCAL YEAR 2024 CONFERENCE CALL

MONDAY, MAY 13th, 2024, 3:00 PM BA (2:00 PM US EST)

The call will be hosted by:

Alejandro Elsztain, CEO

Matías Gaivironsky, CFO

To participate, please access through the following link: https://zoom.us/webinar/register/WN_lzE9fnStSnGQ4A6zwe9uyg

Webinar ID: 925 0329 2206

Password: 263201

In addition, you can participate communicating to this numbers:

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

Israel: [phone] or [phone] or [phone]

Brazil: [phone] or [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]

Preferably, 10 minutes before the call is due to begin.

The conference will be held in English.

MAIN HIGHLIGHTS

OF THE PERIOD

• The net result for the nine-month period of fiscal year 2024 recorded a loss of ARS 25,646 million compared to a profit of ARS 140,918 million in the same period of 2023 due to the impact of exposure to inflation on the fair value of investment properties of IRSA. The result attributable to the controlling shareholder was a profit of ARS 22,340 million.
• The adjusted EBITDA for the period reached ARS 164,332 million, 61.4% higher than the same period in 2023. Agribusiness adjusted EBITDA reached ARS 45,504 million because of better productive results and farmland sales in Argentina.
• The 2024 regional campaign is being developed with a slightly lower planted area than the last campaign, mixed climatic conditions, lower international commodity prices and expected production levels in line, with better prospects in Argentina than in the rest of the region.
• During the third quarter, Brasilagro sold a fraction of 12,335 hectares (8,796 productive) of its Chaparral establishment for the sum of BRL 365.4 million. The gain will be recognized in the financial statements of the fourth quarter of FY 2024.
• In May 2024, we approved a new cash dividend for ARS 30,000 million (ARS/share 50.5482 and ARS/GDS 505.4820), which will be distributed since May 14th.

Third quarter of FY 2024 / 3 »

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 Company operates

The Company operated in an economic context characterized by strong fluctuations in its main variables. The most relevant aspects are detailed below:

• Economic Activity: At the end of 2023, the country experienced a 1.6% drop in its economic activity, according to INDEC data, a trend that continued during the first quarter of the 2024 calendar.
• Inflation: Between April 1, 2023, and March 31, 2024, accumulated inflation reached 288% (measured by the CPI).
• Exchange Rate: In that same period, according to the official exchange rate, the Argentine peso nominally depreciated against the US dollar, going from ARS 209.1 to ARS 855 per dollar at the end of the period. The MEP dollar behaved in the same way, going from ARS 397.34 to ARS 1,017.50.
• Fiscal Surplus: During the first quarter of 2024, Argentina achieved a fiscal surplus, because of the strong adjustment applied by the government to order the accounts of the public sector and lower inflation.
• Exchange Restrictions: The monetary authority maintained the exchange restrictions established in previous years throughout 2023 and the first quarter of 2024. Despite these restrictions, the company managed to meet all financial and contractual maturities.

On December 10, 2023, a new government took office in Argentina with the intention of carrying out a broad legal and regulatory reform.

Among the first measures adopted by this government is a Decree of Necessity and Urgency (DNU) that modifies various laws. These reforms affect areas such as the labor market, the customs code, and the status of public companies. Although the DNU was rejected by the Senate of the Nation's Congress, its provisions have been partially in force since December 29, 2023, due to judicial actions that suspended certain modifications.

The reforms proposed by the new government are in the process of legislative discussion, and it is not possible to predict at this time their evolution or the new measures that could be announced.

The normative and regulatory situation as of March 31, 2024, does not differ substantially from the one mentioned above, and the financial statements of the Company should be read considering these circumstances.

Third quarter of FY 2024 / 4 »

Consolidated Results

	(In ARS million)		9M 24			9M 23		YoY Var
	Revenues		450,813			428,532		5.2%
	Costs	-253,640		-254,482	-0.3%
	Initial recognition and changes in the fair value of biological assets and agricultural produce at		5,786			-2,598		-
	the point of harvest
	Changes in the net realizable value of agricultural produce after harvest	3,047		-1,598	-
	Gross profit		206,006			169,854		21.3%
	Net gain from fair value adjustment on investment properties	-377,718		-134,939	179.9%
	Gain from disposal of farmlands		6,254			2,670		134.2%
	General and administrative expenses	-40,865		-47,321	-13.6%
	Selling expenses		-36,297			-31,270		16.1%
	Other operating results, net	10,280		-20,071	-
	Management Fee	-884		-9,048	-90.2%
	Result from operations		-233,224			-70,125		232.6%
	Depreciation and Amortization	24,127		23,703	1.8%
	Rights of use installments		-10,753			-11,558		-7.0%
	EBITDA (unaudited)	-219,850		-57,980	279.2%
	Adjusted EBITDA (unaudited)		164,332			101,820		61.4%
	Loss from joint ventures and associates	29,680		2,178	1262.7%
	Result from operations before financing and taxation		-203,544			-67,947		199.6%
	Financial results, net	93,571		63,772	46.7%
	Result before income tax		-109,973			-4,175		2,534.1%
	Income tax expense	84,327		145,093	-41.9%
	Result for the period		-25,646			140,918		-118.2%
	Attributable to
	Equity holder of the parent	22,340		79,463	-71.9%
	Non-controlling interest		-47,986			61,455		-178.1%

Consolidated revenues increased by 5.2% during the nine-month period of fiscal year 2024, compared to the same period of fiscal year 2023, while Adjusted EBITDA grew by 61.4% during the same period. Agribusiness segments adjusted EBITDA was ARS 45,504 million, compared to a negative adjusted EBITDA of ARS 6,722 million in the same period of 2023, mainly due to better productive results and farmland sales in Argentina. The urban properties and investments business (through IRSA) adjusted EBITDA was ARS 123,631 million.

The net result for the nine-month period of fiscal year 2024 registered a ARS 25,646 million loss compared to a gain of ARS 140,918 in the same period of fiscal year 2023. This is mainly explained by the loss recorded from changes in the fair value of investment properties in the urban and investments business due to the impact of an inflation much higher than the devaluation on those properties valued in USD at an MEP exchange rate. The net result attributable to the controlling shareholder recorded a gain of ARS 22,340 million in the period.

Third quarter of FY 2024 / 5 »

Description of Operations by Segment

		Urban
9M 2024	Agribusiness	Properties and	Total	9M 24 vs. 9M 23
		Investments

Revenues

Costs

Initial recognition and changes in the fair value of biological assets and agricultural produce at the point of harvest Changes in the net realizable value of agricultural produce after harvest

238,561	177,236	415,797	6.5%
-184,422		-31,238	-215,660	1.2%
5,295	-	5,295	-
3,047		-	3,047	-

Gross profit	62,481	145,998	208,479	20.8%
Net gain from fair value adjustment on investment properties	-44	-377,736	-377,780	173.1%
Gain from disposal of farmlands	6,254	-	6,254	134.2%
General and administrative expenses	-20,459	-20,744	-41,203	-13.9%
Selling expenses	-25,123	-11,961	-37,084	14.3%
Other operating results, net	14,132	-4,052	10,080	-
Result from operations	37,241	-268,495	-231,254	262.8%
Share of profit of associates	1,106	28,272	29,378	583.1%
Segment result	38,347	-240,223	-201,876	239.6%
			Urban
9M 2023		Agribusiness	Properties and	Total
			Investments

Revenues

Costs

Initial recognition and changes in the fair value of biological assets and agricultural produce at the point of harvest

221,656	168,834	390,490
-182,803		-30,277	-213,080
-3,270	-	-3,270

Changes in the net realizable value of agricultural produce after harvest	-1,598	-	-1,598
Gross profit	33,985	138,557	172,542
Net gain from fair value adjustment on investment properties	-287	-138,044	-138,331
Gain from disposal of farmlands	2,670	-	2,670
General and administrative expenses	-18,525	-29,354	-47,879
Selling expenses	-21,080	-11,376	-32,456
Other operating results, net	-1,621	-18,664	-20,285
Result from operations	-4,858	-58,881	-63,739
Share of profit of associates	-3,165	7,466	4,301
Segment result	-8,023	-51,415	-59,438

2024 Campaign

The 2024 regional campaign is being developed with mixed climatic conditions, similar planted area and expected production levels in line with the last campaign. Prospects for Argentina are better than for the rest of the region, given the severe drought experienced during the last campaign. The country projects soybean and corn production of approximately 50 million tons, with better prospects in the south and a decrease in production in the north.

Our Portfolio

During the third quarter of fiscal year 2024, our portfolio under management consisted of 745,049 hectares, of which 307,525 hectares are productive and 437,524 hectares are land reserves distributed in the four countries of the region where we operate.

Third quarter of FY 2024 / 6 »

Breakdown of Hectares

Own and under Concession(*) (**) (***)

		Productive Lands		Reserved			Total
		Agricultural		Cattle
Argentina	72,077	140,335	318,156		530,568
Brazil		60,550		10,519		74,815			145,884
Bolivia	7,925	-	1,950		9,875
Paraguay		11,964		4,155		42,603			58,722
Total	152,516	155,009	437,524		745,049

1. Includes Brazil, Paraguay, Agro-Uranga S.A. at 34.86% and 132,000 hectares under Concession. (**) Includes 85,000 hectares intended for sheep breeding
   (***) Excludes double crops.

Leased(*)

	Agricultural	Cattle	Other	Total
Argentina	44,852	10,896	-	55,748
Brazil	54,719	700	8,734	64,153
Bolivia	1,065	-	-	1,065
Total	100,636	11,596	8,734	120,966

1. Excludes double crops.

Segment Income - Agricultural Business

I) Land Development and Sales

We periodically sell properties that have reached a considerable appraisal to reinvest in new farms with higher appreciation potential. We analyze the possibility of selling based on a number of factors, including the expected future yield of the farmland for continued agricultural and livestock exploitation, the availability of other investment opportunities and cyclical factors that have a bearing on the global values of farmlands.

in ARS million	9M 24	9M 23	YoY Var
Revenues	-	-	-
Costs	-146	-202	-27.7%
Gross loss	-146	-202	-27.7%
Net gain from fair value adjustment on investment properties	-44	-287	-84.7%
Gain from disposal of farmlands	6,254	2,670	134.2%
General and administrative expenses	-37	-31	19.4%
Selling expenses	-82	-19	331.6%
Other operating results, net	3,876	-3,444	-
Profit from operations	9,821	-1,313	-
Segment profit	9,821	-1,313	-
EBITDA	9,845	-1,266	-
Adjusted EBITDA	9,889	-979	-

Segment profit increased by ARS 11,134 million, mainly explained by the fractions sold and the valuation of accounts receivable in the current period for the sale of agreed soybean farms (included in Other Operating Results), from Brazil.

On March 26, 2024, BrasilAgro sold a fraction of 12,335 hectares (8,796 productive hectares) of the "Chaparral" farm located in Correntina, State of Bahia, Brazil, that was acquired in 2007. After this operation, a remaining surface of 24,847 hectares of this farm is still owned by the BrasilAgro. The total amount of the operation was set at BRL 364.5 million, subject to variations in the soybean bag price, and the field was valued on the books at BRL 34.0 million. The internal rate of return in dollars reached was approximately 7.8%. The result of the sale will be recorded in the fourth quarter of the fiscal year.

Third quarter of FY 2024 / 7 »

II) Agricultural Production

The result of the Farming segment went from a ARS 15,646 million loss during the nine-month period of fiscal year 2023 to a ARS 13,704 million gain during the same period of the fiscal year 2024.

		in ARS million		9M 24			9M 23		YoY Var
		Revenues		163,884			154,512		6.1%
		Costs	-138,555		-140,094	-1.1%
		Initial recognition and changes in the fair value of biological assets and agricultural produce at		5,295			-3,270		-
		the point of harvest
		Changes in the net realizable value of agricultural produce after harvest	3,047		-1,598	-
		Gross profit		33,671			9,550		252.6%
		General and administrative expenses	-11,959		-9,732	22.9%
		Selling expenses		-17,164			-15,022		14.3%
		Other operating results, net	6,373		361	1,665.4%
		Results from operations		10,921			-14,843		-
		Results from associates	2,783		-803	-
		Segment results		13,704			-15,646		-
		EBITDA	18,522		-8,203	-
		Adjusted EBITDA		14,071			-21,588		-
II.a) Crops and Sugarcane
Crops
		in ARS million		9M 24			9M 23		YoY Var
		Revenues		112,506			109,186		3.0%
		Costs	-96,923		-99,123	-2.2%
		Initial recognition and changes in the fair value of biological assets and agricultural produce		11,920			11,442		4.2%
		at the point of harvest
		Changes in the net realizable value of agricultural produce after harvest	3,031		-1,598	-
		Gross profit		30,534			19,907		53.4%
		General and administrative expenses	-8,559		-6,660	28.5%
		Selling expenses		-15,022			-12,284		22.3%
		Other operating results, net	6,926		-1,361	-
		Profit from operations		13,879			-398		-
		Results from associates	2,750		-791	-
		Activity Profit		16,629			-1,189		-
Sugarcane
		in ARS million		9M 24			9M 23		YoY Var
		Revenues		28,822			28,338		1.7%
		Costs	-24,820		-27,275	-9.0%
		Initial recognition and changes in the fair value of biological assets and agricultural produce		-3,618			-1,439		151.4%
		at the point of harvest
		Gross profit	384		-376	-
		General and administrative expenses		-1,846			-1,672		10.4%
		Selling expenses	-883		-1,404	-37.1%
		Other operating results, net		-254			1,590		-
		Profit from operations	-2,599		-1,862	39.6%
		Activity profit		-2,599			-1,862		39.6%

Third quarter of FY 2024 / 8 »

Operations

Production Volume (1)	9M 24	9M 23	9M 22	9M 21	9M 20
Corn	235,400	170,503	240,458	199,438	299,918
Soybean	151,007	153,662	157,916	104,217	119,574
Wheat	28,775	21,594	35,502	36,669	43,925
Sorghum	3,154	1,987	2,921	503	3,229
Sunflower	971	6,021	3,560	4,596	1,954
Cotton	14,684	4,396	3,094	6,818	3,519
Other	15,741	8,693	9,557	5,366	5,619
Total Crops (tons)	449,732	366,856	453,008	357,607	477,738
Sugarcane (tons)	1,305,064	1,287,194	1,532,906	1,669,521	1,634,521

1. Includes Brasilagro. Excludes Agro-Uranga.

Next, we present the total volume sold according to its geographical origin measured in tons:

Volume of		9M24			9M23				9M22			9M21			9M20
Sales (1)	M.L	M.E	Total	M.L	M.E	Total		M.L	M.E	Total	M.L	M.E	Total	M.L	M.E	Total
Corn	199.9	94.4	294.3	162.2	92.6	254.8	239.8	65.3	305.1	233.9	70.0	303.9	284.7	54.3	339.0
Soybean	34.4	81.5	115.9	66.4	63.6	130.0	150.3	50.6	200.9	117.5	23.3	140.8	156.1	72.5	228.6
Wheat	28.4	-	28.4	15.4	-	15.4	31.2	1.3	32.5	29.2	1.3	30.5	39.5	-	39.5
Sorghum	3.7	-	3.7	13.2	-	13.2	22.7	-	22.7	-	-	-	-	-	-
Sunflower	3.5	-	3.5	1.4	-	1.4	1.6	-	1.6	2.7	-	2.7	8.5	-	8.5
Cotton	12.6	3.6	16.2	6.4	-	6.4	4.4	-	4.4	6.4	-	6.4	2.5	1.9	4.4
Others	13.0	-	13.0	8.2	-	8.2	7.6	1.4	9.0	5.3	1.0	6.3	6.1	-	6.1
Total Crops (thousands of	295.5	179.5	475.0	273.2	156.2	429.4	457.6	118.6	576.2	395.0	95.6	490.6	497.4	128.7	626.1
tons)
Sugarcane (thousands of	1.305.1	-	1.305.1	1,161.0	-	1,161.0	1,387.7	-	1,387.7	1,560.3	-	1,560.3	1,572.8	-	1,572.8
tons)

1. Includes BrasilAgro. Excludes Agro-Uranga S.A

The Grains activity presented a positive variation by ARS 17,818 million, from a ARS 1,1889 million loss during the nine- month period of fiscal year 2023 to a ARS 16,629 million gain during the same period of fiscal year 2024, mainly because of:

• A gain in the productive result in Argentina due to the diversion in 22-23 Corn & Cotton Campaigns due to a greater volume of tons obtained compared to a negative result in the 21-22 Campaign due to lower yields, higher direct costs and prices lower than projected, along with the progress of 23-24 Wheat Campaign, with higher production margins due to higher yields.
• Offset by a lower productive result in Brazil from soybean and corn due to a lower planted area and a drop in prices.
• A higher gain in the holding and sales result in Argentina, due to better prices performance in pesos against inflation compared with the same period of fiscal year 2023.

The result of the Sugarcane activity increased by ARS 737 million, from a ARS 1,862 million loss in the nine-month period of fiscal year 2023 to a ARS 2,599 million loss in the same period of 2024. This is mainly due to a greater loss in the productive result of the third quarter of fiscal year 2024 in Brazil because of a drop in prices, partially offset by an increase in tons produced due to an increase in yield.

Third quarter of FY 2024 / 9 »

Area in Operation (hectares) (1)	As of 03/31/24	As of 03/31/23	YoY Var
Own farms	115,083	113,408	1.5%
Leased farms	125,540	122,293	2.7%
Farms under concession	22,087	22,314	-1.0%
Own farms leased to third parties	21,380	27,975	-23.6%
Total Area Assigned to Production	284,090	285,990	-0.7%

1. Includes Agro-Uranga.

II.b) Cattle Production

Production Volume

9M24

9M23

9M22

9M21

9M20

Cattle herd (tons)(1)	7,311	7,118	6,538	7,546	9,016

1. Production measured in tons of live weight. Production is the sum of the net increases (or decreases) during a given period in live weight of each head of livestock we own.

Volume of

9M 24

9M 23

9M 22

9M 21

9M 20

Sales (1)

D.M

F.M

Total

D.M

F.M

Total

D.M

F.M

Total

D.M

F.M

Total

D.M

F.M

Total

Cattle herd

9.5

9.5

7.8

-

7.8

8.7

-

8.7

11.9

-

11.9

12.3

-

12.3

D.M.: Domestic market

F.M.: Foreign market

Cattle

	In ARS Million		9M 24			9M 23		YoY Var
	Revenues	15,840		13,160	20.4%
	Costs		-12,387			-11,299		9.6%
	Initial recognition and changes in the fair value of biological assets and agricultural produce		-3,007			-13,273		-77.3%
	Changes in the net realizable value of agricultural produce after harvest		16			-		-
	Gross Profit	462		-11,412	-
	General and administrative expenses		-1,140			-927		23.0%
	Selling expenses	-969		-958	1.1%
	Other operating results, net		-244			120		-303.3%
	Result from operations	-1,891		-13,177	-85.6%
	Results from associates		33			-12		-
	Activity Result	-1,858		-13,189	-85.9%
	Area in operation - Cattle (hectares) (1)		As of			As of		YoY Var
		03/31/24			03/31/23
	Own farms		68,013			68,785		-1.1%
	Leased farms	10,896		10,896	0.0%
	Farms under concession		2,696			2,604		3.5%
	Own farms leased to third parties	-		70	-
	Total Area Assigned to Cattle Production		81,605			82,355		-0.9%
	(1) Includes Agro-Uranga, Brazil and Paraguay,
	Stock of Cattle Heard		As of			As of		YoY Var
		03/31/24			03/31/23
	Breeding stock		69,677			72,945		-4.5%
	Winter grazing stock	10,551		5,144	105.1%
	Sheep stock		13,642			14,734		-7.4%
	Total Stock (heads)	93,870		92,823	1.1%

The result of the Cattle activity increase by ARS 11,331 million, from a ARS 13,189 million loss during the nine-month period of fiscal year 2023 to a ARS 1,858 million loss in the same period of fiscal year 2024, mainly explained by a lower loss in production results due to better price performance compared to inflation, together with an increase in kilograms produced and a decrease in costs, as well as a greater gain in sales results due to an increase in the average price and a greater volume sold.

Third quarter of FY 2024 / 10 »