Cresud S.A. Warrant 2021-08.03.26 on Cresud Q1 FY2025 earnings call

• Planted area: Expected to plant 303,000 hectares, a 9% increase from the previous campaign, mainly expanding leased farms in Argentina.
• Commodity prices: March 2025 commodity prices more stable than last year's drop; input costs slightly reduced but still high compared to prices.
• Weather: Good rains in Argentina helped, while Brazil planting was delayed 2 weeks due to drought but recovering.
• Real estate: Closed two transactions with significant gains, one in Argentina's undeveloped land and one in Brazil's developed area.
• FyO: Celebrated 25 years, became the biggest broker in Argentina for inputs, outputs, and commercial services, with 6.1% market share in Argentina's grain volume.

Cresud planted 303,000 hectares in 4 countries (Argentina, Brazil, Bolivia, Paraguay) in the first quarter of 2025, a 9% increase from the previous campaign, mainly expanding leased farms in Argentina. The crop mix is diversified, with soybean and corn being the main crops, and some sugarcane in Brazil and Bolivia. In real estate, two transactions occurred: one in Argentina's Los Pozos farm undeveloped land with a significant gain, and another in Brazil's Alto Taquari with a large gain. The service company FyO, a 25-year-old agricultural commercial service company, achieved 6.83 million tons of volume last year, representing ~6.1% of Argentina's grain market share, with EBITDA of $25-30 million. Cresud received ~$53 million in dividends, including ~$10 million from BrasilAgro and $43 million from IRSA, offering a ~7% dividend yield.

• Planted area is expected to continue growing in subsequent quarters.
• Real estate sales are anticipated in future quarters.
• BrasilAgro is expected to have better results this year, with sugarcane in a better position.
• Beef cattle production in Argentina is expected to be high.

• Weather risks: Drought in some Argentina wheat areas and Brazil drought affecting planting and potential crop yields.
• Commodity price volatility: Though March prices are stable, ongoing volatility remains a risk.
• Regulatory uncertainty: Impact of agricultural deregulation in the short term is uncertain.

Q: Given the administration's push for deregulation, particularly in the agricultural sector, do you see any specific opportunities emerging for Cresud?

A: Deregulation could reduce the price gap, bring liquidity to land, benefit farmers by reducing the gap between Argentina's land prices and world prices, and allow more foreign investment in land.

Q: How do you consider the optimal allocation between buybacks and dividends? And how do current market conditions influence this analysis?

A: Prefer dividends due to CMB restrictions, but see buyback opportunities if shares are considered cheap; currently, prioritize cash payments to shareholders.

Q: What is the advantage, disadvantage of owning this stake in BrasilAgro versus the whole company?

A: Cresud owns 35% of BrasilAgro, which is sufficient, as BrasilAgro has benefited from selling assets and has a positive cash flow, waiting to buy again when opportunities arise; no need to own 100%.

Q: There is reporting a major drought in Northern Brazil, what's the impact-to-date?

A: Only delay in planting compared to last year, affecting second crop corn in Brazil, but no material impact on Cresud's overall results; expecting better-than-last-year operational results.