Cresud SA Q2 FY2022 earnings call

• Agribusiness: Benefiting from higher commodity prices, achieving record EBITDA, and no more losses from the packing plant.
• Real Estate and IRSA: Revaluation of Costa Urbana led to significant gain, merge with IRSA Commercial Properties completed, shopping malls recovering with real sales growth, offices having disposals and flight to quality, hotels affected by pandemic.
• FyO: Largest broker in Argentina, expecting 7 million tons next campaign, issuing first bond with 0% interest, expanding to Brazil and other regions.
• Agrofy: Raised $29M, valuation over $100M, expanding to Mexico in 2023.

Agribusiness Segment

• Achieved record EBITDA for the agribusiness segment, with better margins than last year due to increasing commodity prices despite higher production costs. Grains, sugarcane, and farm sales contributed. The packing plant that previously caused losses is now profitable.
• In Brazil, there were 2 profitable farm sales.

Real Estate (IRSA-related)

• In Brazil, real estate activity had liquidity with profitable farm sales. In IRSA, the revaluation of Costa Urbana was approved, and the merge with IRSA Commercial Properties was completed. Shopping malls saw real sales increase by 7.6% compared to pre-pandemic levels. Offices had mixed results with disposals and flight to quality. Hotels were still affected by the pandemic.

FyO

• FyO is the largest broker in Argentina, expecting 7 million tons for the next campaign with EBT close to $15M. It issued its first bond with 0% interest and is expanding to Brazil and other regions.

Agrofy

• Agrofy raised $29M, valuing the company over $100M. It is expanding to Mexico in 2023 and is competing as a regional marketplace in South America.

• Expect more farm sales due to the good margin environment.
• FyO aims for 7 million tons in the next campaign.
• Development of Costa Urbana project will take over 10 years, with no major CapEx in the next 2 years.
• Agrofy to expand to Mexico in 2023.

• Climate conditions affecting yields in certain regions.
• Pandemic impact still affecting hotels.
• Central Bank capital restrictions on bond payments, though not immediate for the current year.

Q: Are you going to keep selling farms both in Argentina, Brazil or the rest of the region?

A: Yes. Expecting a lot of movement due to the good margin environment in the 2 countries, with farmers interested in buying.

Q: How are you affected on your issued bonds regarding the Central Bank capital restrictions?

A: Cresud's bond expiring in February 2023, no need to refinance this year; IRSA's bond expiring in March 2023, no complications this year.

Q: Why is the value of the notes reducing?

A: Unclear on secondary market drivers, not sure of specific reason.

Q: Timing on Costa Urbana development project?

A: Development will take over 10 years, no major CapEx in the next 2 years after getting approval.