Cresud S.A.C.I.F. y A.

Good afternoon, everyone. I'm Santiago Lonato, investor relations officer of Cresud, and I welcome you to the third quarter 2020 results conference call. As you know, today's live webcast will be held in a new format, through Zoom. Nevertheless, both audio and slideshow may be accessed through companies' investor relations website at www.cresud.com.ar by clicking on the banner webcast link. The following presentation and the earnings released issued yesterday are also available for download on the company website. After management remarks, there will be a question and answer session for analysts and investors. If you want to make a question, please click the button labeled Raise Hand. Before we begin, I would like to remind you that this call is being recorded and the information discussed today may include forward-looking statements regarding the company's financial and operating performance. All projections are subject to risk and uncertainties, and actual results may differ materially. Please refer to the detailed note in the company's earnings release regarding forward-looking statements. I will now turn the call over to Mr. Alejandro Elsztain, CEO. Please go ahead, sir.

Good afternoon, everybody. Welcome to the third quarter 2020 results. This is a special conference course. You know the different difficult times that we are spending, and I hope that everyone is well and safe. As you know, Cresud Agribusiness is operating relatively normally, being a native that is essential in Argentina and all over the world. Not the same in other segments. We can see that in the urban segments, We had suffered a lockdown since March 20 in the case of Argentina. So the shopping centers were closed and hotels were closed. We are going to see that the main results of this lockdown is going to affect the fourth quarter because it's only 10 days of the third quarter. In Israel, the lockdown and the quarantine made different situations. companies like the supermarkets like Shoeversal and Meadrin were in essential activities so working or better than expected sometimes surpassing the results of the past some of the others were affected but much lower because of short term of quarantine of Israel later we are going to see the result in details but we are going to explain a loss of 7.4 billion pesos for the nine months compared to 14.5 of last year numbers The adjusted EBITDA reached 26.6 billion pesos, comparing a 41% increase to last year numbers. The EBITDA from agribusiness increased almost 45%, and this is mainly due to higher productivity in the operation of agriculture, grains and sugarcane mainly, and in the urban segments there was a small decrease of 2.7% comparing to last year numbers, and the main decrease coming from shopping centers and hotels. In the case of Israel, there was an increase on the EBITDA. We are going to see later. So let's move to the next page, the page number two. And here we can begin speaking about the main effect that we had in Brasilagro through a real estate acquisition that we did through shares. We were lucky to begin to do this mechanism, first time of our history, and we began to buy assets through the shares. Sorry, this is the first time that we do an acquisition through issuing shares. There was a company that failed in the past. It was a big company that was trying to copy the model of Brasilago. After many failures, they sold majority of the remaining. They gave us and we issue shares to pay them. This is a package of 29,000 hectares of total surface for making mainly grains and cattle. That will be a dilution of cost, G&A, and the operational, because you can see on the picture, they are neighbors of our existing chaparral and chateau bas farms. So with this, and using fair value, so we calculate the net asset value of 31 of the share of Brasilagro to make the merge, we made a dilution that represent eight and some percent of the shares. So with that dilution, now we have more shares of Brasilagro, grew in size, now is a company of a portfolio of 214,000 hectares. And so there was an increase of this, and a number of shares that you can see here on the graph on the table. And so from one side, we have this dilution of this 8.5%, almost that of a percentage of dilution because of the emission for making the match. And from other side, we recently sold 6% in the Vobespa market. So Cresud after these two events went from the 43 to the 33.6. On that sale, We raised almost $16 million that we have on the pockets of Cresud today. So this is a new vehicle through shares, and I'm very happy with that. I think this is the first of many, because this is giving liquidity to people that want to leave their business but want to remain in a much more active vehicle like Brasilagro is. If we move to the next page, we can see one purchase that we did recently We did a normal acquisition. This is a 4.5 thousand hectares that we did in Brazil, 2.9 to be developed. And this is for grain. And this is a 25 million reais purchase, 8,500. This is per acre, per hectare, sorry, not millions. This is per hectares. This is a mistake. We paid an initial 11 million reais of payment. and what it has this for us very good it is not only buying the land we are leasing a big portion of land 5.7 thousand hectares adjacent so here what you see the graph this is the part that is not developed and the adjacent had it to be developed the two and they developed they gave us the rental for many years plus they gave us uh they gave us like a fixed payment like a This is an option for us to buy. So we like very much because the day we're going to sell is not going to be sell only our piece, the developed piece. It will be a combination of our piece plus the rented with the option that they gave us for 12 years. So this, the combination of the two makes so attractive business to do in the region of Piauí. If we move to next page, we can see the evolution of the year that we are finishing. Next quarter we are finishing the campaign. This is our historical record of planting area. We grew 9% year to year to 271,000 hectares combining the four countries, Argentina, Brazil, the two main, Bolivia and Paraguay. Breakdown of soybean being the major, second the corn, and very relevant, the sugarcane. And this is the, we are running in the whole region 885,000 hectares between the two players, Cresud and Brasilagro. The sales this year we did, they were only in Brazil. A lot of liquidity. Brazil is closing a very good year. The evaluation helping a lot to the normal farmers, the not sophisticated farmers not hedging their crop. They found the real went from 4 to 570. Today we have seen some Thank you very much. are financing, making huge gain, 11 million book value of one. So this is the kind of what we dream at the beginning of Brasilagro to buy huge pieces, to sell, finance, and make the money and buy again. So we are showing a lot of the real estate evolution in the year in Brazil, not in the rest. We want to have in the rest, we are trying, but we are thinking that Brasilagro is going to find more because the liquidity of that market this year. So, if we move to the next page, we are going to begin the explanation of Carlos Luzon, our manager of Argentina and Bolivia, who will explain some details about the commodities prices of the market.

Good evening, everybody. Thank you, Alejandro. We'll continue with the presentation. Let's move it to the slide number seven, about farming, commodity prices, and global stocks. We can see in the graph the prices keep the low trends. The reasons are the following to consider the supply and demand. Considering the supply, the production of the crops in South America performed very well in general, generating an increment in the global stocks. Let's now overlook the fact that the stocks in the United States, especially in soybeans, are still high because of the delay in export due to the tardiness in agreement with China. Regarding the demand, despite the agreement phase one has been signed between the United States and China last January, export continued to be delayed due to the impact of the global coronavirus outbreak in the last three months as a consequence of the logistic issues. Regarding soybean stock consumption ratio, We can see in the graph a decrease in the war ratio. This happened due to that the demand overcomes the offer. Talking about corn. Talking about corn, we see that the corn stock consumption ratio, the war ratio increased, especially in the United States. They are waiting for a great record campaign this year in the United States and the expected production to achieve the record of 340 million tons. This matches with the low in the use of the corn for ethanol productions affected by the decrease of the oil prices in the world because of the pandemic. We appreciate that the FOB soybean prices in Brazil were more competitive in the United States and Argentina. The reason being the delay in the agreement between the United States and China and Brazil's national currency development. Finally, about the regional hedge campaign, the current hedge level is 78% in soybean in the overall budget prices. In case of corn, the regional level is 89%. a 4% over the budget in the soybean and 2% in the corn. It's clear that these high hits happen because we anticipate to our usual strategy, foreseeing that the market was going down, especially in 2019. Let's go to the next page. Slide number eight, good forming prospect for 2020 campaign. As you can see in the top of the graphic, the evolution of the weather in South America was normal, except from the northwest area in Argentina and Paraguay that suffered a heavy drought during the finition of the years. Related to the exchange rate evolution, you can see that the evolution rate has increased in the last three months. We can see 30% increased in Brazil and 8% in Argentina, allowing an improvement in the competitivity in the export sectors. The regional harvest progress is solving 97% and in corn, 26%. We are harvesting the Safrania corn in Brazil and Argentina in the coming months. Let's move to the next page. is about the COVID-19 agro-business working as an essential activity, protocols used by pursuit and its farms. That is the description of all the protocols. The one is the security and changing protocol, farm access control, suspension of farms visits, reduced transport use, and the last one is change in the way of working, teleworking, was implemented in different positions and functions. Let's move to the next page, Good Farming Prospects for the 2020 campaign. As you can see in the graph, the crop production is expected to increase by 1.3% year to year, achieving a record in the productions to 833,000 of grain. Prospective crop yields are stable in 6.2 tons per hectare in corn and 2.7 tons per hectare in soy. Regardless sugar cane productions, the growing trends continues and we expect a record of 2,373 million of tons in 2021. Finally, The meat production remained stable in 8.7 thousand tons despite of a stable low in cattle stocks. In Argentina, after the end of March, 20% of the livestock was sold, taking advantages of the good market price. Thank you, Matias. We continue our presentation.