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

Good morning, everyone. I'm Santiago Donato, investor relations officer of Cresud, and I welcome you to the third quarter fiscal year 2022 results conference call. All I would like to remind you that both audio and slideshow may be accessed through the company's investor relations website at www.cresud.com.ar by clicking on the banner webcast link. The presentation and the earnings release are also available for download on the company website. Management remarks, there will be a question and answer session for analysts and investors. Want to make a question, please click the bottom labeled raise hand or use the chat. Before we begin, I would like to remind you that this call is being recorded and that information discussed today may include forward-looking statements regarding the company's financial and operating performance. All projections are subject to risk and uncertainty and actual results may differ materially. Please refer to the detail note in the company's earnings release regarding forward-looking statements. We'll now turn the call over to Mr. Alejandro Elsztain, CEO. Please go ahead, sir.

Good morning, everyone. We are beginning our third quarter results. And if we go to page number two, we can begin speaking about climate. And the region is really suffering a drought that was affecting summer crops, and now we are in the harvest time. and the climate is still dry affecting now again the winter crops for next campaign. And we are going to see on the evolution of the prices of the commodities a big explanation of why the prices are so high. It's a combination of many campaigns, North America and South America combination of lower results making smaller stocks on the commodities that we are running. In the side of there was a big improvement on margins because of this increasing on prices, but higher costs mainly driven by fertilizers coming from the region of the world. If we begin speaking about the farmland liquidity and these nine months, we only saw some sales on Brazil and their liquidity on the farm is huge and a lot of transactions on that market, a lot of interest of the farmers to keep buying more land in Brazil. So, we are now speaking about nine months of higher EBITDA coming from agribusiness segment. Matias will explain in this segment, in grain, sugarcane, and farm cells, we have very good results in this year. The net gain, when we speak about the summary of this nine months, we can see higher agricultural operating results. and net financial results very positive and income tax. So we are achieving 16 billion pesos to the controlling company, controlling to a loss of last year numbers. And Matias will explain it deeper later. Related to the human segment through ILSA, we are recovering our EBITDA strongly, mainly in the shopping center industry. We are seeing occupation close to normal in them. So hotels are recovering mainly shaw-shaw. So we are seeing, again, operational in the rental business that last year was very bad. And so at the same time, we are finishing the merge of ILSA and ILSA commercial properties that we are going to see this in the next days. We can now move to the next page and we can see how the prices of soybeans were stable and we were seeing the 2021 and the commodity prices and soybeans that is probably the more relevant for Argentina and Brazil. We can see that the evolution was calmer, but after the many volatility in the weather and dryness in United States, and they saw that it was normal and it was good. But later, we began to see some linear effects in Argentina and Paraguay. We began to see that increasing the prices. And we went from the 13 level to the 16, 17, and after that, We began to see some normalization, but the crisis came with the war in Ukraine and Russia. So the combination of lack of many campaigns in America and now the logistic problem that is the war affecting, having a lot of corn and wheat reserved in Ukraine still not shipped, so making a lot of, plus the climate conditions on the market. Now climate in U.S. again, Thank you very much. Thank you very much. Thank you very much. The food for the animals and for the human beings. And the regional conditions still dry. And we are seeing in our harvest, in Brazil, really, the drought was really more affected in the south of Brazil, where Brasilagro is not. Really, in the south of Brazil, we have no farms. We are mainly in the Cerrados Brasileiros. So finally, we are... Thank you very much. Thank you very much. Thank you very much. and we can see in X5 the evolution of surface. And this here is really a good combination of volumes. We can see the volume of Argentina, 120,000 hectares. 110,000 hectares in Brazil, 14 and 13 in Bolivia and Paraguay, the 255,000 being the soybeans 45%, corn 27%, sugar 10%, that is really relevant, it's a much more intensive crop, and we can see volumes are better than last year, so with the combination of what I explained before, still we have better yields to the total, and with this existing price, it's making us a very, very good operational year of the company. Inc. in the soybeans are a little better than last year. In corn, a little affected, a little less than last year. In the sugarcane, we have less surface that is affected, but it's not per acre. It's totally surface affected to sugarcane. We have a little more heads of cattle and less production on this year because we recover stock at the end, but the majority of the year, we're having less animals on the farms of the company. The two examples in page number seven of the farms we explained before. I will go fast. Two farms in Brazil making very high internal rates of return, close to 56% in Reales and 20% in Reales II. So little, not big pieces, really. They are small pieces, still 7,000 hectares total, productive area of 4,500 hectares. So not big service of sales in the quarter, but really big gains, bringing us more than $40 million gain, so giving us a lot of gains to the balance sheet. I'm expecting to keep this buying and selling all over the region, the four countries. But this nine months, only Brazil did the job. I'm talking about the two branches that we have, one through FIO and one through Agrofi. From 1998, we began this story, but they are beginning to be irrelevant. We are taking some pages to explain what is happening, because really the evidence that these companies are bringing to the balance sheet of Cresud are growing quarter by quarter. In the case of FIO, today is the largest... and the Agricultural Commercial Service of the country. This year we are expecting to pass through this company close to 7 million tons. So this represents a big portion of the Argentine crop. Comparing to Cresud, it's more than 10 times Cresud's size in Argentina, but they are taking from all kind of farmers and making all kind of service to farmers from inputs, from outputs, from Futures and Options, Servicing, Consultancy. This company is really becoming relevant. Look at the increase in the EVT evolution. Today, this year, we're expecting more than $20 million in the evolution of this company that soon runs 50%, 50.1% of the shares. and this company is making five six percent of total argentine harvest so relevant bigger player of argentina largest broker of the country and now beginning the expansion to brazil through the brokerage business and beginning the expansion of selling of inputs like fertilizers to the rest of the region including paraguay bolivia uruguay and chile so these are This company is really beginning to be relevant, and to give you a flavor of this company, it had zero debt up to now, and this year we were able to raise the bond at zero coupon because of the strength of this company. It's beginning to be very relevant to the strategy. AgroPhi, AgroPhi, AgroPhi, AgroPhi, AgroPhi, AgroPhi, Thank you Alejandro, good morning everybody.

Again, a moment to review the investment in IRSA. We can see a very good recovery after the pandemic. As you know, we suffered a lot during the last two years. Most of our operations in malls were closed for nine months, and now we see a good recovery. Last quarter, the retail sales surpassed 21% pre-pandemic levels, so we are very happy with that evolution. Occupancy is going up in the malls. Very good operations. We were also very active in all the fronts at IRSA levels. During the quarter, we did some disposals, some acquisitions. Here we can see two important disposals. We sold five floors in the La Paulera building and also the Republica building in block. So we sold the entire building. So the cash position of the company and also the leverage of IRSA is decreasing significantly. Also, we fulfilled the merge between IRSA and IRSA commercial properties. In the past days, the CMB already did the inscription of the merge. So in the coming days, we will exchange the shares of IRCP for IRSA shares and then the list IRCP from Buenos Aires Stock Exchange and also NASDAQ. If we go to page 11, we can see how we close our nine-month period as of March 31. We are finishing with a net income of 31.6 billion pesos gain compared with a loss during the last year of 14.3 billion pesos. Here we have several I will explain deeper each of them. On the operational side we will see that we are having very good results. In the financial side we have an important gain in line 13 related to the appreciation of the peso in Argentina against the inflation. and also important to mention during the last year most part of this was related to the day consolidation of the investment in Israel in IDB that this year we don't have any result on that. So before going to the next page in the line six also it's important to mention the change in deferred value. that mostly affect our urban business. In Cresud, we don't recognize the value of our properties at fair value. It's more historical plus inflation. But in Irsa level, we assessed every quarter the numbers and that generated a loss. So entering into more detail in next page, we can see the evolution of the main The effects we can see that the devaluation during the year was 16% in both in the official exchange rate and the dollar and the blue chip swap in the dollar map against an inflation of 40%. So the appreciation of the currency in real terms was 17%. That means that every time that we recognize results from our assets, we have to mark a loss. And regarding our debt, we post again. And that affect in the line in the change in the fair value, as I explained in IRSA level, and in the debt that we will see in the next page. In page 13, the most relevant operating metric, our adjusted EBITDA, we can see excellent results in the agribusiness with probably record in our history of 18.3 billion pesos gain against last year 13.7 billion pesos. We see good Good numbers on all the lines. Farmland sales, as Alejandro mentioned, we saw during the quarter or during the nine-month period in Brazil, two farms with very good gains. In the farming, excellent results in all the lines, grain, sugarcane, recovering very or increasing results. with important numbers against last year. FIO, as Alejandro mentioned, also generating excellent results. So we are very happy on the performance on the operational side. In the urban segment, also we can see in the nine-month period, An important recovery is more related to the condition of the malls during the last year that were closed because of the pandemic. If we compare this number with pre-pandemic level, we are still lagging 20-20 numbers, but the recovery quarter by quarter is very important. So the trend is going up. In the offices, we have a different effect. This is more related to the disposals that we did, that we are reducing a little the surface of our office portfolio, but also because of the revenue generation that is more related to dollars, and since the dollars has a lower devaluation than the inflation, In the hotels also, we are seeing a good recovery and sense of development. We have sales during the year, but last year we sold more. In page 14... We see the other line that suffered important recovery or important gain during the nine-month period, the financial line. And this is related to also the difference between the effects and the inflation. So we can see in the line two, the next exchange differences, we are posting a gain of 19.2 billion pesos. Finally, in page 15, we can see the evolution of our debt that maintained similar levels than previous year. After the end of the quarter, we collected a dividend from Brasilagro. So, we already collected, say, $16 million. So, we will see the decrease in the net debt probably in the next quarter. Brasilagro paid 200 million reais This is an anticipated dividend, and remember that we collected also in October a similar amount. The debt amortization schedule, we have a challenge during the beginning of next year in February 2023 related to some notes that we issued in the past. that expire for $113 million. So we are working in order to refinance that. According to the central bank regulation, we will be forced to refinance at least 60% of that obligation. So the central bank is not giving the companies all the dollars to repay, so we will need to do some sort of refinancing of that obligation. And lastly, we mentioned this in the last call, but in February the company issued a new dollar-linked note with expiration in 2025 at an interest rate of 2% fixed. That was new regarding our liability structure. So with this, we finished the formal presentation. Now we open the line to receive your questions.