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 first quarter 2023 results conference call. First of all, I would like to remind you that 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 MS release 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 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 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 Elstein, CEO. Please go ahead, sir.

Thank you very much. Good morning, everyone and everybody. We are beginning our first quarter results, 2023. And the main highlight for this quarter, that the strong commodity prices are still, and the sustained margins per acre that have received some impact because of cost of inputs and sometimes lower prices of outputs, but in general still keeping good margins per acre for the oral culture in South America. The climate is affecting us something, and the climate mainly is affecting Argentina, not the rest, not Brazil, not Paraguay, not Bolivia. But in Argentina, the effect on the climate was enough strong, and we're going to show you in the map what is the situation for the country. Related to real estate, this quarter we were able to acquire a farm in Brazil. close to 11,000 hectares from those net of 5.5,000 hectares of arable lands. And some sales, not in the first quarter, but in later, we are seeing a lot of movement related to the real estate in the selling. So we are seeing that movement on the markets. Related to our service company, FIO, we are achieving very good results in the commercial services, very good EBITDA in the year related to the sales of outputs and the commercialization of inputs, mainly in Argentina, but expanding to the rest of the region. And this is really growing a lot. Related to the urban business, we are going to see some small pictures related to IRSA that closed a very good quarter, mainly related to the rental properties, mainly to the shopping centers that they were recovering a lot comparing to the 19 time, 19 numbers, 2019 numbers before pandemia. So the EBITDA from the urban and mainly the hotels are recovering too. So the two are bringing very good results. We have successfully exchange offered this quarter. We are going to see later. We are doing a share buyback program. And we began again to pay in cash these days. Cresut paid a dividend for the shareholder. So we can move now to page number three. And we can see these two representations of our size that we are increasing again in size. Last year, we were planting 255,000. We are this year planting 260,000. Comparing, I think next year Brazil will surpass Argentine size because Brazil bought some new lands and rented more new lands from cattle to grain. So, but comparable sizes in the two countries, much smaller between Bolivia and Paraguay. Keeping this breakdown of crops, mainly soybeans and corn, the first two, sugar can be the third. And we are seeing the volatility on the prices. We saw some of the drop on the prices of the soybeans, less in the corn, but more in the costs. We are seeing this year a relevant input costs, mainly fertilizers, impacting cost of per hectare, mainly in Brazil, more than in Argentina. But in the two, we are seeing margins decreasing because of inputs increasing for this year. So, but still, enough reasonable and very good margins in the 260,000 that we have planned. We can now move to page number four. And here we can see the drought that is affecting Argentina. This is the water on the arable area and majority of the countries in the red showing some areas that they are not so bad. Today and yesterday we had a rain. but really the rain came later for the winter crops. Winter crops that they were 100% planted and they were close to be harvested in December really suffered a combination of drought plus early frozen that came in October days. So the combination of the drought and the frozen season is really affecting, and there are some analysts thinking that Argentina, instead of the 20 million tons that began when the plantation came, is expecting a 10, 11, 12. Some of them are staying below 10 million tons. So close to a loss of half of the plantation. Mainly affected was the Corn Belt area, the best part close to Buenos Aires area. In our case, Our expectation is less because we have some of our farms that receive enough good rain, so really we are not expecting that drought and that erosion affecting half of the hill, but for sure affecting what we budgeted at the beginning. And now the relevance will be majority of our campaign is 10,000 is just winter, but the rest is pure winter. summer crops. So, majority of the gain comes on the summer, mainly soybeans and corn. And after the rain of yesterday, there was some recovery on the soil humidity, but still needs much more rain to have a normal year. No one is clear expecting what is happening, but yesterday was a good signal, mainly the corn bed, that were 30, 40, 50 millimeters in majority of the areas. So, but still uncertainty on the case of the yields of this campaign. Talking about real estate, the only things that they were done in the first quarter, one was the purchase that we spoke about in Mato Grosso, this farm that 80% of the crop can double crop, can make a double crop, so that will be mainly corn and cotton. So these are very productive and efficient farms in the north of Mato Grosso. For those, we paid 285 million reais divided into one cash, and the first second payment will be next year in a year period. And it's all done, and only we need to transform from castle to grain, and we'll be very, very productive farm north of Mato Grosso. Another real estate activity for the quarter, not in the quarter, was done after the 30th of September, so the number will be reflected in the 30th of December numbers. We sold a small area in Paraguay from the productive area, close to 500 hectares, total hectares of 863. And we have still remaining close to 59,000. So this is a really small percentage of the arable area and the total area, and we really were able to be selling at $3,000 per hectare, the developed agricultural land. That is really very good. We were buying this land at $250, $300. You need two hectares for land, and so after preparing the land, so it's below $1,000 per hectare. We were selling for $3,000, very good in general rates of return in US dollars, close to 28%. So really, it's the beginning of the selling. This is a very comparable farm to Salta, the one we are doing in Los Pozos in Argentina. So this is the first sale of a developed farm in Chaco, Paraguayo, that is the same as the Chaco from Argentina. And we are very happy to begin to share that with other farmers. And the man who bought, not only bought 500, but rented like 800 surrounding. So this is the beginning of buying, beginning of selling, buying buyers for those big farms that we are doing in the Chaco Paraguayan area of Salta and in this case, Paraguay. But there is a lot of more movement in the real estate. So we are seeing a lot of activity. We are expecting a very active area in the real estate area. Now I will introduce Matias Aguiloski, our CFO,

Thank you, Alejandro. Good morning, everybody. So going to page six, we have a short breakdown of our investment in IRSA. We can see the strong recovery in the VIDA, the rental VIDA. We are reaching pre-pandemic levels after three years that the business was very affected by the pandemic. You know that last year we started to open 100% of our malls. There was a A recovery quarter by quarter. Now we are reaching higher numbers than 2019. So we are very happy to see the company with that recovery. Also in the hotels, we are seeing an excellent result, mainly from our hotel in the Patagonia, Sao Sao. The two in the city of Buenos Aires still some potential to recover. Now the tourism in Argentina is growing and we... We are seeing better numbers, but still some room for recovery. But we are achieving one of our records in the hotel industry in the last years. Also, we see one transaction. There was a disposal of one floor in the 200 de la Paulera building. So, we sold for a price of $10,600 per square meter. We received $12.6 million. And, you know, we are using mainly the proceeds to cancel debt. So, we saw an impressive reduction of debt of IRSA from $755 million two years ago to the current levels of $307 million. Going to the breakdown of our financial statements this quarter. First of all, we need to understand what happened with the macroeconomic drivers that has an impact on our financials. Basically, what happened with the effects and what happened with inflation. Inflation during this year and this quarter accelerated to levels of 22% in the last quarter. compared with 9% in the previous year. And the valuation was 18% this year, compared with the inflation of 22. That means that we have an appreciation of the pesos of 4%. And last year, the valuation was 3% against the inflation of 9%, means there was a real appreciation of 6%. That has an impact on our dollar-denominated debt when we recognize results We are recognizing a gain because of that and also has an impact on when we value assets in pesos terms. In real terms, we will recognize a loss. So going to page nine, we can see what happened with our adjusted EBITDA in agribusiness. There was a reduction. The first quarter is not the most representative quarter of the year, so that basically has an impact on if we have a stock of grains or what happened with the production during the quarter, but it's not the most relevant. We can see the reduction came From the sugar cane, in grains, we see a better result. But still, we are not recognizing the campaign. So still, this is all to cane. And in sugarcane, that is related to high, last year was high prices of the ethanol and the sugar, and lower production during this year because of weather conditions in Brazil, and higher costs, as Alejandro mentioned. In the cattle, it's more related to the holding activity or the result of our stock, that increased lower than inflation. So here we're recognizing real terms, so we are recognizing a loss because of that. So that is basically the drop in the adjusted EBITDA. When we go to the operating income, including IRSA, we see a decrease of 12.4%. This is excluding the fair value of the investment properties. The investment properties itself, we see a loss during the quarter of 6.6 billion pesos. If we see the valuation in dollar terms, it's very stable. I would say more or less the same than in June this year. And the loss is because, as I mentioned at the beginning, the devaluation of the peso of the inflation was higher than the devaluation. Regarding the net financial results, we see again during the quarter, 6.3 billion pesos. Here we have different components. One is what happened with FX, generated a gain of 4.5 billion pesos this year and 8.7 billion pesos last year. Remember that the real appreciation last year was higher than this year. And also we see a reduction in the net interest. from 4.6 billion pesos last year to 3 billion pesos this year. It's related to the leverage of our consolidated net debt. And also the other important effect is in the line one, inflation adjustment, that because of the acceleration of the inflation, we are recognizing higher results on this line. So finally the bottom line, then the net result of the quarter was 5.2 billion pesos against the same last year, attributable to our controlling interest is 3.5 billion pesos. Regarding the net result, Dividends that we received during the fiscal year and during the last quarter, we saw that during the year, Brazil received $40.1 million, most from Brasil Agro and some from FIO. Then after the quarter, we are receiving this week $24.5 million more of Brasil Agro. And also IRSA paid dividends for first time in the last years. The previous one was in shares of IRCP. Now IRSA is paying dividends. Dividends in cash, $7.8 million. Also, Cresut is paying dividends. Last Friday, we started the distribution of dividends that we will see in the next page. So the net or the debt amortization scale and the net debt, we see a slight reduction in the net debt of the company, $389.6 million. The debt amortization scale, we have part that expired this year, but there is no any major amortization or expiration during the This year, during the quarter, and we saw in the last webcast, we did the exchange offer of our $113 million note that expired in February with a very high acceptancy. We received 87% acceptancy, so the debt situation for the next year is very clear for Crescent. Finally, on page 15, we see the activity on our capital structure. We decided a share repurchase plan that we've finished. We bought 1 billion pesos of shares of Resul that represent around 1% of the company. And also, we decided the dividend distribution for 3.1 billion pesos that we started to pay in last Friday. That was a dividend yield of 3%. And our ADR shareholders will receive the payment probably in the next 10 days. So, with this, we finish the formal presentation. Now, we open the line to receive your questions.