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

Good morning, everyone. I'm Santiago Donato, Investor Relations Officer of Cresut, and I welcome you to the first quarter 2025 results conference call. First of all, I would like to remind you that every play of this webinar, the presentation and the earnings release will be available on our website at www.cresut.com.ar. After management remarks, there will be a question and answer session for analysts and investors. If you want to make a question, please 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.

Good morning, everybody. We are beginning our first quarter 2025 results. This year the regional campaign is showing us an increase in planted area comparing last year numbers and the one that is mainly explaining that is Argentina in the growing in deep leasing areas in the country. We are beginning the campaign. The conditions are good. The good not so good in the case of the winter crops in Argentina, but yes for the rest, mainly summer crops, soybean, corn, and with a much more stable commodity prices comparing last year, where there was a big drop, and some slight input cost reduction that we are seeing, so recovering some of the margins of the activity. Related to wheat, the wheat was 100% planted and now we are close to be harvesting in November, December, and with some drought areas in Argentina decreasing some of the result, but still early to speak. In the case of soybean in Brazil, 45%, it's been sown, so planted in Brazil. So it's a normal campaign. A little delay, two weeks later in Brazil, but after the rain, the conditions are recovering. There were two transactions related to real estate in the quarter. One is in Los Pozos farm and developed land, and other one is in Alto Taquari in Brazil. I will show you later. We received many dividends from the companies and the total dividend we received in Brazil was close to 53 million dollars. Brasilagro gave us close to 10 and IRSA 43. With the two we're distributing dividends these days for investors close to seven percent dividend yield and so the company is in a very good shape today and doing this activity the first quarter. Saying that, I will now introduce Vigo Chicharro.

Thanks, Alejandro. Morning, everyone. In this page, we can see the planted area evolution. Cresud this year is increasing the number of hectares and sowing under planted area. We are expecting to plant 303,000 hectares in the four countries. where we operate in Argentina, Brazil, Bolivia, and Paraguay. So this is a 9% increase compared to the last year, to the previous campaign. Mainly we are expanding our surface in least farms in Argentina, but also some in our farms. Regarding our breakdown, we keep having diversified mix of crops. but mainly soybean and corn, and we do some sugarcane in Brazil and Bolivia as well. Next page, number four. Here we are the commodity prices and the cost. In this page, we can see the evolution of the commodity prices. The 2024 campaign was marked by the down pressure on the international market. commodity prices as Alejandro said and the beginning of the this new campaign maintain the low price level for the peak reach after the pandemic and the war Ukraine was regarding input cost they are adjusting a little bit but are still high levels compared with the to the commodity prices affecting of course part of the agricultural margins the good part of That is the inputs are starting to correct a little bit. Next page, number five. In this page, we can see the regional weather condition in the region and the sowing progress. After 2024 campaign, we experienced the lower yields in Argentina and Brazil both. due to the lack of rains. This 2020 campaign is present with the weather, the good weather condition, La Niña phenomenon that was pecked at the beginning of the season has, but in the last weeks we received a good rains, mainly in Argentina. With that, regarding the sowing progress, we have a planting, as Alejandro said, 100% of the wheat in Argentina. and the rest of the crops, the total region for soybean is 27% for soybean and 10% for corn. Now, Alejandro.

Talking about our real estate activity, we closed this quarter, the second portion, second fraction sold. Here we see on the map, last year we saw the first fraction, and this year we are selling the second. This second is 3,600 hectares, undeveloped, totally undeveloped. The sale price of this fraction was $2.2 million, $614 per hectare. Comparing to the acquisition and the capex invested in the last year, 30 years, close to 30 years, that was 15, so a profit of 41 times the price acquisition. The accounting gain is almost all, 2.1 million dollars, and we have still a remaining surface of 231,000 hectares in the farm. So this shows the big gain the company is having in the developed and in the undeveloped regions of the farms we bought a long time ago. The other big fraction sold in the quarter was done in next page in Brazil, Alto Taquari, that was mentioned before, but was implemented this quarter. This was a 3,700 hectares sold area, and this is of 2,700 total sold area, but this smaller fraction was done this quarter was 1,100 hectares. So the remaining part, selling price of 190 million reais, a big cane, close to 100 million reais as cane. So this, in an available area, where we did a lot of sugar cane and the big transaction in internal rate of return, we bought that for $4,000, $5,000, and we were selling later for... $25,000 or more in Brazil, in the Mato Grosso area. So saying that, we had the first quarter, some activity in undeveloped area. And so we expect to have this in the next quarters the same. Saying that, we can move now to page number eight and see the evolution of our service company, agricultural commercial service company called FIO. FIO that began 25 years ago, but this last week we had the party for 25 years. became the biggest broker of the country in inputs, outputs, commercial services. And here we see the evolution on volume of tons. So we achieved last year 6.83 million tons representing close to 6.1% of the market share of Argentine grain total market. So, this is a very strong evolution and the AEBT or EBITDA, we are seeing 25 or 30 million dollars last year, so showing a very strong company, just pure servicing farmers using the volume of Cresut, but not only, Cresut represents today close to 4% of the volume of FIO, and became not only very relevant in Argentina, now launching the story in Brazil through Bianchi. So this service company is expanding its operation in the rest of Latin American region. Saying that, I will now introduce Matias Gaviroski,

Thank you, Alejandro. Good morning, everybody. So, moving to page 9, we can see the evolution of our investment in IRSA. Remember that we have 55.9% of the shares of IRSA. It was a good quarter with an adjusted EBITDA in shopping malls that was the same than the previous year. Then we have some slowdown in hotel industry because of the effects competitiveness and also in offices some reduction because the disposal that IRSA did during the year and that sold some floors of the portfolio. Regarding the tenant sales, we can see a slight recovery against the previous quarter, the first quarter of 2004. But when we compare this quarter with the same quarter of the previous year, still some reduction of 12% below the last year. Regarding occupancy of offices, we reached 98%, in malls, 97%. So, we keep with good levels of occupancy. Real estate activity, we acquired a new plot of land close to Alto Avellaneda shopping mall for a future expansion, so it was a good acquisition. And as Alejandro mentioned, IRSA paid during the year good dividends with an 8% dividend yield and also distributed 3.6% of the shares that has in their own portfolio. When we see the evolution of the last 12 months EBITDA, we can see it remain stable against the previous fiscal year and fiscal year 2023, but very positive when we compare with pre-pandemic level in fiscal year 2019. About the financial results, first to understand some impacts, what happened with the effects and the inflation during the quarter. We saw during this year an appreciation of the peso, so the inflation was higher than the devaluation. At the official exchange rate, that effect is 5%. At the blue-chip swap, it was 20%. So if we compare with the dollar map, At the end of fiscal year 24, that number expressed at the current numbers is $2,100 per dollar. And that number today is $1,200 per dollar. So that will have an impact when we analyze our results that I will explain in the following pages. Regarding the operating results during the quarter, we see positive numbers, mainly because of the farmland sales that we were more active during this quarter than the previous quarter. So that is an important jump. Then when we analyze the quarter, it's not the most representative quarter for the agribusiness because it's the starting of the campaign for grains. In sugarcane, we have positive numbers when we measure that in reais, but when we convert those into pesos at the current numbers, that is a negative effect, but it's just an accounting treatment to re-express the first quarter 24 adjusted by inflation. In cattle, we see positive numbers. We have higher numbers in production, higher prices above inflation, so that is generating positive numbers for the cattle activity. When we move to page 13, Here we have the most important effect during the quarter that generated losses for IRSA and also for Cresud. When we consolidate all the numbers, we will see a net income that is negative. The main reason is an accounting effect, it's non-cash, that is to value the investment properties of IRSA at fair value. So since the peso is appreciating, that means that goes below inflation, we see negative numbers. When we see the numbers in dollar terms, are positive, shopping malls increased valuation and offices and the land bank remain stable. But when we re-express those numbers into pesos, that is the negative effect that we can see here, that the last year was very positive, 311 billion pesos and this quarter negative by 222 billion pesos. On page 14, you can see that the other important effect that is in the line of net financial results that we see a positive number, 7.1 billion pesos compared with 5.8 billion pesos last year. Here we have a couple of effects. The first effect is on the current exchange rate that the appreciation of the peso generate positive results because we have to re-express our dollar denominated debt into pesos. So that is positive. And also the fair value of the financial assets that generate also positive numbers. With all those effects, we finished the quarter with a negative number on the net income of 72.3 billion pesos attributable to our controlling interest, 39.5 billion pesos, and the rest is the non-controlling interest. About our debt. We see a reduction in our net debt evolution from $421 million in fiscal year 21 to $310 million currently. The net amortization schedule, we see some amortizations during this fiscal year. that we announced last week that we will issue a new bond to pay down and to refinance that amortization. So we are in the market issuing a new bond for four years with maturity in 2028. So we will close that next Wednesday. As Alejandro mentioned the dividends, we paid a dividend yield of 7% that we already distributed that in Argentina for our ADR holders will happen in the next probably 15 days the payment or 20 days and we don't anticipate any further delay like other years. And if we see the evolution, we have been paying good dividends for the last three years. And this year will be at the blue chip swap around $38.8 million. And finally, about the repurchase of shares, we announced a new buyback program for 6.5 billion pesos. with a maximum amount of $12 per ADR or 1.5 thousand pesos per share. So we haven't started yet the acquisitions of shares. So we will start executing this program in the coming days. So with this, we finished the formal presentation. Now we open the line for the Q&A session.

Well, we'll start with a Q&A session. If you have a question, please use the chat. We will take them in the order we receive them. Here we have the first question. Given the administration's push for deregulation, particularly in the agricultural sector, do you see any specific opportunities emerging for Cresud? Could you discuss how the liberalization of agricultural export controls, land permitting and elimination of export taxes might benefit Cresud operations?

For sure, this government is speaking from the very beginning about how to support the very relevant agriculture sector. The president went to the La Ganadera, that is a fair exposition, I don't remember the name in English, but where he was speaking to the farmers and asking for some patience. He said that, first of all, the reduction of the gap between the two dollars would benefit dramatically. And I agree with him that that main gap of the 100 percent or more than in the past, comparing to today or 10 or 15 percent to the blend that the farmers are receiving, is the bigger benefit for the farmers for sure. The second will be coming from taxes on exports that the government still doesn't didn't do almost nothing. He did some small percentage in some categories in cattle, but really nothing relevant. But the government is waiting for the recovery on the taxes before giving taxes to farmers. And the farming industry, the farmers are waiting for that with patience, I think, because Everything that the government is showing is in favor of farmers for Argentina. For example, reducing the taxes for imports that is affecting the input costs. So, the combination of factors is something that the government is speaking about the foreigners buying more land than what they were permitted that it's coming to. So, all this thing is bringing liquidity to the land And that liquidity to the land brings a big opportunity to farmers because Argentina was close to be disconnected to prices of the world. At times in the U.S., when the prices were going to the 17 or 18, the farms of U.S., Brazil and all developed countries were going to peaks. But Argentina was not receiving that benefit. Today, after the relation that the government and the official activities of the government are going to farmers, this is probably to reduce the gap of price of the land that Argentina was disconnected. So it's going to bring more liquidity to farm, new players to buy new farms because they're going to allow in bigger size. is reducing the gap and the reduction of gap brings you more dollars in your pocket. Before you were doing a lot of official dollars, but when you make the calculation of what they were in blue chips, really what's half or less. So farmers are benefit and are going to be more benefit with the new measures that we are not waiting for short term, but I would say in a year period, I would expect some of that coming to the agriculture industry.

Thank you, Alejandro. I have another question regarding capital allocation, which is the optimal allocation between buybacks and dividends and how do current market conditions influence this analysis regarding buybacks and dividend payments?

What we did in the last years was to give priority to payments in cash, so dividends instead of buybacks. Although we did, in terms of size, we did buybacks in the last three years for both, for Iursa and for Cresul, we did more priority for the cash payments. There is some restrictions, from the CMB is that we can't use all the money to buy back shares because there is certain restriction that we can buy up to 25% of the volume of the shares. So that in certain way limit the size of the buyback programs in our case. So we prefer to give the money to our shareholders and They can buy back shares as well if they believe that the shares are cheap. We do. We think that there is a very good opportunity to keep buying shares. And if we have the liquidity, we will keep doing that.

Thank you, Matias. I have another question here regarding our stake in Brasilagro. What is the advantage, disadvantage of owning this stake in Brasilagro versus the whole company?

As you probably know, we did this company in the Bovespa market. And the Bovespa, that is probably the more regulated and advanced market in Brazil, give us authorization to buy up to 42%, no more than that. Today, Cresut owning 35% is close to that. So we are not thinking of owning 100%. This is a story that was done from the very beginning, and that was a blind check. We did that company through raising capital without having any employee, any farm, any notebook. So that was a public company from the origin, and Cresut began with 7% and went to 40 some in some moments today we have in the 35 level and we are happy with that strategy for it and land the company brasil agro it's in that mission and as you probably know the last three or four years uh brasil agro was benefiting through the selling of the assets we were buying 10 or 15 years before that they had a very important appreciation so we're sales of more than 350 million dollars in the last three and a half years benefiting with that and having a positive cash flow this company has a net debt positive because of a lot of sales done in installments and today that company is intending to buy again when the opportunities are going to come and we are expecting that some companies forced to sell because of the interest rate going higher in Brazil, so that company is waiting for that moment. But related to Cresut, this ownership is enough good for us.

Another question regarding Brazil, that there is reporting a major drought in northern Brazil, if we had some impact to date.

As I know, the only impact was the delay on planting compared to last year, and that will affect some of the second crop. Probably we'll have some less saffronia of corn for the plantations in Brazil. So this drought that delayed whole Brazil, made probably the soybean plantation to be later. And when you have that, you will have less corn of second crop in that region of Brazil. But really nothing very material for our results. We are expecting a Much better result in Brazil agro this year. Sure, cane is in a much better position. There are not decreases on the price of the soybean and the corn related to our budget. The costs were lower to last year. So we are expecting better than last year results related to the operation. Plus the real estate that the first quarter we showed a sell and we are expecting for the next three quarters some more sales for the corn.

Okay, we'll give some minutes more for any additional questions that you may have. Please use the chat. Okay, there are no more questions. We conclude the presentation on the Q&A and I will turn back to Alejandro Elstein for his closing remarks.

As you know, first quarter is not so relevant for us. It's just the beginning of the plantation, but having sold two farms, one in Argentina, one in Brazil, and expecting money in the quarters, plus the operation being normalized through climate, and the higher size that we are achieving. And in the beef cattle too, producing, we are expecting to be in very high production in beef in Argentina. So we are optimistic in the operational and real estate and the service for the year. So we are optimistic in this business and mainly to Cresud that can be taking the opportunities where majority is not. So we are very optimistic of the year. So just to thank you very much and have a very good day.