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 second quarter 2025 results conference call. First of all, I would like to remind you that the replay of this webinar, the presentation and the earnings release will be available on our website at www.cresud.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 Alejandro Elstein, CEO. Please go ahead, sir.

Thank you very much, Santi. Good morning, everybody. We are beginning page number two, the main events for the second quarter 2025. We have this year, 2025, a very big regional campaign. We increased, comparing last year, planted area, 9%. And we have our record in size in total agriculture between the combination of the four countries, Leeds and Ong. We have this year good climate conditions in general in the region. There is slightly an increase in commodity price on the last quarter, mainly in Argentina, because of some reasons in Argentina that I will explain later. And from other sides, some input cost reductions, mainly in Brazil, because of devaluation of the real. During the January, there was a small lack in the rain, but finally now in February, we are receiving some rain and we are expecting a normal campaign for our crops in Argentina too. Related to the crop taxes export reduction, there was a big measure done by the government, and that decreased from 33 to 26 the soybeans and the corn and wheat from 12 to 9.5. And this is more or less a 5% increase in the prices for farmers, depending what the margins the farmers are receiving, because the exporters are taking part of that profit too. But finally, it's a benefit that is mainly for Argentina, it's just for Argentina, but helping Argentinian farmers in the drop of prices that we have received last 12 months, comparing to higher prices that we had in the past. Related to Brasil Agro, we have very good productive results and the prospects for the campaign are very good. Soybean is beginning to harvest and we are seeing very good yields. They are sustained price. The inputs are going down because of that devaluation. Related to real estate, we have accumulated up to now just Los Pozos sale and Alto Tacorí, but that was in the first quarter. In the second, there are not more sales, but we are seeing a movement and we are expecting for next half year some more sales on the assets on the region. and related dividend distribution we distributed 45 000 million pesos in november that represents close to seven percent of dividend yields we can move now to page number three and here we see our evolution that jump of nine percent year to year achieving more than three hundred thousand hectares in the combination of the four countries being argentina and brazil in the main Finally, the Paraguay and Bolivia are smaller. And here we see soybean representing half of total planted area, 23% corn, 9% sugar cane. Today, in Brazil, the main two are sugar cane and soybean. And in Argentina, the main two are soybean and corn, main two products. And this is the breakdown for the region. And we can move now to the next page. And now I will give the word to Mr. Diego Chicharro.

Thanks, Alejandro. Good morning, everyone. In this page, we can see the evolution of commodity prices as we show every quarter. Remember, we come from the 2024 campaign that was marked by the down pressure on international commodity prices. And we have seen at the very beginning of 2025 the same trend, low prices level. But in the last quarter, we have seen a slight recovery, both in corn and in soybean prices in Chicago. Soybeans are about 5% and corn 7%. So it's good news. Regarding input cost, they continue to adjust. They were lagging behind prices. So Alejandro will back to talk about the taxes.

Here we showed you in page number five the evolution on taxes on exports for the two main products of Argentina that we produced, they are soybean and corn. And we see that from the 1982 up to now, so more than 40 years, there were taxes on exports. I would say that the average was at the 30 something, but now there was an announce of decrease from 26, but that was announced up to the 30 of June of 2025. This is pushing farmers to sell some of what they retain from the crop. And in the case of corn, from 12 to 9 and 1 half, So, a big majority of the history of the last 40 years, we were taxing our exports, and our existing president, Millet, said he will decrease or make them disappear. But at the time, he will have always surpassed having a surplus on the on the spending on the government. So now he gave some, but he announced up to the 30th of June. The market is not showing an increase again. So the market is reflecting that there was an expectation that maybe can stay that on the prices and the government will try to stay. But up to now, they announced formally up to the 30th of June. So the 1st of July, they would rebound to the 73. From other side, the rest of the commodities, the specialities, rice, cotton, and all the small dairy, all the small products of Argentina, they went to zero. And that was permanent. So they gave a good measure. Farmers are happy. That measure gave us some error, Diego said, like a 5% to prices. And this is a good sample of what we are expecting from the government. We are not seeing the rebound on the prices, but we are seeing a country and a government intending to decrease taxes. And in the case of farmers, taxes on exports, that is the main taking from the revenue. So, saying that, I will give you, Diego, again, the word about the climate of the region.

The climate condition and sowing progress. In this page, we can see the regional weather condition and sowing after the 2024 campaign, where we experienced lower yields and production, both in Argentina and Brazil, due to the lack of rain. In the 2025 campaign, it's developing with the weather condition, the good weather condition, is much better. For example, Brazil has any problem of rain in the first semester in the areas in the region where it operates. However, talking about Argentina, the lack of rain in January has been noted, which, if it persists, could impact the main crop yields. So we hope to see a good rainfall the next weeks. Today is raining here in Buenos Aires, and this month we expect continuing rain. Regarding the soybean progress, we have planted 100% the soybean in the area, in the region. The good level of rainfall at the beginning allowed for fine and optimal sowing of summer crops. And regarding crop corn, we have 80% with Brazil around 30% calls me low suffering is an anormal for this time of the month. Taking about the harvest the winter crops in which we have complete the harvest in Argentina with it's almost double size than the last year. we sow and we harvest like 13,000 hectares of wheat. This is almost 95% in waste compared to the previous campaign. Similar yields, a little lower, but in terms of the tons, the general production was 65% above the last year, reaching 45,000 tons. And in page number seven, the cattle activity in Argentina regarding, we have seen the very high prices sustained. The prices had a significant improvement in the last year. The trend that we experienced last year remained the same. We increased a little bit size of herds, reaching almost 50,000 herds in Argentina. The production is increasing. We are expecting to have a higher with similar margins.

So, I will back Alejandro to talk about FIO. Related to FIO, our service agriculture company, here we see the evolution on tons the company is trading. from the last 10 years from 3 million to 7 million surpassing this year. We're expecting to surpass the 7 million if the campaign stays as it is. And EVT evolution to $25 million per year. This company became very relevant in the market, not only in servicing outputs but inputs we sell through FIO fertilizers and herbicides and other inputs for farmers and that company became very relevant with more than 400 employees working in Argentina and now developing the main this main service in Brazil through beyond another company. So with a combination of two, that company is growing a lot too. So we combine the three businesses, the real estate, the operational, and the service company. Saying that, now I will introduce Matija Javiroski that will talk about our investment in IRSA, where Cresud owns 56% of the stake.

Thank you, Alejandro. Good morning, everybody. So to review the main events of IRSA during the quarter, well, first we saw a loss of 40.9 billion pesos that is mainly related to a non-cash effect about the fair value of the investment properties. that then I will explain a little deeper. We saw during the quarter a higher occupancy and sales recovery in our malls activity. We saw a 21.4% increase on tenant sales against the previous quarter. Still below the last year, when we compare with the same quarter of the last year, we still see a decrease of 8.5%. But we expect during the next quarter to start showing positive numbers compared with the previous year. About the office portfolio, we reached 100% occupancy, so we are happy with that. About the hotels activity, we saw a drop during the quarter related to the decrease in revenues and occupancy because of the new environment in Argentina and the new exchange rate. We are receiving less tourism than the previous year. About the... The malls as well, during the quarter, we finished the acquisition of a new mall, Terrazas de Mayo, that is located in Greater Buenos Aires. So with this acquisition, we are increasing our mall portfolio in terms of GLA, Grossly Civil Area, of around 10%. also during the quarter we finished the first two plot sales in ramblas del plata project so this is a major milestone for the company after receiving the approvals and after the designing the the master plan of the project we started the commercialization and we already sold two plots so we signed the two agreements and we are working in around 10 different barter agreements with different developers to sign in the coming months. About the dividend of years, also distributed dividends in November was around 8% dividend yield and also 3.6% in treasury shares. When we see the EBITDA in dollar terms, the rental EBITDA, we see a good trend. Just the decline this year compared with the previous year is related to the hotel activity. The malls and the offices remain stable. Going to next page. About the financial result, well, to compare with the previous year, first, we need to understand what happened with the effects on the inflation. You remember that during the last year, we had the big jump in the big devaluation of the peso from 350 to 800 pesos. had an impact at that moment on our holding and the stock of grains and also was a negative impact about our debt that we will see in the coming slides. This year the The macroeconomic situation of Argentina is much more stable. Inflation went down from 107% last year to 21%. The valuation was only 13%. So we have an appreciation of the peso of 7%. And about the blue chip swap, the dollar MEP, we also see a big reduction in the gap between the parallel market and the official exchange rate. So going to the next page to see the operational results first in the agribusiness and the farming activity. You know that this semester is not the most relevant semester of the campaign, we will have most of the results coming in the next two quarters. But when we analyze what happened this semester, we see a drop in some of the numbers. So first, the positive numbers came from the farmland sales. As Alejandro mentioned, we haven't sold this quarter any properties, but we sold during the first quarter. Compared with the previous year, we are we are having better numbers. About FIO, here is not the best picture because we are comparing on the operational results and some of the results of FIO are recognized in the line of financial results. So here we see a big drop from 17 billion pesos last year to a negative numbers of 16 billion pesos. But when we see the final line in the net income, we see comparable numbers with the previous year. About the farming activity, we see here a drop in the grain activity. This is basically related to the holding results related to our stock. We have... lower prices and grains compared with the previous year. And also the evolution during the quarter of prices in pesos term was lower than inflation. So we are recognizing negative numbers because of our stock and also the remaining results of the previous campaign that are bringing some negative numbers because of the drop in prices. And about the wheat harvest, we have some reduction compared with the previous year related to reduction in yields and also in prices. About the sugarcane activity that is mainly in Brazil, we have very positive numbers. We have basically better prices than previous year. The cattle activity also, we have an improvement in kilograms produced and also in prices. So those are the main drivers of the drop on the farming activity. Going to next page. So here on the right side, we have the main explanation of why we are showing losses, both in IRSA and at Gresud levels. Basically, we are having negative numbers in the evaluation of our investment properties. Last year, we can see here that was a big jump in valuation because of the devaluation of the peso. So in peso's term, we recognized very positive numbers. And this year, since prices remain stable in dollar terms and the blue-chip swap reduced, and also we have an appreciation of the peso, we are recognizing losses. When we see the numbers in dollar terms, both in offices and land bank remain stable. And in shopping malls, we posted an improvement in valuations of around $120 million. um next page um so finally regarding the net financial results also in the in the left part you can see that last year we have a negative numbers because space mainly because of the evaluation that affected all our dollar denominated debt this year we have an appreciation of the peso so we are recognizing gains about that and also we have positive numbers on the fair value of our assets, financial assets that are basically our liquidity. With all those drivers, we are finishing the net result of the semester with negative numbers of 61.5 billion pesos. Attributable to a controlling interest is 64.4 billion pesos compared with a gain of 266 billion pesos last year. All about our debt, there was no major news during the quarter. The debt remained stable, $323 million during the end of December. It was a reduction in the debt compared with the previous quarter, with the previous year, sorry. And this is after paying the dividend of Cresut as well. So with this, we finish the formal presentation. Now we open the line for any questions that you can have.

We'll start the Q&A session. If you have a question, please use the chat. We will take the questions in the order we received them. Here we have some questions in the chat. Could you be able to give shareholders any kind of guide for what the second half capital allocation will look like between acquisitions, capex, dividends, and buybacks? I was surprised there wasn't another repurchase authorization in such a volatile market.

There was. Recently, we were repurchasing some shares of Cresut, close to a little less than 1%. That was approved recently, a few months ago, and was done before the end of the year. So, yes, it was done a small repurchase. Related to purchases and sales and capex, the company, each Cresut, it's... trying to find some purchases of land at the same time selling some assets that are mature. So we are in the process of that. We are expecting to do some of that in the second semester of the company. Related to the capex of the company, we keep doing the normal capex of the company. That is normally, it's like five, six million per year. So this is the normal size of Cresut by year.

Here we have other questions that are more macro. If you can walk us through the shifting regulatory environment regarding conversion of your land bank assets to productive land. I imagine this is related to some provinces that they are reviewing this regulatory laws, environment law.

Yes, mainly the province of Salta is speaking about that. It's changing regulation on the areas that can be developed. Sounds like the new government is intending to develop more land in Argentina than the opposite. And maybe that could be affecting our two projects in Anta and Los Pozos. Today we are not so sure because it's not finished, it's not done. Today we are not in big process of developing land, but what the government is intending probably will increase the surface of Argentina, mainly for the northern areas of Argentina, northwest of Argentina.

Good. And here a question regarding the upcoming harvest that is expected to be largest harvest and better. Do you expect numbers to be to join that direction, to be more positive?

Yes, we expect that because in general what we do related to each year is we plant, and we forecast related to price, related to cost, related to yield, and related to hectares planted. And this year, I would say, is very normal related to prices. It's positive because there is not a negative price to the beginning of the campaign. It's a little positive because of Argentinian effect mainly. Related to cost, it's not affecting neither. The yield sounds, but it's too early to speak because today in February, it's not done, but sounds like it's a normal year to the region. And in hectares, we planted majority what we expected. So big majority, so close to, there is a small, very small discount on the hectares planted. So yes, we are expecting a better, much better operational business than the last year, yes.

Let me add something about some accounting treatment that sometimes when we measure in our management presentations and internally, we tend to measure results in dollar terms. So when we So numbers on our financial statement, we have to do it in pesos, and in pesos term is adjusted by inflation. So sometimes we have positive numbers in dollar terms, but when you convert that in real pesos, sometimes turn to negative. For instance, our holding results, that if you have a stock of grains and that grains didn't improve as much as the inflation, then you have to recognize a negative number. So sometimes our financials are not the best proxy or the best way to see the real performance.

Yeah. Yeah, we have some additional questions. How is a recently completed new free trade deal with Europe going to affect your crops meet exports? And how is the new European Union tariff agreement going to affect you? If you can give Alejandro perhaps some color on how is this new trade with Europe? This is United States or Europe, I imagine?

Europe. Europe. This is recently signed and it's going to affect. In the case of beef, it's going to increase the quotient. beef exports to Europe. So that will be a benefit for Argentinian and South American beef. And we'll bring some competition of European products to Argentina that will make us to prepare better products and more efficient industrial things in Argentina. But in general, it's a positive measure for Argentinian farmers, what was finally signed between European Union and South American Mercosur.

I think we have a question regarding Agro-Fi. If you can give some color, how is the business performing?

Less taxes on many things like soybeans and other things. So it's going to benefit for farmers, for sure. It was verified by the farmers of Europe because benefits South American farmers.

Question about Agro-Fi.

what it was, sorry.

Last question regarding Agrofy, if we can give some color on how is the business performing or the expectations for this year.

Agrofy is a company that is reducing a lot its number of employees. The company began spending much more money thinking that sales would be much higher, but the main companies still are not decided to show their products and prices on the web. So the marketplace is beginning to work mainly in machinery and all kind of supplementary things for the farmers, not still for the main inputs as seed, herbicides, fertilizers or crops. And that makes us to reduce our staff Today, the stuff is closer to breakeven. The company has cash on the pockets and now is thinking how to achieve that to the breakeven because now it's very close. The company was spending $10 or $20 million per year. Now, we're spending less than $2 million of burn rate and has the money close to the money to achieve the positive. So the company is in a much better position than it was. understanding that the business, the industry, is delaying as much as possible the marketplace for agriculture. But Agrofy is still the leader. And now with the sales of that input for farmers, like tools or... tractors or all kind of machinery that is not a commodity for the farmer, it's making much higher returns. So we are expecting to put the company in a year and some in a breakeven position.

Great, last question is your view on a political side under President Milley with upcoming congressional elections. If you are positive on Milley winning and getting more power in the Congress.

Today, the situation and the people in favor of him is huge. Today, the majority of Argentina is liking what Millet is bringing. First of all, the decrease in inflation was the main, macroeconomy is working, and so some good effects are coming to the country. So today, if the election would be today, I don't have any doubt. That is, this year, they are expecting a much better situation related to Congress. Today, they are running the country with a very small percentage of the Congress, no? Very small in the two, Congress, the Senate, and the deputies. But we think that Millet is going to strengthen a lot during this year, and he's going to keep doing what he was doing. More measures, they're regulating, helping imports, and I probably... I think it's going to unify the currencies and it's going to, I think, keep decreasing the cost of the capital of Argentina. We see the companies now are beginning to, and Cresuda and IRSA, were using those tools, having bonds. And today the market is opening for long-term debt for Argentina. So yes, we think he's going to have much more support on the Congress and much more measures on the government. If that is the last question, I would thank everybody because of the presentation. Half a year for Brazil is not very relevant. The more are the third and the fourth, March and June. And we expect to keep having the three businesses very well run and very actively. And I hope to show more sales and buys in the two main countries that are Argentina and Brazil. And they are related to the farming. The summer is our main activity where soybean and corn, they are coming. So I'm very optimistic on the year. So just to thank you, everybody, and have a very good day. Thanks a lot.

Thank you.