Release Date: February 11, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Cresud SACIF y A (CRESY, Financial) reported a 9% increase in planted area compared to the previous year, achieving a record size in total agriculture across four countries.
- The company benefited from favorable climate conditions in the region, contributing to a positive outlook for crop yields.
- A reduction in crop export taxes in Argentina has led to a 5% increase in prices for farmers, benefiting the agricultural sector.
- Cresud SACIF y A (CRESY) distributed a significant dividend of $45,000 million pesos in November, representing a 7% dividend yield.
- The company achieved 100% occupancy in its office portfolio, indicating strong demand and effective asset management.
Negative Points
- Cresud SACIF y A (CRESY) reported a loss of ARS40.9 billion pesos, primarily due to non-cash effects related to the fair value of investment properties.
- The company experienced a decrease in tenant sales in its malls, with a decline of 8.5% compared to the same quarter last year.
- The hotel segment faced challenges with decreased revenues and occupancy due to the new economic environment in Argentina.
- The farming activity saw a drop in grain activity, attributed to lower prices and yields compared to the previous year.
- Cresud SACIF y A (CRESY) faced negative financial results due to the appreciation of the peso, impacting the valuation of investment properties and dollar-denominated debt.
Q & A Highlights
Q: Could you provide guidance on capital allocation for the second half, including acquisitions, CapEx, dividends, and buybacks?
A: Alejandro Elsztain, CEO: We recently completed a small share repurchase of less than 1%. We are exploring land purchases while selling mature assets. Our CapEx remains around ARS5 to ARS6 million annually.
Q: Can you discuss the regulatory environment regarding converting land bank assets to productive land?
A: Alejandro Elsztain, CEO: The province of Salta is revising regulations to potentially develop more land. This could impact our projects in Anta, but the final outcome is uncertain.
Q: What are your expectations for the upcoming harvest?
A: Alejandro Elsztain, CEO: We anticipate a better operational year compared to last year, with normal prices and yields. Most of the planned hectares have been planted, indicating a positive outlook.
Q: How will the new free trade deal with Europe affect your exports?
A: Alejandro Elsztain, CEO: The deal increases beef export quotas to Europe, benefiting Argentinian farmers. It will also introduce European competition, encouraging efficiency in Argentina.
Q: Can you provide an update on Agrofy's performance?
A: Alejandro Elsztain, CEO: Agrofy is reducing its workforce to approach break-even. The company is focusing on machinery and supplementary products, with expectations to reach break-even within a year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
