Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria

Management did not provide a full income statement summary such as revenue, EPS, or gross margin on the call, but said the quarter was affected by macro and operating headwinds. Adjusted EBITDA declined, mainly because of sugarcane and cattle-related valuation effects, while operating income excluding fair value changes in investment properties fell 12.4%. They also said the quarter included a loss of ARS 6.6 billion on investment properties, net financial results of ARS 6.3 billion, and bottom-line net result of ARS 5.2 billion, or ARS 3.5 billion attributable to controlling interest. On guidance, management said margins should decline somewhat this year because input costs rose more than 30% in some cases, but they still expect “good prices” and attractive margins if yields hold up; they also said they are optimistic about the year and expect strong operating results if climate does not worsen. For capital structure, they said Cresud received $40.1 million in dividends during the fiscal year, then $24.5 million more from Brasilagro after quarter-end and $7.8 million in cash dividends from IRSA, while the company started paying ARS 3.1 billion in dividends and completed an ARS 1 billion share repurchase.

Alejandro Elsztain emphasized that the core story remains strong agricultural economics in South America, but weather in Argentina is the main near-term problem. He highlighted expanding planted area to 260,000 hectares, ongoing land acquisitions in Brazil, and a growing real estate business where Cresud is beginning to sell developed farms in smaller parcels rather than only large blocks. His tone was constructive and confident, saying he is “very optimistic on the year,” while also acknowledging the need for more rain in Argentina and the pressure from higher input costs.

Matías Gaivironsky focused on the financial effects of inflation, FX, and asset valuation. He said inflation accelerated to 22% versus a 18% devaluation, creating a peso appreciation that affects dollar debt and asset valuation, and he cited a 12.4% decline in operating income excluding investment-property fair value changes. He also pointed to a loss of ARS 6.6 billion on investment properties, net financial results of ARS 6.3 billion, improved interest expense from debt reduction, consolidated net debt of $389.6 million, $40.1 million in dividends received during the fiscal year, and the ARS 3.1 billion dividend and ARS 1 billion buyback. On leverage, he noted IRSA debt fell from $755 million two years ago to $307 million.

Analysts asked about margin trends as costs rise, bond maturities, the impact of the government’s soy FX program, and whether Cresud will continue buybacks and dividends. Management said fertilizers and herbicides are up sharply and margins should soften, but yields and crop prices will be the key offset; they also said the soy FX measure had a positive but limited effect, roughly $2 million, and helped their service business. On the bond question, management said they are paying the note now and expect to have the tools to cover the remaining holdout amount in February if rules do not change. On capital returns, they declined to set targets but said their general pattern has been to pay dividends whenever possible.