Financial Performance - Total revenues for the year ended June 30, 2024, amounted to ARS 655,037 million, with the agricultural business contributing ARS 384,487 million and urban properties contributing ARS 270,550 million [335]. - Gross profit for the total segments was ARS 294,983 million, with a gross profit margin of approximately 45% [336]. - The company reported a profit from operations of ARS (136,236) million, indicating a challenging operational environment [336]. - The company reported a profit of ARS 67,856 million for the period, an increase of 48,175 million or 273.5% compared to a loss of ARS 162,123 million in the previous year [346]. - The company’s net profit for FY 2024 was ARS 93,980 million, down from ARS 290,458 million in FY 2023, primarily due to losses in the Urban Properties and Investment business [378]. Revenue Recognition - Revenue from agricultural activities primarily comes from sales of agricultural produce, with revenue recognized upon transfer of ownership risks and benefits [315]. - Revenue from the sale of grains is recognized based on the price determined for each client, considering foreign exchange rates at the delivery date [315]. - Rental income from shopping malls is recognized on a straight-line basis over the lease term, with contingent rents ranging from 2% to 12% of lessees' gross sales [317]. - The company recognizes revenue from hotel operations when services are provided, including room services and gastronomy [320]. - Revenue from the sale of real estate properties is recognized only when possession is transferred to the buyer, typically upon unconditional exchange of contracts [320]. Economic Environment - Argentine GDP decreased by 1.7% year-on-year in Q2 2024, an improvement from a 4.9% decrease in Q2 2023 [322]. - Inflation rates in Argentina reached 271.5% (CPI) and 284.4% (IPIM) for the fiscal year 2024, significantly higher than 115.6% and 112.8% in 2023 [323]. - The average exchange rate for USD was ARS 910.50 as of June 30, 2024, compared to ARS 256.50 in 2023, indicating a depreciation of the Peso by 255.0% [322]. - The unemployment rate in Argentina rose to 7.6% as of June 30, 2024, up from 6.2% in the previous year [321]. Agricultural Business Performance - Total revenues for the agricultural business reached ARS 384,487 million, an increase from ARS 323,676 million in the previous year, reflecting a growth of approximately 19% [338]. - Gross profit for the agricultural business was ARS 73,324 million, compared to ARS 49,272 million in the prior year, indicating a significant increase of around 49% [339]. - The agricultural business segment showed a revenue increase compared to the previous year, with revenues of ARS 378,132 million for the year ended June 30, 2023 [335]. - Agricultural Business revenues totaled ARS 258,632 million from Argentina and ARS 257,240 million from other countries, primarily Brazil with ARS 237,601 million [341]. Urban Properties and Investments - Urban properties and investments generated total revenues of ARS 270,550 million, with shopping malls contributing ARS 179,650 million and offices ARS 16,243 million [342]. - The gross profit for urban properties and investments was ARS 221,659 million, with a net loss from fair value adjustments of investment properties amounting to ARS 341,584 million [342]. - The company reported a segment profit of ARS 120,545 million for urban properties, despite a loss of ARS 56,829 million from offices [342]. - The net loss from fair value adjustments in the previous fiscal year was ARS 190,751 million, reflecting market challenges [343]. Costs and Expenses - General and administrative expenses were ARS 85,131 million, reflecting the company's cost management efforts [336]. - Selling expenses were reported at ARS 43,768 million, which is an increase from ARS 34,723 million, indicating rising costs in this area [339]. - General and administrative expenses increased to ARS 33,678 million from ARS 31,550 million, a rise of 2,128 million or 6.75% [346]. - The overall cost of goods sold was ARS 311,163 million, which represents an increase of 10,906 million or 3.6% from ARS 300,257 million in 2023 [347]. Debt and Financing - The company expects to incur total borrowings of ARS 822,535 million as of June 30, 2024, with ARS 346,944 million due within one year [404]. - Total debt as of June 30, 2024, was ARS 822,535 million, with non-current liabilities at ARS 475,591 million and current liabilities at ARS 346,944 million [417]. - The total borrowings decreased from ARS 973,601 million in June 2023 to ARS 822,535 million in June 2024, reflecting a reduction of approximately 15.5% [417]. - The company plans to continue refinancing short-term liabilities and working capital through various note issuances [421]. Legal and Regulatory Matters - The company is involved in a legal proceeding with Exagrind S.A. regarding damages from a fire, with a potential claim amounting to ARS 52,893,850 [492]. - Cresud has initiated judicial actions against the Province of Salta regarding fees for corn, soybeans, and sorghum campaigns, with estimated contingencies amounting to ARS 284.5 million at year-end [493]. - The company is subject to Argentine law regarding dividend distribution, requiring approval from shareholders at the annual meeting [509]. Future Outlook - The company anticipates continued growth in revenues and profitability driven by market expansion and new product developments in the agricultural sector [338]. - The company plans to focus on market expansion and new product development as part of its future strategy [346]. - The company is considering strategic acquisitions to bolster its market position, with a budget of USD 100 million allocated for potential deals [456].
Cresud(CRESY) - 2024 Q4 - Annual Report