Cresud(CRESY) - 2025 Q2 - Quarterly Report

Legal Information Company Overview Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria, founded in 1936, is an Argentine company focused on real estate and agriculture, with its 92nd fiscal year ending December 31, 2024, controlled by Eduardo S. Elsztain and affiliates - Company Name: Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria[3] - Company Activities: Real estate and agricultural activities[3] - Control Group: Eduardo S. Elsztain controls the company directly or through Inversiones Financieras del Sur S.A., Consultores Venture Capital Uruguay S.A., and Consultores Asset Management S.A[4] Company Ownership Structure | Metric | Value | | :--- | :--- | | Fiscal Year Number | 92 (commencing July 1, 2024) | | Company Bylaws Expiration Date | June 6, 2082 | | Ordinary Shares Issued | 603,140,435 shares | | Subscribed, Issued, and Paid-in Capital Par Value | 603 million Argentine Pesos | | Control Group's Direct and Indirect Participation in Capital | 230,771,688 shares | | Voting Shares (Direct and Indirect Equity) | 38.67% | Glossary Terms and Definitions This section provides non-technical definitions for specific terms used in the financial statements to aid reader comprehension, including company names, regulatory bodies, accounting standards, and abbreviations for key affiliates and entities - The glossary aims to help readers understand specific terms used in the notes to the financial statements, not to provide technical definitions[11] Key Term Examples | Term | Definition | | :--- | :--- | | Cresud, "the Company", "us" | Cresud S.A.C.I.F. y A. | | CNV | Securities Exchange Commission (Argentina) | | IFRS | International Financial Reporting Standards | | IRSA | IRSA Inversiones y Representaciones S.A. | Unaudited Condensed Interim Consolidated Financial Statements Unaudited Condensed Interim Consolidated Statement of Financial Position As of December 31, 2024, total assets decreased to ARS 3,955,326 million from ARS 4,207,077 million on June 30, 2024, with total equity at ARS 1,659,876 million and total liabilities at ARS 2,295,450 million Key Consolidated Statement of Financial Position Data (ARS million) | Metric | December 31, 2024 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 3,095,323 | 3,351,393 | -7.64% | | Current assets | 860,003 | 855,684 | 0.50% | | Total assets | 3,955,326 | 4,207,077 | -5.98% | | Equity attributable to owners of the parent | 739,254 | 843,378 | -12.35% | | Non-controlling interests | 920,622 | 1,051,029 | -12.41% | | Total equity | 1,659,876 | 1,894,407 | -12.38% | | Non-current liabilities | 1,477,235 | 1,516,093 | -2.56% | | Current liabilities | 818,215 | 796,577 | 2.72% | | Total liabilities | 2,295,450 | 2,312,670 | -0.74% | - Investment properties decreased from ARS 2,120,192 million on June 30, 2024, to ARS 1,918,764 million on December 31, 2024[14] - Biological assets (current) increased from ARS 70,602 million on June 30, 2024, to ARS 109,624 million on December 31, 2024[14] Unaudited Condensed Interim Consolidated Statement of Income and Other Comprehensive Income For the six months ended December 31, 2024, the company reported a net loss of ARS 64,391 million, a significant decline from the prior year's net profit of ARS 266,118 million, primarily due to a net loss of ARS 227,858 million from fair value adjustments to investment properties, despite a slight 0.7% increase in operating revenue and a 25.9% decrease in gross profit Key Consolidated Statement of Income and Other Comprehensive Income Data (ARS million) | Metric | December 31, 2024 (Six Months) | December 31, 2023 (Six Months) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 449,163 | 445,859 | 0.7% | | Costs | (298,248) | (253,034) | 17.9% | | Gross profit | 153,481 | 207,081 | -25.9% | | Net (loss)/gain from fair value adjustments to investment properties | (227,858) | 304,210 | -174.9% | | Operating (loss)/profit | (135,606) | 449,429 | -130.2% | | (Loss)/profit for the period | (64,391) | 266,118 | -124.2% | | (Loss)/profit attributable to owners of the parent | (61,541) | 106,267 | -157.9% | | Basic (loss)/earnings per share | (103.27) | 179.48 | -157.5% | - Fair value adjustments to investment properties shifted from a gain of ARS 304,210 million in the prior year to a loss of ARS 227,858 million for the six months ended December 31, 2024, significantly impacting net profit[18] - Gain on disposal of agricultural land significantly increased by 158.0%, from ARS 9,196 million in the prior year to ARS 23,726 million[18] Unaudited Condensed Interim Consolidated Statement of Changes in Shareholders' Equity For the six months ended December 31, 2024, equity attributable to owners of the parent decreased from ARS 843,378 million on June 30, 2024, to ARS 739,254 million, primarily due to the loss for the period, other comprehensive losses, and dividend distribution, partially offset by the exercise of warrants Key Consolidated Statement of Changes in Shareholders' Equity Data (ARS million) | Metric | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | | Balance at beginning of period | 843,378 | 936,215 | | Loss for the period | (61,541) | 106,267 | | Other comprehensive loss | (30,620) | 107,984 | | Dividend distribution | (47,338) | (111,708) | | Exercise of warrants | 45,079 | 5,685 | | Balance at end of period | 739,254 | 843,378 | - The company repurchased treasury shares on December 31, 2024, resulting in a decrease of ARS 6,517 million in equity attributable to owners of the parent[24] - Non-controlling interests decreased from ARS 1,051,029 million on June 30, 2024, to ARS 920,622 million on December 31, 2024, primarily due to the loss for the period and dividend distribution[24] Unaudited Condensed Interim Consolidated Statement of Cash Flows For the six months ended December 31, 2024, the company reported a net cash outflow of ARS 20,371 million from operating activities and ARS 62,277 million from investing activities, offset by a net cash inflow of ARS 40,338 million from financing activities, resulting in cash and cash equivalents of ARS 97,928 million at period-end Key Consolidated Statement of Cash Flows Data (ARS million) | Metric | December 31, 2024 (Six Months) | December 31, 2023 (Six Months) | Change (%) | | :--- | :--- | :--- | :--- | | Net cash from operating activities | (20,371) | 106,197 | -119.2% | | Net cash from investing activities | (62,277) | 118,217 | -152.7% | | Net cash from financing activities | 40,338 | (244,973) | -116.5% | | Net decrease in cash and cash equivalents | (42,310) | (20,559) | 105.8% | | Cash and cash equivalents at end of period | 97,928 | 221,670 | -55.8% | - Net cash from operating activities shifted from an inflow of ARS 106,197 million in the prior year to an outflow of ARS 20,371 million for the six months ended December 31, 2024, primarily due to income tax payments and reduced cash flow before taxes from operating activities[38] - Net cash from financing activities shifted from an outflow of ARS 244,973 million in the prior year to an inflow of ARS 40,338 million for the six months ended December 31, 2024, driven by the issuance of borrowings, new notes, and the exercise of warrants[38] Notes to the Unaudited Condensed Interim Consolidated Financial Statements Note 1 - The Group's Business and General Information The Cresud Group, founded in 1936, initially focused on rural and urban loans before transitioning to agricultural activities, later investing in real estate company IRSA in 2002 and making it a primary subsidiary by 2009, now operating two main business lines: agriculture and urban properties and investments - Cresud was founded in 1936 as a subsidiary of the Belgian company Credit Foncier, initially focusing on rural and urban loans and real estate management[40] - In 2002, Cresud acquired a 19.85% stake in IRSA, increasing it to 55.64% by 2009, making IRSA its primary subsidiary[41] - As of December 31, 2024, the Group primarily operates two business lines: agricultural business and urban properties and investments[43] Note 2 - Summary of Significant Accounting Policies These financial statements are prepared in accordance with IAS 34 "Interim Financial Reporting" and should be read in conjunction with the Group's annual consolidated financial statements as of June 30, 2024, and have been restated under IAS 29 using the National Consumer Price Index due to Argentina's classification as a highly inflationary economy since July 1, 2018 - The financial statements are prepared in accordance with IAS 34 "Interim Financial Reporting" and should be read in conjunction with the Group's annual consolidated financial statements as of June 30, 2024[44] - Argentina has been classified as a highly inflationary economy since July 1, 2018, requiring the financial statements to be restated in accordance with IAS 29[47][50] - The index used for inflation adjustments is the National Consumer Price Index (National CPI) since January 2017[48] Price Variation Rates | Period | Price Variation Rate | | :--- | :--- | | December 31, 2024 (Six Months) | 21% | | December 31, 2024 (Twelve Months) | 118% | Note 3 - Seasonal Effects on Operations Both the Group's agricultural and urban properties and investments businesses are subject to seasonal effects, with grain harvesting and sales occurring in specific regions, cattle production peaking in the second quarter, and shopping center sales reaching their highest levels during winter and year-end holidays while being lowest in summer - Agricultural business is subject to seasonal effects, with corn and soybean harvests in Argentina occurring in June and March, respectively, while Brazilian soybeans are harvested in February, and corn has two seasons[54] - Cattle production typically sees higher output in the second quarter due to more favorable conditions[54] - Shopping center sales are lowest during the Argentine summer (January and February) and peak during winter holidays (July) and year-end holidays (December)[55] Note 4 - Acquisitions and Disposals For the six months ended December 31, 2024, the Group executed significant acquisitions and disposals across its agricultural and urban real estate segments, including farm sales and property acquisitions by its subsidiaries - On August 6, 2024, BrasilAgro acquired Agrícola Nova Horizonte S.A., an agricultural company focused on grain production with 4,767 hectares under lease, for BRL 6.2 million[57][58][59] - On September 26, 2024, BrasilAgro completed the sale of the remaining 1,157 hectares of Alto Taquari farm for the equivalent of BRL 189.4 million[61][62] - On September 30, 2024, Cresud sold 3,630 hectares of Los Pozos farm for a total of USD 2.23 million, with USD 1.1 million already collected[65] - On August 1, 2024, IRSA acquired an adjacent property to Alto Avellaneda shopping center for USD 12.2 million, having paid USD 9.2 million[69][71] - On October 15, 2024, IRSA sold office floors at "261 Della Paolera" for approximately USD 7.1 million, with USD 6.0 million collected[77][80] - On December 3, 2024, IRSA acquired the business assets of "Terrazas de Mayo" shopping center for USD 27.75 million, with 60% already paid[81][82] Note 5 - Financial Risk Management and Fair Value Estimates These financial statements do not include all financial risk management information and should be read in conjunction with the annual financial statements, noting no significant changes in the Group's risk management or policies since the fiscal year-end, nor any material changes in business or economic conditions affecting the fair value of assets or liabilities as of this report's issuance - These financial statements do not contain all financial risk management information and should be read in conjunction with the annual financial statements[83] - There have been no significant changes in the Group's risk management or risk management policies since June 30, 2024[83] - As of the date of issuance of these financial statements, no significant changes in business or economic conditions have occurred that would affect the fair value of the Group's assets or liabilities[84] Note 6 - Segment Information The Group's operating segment information is reported by product and service, encompassing agricultural business and urban properties and investments, with an operating loss of ARS 135,606 million for the six months ended December 31, 2024, primarily due to net losses from fair value adjustments to investment properties in the urban real estate segment - The Group's operating segment information is reported by product and service, including agricultural business and urban properties and investments[85] Group Operating Segment Performance (ARS million) - December 31, 2024 (Six Months) | Metric | Agricultural Business | Urban Properties and Investments Business | Total Segment Information | | :--- | :--- | :--- | :--- | | Revenue | 238,715 | 170,141 | 408,856 | | Costs | (216,929) | (38,218) | (255,147) | | Gross profit/(loss) | 22,766 | 131,923 | 154,689 | | Net (loss)/gain from fair value adjustments to investment properties | (646) | (226,998) | (227,644) | | Operating profit/(loss) | 8,429 | (143,043) | (134,614) | | Segment profit/(loss) | 7,306 | (118,982) | (111,676) | Group Operating Segment Performance (ARS million) - December 31, 2023 (Six Months) | Metric | Agricultural Business | Urban Properties and Investments Business | Total Segment Information | | :--- | :--- | :--- | :--- | | Revenue | 225,523 | 183,583 | 409,106 | | Costs | (181,614) | (32,373) | (213,987) | | Gross profit | 57,588 | 151,210 | 208,798 | | Net gain from fair value adjustments to investment properties | 2,079 | 304,614 | 306,693 | | Operating profit | 41,449 | 423,929 | 465,378 | | Segment profit | 41,332 | 465,239 | 506,571 | - On December 31, 2024, the urban properties and investments business reported a net loss of ARS 226,998 million from fair value adjustments to investment properties, primarily due to implied exchange rate variations below inflation, resulting in a 28.35% decrease in the real value of office buildings, undeveloped land, and other leased properties[92][93] I) Agricultural Business Line The agricultural business line, comprising agricultural production, land transformation and sales, corporate, and other segments, reported an operating profit of ARS 8,429 million for the six months ended December 31, 2024, a significant decrease from ARS 41,449 million in the prior year, primarily due to losses in the agricultural production segment Agricultural Business Line Performance (ARS million) - December 31, 2024 (Six Months) | Metric | Agricultural Production | Land Transformation and Sales | Corporate | Other | Total Agricultural Business | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 148,762 | - | - | 89,953 | 238,715 | | Operating profit/(loss) | (3,667) | 31,088 | (2,617) | (16,375) | 8,429 | | Segment profit/(loss) | (3,983) | 31,088 | (2,617) | (17,182) | 7,306 | Agricultural Business Line Performance (ARS million) - December 31, 2023 (Six Months) | Metric | Agricultural Production | Land Transformation and Sales | Corporate | Other | Total Agricultural Business | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 153,519 | - | - | 72,004 | 225,523 | | Operating profit | 3,306 | 23,151 | (2,633) | 17,625 | 41,449 | | Segment profit | 5,483 | 23,151 | (2,633) | 15,331 | 41,332 | - Operating profit from the land transformation and sales segment increased from ARS 23,151 million in the prior year to ARS 31,088 million for the six months ended December 31, 2024, primarily driven by gains on disposal of agricultural land[90] II) Urban Properties and Investments Business Line The urban properties and investments business line, comprising shopping centers, office buildings, sales and development, hotels, and other segments, reported an operating loss of ARS 143,043 million for the six months ended December 31, 2024, primarily due to net losses from fair value adjustments to investment properties Urban Properties and Investments Business Line Performance (ARS million) - December 31, 2024 (Six Months) | Metric | Shopping Centers | Office Buildings | Sales and Development | Hotels | Other | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 120,943 | 8,690 | 6,894 | 30,545 | 3,069 | 170,141 | | Operating profit/(loss) | 212,264 | (97,938) | (260,638) | 3,260 | 9 | (143,043) | | Segment profit/(loss) | 212,264 | (97,938) | (260,638) | 3,260 | 24,070 | (118,982) | Urban Properties and Investments Business Line Performance (ARS million) - December 31, 2023 (Six Months) | Metric | Shopping Centers | Office Buildings | Sales and Development | Hotels | Other | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 122,405 | 7,648 | 9,858 | 41,094 | 2,578 | 183,583 | | Operating profit | 426,437 | 6,325 | (37,576) | 13,719 | 15,024 | 423,929 | | Segment profit | 426,437 | 6,325 | (37,576) | 13,719 | 56,334 | 465,239 | - Net gain from fair value adjustments to investment properties in the shopping centers segment decreased from ARS 331,033 million in the prior year to ARS 119,242 million for the six months ended December 31, 2024, while the sales and development segment recorded a loss of ARS 241,355 million[92][95] Note 7 - Investments in Associates and Joint Ventures As of December 31, 2024, the Group's total investments in associates and joint ventures increased to ARS 186,740 million from ARS 166,663 million on June 30, 2024, with a profit share of ARS 23,654 million for the period, partially offset by dividend distributions of ARS 2,390 million Changes in Investments in Associates and Joint Ventures (ARS million) | Metric | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | | Balance at beginning of period | 166,663 | 178,574 | | Share of profit | 23,654 | 39,921 | | Dividends | (2,390) | (20,896) | | Balance at end of period | 186,740 | 166,663 | - Investment in BHSA increased from ARS 125,724 million on June 30, 2024, to ARS 137,603 million on December 31, 2024, with a share of comprehensive income of ARS 14,710 million[100] - Investment in La Rural S.A. increased from ARS 12,862 million on June 30, 2024, to ARS 16,835 million on December 31, 2024, with a share of comprehensive income of ARS 6,027 million[100] Note 8 - Investment Properties As of December 31, 2024, the fair value of the Group's investment properties decreased to ARS 1,918,764 million from ARS 2,120,192 million on June 30, 2024, with a net loss of ARS 227,858 million from fair value adjustments for the period, primarily influenced by changes in macroeconomic conditions Changes in Investment Properties (ARS million) | Metric | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | | Fair value at beginning of period | 2,120,192 | 2,638,688 | | Net (loss)/gain from fair value adjustments | (227,858) | (422,361) | | Fair value at end of period | 1,918,764 | 2,120,192 | - As of December 31, 2024, investment property values included ARS 982,785 million for shopping centers and ARS 603,220 million for undeveloped land[104] - The net loss of ARS 230,596 million from fair value adjustments to investment properties was primarily due to macroeconomic impacts from inflation and changes in reference exchange rates[105] - The "Ramblas del Plata" project has obtained its environmental suitability certificate for the first stage and is currently tendering for earthworks, infrastructure, and road construction[113] Note 9 - Property, Plant and Equipment As of December 31, 2024, the Group's net book value of property, plant, and equipment decreased to ARS 572,743 million from ARS 618,361 million on June 30, 2024, with additions of ARS 20,376 million for the period, but a net reduction due to currency translation adjustments and depreciation expenses Changes in Property, Plant and Equipment (ARS million) | Metric | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | | Net book value at beginning of period | 618,361 | 655,054 | | Additions | 20,376 | 58,927 | | Disposals | (1,572) | (27,136) | | Currency translation adjustments | (55,648) | (61,184) | | Depreciation expense | (15,764) | (27,290) | | Net book value at end of period | 572,743 | 618,361 | - As of December 31, 2024, the net book value of owned agricultural land was ARS 454,901 million, and buildings and facilities were ARS 80,529 million[115] - Of the depreciation expense, ARS 2,796 million was recognized in "Costs," ARS 1,047 million in "General and administrative expenses," ARS 242 million in "Selling expenses," and ARS 11,679 million was capitalized as biological asset costs[116] Note 10 - Trading Properties As of December 31, 2024, the Group's total trading properties decreased to ARS 22,465 million from ARS 24,159 million on June 30, 2024, comprising ARS 22,110 million in non-current and ARS 355 million in current trading properties Changes in Trading Properties (ARS million) | Metric | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | | Balance at beginning of period | 24,159 | 27,808 | | Additions | 792 | 1,102 | | Disposals | (914) | (3,466) | | Balance at end of period | 22,465 | 24,159 | | Non-current | 22,110 | 23,660 | | Current | 355 | 499 | - The decrease in trading properties was primarily influenced by currency translation adjustments and disposals[118] Note 11 - Intangible Assets As of December 31, 2024, the Group's net book value of intangible assets decreased to ARS 73,580 million from ARS 87,801 million on June 30, 2024, with additions of ARS 2,760 million for the period, but reduced by impairment losses of ARS 11,849 million and amortization expenses of ARS 1,332 million Changes in Intangible Assets (ARS million) | Metric | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | | Net book value at beginning of period | 87,801 | 44,856 | | Additions | 2,760 | 12,173 | | Disposals | (5,662) | (287) | | Impairment | (11,849) | - | | Amortization expense | (1,332) | (1,867) | | Net book value at end of period | 73,580 | 87,801 | - The impairment loss of ARS 11,849 million was primarily due to the exchange rate variation for the period being lower than accumulated inflation, causing the dollar reference value of units to be received through barter agreements to be lower than their inflation-adjusted cost when converted to Argentine Pesos[121] - Of the amortization expense, ARS 1,064 million was recognized in "Costs" and ARS 268 million in "General and administrative expenses"[119] Note 12 - Right-of-Use Assets and Lease Liabilities As of December 31, 2024, the Group's total right-of-use assets amounted to ARS 101,611 million and total lease liabilities to ARS 96,472 million, with right-of-use assets primarily comprising agricultural land, convention centers, and office buildings, and depreciation expense for the period totaling ARS 10,586 million Right-of-Use Assets (ARS million) | Asset Type | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | | Agricultural land | 89,274 | 78,872 | | Convention centers | 4,099 | 10,430 | | Office buildings, shopping centers and other buildings | 5,000 | 5,453 | | Machinery and equipment | 3,238 | 2,134 | | Total right-of-use assets | 101,611 | 96,889 | Lease Liabilities (ARS million) | Liability Type | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | | Agricultural land | 91,376 | 82,304 | | Convention centers | 2,153 | 10,867 | | Office buildings, shopping centers and other buildings | 2,943 | 3,466 | | Total lease liabilities | 96,472 | 96,637 | | Non-current | 75,723 | 74,184 | | Current | 20,749 | 22,453 | - As of December 31, 2024, depreciation expense for right-of-use assets totaled ARS 10,586 million, of which ARS 9,437 million was capitalized as biological asset costs[125] Note 13 - Biological Assets As of December 31, 2024, the Group's net book value of biological assets increased to ARS 146,882 million from ARS 104,550 million on June 30, 2024, comprising ARS 37,258 million in non-current and ARS 109,624 million in current biological assets, with initial recognition and fair value changes for the period totaling ARS 4,194 million Changes in Biological Assets (ARS million) | Metric | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | | Net book value at beginning of period | 104,550 | 126,007 | | Initial recognition and fair value changes | 4,194 | 7,072 | | Purchases | 7,798 | 8,998 | | Decrease due to harvest | (85,733) | (265,758) | | Sales | (14,489) | (24,716) | | Net book value at end of period | 146,882 | 104,550 | | Non-current (productive) | 37,258 | 33,948 | | Current (consumable) | 109,624 | 70,602 | - Initial recognition and fair value changes for biological assets with a production cycle exceeding one year (i.e., livestock) amounted to ARS 3,912 million, with ARS 5,444 million attributed to price changes and (ARS 1,532) million to physical changes[127] Production Capitalized Costs as of December 31, 2024 (ARS million) | Item | Amount | | :--- | :--- | | Materials and services | 112,599 | | Salaries, social security costs and other personnel expenses | 6,315 | | Depreciation and amortization | 21,116 | | Total | 148,671 | Note 14 - Inventories As of December 31, 2024, the Group's total inventories decreased to ARS 105,990 million from ARS 140,854 million on June 30, 2024, comprising ARS 105,389 million in agricultural inventories and ARS 601 million in hotel supplies Inventory Details (ARS million) | Inventory Type | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | | Crops | 33,701 | 63,316 | | Materials and supplies | 70,442 | 75,489 | | Sugarcane | 1,246 | 1,225 | | Total agricultural inventories | 105,389 | 140,030 | | Hotel supplies | 601 | 824 | | Total inventories | 105,990 | 140,854 | - The decrease in inventories was primarily attributable to a reduction in crop inventories[132] Note 15 - Financial Instruments by Category This note presents financial assets and liabilities by category, reconciled with corresponding items in the consolidated statement of financial position, with total financial assets of ARS 817,300 million and total financial liabilities of ARS 1,413,894 million as of December 31, 2024, classified by fair value hierarchy (Level 1, Level 2, Level 3) - Financial assets and liabilities are classified by fair value hierarchy: Level 1, Level 2, and Level 3[133] Financial Assets (ARS million) - December 31, 2024 | Category | Amortized Cost | Level 1 | Level 2 | Level 3 | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Trade and other receivables | 323,849 | 45,874 | - | - | 369,723 | | Investments in financial assets | 4,121 | 216,072 | - | - | 220,193 | | Derivative financial instruments | - | 8,335 | 1,542 | 1 | 9,878 | | Cash and cash equivalents | 28,320 | 41,592 | - | - | 69,912 | | Total financial assets | 388,464 | 311,948 | 1,542 | 1 | 701,955 | Financial Liabilities (ARS million) - December 31, 2024 | Category | Amortized Cost | Level 1 | Total | | :--- | :--- | :--- | :--- | | Trade and other payables | 254,239 | - | 254,239 | | Borrowings | 1,016,200 | - | 1,016,200 | | Derivative financial instruments | - | 26,150 | 26,150 | | Total financial liabilities | 1,270,439 | 26,150 | 1,296,589 | - As of December 31, 2024, there were no differences in the valuation models used for Level 2 instruments compared to those used on June 30, 2024[138] Note 16 - Trade and Other Receivables As of December 31, 2024, the Group's total trade and other receivables slightly decreased to ARS 479,959 million from ARS 488,584 million on June 30, 2024, with trade, lease, and service receivables at ARS 315,281 million and prepayments at ARS 77,233 million Trade and Other Receivables Details (ARS million) | Item | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | | Trade, lease and service receivables | 315,281 | 311,550 | | Less: Allowance for doubtful accounts | (5,109) | (5,184) | | Total trade receivables | 310,172 | 306,366 | | Prepayments | 77,233 | 71,746 | | Tax receivables | 37,660 | 31,116 | | Total trade and other receivables | 479,959 | 488,584 | | Non-current | 158,452 | 171,624 | | Current | 321,507 | 316,960 | Changes in Allowance for Doubtful Accounts (ARS million) | Item | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | | Balance at beginning of period | 5,184 | 6,806 | | Additions | 857 | 1,547 | | Reversals | (191) | (275) | | Currency translation adjustments | 211 | 3,590 | | Used during the period | (149) | (19) | | Inflation adjustment | (803) | (6,465) | | Balance at end of period | 5,109 | 5,184 | - The carrying amounts of trade and other receivables approximate their fair values due to their short-term nature, making the discount effect insignificant[142] Note 17 - Cash Flow and Cash Equivalents Information For the six months ended December 31, 2024, the Group reported a net cash outflow of ARS 13,487 million from operating activities before tax, a significant shift from the prior year's net inflow of ARS 112,684 million, with non-cash transactions including increases in investment properties, decreases in property, plant, and equipment, and currency translation adjustments for associates and joint ventures Operating Cash Flow Details (ARS million) | Item | December 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | (Loss)/profit for the period | (64,391) | 266,118 | | Income tax | (22,648) | 82,064 | | Amortization and depreciation | 6,736 | 6,242 | | Net loss/(gain) from fair value adjustments to investment properties | 227,858 | (304,210) | | Net financial results | (96,829) | 147,559 | | Net cash from operating activities before tax | (13,487) | 112,684 | - The significant decrease in operating cash flow was primarily attributable to the loss for the period, net loss from fair value adjustments to investment properties, and the negative impact of net financial results[145] - Non-cash transactions for the period included an increase in investment properties of ARS 12,397 million through trade and other payables, and currency translation adjustments and other comprehensive income for associates and joint ventures of ARS 30,920 million[147] Note 18 - Trade and Other Payables As of December 31, 2024, the Group's total trade and other payables slightly increased to ARS 371,544 million from ARS 362,283 million on June 30, 2024, with trade payables at ARS 209,824 million and advances from sales, leases, and services at ARS 54,724 million Trade and Other Payables Details (ARS million) | Item | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | | Trade payables | 209,824 | 171,851 | | Advances from sales, leases and services | 54,724 | 74,713 | | Accrued invoices | 21,508 | 15,651 | | Deferred income | 532 | 572 | | Admission fees | 34,635 | 35,623 | | Deposits | 538 | 696 | | Total trade payables | 321,761 | 299,106 | | Dividends payable to non-controlling interests | 278 | 7,960 | | Tax payables | 27,414 | 18,931 | | Directors' fees | 4,557 | 6,762 | | Management fees | - | 9,529 | | Other | 17,534 | 19,995 | | Total other payables | 49,783 | 63,177 | | Total trade and other payables | 371,544 | 362,283 | | Non-current | 62,962 | 61,275 | | Current | 308,582 | 301,008 | - Trade payables significantly increased, while advances from sales, leases, and services decreased[149] Note 19 - Provisions As of December 31, 2024, the Group's total provisions slightly decreased to ARS 31,417 million from ARS 31,706 million on June 30, 2024, comprising ARS 31,383 million for legal claims and ARS 34 million for investments in associates and joint ventures, with the IDBD lawsuit ongoing and relevant provisions made Changes in Provisions (ARS million) | Item | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | | Balance at beginning of period | 31,706 | 32,994 | | Additions | 2,662 | 10,216 | | Reductions | (457) | (506) | | Inflation adjustment | (2,195) | (10,194) | | Balance at end of period | 31,417 | 31,706 | | Non-current | 26,382 | 26,142 | | Current | 5,035 | 5,564 | - IDBD filed a lawsuit against Dolphin BV and IRSA on December 26, 2021, claiming ILS 140 million, with legal proceedings ongoing and the company having made relevant provisions[155][159] - On April 9, 2024, the court dismissed IRSA's appeal regarding applicable jurisdiction and the form of claim notification, ordering IRSA and Dolphin to pay ILS 25,000 in costs[157] Note 20 - Borrowings As of December 31, 2024, the Group's total borrowings increased to ARS 1,016,200 million from ARS 996,360 million on June 30, 2024, with non-convertible notes accounting for ARS 895,806 million and bank loans for ARS 84,451 million, as both Cresud and IRSA issued new notes for debt refinancing and working capital during the period Borrowings Details (ARS million) | Item | December 31, 2024 (Carrying Amount) | June 30, 2024 (Carrying Amount) | | :--- | :--- | :--- | | Non-convertible notes | 895,806 | 892,026 | | Bank loans | 84,451 | 51,791 | | Bank overdrafts | 27,704 | 40,158 | | Other | 8,239 | 12,385 | | Total borrowings | 1,016,200 | 996,360 | | Non-current | 628,242 | 576,097 | | Current | 387,958 | 420,263 | - On July 18, 2024, Cresud issued Series XLVI notes totaling USD 28.6 million at a fixed interest rate of 1.5%[162] - On November 15, 2024, Cresud issued Series XLVII notes totaling USD 64.4 million at a fixed interest rate of 7.0%, maturing on November 15, 2028[163] - On October 23, 2024, IRSA issued Series XXII and XXIII notes totaling USD 67.3 million with interest rates of 5.75% and 7.25%, respectively[164] Note 21 - Taxation For the six months ended December 31, 2024, the Group's income tax expense was ARS 22,648 million, a significant shift from (ARS 82,064) million in the prior year, with the net balance of deferred tax assets and liabilities improving to (ARS 666,014) million from (ARS 761,213) million on June 30, 2024 Income Tax Details (ARS million) | Item | December 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Current income tax | (62,320) | (25,859) | | Deferred income tax | 84,968 | (56,205) | | Income tax | 22,648 | (82,064) | Changes in Deferred Income Tax Account (ARS million) | Item | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | | Balance at beginning of period | (761,213) | (864,233) | | Recognized in profit or loss | 84,968 | 97,354 | | Balance at end of period | (666,014) | (761,213) | - Income tax expense shifted from a negative value in the prior year to a positive value, primarily due to a significant positive impact from deferred income tax[165] Note 22 - Revenues For the six months ended December 31, 2024, the Group's total revenue slightly increased by 0.7% to ARS 449,163 million from ARS 445,859 million in the prior year, with agricultural business revenue at ARS 237,291 million and urban properties and investments business revenue at ARS 211,872 million Revenue Details (ARS million) | Revenue Source | December 31, 2024 | December 31, 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Agricultural business sales and services revenue | 237,291 | 225,005 | 5.5% | | Urban properties and investments business sales and services revenue | 211,872 | 220,854 | -4.1% | | Total revenue | 449,163 | 445,859 | 0.7% | - Agricultural business revenue growth was primarily driven by increased sales of supplies and livestock[166] - Urban properties and investments business revenue decreased primarily due to reduced income from hotel operations and tourism services[166] Note 23 - Costs For the six months ended December 31, 2024, the Group's total costs increased by 17.9% to ARS 298,248 million from ARS 253,034 million in the prior year, with agricultural business sales and services costs at ARS 216,795 million and urban properties and investments business sales and services costs at ARS 81,320 million Cost Details (ARS million) | Cost Source | December 31, 2024 | December 31, 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Agricultural business sales and services costs | 216,795 | 181,470 | 19.5% | | Urban properties and investments business sales and services costs | 81,320 | 71,414 | 13.9% | | Total costs | 298,248 | 253,034 | 17.9% | - Agricultural business cost growth was primarily influenced by increased costs of crops and supplies[167] - Urban properties and investments business cost growth was primarily influenced by increased lease and service costs[167] Note 24 - Expenses by Nature Group expenses are functionally classified under "Costs," "General and administrative expenses," and "Selling expenses," totaling ARS 382,005 million for the six months ended December 31, 2024, an increase from ARS 323,813 million in the prior year, with agricultural products and biological asset changes, salaries and social security costs, and cost of goods sold and services provided being the main components Expenses by Nature (ARS million) | Nature of Expense | December 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Agricultural products and biological assets changes | 98,947 | 108,040 | | Salaries, social security costs and other personnel expenses | 63,146 | 59,878 | | Fees for services and payments | 35,633 | 40,917 | | Cost of goods sold and services provided | 87,579 | 37,636 | | Maintenance, security, cleaning, repairs and others | 26,442 | 22,382 | | Taxes and contributions | 17,731 | 22,618 | | Advertising and other selling expenses | 11,764 | 12,282 | | Freight | 11,954 | 7,812 | | Directors' fees | 9,079 | (6,966) | | Depreciation and amortization | 6,736 | 6,242 | | Total expenses | 382,005 | 323,813 | - Cost of goods sold and services provided significantly increased, while agricultural products and biological asset changes costs slightly decreased[169] - Directors' fees shifted from a negative value (reversal) in the prior year to a positive value for the six months ended December 31, 2024, reflecting the approval of board remuneration[169][170] Note 25 - Other Operating Results, Net For the six months ended December 31, 2024, the Group's other operating results, net, amounted to (ARS 1,198) million, a decrease from ARS 11,998 million in the prior year, primarily due to impairment losses on intangible assets and the negative impact of legal proceedings and other contingencies Other Operating Results, Net (ARS million) | Item | December 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Gain from commodity derivative financial instruments | 3,386 | 2,907 | | Gain/(loss) on disposal of property, plant and equipment | 3 | (2,361) | | Impairment of intangible assets | (11,849) | - | | Gain/(loss) on disposal of joint ventures | 2,061 | (1,883) | | Legal proceedings and other contingencies | (2,236) | (4,546) | | Interest and allowances generated by operating assets | 10,593 | 15,765 | | Total | (1,198) | 11,998 | - The impairment loss of ARS 11,849 million on intangible assets was the primary reason for the negative shift in other operating results, net, for the period[172] - Interest and allowances generated by operating assets decreased from ARS 15,765 million in the prior year to ARS 10,593 million for the six months ended December 31, 2024[172] Note 26 - Financial Results, Net For the six months ended December 31, 2024, the Group's net financial results significantly improved to ARS 24,913 million from (ARS 144,523) million in the prior year, primarily driven by net exchange gains and fair value gains on financial assets and liabilities, despite negative impacts from inflation adjustments Net Financial Results (ARS million) | Item | December 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Financial income | 3,350 | 18,864 | | Financial costs | (37,109) | (40,676) | | Other financial results: | | | | Net exchange differences | 36,726 | (455,008) | | Fair value gains on financial assets and liabilities | 68,842 | 206,729 | | Loss from derivative financial instruments (excluding commodities) | (12,401) | (33,064) | | Inflation adjustment | (34,418) | 148,683 | | Net financial results | 24,913 | (144,523) | - Net exchange differences shifted from a loss of (ARS 455,008) million in the prior year to a gain of ARS 36,726 million for the six months ended December 31, 2024, serving as a primary driver for the improvement in net financial results[173] - Fair value gains on financial assets and liabilities decreased from ARS 206,729 million in the prior year to ARS 68,842 million for the six months ended December 31, 2024[173] Note 27 - Related Parties Transactions As of December 31, 2024, the Group's net balance with related parties slightly decreased to ARS 17,683 million from ARS 18,632 million on June 30, 2024, with related party transactions for the period resulting in a loss of (ARS 9,095) million, a shift from a profit of ARS 3,327 million in the prior year, primarily due to the negative impact of directors' fees Summary of Related Party Balances (ARS million) | Item | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | | Trade and other receivables | 29,688 | 42,544 | | Investments in financial assets | 4,282 | 4,582 | | Trade and other payables | (15,288) | (27,861) | | Borrowings | (999) | (633) | | Total | 17,683 | 18,632 | Summary of Related Party Transaction Results (ARS million) | Related Party | December 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total associates and joint ventures | 156 | 1,933 | | Total other related parties | 423 | (5,202) | | Total parent company | 15 | - | | Total directors and key management personnel | (9,689) | 6,596 | | Total | (9,095) | 3,327 | - Directors' and key management personnel expenses shifted from ARS 6,966 million (management fees) in the prior year to (ARS 9,079) million (management fees) for the six months ended December 31, 2024, primarily contributing to the negative related party transaction results[179] Note 28 - CNV General Resolution N° 622 This note details information disclosed in the financial statements in compliance with CNV General Resolution N° 622, covering property, plant and equipment, intangible assets, equity investments, other investments, provisions and allowances, cost of sales, and foreign currency assets and liabilities Information Required by CNV General Resolution N° 622 | Appendix | Note | | :--- | :--- | | Appendix A - Property, plant and equipment | Note 8 - Investment properties; Note 9 - Property, plant and equipment | | Appendix B - Intangible assets | Note 11 - Intangible assets | | Appendix C - Equity investments | Note 7 - Investments in associates and joint ventures | | Appendix E - Provisions and allowances | Note 16 - Trade and other receivables and Note 19 - Provisions | | Appendix G - Foreign currency assets and liabilities | Note 30 - Foreign currency assets and liabilities | Note 29 - Cost of Sales and Services Provided For the six months ended December 31, 2024, the Group's total cost of sales and services provided increased to ARS 298,115 million from ARS 252,884 million in the prior year, with agricultural business costs at ARS 216,795 million and urban properties and investments business costs at ARS 81,320 million Cost of Sales and Services Provided Details (ARS million) | Item | December 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Inventories at beginning of period | 94,961 | 96,796 | | Initial recognition and fair value changes of biological assets | 10,647 | 862 | | Harvest | 149,477 | 176,434 | | Purchases and classification | 207,387 | 191,693 | | Consumption | (30,134) | (20,805) | | Inventories at end of period | (183,226) | (252,660) | | Total costs | 298,115 | 252,884 | - The increase in costs was primarily influenced by purchases and classification, as well as initial recognition and fair value changes of biological assets[185] Note 30 - Foreign Currency Assets and Liabilities As of December 31, 2024, the Group's total foreign currency assets amounted to ARS 319,131 million and total foreign currency liabilities to ARS 920,040 million, with the US Dollar being the primary foreign currency, significantly impacting trade and other receivables, investments in financial assets, and borrowings Foreign Currency Assets (ARS million) - December 31, 2024 | Item | US Dollars | Brazilian Reals | Euros | Other | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Trade and other receivables | 156,001 | 775 | 11 | 212 | 157,074 | | Investments in financial assets | 103,752 | - | - | 2,446 | 106,198 | | Derivative financial instruments | 1,191 | - | - | - | 1,191 | | Cash and cash equivalents | 50,428 | 24 | 11 | 4,205 | 54,668 | | Total assets | 311,372 | 799 | 22 | 6,863 | 319,131 | Foreign Currency Liabilities (ARS million) - December 31, 2024 | Item | US Dollars | Brazilian Reals | New Israeli Shekels | Other | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Trade and other payables | 80,967 | 3,439 | - | 3,009 | 87,415 | | Lease liabilities | 6,848 | - | - | - | 6,848 | | Provisions | - | - | 24,411 | - | 24,411 | | Borrowings | 801,360 | - | - | - | 801,360 | | Derivative financial instruments | 6 | - | - | - | 6 | | Total liabilities | 889,181 | 3,439 | 24,411 | 3,009 | 920,040 | - The US Dollar is the primary currency for the Group's foreign currency assets and liabilities, with the highest proportion of US Dollar-denominated items in borrowings[189] Note 31 - Other Relevant Events of the Period During the period, Cresud and its subsidiaries BrasilAgro and IRSA experienced several significant events, including Cresud's warrant exercises, cash dividend approvals and payments, and completion of a new share repurchase plan, alongside BrasilAgro's dividend approvals and payments, and IRSA's cash dividend and treasury share distributions, share repurchase plan completion, and warrant exercises - For the six months ended December 31, 2024, Cresud received USD 2.8 million from the exercise of warrants, issuing 6,785,115 ordinary shares[192] - On October 28, 2024, Cresud's Shareholders' Meeting approved and paid a cash dividend of ARS 45,000 million[193] - Cresud's Board of Directors approved a new share repurchase plan for a maximum of ARS 6,500 million, which was completed on December 19, 2024, repurchasing 4,522,623 ordinary shares[196][197] - On October 22, 2024, BrasilAgro's Shareholders' Meeting approved and paid a dividend of BRL 155 million[198] - IRSA's Board of Directors approved a new share repurchase plan for a maximum of ARS 15,000 million, which was completed on September 12, 2024, repurchasing 11,541,885 ordinary shares[200][201] - On October 28, 2024, IRSA's Shareholders' Meeting approved and paid a cash dividend of ARS 90,000 million and distributed 25,700,000 treasury shares[202][203] Note 32 - Subsequent Events Subsequent to the reporting period, FYO approved a USD 3.2 million dividend payment on January 8, 2025, and IRSA signed two sales agreements for "Ramblas del Plata" project plots on January 27, 2025, totaling approximately USD 23.4 million, with 30% paid upon signing - On January 8, 2025, FYO's Shareholders' Meeting approved a dividend payment of USD 3.2 million[206] - On January 27, 2025, IRSA signed two sales agreements for "Ramblas del Plata" project plots totaling approximately USD 23.4 million, with 30% of the amount already collected[207][208] Report on Review of Interim Financial Information Auditor's Review and Conclusion Price Waterhouse & Co. S.R.L. reviewed Cresud Group's condensed interim consolidated financial information as of December 31, 2024, without issuing an audit opinion due to the limited scope, concluding that no material matters indicated non-compliance with IAS 34, though noting that company financial statements were not transcribed to inventory and balance sheets, and December 2024 accounting entries were not transcribed to the general ledger - The auditors reviewed the condensed interim consolidated financial information, not an audit, and therefore did not express an audit opinion[212][213] - The review concluded that no material matters were identified to suggest the financial information was not prepared in all material respects in accordance with IAS 34[213] - The company's financial statements were not transcribed to the inventory and balance sheets, and December 2024 accounting entries were not transcribed to the general ledger[215] - As of December 31, 2024, Cresud's debt to the Argentine Integrated Social Security System amounted to ARS 596,820,390, which was not yet due on that date[215] Brief Comment on Company Activities and Subsequent Significant Events Consolidated Results Overview For the first half of fiscal year 2025, consolidated revenue increased by 0.7% year-over-year, while adjusted EBITDA decreased by 15.3%, resulting in a net loss of ARS 64,391 million, a 124.2% decline from the prior year, primarily due to fair value adjustment losses on investment properties in the urban real estate and investments business Key Consolidated Performance Data (ARS million) | Metric | H1 FY2025 | H1 FY2024 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 449,163 | 445,859 | 0.7% | | Costs | (298,248) | (253,034) | 17.9% | | Gross profit | 153,481 | 207,081 | (25.9)% | | Operating results | (135,606) | 449,429 | (130.2)% | | Adjusted EBITDA | 134,961 | 159,389 | (15.3)% | | Results for the period | (64,391) | 266,118 | (124.2)% | | Attributable to owners of the parent | (61,541) | 106,267 | (157.9)% | - Net profit shifted from a profit of ARS 266,118 million in H1 FY2024 to a loss of ARS 64,391 million in H1 FY2025, primarily due to fair value adjustment losses on investment properties in the urban real estate and investments business[218] - Adjusted EBITDA for the agricultural business was ARS 35,262 million, while for the urban properties and investments business (through IRSA), it was ARS 103,136 million[217] Description of Operations by Segment This section details the operating performance of the Group's two core business segments: agricultural business and urban properties and investments, highlighting strong land development and sales in agriculture, but losses in agricultural production (especially grains) due to prices lagging inflation, while sugarcane and livestock production improved, and urban properties and investments (via IRSA) saw reduced revenue and adjusted EBITDA due to negative fair value adjustments to investment properties Segment Performance Summary (ARS million) - H1 FY2025 | Metric | Agricultural Business | Urban Properties and Investments Business | Total | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 238,715 | 170,141 | 408,856 | (0.1)% | | Operating results | 8,429 | (143,043) | (134,614) | (128.9)% | | Segment results | 7,306 | (118,982) | (111,676) | (122.0)% | - In H1 FY2025, the Group's land portfolio under management totaled 728,114 hectares, with 304,189 hectares as productive land and 423,925 hectares as land reserves[223] - In H1 FY2025, the agricultural business's land development and sales segment profit grew by 34.3%, primarily driven by gains from agricultural land sales[227] - The agricultural production segment shifted from a profit of ARS 5,483 million in H1 FY2024 to a loss of ARS 3,983 million in H1 FY2025, primarily due to Argentine grain prices lagging inflation[229][237] - Sugarcane activity profit increased by 352.9%, primarily due to increased production and improved margins in Brazil[232][236] - Livestock activity profit increased by 617.1%, primarily due to improved market prices in Brazil and a significant increase in Argentine meat production[241] I) Land Development and Sales%20Land%20Development%20and%20Sales) The Land Development and Sales segment achieved an operating profit of ARS 31,088 million in H1 FY2025, a 34.3% year-over-year increase, primarily driven by agricultural land sales recorded in the first quarter, as the company continues to divest properties at significant valuations to reinvest in new farms with higher appreciation potential Land Development and