Cresud(US:CRESY)2025-10-24 16:42Financial Adjustments and Economic Context - As of June 30, 2025, the company has adjusted its financial statements in accordance with IAS 29 due to Argentina being classified as a hyperinflationary economy [987]. - Argentina's GDP increased by 6.3% interannually in Q2 2025, compared to a decrease of 1.7% in Q2 2024 [1029]. - The average exchange rate per USD was ARS 1,200.5 as of June 30, 2025, compared to ARS 910.5 in 2024 [1029]. - Inflation rates for the fiscal year ended June 30, 2025, were 39.4% for the consumer price index and 21.2% for the wholesale price index [1034]. - The unemployment rate as of June 30, 2025, was 7.6%, unchanged from the previous year [1031]. Revenue Recognition and Sales Performance - Revenue from agricultural activities primarily comes from sales of agricultural produce, biological assets, and related services, with revenue recognized upon service delivery [993]. - Revenue from the sale of grains is recognized when ownership risks are transferred, typically upon delivery, with pricing often determined in U.S. dollars [996]. - Revenue from the sale of farms is recognized when performance obligations are met, including the buyer's down payment and transfer of risks [998]. - Rental income from shopping malls is recognized on a straight-line basis over the lease term, including base rent and contingent rent based on sales [1007]. - The company recognizes revenue from sales and developments of real estate properties only when possession has been transferred to the buyer [1019]. - The company engages in barter transactions, recognizing revenue at the fair value of goods delivered, adjusted for any cash received [1021]. - Total revenues for the agricultural business reached ARS 448,266 million, with ARS 236,332 million generated in Argentina and ARS 211,934 million from other countries, primarily Brazil [1072]. - The urban properties and investments line of business generated total revenues of ARS 374,662 million, with ARS 374,042 million originating in Argentina [1077]. - Revenues decreased to ARS 448,266 million in June 2025 from ARS 503,614 million in June 2024, a decline of 10.96% [1085]. - Revenues from the Shopping Malls segment increased by 8.0% from ARS 250,468 million in FY 2024 to ARS 270,531 million in FY 2025, driven by higher base rental revenues and parking income [1089]. - Revenues from the Offices segment decreased by 11.4% from ARS 22,646 million in FY 2024 to ARS 20,065 million in FY 2025, primarily due to a 12.1% drop in lease revenue [1090]. - Revenues from the Hotels segment decreased by 24.7% from ARS 85,840 million in FY 2024 to ARS 64,596 million in FY 2025, attributed to a decline in international tourism [1092]. - Revenues from the Agricultural Production segment decreased by 12.6% from ARS 374,179 million in FY 2024 to ARS 326,975 million in FY 2025, primarily due to lower crop sales [1088]. Profit and Loss Analysis - For the year ended June 30, 2025, total revenues reached ARS 914,157 million, a decrease from ARS 959,359 million in 2024, reflecting a decline of approximately 4.7% [1063][1064]. - Gross profit for the year ended June 30, 2025, was ARS 368,054 million, compared to ARS 406,483 million in 2024, indicating a decrease of about 9.5% [1063][1065]. - The company reported a profit from operations of ARS 220,945 million for the year ended June 30, 2025, compared to a loss of ARS 191,917 million in 2024 [1063][1065]. - The share of profit from associates and joint ventures was ARS 26,890 million for 2025, compared to ARS 45,943 million in 2024, reflecting a decrease of approximately 41.5% [1063][1065]. - The company reported a net gain from the fair value adjustment of investment properties of ARS 19,075 million for the year ended June 30, 2025 [1063]. - The net profit for the year increased by ARS 75,527 million, from ARS 148,839 million in FY 2024 to ARS 224,366 million in FY 2025, with ARS 201,257 million derived from the Urban Properties and Investment Business [1175]. Costs and Expenses - General and administrative expenses for the year ended June 30, 2025, were ARS 111,002 million, slightly lower than ARS 118,299 million in 2024, indicating a decrease of about 6.9% [1063][1065]. - The total costs for the year ended June 30, 2025, were ARS 570,742 million, down from ARS 571,311 million in 2024, showing a marginal decrease of about 0.1% [1063][1065]. - General and administrative expenses for the Agricultural Production segment decreased by 15.1% from ARS 27,383 million in FY 2024 to ARS 23,258 million in FY 2025 [1128]. - General and administrative expenses for the Shopping Malls segment decreased by 3.7% from ARS 30,126 million in FY 2024 to ARS 28,999 million in FY 2025 [1131]. - Selling expenses for the Agricultural Production segment decreased by 11.5% from ARS 40,340 million in FY 2024 to ARS 35,685 million in FY 2025 [1136]. - Selling expenses in the Sales and Developments segment decreased by 30.9%, from ARS 4,512 million in FY 2024 to ARS 3,116 million in FY 2025, with expenses as a percentage of revenues dropping from 35.0% to 24.4% [1142]. Segment Performance - The segment profit for Urban Properties and Agricultural business was ARS 258,667 million for 2025, down from ARS 247,835 million in 2024, showing an increase of approximately 4.3% [1063][1065]. - The urban properties segment reported a segment loss of ARS 226,038 million, highlighting challenges faced in this area despite overall revenue generation [1078]. - The agricultural business segment profit was ARS 47,554 million, indicating a strong performance in comparison to the previous fiscal year [1071]. - The urban properties segment experienced a gross profit of ARS 287,056 million, despite a net loss from fair value adjustments of investment properties amounting to ARS 570 million [1076]. - The share of profit of associates and joint ventures in the Agricultural Production segment decreased by 83.0%, from ARS 2,161 million in FY 2024 to ARS 368 million in FY 2025 [1163]. - The share of profit from the Others segment decreased by 46.2%, from ARS 47,068 million in FY 2024 to ARS 25,332 million in FY 2025, mainly impacted by macroeconomic conditions in Argentina [1171]. Investment and Asset Management - Reportable assets as of June 30, 2025, totaled ARS 5,088,822 million, compared to ARS 4,842,217 million in 2024, representing an increase of about 5.1% [1063][1065]. - Investment properties in the urban segment totaled ARS 2,499,231 million, showcasing the company's substantial asset base in this area [1076]. - The company holds reportable assets of ARS 1,038,536 million in the agricultural business, with a significant portion located in Argentina [1072]. - BrasilAgro completed the sale of 1,157 hectares of the Alto Taquari farm for BRL 189.4 million (ARS 43,395 million) on September 26, 2024 [1127]. - BrasilAgro sold 12,335 hectares of the Chaparral farm for BRL 364.5 million, subject to variations in soybean bag price, on March 26, 2024 [1139].