Cresud(US:CRESY)2023-09-11 16:49Financial Data and Key Metrics Changes - The company reported a net result of ARS75.3 billion, down from ARS135 billion the previous year, indicating a significant decline in profitability [54] - Inflation accelerated to 116% compared to 64% in the previous year, impacting financial results [9] - The net financial results showed a gain of ARS24.2 billion, down from ARS47.3 billion last year, primarily due to the appreciation of the peso affecting dollar-denominated debt [11] Business Line Data and Key Metrics Changes - The agricultural operational results saw a reduction of 85.9%, with a loss of ARS7.8 billion compared to a gain of ARS23 billion last year [69] - The company achieved record farm sales of ARS122 million, although this was lower than the previous record of ARS134 million in 2015 [5] - The service company, FyO, experienced a drop in sales volume from 6.6 million tons to 5.3 million tons, representing about 8% of the Argentine market share [21] Market Data and Key Metrics Changes - The company faced significant drought conditions in Argentina, affecting yields, particularly in soybeans and corn, with losses of 50% and 35% respectively [3][10] - The company noted a drop in corn production of approximately 10% year-over-year in Argentina, while the overall region saw a 4% decline [19] - The prices of soybeans and corn dropped by 9% and more significantly for corn, indicating a tougher pricing environment for the upcoming campaign [61] Company Strategy and Development Direction - The company plans to increase its planted area by 6% to 7% while reducing leased areas to third parties, focusing on self-planting [73] - The company is optimistic about the upcoming year, expecting better operational performance due to recovering yields and lower costs [73] - The company is actively involved in real estate, with plans to continue buying and selling properties in Argentina and the broader region [79] Management's Comments on Operating Environment and Future Outlook - Management highlighted the severe drought in Argentina as a significant challenge but noted that the company's diversification mitigated some impacts [60] - The company anticipates a more normal year for yields, with expectations of lower prices but also lower costs, leading to improved margins [73] - Management expressed optimism about the future, despite uncertainties related to upcoming elections and potential economic changes in Argentina [79] Other Important Information - The company obtained RTRS certification for over 4,000 hectares of soybean production, emphasizing its commitment to sustainable practices [7] - The company increased its stake in IRSA from 54% to 57%, recognizing strong operational performance in malls and hotels [8] - The company plans to distribute a dividend proposal of ARS22 billion and 3% of IRSA shares, pending shareholder approval [71] Q&A Session All Questions and Answers Question: What is the reason for distributing IRSA shares? - Management indicated that the expiration of warrants is in 2026, and there are no plans to exercise them before that date [29] Question: Can you provide more details on the provision or legal proceedings in Israel? - Management explained that IRSA signed a commitment for two installments of $20 million, which were not fulfilled, leading to a conservative provision of $20 million [30] Question: Do you plan to purchase further Argentine farmland? - Management confirmed intentions to continue purchasing farmland in Argentina if opportunities arise [31] Question: Will the cash dividend be distributed as a lump sum? - Management stated that the details about the dividend distribution will be decided by the shareholders' meeting [39]