Cresud(US:CRESY)2023-02-14 18:44Financial Data and Key Metrics Changes - The net result for the semester is a gain of ARS 19.2 billion compared to ARS 74 billion last year, indicating a significant reduction primarily related to the fair value of investment properties [17] - Adjusted EBITDA for the agricultural business decreased from ARS 9.3 billion last year to ARS 800 million this year, with grains also seeing a reduction from ARS 1.9 billion to ARS 220 million [22][23] - Operating income on a consolidated basis reduced by 44.3%, excluding the effect of changes in fair value related to the investment in IRSA [25] Business Line Data and Key Metrics Changes - The company increased its stake in IRSA from 54% to 57%, with strong operational and financial results, including EBITDA surpassing pre-pandemic levels [5][12][13] - The agricultural business faced challenges, particularly in sugarcane, which saw a reduction in results due to lower prices and adverse climate conditions [4][22] - The agricultural brand and services segment reported a gain of 116%, increasing from ARS 1.8 billion to ARS 4 billion during the year [24] Market Data and Key Metrics Changes - Inflation during the semester was 43%, and devaluation was 41%, leading to a real appreciation of the peso by 1% [14] - The drought in Argentina is expected to impact commodity prices, with the market anticipating a lower yield of approximately 35 million tons compared to previous years [44][60] - The regional balance is better in Brazil, with good rainfall leading to positive expectations for corn and soybeans, while Argentina is facing more challenges [3][10] Company Strategy and Development Direction - The company is optimistic about the second semester, expecting improved operational results in IRSA and growth in the agricultural sector, particularly in Brazil [51][54] - There is a focus on increasing the size of leased lands and expanding operations in Brazil, where liquidity is high [8][46] - The company plans to continue executing its share buyback program and is optimistic about future dividends, although no specific guidance was provided [29][38] Management's Comments on Operating Environment and Future Outlook - Management noted mixed conditions across different countries and crops, with sustained commodity prices but increased growing costs affecting margins [3][6] - The company remains optimistic about the agricultural campaign in Argentina and Brazil, despite the challenges posed by drought [10][51] - Future expectations include a potential rebound in land prices in Argentina due to government measures and increased activity in the real estate sector [47][54] Other Important Information - The company received dividends from subsidiaries totaling $34.8 million during the semester, with expectations for more in the future [27] - A successful debt refinancing was achieved, with a significant reduction in net debt from nearly $1.2 billion to $680 million since 2020 [28][29] Q&A Session Summary Question: Do you expect farmland sales in Argentina for the next semester of this year 2023 and also in the region? - Management indicated that while the first semester was not very active in real estate, they are optimistic about increased activity in the second semester, particularly in Brazil [21] Question: Can you explain the reasons for the significant tax credit in the P&L in the latest quarter results? - The tax credit was due to a conservative approach in recognizing losses in previous quarters, reversed following a Supreme Court decision allowing inflation adjustments in tax balance sheets [33] Question: What is the outlook for commodity prices given the drought in Argentina? - The drought is expected to keep prices stable, with the market not anticipating a significant rebound due to Brazil's larger production offsetting Argentina's losses [44] Question: Any guidance on dividend and share repurchase going forward? - The company plans to continue executing its buyback program but prefers not to provide specific guidance on dividends [38] Question: What is the average market price of agricultural land in Argentina and Brazil? - Prices in Brazil have rebounded significantly, while Argentina's land prices remain lower due to government interventions and taxes on exports [40][41]