Alejandro Elsztain - CEO Carlos Blousson - CEO International Operations Matias Gaivironsky - CFO

Good day, everyone, and welcome to Cresud’s Second Quarter 2017 Results Conference Call. Today’s live webcast, both audio and slide show may be accessed through the Company’s Investor Relations website at www.cresud.com.ar/ir, by clicking on the banner Teleconference. The following presentation and the earnings release issued last week are also available for download on the Company’s website. After management’s remarks, there will be a question-and-answer session for analysts and investors. At that time, further instructions will be given. [Operator Instructions] Before we begin, I would like to remind you that this call is being recorded and that information discussed today may include forward-looking statements regarding the Company’s financial and operating performance. All projections are subject to risks and uncertainties, and actual results may differ materially. Please refer to the detailed note in the Company’s earnings release regarding forward-looking statements. I would now like to turn the call over to Mr. Alejandro Elsztain, Chief Executive Officer. Please go ahead, sir.

Thank you very much. Good afternoon everybody. We are beginning the second quarter of 2017 conference call. And if you move to Page number 2, we can see the main highlights for the six months of this year. In the financial consolidated results, revenue for Cresud achieved ARS38.7 billion and we divided 4.7 billion coming from agribusiness and Argentina urban business center and the rest coming from Israel. The operating income ARS2 billion and from those almost a 1 billion coming from agribusiness and Argentina urban center and the rest from Israel. The net income for the six months, this time we've a gain of ARS3.8 billion, and we can compare it to the loss of last year 152 million, coming from agribusiness and Argentina business center. And to the Cresud shareholder, the gain was ARS919 million comparing to a loss of ARS771 million, last six months. If we're dividing the agribusiness, we can see overall good weather conditions in the region and the commodity prices are expected to be assumed, and we're going to talk a little later about planting area we're achieving 194,000 hectares and developing 13,000. We began to buy cattle in Brazil this year, and this is -- we were waiting up to a drop on the prices of the cattle in there. And we began buying almost 5,000 hecs, but now we're going to keep buying in Brazil to full two farms that we have in Bahia region. We sold the farm in Argentina for $6 million in the first quarter of this year. Later, we didn't have any more farm sales, but we're thinking that they're coming in the next quarter. We made an agreement with CRESCA that was signed in October of 2016; Brasilagro and Carlos Casado agreed to sell to third parties…

Thank you, Alejandro. Good afternoon everyone. Today, I'm going to talk about our production forecast and the global stocks, weather condition for 2017 campaign and the commodity price. Let me start to the Slide number 6, there about farming production forecast and global. As you can see in the bar graph regarding soybean production, Argentina's forecast in the last campaign has reached about 55 million tons, going down in comparison with last campaign, due to two reasons, less planting area and two high rain season in the south of Santa Fe province. However, the soybean production in Argentina next month will define real. Same thing about corn, it has increased up to 37 million tons, 27% more than the previous campaign because the planting area Argentina has increased by 20% and the weather condition has been positive. Lot more that the farmers have met the government measures. Let me draw your attention to [indiscernible] situation. In terms of soybean productions, it's increased 7% as expected as a good weather conditions, because the area keeps stable, plus the [Indiscernible] has been faster. On the corn, the Brazilian corn production has increased 25%, coming back to the normal productions after weather condition are positive especially in the soybean production. Talking about United States, the last campaign United States is still directed to corn of 9% more with soybean production because of the nice weather condition; and in term of corn, it's also aiming with another 9% because of regular conditions and more planting area heating record of 385 million tons. Both corn and soybean have increased in their hay production level reaching 385 million tons and 117 million tons respectively. As the fertilizer of [Indiscernible] good production in soybean and corn in United States, we can see all slide how the stocks United States are growing during the last three campaigns. If we move to the next Slide number 7, about the weather conditions and commodity prices. As you can see in the left upward part of the slide, you will see good weather condition in general. Moving from green area that broke hard rain in the Northeast of Argentina and in Brazil we expect low trend situation now. The planting is currently on track. So, let's go to the commodity prices now. If you take a look at the graph, you will see the price have increased slowly close to 5% in the last three months. On other hand [Indiscernible] three year in terms of soybean, the prices have increased 18.7% because of the trade demand especially in China. Regarding corn also the demand and supply, as I said preview and they still grew the prices went down to 2.1%. Thank you very much. Now, Matias will continue with the presentation.

Thank you, Carlos. Going to Page 8, we have the description of our investment in IRSA. This quarter, we have good results on the rental segments. You can see in occupancy levels remain very high at 98.4% in shopping mall. Tenant sales grew 18.6% during the last quarter compared with the same quarter on the previous year, it was on the slowdown in consumption in the recent quarters, and we hope that this trend will change in the coming quarters. In offices, the occupancy we rate 100% occupancy in the portfolio and great table during the last quarter. In next page, we have the description of our investment in IDB in Israel. The Israel is a business center. Here you can see the structure of the main subsidiary. So IRSA controls Dolphin with 99.99%. Then Dolphin controls 68.3% of IDB. And then if IFISA controls 31.7% of IDB. If IRSA is a company where that controlled by our [Indiscernible]. And then IRSA has directly 8.8% stake in DIC that is one of the main subsidiaries of IDB. So, in terms of our financial statement, DIC is fully consolidated in IRSA and in Cresud. Clal insurance is valued at market value, so we recognize without according to the valuation of the shares in the Israel Stock Exchange. And then, the other subsidiaries IDB Tourism that we IDB controlled 100%, that there is negotiation to dispose that asset, and in this quarter IDB recognizes that an impairment in IRSA also ARS230 million loss of impairment during the last six months. So, the main highlight for our investment in Israel was the disposal of Adama. So, DIC sold the stake in Adama, a 40% stake in Adama for $230 million in cash in excess of total debt on that asset. So, that generated…

It appears that we have no questions in the question queue. So this time I would like to turn the conference back over to Mr. Alejandro Elsztain for any closing remarks.

I will give one word more to Matias that wants to make an explanation.

Yes, sorry, I did a mistake on Page 13 I said that attributable to the controlling shareholders worth 2.9, that was the part of the non-controlling interest. So the controlling shareholders gain was ARS919 million. Making that correction just to finish in the quarter, the quarter brings not a very positive early quarter result, the first semester was not very good because part of that was not a making gain. But we're expecting a very good campaign on the region in the four countries, the conditions crops and crops are very good. And we're optimistic on selling more assets, there is interesting our funds plus the Argentina rental segment that is breaking very well plus the Israeli investment that is bringing core financing. So, we expect to keep this pace for the next quarter. Thank you very much and have a very good day. Bye.

Thank you. This concludes today’s presentation. You may disconnect your line at this time. Have a nice day.