Santiago Donato:

Good morning, everyone. I'm Santiago Donato, Investor Relations Officer of Cresud, and I welcome you to the second Quarter of Fiscal Year 2024 Results Conference Call. First of all, I would like to remind you that both audio and slide show may be accessed through company's Investor Relations website at www.cresud.com.ar by clicking on the banner webcast link. The following presentation and the earnings release are also available for download on the company website. After management remarks, there will be a question-and-answer session for analysts and investors. If you want to make a question, please use the chat. Before we begin, I would like to remind you that this call is being recorded, and the 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 will now turn the call over to Mr. Alejandro Elsztain, CEO. Alejandro Elsztain: Good morning, everybody. Now we are beginning the main highlights for our second quarter 2024. And we can begin with the regional campaign progress. This is a campaign that is replicating the size of last year, but the commodities have dropped a lot, and we are going to see later in between the soybeans, the corn and the ethanol are affecting our results. But in the other side, we are expecting higher yields and margins mainly in Argentina because last year dropped because of the drought and this year, a normal or Nino campaign. Related to that, the better climate conditions were at the beginning of the campaign, there was a month with the lack of rains, but these days, yesterday, today is raining again. So this is recovering the moisture of the soil. So we are expecting -- we have a very normal and good winter campaign, and we are expecting a normal and better -- much better for last year, but more than normal year related to soybean and corn. About BrasilAgro, this year, we have lower productive results and the climate affecting them, it's decreasing some of the yields, not dramatically, but some of the yields, but mainly the effect is the lower valuation of the crops. And the combination of those -- that big drop of the prices and increase on the basis of the prices of Brazil related to Chicago. So this is a big discount this year is affecting really the margins of the main range of Brazil. Related to farm sales, we -- in these 6 months, we had 2 sales in Argentina. Still now not in the rest of the region, but we are optimistic on that too. And these 2 are Los Pozos and El Tigre. We sold 2 small pieces of 2 big farms, and we are going to explain you later. These are some examples of good transactions on good internal rates of returns of funds in Argentina, some more activity in the country related to the accounting results this year brings ARS 22,000 million gain. This is a combination of better agriculture and better urban. Better agriculture because of this year, some effects on the crops, a good winter, better tenants holding with the crops that we had, mainly related to the maize that brought us good results. And the sales of these 2 firms. This effect is bringing a much better year related to agro. And in the other side, the urban, good operational and better fair value on investment properties. Matthias will explain in more details later. Related to the dividend distribution. Finally, we had approved and took us some time. But finally, a few weeks ago -- a few days ago, we were ready to pay approved by the all the organizations. And finally, we were able to pay the dividend and the shares that we paid approved in October. So saying that, let's move to next page. And here, we can see the evolution of the exchange rate. And look at what happened after the entry of Milei to government, we can see there was a big change, the ARS 350 or ARS 360 per dollar went directly to the ARS 800 level, and that big change coming to the farmers made the really big change on the margins of the year. So when you see that, the farmers receive almost all in the official but 20% in the [indiscernible] or MEP. So the combination of the 2 makes the farmer was from ARS 350 in the end of [indiscernible] it was at ARS 500 and went to close to ARS 900 per dollar, and this is the big change on margins on farmers receiving a big portion of that devaluation. This is dilution on costs and increasing on the revenues. So farmer situation between the climate and this main rule that came to government after a few days of government made the big change in Argentina's situation. The gap today of the blue chip and the official is much smaller. There were times of 1 to 3, now is 1 to 150. So that big difference is making farmers of Argentina. To give you an example, in the moment of USD 500 per ton of soybeans. Argentine farmers were receiving in the normal dollar in the $3, they were receiving USD 170 or USD 200 look at what is today. This is because of this situation is much better comparing the taxes and exports were not changed. The government tried to change, but it's not changing still. But the big change of the official dollar is really making a much better environment for farmers in Argentina. Here, we can see the evolution on prices. And if you want Diego to talk about that, please explain the drop of these days. Diego Biaus: Yes. Thanks, Alejandro. Good morning, everybody. Well, on Slide 2, you can see the evolution of commodity prices after the big bridge after pandemic soybean and corn international prices haven't experienced a correction that was accelerated in the last quarter due to the growth in supply from South America. The market is waiting for the demand to be reactivated. soybean increase approximately -- price of soybean decreased approximately 18% since July 2023, and corn is down 12%. Regarding input costs, they are still high levels but we expect that it's just in line with the [indiscernible] basis. Next page. On this page, we show the expected planted area in the region. We expect to plant 282,000 hectares. This is a bit less than we expected at the beginning of the campaign, where mainly in Brazil with the weather. But the size of the campaign will be similar to the previous campaign. Regarding crop breakdown, we have diversified crop mix, but we produce mainly soybean and corn that account from an approximately 17% of our plant and service. Next page. Here, in this page, we can see the climate conditions for the region showing progress. Regional weather conditions are better than the previous campaign mainly in Argentina. Remember the historical drought we had in the past. Our -- the expectation of the good or regular campaign despite the beginning of the campaign with a lack of rain with the impact on the winter crop production. And last week, we received a higher rain of [indiscernible]. BrasilAgro is being affected by the Nino with impact, mainly in MAPITOBA region. Regarding of the showing progress, it's almost completed in Argentina and advance in the other region, soybean 97% progress and the corn 74%, Wheat 100% the winter crop. For Argentina corn too close to 90%. Now Alejandro, we want to continue with the real estate business. Alejandro Elsztain: Related to the fraction of the Los Pozos farm, we have the chance of selling a small portion of 4,200 hectares of land. That was done at $540 per hectare what we paid in 1995, $10. So -- and the CapEx invested on that was $25. So the profit in the investment, it's 14x. That represents an internal rate of return of dollars of 14% from 1995 to now to 2024. So this is this a small portion, we have a remaining surface of 235,000 hectares, and we made an accounting gain of ARS 722 million in this quarter. So this is the kind of transformation from $10 to $500, $1,000 and we expect the developed to be at thousands, the agriculture and the cattle area. So imagine what is the kind of transformation from $10 to $1,000 or a few thousand dollars per hectare. This is a not developed area where we decided to sell directly to other people that they are ready to do -- they are going to probably to develop it. This is an area that is permitted to develop. And if we move to next page, here, we did, I think, one of the best transactions on Cresud story. We bought a long time ago, I think 2006, so I don't remember it exactly, but 2003. 20 years ago, we bought a piece of land of 8,400 hectares, and we began to sell -- and this is the first small sell on that big transaction. So we have a big remaining 7,800 hectares. The 500 hectares we sold for $7,500 per hectare. We bought in 2003 in $1,000, $1,100 per hectare, and we invested throughout the history $350. Again, a profit of 5x to investment accounting gain of ARS 2,600 million, an internal rate of return of 16% in dollars for this like 20 years, 21. And at the same time, we had the chance of buying at 60 kilometers distance. So we bought -- we sold 500, but we bought for the same farmer in another 60 kilometers distance, to be run by the same manager 1,250 hectares for close to the same price of the 500. So we paid for that $4.5 million. So a big, small difference, so $700,000 and a price per hectare of $3,600, so close to half. And this is to increase the size of the farm without using liquidity. And the margin that the [indiscernible] is more than double than the farm we are selling. So we love this kind of transaction. It's rotating, buying more and giving more farm to that manager to run. And I think we would like to have more than this transaction in the areas that we have no big farmers. So be selling -- the reason was someone was ready to pay was enabled and he was ready for paying a higher premium, and we found the way of having a better business related to that region. So these 2 are the transactions of the semester, and we are waiting for more liquidity in the real estate not only in Argentina, mainly Brazil. Brazil has much more liquidity in the real estate farm activity, but this is the first 6 months of the year. Related to FyO, we see here the evolution of FyO in tons, our service company that really is the largest by far service agriculture commercial company in the country, now expanding to the whole region, not only to Argentina, but Brazil, Bolivia, Paraguay, Uruguay, Chile, inputs and outputs. This is the evolution of output of the grains in Argentina. And now we are beginning to show in the next future, the volumes on the rest of the region. And we come from a market share in the beginning of 2015, 3% market share of Argentina went to 5%, went to 6%. Last year, we did 5.5 million tons that represented 8% of market share of Argentina that dropped a lot the campaign because of the drought and we are expecting for next year 7 million or a little more, close to 6% market share of Argentina total crop. And this is the evolution of EBT evolution. And last year, we closed at $25 million, the year before $28 million. The budget for this year is $27 million. This is a big company making huge profit where Cresud owns 51% of the shares. Now I will introduce Matias to talk about our investment in IRSA, where Cresud owns 54% of the shares. Matias Gaivironsky: Thank you, Alejandro. Good morning, everybody. So analyzing the results of IRSA during the first half of the year were very good results both on an operational and financial. Tenant sales keep growing at a base higher than inflation. EBITDA of the hotels remain very strong with very high occupancy. About our offices, there was a slight improvement in occupancy. This segment will have a benefit of the revaluation. Remember that here we collect revenues tied to the official exchange rate. So after the revaluation in pesos term, we will improve significantly our collection. And also during the quarter, there was a very strong real estate activity selling 2 floors of Della Paolera building. We did a barter agreement on important plot of land in Del Plata, where we put the land and we will receive units from a closed community that will be developed there. And also with the new project is the Della Paolera building Trust. This is a building very close to the obelisk in Argentina and downtown Buenos Aires. It's an important building that IRSA will be the developer and also an investor. We did the Trust, and we sold 100% of the project in less than a month. So about the evolution of the rental EBITDA, you can see on the right side, the dollar terms still strong, $166 million remained stable against the last year. So probably we expect because of the new rules of the new administration, there will be probably a slowdown in consumption in the coming months. So probably in pesos term, our tenant sales will grow lower than the inflation. So we will see that in the coming quarters. In dollar terms, maybe we will keep growing because the pace of the official exchange rate, they are evaluating the currency at 2%. So maybe in dollar terms, we will keep growing. But in pesos term we will see deceleration, at least in the coming quarters. Going to the next page, so Alejandro mentioned some of what happened with the devaluation and inflation, just to remember that this has an impact, both in our dollar-denominated debt, the [indiscernible] We have to recognize results in pesos terms according to official exchange rate. So the real devaluation will have an impact, a negative impact on our debt. And on the other side of the assets, we are valuing the based on properties of IRSA at fair value. So the shopping malls are valued using the official exchange rate and the offices and land bank using the net FX. So that will have an impact when we review the results of the investment properties. Going to the next page, we can see the operational results on the Agri business when we compare with the previous year, is a stronger quarter. Remember that last year, we have the drought basically in Argentina. So when we compare the grain segment, we can see an improvement from a loss of ARS 6.2 billion to ARS 446 million. If we open on to more details in the grain, we will see better results in Argentina and lower results in Brazil, in Argentina is related to different drivers. First, we have a higher production against the estimations that we have at the end of the year. So that has a positive result, also the holding results has a positive result because of the devaluation. And also when we compare with the previous year in the weeks production, we have better results compared because of the drought last year. About the cattle, the last year, prices increase is lower than inflation. So here, we have the impact of the real appreciation this year compared with the last year. About FyO, the other important part is we see here lower results, but it's only the sustainability during the quarter, compared with the previous year was more active quarter. But as Alejandro showed, we expect very good results from FyO. Going to next page. So we can see on a consolidated basis, also including the results of IRSA, but excluding the fair value of the investment properties, an increase of 80%. And when we see the fair value of the investment properties on the right side, we see a very important improvement. This is related of the evolution of the macro drivers of Argentina. Basically, every time that we have a positive devaluation, we have positive results, and we have appreciation of the currency, we have lower results. When we measure this in dollar terms, the properties are -- the value of the properties are stable. So it's only the effect of the devaluation and the inflation of the volatility. Going to the next page. On the financial side, the net financial results here, we have on the left side, the evolutionary comparison is related first to the devaluation. In the next FX result, we have to give impact to the devaluation of our dollar-denominated debt. So that generated a loss. But that was somehow compensated by the fair value of our liquidity and also the inflation adjustment. So most of our liquidity was invested in dollars. So with this -- we've finished the semester with a gain of ARS 122 billion, attributable to our controlling interest is 48.8% compared with ARS 59 billion or ARS 32.9 billion of the previous year. Going to the next page. We can see the evolution of our net debt. There was a reduction from the fiscal year '21, about 32% reduction to $288 million. Here, we have the -- the debt amortization scheduled after December, we -- in January, we issued a new loan in the local market. We raised $64 million, $40 million were issued in dollar terms at an interest rate of 6% with maturity in 2027 and $24 million was to replace bank debt that we did it at a cost of BADLAR plus 0% spread. And there, we have a maturity next year in January '25. So most of the amortizations that you see here in the graph were replaced with longer tenure. We are happy that we could replace one debt that expired in May at the cost of 5.75% for that new bond at 6%. So we haven't increased significantly the cost of funding. Next page, we have -- remember that in October, we released -- we approved a dividend -- there was an important dividend at dividend yield of 8%. So we decided to try to anticipate what could happen with elections and distributed before and in the middle of the payment, there was a new regulation in Argentina that didn't allow us to pay as we used to. So we have been working with the [indiscernible] authorities. And finally, we got change in the regulation that allow us to pay. In the middle, we haven't sent the money to [indiscernible] so we maintain the money in a money market fund and all the return of over that fund plus the conversion at the end of the day, means that investors collected 20% more in dollar terms than if we converted that in the first day in dollars. So we are happy with the results. And finally, we are happy that could distribute it everything without a major problem. So with this, finally, there was a completion of our buyback program. We finished the buyback of ARS 4 billion. So that was concluded a couple of days ago. So with this, we finished the formal presentation. Now we open the line to receive your questions. Thank you very much. Santiago Donato: [Operator Instructions] Well, the first question is related to the campaign, which are the perspective for the campaign, if you can give a little bit more color on that. And the recent measures of Milei, and the one that he plans to take, how that could affect or impact in the agri business in general and particularly in Argentina. Alejandro Elsztain: Related to the campaign, I think we can speak about a good, very good campaign in Argentina. In volumes, the conditions comparing year-to-year is busy because last year was one of the worst in the history of Argentina. But related to average, we expect a better than average year, and this is what the USDA is forecasting. And so the combination of the measures of the government, the government was trying to change the taxes on export. Finally, didn't approve it and took it from the measures of the government, but up to now, the condition of the valuation in the farmers with the combination of the yields that is more than normal or better, really, it's -- last year was a very negative campaign and the humid pump has suffered a lot. Farmers lost money per hectare, but we didn't see any bankruptcy on the country, really was amazing in a big, very big, strong situation with the big taxes on exports, big gap in the dollars and big drop on the deals no one disappeared. So the situation for this year is much better comparing much, much better. We are all expecting good margins, dilution on cost because of FX and with a better yields. So situation and probably giving more liquidity to the real estate to Argentina. Argentina was close to disconnected to the world. There was a big valuation of the land of the world, but Argentina was close to be disconnected. Now with this environment, we think it's going to be more liquid and stronger the farms in Argentina, and we began to see 2 examples on this year. And related to the rest of the region, I imagine close to normal conditions, a little lower yields, but a lot of more liquidity in the rest of the farmers. So the average of the yield for the region is, there is a reduction for margins, for sure, when you see the drop on prices, margins for farmers are reducing. In the case of Argentina, we are [indiscernible] because of the Argentine measures. But in the farmers industry, this is now affecting the margins. So probably is helping us to be, again, buying after the disappearance of the sales probably will come a time of buying for the region, for Cresud and BrasilAgro. Santiago Donato: Well, there is a question here related to a little bit what we have already talked Alejandro, the impact of the rejected of reform bill on Cresud and IRSA, the 2 companies I don't know if that's something to add or... Alejandro Elsztain: We're affecting was an increase in taxes on exports. So that is -- it was a small negative, small because we're at 1 to 3 points increasing the taxes on exports in some of them, not all. So it wasn't some impact, but was not so negative. But what Milei is trying to change is many pockets of the country. So he's talking about fiscal deficit and these all kind of distortions of the market, we think for farmers are going to be much better than worse because if Argentina is going to be allowing foreigners to buy more land. Today, they can but small pieces. So he was thinking on changing that and allowing foreigners to buy the size they want. That will be a connection of the price of the farm of Argentina. Argentine corn today is at $15,000, I would say, comparing to a 40-50 in U.S. That was very close relation. And now that gap is huge. It's one of the largest history. So everything that Argentina will go in the trend of connected to the world. It will be in the holding of the cattle, the holding of the land and probably -- and he was thinking on reduction on taxes in the long term. He said that. In the middle, he is showing serious measures to have surplus, not on deficit. And that was his measure, and he's thinking doing that, too. So the law didn't work, but now he is going to probably present something else. We don't know what it's going to be, but we are waiting for that. So we are thinking that Milei effect on Argentine farmers and the urban story, too will come credit probably to Argentina, capital international market. So we are optimistic on the kind of measures Milei is bringing to the economy. And now we are on that uncertainty of what are the next steps he's going to bring. Santiago Donato: Yes. Additional question regarding the FX. How do you think it will affect or at the end, if they liberate all the gap between the FX and there's a new FV ffect and only one for Cresud. Matias Gaivironsky: I think Alejandro mentioned at the beginning when he described the valuation. At the end of the day, farmers are receiving pesos according to the official exchange rate. So if there is only one FX, then farmers can convert those pesos into dollars so they will receive the same one amount of dollar, not [indiscernible] amount of dollars. So that is definitely positive for farmers. I don't know what will be the level of the FX if there will be one FX on the current value or the blue chip swap value or higher value, we don't know. But definitely having only one exchange rate for farmers is something very positive. About our debt, we pay everything at the official exchange rate. So at the end of the day, if there is an evaluation, we will pay a higher cost in pesos term. But since our farms, our value in dollars and the productions are value in dollars, then we are hedged against that. So I believe that the normalization is very positive for the farming industry. Santiago Donato: Well, we give 2 minutes more if there is any additional question. You can use the chat. Okay. If there are no more questions, we conclude the presentation, the Q&A session, and I turn back to Alejandro, CEO of Cresud, for his closing remarks. Alejandro Elsztain: As you know in our long history, half of the year, it's the beginning of the campaign. So let's see, the second half, probably more real estate transactions let's see what is there with summer crop that is the main activity for Cresud. And the macro of Argentina that probably will affect and the new measures are going to be the main issue for Argentina for the next 6 months. So happy to be reducing the debt on the company on Cresud comparing Cresud and IRSA and BrasilAgro everything today, the financial situation of the company is strong, very, very, very strong related to the assets and maybe next presentation, we can show the holding of everything that shows that we're really very conservative position and assets that they are working much better than in the past and now with a very being operational, commercial and real estate activity. Thank you very much, and we see you next quarter. Have a very good day.