Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria (CRESY) Q1 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary indicates strong financial performance with positive net income and reduced net debt. The company is also benefiting from favorable government policies in agriculture, which should enhance liquidity and opportunities. The Q&A section reveals management's optimism despite some uncertainties, such as the drought in Brazil, which they expect will not materially impact results. Additionally, the announced buyback program and high dividend yield are likely to positively influence stock price. However, debt management risks and supply chain challenges are concerns, but overall sentiment is positive.
Key Financial Performance
Dividends Received $53 million total dividends received, with Brasilagro contributing $10 million and IRSA contributing $43 million, reflecting a strong dividend yield of close to 7%.
Planted Area 303,000 hectares planted, a 9% increase year-over-year, primarily due to expansion in leased farms in Argentina.
Real Estate Sale (Los Pozos Farm) Sold 3,600 hectares for $2.2 million ($614 per hectare), resulting in a profit of 41 times the acquisition price, with an accounting gain of approximately $2.1 million.
Real Estate Sale (Alto Taquari, Brazil) Sold 1,100 hectares for BRL190 million, generating a gain close to BRL100 million, with a significant increase in value from $5,000 to $25,000 per hectare.
EBITDA from FyO Achieved $25 million to $30 million in EBITDA last year, representing a strong market position with 6.1% market share in Argentine grain.
Net Financial Results Positive net financial results of ARS7.1 billion, up from ARS5.8 billion last year, due to peso appreciation and fair value of financial assets.
Net Income Net income of ARS72.3 billion, with ARS39.5 billion attributable to controlling interest, primarily affected by non-cash accounting adjustments.
Net Debt Reduced net debt from $421 million in fiscal year '21 to $310 million currently, with plans to issue a new bond for refinancing.
Share Buyback Program Announced a new buyback program for ARS6.5 billion, with a maximum price of $12 per ADR or ARS1,500 per share.
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Operating Highlights
Planted Area: Cresud is increasing the number of hectares under sowing, expecting to plant 303,000 hectares across Argentina, Brazil, Bolivia, and Paraguay, a 9% increase compared to the previous campaign.
Commodity Prices: Commodity prices remain low compared to the peak reached after the pandemic and the war in Ukraine, affecting agricultural margins.
FyO Service Company: FyO, Cresud's agricultural commercial service company, achieved a market share of 6.1% in Argentine grain, expanding operations into Brazil.
Real Estate Transactions: Cresud completed two significant real estate transactions, selling undeveloped land in Los Pozos for $2.2 million and a developed area in Alto Taquari, Brazil, for BRL190 million.
Dividend Distribution: Cresud received dividends totaling approximately $53 million, with a 7% dividend yield for investors.
Operational Efficiency: Input costs are beginning to correct, which may improve margins despite still being high compared to commodity prices.
Debt Reduction: Cresud reduced its net debt from $421 million in fiscal year '21 to $310 million currently.
Share Buyback Program: Cresud announced a new buyback program for ARS6.5 billion, with a maximum purchase price of $12 per ADR.
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Risk or Challenges
Commodity Price Risks: The company is facing pressure from low international commodity prices, which have remained low since the peak after the pandemic and the war in Ukraine. This affects agricultural margins.
Weather-Related Risks: The agricultural yields in Argentina and Brazil have been impacted by lower rainfall, leading to concerns about crop yields for the current campaign.
Regulatory and Economic Factors: The company is experiencing challenges related to foreign exchange (FX) fluctuations and inflation, which have affected financial results and the valuation of investments.
Supply Chain Challenges: High input costs remain a concern, although there are signs of slight reductions. The company is still facing challenges in managing these costs relative to commodity prices.
Debt Management Risks: The company has a significant amount of debt, currently at $310 million, and is planning to issue new bonds to refinance existing debt, which poses risks if market conditions change.
Real Estate Market Risks: The real estate activities are subject to market fluctuations, and the company has reported a negative net income due to accounting effects related to the valuation of investment properties.
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Guidance & Outlook
Planted Area Increase: Cresud is expecting to plant 303,000 hectares across Argentina, Brazil, Bolivia, and Paraguay, marking a 9% increase compared to the previous campaign.
Real Estate Transactions: Cresud completed two significant real estate transactions, selling undeveloped land in Los Pozos for $2.2 million and a developed area in Alto Taquari, Brazil, generating substantial profits.
Dividend Distribution: Cresud received dividends totaling approximately $53 million, with $10 million from Brasilagro and $43 million from IRSA, resulting in a 7% dividend yield for investors.
FyO Service Expansion: Cresud's agricultural commercial service company, FyO, is expanding operations in Latin America, achieving a market share of 6.1% in the Argentine grain market.
Share Buyback Program: Cresud announced a new share buyback program for ARS6.5 billion, with a maximum purchase price of $12 per ADR.
Future Revenue Expectations: Cresud anticipates improved margins due to stable commodity prices and slight reductions in input costs.
CapEx and Financial Projections: Cresud plans to issue a new bond to refinance existing debt, with a net debt reduction from $421 million to $310 million.
Dividend Payment Timeline: Cresud expects to distribute dividends to ADR holders within 15 to 20 days.
Operational Outlook: The company expects continued positive performance in cattle production and sugarcane, despite some accounting challenges.
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Shareholder Return Plan
Total Dividends Received: Cresud received close to $53 million in dividends, with Brasilagro contributing approximately $10 million and IRSA providing $43 million.
Dividend Yield: The company is distributing dividends with a yield close to 7%.
Upcoming Dividend Payment: For ADR holders, the dividend payment is expected in the next 15 to 20 days.
Historical Dividend Payments: Cresud has been paying good dividends for the last three years.
Projected Dividend Payment: This year, the projected dividend payment will be around $38.8 million.
Share Buyback Program: Cresud announced a new buyback program for ARS6.5 billion, with a maximum purchase price of $12 per ADR or ARS1,500 per share.
Execution of Buyback Program: The execution of the buyback program is expected to start in the coming days.
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Key Q&A
Q:Given the administration's push for deregulation, particularly in the agricultural sector, do you see any specific opportunities emerging for Cresud? Could you discuss how the liberalization of agricultural export controls, land permitting and elimination of export taxes might benefit Cresud operations?
A:The government is supporting the agriculture sector, and the reduction of the gap between official and market prices will benefit farmers. The government is also expected to reduce export taxes, which will further help farmers. Overall, these measures will bring liquidity to the land and create opportunities for farmers.
Q:How to -- which is the optimal allocation between buybacks and dividends and how do you current -- how do current market conditions influence this analysis regarding buybacks and dividend payments?
A:We prioritize cash payments (dividends) over buybacks due to restrictions on share buybacks. We believe shareholders can buy back shares if they see them as cheap, and we will continue to do buybacks if liquidity allows.
Q:What is the advantage, disadvantage of owning this stake in Brasilagro versus the whole company?
A:Cresud owns 35% of Brasilagro, which is close to the maximum allowed. We are satisfied with this strategy as Brasilagro has been benefiting from asset sales and has a positive cash flow. We are not looking to own 100%.
Q:There is reporting a major drought in northern Brazil. If we had some impact to date?
A:The drought has caused delays in planting, which may affect the second crop of corn, but it is not expected to have a material impact on our results. We anticipate better results in Brasilagro this year.
Q:Review of Unclear Management Responses
A:Management's response regarding the impact of the drought in Brazil lacked clarity, as they mentioned only a delay in planting without providing specific data on potential financial impacts.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
ARS dollar
BOVESPA market
Brazil drought
Cresud number
Elsztain
Fear
FyO
Page effect
Page evolution
Today
accounting
acquisition
allocation
amortization
beginning
buyback dividend
commodity price
crop soybean
drought Brazil
estate activity
farmer benefit
farmer patience
fraction hectare
industry
input cost
land liquidity
liquidity land
number ARS
number effect
number income
opportunity
payment
priority
reduction gap
result number
shopping mall
size buyback
story
time price
weather
week
CRESY Transcript
Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria WT EXP 030926 (CRESW) Q1 2026 Earnings Call Transcript
Unknown11-12
The earnings call presents mixed signals: while Cresud received significant dividends and has an optimistic outlook on farmland prices and expansion, there are concerns about commodity price volatility, currency risks, and unclear management responses. The Q&A highlights potential sales and expansion but lacks specificity, which may cause investor hesitation. Overall, the sentiment is neutral as positive and negative factors balance out.
Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria (CRESY) Q3 2025 Earnings Call Transcript
Unknown5-12
The earnings call presents mixed signals. While there is a notable profit turnaround and credit rating upgrade, significant challenges remain, including operating results decline, losses in grains and FyO, and supply chain issues. The Q&A reveals uncertainties about dividends and long-term strategies, which dampen positive sentiments. Given these mixed factors, the stock is likely to remain stable in the short term.
Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria (CRESY) Q1 2025 Earnings Call Transcript
Positive11-11
The earnings call summary indicates strong financial performance with positive net income and reduced net debt. The company is also benefiting from favorable government policies in agriculture, which should enhance liquidity and opportunities. The Q&A section reveals management's optimism despite some uncertainties, such as the drought in Brazil, which they expect will not materially impact results. Additionally, the announced buyback program and high dividend yield are likely to positively influence stock price. However, debt management risks and supply chain challenges are concerns, but overall sentiment is positive.
Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria (CRESY) Q4 2023 Earnings Call Transcript
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CRESY Report
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