#Argentina #Buenos Aires #Agriculture #Cresud S.A.C.I.F

Recent Financial Insights from Cresud S.A.C.I.F. y A.

Cresud S.A.C.I.F. y A., an Argentine leader in agricultural productions, has disclosed its financial results for the second quarter of Fiscal Year 2025, concluding on December 31, 2024. The outcomes reflect a challenging landscape for the company, showcasing both losses and opportunities.

Financial Overview

The company reported a net loss of ARS 64,391 million for the first half of FY 2025. This significant loss is primarily attributed to a downturn in the fair value of investment properties managed by IRSA. Notably, adjusted EBITDA for the period tallied ARS 134,961 million, representing a 15.3% decline compared to the same timeframe last year. Of this, the agribusiness segment contributed ARS 35,262 million, while urban properties, through IRSA, accounted for ARS 103,136 million.

Commodity Market Dynamics

The agricultural sector is currently operating under historically low commodity prices. Despite these challenges, there has been a slight price recovery observed in the last quarter, complemented by a reduction in input costs and favorable climatic conditions in the farming regions. In total, Cresud cultivated 303,000 hectares, which is a 9% increase from the previous season. This development is crucial as it indicates a strategic response to adverse market conditions.

In an encouraging move, the Argentine government earlier this year declared a temporary tax reduction on crop exports until June 30, 2025. This measure saw the soybean export tax decrease from 33% to 26%, and the tax on wheat and corn dip from 12% to 9.5%. The tax relief is projected to positively influence both current and future crop prices by approximately 5%.

Strategic Sales and Dividends

During the first half of the fiscal year, Cresud executed several strategic transactions. Noteworthy is the sale of a portion of the Los Pozos farm in Argentina, which garnered USD 2.2 million, alongside a fractional sale of its subsidiary BrasilAgro's Alto Taquari farm, which amounted to BRL 189.4 million. These sales reflect Cresud's proactive strategy to manage its assets amidst tough market conditions.

In November 2024, the company also distributed a cash dividend of ARS 45,000 million, resulting in a dividend yield of approximately 7%. This distribution demonstrates Cresud’s commitment to returning value to its shareholders despite navigating through turbulent waters.

Looking Forward

Cresud is nearing its Q2 fiscal results, set to take place on February 11, 2025, with a focus on discussing the implications of current market conditions and forecasts for future performance. Investors are anticipated to tune into the results conference call, indicating continued interest in the firm’s direction and recovery strategies.

As Cresud S.A.C.I.F. y A. continues to adapt and respond to declining commodity prices and governmental regulations, the coming quarters are poised to present both challenges and potential opportunities for this significant player in Latin America’s agricultural landscape.

Conclusion

The recently released results underscore Cresud’s resilience and adaptability in a fluctuating market. While the company faces substantial obstacles, the strategic tax changes by the Argentine government and the recent initiatives taken by Cresud itself provide a silver lining for optimistic recovery and growth in the agricultural sector.