CRESUD INC

CRESUD Sociedad Anónima Comercial, Inmobiliaria, Financiera y Agropecuaria is a prominent Latin American agricultural company with a growing presence in Argentina, Brazil, and other Latin American countries, primarily through its investment in Brasilagro. The company's core business model revolves around the acquisition, development, and exploitation of agricultural properties with attractive prospects for production and value appreciation, coupled with the selective sale of such properties once appreciation has been realized ¹. CRESUD also engages in leasing land to third parties and providing agency and agro-industrial services ¹. Beyond its agricultural operations, CRESUD is directly and indirectly involved in the real estate business through its 54.06% equity interest (net of treasury shares) in IRSA Inversiones y Representaciones S.A. ², one of Argentina's leading real estate companies ¹. IRSA's activities encompass the development, acquisition, and operation of shopping malls, premium offices, and luxury hotels in Argentina, and it also holds a 29.12% interest in Banco Hipotecario ³, a significant financial institution in the country ¹.

The company's business model is diversified across two main segments: agricultural business and urban properties and investment business ¹. The agricultural business focuses on land acquisition, development, and exploitation, with a strategy of acquiring large areas of land with high appreciation potential and enhancing productivity through advanced technology and agricultural practices ¹. The urban properties and investment business, primarily through IRSA, generates revenue from leases and services in shopping malls and offices, as well as from the development and sale of undeveloped land and trading properties ¹. Recurring income is generated from agricultural production (crops, cattle, sugarcane, and agricultural rentals and services) and from leases in the urban properties segment, while transactional income stems from land transformation and sales in the agricultural segment and sales and developments in the urban properties segment ¹.

The agricultural business is further segmented into "Agricultural production," "Land transformation and Sales," "Other segments," and "Corporate" ¹. The "Agricultural production" segment, which includes crops, cattle, sugarcane, and agricultural rentals and services, held assets of ARS 839,697 million ⁴ as of June 30, 2025, representing 80.85% ⁵ of the agricultural business assets, and generated a profit from operations of ARS 16,305 million ⁶ for the fiscal year ended June 30, 2025 ¹. Within this, the "Crops" activity, encompassing wheat, corn, soybeans, cotton, and sunflowers, had assets of ARS 560,909 million ⁷ and incurred a loss from operations of (ARS 5,229) million ⁸ for the fiscal year ended June 30, 2025 ¹. The "Cattle" activity, involving breeding and fattening, had assets of ARS 122,022 million ⁹ and generated a profit from operations of ARS 8,545 million ¹⁰ for the same period ¹. "Sugarcane" activity, with assets of ARS 141,527 million ¹¹, contributed ARS 8,931 million ¹² in profit from operations ¹. "Agricultural Rentals and Services" had assets of ARS 15,239 million ¹³ and generated ARS 4,058 million ¹⁴ in profit from operations ¹.

The "Land transformation and Sales" segment, focused on gains from the development and disposal of farmlands, held assets of ARS 117,320 million ¹⁵ as of June 30, 2025, representing 11.30% ¹⁶ of agricultural business assets, and generated a profit from operations of ARS 55,929 million ¹⁷ for the fiscal year ended June 30, 2025 ¹. The "Other segments" (primarily brokerage activities through FyO) had assets of ARS 81,519 million ¹⁸ and reported a loss from operations of (ARS 18,755) million ¹⁹ for the fiscal year ended June 30, 2025 ¹. The "Corporate" segment, covering corporate expenses related to the agricultural business, generated operating losses of (ARS 5,925) million ²⁰ for the fiscal year ended June 30, 2025 ¹.

For the fiscal year ended June 30, 2025, CRESUD reported consolidated revenues of ARS 914,157 million ²¹, a gross profit of ARS 209,006 million ²², and an operating income (profit from operations before financing and taxation) of ARS 247,835 million ²³. The net income for the period was ARS 75,608,298,323.55 ²⁴. Diluted EPS for the fiscal year ended June 30, 2025, was ARS 123.12 ²⁵. As of June 30, 2025, cash and cash equivalents totaled ARS 103,171 million ²⁶, and total borrowings amounted to ARS 1,343,112 million ²⁷.

Comparing fiscal year 2025 to fiscal year 2024, consolidated revenues decreased from ARS 959,359 million ²⁸ to ARS 914,157 million ²¹, representing a 4.71% decline ¹. Profit from operations, before financing and taxation, significantly improved from a loss of (ARS 145,974) million ²⁹ in fiscal year 2024 to a profit of ARS 247,835 million ²³ in fiscal year 2025 ¹. The "Agricultural production" segment's profit from operations increased from ARS 4,648 million ³⁰ to ARS 16,305 million ⁶, a 250.80% increase ¹. Within this, "Crops" activity shifted from a profit of ARS 6,046 million ³¹ to a loss of (ARS 5,229) million ⁸, while "Cattle" activity improved from a loss of (ARS 7,177) million ³² to a profit of ARS 8,545 million ^{10 1}. "Sugarcane" profit from operations increased by 109.0% ³³ from ARS 4,274 million ³⁴ to ARS 8,931 million ^{12 1}. The "Land transformation and Sales" segment's profit from operations decreased by 30.1% ³⁵ from ARS 80,047 million ³⁶ to ARS 55,929 million ^{17 1}. The "Other segments" in agricultural business shifted from a profit of ARS 16,302 million ³⁷ to a loss of (ARS 18,755) million ¹⁹, a 215.0% decrease ¹.

During the fiscal year ended June 30, 2025, BrasilAgro completed the sale of the remaining 1,157 hectares of the Alto Taquari farm for 1,272,274 bags of soybeans, equivalent to BRL 189.4 million (ARS 43,395 million) ³⁸, recognizing a gain of ARS 22,179 million ^{39 1}. BrasilAgro also transferred 190 hectares of the Rio do Meio farm for 54,053 bags of soybeans, equivalent to BRL 7 million (ARS 1,604 million) ⁴⁰, and an additional 660 hectares for 75,454 bags of soybeans, equivalent to BRL 10 million (ARS 2,132 million) ⁴¹, recognizing a total gain of ARS 2,300 million ^{42 1}. CRESUD transferred a 3,630-hectare fraction of the "Los Pozos" farm for USD 2.23 million (ARS 2,742 million) ⁴³, recognizing a gain of ARS 2,597 million ^{44 1}. BrasilAgro completed the sale of the entire Preferencia farm (17,799 hectares) for 452,342 arrobas of cattle (6,785,130 kg), equivalent to BRL 140.0 million (ARS 29,854 million) ⁴⁵, with a recognized gain of ARS 14,916 million ^{46 1}. In urban properties, IRSA acquired a property adjacent to its Alto Avellaneda shopping mall for USD 12.2 million (ARS 14,636 million) ^{47 1}. IRSA also sold a floor in the "261 Della Paolera" tower for approximately USD 7.1 million (MEP) (ARS 8,558 million) ⁴⁸, generating a gain of ARS 5,340 million ^{49 1}. Additionally, IRSA acquired the "Terrazas de Mayo" shopping mall for USD 27.75 million (ARS 34,335 million) ^{50 1}.

The Board of Directors has resolved to call a General Ordinary and Extraordinary Shareholders’ Meeting to be held on October 30, 2025, to consider the allocation of net income for the fiscal year ended June 30, 2025, for ARS 75,608,298,323.55 ⁵¹, and unallocated results from previous fiscal years for ARS 19,480,344,053.25 ⁵², with a consideration for the distribution of dividends payable in cash and/or in kind for up to ARS 88,500,000,000 ^{53 1}.

In the agricultural business, Agrofy aims to consolidate and scale its membership and transaction businesses, strengthen its value proposition for sellers and producers, streamline its organizational structure, drive the growth of Agrofy Pay as a comprehensive payment solution, and expand the use of artificial intelligence through tools like "Clementina" to enhance user experience ¹. The company will continue its expansion plans to other countries in the region ¹. For the 2025/2026 season, the United States Department of Agriculture (USDA) estimates Argentina's crops output (wheat, corn, and soybean) to reach 121.5 million tons ⁵⁴, with soybean production at 48.5 million tons ⁵⁵, wheat production at 20 million tons ⁵⁶, and corn production at 53 million tons ^{57 1}.

In the urban properties and investment business, IRSA plans to convert the recently acquired "Al Oeste Shopping" into an outlet center to be relaunched during the next year ¹. This property has approximately 20,000 GLA sqm ⁵⁸ and an expansion potential of 12,000 GLA sqm ^{59 1}.

The Central Bank announced on September 4, 2025, that the new inflation estimate for 2025 will be approximately 29.5% ⁶⁰ based on its survey of market expectations ¹. The Argentine Government has also announced that foreign exchange controls would be lifted by the end of 2025, though no detailed plan or timing has been disclosed ¹.

The Argentine Government has appealed the judgment ordering it to pay USD 16 billion ⁶¹ to investment fund Burford Capital in connection with the expropriation of YPF ¹. In October 2024, the Supreme Court of the United Kingdom rejected Argentina's appeal, meaning Argentina will have to pay Euro 1,330 million ⁶² along with applicable interests ¹. In January 2025, the U.S. Supreme Court rejected Argentina's appeal and authorized the seizure of Argentine assets totaling USD 310 million ^{63 1}. In April 2025, the IMF approved an extended fund facility program for Argentina totaling approximately USD 20 billion ⁶⁴, with USD 15 billion ⁶⁵ expected to be disbursed by the end of 2025 ¹.

The company faces significant macroeconomic and political risks in Argentina, including exchange rate volatility, high inflation rates, and potential governmental intervention in the economy, which could adversely affect its financial performance and operations. The current administration's policies, while aimed at deregulation, are subject to political and social challenges, and future legislative elections in October 2025 could lead to policy reversals, including the reintroduction of expropriations, price controls, or changes in taxation ¹. The ongoing legal disputes against Argentina, such as the YPF expropriation case where Argentina was ordered to pay USD 16 billion ⁶¹ and the Supreme Court of the United Kingdom's rejection of Argentina's appeal in another case, requiring a payment of Euro 1,330 million ⁶², could further strain public finances and limit access to international capital markets ¹. In Brazil, the government's significant influence over the economy, coupled with political and economic instability, inflation, and interest rate increases, may adversely affect the company's investment in BrasilAgro ¹. Restrictions on acquisitions of agricultural properties by foreign nationals in Brazil, and the ongoing legal discussions surrounding these restrictions, could materially limit Brasilagro's ability to expand ¹. Furthermore, unpredictable weather conditions, pest infestations, and diseases pose a constant threat to crop yields and cattle production, while fluctuations in market prices for agricultural products, exacerbated by unhedged production, expose the company to significant losses ¹. Cybersecurity events also present a critical risk, potentially affecting the company's reputation, financial condition, and results of operations despite implemented security measures ¹.

Management's message to shareholders emphasizes a strategic focus on optimizing business units and streamlining cost structures, particularly within Agrofy, to navigate challenging macroeconomic environments ¹. They highlight efforts to contain expenses and improve operational efficiency, which have led to a substantial improvement in gross margins and a significant reduction in the burn rate, resulting in a stronger financial position ¹. Key strategic priorities include consolidating and scaling membership and transaction businesses, strengthening the value proposition for both sellers and producers, and driving the growth of Agrofy Pay as a comprehensive and reliable payment solution within the agribusiness ecosystem ¹. Additionally, management is committed to expanding the use of artificial intelligence through tools like "Clementina" to enhance personalization and efficiency in the user experience ¹. The Board of Directors has resolved to call a General Ordinary and Extraordinary Shareholders’ Meeting on October 30, 2025, to consider the allocation of net income for the fiscal year ended June 30, 2025, amounting to ARS 75,608,298,323.55 ⁵¹, and unallocated results from previous fiscal years of ARS 19,480,344,053.25 ⁵², with a proposal for the distribution of dividends payable in cash and/or in kind for up to ARS 88,500,000,000 ^{53 1}.