Cresud's 2026 Q1 Earnings Call: Contradictions Emerge on Farmland Pricing, Strategic Value Unlocking, and Share Repurchases

Guidance:

• Begin largest campaign in company history; planted area expected to grow 7.4% YOY to ~321,000 hectares.
• Weather and sowing conditions described as favorable (wheat 100% planted; soybean and corn sowing started).
• Management expects gradual reduction of Argentina export taxes over time, improving farmer margins and real-estate liquidity.
• Real-estate sales anticipated across next three quarters; Argentina expected to rebound, Brazil/Paraguay more muted.
• Dividends paid (70% cash / 30% in kind); ADR record date to be set by Bank of New York, payment ~10 days after record date.
• Company is well hedged, has reduced net debt vs prior year and plans refinancing; buybacks considered if cash allows.

Business Commentary:

• Agricultural Expansion and Crops:
• Cresud reported expected planted area of 321,000 hectares, growing 7.4% year-to-year, driven by Argentina and Brazil.

• The growth was primarily due to leasing more land in these countries and the commencement of a significant campaign.

• Commodity Price Trends:

• There was a slight increase in commodity prices, particularly wheat, with 100% already planted and near harvest.

• The government's temporary 0 rate for export taxes on soybeans boosted prices, with a rebound from $300 to $360 per ton.

• Dividend Payments and Cash Flow:

• Cresud received $66 million in dividends from subsidiaries, paying $64 million in dividends, 70% in cash and 30% in kind.

• The dividend payment and receipt reflect strong cash flow and a focus on returning capital to shareholders.

• Cattle Business and Productivity:

• The cattle business in the region saw increased productivity, aiming to surpass 10 million kilograms in 2026.

• This was driven by intensified activity, improved pregnancy rates, and faster rotation of cattle in the feedlots.

• Service Expansion in Agriculture:

• Cresud's brokerage service, FyO, achieved a market share of more than 6% in Argentina, becoming the largest broker in the country.
• The expansion was due to providing valuable services to farmers, including credit, advising, and digital assistance.
  

Sentiment Analysis:

Overall Tone: Positive

• Management repeatedly stated optimism: "we are optimistic," "we are beginning a big campaign," "we are well hedged." Highlighted positives include favorable weather, 7.4% planted-area growth, strong cattle prices, IRSA dividends received and improved liquidity supporting farmland price rebound.

Q&A:

• Question from Unidentified Analyst (Unidentified): Clarify timing and process for dividend payments to ADR holders—has the record date been set and when will payment occur?
  Response: Cresud has already paid Bank of New York; the bank will set the ADR record date (expected next week) and payment will occur ~10 days after that record date.

• Question from Unidentified Analyst (Unidentified): Were there any farmland sales in the quarter and do you plan asset sales going forward? How do you see farmland prices?
  Response: First quarter had no sales but asset sales are part of the annual strategy; expect activity over the next three quarters with Argentina prices rebounding and liquidity improving, while Brazil and Paraguay face slower/adjusting markets.

• Question from Unidentified Analyst (Unidentified): Do you plan share repurchases given the optimistic outlook for Argentina and farming?
  Response: Buybacks are considered depending on cash and results; this quarter management prioritized cash dividend distribution but may repurchase shares if comfortable with cash position.

• Question from Unidentified Analyst (Unidentified): Given improved agribusiness margins, will you pursue more leases or purchases of farmland?
  Response: Plan to expand via both leasing and selective purchases, with a greater emphasis on leasing for scale and targeted purchases in agricultural areas and irrigation expansion.

Contradiction Point 1

Farmland Pricing and Market Conditions in Argentina

It reflects differing views on the farmland market conditions in Argentina, which could impact the company's investment decisions and strategic direction.

Do you have plans for farmland sales in the coming quarters, and how do you see farmland prices evolving? - Santiago Donato(Investor Relations Officer)

2026Q1: The situation in Argentina is improving, with reconnected markets and reduced export taxes. This is bringing liquidity, making farm sales easier, and leading to land price appreciation. - Alejandro Elsztain(Second Vice Chairman, CEO, & GM)

Is the company considering buying or selling farms in Argentina? Are there pricing opportunities? - Santiago Donato(Investor Relations Officer)

2025Q4: Argentina is providing more liquidity to real estate, enabling Cresud to sell some assets and consider purchases due to delayed pricing. - Alejandro Elsztain(Second Vice Chairman, CEO, & GM)

Contradiction Point 2

Strategic Actions to Unlock Value at Cresud

It involves differing perspectives on the appropriate actions to address the perceived undervaluation of Cresud, which could impact shareholder expectations and corporate strategy.

Will you repurchase shares given the optimistic outlook? - Santiago Donato(Investor Relations Officer)

2026Q1: If we feel comfortable with our cash position and have strong results, we could consider buybacks in the future. - Matias Gaivironsky(CFO)

Has management considered actions to unlock value at Cresud, given that its market cap equals the value of its stake in IRSA? - Santiago Donato(Investor Relations Officer)

2025Q4: The management believes the best way to address undervaluation is through dividends and buybacks, and they are open to further actions if certain conditions align. - Matias Gaivironsky(CFO)

Contradiction Point 3

Farmland Sales and Pricing Trends

It involves differing statements regarding farmland sales and pricing trends, which are crucial for understanding the company's financial strategy and market conditions.

Do you have plans to sell farmland in the coming quarters, and how do you expect farmland prices to change? - Santiago Donato

2026Q1: Farmland sales are part of our strategy, and while there were no sales in Q1, discussions are ongoing for the remainder of the year. The situation in Argentina is improving, with reconnected markets and reduced export taxes. This is bringing liquidity, making farm sales easier, and leading to land price appreciation. - Alejandro Elsztain(CFO)

Can you discuss the recent farmland sales in Brazil and their impact on the balance sheet? - Alejandro Elsztain

2022Q1: Two significant farmland sales were made in Brazil, totaling 5,600 hectares. The first sale of 2,900 hectares resulted in an internal rate of return of 56% in real and 40% in dollars. - Alejandro Elsztain(CFO)

Contradiction Point 4

Share Repurchases and Capital Management

The differing statements on share repurchases could affect investor expectations regarding capital allocation and shareholder returns.

Do you plan to make share repurchases given the optimistic outlook? - Santiago Donato(Investor Relations Officer)

2026Q1: We have previously done buyback programs for Cresud and IRSA. This quarter, we prioritized distributing cash. If we feel comfortable with our cash position and have strong results, we could consider buybacks in the future. - Matias Gaivironsky(CFO)

Can you update us on the capital management strategy and shareholder returns? - Alejandro Ramirez (BNP Paribas)

2022Q2: We continue to evaluate shareholder returns and are comfortable with our capital structure. Our approach to capital allocation remains flexible. - Matias Gaivironsky(CFO)