Cresud Shs Sponsored American Deposit Receipts Repr 10 Shs (NASDAQ:CRESY) Q4 2020 Earnings Conference Call - Final Transcript

Sep 30, 2020 • 01:00 pm ET

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Cresud Shs Sponsored American Deposit Receipts Repr 10 Shs (NASDAQ:CRESY) Q4 2020 Earnings Conference Call - Final Transcript

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Presentation
Executive
Alejandro G. Elsztain

next page, in the page number 5, we can see the four small sales, all of them, then in Brazil, and the profit is the yellow part of the orange, majority of the sale are gains, so book value is very low, so we see $14 million to $34 million to $7 million to $46 million, $7 million to $67 million, $2 million to $19 million. We can see the total surface of the sales, net of the earliest is 2,400 hectares of arable land that we sold, with huge gains. So the total is sales of $19 million, with cost of $2 million. This is the kind of internal rate of returns that we are achieving in reais and in dollars, 15% or 20% more in reais, and adding 5% or 15% in dollars, some of them because of the valuation in Brazil affected our internal rate of return in dollar terms. So with that the company is adding -- the company in the meantime had the chance of buying another asset called Serra Grande, that it's an area for 4,500 hectares. 2,900 hectares to be developed, and from that we are doing -- adding, not only, only new land, but adding rental. This owner gave us 5,700 hectares land of rental for 12 years and an option in the real estate. That's the reason why we did this transaction in Brazil, in the state of Maranhao.

So, we can move to the next page; and we can see the evolution in the planted area, and we can see that we achieved our record in size arriving to the 264,000 hectares, main two countries, Argentina and Brazil, after that, Bolivia and Paraguay, an increase of 6.5% comparing last year. Soybeans being more than half, 51%, corn 24%, 11% sugarcane, it's relevant and the investment in sugarcane is very big, so it represents more than 11% in size of investment. So we see how this year, the company had big size in real estate and big size in operation. And the combination of the two, we're going to see later, made us very good, and a record in operational, combining a less important year for the real estate. Small sales, but the two included made us to have a record in the EBITDA too.

So, we are going to now introduce Mr. Carlos Blousson, who's going to go more into the details.

Executive
Carlos Blousson

Thank you, Alejandro. Good evening, everybody. Let's move to slide number 7; farming, commodity prices and global stocks. We can see in the graph in the top right of the graph, the prices keep the low trend, but after finished the fiscal year in the last two months, the prices started to increase considerably, about 12%, 14% in corn and soybean. The reasons are the following; that's considering the supply, the production of the crops in South America performed very well in general, generating an increment in the global stocks and the production in United States is also