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FY17 Conference CallSeptember 11, 2017
Hosted by: Alejandro Elsztain, CEO
Carlos Blousson, General Manager of Argentina & Bolivia
Matías Gaivironsky, CFO
Main Events FY17
2
Main events - 2017
Urban Properties & Investment
Argentina Business Center:
EBITDA from rental segment grew by 27.8% in FY17
vs FY16. Occupancy reached 98.5% in Malls, 96.2%
in offices and 67.2% in the hotels’ portfolio.
Israel Business Center (Consolidated 12M 17 vs 6M16):
After Adama Sale (agrochemicals’ company) from
Discount Corporation (DIC), IDBD group improved its
financials figures and came up to the capital markets.
Main challenges for 2018: Clal and the execution of the
proposal to meet the requirement of the Concentration
Law
Consolidated Financial Results:Net result for FY17 registered a gain of ARS 5,028 million
compared to a gain of ARS 8,537 million in 2016 mainly
explained by:
- Lower results from changes in the fair value of
investments properties compensated by:
- Higer results from Adama sale and the increase in Clal
share price, valued at market value.
Investment Properties Valuation Method
We decided to change the valuation method for the
investment properties from historical cost to reasonable
value, which was reflected in the company’s financial
statements as of the IVQ of FY17
Agribusiness
Farmland Development
We have sold farms during the year for ARS 479 millones,
registering a net gain of ARS 280 million.
During the year, our subsidiary Brasilagro acquired a farm
of 17,566 ha of crop activity in the state of Maranhão for
R$ 100 million
We have developed 13,326 ha in the region, 62% above
previous year
Farming
The 2017 campaign presented good climate conditions in
the region, except in Bolivia where climate was adverse.
We have planted 203,000 ha and developed 13,326 ha in
the region.
Portfolio Evolution FY 2017
Portfolio Evolution(Owned and Long term Lease – Th. ha)
754
763
754
17,6 2,9 0,1 1,6 0,62,7
9,4
Total Ha FY
2016
Acquisition
Sao Jose
El Invierno y
La Esperanza
Sale
Mendoza
Farmland
Sale
Partial Sale
Araucaria
Partial sale
Jatobá
Cuatro
Vientos Farm
Total Ha FY
2017
Subsequent
Sale: La
Esmeralda
Proyected
Ha FY 2018
Acquisitions
Sales
3
Current Portfolio Breakdown FY 2017 – In Hectares
By type of property By country
By use of the land By productive activity
624,77074%
7,7731%
83,46610%
132,00016%
Owned Leased to 3rd parties
Leased Long Term concession
612,43572%
166,16920%
9,8751%
59,4907%
Argentina Brasil Bolivia Paraguay
376,53244%
471,43756%
Productive Reserve
187,98150%
102,51627%
86,03623%
Agriculture Cattle Others (Milk & Wool)
4
Portfolio Appraisal
5
Disclosure of independent appraisal of our portfolio of Owned Farms and Long term lease
Appraisers
Argentina & Bolivia Farmland (Compañía Argentina de Tierras – CAT)
Brazil & Paraguay Farmland DELOITTE TOUCHE TOHMATSU)
32
43
320
378
0 50 100 150 200 250 300 350 400
Farms in Bolivia
Farms in Paraguay
Farms in Argentina
Farms in Brazil
Consolidated Valuation – USD million
32
19
320
164
0 50 100 150 200 250 300 350
Farms in Bolivia
Farms in Paraguay
Farms in Argentina
Farms in Brazil
Valuation for Cresud' stake – USD million
As of June 30, 2017, the independent valuation for CRESUD consolidated regional farmlandreached the sum of USD 773 million (USD 535 million for CRESUD direct stake)
Farmland Acquisition during FY17
Balsas
Farm São José
São José Farm(São Raimundo das Mangabeiras/MA)
Lease & PartnershipAcquisition – Farm São José
Location: São Raimundo das Mangabeiras/MA
Arable Area: 15,000 hectares
Value: 10% of the total supply
Project : Sugarcane
Total Area: 17,566 ha | Arable: 10,000 ha
Value: R$ 100 million (R$/arable ha 10,000)
Project: Grains, Sugarcane
6
Regional Farmland Sales during FY 2017
7
1 1,1
9,75 1,1
4,5
62,2
14,24,1%
11% 11%
El Invierno y La Esperanza (July '16) Finca Mendoza Cuatro Vientos (July '17)
Book Value Land appreciation gain IRR (USD)
4 3 1,2
139,9
8,9
17
12,910,1
11,70% 12,08%9,23%
Araucaria (May '17 - partial) Araucaria (March '17 - partial) Jatobá (July '17 - partial)
Book Value Land appreciation gain IRR USD
Farmland Sales in Argentina & Bolivia (USD million)
Farmland Sales in Brazil (BRL million)
Subsequent event: Farmland Sale in Argentina
8
o July 2017: Sign of agreement & payment of USD 4 million
o Balance of USD 15 million financed with a mortgage in 4
installments at 4% fixed rate due 2022
o Sign of Deed: June 2018
o Results will be recognized in the 4Q18
o Book Value: ARS 52 million
La Esmeralda FarmlandUSD 19.0 million (USD/ha 2,031)
Regional Farmland Prices – USD/ha
9
Farmland Sales(USD million)
Regional Farmland Prices – USD/ha
15.900
5.837
10.000
4.000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Argentina - Corn Belt
Brasil Corn Belt
Paraguay Corn Belt
Bolivia Corn Belt
Farmland Sales(USD million)
Farmland Sales(USD million)
7 1234
8
62
147,2 6,60,3
3,513,3 14,0
27,8
13,1
72,1
19,79,7 7,6
0,5 4,7
20,626,1
61,7
21,3
133,8
34,1
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Profit USD M Sales USD M
Farmland Development
Land Transformation Evolution(Accumulated ha overall the region)
40.576
59.625
88.124
119.111
147.321
170.974
191.274
206.674
218.274226.474
239.774
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
CAGR (07-17’)+19,4%
Land Transformation 2017 vs 2016(Ha by country)
3,22,1
3,6
9,6**1,4
1,6*
8,2
13,3
FY 2016 FY 2017E
Argentina
Brazil
Paraguay
** 3,300 terminadas y 6,300 pendientes de terminación
10
After CRESCA division (partnership between Brasilagro & Carlos Casado)
during FY17
Farming: Production Forecast & Global Stocks
CornSoybean
-2% -4% -6%
Var % YoYVar % YoY
-1% -6% -1%
USDA Production Forecast
Stock / ConsumptionStock / Consumption
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
30,0%
US
World
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
US
World
29 41 4067
99 95
346385
362
2015/2016 2016/2017 2017/2018E
Argentina
Brazil
USA
57 58 57
97
114107107
117 116
2015/2016 2016/2017 2017/2018E
Argentina
Brazil
USA
11
Farming: Climate Conditions & Commodity Prices
ARGENTINA
BRASIL
12
Commodity Prices – USD/tn
602
373 350
490
648
560 550
351
430
345
355
346297
125134
239
327
262
188139 169
141
145 146
ene/
06
jul/
06
ene/
07
jul/
07
ene/
08
jul/
08
ene/
09
jul/
09
ene/
10
jul/
10
ene/
11
jul/
11
ene/
12
jul/
12
ene/
13
jul/
13
ene/
14
jul/
14
ene/
15
jul/
15
ene/
16
jul/
16
ene/
17
jul/
17
Soybean Corn
Var % YoY (17’vs 16’)Soybean: -19.8%
Corn: + 3.3%
Farming: Planted Area, Crop Production & Yields
13
Yields Evolution(tn/ha)
Crop Production*(Th Tonnes)
*Excluding sugar cane production** Includes production from previous season
Crop Breakdown(FY 2017 in ha)
358 377 380482
158 14839
8632 40
30
27568 589
483
612
FY 2014 FY 2015 FY 2016 FY 2017
Argentina Brazil Bolivia Paraguay
+ 27%
13
+13%
106 120
51 65
16
116
7 179
203
FY16 FY17E
Argentina Brazil Bolivia Paraguay
2,22,6
2,32,7
4,7
5,5 5,5
6,0
FY 2014 FY 2015 FY 2016 FY 2017
Soybean Corn
38%
30%
4%
2%
15%
7%4%
Soybean
Corn
Wheat
Sunflower
Sugarcane
Others
Leased to 3rd parties
Planted Area(FY 2017 in Th. ha)
Farming: Sugarcane, Cattle & Milk Production
Sugarcane Production(Th Tonnes)
17,516,3
14,0
2,2 2,0 1,5
21,5
21,824,7
jun-15 jun-16 jun-17
Milk Production
Milk Production (Lts M.) (ytd)
Daily Milking Cows (Th. Heads) (ytd)
Milk Production/ Cow / Day (Lts) (ytd)
8,38,2
8,1
70
75
83
47
52
57
62
67
72
77
82
87
6,70
6,90
7,10
7,30
7,50
7,70
7,90
8,10
8,30
8,50
jun-15 jun-16 jun-17
Milla
res
Meat Production
Beef cattle production (Th. Tn) (ytd) Total (Th. Heads)
928
1.229
1.063
jun-15 jun-16 jun-17
14
Other Segments
1515
AGRIBUSINESS GLOBAL MARKETPLACE
Seeks to become a leading online business
platform in the farming industry
More than 2000 agribusiness suppliers sell their products
through this platform
3.4 million grains traded in FY17
Strong Market share (4.2% soybean & 2,4% corn)
Results FY 17: ARS 51.2 MM (vs ARS 27.5 MM in 2016)
Cresud stake: 40.2%
Cresud stake: 59.6%
Poor results from our Meatpacking Plant in La Pampa (Argentina)
Catte price has gone up
Exchange remained stable (after the positive impact of depreciation)
Local market could not translate to price the higher costs
Results FY 17: Loss of ARS 132.6 MM (vs. Loss 65.7 MM in FY16)
Cresud 100%
Investment in IRSA: Argentina Business Center
Rental Segment: EBITDA from rental segment grew by 27.8% in FY17
vs FY16.
Occupancy reached 98.5% in Malls, 96.2% in offices
and 67.2% in the hotels’ portfolio.
Sales & Development Lower Sales of Investment Properties during FY17
compared to FY16.
Start of commercialization of Greenvielle lots (closed
community in Hudson, South of BA
International & Financials Lisptick building: Good operating figures during 2017.
Avge leases of USD/sqm 69 and 95% occupancy.
Condor Hospitality Trust (US) is flying to better hotels’
quality raising equity in the market
Investment in Banco Hipotecario generated a gain of
ARS 83 million in FY17 and market value of our
investment reached USD 180 million.
Main events - 2017
16
3 luxury hotels
Sheraton Buenos Aires
Intercontinental Buenos Aires
Llao Llao Resort –Bariloche
Land reserves
~ 700,000 sqm to be developed Premium Location in BA City
Mixed Use Project Approvals pending
Lipstick Building NYC
Condor Hospitality Trust
NASDAQ: CDOR-28.5% equity stake
CRESUD63.8%
FLOAT36.2%
Ownership
Investment in IRSA: Israel Business Center
Main events - 2017
Clal Insurance: The continuation of the legal processes in the matter of
the outline for the sale of the Company’s holdings in Clal
Insurance.
As of today, IDBD sold 10% of Clal Insurance through
the execution of two swap transaction.
The Concentration Law: The law do not allow to have more than 3 layers of public
companies (Eg: IDBD-DIC-PBC-Gav-Yam)
The selected course of action involved the sale of all the
shares of Discount Investment Corporation Ltd. (“DIC”)
at a fair value to a special-purpose corporation
incorporated in Israel, controlled by IRSA and financed
through a loan with guarantee of DIC shares.
On August 2017, Dolphin made a non binding offer to
acquire all the stake of IDBD in DIC.
The execution is subject to approval of IDBD and IRSA
board of directors
Sale of Adama: DIC sold its 40% stake in Adama to Chemchina for USD 230
mm in excess of the total loan cancellation for USD 1.17 Bn
Gain recognized at IRSA: ARS 4.2 billion
The signing of the Israir – Sun D’or transaction The signing of a transaction for the sale of Israir, within the
framework of which a net amount of approximately $42 – 45
million will be received in cash and 25% of the shares in Sun
D’or (subject to crucial terms, including the approval of the
Anti-Trust Authority.
Debt The raising of the rating, the strengthening of the liquidity, the
continuation of the lowering of the yield on the bonds and the
removal of the going concern clause and covenants.
Refinance of short term debt to 2019 at 5.40% fixed rate.
Dividends DIC paid dividends for the 1st time since 2014 for a total
amount of NIS 694 million.
17
Change to Fair Value of our Investment Properties
Valuation of Investment Properties at Fair Value Property, Plant and
Equipment at Historical Cost
Hotels Owned FarmsOffices*Shoppings IDB Investment
PropertiesFarms leasedto 3rd parties
Land Reserves
* Includes La Rural S.A. & Lipstick building
During FY17, the Group have decided to change the valuation method of their investment properties from
historical cost to fair market value, in accordance with the International Financial Reporting Standards (IFRS).
• The subsidiary IRSA Commercial Properties has already reflected this change in the IIIQ17 and CRESUD & IRSA
is reflecting it in the fourth quarter of the fiscal year.
Valuation made by 3rd qualified independant party
AGRIBUSINESS: CAT (Argentina) & DELOITTE (Brazil)
URBAN PROPERTIES AND INVESMENTS – ARGENTINA BUSINESS CENTER: NEWMARK BACRE
URBAN PROPERTIES AND INVESMENTS – ISRAEL BUSINESS CENTER: Different appraisers
19
Change to Fair Value of our Investment Properties
20
3,294
141 39 30 4
3,588
1,718
380 325
18
IDBD Properties Shopping Malls Office buildings Land Reserves and
Properties under
development
Farms leased to 3rd
parties
Historical cost (as of March 31,2017) Fair Value
1,1x
The Group believes that this change is justifiable because it better reflects the reasonablevalue of its core assets and therefore provides more relevant information to managementand users of our financial statements.
Why we decided to change the valuation method?
12,2x
9,7x 10,8x4,6x
Investment Properties’ Valuation (USD million)As of June 30, 2017 (using ARS/USD 16,63)
Operating Income by Segment FY17 (in ARS MM)
311
AGRIBUSINESS
21
199
-200
47
-44
121
63
-4
-6
50
102
413
-85,0
-12
258
311
Farmland Sales Farming OthersIncludes Agro-Industrial,and FyO
FY2016 FY2017 FY2016Cattle
Grains Sugarcane
MilkFY2017
Agriculture Rent & Service
-90-115
Excluding Results from changes in the fair value of Investment Properties
Operating Income by Segment FY17 (in ARS MM)
317
URBAN PROPERTIES & INVESTMENTS – Argentina Business Center
Rental Segment(ARS million)
Sales & Development(ARS million)
Financial & Others(ARS million)
URBAN PROPERTIES & INVESTMENTS – Israel Business Center
+56%
2,208
1,619
-253-758
Bienes raíces Supermercados Telecomunicaciones Otros
1,559
2,434
FY16 FY17-114
-39 -145
-308FY2016 FY2017
Excluding Results from changes in the fair value of Investment Properties
22
Consolidated Financial Results FY 2017 – ARS MM
31123
Gross Profit Results from changes in Fair Value of Investment
Properties
Operating Income
Argentina Business Center
Israel Business Center
Agri-business
FY 2017FY 2016
979 55222 331 278 355
2,964 3.341
17.856
4.296
19.493
6.371
7,455
19.312
-339
374
378
3.199
11.398
23.205
17.539
5.001
20.149
9.925
Consolidated Financial Results FY 2017 – ARS MM
31124
Agri-business
Operating Income Net financial Results Net Income
Argentina Business Center
Israel Business Center
FY 2017FY 2016
Total
278355
19.493
6.371
378
3.199
20.149
9.925
-6.115-5.225
8.537
5.028
1,511 Controller
3,517 Minority
Consolidated Balance Sheet FY 2017 – ARS MM
31125
241,446
192,273
16,405
175,621
154,348
2,837
Assets Liabilities Equity controlling shareholders
March 31, 2017 June 30, 2017
5.7
32.7
March 31, 2017 June 30, 2017
Book value per share (ARS)
Cresud Stand Alone Debt as of June 30, 2017
26
AgribusinessAmount
(USD MM)
Cresud Total Debt 348.6
Cash & ST Investments 2.5
Cresud Net Debt 346.1
Debt Description
51,5
188,1
56,440,8
11,4
2017 2018 2019 2021 2022
Debt Amortization Schedule
(Cresud Standalone - USD million)
Cautionary Statement
ALEJANDRO ELSZTAIN – CEOMATÍAS GAIVIRONSKY - CFOTel +(54 11) 4323 7449
Corporate OfficesIntercontinental PlazaMoreno 877 23° FloorTel +(54 11) 4323 7400Fax +(54 11) 4323 7480C1091AAQ - City of Buenos Aires -Argentina
Independent AuditorsPricewaterhouseCoopers ArgentinaTel +(54 11) 4850 0000Bouchard 557 7º FloorC1106ABG – City of Buenos Aires -Argentina
NASDAQ Symbol: CRESYBASE Symbol: CRES
www.cresud.com.arContact e-mail: [email protected]
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Investing in all equities, including natural resources and real estate-related equities, carries risks which should be taken intoconsideration when making an investment.
This institutional presentation contains statements that constitute forward-looking statements, in that they include statementsregarding the intent, belief or current expectations of our directors and officers with respect to our future operating performance.You should be aware that any such forward looking statements are no guarantees of future performance and may involve risks anduncertainties, and that actual results may differ materially and adversely from those set forth in this presentation. We undertakeno obligation to release publicly any revisions to such forward-looking statements to reflect later events or circumstances or toreflect the occurrence of unanticipated events.
Additional information concerning factors that could cause actual results to differ materially from those in the forward-lookingstatements can be found in the companies’ Forms 20-F for Fiscal Year 2016 ended June 30, 2016, which are available for you inour websites.
Contact Information
@cresudir