Executive Summary / Key Takeaways

• Diversified Business Model: Cresud operates a unique dual-engine strategy, combining extensive agricultural operations across Latin America with a significant urban real estate portfolio through its controlling stake in IRSA, offering a balanced approach to regional market dynamics.
• Technological Edge in Agribusiness: Through subsidiaries like FyO and Agrofy, Cresud leverages digital platforms and fintech solutions to enhance agricultural brokerage and e-commerce, providing a competitive moat and driving operational efficiency in the sector.
• Robust Real Estate Recovery & Strategic Development: IRSA, Cresud's urban real estate arm, has demonstrated strong operational recovery post-pandemic, with high occupancy rates in shopping malls and office buildings, complemented by the long-term growth potential of the approved Costa Urbana development project.
• Strategic Land Monetization & Agricultural Resilience: The company actively monetizes its vast agricultural land holdings, particularly in high-liquidity markets like Brazil, while its diversified farm locations and hedging strategies provide resilience against adverse climate conditions and commodity price volatility.
• Sound Financial Management & Outlook: Despite macroeconomic challenges in Argentina, Cresud maintains a strong focus on deleveraging and capital management, with management expressing optimism for agricultural results to align with budget and anticipating appreciation in Argentine land prices driven by potential future policy changes.

The Dual Engine: Cresud's Strategic Foundation

Cresud S.A.C.I.F. y A. stands as a distinctive entity in the Latin American investment landscape, operating a diversified model that spans both large-scale agricultural production and a substantial urban real estate portfolio. This dual-engine strategy, refined over decades, positions the company to capitalize on opportunities across varied economic cycles and regional strengths. Founded in 1936, Cresud initially focused on rural and urban loans before pivoting exclusively to agriculture in the 1960s. A pivotal moment arrived in 2002 with an initial investment in IRSA , a real estate company, which evolved into a controlling 55.64% stake by 2009, marking its strategic entry into urban properties and investments. This historical evolution underscores Cresud's adaptive approach to value creation.

The company's operational footprint extends across Argentina, Brazil, Paraguay, and Bolivia in its agricultural segment, while its urban properties, primarily managed through IRSA, are concentrated in Argentina and have a presence in the U.S. real estate market. This broad geographic and sectoral diversification is a core tenet of Cresud's strategy, aiming to mitigate risks inherent in any single market or industry.

Technological Differentiation and Operational Efficiency

Cresud's competitive advantage is increasingly bolstered by its strategic investments in technology, particularly within its agricultural services segment. This technological differentiation is primarily manifested through two key subsidiaries: FyO and Agrofy.

FyO, in which Cresud holds a 50.1% stake, is Argentina's largest agricultural broker, leveraging a significant digital infrastructure. The company employs 75 individuals in technology roles, positioning it as a leading "digital broker" in the country. This technological backbone enables FyO to offer efficient brokerage services for agricultural inputs and outputs, consultancy, and futures and options, expanding its reach and operational efficiency. FyO's strong market confidence was demonstrated by its ability to issue an inaugural bond at a 0% interest rate for two years, indicating robust financial health and investor trust in its digital-first model.

Agrofy, an agricultural e-commerce marketplace where Cresud holds approximately 18%, is strategically positioned as "the player" in the South American region's digital agricultural commerce. Agrofy provides a platform for transactions and offers "fintech solutions," aiming to streamline agricultural commerce and provide new revenue streams. While the company is currently focused on achieving breakeven by stabilizing sales and optimizing costs, its regional expansion, with plans to enter Mexico, highlights its ambition to capture a significant share of the digital agricultural market. These technology-driven ventures contribute significantly to Cresud's competitive moat by enhancing efficiency, expanding market reach, and diversifying revenue streams beyond traditional farming and real estate.

Competitive Landscape and Market Positioning

Cresud operates in a competitive environment with both direct and indirect rivals. In the agricultural sector, direct competitors include Adecoagro (AGRO) and BrasilAgro . Cresud's diversified model, encompassing both agricultural production and real estate, provides a qualitative edge against AGRO's more focused bioenergy strategy and LND's concentration in Brazil. While AGRO may exhibit greater operational efficiency in bioenergy and LND in cost-effective farming, Cresud's broader international footprint and integrated agricultural-real estate model offer enhanced risk diversification and a more comprehensive value proposition.

In urban real estate, IRSA , a direct peer to Cresud's urban segment, is a significant competitor. Cresud's controlling stake in IRSA means it is both a competitor and a strategic asset. IRSA's strong focus on urban assets and local market knowledge provides agility in real estate-focused areas. Cresud's unique value proposition lies in its ability to leverage synergies between its agricultural and urban real estate segments, which can provide more stable revenue streams and capital efficiency. Indirect competitors, such as agtech companies offering precision farming tools or global food processors, could impact Cresud by introducing more efficient technologies or alternative land uses, potentially pressuring agricultural revenue opportunities.

Financial Performance and Operational Momentum

Cresud's financial performance reflects its strategic diversification and operational effectiveness, even amidst challenging macroeconomic conditions. For the trailing twelve months (TTM) ended September 23, 2025, Cresud reported annual revenue of ARS 914.16 billion and a net income of ARS 96.15 billion. The company's profitability metrics are robust, with a TTM Gross Profit Margin of 35.88%, Operating Profit Margin of 14.63%, and an EBITDA Margin of 34.00%.

The Agricultural Business segment generated revenues of ARS 448,266 million in FY 2025, with a segment profit of ARS 47,554 million. This segment has faced mixed conditions, including severe drought in Argentina in FY2023-2024, which impacted crop yields. However, Cresud's geographic diversification and strategic hedging helped mitigate the broader regional losses. For instance, BrasilAgro's strong yields partially offset Argentina's production shortfalls, preventing a major impact on global commodity prices. High input costs, particularly for fertilizers, initially pressured margins, but a significant 30% year-over-year drop in fertilizer prices in late FY2024 is expected to positively impact future agricultural margins.

The Urban Properties and Investments Business segment, primarily driven by IRSA , reported revenues of ARS 374,662 million in FY 2025, with a segment profit of ARS 211,113 million. IRSA has demonstrated a strong operational recovery, with tenant sales increasing and occupancy rates reaching historical levels of 97% in shopping malls and 100% in AAA office buildings. Hotels also achieved what management described as "probably record EBITDA" post-pandemic. This segment's performance is a testament to IRSA 's effective management and the strategic value of its high-quality assets.

Cresud's liquidity and capital management remain a key focus. The company's TTM Current Ratio stands at 1.25 and Quick Ratio at 0.95, indicating a healthy short-term financial position. The Debt/Equity Ratio is 1.69, reflecting a balanced capital structure. Cresud has actively managed its debt, successfully refinancing a $113 million bond in February 2023 and issuing new dollar-linked notes at 0% interest, contributing to a credit rating upgrade from AA to AA+. This deleveraging process, particularly at IRSA , has freed up significant cash flow for future investments and shareholder returns.

Strategic Initiatives and Forward Outlook

Cresud's strategic initiatives are designed to drive long-term growth and enhance shareholder value across its diversified portfolio. In the agricultural sector, the company continues its strategy of "buying in bulk and selling in smaller and financing," acquiring undeveloped land, enhancing its value through development, and then monetizing it in smaller parcels. A notable example is the sale of a 500-hectare productive area in Chaparral, Paraguay, at $3,000 per hectare, yielding a high internal rate of return of approximately 28% in US dollars. BrasilAgro (LND)'s acquisition of Agrícola Nova Horizonte S.A. in May 2024 further expands the Group's agricultural presence and optimizes operations.

In urban real estate, the approval of the Costa Urbana development project in Buenos Aires is a significant long-term growth driver for IRSA . This project allows for the development of almost 900,000 square meters of mixed-use properties over more than a decade, fundamentally reshaping IRSA 's growth trajectory. IRSA 's recent acquisitions, such as the property adjacent to Alto Avellaneda shopping mall and the Terrazas de Mayo mall, further strengthen its portfolio and potential for future expansion.

Management's outlook for the agricultural business remains optimistic, with expectations for results to align closely with the budget, despite the challenging climate conditions experienced in Argentina. The anticipated shift from Niña to Niño weather patterns is expected to normalize rains in Argentina, which is crucial for upcoming crop campaigns. Furthermore, management anticipates an appreciation in Argentina's land prices, contingent on future government policies that may reduce the gap between exchange rates and export taxes. FyO is poised for continued expansion into Brazil, while Agrofy focuses on achieving breakeven by optimizing costs and stabilizing sales.

Risks and Challenges

Despite its diversified strengths, Cresud faces several risks inherent in its operating environment. The primary challenge is the economic volatility in Argentina, characterized by hyperinflation (projected at 27.30% for December 2025) and fluctuating exchange rates. These macroeconomic factors can significantly impact financial results, particularly the valuation of investment properties and the conversion of dollar-denominated assets and liabilities.

Nature risks, including adverse weather conditions and natural disasters, pose a continuous threat to agricultural yields. While Cresud's diversified farm locations mitigate some of this risk, extreme events can still materially affect production. Commodity price risk, driven by cyclical global markets, can also impact the profitability of its agricultural segment.

Legal uncertainties surrounding investments like the Puerto Retiro joint venture and La Rural S.A. introduce potential financial exposures and operational delays. The ongoing IDBD lawsuit, for which an accounting provision has been recorded, also represents a contingent liability. The valuation of biological assets, such as unharvested crops and sugarcane, relies on subjective assumptions, making these valuations sensitive to market changes and environmental factors.

Conclusion

Cresud's strategic blend of agricultural prowess and urban real estate development positions it as a resilient and adaptable investment opportunity in Latin America. The company's commitment to leveraging technology through FyO and Agrofy provides a modern edge in traditional sectors, enhancing efficiency and expanding market reach. With IRSA (IRS)'s strong operational recovery and the long-term potential of projects like Costa Urbana, the urban segment is poised for sustained growth.

While macroeconomic volatility in Argentina and inherent agricultural risks present ongoing challenges, Cresud's proactive capital management, diversified asset base, and strategic land monetization initiatives underscore a compelling investment thesis. The company's ability to generate substantial dividends from its well-performing subsidiaries further reinforces its capacity for long-term value creation, making Cresud an intriguing prospect for discerning investors seeking exposure to the dynamic Latin American markets.