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Cresud's CEO Discusses F2Q12 Results - Earnings Call Transcript

The operating income of this year totaled 654 million pesos, 10% lower than last year. The severe drought affected our core agricultural areas in South America, mainly in Argentina and Brazil and probably the combination of such drought that first came to South America and later came to the States we’re going to see later, made a big change on prices of the commodities that is not reflected in this fiscal year 2012.

The lower operating income, because of this came brought to this partnership is mainly explained by this drought, and that levered the result from our beef cattle and feed loss segment and the losses from holding and derivative in BrazilAgro. But these are going to be recovered next fiscal year. We are going to explain you later that some affects of those hedges are affecting these existing balance sheets too.

The result was offset by a 27% year to year increase in the operating income from our real-estate segment, coming from ISA and Alto Palermo Banco de Crédito. The net income for this fiscal year 2012 was 78 million pesos. The production grew by 153% reflecting the consolidation of BrazilAgro.

The beef cattle segment increased 76% in production result, thanks to the 38% increase in beef production and the higher market prices. Our concerned milk production, it produces 16.6 million pesos reaching an output of 21 liters per day a cow, 12% higher than last year. This partnership (inaudible) in BrazilAgro to almost 40% and our safety in meat stuff reaching 64%. We paid a cash dividend of 64 million pesos, and as we gave a dividend here of 2.6%.

So, I will introduce to Carlos Blousson, our General Manager of Argentina, Bolivia and Paraguay.

Carlos Blousson

Thank you Alejandro, good morning everybody. Let’s go to slide three. Here you can see the nearby revolution during the last year in America. On the left, Argentina Brazil experienced overall conditions during the last fiscal, which reduced dramatically soybean and corn production. North America also suffered a similar dry condition which affected productions compared for the next fiscal.

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