Cresud S.A.C.I.F. y A. — Form 20-F Summary
Reporting period: Fiscal year ended June 30, 2023, with comparisons to the fiscal year ended June 30, 2022. The filing is an annual report, not a standalone 2022 Q4 report; separate Q4 financial results are not provided in the supplied text. Amounts below are Argentine pesos (ARS) in millions unless stated otherwise. Financial statements are prepared under IFRS and restated for hyperinflation under IAS 29, so comparisons reflect inflation-adjusted reporting amounts, not unadjusted cash values.
Business context and key financial metrics
Cresud combines agricultural operations in Argentina, Brazil, Paraguay and Bolivia with urban real estate and investment activities, principally through its 56.93%-owned subsidiary IRSA. It also has interests in agricultural services, brokerage and financial businesses. The reported figures are consolidated.
| Metric | FY2023 | FY2022 | Change / context |
|---|---|---|---|
| Revenue | 190,405 | 206,634 | Down 7.9% |
| Gross profit | 71,271 | 91,542 | Gross margin approximately 37.4%, versus 44.3% |
| Operating profit / (loss) | (20,390) | 93,193 | Operating margin approximately (10.7)%, versus 45.1% |
| Net profit | 78,179 | 135,815 | Down 42.4%; included a substantial income-tax benefit in FY2023 |
| Net cash from operating activities | 35,974 | 47,012 | After income taxes paid; pre-tax operating cash flow was 41,757 in FY2023 |
| Net cash from investing activities | 14,916 | 27,796 | Inflows included investment-property and property/equipment disposals |
| Net cash used in financing activities | (90,743) | (79,799) | Debt repayments, interest and dividends exceeded new borrowing proceeds |
| Cash and cash equivalents, year-end | 38,936 | 75,261 | Down 48.3%; cash decreased 39,853 during FY2023 |
| Total assets / shareholders’ equity | 1,069,353 / 483,026 | 1,140,909 / 445,799 | Assets declined; equity increased |
| Gross borrowings | 262,052 | 304,897 | Current 102,701; non-current 159,351. Gross debt less reported cash was approximately 223,116 |
| Working capital | 15,471 | Not clearly stated | Positive at year-end; current assets 214,938 and current liabilities 195,017 |
Material changes versus the prior comparable year
- A severe drought reduced crop yields and sales volumes. Crop sales volume fell to 617,700 tons from 833,600 tons; total crop production was 652,913 tons versus 804,865 tons. Sugarcane production declined to 1.64 million tons from 2.19 million tons. Agricultural production operating results moved from profit of ARS 23,031 million to a loss of ARS 7,801 million.
- The change in biological-asset and harvested-produce fair value was a loss of ARS 1,515 million, compared with a gain of ARS 39,243 million in FY2022. Lower yields, crop prices and margins, drought effects, and higher production costs contributed.
- Urban property results were heavily affected by non-cash fair-value movements: the group reported a net loss on investment-property revaluation of ARS 51,677 million, versus a gain of ARS 35,750 million. IRSA’s Sales and Developments segment recorded an operating loss of ARS 36,623 million, versus profit of ARS 33,606 million, largely reflecting this valuation swing.
- Shopping Malls revenue rose 26.9% to ARS 47,438 million; year-end occupancy was 97.4%, versus 93.1%. Tenant sales increased 16.0% in real terms as reported by the company. Hotels revenue rose 61.4% as occupancy recovered.
- Financial results, net, declined to profit of ARS 24,268 million from ARS 47,304 million. The company attributed the decline primarily to lower foreign-exchange gains in real terms, partly offset by an inflation-adjustment gain.
- Net profit benefited from an income-tax gain of ARS 72,721 million, compared with an income-tax expense of ARS 4,262 million in FY2022. IRSA reversed previously recorded income-tax provisions and recognized deferred-tax effects; this materially affects the reported bottom line and is not operating cash generation.
Outlook, management commentary, risks and unusual items
- Outlook: The filing provides no quantified company-wide earnings or revenue guidance. Management describes continued evaluation of financing, asset sales and other capital-management options. Agrofy planned a new version of its payment platform; IRSA anticipated continued event and convention activity. These are stated plans, not financial forecasts.
- Argentina and currency: The filing highlights high inflation, peso depreciation, exchange controls and restricted access to foreign currency. Argentine CPI inflation was 115.6% for FY2023; the peso depreciated 105.0% against the U.S. dollar during the fiscal year. The filing states that restrictions can impede foreign-currency debt service, dividend payments and transfers abroad. CRESUD reported USD 113.9 million of outstanding specified U.S.-dollar notes subject to these risks.
- Agricultural and climate exposure: Drought, weather volatility, commodity-price changes, pests and disease can affect yields and prices. The company states that a significant portion of production is not hedged. The ten largest agricultural customers represented approximately 55%–60% of agribusiness net sales, and many sales arrangements are short-term.
- Debt and liquidity: The company reported ARS 262,052 million of consolidated gross borrowings and ARS 102,701 million due within one year. Financing access, refinancing costs, exchange restrictions and currency mismatches are material risks. The filing also notes subsidiary debt covenants that may restrict dividends to Cresud.
- Unusual and non-cash items: Investment-property and biological-asset fair-value changes, hyperinflation accounting and deferred-tax adjustments materially affected results. Reported Argentine-peso amounts should not be treated as equivalent to U.S.-dollar amounts; the filing gives an official exchange rate of ARS 256.70 per U.S. dollar at June 30, 2023 and warns that conversion at that rate may not be available.
- Contingencies: The filing describes an IDBD-related claim against IRSA and Dolphin B.V.; an ARS 5,536 million provision is recorded in the notes. Cresud also reports disputes and bank-account attachments concerning Salta Forestal fees; the estimated contingency is stated as approximately ARS 450 million in one section, while another section gives ARS 284.5 million. The company also describes legal proceedings involving Puerto Retiro and other property matters.
- Post-year-end events: Shareholders approved an ARS 22,000 million cash dividend and a dividend in kind of 22,090,627 IRSA shares, payable after year-end. The filing also reports subsequent property sales and debt amortizations; these are not FY2023 operating results.
Most important facts for investors to verify
- Check the audited statements and notes for the drivers and cash-flow implications of the ARS 72,721 million income-tax benefit, and distinguish it from recurring operating performance.
- Review the valuation assumptions and sensitivities for investment properties and agricultural biological assets, including the significant Level 3 discounted-cash-flow estimates identified as a critical audit matter.
- Confirm debt maturities, refinancing plans, covenant headroom, and practical access to foreign currency for U.S.-dollar obligations; compare cash with near-term debt and other available liquidity.
- Assess the severity and continuing effects of drought on crop yields, production costs, crop-price exposure, and subsequent harvests; verify customer concentration and hedging levels.
- Follow the Salta Forestal and IDBD-related contingencies, noting that the Salta exposure is reported at different amounts in different sections, and assess the status and potential cash impact of other material proceedings.
- Confirm the post-year-end dividend, repurchases, share distributions, and property-sale proceeds, including payment timing, exchange restrictions and tax withholding.