CRESY — FY2026 Annual Financial Report Analysis

Cresud's fiscal 2026 (the year to June 30, 2026) was a record year on its farms and a weak year in its farm profits, and the 38% rise in profit belonging to shareholders came mostly from somewhere else: a non-cash revaluation of the Buenos Aires shopping malls and offices owned by its 55%-held subsidiary IRSA. Revenue rose 13.0% to ARS 1.38 trillion and net income attributable to Cresud's shareholders rose to ARS 177.3 billion, but the agribusiness segment swung to a loss, cash from operations fell by two-thirds, and the company's own "Adjusted EBITDA" (which strips out revaluations) fell 23.1%.

At a glance

• ARS 190.2 billion of revaluation gains on investment properties, up from ARS 25.5 billion a year earlier. This is the main reason profit rose, and no cash changed hands: it reflects a lower discount rate on IRSA's malls after Argentina's country risk premium fell by about 130 basis points (1.3 percentage points).
• Agribusiness segment result: a loss of ARS 15.1 billion, versus a ARS 63.5 billion profit in fiscal 2025, despite crop production up 32% to 914,781 tons. Losses on grain derivatives and a fire- and frost-hit sugarcane harvest in Brazil, plus almost no farmland sales, did the damage.
• Operating cash flow of ARS 62.9 billion, down 68% and equal to only 17% of the year's total profit of ARS 372.3 billion, mostly because income tax paid jumped to ARS 128.1 billion from ARS 11.2 billion.

Read this first: what the peso figures mean

Every figure here is in Argentine pesos (ARS), the currency Cresud reports in. Two things make these numbers different from a US company's:

1. Argentina counts as a "hyperinflationary" economy for accounting purposes, so Cresud reports under IAS 29, an accounting rule for high-inflation countries. Under it, last year's figures are restated into June 2026 pesos so the two years are comparable. The financial statements put inflation for the year at 34% (the release cites 33.55% for consumer prices). So the 13.0% revenue growth below is growth on top of inflation, not 13% in raw pesos; in unadjusted pesos the increase would look much larger. The restatement also produces a line called "inflation adjustment" in financial results (a gain of ARS 36.5 billion this year), which mainly reflects the company owing more in pesos-denominated monetary items than it holds, so inflation shrinks the real value of what it owes.
2. The peso keeps sliding against the dollar. It went from about ARS 1,205 per US dollar at the start of the fiscal year to ARS 1,482 on June 30, 2026, a weaker fall (23%) than inflation (34%), which means the peso actually got stronger in "real" terms. For a rough sense of scale only: at the year-end rate, revenue of ARS 1,379,363 million is about USD 930 million. That is our own conversion, not a company figure, and using one rate for a year of sales overstates precision.

One more structural point: Cresud consolidates IRSA, Argentina's largest owner of shopping malls and office buildings, but owns only 55.14% of it, so a large slice of the group's profit belongs to IRSA's other shareholders. Of the ARS 372.3 billion total profit, ARS 195.0 billion went to these "non-controlling interests" and ARS 177.3 billion to Cresud's own shareholders. Each US-traded ADS represents 10 ordinary shares.

The numbers

Prior-year peso figures are restated into June 2026 purchasing power (IAS 29), as published by the company. Diluted EPS per ADS is ARS 2,696.8 (10 shares per ADS). Operating margin is our calculation (result from operations divided by revenue).

Takeaway: Strip out the revaluation of IRSA's buildings and fiscal 2026 was a worse year than fiscal 2025, not a better one. Operating profit excluding revaluation gains fell from ARS 269.6 billion to ARS 196.0 billion (about 27% lower), the farming business lost money in a record-harvest year, and cash generation fell by two-thirds. The headline 38% profit growth depends on a valuation model reacting to a lower Argentine country risk premium, which can reverse as quickly as it arrived.

Two businesses moving in opposite directions

Cresud reports two big blocks: Agribusiness (its own farms in Argentina, Brazil via BrasilAgro, Bolivia and Paraguay, cattle, land sales, and the grain-trading business FyO) and Urban Properties and Investments (IRSA).

IRSA did the heavy lifting, mostly on paper. IRSA's revenue rose 5.1% to ARS 656,714 million and its Adjusted EBITDA (cash-like operating profit) rose only 3.9% to ARS 291,055 million. Its segment result, though, jumped 66.2%, because the urban business booked ARS 195,067 million of revaluation gains. The company attributes the improvement to "more favorable macroeconomic projections regarding the real exchange rate and GDP, as well as by an approximately 130-basis-point reduction in the country risk premium, which impacted the discount rate used in the valuation of shopping centers." In plain terms, a lower discount rate makes a mall's future rent worth more today, and when the model says the building is worth more, the gain flows through profit even though nothing was sold. The rental business itself had a steady year: the release describes high occupancy across malls, offices and hotels.

Agribusiness had a record harvest and still lost money. The company planted about 314,000 hectares (roughly 5% more than the prior season) and its own production table shows crops up 32.4% to 914,781 tons, with soybeans up 19% to 438,361 tons, corn up 52% to 361,106 tons and record wheat of 61,931 tons. (The release's "exceeding one million tons" headline includes the 34.86%-owned Agro-Uranga, which the production table excludes.) The agricultural production segment nonetheless went from a ARS 21,774 million gain to an ARS 18,480 million loss. The pieces:

• Grains: loss widened to ARS 27,225 million from ARS 6,985 million. The company blames "a loss in Brazil, mainly explained by negative results from grain derivatives and lower production and holding results, primarily in corn," plus a cotton production loss from the prior crop year. Argentina did better, helped by grain prices that "outpaced inflation during the months with higher inventory levels". Grain revenue rose 22.2% but costs rose 27.7%.
• Sugarcane: from an ARS 11,928 million gain to an ARS 6,082 million loss. Volume fell 35.4% to 1.19 million tons after fires and frosts at BrasilAgro, and the company also marked down the expected value of the 2026/27 crop still in the fields.
• Cattle: profit fell 43.2% to ARS 6,481 million, even though beef production hit 12,065 tons (up 4.3%) and cattle revenue rose 82.9%. Brazil's cattle business shrank after the sale of the Preferencia farm; Argentina was strong but with higher costs.
• Land sales nearly stopped. Gains from selling farmland fell to ARS 633 million from ARS 56,079 million, and the agricultural land Cresud holds as investment property was marked down by ARS 5,504 million, mainly on lower land values in Brazil. The land-development segment went from a ARS 74,690 million profit to a ARS 7,719 million loss. The only sale of note was part of BrasilAgro's Morotí farm in Paraguay, about USD 0.6 million recognized so far out of a USD 1.5 million deal.

The bright spot was FyO, the grain brokerage and input-sales business, which swung from a ARS 25,046 million loss to an ARS 16,846 million gain on higher volumes. Part of that swing is accounting: in fiscal 2025, "due to hedging strategies, a significant portion of the results had been recognized within financial results" rather than in the segment.

What the headline numbers hide

• Cash conversion was poor. Operating cash flow was ARS 62,938 million against total profit of ARS 372,280 million. Before tax, operating cash flow was ARS 191,081 million (down 8% from ARS 207,968 million); the collapse comes from income tax paid of ARS 128,143 million versus ARS 11,209 million a year earlier. The single biggest profit driver, the ARS 190.2 billion revaluation gain, produced no cash at all.
• The company's own adjusted measure moved the other way. Cresud's Adjusted EBITDA, which removes unrealized revaluation gains and biological-asset fair-value changes and adds back other exceptional expenses (ARS 8,440 million) and impairments of properties held for sale (ARS 33,532 million), fell 23.1% to ARS 273,263 million. Agribusiness Adjusted EBITDA was only ARS 17,812 million. This is a non-IFRS figure (not defined by accounting standards), but here it's the better guide to how the businesses ran.
• Last year had its own one-off in the other direction. Fiscal 2025 profit included ARS 56,079 million of farmland-sale gains that did not recur. Taking out both years' revaluation gains and farmland-sale gains, operating profit was about ARS 195.4 billion in fiscal 2026 versus about ARS 213.5 billion in fiscal 2025 (our calculation), a decline of about 8.5%.
• Interest costs rose sharply. Finance costs climbed 64.9% to ARS 178,999 million as total borrowings rose about 13% to ARS 2.02 trillion. Net financial results still came out positive (ARS 63,805 million) because "other financial results" contributed a ARS 192,002 million gain and the inflation adjustment another ARS 36,493 million. Those are market-driven lines, not repeatable operating income.
• EPS growth was not driven by tax or buybacks, and the share count went up. The effective tax rate was flat at about 24%. Warrant exercises lifted the share count from 614 million to 709 million during the year, which diluted existing holders. Diluted EPS still rose slightly faster than net income (39.1% vs 38.0%) because last year's diluted figure already assumed the warrants would be exercised.
• The manager's fee grows with paper profits. Cresud pays Consultores Asset Management (CAMSA), 85% owned by chairman Eduardo Elsztain, "an annual fee equal to 10% of our annual net income after taxes" (our translation of the Spanish financial statements). The fee more than doubled to ARS 27,169 million, so part of the non-cash revaluation gain turned into a real expense paid to a related party.
• Currency exposure is large. The financial statements put the group's net liabilities in foreign currency at ARS 1,350,942 million and estimate that a 10% real depreciation of the peso would mean a pre-tax loss of about ARS 135,094 million. This year the peso strengthened in real terms, which helped; a reversal would hurt.

Debt and shareholder returns

Cresud's own (parent-level, agribusiness) debt stood at USD 432.5 million with net debt of USD 373.0 million on June 30, 2026, almost all in US-dollar notes sold locally at 0% to 8% coupons. It issued about USD 256 million of notes during the year and has since redeemed the 6.00% Series XLIV (July 2026, at 101%) and 7.25% Series XLIX (September 2026), repaid the Series XLV at maturity in August, and reopened the 6.25% Series LIII for USD 40.4 million. IRSA's debt is separate: USD 671.3 million gross and USD 281.8 million net. BrasilAgro carries another USD 159.1 million of net debt. Liquidity (current assets divided by current liabilities) improved to 1.46 from 1.24.

The company paid ARS 93,782 million of dividends during the year, partly in cash (ARS 65,080 million) and partly in IRSA shares (ARS 28,702 million), which it describes as an approximately 8% dividend yield. Equity attributable to shareholders was ARS 1,454,933 million at year end; at ARS 1,482 per dollar and 709 million shares that is roughly USD 13.8 per ADS, against an ADS price of USD 11.21 on June 30 (our calculation, and much of that book value is itself the fair value of IRSA's properties).

Outlook

Management did not give numeric guidance. It expects the 2027 crop season to benefit from an El Niño year, "with good rainfall levels expected across the main production regions," plans to increase planted area, particularly in Argentina, and expects BrasilAgro to "recover production levels" after the poor sugarcane year. At IRSA it expects the rental segments to hold up "despite the uncertainty that the electoral process could generate," with the Distrito Diagonal mall in La Plata due to open toward the end of fiscal 2027 and construction of the first buildings at Ramblas del Plata to start.

Our read: the operating story for fiscal 2027 is more promising than fiscal 2026's, because a normal Brazilian harvest, higher grain prices (the release cites soybean and corn prices up about 20% and 29% over twelve months) and lower Argentine export taxes all point toward agribusiness recovering from a loss. The reported profit is a different matter. This year's ARS 190 billion revaluation gain depended on Argentina's country risk falling, and the release itself flags an electoral process ahead; if risk premiums widen again, the same valuation model would produce losses, as it did in fiscal 2024 when revaluations cost ARS 649 billion. Three things to watch: whether agribusiness Adjusted EBITDA recovers from ARS 17.8 billion, whether operating cash flow catches up with reported profit once the tax spike passes, and whether IRSA's revaluations stay positive.

Sources: Cresud's Fiscal Year 2026 earnings release (published for its September 8, 2026 results call) and audited consolidated financial statements for the years ended June 30, 2026 and 2025, plus its September 7, 2026 summary filed with the SEC on Form 6-K. Cresud is a foreign private issuer, so its full annual report on Form 20-F was not on EDGAR when this was written.