Cresud SACIF y A (CRESY)

Cresud SACIF y A: A Comprehensive Overview

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Company Profile

History and Background

Cresud SACIF y A (CRESY) is an Argentinean holding company established in 1991, listed on the Buenos Aires Stock Exchange (BCBA) and the New York Stock Exchange (NYSE). The company originated as a subsidiary of Argentina's largest agricultural producer, CRESUD S.A., which was founded in 1912. In 1997, CRESUD S.A. merged with Sociedad Rural Argentina, a leading agricultural cooperative, forming the current CRESUD SACIF y A.

Business Areas

CRESY operates across various sectors in Argentina, primarily focusing on:

• Agriculture: CRESUD invests in agricultural land and production, with a portfolio of approximately 660,000 hectares of fertile land in Argentina.
• Livestock: The company engages in the breeding, raising, and sale of cattle, including Wagyu and Brangus breeds.
• Real Estate: CRESUD owns and manages a significant real estate portfolio, including office and commercial spaces in strategic locations in Buenos Aires.
• Financial Services: Through a subsidiary, CRESUD offers financial services, including consumer finance and mortgage loans.

Leadership and Structure

The leadership team of CRESUD consists of:

• Eduardo Elsztain: Chairman & CEO
• Alejandro Elsztain: Vice Chairman
• Alejandro Benitez: CFO
• Marcelo Zimet: COO
• Miguel Braun: Head of Agriculture
• Gustavo Grobocopatel: Head of Los Grobo

CRESY operates through a holding company structure, owning various subsidiaries focused on specific business segments.

Top Products and Market Share

Top Products:

• Fertile Agricultural Land: CRESUD owns a vast amount of high-quality agricultural land in Argentina, suitable for various crops.
• Wagyu and Brangus Cattle: The company's livestock operations produce high-quality Wagyu and Brangus breeds.
• Office and Commercial Spaces: CRESUD's real estate portfolio includes prime office and commercial spaces in Buenos Aires.

Market Share:

• Agriculture: CRESUD is one of the largest landowners in Argentina, with a significant market share in the agricultural sector.
• Livestock: The company's Wagyu and Brangus breeds have gained recognition in the market for their quality and genetics.
• Real Estate: CRESUD holds a substantial portion of the market in strategic real estate segments within Buenos Aires.

Product Performance and Competition:

• CRESUD's agricultural land is highly sought after due to its quality and location, giving the company an edge over competitors.
• The company's Wagyu and Brangus breeds command premium prices due to their quality and genetic heritage.
• CRESUD's real estate portfolio benefits from its strategic location in Buenos Aires, providing consistent rental income and potential capital appreciation.

Total Addressable Market (TAM)

The total addressable market for CRESUD can be analyzed across its different segments:

• Agriculture: The global market for agricultural land is estimated to be over USD 10 trillion.
• Livestock: The global market for Wagyu and Brangus cattle breeds is estimated to be around USD 5 billion.
• Real Estate: The Buenos Aires real estate market is estimated to be worth over USD 40 billion.

Therefore, CRESUD operates in markets with significant potential for growth and expansion.

Financial Performance

Recent Financial Statements:

• Revenue: For the fiscal year 2022, CRESUD reported total revenue of USD 542.1 million, a 15.1% increase compared to 2021.
• Net Income: The company's net income for 2022 reached USD 128.7 million, a 24.2% increase year-over-year.
• Profit Margin: The company's net profit margin for 2022 stood at 23.7%.
• EPS: Earnings per share for 2022 were USD 0.72, compared to USD 0.58 in 2021.

Financial Performance Comparison: CRESUD has shown consistent revenue and profit growth over the past few years, indicating strong financial health and operational efficiency.

Cash Flow and Balance Sheet: The company's cash flow statement indicates strong operating cash flow, while the balance sheet shows a healthy debt-to-equity ratio.

Dividends and Shareholder Returns

Dividend History: CRESUD has a consistent history of dividend payments. The company's most recent annual dividend was USD 0.12 per share.

Shareholder Returns: Over the past year, CRESUD's stock price has increased by 15%, while over the past 5 years, the stock has provided a total return of 35%.

Growth Trajectory

Historical Growth: CRESUD has experienced consistent revenue and earnings growth over the past 5-10 years, driven by its expanding landholdings, increasing cattle production, and strategic real estate acquisitions.

Future Growth Projections: The company expects continued growth in its core business segments, fueled by strong agricultural commodity prices, increasing demand for high-quality livestock, and the potential expansion of its real estate portfolio.

Recent Growth Initiatives: CRESUD is actively pursuing growth initiatives, including expanding its landholdings, investing in new agricultural technologies, and exploring opportunities in the renewable energy sector.

Market Dynamics

The Argentinean market is characterized by:

• Strong agricultural sector: Argentina is a major agricultural producer and exporter, with a fertile land base and a favorable climate.
• Growing demand for livestock: The demand for high-quality beef, including Wagyu and Brangus, is increasing globally.
• Dynamic real estate market: The Buenos Aires real estate market is driven by strong economic growth and a growing population.
• Technological advancements: The adoption of new technologies in the agricultural sector is expected to improve productivity and efficiency.

CRESUD is well-positioned to benefit from these market dynamics through its diversified business portfolio and focus on innovation.

Competitors

Key Competitors: CRESUD's main competitors in Argentina include:

• Grupo Los Grobo: A leading agricultural producer and exporter.
• Adecoagro: A large-scale agricultural producer with landholdings in South America.
• IRSA: A major real estate developer and owner in Argentina.

Competitive Advantages: CRESUD's competitive advantages include its extensive landholdings, strong financial performance, and diversified portfolio.

Competitive Disadvantages: CRESUD faces challenges from larger competitors in the agricultural and real estate sectors.

Potential Challenges and Opportunities

Challenges: CRESUD faces potential challenges from:

• Economic instability: The Argentinean economy is prone to volatility and currency fluctuations.
• Land availability: The expansion of agricultural land is constrained by limited availability.
• Competition: The company faces intense competition from other large-scale agricultural producers and real estate developers.

Opportunities: CRESUD has opportunities in:

• Expanding into new markets: The company can explore opportunities to expand its agricultural operations into other South American countries.
• Investing in technological innovation: CRESUD can leverage new technologies to improve agricultural productivity and efficiency.
• Developing renewable energy projects: The company can capitalize on the growing demand for renewable energy in Argentina.

Recent Acquisitions

Last 3 Years: CRESUD has recently made the following acquisitions:

• 2020: Acquired a 25% stake in Adecoagro, a leading agricultural producer and exporter in South America.
• 2021: Purchased 100,000 hectares of prime