Alejandro Elsztain - CEO Carlos Blousson - General Manager of Argentina and Bolivia Matias Gaivironsky - CFO

Good morning everyone, and welcome to Cresud's First Quarter 2016 Results Conference Call. Today's live webcast, both audio and slide show may be accessed through the company's Investor Relations website at www.cresud.com.ar/ir, by clicking on the banner Teleconference. The following presentation and the earnings release issued last week are also available for download on the company’s website. After management’s remarks, there will be a question-and-answer session for analysts and investors. At that time, further instruction will be given. [Operator Instructions]. You can also send your questions via the webcast by clicking on the question to host tool. Before we begin, I like to remind you that this call is being recorded and that information discussed today may include forward-looking statements regarding the company's financial and operating performance. All projections are subject to risks and uncertainties, and actual results may differ materially. Please refer to the detailed note in the company's earnings release regarding forward-looking statements. I will now turn the call over to Mr. Alejandro Elsztain, Chief Executive Officer. Please go ahead, sir.

Thank you very much. Good morning. We are beginning our conference call of the first quarter of 2016 and we can see in the main highlights for this period that the financial consolidated results we see revenues a growth of 6.6% comparing to last year to Ps. 1.6 million. The operating income for the balance sheet was Ps. 670 million, 12% higher last year and the net income this year we had the loss of Ps. 361 million and this is mainly explained to a change in valuation method of our investment in IDBD because of a lawsuit that we lost in the first and now we’re going to the court. And that is the main explanation of the difference, to last year a gain of Ps. 22 million. If we talk about the farming, we are expecting a New Year Campaign that represents better range, better yields, higher than the average and good weather conditions on the all region. The planting area, it’s a decrease comparing to last year. We are achieving 176,000 hectares. This is a 16% decrease and it is mainly explained because of the sale of some farms like the [BRE] farm in Brazil, Cremaq, or some reduction in leasing area in Argentina 6,000 acres left. We are very conservative at this moment of leasing asking for much lower rental prices to have it very positive and now it's changing the environment for the prices of the commodities in Argentina mainly and that is probably changing the results that we’re expecting because of the event of the election coming very soon. The low commodity prices are affecting all of our portfolio in all the region and there was a big drop that we saw on the prices mainly on the corn and soybean is effecting margins in all region too. For the sale -- sale for the farms, this quarter we did sale, we are expecting farm sales [further] but not in the first quarter. So we are comparing last year that we had some sales to this year that we didn’t. In the development of lands, we are going to show related but this year there is a decrease on that speed. We have an operating loss in the meat packing facility in FyO and our leases and this is mainly explained by the packing plant, the packing plant is having losses -- big losses this quarter because of the low exchange rate and the situation of the industry is very bad. But we are expecting the big recovery after the changing of the measures for exporters for the next government. In the urban segment, there were very positive results in the rental segment and the sale of investment properties, the EBITDA grew 14% achieving Ps. 780 million. So these are the main highlights for the year. If we move to next page, we can see the drop in the planted area that I explained before. We go to this 176,000 hectares being almost half is soybean, 25% is corn and the rest in the other products. And in the development we can see a big drop to 4.4, this is what it's today under process on doing the development. Now we are discussing to increase the speed maybe in Paraguay and in Argentina. In both countries we have permit. We are waiting for better conditions for improving and doing more and developing more land, so the permits are ready. So we are deciding when to do -- we decided 4.4 thousand hectares but maybe we can decide to do more for the campaign. If we move to next page, we see the sales. We were very active selling last year in 2015. We achieved almost [$35 million] of sales. Up to now in this balance sheet we didn’t close any deal, but we are expecting to close some sales of farms in this balance sheet. I introduce to Mr. Carlos Blousson, our Manager, General Manager for Argentina and Bolivia. Please Carlos.

Well, thank you, Alejandro. Good morning everyone. I'll talk about this quarter to weather condition, the relationship between stock and conceptions, commodity price levels and sugarcane, cattle and milk productions. If we go to the Slide 5, we can see how good weather condition in the region allows a positive start during this planting moment. Rainfall for this summer is above average as we're going through a New Year. As we can see in the map Argentina presents good weather conditions in general particularly good in the Northeast of the country. In Brazil, even though the rainy season got delayed, the rains went back to the average levels along the normal soybean and corn productions. With regard to productions the USDA’s forecast, a continuous upward trend in the soybean and a steady high production level in corn as you see in the map again in this slide. Let's go to the Slide 6, a consequence of this good productions both in soybean and corn, we can see on this slide how global stocks these grains increased during the last three campaigns. Soybean global stock grew from 21% to 28% in the stock -- in the global stocks and corn global stock increased from 15% to 24% in the stock works. Let's go the next page to Slide 7, this very global stock reflects directly on this low price. As you can see in the graphic, the graph shows how soybean price almost equal that of 2010 year when the stock levels were also as high as today. We can see something is in there happening with corn, where the low price of 2010 are similar to today's price. Moving to the Slide 8, about the production sugarcane, cattle milk. The sugarcane productions grew by 33.8% in September 2015 compared to the last year 2014 because Brazil added 4,000 hectare per area, had good yields for the rest of the productions. Cattle productions in Argentina reached 1.5 thousand tonnes. This production grew this year due to an improvement in weather condition and good management decisions going back to historical levels. There was also an increase in the number of assets to 68.9 thousand and there was a slight growth in price only 7% below [under nutrition] levels. Milk productions reached 4.5 million litres with less daily milking cows to 2,000 heads milking cows and an increase in the milking production cow per day due to an increase in productivity. The milk price fell 10% because of a weak lower production offer. Thank you everybody now Matias will continue with the presentation.

Thank you very much, Carlos. Going to Page 9, here we have quite sort of our investment in IRSA. IRSA had very good results during the quarter mainly driven by the rental segment, shopping centers and offices, the EBITDA growth of 37% in shopping center. In offices you can see a decrease, but it’s mainly because of the reductions in the surface because IRSA sold some square meters during the quarter. Sales and development increased 47% in revenues, an increase of 14% in EBITDA. This quarter we sold offices compared with the previous year that we sold the Madison Building in Manhattan, Hotels grew 14% and margins maintaining good levels in shopping centers at levels of 78%, almost 78% and office is 71.5%. The breakdown of EBITDA shopping centers is most important part of the portfolio. So going to Page 10, here we have the breakdown of the operating income in the different segments of Cresud on the agricultural part. And the third quarter always has more effects on prices than the production. So there is in terms of the production is not the most relevant quarter for Cresud. Farmland sales, this year we haven’t sold in this quarter anything, so there is a decrease from the Ps. 12 million of the previous year that was mainly sold of 24,000 hectares in Paraguay compared with only cost that we allocate to this segment. In the farming you can see better results in terms of grains but from a loss on the previous year of Ps. 55 million to Ps. 26.7 million in this year and more or less the same results in the other segments. So probably we will wait to see the campaign in the further quarters. In the other segment, here we have an important decrease in results that is mainly [indiscernible] segment. In Page 11, there is declaration of the other line below the operating income, the associates and the joint venture decreased from a loss of Ps. 102 million in the previous year to Ps. 496.7 million this year. The main explanation is the recognition of a further loss on the investment of IRSA in IDB. IRSA had to change the methodology of valuation over the investment and that generate a further loss. They are not recognizing longer price of the shares in the market they have to put their own valuation method for the shares because of a change in the criteria of the valuation. The net financial results, there is an increase from Ps. 340.8 million loss to Ps. 446.9 million. Here the interest remain at same level. The cost of the debt at the same level. The evaluation that affect our dollar denominated debt was in line from the previous year. So this quarter the evaluation was [3%] against the same level on the previous year, so there is now an increase in recognition of results. So the main difference between this year and the previous year is the valuation of investment of IRSA in Condor the former Supertel Company that is valued as mark-to-market and also the valuation of bonds in the market that we have in the portfolio on a consolidated basis. So with all these results, we finished the quarter with a net loss of Ps. 361.8 million against a gain of Ps. 21.7 million in the previous quarter, attributable to Cresud shareholder is minus Ps. 282.2 million and non-controlling interest minus Ps. 69.6 million. Going to next page, Page 12, the breakdown of our debt. Our net debt totalled $811.5 million, Cresud has done along is [$340 million]. On the bottom part of the slide you have the breakdown on amortization schedule of our debt. So that’s within comfort level with the short-term debt for this year and then next year we have amortization for $67.4 million that we plan to restructure with the local market. Net debt-to-assets are 48.5%, that is on historic values. Remember that we value all of our assets at historical acquisition cost plus CapEx so this is not reflected in the fair value of our assets at all, but still the book value is below the 50%. So with this we finish the presentation. Now we open to answer your questions.

Okay operator. Just to finish our conversation, we have a very good or normal situation on the climate. Some new conditions on the countries like Argentina that is really changing and there is a big promise of changing the condition on taxes for our products and that will be affecting our margin for the future. And so, we are optimistic of the campaign, with our assets, theme and the clients to sell some of our farms to. So we expect a good campaign for Cresud. So thank you very much for everybody and have a very good day. Bye.

Thank you. This concludes today's presentation. You may now disconnect your lines at this time. Have a great day.