Alejandro Elsztain - Second Vice Chairman, CEO, Acting President & GM Carlos Blousson - CEO of International Operation and GM of Argentina & Bolivia Operations Matias Gaivironsky - Chief Financial & Administrative Officer

Good day everyone and welcome to Cresud's Second Quarter 2018 Results Conference Call. Today's live webcast, both audio and slide show, maybe 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 website. After management’s remarks, there will be a question-and-answer session for analysts and investors. At that time, further instructions will be given. [Operator Instructions] Before we begin, I would like to remind you that the 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 would now turn the conference over to Mr. Alejandro Elsztain, Chief Executive Officer. Please go ahead, sir.

Thank you very much. Good afternoon, everybody. We are beginning our second quarter 2018 results. And we can go directly to Page number 2, and see the main event for the six months of this fiscal year. And when we speak about agribusiness, we sold the Esmeralda farm. We didn't -- the profit is still not registered in the balance sheet. It will be in the fourth quarter of this year when we give the details with the account of the farm. We did that for $19 million and the group value is much more I think almost ARS50 million, something like that. So the big result is coming in the fourth quarter where we do the deed. We are in the middle of some new farms sales with second semester in Argentina and the region, so we expect to have more new farms under sales in this second semester. In the development, we are planning to do 4,500 in region between Argentina and Paraguay for development of the region. In the final activity for the first part of the year, we concluded the sowing in the region. And we would expect similar to the previous year in the whole region, and we have discontinued our daily activity and integrate that is actually many, many years. But because of the adverse conditions for the system, we decided to close to sell all the cows and now we're in more agriculture and feedlot of the place. In the other segment, November, we recently sold 9.5% of FyO, of Futuros y Opciones, our company, our service company of input and output. We have subsidiary beginning 60% of the share and we sold 9.5% for the valuation of $32 million. It is cash out so Cresud received all this amounts. And we brought two strategic investors to the balance sheet, we are going to show you later. And for the Urban Properties Business in Argentina, we had the EBITDA from the rental segments that grew 18.4% compared to last year numbers. The occupancy 99% in malls, almost 94% in the offices, 31% in hotels portfolio was occupied, so very good levels of occupation on the portfolio of the rental. And the Israel business center, the consolidation of 100% of the investment in IDBD under Dolphin. So we bought 100% of the shares Dolphin brought it. So today we had a very good result in the operation of this subsidiary. And on the debt side of Cresud, we recently in favor with this year, we issued a note in the local capital markets for $114 million, paying $16 of 6.5% due to 2023 and without the cancel short term debt that Cresud had. And in consolidated financial results, the net results for the six months registered a gain of almost ARS10 billion comparing to a gain of last year of ARS6.7 billion, and we’re attributable to Cresud with ARS4.6 billion compared to ARS2.2 billion last year numbers. So now, I would introduce to Mr. Carlos Blousson about the development of the land and the region. Thank you very much.

Thank you, Alejandro. Good afternoon, everyone. Let’s beginning by the Slide 3, farmland development and farmland sales, as you can see in the bar graph, we continue to develop the undergoing farmland. In the last year, 4,500 hectares; 2,500 hectares in Argentina and 2,000 hectares in Paraguay, in terms of sales, we sold La Esmeralda before farmland in Argentina for an amount of $19 million. We’ve got the profit of $16 million as you can see in the graph. Turning around your attention to the next slide, and as I mentioned it before in the first semester of fiscal, we sold La Esmeralda farm of price of $19 million. In July, we signed an agreement and payment for $4 million, with the balance of $15 million financed with a mortgage in four installments at 4% fixed tax rate due 2022. As a result we will be recognized in the fourth quarter in 2018. We expect to continue common sales during the second semester and the fiscal year 2018. Let’ move to the production forecast and global stocks. The farmland soybean productions, we can see the Brazil, our grains sales have remained upward, setting a new record and Argentina is stable. So the stock consumption had grown up to 40%. In case of corn, the Brazilian and United States production have decreased 4% and Argentina has remained stable. So the stock consumptions have decreased slightly from 90% to 70%. Move to the Slide 6, well, let’s talk about the climate conditions and commodity prices. As you can see in the graph, there are two different situations. Brazil had a positive climate condition and on the other side, Argentina going through a slight [indiscernible] with low rain levels. In the bottom-line, you can see the reduction of the commodity prices. The soybean price equates 3.1% year-to-year, but corn remained stable, but increasing slightly 0.3% year-to-year. These slow prices close exactly lead to the higher level of the old stocks. The Slide 7 is the Cresud planted area, crop and sugarcane production and breakdown of the productions. I’m going to start with planted area. We planted 196,000 hectares in the regions quite similar to the last year. We estimate 568,000 tons in terms of copper and in sugarcane we estimate that the ratio of 1.884 million tons of sugar, so the current breakdown is 46% soybean, 25% corn, 50% sugarcane, and 20% other products like sugar and like sunflowers, wheat and other seeds. Let's move to the Slide 8, sale of the stake in FyO. It's shown 9.5% of the stake in FyO our brokerage company, resulting in the stake reactions from 11.6% to 50.1% keeping the control. It represents an amount of $3.24 million and profit will be regulated in the second quarter of 2018 ARS42.6 million. Let me turn to the transactions we execute with the new strategic partner in the Company. Thank you very much. Matias?

Thank you, Carlos. Turning to Page 9, we can see the results on our urban business and investments. So as Alejandro, net income for IRSA in the six months in 2018 achieved ARS10.8 billion that is 58.9 higher than the previous year, attributable to IRSA ARS8.9 billion against ARS3.8 billion. The Argentina business center gain was ARS12.1 billion, main reason and I would explain later is the fair value of our investment properties, higher result on our rental segment and also a result from Banco Hipotecario and Lipstick building. The Israel Business Center generated a loss of ARS1.3 billion from which ARS2.2 billion is related debt exchange at DIC level, that is a noncash effect but we recognized and remember in the previous quarter. So, the adjusted EBITDA reached ARS7.2 billion that is 38% higher than the previous year. Regarding Argentina Business Center the rental segment grew by 18.4%, the occupancy of shopping malls achieved 99%, 99.1%, 93.2% in offices and currently 1.5% in the hotel. We have like better results on the sales and development, like also the sales of Beruti, Maipu and Baicom plot of land. If you remember we paid a dividend of ARS1.4 billion in the previous quarter, so Cresud collected 64.5% of that, also IRSA sold in the secondary market $138.2 million of IRCP shares that represented stake of 8.5%, so today the free float flows of IRCB today at 13.5%. In terms of Israeli business center, there was -- we complete the Concentration Law requirement. So we fulfill all the transactions. So today, we have more time until the next step that will be at the end of 2019. Also we acquired from Dolphin the remaining stake of the shares of IDB that used to be from at the level of the IFISA. So today Dolphin control 100% of the shares of IDB. And also an important development that was regarding Klel that we sold another 5% of the shares through a swap transaction so today the stake in Klel will be use to 39.9% by the way we still maintained the economic rise of our duration stake that was 55%. So going to Page 11, we have good response in the semester. We started with a gross profit 27% more than the previous year. The important effect that we have in the semester is regarding that tax reform in Argentina you remember there was a new law in Argentina that established a reduction in the tax income of the Company from 35 to 30 starting this year and 25 starting in 2021. So that there is an important effect of the evaluation of our shopping malls that we value the DCF mall. And so now we change in the tax rate from 35 to 25 and that generate an important gain and you see in the middle of the graph that result from investment property, the blue bar is related to Argentina and it’s mainly due to the shopping center in city and generate other important improvement. So with this, we see an operating income 149% better than the previous year. So we are really analyzing what happened with the rental segment at IRSA level regarding the agribusiness, farmland sales you can see here a reduction in the result that is basically because in this year we haven’t recognize it yet the disposal of farms. And in the previous year, we sold the El Invierno La Esperanza that generated positive results. So at the end of the year, we will see an improvement in this segment as well. In farming, we can see a good evolution when we compare with the previous semester. Basically what happens here is that at the beginning of the previous year starting in July 2016 at that moment prices of soybean and grain was much higher than what happened at the end of December. So we recognized the effect on the lower prices of the grain. During the last year and in this year, we have an improvement in prices so that there is a positive result and also in sugarcane that you can see here a big jump from $22 million to 217% this is basically related to the farm that we acquire in Brazil and also the farm that we rented in the field that incorporated in 1,000 hector of sugar cane production that generate much higher returns than previous year. Regarding the other segment that here we have the corporate expenses and early -- the industrial meat-packing facility and Fyo. We still have losses meat-packing facility that is affecting in this segment, little compensated by FY that we've generated good result, but still a relative impact when you compare all the facts together. So finally in Slide 13, we have rest of the important drivers of net income, the net financial results, we have lower results from ARS2.9 billion in the previous year to ARS 6.9 billion this year, here are mainly three drivers. The first one is debt exchange level that generated ARS2.2 billion of losses then we have higher evaluation of the peso that affected all our dollar denominated debt consolidated and also lower results that came from depreciation of shares of Klel. Remember that we value Klel at market value, last year and the last semester have a big improvement, this year keep growing but lower state so we recognize as lower result. Regarding taxes the income tax you can see again in this semester against loss last year, here we have defect also of the tax reform, remember that we will revalue, the investment properties automatically we generate a differed tax, you seen the income tax at that moment, we used to have 35% and now we're using 25% so that 10% difference, we're recognizing a gain that is one short gain during the semester. So with this, we finish this a net income of ARS9.9 billion against 6.7 billion on the previous year, attributable to our shareholders is ARS4.6 billion. Going to Page 14, you can see revolution of our debt the net debt of the Company review, remember that we collected a big dividend from IRSA and Cresud paid less that we received so that generated a cash positive for Cresud, so today the net debt is $288.2 million and an important development that is sequent event after the closing that we issue a new bond level. So we issue $113 that mature in 2023 with a fix rate of 6.5% in dollar term. So all the bond where we use to refinance short-term debt, you can see that in 2018, we have $234 million of amortization. So we will use these ARS 113 million to refinance part of the debt, and the rest we plan to maintain short-term debt that we have here in Argentina lines, very attractive in terms of cost, in short-term. So probably we will use that part to rollover that debt, but maintaining in the short run and not expanding for the long run. So with this, we finished with the presentation now. Operator, we are ready to start with the Q&A session.

Thank you very much. Just to finish, we had a very good semester. Now comes to second semester wherever harvest of great incomes. We expect a lot of movement in the real estate part of the agribusiness of the second semester. And so, we have good positions in general, some drought in Argentina, but a little, not affecting too much up to now. So, we expect to have a very good year. So thank you very much everybody for participating in this conference and we’ll see you in next quarter. Thank you.

Thank you. This concludes today's presentation. You may disconnect your line at this time and have a nice day.