20-F: Cresud's 2025 Annual Report: Strategic Shifts & Growth

Cresud's 2025 annual report details strategic shifts in its agricultural and urban property businesses, reporting a significant net profit increase to ARS 224,366 million despite macroeconomic challenges.

Summary

• Net profit for fiscal year 2025 increased by ARS 75,527 million to ARS 224,366 million, up from ARS 148,839 million in fiscal year 2024.
• Consolidated revenues decreased by 4.7% to ARS 914,157 million in fiscal year 2025 from ARS 959,359 million in fiscal year 2024.
• Profit from operations significantly improved to ARS 220,945 million in fiscal year 2025 from a loss of ARS 191,917 million in fiscal year 2024.
• Total consolidated assets increased by 5.09% to ARS 5,088,822 million, and consolidated shareholders' equity increased by 1.63% to ARS 2,213,792 million.
• Agricultural business revenues decreased by 12.6% to ARS 326,975 million, primarily due to lower crop sales and international commodity prices.
• Urban properties and investment business revenues decreased by 0.7% to ARS 374,662 million, with shopping mall revenues increasing by 8.0% to ARS 270,531 million, but office revenues decreasing by 11.4% to ARS 20,065 million.
• IRSA acquired Al Oeste shopping mall (20,000 GLA sqm) for USD 9 million, with plans to convert it into an outlet center.
• Cresud completed the sale of the entire Preferencia farm (17,799 hectares) for BRL 140.0 million (ARS 29,854 million).
• A material weakness in internal control over financial reporting was identified related to inflation adjustment of share premium from warrant exercises, leading to a restatement of fiscal years 2024, 2023, and 2022 financial statements.
• Warrants were exercised between September 17-25, 2025, resulting in the issuance of 17,769,882 common shares and collection of USD 7,141,716.

Sentiment

Score: 6

Explanation: The company reported a significant increase in net profit and a turnaround in operating profit, driven by fair value adjustments and strategic asset sales. However, core revenues in several segments declined, and a material weakness in internal controls required a restatement of prior financials. Macroeconomic conditions in Argentina remain volatile, presenting both opportunities and risks.

Positives

• Operating profit showed a significant turnaround, moving from a loss of ARS 191,917 million in fiscal year 2024 to a profit of ARS 220,945 million in fiscal year 2025.
• Net profit for the year increased substantially by ARS 75,527 million to ARS 224,366 million.
• A positive revaluation of agricultural land in Brazil contributed to a net gain from fair value adjustment of investment properties (ARS 12,467 million in agricultural business).
• The Shopping Malls segment demonstrated strong performance with revenues increasing by 8.0% to ARS 270,531 million, driven by contract renegotiations and higher retail stand income.
• IRSA's acquisition of Al Oeste shopping mall for USD 9 million and plans for its conversion into an outlet center indicate strategic growth in the urban property segment.
• Successful sales of farmland properties, including Alto Taquari, Rio do Meio, Los Pozos, and Preferencia farms, generated significant gains (e.g., ARS 22,179 million from Alto Taquari).
• Cattle sales revenues increased by ARS 9,176 million due to improved price performance in Argentina and increased kilograms produced.
• Sugarcane sales revenues increased by ARS 5,946 million, resulting from a higher volume of tons traded and better prices.
• The successful exercise of warrants led to the issuance of 17,769,882 common shares and the collection of USD 7,141,716.
• Argentina's economy is projected to grow by 5.5% in 2025 and 4.3% in 2026 and 2027, primarily driven by the agriculture, energy, and mining sectors.
• The IMF approved an extended fund facility program for Argentina totaling approximately USD 20 billion, with USD 12 billion disbursed in April 2025 and USD 2 billion in August 2025.
• The Argentine Government announced the removal of export duties on over 70 agro-industrial products, establishing a 0% export tax rate until October 31, 2025, or until a USD 7 billion quota is exhausted.

Negatives

• Consolidated revenues decreased by 4.7% to ARS 914,157 million in fiscal year 2025.
• Agricultural business revenues decreased by 12.6% due to lower crop sales and international commodity prices.
• Urban properties and investment business revenues decreased by 0.7%.
• Office segment revenues decreased by 11.4% due to stable lease rates in USD and lower foreign exchange variation relative to inflation.
• The Sales and Developments segment recorded a gross loss of ARS 5,168 million in fiscal year 2025, a 195.0% decrease from a profit in fiscal year 2024, and an impairment loss of ARS 19,125 million on trading properties.
• Hotels segment revenues decreased by 24.7% due to a drop in international tourism arrivals and reduced currency competitiveness.
• Other operating results, net, for the Agricultural Production segment decreased by ARS 5,862 million due to lower commodity transaction results.
• Other operating results, net, for the Land Transformation and Sales segment decreased by ARS 15,654 million due to the valuation effect of soybean-bag-denominated receivables.
• Financial results, net, decreased significantly by ARS 160,976 million, mainly due to lower positive results from fair value measurement of financial assets and liabilities, and decreased interest income and foreign exchange gains.
• Income tax shifted from a profit of ARS 86,261 million in fiscal year 2024 to a loss of ARS 71,045 million in fiscal year 2025.
• Argentina's current account posted a deficit of USD 3,016 million in the second quarter of 2025.
• Argentina's country risk, while decreasing, remains high at 1048 basis points as of October 20, 2025, compared to Brazil (195 bps) and Mexico (226 bps).
• A material weakness in internal control over financial reporting related to inflation adjustment of share premium from warrant exercises required a restatement of prior financial statements.
• Ongoing legal proceedings for Puerto Retiro and Arcos del Gourmet have uncertain outcomes and potential significant financial impact.
• The cross-restriction rule on foreign exchange transactions (Communication A 8336) limits individuals from operating in certain financial dollar markets for 90 days after official dollar purchases.

Risks

• Dependence on macroeconomic and political conditions in Argentina, Brazil, Paraguay, and Bolivia.
• Exchange rate volatility may adversely affect the Argentine economy and financial performance.
• Economic and political developments in Argentina, and future government policies, may adversely affect operating sectors.
• Maintenance or implementation of additional exchange controls and capital inflow restrictions could limit international credit and threaten the financial system.
• Inflation could adversely affect the Argentine economy and operational results.
• High levels of public spending in Argentina could generate long-lasting adverse consequences for the Argentine economy.
• The Brazilian government has exercised, and continues to exercise, significant influence over the Brazilian economy, which, together with Brazilian political and economic conditions, may adversely affect operations.
• Fluctuation in market prices for agricultural products could adversely affect financial condition and results of operations.
• Worldwide competition in the markets for agricultural products could adversely affect business and results of operations.
• Unpredictable weather conditions, pest infestations, and diseases may have an adverse impact on crop yields and cattle production.
• Cattle are subject to diseases which can negatively impact the demand for and sales of cattle production.
• Exposure to significant losses due to volatile crop prices since a significant portion of production is not hedged.
• The creation of export taxes and/or market intervention may have an adverse impact on sales and results of operations.
• Dependence on international trade and economic and other conditions in key export markets.
• Risks associated with land-takings in Argentina.
• The imposition of restrictions on acquisitions of agricultural properties by foreign nationals in the countries where operations occur may materially restrict business development.
• A global economic recession could decrease the demand for products or lower prices.
• Delays or failures in the delivery of raw materials used by the company and its suppliers could have an adverse effect on operations.
• Climate change-related risks may adversely affect business.
• Lack of insurance coverage over all crop storage facilities could lead to significant losses.
• Inability to maintain relationships with customers could adversely affect business and results of operations.
• Business seasonality in agricultural operations can cause significant fluctuations in results.
• A substantial portion of assets consists of farmland, which is an illiquid asset.
• Restrictions on dividend payments from subsidiaries may adversely affect the company.
• Investments in BrasilAgro could be materially and adversely affected.
• Labor relations could negatively impact the company.
• Internal processes and controls might not be sufficient to comply with extensive environmental regulation, and current or future environmental regulations could prevent full development of land reserves.
• New restrictions on agricultural and food products containing genetically modified organisms could be established.
• Holding Argentine securities might be more volatile than U.S. securities and carry a greater risk of default.
• The level of debt may adversely affect operations and ability to pay debt, and capacity to successfully access local and international markets on favorable terms affects funding cost.
• Dependence on the chairman and senior management.
• Cybersecurity events could negatively affect reputation, financial condition, and results of operations.
• The Investment Company Act may limit future activities.
• IRSA is subject to risks inherent to the operation of shopping malls that may affect profitability.
• IRSA's performance is subject to the risks associated with its properties and with the real estate industry.
• IRSA could be adversely affected by decreases in the value of its investments.
• IRSA's assets are highly concentrated in certain geographic areas, and an economic downturn in such areas could have a material adverse effect.
• The loss of tenants could adversely affect IRSA's operating revenue and value of properties.
• IRSA may face risks associated with acquisitions of properties.
• IRSA's future acquisitions may not be profitable.
• IRSA may be liable for certain defects in its buildings.
• IRSA could have losses if it has to resort to eviction proceedings in Argentina because such proceedings are complex and time-consuming.
• Argentine laws governing leases impose restrictions that limit IRSA's flexibility.
• Demand for IRSA's premium properties, aimed at high-income consumers, may not be sufficient.
• The shift by consumers to purchasing goods over the internet may negatively affect sales at IRSA's shopping malls.
• IRSA is subject to risks affecting the hotel industry.
• IRSA's business is subject to extensive regulation, and additional regulations may be imposed in the future.
• Antitrust laws in Argentina could limit IRSA's ability to expand business through acquisitions or joint ventures.
• Greater than expected increases in construction costs could adversely affect the profitability of IRSA's new developments.
• Property ownership through joint ventures or investees may limit IRSA's ability to act exclusively in its interest.
• IRSA is dependent on its Board of Directors, senior management, and other key personnel.
• IRSA may face potential conflicts of interest relating to its principal shareholders.
• The stability of the financial system depends upon the ability of financial institutions, including Banco Hipotecario, to maintain and increase the confidence of depositors.
• The asset quality of financial institutions is exposed to the non-financial public sector and Central Bank indebtedness.
• Banco Hipotecario could suffer losses in its investment portfolios due to volatility in the capital markets and in the exchange rate.
• Potential adverse effects of Consumer Protection Law and class actions on Banco Hipotecario.
• Banco Hipotecario operates in a highly regulated environment and its operations are subject to capital controls regulations.
• Increased competition and M&A activities in the banking industry may adversely affect Banco Hipotecario.
• Future governmental measures may adversely affect the economy and the operations of financial institutions.
• The option to discharge in Pesos a foreign currency obligation may be waived by the debtor is still under discussion.
• The exposure of Banco Hipotecario to individual borrowers could lead to higher levels of past due loans, allowances for loan losses and charge-offs.
• An increase in fraud or transaction errors may adversely affect Banco Hipotecario.
• Shares eligible for sale could adversely affect the price of common shares and ADSs.
• If additional equity securities are issued in the future, shareholders may suffer dilution, and trading prices for equity securities may decline.
• Subject to certain different corporate disclosure requirements and accounting standards than domestic issuers of listed securities in the United States.
• If considered to be a passive foreign investment company for United States federal income tax purposes, United States holders of common shares or ADSs would suffer negative consequences.
• Changes in Argentine tax laws may affect the tax treatment of common shares or ADSs.
• Holders of the ADSs may be unable to exercise voting rights with respect to the common shares underlying their ADSs.
• Trading on more than one market may result in price variations, and investors may not be able to easily move shares for trading between such markets.
• Under Argentine law, shareholder rights may be fewer or less well defined than in other jurisdictions.
• Restrictions on the movement of capital out of Argentina may impair the ability to receive dividends and distributions on, and the proceeds of any sale of, the common shares underlying the ADSs.
• The protections afforded to minority shareholders in Argentina are different from and more limited than those in the United States and may be more difficult to enforce.
• Warrants are exercisable under limited circumstances and will expire.
• A material weakness in internal control over financial reporting may affect the ability to accurately report financial results or prevent fraud, which may affect the market for and price of common shares and ADSs.

Future Outlook

Argentina's economy is expected to grow by 5.5% in 2025 and 4.3% in 2026 and 2027, driven by agriculture, energy, and mining sectors. The IMF projects Argentina's GDP to grow by 4.5% in 2025 and 4.0% in 2026, with the Central Bank estimating 29.5% inflation for 2025. The Argentine Government aims to lift foreign exchange controls by the end of 2025. The entertainment industry anticipates a positive outlook for fiscal year 2026 with larger-scale events. IRSA plans to convert the newly acquired Al Oeste shopping mall into an outlet center and complete Llao Llao hotel renovations by Q1 2026. Development and commercialization of the Ramblas del Plata project and construction of the Del Plata Building Trust project are underway, with the Philips Building undergoing expansion for full occupancy.

Management Comments

• The Company's Board of Directors continuously monitors the evolution of variables affecting its business in order to define its course of action and identify potential impacts on its financial position and results.
• The Group seeks to manage its capital requirements to maximize value through the mix of debt and equity funding, while ensuring that Group entities continue to operate as going concerns, comply with applicable capital requirements and maintain strong credit ratings.
• The company will continue working on its expansion plans to other countries in the region (referring to FyO).
• Agrofy continued to position itself this year as the leading online business platform for agriculture in Argentina and Brazil, exceeding 40 million visits.
• We believe that our agricultural lands have significant productivity potential and, through the implementation of best agricultural practices and application of our accumulated knowledge and experience, we are able to enhance the value of our agricultural lands.
• We are working on new proposals for product improvement and differentiation in anticipation of the full recovery of conventions and corporate events (Hotels segment).
• Our view of development goes beyond business profitability and adds aspects associated with quality of life, in its broadest sense. The company contributes with its own role, but also aims to be an actor in innovation, social cohesion, and the construction of possibilities (Sustainability section).
• We are aware of the constant cybersecurity risks and continue to implement protective measures that allow us to minimize potential negative impacts on our business.

Industry Context

Argentina's economy is expected to recover, driven by sectors relevant to Cresud's agricultural business, supported by the removal of export duties and IMF financing. However, high inflation and exchange rate volatility persist, impacting consumer spending and operating costs, particularly for urban property segments like shopping malls and hotels. The real estate sector is adapting to new work models, with IRSA's office properties outperforming market vacancy rates. The hotel industry faces challenges from reduced international tourism, while the entertainment sector shows resilience. Global economic instability and trade tensions continue to influence commodity prices, affecting Cresud's international agricultural operations. The ongoing property crisis in China highlights broader real estate market vulnerabilities.

Comparison to Industry Standards

• Argentina's projected GDP growth of 5.5% in 2025 (World Bank) and 4.5% (IMF) indicates a recovery, contrasting with previous contractions and suggesting a more favorable operating environment for Cresud compared to recent years.
• Argentina's country risk at 1048 basis points as of October 20, 2025, remains significantly higher than Brazil (195 bps) and Mexico (226 bps), indicating a higher perceived sovereign risk that could impact Cresud's financing costs and access to international capital.
• IRSA's shopping mall occupancy rate of 97.7% (excluding Terrazas de Mayo) as of June 30, 2025, is strong, demonstrating effective management in a challenging consumer environment.
• IRSA's office occupancy rate of 96.2% as of June 30, 2025, is robust, outperforming the broader Buenos Aires premium office market which reported a 14.46% vacancy rate in Q2 2025, suggesting superior property management and tenant appeal.
• The Argentine hotel industry experienced a 7.1% decrease in overnight stays in June 2025 compared to the previous year, indicating a challenging market for IRSA's hotel segment, which saw a 24.7% revenue decrease.
• Cresud's agricultural production volumes for corn, soybean, and wheat contribute to Argentina's position as a major global exporter (e.g., 4th largest corn exporter), aligning with the company's strategy to leverage favorable natural conditions and potentially outperform smaller, less diversified producers.
• The company's use of advanced breeding techniques, pasture improvement for cattle, and RWS certification for wool production indicates a focus on quality and sustainability that may differentiate it from competitors in the agricultural sector.

Corporate Governance

Legal Proceedings

• Litigation with Exagrind S.A. for damages from a fire at San Rafael farm, with Cresud's merged subsidiary paying ARS 196,531,913.02 in December 2024.
• Trial and Preventive Seizure in Salta Province regarding fee assessments for public land use, settled on December 6, 2024, with Cresud agreeing to pay fees and Salta Forestal S.A. to return seized amounts.
• Puerto Retiro is involved in a bankruptcy extension lawsuit and a civil action by Tandanor, with ongoing proceedings regarding property confiscation and statute of limitations. A 100% impairment provision was recorded in fiscal year 2019 for the investment property.
• La Rural S.A. faces a judicial proceeding challenging the annulment of a 1991 decree for the sale of Palermo Exhibition Grounds; the case is in the evidentiary stage with no current impact on La Rural S.A.'s property use rights.
• Arcos del Gourmet is a party in a lawsuit concerning environmental approvals and zoning for the Distrito Arcos project. The Superior Court ruled against demolition but required land allocation for a green park. The AABE revoked the concession agreement, which is under appeal to the Supreme Court. An eviction proceeding is also pending before the Supreme Court. An agreement was reached on February 11, 2025, for ARCOS to pay ARS 1,027,360,977.52 for green space creation.
• A protection action (amparo) was filed against the Caballito Chico project, resulting in a suspension of construction work, with the main proceeding in the evidentiary stage and negotiations underway.
• Legal proceedings in Israel: IDBD filed a claim against Dolphin Netherlands B.V. and IRSA for NIS 140 million for alleged breach of commitment. The Israeli Court asserted jurisdiction, and IRSA provided a commitment for a minimal surplus of assets/cash of NIS 80 million. The case is in discovery proceedings, with mediation suggested.

Related Party Transactions

• Offices and Shopping Mall Leases: Rental of office space from IRSA and properties owned by family members of Mr. Eduardo S. Elsztain. IRSA also leases spaces to Banco Hipotecario.
• Agreement for the Exchange of Corporate Services: Between CRESUD and IRSA (and former IRSA PC) for corporate services, with the latest amendment on July 12, 2022.
• Hospitality Services: CRESUD and related parties hire hotel services from IRSA subsidiaries (Nuevas Fronteras S.A. and Llao Llao Resorts S.A.).
• Financial and Service Operations: CRESUD engages with Banco Hipotecario and its subsidiaries (BACS) and FyO for credit, investment, securities, and financial derivatives. BACS acts as an underwriter, and CRESUD invests in mutual funds managed by BACS Administradora de Activos S.A. S.G.F.C.I.
• Del Plata Building Trust: IRSA entered into a trust agreement with Banco Hipotecario (contributing a building) and CRESUD (as money trustor and beneficiary), with an investment manager controlled by Mr. Eduardo Sergio Elsztain.
• Donations to Fundacin IRSA, Fundacin Puerta 18, and Fundacin Museo de los Nios: Non-profit organizations with overlapping board members with CRESUD/IRSA management. IRSA granted gratuitous bailment of shopping mall areas to Fundacin Museo de los Nios.
• Borrowings: CRESUD enters into loan agreements or credit facilities with related companies at prevailing market rates.
• Operations with IFISA: Loans granted by CRESUD to IFISA (controlled by Mr. Eduardo Sergio Elsztain) were fully cancelled in January 2024.
• Legal Services: Received from ZBV Abogados, where Sal Zang (First Vice-Chairman) was a founding partner.
• Farmland Lease Agreement San Bernardo: Lease of 10,896 hectares from San Bernardo de Crdoba S.A. (formerly Isaac Elsztain e hijos S.C.A), extended until June 30, 2026.
• Consulting Agreement: With Consultores Asset Management S.A. (CAMSA), owned 85% by Mr. Eduardo Sergio Elsztain and 15% by Sal Zang, for advisory services, with an annual fee of 10% of CRESUD's annual after-tax net income.
• Loan between Tyrus S.A. and Yad Leviim Ltd.: Extension of a USD 16.2 million loan from Tyrus S.A. (wholly owned by IRSA) to Yad Leviim Ltd. (controlled by Eduardo Elsztain).
• Investment in Golden Juniors Segregated Portfolio: IRSA approved an investment of up to USD 12 million in a fund whose investment manager is controlled by Mr. Eduardo Sergio Elsztain.

Stakeholder Impact

• Shareholders are impacted by the net profit increase, dividend distributions, share buyback programs, warrant exercises, and potential dilution from future equity issuances. They are also affected by macroeconomic conditions, legal proceedings, and internal control issues.
• Employees are impacted by compensation plans (defined contribution, share-based incentives), labor relations, and potential changes in employment conditions due to economic volatility.
• Customers in the agricultural sector are affected by commodity price fluctuations, weather conditions, export policies, and quality control measures.
• Customers in urban properties (tenants) are impacted by lease terms, rental prices, consumer spending trends, competition from online sales, and economic conditions affecting their sales.
• Customers in the hotel sector are affected by tourism trends, economic conditions, and competition.
• Creditors are impacted by the company's debt levels, ability to service debt, credit ratings, and macroeconomic conditions affecting refinancing capabilities.
• Regulatory bodies are involved in the oversight of financial reporting, corporate governance, antitrust, environmental compliance, and foreign exchange controls.
• Local communities are affected by the company's social responsibility programs, environmental management, and real estate developments.

Next Steps

• CRESUD's General Ordinary and Extraordinary Shareholders Meeting on October 30, 2025, to consider financial results, dividend distribution (up to ARS 88,500 million cash and/or in-kind), distribution of up to 5.3 million own shares, and an addendum to the warrant agreement for cashless exercise.
• IRSA's General Ordinary and Extraordinary Shareholders Meeting on October 30, 2025, to consider financial results and dividend distribution (up to ARS 164,000 million cash and/or in-kind).
• Conversion of Al Oeste shopping mall into an outlet center to be relaunched during next year.
• Completion of renovation works in the Bustillo wing of Llao Llao hotel during Q1 2026.
• Continued development and commercialization of the Ramblas del Plata project.
• Continued construction works for the Del Plata Building Trust project.
• Continued expansion of the Philips Building to achieve full occupancy.
• Negotiations for extension of maturity for USD 1.13 million from Los Pozos farm sale until September 2026.
• The 'Cuadernos case' (corruption allegations) is scheduled to go to trial in November 2025.
• National mid-term legislative elections are expected in Argentina on October 26, 2025.
• The U.S. Court of Appeals for the Second Circuit scheduled the oral hearing for the YPF case on October 29, 2025.

Key Dates

Recommendation

While Cresud reported a substantial increase in net profit and a turnaround in operating profit for FY2025, these positive results are significantly influenced by fair value adjustments of investment properties rather than robust organic revenue growth across all segments. Core business revenues in agriculture, offices, and hotels experienced declines, indicating underlying operational challenges. The identification of a material weakness in internal controls and the need for restatement of prior financial statements raise concerns about financial reporting reliability. The macroeconomic environment in Argentina remains highly volatile, with ongoing inflation, exchange rate fluctuations, and political uncertainties, which could impact future performance. Strategic acquisitions and farm sales are positive, but ongoing legal proceedings for key urban properties (Puerto Retiro, Arcos del Gourmet) introduce significant uncertainty and potential liabilities. Given the mixed operational performance, the reliance on fair value gains, and the persistent macroeconomic and regulatory risks, a 'Hold' recommendation is appropriate for investors to monitor the effectiveness of remediation efforts and the stability of the operating environment before making further investment decisions.

Keywords

Real Estate, Agriculture, Argentina, Brazil, SEC Filing, Financial Results, Corporate Governance, Risk Management, Shopping Malls, Farmland, Cresud, IRSA, BrasilAgro, Financial Performance, Economic Outlook, Capital Markets, Cybersecurity, Warrants, Dividends, Hyperinflation