Cresud SACIF y A (CRESY) 2004 Q3 法說會逐字稿

Good afternoon and welcome to your Cresud conference call.

[OPERATOR INSTRUCTIONS].

It's now my pleasure to turn over the call to Alejandro Elsztain and Gabriel Blasi. Sir, you may begin.

Hello, good morning everybody. We are going to talk about the third quarter fiscal year 2004 that ended March 31. In the Cresud's case, the net income for this period ended up a gain of 10.2 million pesos, the gross profit for the nine-month for the life 18 (ph) 14% higher last year. In the corn and soybeans are the last and biggest of our crop.

We are finishing and we will see at the end of May or beginning of June we are going to be finishing.

Today is the 11th of harvest instead of 30 and 59 that were on the 31 of March. Today at levels of 60% in the case of soybeans on 64%, in the case of corn and at higher yield than that was budget, like 10% higher. We are continuing in creating hectares of reserve land, I would explain later, and we were spending very good year in pricing and that it is giving us this very positive year, in the combination of the two businesses we manage. As you remember the mission of Cresud is in the line of business of operation of the farms meantime we buy and sell farms.

So, we think that this year we will be with good combination of both of these two businesses, we seen the last nine months but the more important months will come the last quarters when we harvest soybean and corn that are the main crops the company makes. The main difference of last year comes from the results of the user taste where we are over 22%, this year showed a small gain comparing of the gain, big gain last year. And apart of that we had a dilution is a state to (inaudible) dilution because of the comparisons that is received and presume up to now didn't convert and the effect of that dilution is affecting in mere 10 million pesos. That may be will be revert last quarter. So that dilution is got we did (inaudible) our convertible bonds that we hold 50 million slight 50 million of the convertible bond that's I assured.

So we know, that the Aglo (Ph) was very big beneficiary of the evaluation and we will show this year operationally how the grain is making very positive and the milk is making very positive too. In the case of the beef we are not making so big gains comparing to last year because the drought affected our results. I will have to send another stable (ph) instead of finishing at very low cost, we send to the feed lost and that made up to serve all this but at a key higher cost, so the operational number of the beef was not like the last year was little lower but in the grain and in the milk its higher than last year.

So operationally the year will grow very positive we will see last quarter but there is the combination of, the effect of prices and good yields and costs in pesos, we make a very positive operations. In the case of the appreciation, we have continued with our vision of selling the assets when they appreciate a lot and buying in more marginal and developing and we are doing more for this quarter two, we are selling part of the (inaudible) and buying in the marginal that was seeing - keeping the strategy we had in the past and in the Corebell (ph) the prices of the land improved a lot were to a very high level so today we are thinking on selling more than buying and in marginal we are buying or developing and the examples are we have many purchases in marginal areas today we are under discussion in the developing, we are developing part of Lou Peso (ph).

We cleared like 8,000 of 18,000 plan, we cleared and we are now putting the wires put in the batches are preparing to receive the cattle next year so some 14,000 hectares, we had developed in the past, now we have like 22 that will be open soon and we are going to finish, we are going to continue doing that but its giving very good positive operational numbers so we are working for this 18,000 of development Lou Peso project.

We are buying more land like that because we think the appreciation of this kind of marginal in Argentina it should remember the case of last quarter we purchase them at 10 today the value of that growth 800 (ph) so we can make big gains buying this kind of land. So that is the reason we are purchasing more lands in Argentina is marginal. In (inaudible) we are clearing 1200 hectares that will be under operation on June of this year, so we grew like 50% in that project in the beginning it was 26,000 hectares, we are achieving like 4000 hectares under irrigation and in the same idea of making activities that they have diluted cost because the valuation on revenues in dollars it was clubbed. So we are putting that land result all on under production.

In the beef, we thought it was cheap beef price, we thought it was good chance and retain some levels of 80,000 hectares. Now we are leveraged like 100,000 hectares, leveraging 95,000 in March but today is higher than that and still with a very big gap comparing to American prices and we are optimistic on the opening of the American market, which was targeted obtain this year bought an industry a backing plant and that shows that the Americans are thinking Argentina is going to export again through market and that's the reason they are positioning in these countries that is a very good sign. Remember that Argentina beef price is less than half the America price and Europe, you probably know, require quality of our cattle. That makes us to be very optimistic in the cattle evolution, in the drive for -- of Argentina.

So the combination of this year will be operationally very positive. In the buying and selling we are going to show very good results to and in the results of evolution we will reverse the last quarters evolution. So probably the balance sheet at the end of the period will be very good, showing products what we should gain this year, this year because of the recovery of prices of the lamb. We have a very big chicken value in our balance sheet, remember the assets are staying at cost adjusted by inflation but to give you an idea with regarding the call in 2000 in 95, today is at the level of 1,600 and level of price of that is $5,000 or $6,000 per head. So is more than triple the price that the book value reflects a family conducts.

That shows an idea of what can be the hidden value of the assets the company owns. That they are only reflected the way we show them. So we think growth are very positive, we are going to use the cash that company generate this year to purchase more and develop more, to make more profit, to open a new (inaudible) in other province. So we are going to invest more in a sector that was really very benefit in the last two years. In the conversion, we have received many conversions of the bonds like $7 million of the 50 were converted and we will receive part of the warrant exercise too. So we are using that liquidity to invest in the sector too. So I think that summaries the quarter, please I wait for your questions.

Thank you. [OPERATOR INSTRUCTIONS]

There is no question at this time.

OK may be I was too boring or may be was very clear, I hope the second. It was the first, I hope this quarter, I would have been less boring and I think the results are enough explanatory and we see we are going to show very good results in the Argentina.

So, thank you to our shareholders to be in the press conference call and please be in contact with us.

Thank you very much and have a good day. Bye.