Cresud Profits Soar on Real Estate Gains Amid Agribusiness Headwinds

BUENOS AIRES, Argentina – February 10, 2026 – Cresud S.A.C.I.F. y A. (NASDAQ: CRESY), a leading South American agricultural company, today announced a dramatic turnaround in its fiscal second-quarter results, posting a substantial net income that starkly contrasts with a loss from the previous year. However, the headline figure is largely powered by non-cash accounting gains from its urban real estate division, obscuring a decline in operational earnings and highlighting the company's strategic reliance on its diversified business model.

For the first six months of its 2026 fiscal year ending December 31, 2025, Cresud reported a net income of ARS 193,932 million. This represents a significant reversal from the ARS 28,851 million loss recorded in the same period of the prior year. The primary driver of this profit surge was a significant gain from changes in the fair value of investment properties held by its urban real estate subsidiary, IRSA.

Despite the impressive net income, the company’s Adjusted EBITDA—a key metric of operational profitability—told a different story, falling 19.0% to ARS 137,967 million. This divergence underscores the two distinct narratives currently defining Cresud: a booming real estate portfolio on one hand and a resilient but challenged agribusiness on the other.

The Urban Shield: How Real Estate Propped Up Profits

The overwhelming majority of Cresud's reported success stems from its strategic investment in IRSA, one of Argentina's largest real estate companies. The urban properties and investments business contributed ARS 132,333 million to the consolidated Adjusted EBITDA, dwarfing the contribution from the core agribusiness segment.

The massive net income gain is primarily an accounting entry, not a cash windfall. Under International Financial Reporting Standards (IFRS), companies can value investment properties at their current market price, recognizing any appreciation as profit. This 'fair value' gain reflects the rising worth of IRSA's extensive portfolio of shopping malls, office buildings, and land reserves, as determined by independent appraisers. These gains are considered unrealized until the assets are sold.

This accounting practice has proven highly beneficial for Cresud amid a resurgent Buenos Aires real estate market. Recent economic reforms and the return of mortgage lending have fueled what some analysts are calling a 'bull market,' with property transactions reaching their highest levels since 2018. IRSA's premium office portfolio remains 100% occupied, and its rental segments are generating positive cash flow, with rental-adjusted EBITDA showing a 4.9% increase in the first half of the fiscal year. The performance of its shopping malls, which have inflation-linked lease structures, has also helped bolster revenues despite lower real sales, showcasing the defensive qualities of the portfolio.

While these fair value gains significantly boost the bottom line and shareholder equity, their non-cash nature means they don't directly fund operations or dividends. Instead, they reflect the strategic value of Cresud’s diversification, providing a powerful 'urban shield' that protects the company’s overall financial health from the volatility inherent in the agricultural sector.

Harvesting Resilience Amidst Market Headwinds

While real estate took the spotlight, Cresud’s foundational agribusiness navigated a complex landscape of operational triumphs and market challenges. The segment contributed ARS 15,350 million to Adjusted EBITDA, a figure that, while positive, highlights the pressures facing the agricultural industry.

On the ground, the company demonstrated operational strength. It reported a record wheat harvest in Argentina and increased its total planted area across the region by 5.8% to 316,000 hectares for the 2026 campaign. The livestock business has been a particularly bright spot, continuing to benefit from firm prices and strong margins, driven by both robust international demand and a healthy domestic market.

However, these successes were set against a backdrop of difficult market conditions. The company noted that international commodity prices, while stable, remain at historically low levels, capping potential revenue from crop sales. Furthermore, while the overall regional campaign has benefited from good weather, summer crops in parts of Argentina are facing challenges from a lack of rain, though conditions have reportedly shown signs of improvement in recent weeks.

The segment's performance was aided by favorable, albeit temporary, government policies. In September 2025, the Argentine government's decision to eliminate export taxes on certain crops and beef provided a welcome boost to prices and margins for producers. This complex interplay of record harvests, strong livestock demand, low global commodity prices, and shifting weather patterns paints a picture of a resilient agricultural operation actively managing a host of external variables.

A Capital Balancing Act: Debt, Dividends, and Future Growth

Against this mixed performance, Cresud's management has been actively engaged in a capital balancing act, aiming to reward shareholders while securing funding for future growth. During the quarter, the company distributed a substantial dividend of ARS 93,782 million, which equated to an approximate 8% dividend yield. Notably, the distribution was a hybrid of cash (ARS 65,080 million) and shares in its subsidiary IRSA (ARS 28,702 million), a move that provides a significant return to investors while strategically managing cash reserves.

Simultaneously, Cresud tapped local debt markets, issuing Series L and Series LI Notes for a total of USD 117.2 million. This new debt issuance increases the company's financial leverage and will likely lead to higher interest payments, a factor noted by executives at its subsidiary. The capital raised is expected to be used for general corporate purposes, including working capital and refinancing existing obligations, providing the firm with liquidity and flexibility.

These financial maneuvers reflect a confident strategy in the face of Argentina's volatile economic environment. By leveraging the strength of its real estate holdings to secure profits and distributing returns through a mix of cash and equity, Cresud is navigating the present challenges. The new debt, meanwhile, signals an intent to continue investing in its operations, ensuring both its agricultural roots and its urban property ventures are positioned for growth in the years ahead.