Good morning, everyone. I'm Santiago Donato, investor relations officer of Cresud. I welcome you to the Q3 of fiscal year 2023 results conference call. First of all, I would like to remind you that both audio and slideshow may be accessed through company's investor relations website at www.cresud.com.ar by clicking on the banner webcast link. The following presentation and the earnings release are also available for download on the company website. After management remarks, there will be a question and answer session for analysts and investors. If you want to make a question, please click the button labeled Raise Hand or use the chat. Before we begin, I would like to remind you that this call is being recorded and the information discussed today may include forward-looking statements regarding the company's financial and operating performance.
All projections are subject to risk 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, CEO.
Thank you very much, Santiago.
Please go ahead, sir.
We are giving now the Q3 results, and we can see in the page number two that the company's record planted area in the region, combining the four countries, combining between the ones that we own, the ones that we lease, and the ones that we lease to third party tools. In there, we have like 28,000, like 10% of the farms that we rent, generally with the mission of bringing clients, giving sustainability at the beginning of development farms and bring clients to the selling, to the real estate part of the company. Related to the campaign progress, have this year more mixed conditions than last year. Last year was a big increase on prices and some good yields.
This year there is prices, we could say that they are sustained and all of them, soybeans, corn, and some of the sugarcane. The high cost pressure that we suffer from the very beginning, mainly explained by fertilizers and some other input costs, made margins to decrease. Finally, the adverse climate conditions is affecting the yields of the region, mainly Argentina. The one more affected is Argentina for sure, and we are going to show you a little later. This severe drought in Argentina, biggest of the, I think, from my history, more than 30 years of Cresud, but it really, to see something like this long term in Argentina, is impacting the crop yields.
Not only winter crops, they got with the wheat and barley, later came to soybeans and corn, affecting a lot the yields of the country and some of Cresud. In the case of Argentina, there is a recovery that is going to come in the future because there's a new announcement of the government about the new soybean, the third soybean of the country and at a different price. Some of the drought effect on soybeans is going to be compensated because of that effects and will be reflected on the third, on the fourth. Not in this one. This one is not reflected, but in the fourth will be reflected the yield of the soybean, but with a new price because of the new effects.
Related to BrasilAgro, there is lower productive too, some farmland sales this year probably will be very relevant in farmland sales, mainly in Brazil, some in Paraguay too, and one in Argentina that is going to come. We are expecting. We have a lot of activity in the farmland sales, and this is. We are going to show you one big transaction that is not reflecting on today balances that Matias will explain. It's going to be in the Q4. Related to investment in IRSA, we have an increase of 3% on the shares of IRSA. In IRSA, we are recovering a lot of the EBITDA of the past and deleveraging progress process of the company. We received a huge amount of dividends from IRSA, from BrasilAgro and Futuros y Opciones, $125 million.
In the case of dividends, we began to pay again recently last week, and this week we were paying, and we are paying 6% dividend yield. On top of that, we were giving to the shareholders 2.2% of the capital stock on shares dividends distributions. Related to prices, we can see that after the pandemic, there was a big increase on the prices, achieving more than $600 per ton. Later, this price went to the $500 level, and we are seeing that price decrease on the futures too. Some less pressure on the prices of commodities, the two, soybeans and corn.
We are in the planted area, 284 between the four countries, 2% increase last year comparison, and being mainly soybeans, corn, and sugarcane, the three main between the four countries. About the drought of Argentina, we can see in this graph where Pergamino district shows. Pergamino is in the middle corn belt of Argentina, probably it's one of the more famous areas of the corn belt of Argentina. The drought made to have a rain in the total year of 336 millimeters, comparing to the normality that Argentina has many regions of 1,000. The proportion of this drought affected so big proportion of Argentina and made mainly the corn belt of the country a big decrease on the yields.
Here we can see in the other graph in the right the production current forecast, where Argentina in soybeans is expecting, because really it's not finished. This is under process today. The harvest is today on the farms. Soybeans, the country is expecting 47% drop compared to the 1st yield that was done at the beginning of the campaign. Almost half of what Argentina was expecting. There are some analysts talking about more than half drop for soybeans in Argentina. In the case of corn, the expectation is 28% below, and in the wheat that it was finished in December last year, it was 40%. Here, we are seeing some of the forecast of Cresud. Here we can see on the map where the farms of Cresud are.
The globes are home farms, and the small points are the released farms. We can see that our areas are not exactly the corn belt. We have the, this year, Salta province that represents almost a third of Cresud, really explain a big recovery of the... Not loss, not recovery, but our loss in soybeans is the 26 compared to the 47. This represents the difference of areas at Cresud, that the drought, it is there. It's really that it's not raining as normal, but really not so dramatic like the corn belt of Argentina. The map of Argentina shows in red the bad areas of April. The drought is not finished. It's not done. Some effects of this are probably coming to wheat.
If the rain doesn't come to the country, wheat is going to be affected for next year, too. Really the situation of farmers of the country was very bad. This year, Argentina, in the past, Argentina had drought. The prices recovered a lot. This year, because of regional yields, mainly explained by Brazil, made that the loss of the 25 million tons of Argentina were more than compensated by the yields of Brazil. That grew, like, 30 million tons year to year. Really, there was not any main effect on prices. The, the part that is coming is because the government helping some of the situation of the farmers of the country. If we move to next page, in page number five, we can see that the harvest progress, in soybeans, Argentina is close to 42%. Bolivia is done.
Brazil is close to finish. Paraguay is zero. Paraguay is going to begin these days. The total region is 71. In case of corn, majority of the corn is safrinha in Brazil or late corn in Argentina. The combination of the two makes, like, 7% advanced area for harvesting of corn for the region. All are projections, but we are optimistic that the effect of the bad climate of the region, in case of mainly of Argentina, affected, but not so much like the rest of the country. We can now move to page six. We are expecting, like, a drop year-to-year of 4% in yields. The 798,000 tons to the 765,000 tons for the whole region.
That's the main effect is Argentina, but the rest is not so affected. The total drop is not so relevant. The operational margins are worse than last year, because what I explained at the beginning, the effect of higher costs, the prices last year made a very big rebound. Really, there was a big effect on the increase on the prices that this year is not. It's the opposite. It's even or degree, below the price of the budget. Really, the effect of prices of this year is not helping like last year. Not yields, no prices, and costs going higher. That is why today, the nine months reflecting some of those effects is really comparing last year, so different. Sugarcane is a little lower, but not so important.
We can see the yields of the region, that they are stable when we compare the corn at 5.6 tons or soybeans at 2.6 tons. Really, the effect of having that in the region made us more stable than having only in one region. In the meat, nothing special to compare. 78,000 heads of cattle, 7 million tons of meat in the company. About real estate, up to now, the explanation of the nine months, there were two small farms, one in Paraguay and one in Brazil. There is a subsequent sale that is not reflected on balances, that BrasilAgro made the relevant fact later. That was done, I think, in April. Here, there was a big sale in a total valuation of BRL 409 million.
Comparing to the purchase price and CapEx of close to 60 million BRL. Really a big gain that is going to come on the Q4. We did it in two portions. One was the 330 hectares of total area, and the other, 5,200 hectares of total area. The combination of the two makes a total sale of 400 and some million BRL. Really a big gain. It's going to be like 260-270 million BRL that are going to come on the Q4. Related to the operational business, there are two main effects. Real estate, that is, in the fourth, a lot of activity. In the operational, like the soybean price, that is going to come on the fourth too.
We move to now, to the page of our service part, not the operational, not the real estate. Service area, the two companies that we run, FyO, where Cresud owns 50% of the shares. We see the evolution, long-term evolution of traded tons of this company. Last year, in a normal campaign, not very good, but normal campaign, FyO did 6.6 million tons. Last year did a EBIT of $28 million. This year, because of drought, the campaign of Argentina is much lower. The company is only intending to increase the market share to Argentina, not increasing the tons comparing year-to-year, because Argentina will be in close to half of the campaign of comparing last year. The company is very positive. It's going to keep making a lot of money, having lower volume because Argentina evolution.
This year did another bond, a $20 million new bond, again, at zero interest rate for three years. This company is growing, not only in Argentina, giving service to farmers in inputs, in outputs, in consultancy and in futures and options. Now it's doing this process in Brazil too, through a company that is launching recently called Beyond Beef. Relating to Agrofy, where Cresud owns close to 18%. This is the marketplace for agriculture. The company is stable in revenues. This year is not growing because of the effect of drought in Argentina. This effect is having the company and the decision of the company in this environment to the companies, the high-tech companies, is to decrease the burn rate, to keep the sales stable, and to look for the break-even.
The company is on that mission, decrease some of the number of employees to have this situation, understanding the change on the timing. We think, and we have keep thinking that this is going to happen. The marketplace for agriculture is coming. Probably this delays a little, so we are deciding to burn the money on the company slower to arrive to the break-even point with the cash the company raised in the past. These are the map where our locations are in South America. The easy, more visits marketplace of agriculture for the region. I will introduce Mr. Matias Gaivironsky, that will begin speaking about IRSA.
Thank you, Alejandro. Good afternoon, everybody. Going to the results of IRSA first. As Alejandro mentioned, Cresud during the quarter increased by 3% the stake in IRSA. Today we control IRSA with 56.8% of the shares. IRSA has, during the quarter, a very good results. The 9-month period, we saw an excellent performance all in the operational and the financial results. Tenant sales are growing, higher occupancy. IRSA reached historical levels again after the pandemic that went down to levels of 89. Now it's again at levels of 97%. The offices as well, 100% occupancy in the Triple A buildings. We finished the occupation of the La Maulea building. We also sold a lot. We sold seven floors of the La Maulea building at very good prices.
There was a revaluation of the remaining square meters of the building because the price now is higher than what used to be in our books. Hotels as well are performing very, very well. There is a huge recovery after the pandemic with probably record EBITDA for our portfolio, and the very good occupancy. IRSA keep deleveraging during the three-month period. Remember that was a big challenge of cancellation of debt during March. IRSA paid 100% of the debt, so now there is no more challenges regarding the central bank regulation. Also, IRSA paid a very high dividend during the last month or the last days. It was a 13% dividend yield that Cresud collect part of that.
If we saw the graph, we can see the EBITDA, the last 12 months EBITDA of the rental segment, increasing and surpassing pre-pandemic levels, reaching $162 million. If you move to our financial results, first it's important to understand on the macro side what happened with the different drivers. FX and the inflation generate important results in our results. First of all, to understand that the inflation was 74% during the 9 months period, against the devaluation on the official exchange rate of 67% and on the Blue Chip Swap of 59%. That means that in real terms, we have an appreciation of the peso, the official exchange rate of 4%, and in the Contado con Liquidación or the Blue Chip Swap, 8%.
That will have different impacts in our results. Going to the page 12, on the operational side, as Alejandro mentioned, this is a very challenging year to compare one year to the other. The last year was a record campaign, excellent results in Brazil, in Argentina, excellent results of production, prices, costs that were much lower than this year. This year, when we compare, we have many effects on the negative side, that the drought in Argentina, higher cost in Brazil, lower production that is generating that the comparison, you can see this drop of 89%. Here we don't have many results that will be recognized in the next quarter. We will have a different exchange rate for our production in Argentina for the soybean that in March we haven't, so it's not recognized yet.
The farm that we sold in Brazil that is not recognized in this nine-month period will be recognized next quarter. Probably this picture is not the best picture to analyze what will be our results in the 12-month period. Of course, this year is worse than the previous one. In terms of our forecast and our budget, we are more or less in line on what we forecast this year. Of course, compared with the previous year, is lower. We go to the next page, on the operating income, including IRSA, the previous one was just the farming activity. Including IRSA, we see a drop of 59.2% compared with the previous year. Mostly is the agricultural part inside generating better results than the previous year.
Other important driver or line in our balance sheet, that is the change in the fair value of the investment properties. This is 100% or almost all related to IRSA, that we are posting a loss of ARS 34.8 billion. The same again, a loss as well in last year of ARS 20 billion. This is more related to what I said at the beginning, the drivers between inflation and the valuation. In dollar terms, the investment properties are increasing slightly. Shopping malls remain stable. The offices will increase a little because of the revaluation of the 200 Della Paolera , and the land reserves remain stable in dollar terms. When we convert that in real pesos, that generate that loss.
Regarding the net financial results, we can see a gain of ARS 16.4 billion was a higher gain last year of ARS 34.5 billion. If you see in the table below, you can see in the first line, the net FX results that last year was a gain of ARS 40 billion. That is related to the appreciation of the pesos. Here we convert the dollar-denominated debt into pesos, as with in real pesos, and the appreciation of the pesos generate this gain. This year is lower than the previous year, but it's a gain. In the net interest, we can see an increase, a slight increase in the net interest this year compared with the previous one. This is more related to the composition of the debt. Cresud has a little more debt in pesos term.
That generates an accrual of higher interest in that line. There is compensated because of the revaluation and the dilution of the peso debt, but it's recognized in the first line in the net final FX results. Trying to understand the net income, all these drivers has an effect on the net income line. Finally, we posted a gain of ARS 36 billion, attributable to the controlling interest is ARS 20.4 billion, compared with again last year of ARS 64.7 billion and controlling interest of ARS 40 billion. We see the evolution of our debt during February, we canceled the remaining part of the bond that we have to refinance because of the central bank regulations, we canceled that.
In April, we issued two new notes, one in Dollar-linked, that we issued $30 million at an interest rate of zero that will expire in the next three years. We raised money in peso terms for 1 year and a half, and we raised $20 million at BADLAR + 3%. One good news here is the credit rating upgrade. Fix SCR . increased our rating from AA to AA+. Regarding the dividend, we announced and then paid a dividend for ARS 9.5 billion, that is ARS 16.52 per share, or ARS 165.2 per ADR. This is 6% dividend yield. We already paid in ARS, and we are in the process to pay to our ADR holders in USD.
Also, we decided to distribute the shares that we bought from our buyback program, that we at the same time that the dividend, we distributed those shares, so that was already distributed. Regarding our buyback program, we decided to extend the term of the timing for our program. The original expiration was this week, and we decided to extend that up to for the next 180 days. From our program, we already bought almost 80%, so there is a remaining of 20%, more or less ARS 800 million. We also adjusted the price in pesos term to ARS 425, and in dollars, still
$8.5 per ADR. I think with this, we finish the formal presentation. We open the line to receive your questions.
Well, now is the time for the Q&A session. If you have a question, please click the bottom labeled Raise Hand. I remind you that questions will be taken in the order we receive them, as we always do. Here we have some questions from Mohit Khanna. The Argentina Corn Belt land price chart that you used to show in your presentation earlier was used on official FX rate or parallel FX rate?
This is probably when we show that those are real dollars. When we show the price of Argentine land of around $14,000-$15,000, the hectares, is always on real dollars, but it's found well, in Argentina. That is the Corn Belt, you know. Cresud owns farms across Argentina and most marginal areas in the north. But in general, marginal areas follows the corn, the Corn Belt in terms of, you know, of prices.
Yeah, like.
The real U.S. dollars.
Yeah, like all real estate and farming, real estate in Argentina, everything is quoted in real USD. People could pay in pesos, but you always fix prices thinking in real USD. He asked as well, most of your farmland sales were in Brazil. If you can indicate an outlook for Argentina, farmland prices and possible sales in the near future.
yes, there are some possibilities of transactions in Argentina. Prices are not decreasing so much as we would be thinking because of the exchange rate difference between the blue and the official. Really from the top prices of the Corn Belt in the few years ago, that was at $18,000. Today, you are talking about $14,000-$15,000. So there was a drop to the peak. What happened in the land of Argentina was didn't follow the trends that U.S. and Brazil and other areas of the world increased dramatically these years. but still, they are not big drop to the highest prices few years ago. the...
What we expect is probably next government, I'm not sure what will be the election or who will be the candidate, but how will be the measures related to dollars and taxes and exports. We are expecting some decrease of the gap of the $2 and maybe the decrease on time in the taxes and exports too. We expect as farmers, this is different to the farmers of U.S. and Brazil are really damaging a lot farmers of Argentina. We are expecting that to be decrease on time. If that is the case, price of the land of Argentina will grow a lot, because today the gap between prices of Argentina Corn Belt to the other areas is dramatic, highest of the history.
Thank you. We have next questions come from Gordon Lee. When can ADR investors expect to receive the cash and stock dividends?
Well, we already are working with The Bank of New York as a trustee of our ADR program. We hope at least that will take 10 days or so since The Bank of New York fixed the record day. The payment will be 10 days later. We expect that The Bank of New York will fix the date probably next week. We are working with them, and the idea is to do it as fast as possible.
Good. There is a new question. Forecast for rainings in the next coming 12 months and the next campaign, what we can expect?
Up to now, every specialist of climate was speaking about the changing from La Niña to El Niño, and that was representing that in February the rain would come. Some came, but really not the one we expected. There is a, I would say, delay of the change from the La Niña to El Niño. If El Niño comes, that will make the normalization of rains in Argentina that had three years of very bad climate. This year is worse, but the three were bad. If El Niño comes, it's going to have more than 1,000 in the Corn Belt of Argentina. That's what we are expecting. But today is not, and today, what I said at the beginning, the wheat, if doesn't rain the next 30 days, is going to be strongly affected.
We are waiting for those rains.
There is one more from Gordon Lee. If there is plans on listing FyO Brokerage Company anytime on an exchange.
We don't know really. This company today has plenty of cash and is making really big benefits and giving good dividends. Maybe with this company, we'll need some cash or some more. The strategy we are beginning to think and developing in Brazil will need. Maybe, yes. For Argentina, I would say no, but mainly for expansion of the strategy for Brazil, the company could be thinking on raising capital because the size and the working capital the country Brazil needs on that business probably will need that.
Good. I give minutes more. If there is any additional question, you can use the chat or raise hands. Here, a new one. Are you seeing any reduction in fertilizer costs?
Yes. Was a big drop comparing last year to this year. like 30% of drop prices comparing year-to-year in USD terms. That is helping some on the margins for next campaign, because drop of prices, but drop of input is going to have, I would say, like, same margins as the last year forecast, last year budget. Really there is a the impact of these inputs is going to be for the next campaign. The one that is probably more affected because of use of fertilizers is Brazil more than Argentina. Really, cost of inputs is going down. Because of margins of farmers, no, this is the case.
Well, we can conclude the Q&A session and the presentation. We thank you all, and I will turn back to Alejandro for our CEO for his closing remarks.
We are finishing the campaign. Next quarter will be the last one. We spoke about the operational. I think the result finally between the combination of our three steps in the agriculture, that they are real estate, operational, and services, is going to be close to budget. Really, we are lucky comparing to the situation of other farmers of the region. We are expecting next campaign with this condition of little lower prices for the next campaign, but a lot of liquidity in the real estate. Not in Argentina because of the situation of Argentina, but the rest of the region is really much more liquid. We could be making more result in that portion of the company.
We are very optimistic in agriculture in the region, and Cresud intends to keep growing from the 280,000 hectares to keep growing in surface in the region. Thank you very much, and we'll see you next quarter in the final numbers.