Q4 2019 Earnings Call

investors

And the general economic conditions industry conditions and our operating factors could also affect the future results of popular GI and could cause results to differ materially from those expressed in such forward-looking statements. Now, I'll turn the conference over to leader Wang investor relations officer of pop energiya. This is Lena. You may begin your conference.

Thank you, Gran. Good morning everyone and thank you for joining our conference call. I will make a brief summary or Compass completely figures reviewing the year. We just come by and the quarters highlight the wage even that they didn't warranty GS already held their calls on Monday. We'll focus more on the core businesses of Tampa that is powering m p or CEO. Mr. Osama Ronnie and our CFO missing a vehicle in or both here and joining us for Q&A.

Before we begin let me remind you that, holes u.s. Dollar as functional currency since January 2019 for the 2018 comparative according to box to yours are reporting in pesos adjusted for inflation as of 2018 year end and shown in dollars exclusion effects. This comparison might be difficult to comprehend there for for a life form a basis 2019, Compares with reporting nominal figures in Q4 2018 and converted to dollars a direct object in the case of peso links series such as our oldest. The figures are adjusted by inflation and shown in dollars at the 2019 year nfx.

So having made this qualifications, we can start 2019 was once again a year full of political uncertainty as a result of the presidential elections the worst month of the recession that continue striking the country and the general deterioration of all micro economic variables bumper navigate the stuff Waters with confidence or going to the outstanding job, like the whole company over the last years included the development of non-strategic assets focus on our core businesses.

General significant level Investments the window at the same time maintaining high levels of liquidity and extending the average life of our financial abilities among off there for in 2019. Once again, we can say we had a positive year in several aspects and achievement that makes us proud as shown inside for revenues in 29000 were maintaining similarity increasing by 6% despite the peso collapse witness again last year while 50% of our sales were dollar Link in terms almost 75% came from dollar-denominated corporations has power and gas. However, MPS is still affected by the downward pricing environment in gas in addition to the effect volatility month and holds to the Tariff increases affecting our regulated businesses upset by higher gas production and power capacity which contributed to deliver a 955.

$10 in 2019

50% lower year-on-year but keeping competitive margins power generation keeps leading the sheriff's thanks to the new Commissioners PPA of performance and not in our control by pumper continue pursuing their investment commitment with the country having diverse over 1 billion dollars off last year. I figured slightly lower than 2018. But if you see the chart below at Tampa we take pride in having remain committed to the country energy needs for our history.

Out of the total investment half was diverse for the maintenance of our assets, especially the rendering of equality service by our Regulators of series and the other half was all she needed to expansion projects mainly distributed between the construction of new winforms. The closing two combined cycle gas line and Desperation targeting back and more information.

On the Syfy let's make a quick stop by reviewing the quarter's financial highlights ABD a year on year by 9% mainly explained by lower hydrocarbon prices wage reduces for remuneration and the volition effect on our Frozen utilities partially offset by the commissioning of new power units more gas production destined to sell pre-owned no more electricity demand other than or that position of internal Oregon and inflation of facing devaluation during Q4 nineteen or Ron Carter Blvd a decreased about 49% mainly because of lower Legacy and gas prices due to the office season as we show right on the right below oil and gas sure shrunk further given the current pricing environment in the MP while electricity takes the other 72% mostly led by power generation.

Moreover a show me the chart left Below in the fourth quarter of this year our capex decrease 43% compared to 2018 mainly explain lower pasting power generation as projects are commissioned and internet expansion words just began in addition to a lower the network capex because of the devaluation of them by increasing MP activity in anguish of lock. However, capex increase by 31% quarter-on-quarter mainly explained by stronger peso driving up an enormous Investments thousand dollars and execution of the final milestones at Hannover Blue's Clues into combined-cycle.

so as you can see on slide 6 in the fourth quarter of 2019 with which account of $179 9% less compared to the hundred eighty-seven million dollars every day recording to four 2018 mainly explained by decreases in oil and gas as we detail before lower International spreads and petrochemicals Thursday dinner from calling another's partially upset by the increases at Power and electricity distribution as we detail before

Moving to power generation segment as we seen a thin slice 7 during the forequarter of 2019. We posted and adjusted BDA of a hundred seven million dollars fourteen percent fire than 2018 mainly given by the newly commissioned confirm with p p a and can you play Blues new gas turbines as well as the recently-acquired in Snellville example that week alone with y p f and we are to our 50% stake and the devaluation impact our president nominated cost. This effects were partially upset mainly by the reduction and Legacy for my remuneration as per resolution one of 2019 in which lower the capacity payment during spring season of October and November by around 40% for women and bear awareness intervenes as they are the lowest utilization units in our portfolio the impact of on our highest low Factor. Yep.

Send their legacy formal that is Geneva and low melodic psychos is a smoother throughout the year, but during the office season it gets 20% lower more over in Q4 2019. And if he approves volumes and prices were lower, you know, read year-on-year current quarter winter season pricing for legacy until 3:19 contributed to the 18% decrease for the second consecutive year. We have position ourselves as the largest independent power producer in Argentina representing 12% of the country's total generation. Thank you for 19 generation was 14% higher than last year mainly due to the higher dispatch Loma and. Buena because we managed to get the gas and therefore competitive very low-cost known as CVP to get this batch plus also contributed the commissioner of Canelo blue thermal power plant gas turbines as well as the higher wage.

Generation coming from the wind farm which ranks senior in the dispatch priority because the cost is close to syrup and the operatorship at Ensenada Ryan.

This effects were partially offset by the scheduled maintenances at Geneva's Old City. GT lower low Factor iguanas caused by the higher CVP from the partial recognition of the home gas. They're replacing them behind the Greeks dispatch priority plus low water flows at Mendoza hydros, quarter-on-quarter power generation decrease mainly because of em all ccgt overhaul availability in the fourth quarter 2018 was almost 98% with installed capacity of 4.8 gigawatts that includes the recently-acquired wage similar to the availability achieve in the same quarter last year and also compared to the Q3 2019 thermal availability in Q3. Also, I'm sorry also reach 97% similar to the year of 2018 and but a little bit lower than the queue free of this year 2019 because of Connecticut over whole month.

on this new section

January of this year Legacy power generation pricing scheme was changed to one in pesos and set up an automatic automatic update factor that full PPI being the latter more correlated to the dollar also this new spot pricing changes the capacity payments reducing them and making it more vulnerable compared to the previous scheme of resolution one way to make it more flexible in line with the government's intention to light it up power divestment. But also 60,000 the highest no Factor units in the grid hence introduces an additional remuneration in the hours of high thermal dispatch.

To understand these changes. Please turn to your attention to the charge on flight eight, assuming an effect of sixty pesos per dollar the thermal units with the highest a factor, especially during the so-called high demand hours in Peak or off-peak season will end up building and an average capacity payment of the year a little bit higher than the previous key on the other hand should the unit dispatch be lower than 70% power and moderation is reduced by $1,000 per kilowatt per month gets wider. If the low factor is below 30% pay attention that loads utilization units now get an average of $3,150 per mile what per month which is consistently the average back in 2015.

Regarding this pensions in the pipeline. We are currently at 99% completion of the closing to combine cycle of the 383. Megawatt Blues which began Thursday October 2017. The before-and-after is remarkable on nine. You may appreciate how it looked like pretty months ago in October 2017 right before the suspension work began and the great difference compared to now as seen on page ten. We are preparing for the first thing he to run the city commission and test before reaching Tomatoes final approval schedule on June 2020. Hence. Bamba will become the largest operator of combined Cycles in Ireland and Greece with both of the 25 combined Cycles is still in the country. Thus contributed to generated the least possible impact to the environment.

Also, if you can seems like 11 a few days ago, we kick off with the suspension Works to cgt at a $280 project at the Oscars of the wrong hands on finish will become one of the most efficient and largest sperm of plants in the country.

We estimate few the by the end of 2022 which next PPA for ten years with camisa.

the cabin

A required field Finance not representing an issue for the Expansion Project.

As you can see on slide 12 during two for 2019 the oil and gas segment. We posted and adjust DVD of twenty 60% lower than in 2018 mainly because this is still reflecting the downward Trend in the gas prices driven by camisa lower oil prices resulting for the FX freeze discretionary set by the government and drop off International old reference prices.

The increase in activity other languages the money operation and transportation costs and lower oil production partially offset by 15% higher production a gas motivated by integral vertical integration with our generation lower royalties and penciling expenses. Everyday aquarium quarter decrease was sick meme explained by the lower gas prices and production as Q4 is mostly off big months for surely upset by lesser evil impact on the peso link wage expenses as well as the slightly higher oil Productions.

Oroville production in Q4 2019 increased 12% year-on-year, but it's 4% reaching to a nearly 48,000 barrels of oil a day of which 90% is composed by natural gas on the other side production level year-on-year decrease 8% which into five thousand barrels of oil per month per day, but quote unquote agree 4% mainly because of the lower well completion rate at Theresa and lesser drilling activity at Rio new condition of set by production resuming at last November as well as shallow contribution from England England since last August month during Q4 2019 the crude oil prices.

Decrease your on your by 17% but slightly increase for inquire to reach into $50 per barrel mainly same at the government-imposed freeze in prices them for domestic oil until November 2019 selling at the average of 20% discount in addition to Grand prices falling in June 2019. 55% of all our oil production is a scale and the heavy oil which is sweet and given the current clean fuel strength Narrows the Magneto.

Please don't just like fourteen where we want to explain in deeper detail the situation in gas regarding the gas production the quarter reach an average of 256 million to 3 per day 15% year-on-year increase but decrease 5% or an order mainly explained by the increasing among Russa a block in which evacuees structure was suspended accordingly given the outstanding productivity and upside potential and also keep in mind that it's fully owned by holding operator should as well.

Thank you.

For 2018 in Montrose will reach 151 mcf per day of gas production 53% higher than Q4 2018 and contributed almost sixty percent of our overall gas ranked 5th highest producing block a nu Kina basing. It is also remarkable that 10% of Q4 2019 production correspondent to Shell gas from the complete lack of two horizontal with language of luck in last August. This positive effects were partially offset by the lower production in other gas. Blocks because of the lack of discipline sale prices, which impacts on the break even equation.

Prices have been going down due to the excessive Supply driven by the Restriction of shell development.

It's definitely get back up by the floor the sign unconventional gas plan as well as the local demon drop due to the seasonal and inability to pass through actual prices to Consumers.

This affects negatively impacted on Rincon with lesser Drilling and natural Decline and a minor decrease in Okinawa blocks off the case of Sierra chat. I kept a similar production due to the completion of tourists until tight wells in the last September during fall quarter 2019. We actually weighted average sales price of gas.

2.6 dollars per million. Btu. Roughly 25% lower year-on-year and quarter-on-quarter mainly due to the reduction on the reference price for gas fire power plants and the founders on the interrupted basis conducted by commission as well as the demand seasonality compared to Q3 since September to drop in reference price reflects the office season, whereas last winter set price was 37% higher in dollars.

You said also impacted negatively the commercialization in industrial segment and other spot price.

The fuel procurement soft procurement for our power generation help to recover the gas production levels that seemed most of our production there. So it may not improve the pricing. We covered already given calls and it helps to have a certain object especially during the week ma'am. And to monetize some Synergy between Power and Gas.

Although our largest power plant Canada was under program maintenance during the mount wall mount in Q4 2019.

Expert biding volumes to kill increase and also we made use of our Beetle order to commit tender.

Moreover since December 1st, 2019 the gas supply manager for power plants except for intership loose was restored to camisa there for today. We are selling roughly about 70% of our production directly to commit as you can see on slide 14, the average price of gas prices that we are recording to demand have been plunging since second half of 2018 for me to the lowest point years and hardly recovering the country's marginal rate given cost winter season ticket prices, but as evidence in the past, the domestic production was not long enough to cover the domestic needing to cover 15% and during the worst time three percent of the gas consumed the gas with gas imports from Allan G and Bolivia as much higher than those paid by to domestic producers. We find that a significant reduction in the uncertainty overhanging the gas sector, which is so critical for the cub.

East Paramount

we are concerned about the lack of predictability faced by the business which has caused the activity to be at historically low levels this added after the fact that the press and more than half of the national gas production comes from and conventional fields, which the decline rate is much higher than a conventional makes us feel if the negative Trend in reserves development is not reversed the country might fall again in the growing need for gas Imports with the result in negative macroeconomic impact

We really camisa understand this and since February tender, said change the approach by adding a 3% deliver pay binding condition raising the price will hit then average of $205 per minute to you nuking everything as we can see on charge in the charge in page. Fourteen. This is a huge step compared to the previous situation when non-binding tenders were getting bitched at an average of price as low as 1.73 dollars per millimeter you which were detrimental to the development of domestica.

Before I move on from the oil and gas. I wanted to give you a quick update of our operations. We close the year 2019 350 57 Wells drilled and 51 completed in the case of gospels more than 90% were targeting unconventional gas gas Wells targeting simultaneously two types Transformations would drill At The Mangrove show off as well as or covers to formally monitoring Wells targeting to another formation called agreeable, which is very important for the maintenance of the record production in the block. We also drill and completed Jewelry Center was in theory as we said hoping to sustain the production.

During 2019. We began the original resources in back and more information in the gas window. We drilled and completed two walls at each with horizontal extension of eight thousand feet completed with 45 fracking stages, which resulted in an outstanding join initial gas production of more than thirty million people day today. It's around m m c f birthday more older a vertical pilot will was filling and completed with the first

Pilot vertical well, and it Heats horizontal Branch with an extension of seven thousand feet at Rincon de LaRhonda completely with 27,000 stages resulting in initial flow of 1.1 thousand barrels per day in line with expected rate as a result of this exploration campaign 8% of our production in 2019 came that she'll and oil and major milestones for our businesses.

Which we expect increase in 2020 by completing the remaining two walls real last year and if the context improves when you drill and the remarkable results with us to certify as Reserve from back and more information for the first time in pompous history, even with a year-on-year growth in production. We also recorded once again, a 1.3 positive replacement ratio and an average life of roughly 8 years. We've proven reserves reaching $139.35 million barrels of oil should be 90% gas.

in terms of the net

I'm going to double to the owners of the company sample reported a Consolidated gain of nine million dollars in the fourth quarter. Whereas in the same period of 2018 289 million was recorded. I mean he's playing but the lower actual of losses from FX difference and inflation exposure as a result of the change in the functional currency, as I explained ending of this call lower gains from the affiliate and higher loss from the impairment of fixed assets.

Finally moving to the side 17. We must highlight the resilient balance sheet of the company compared to other peers in the industry and in Argentina. We have always been very proactive towards cash and I will let the management especially after witnessing narrow window in the international market. We continue redeeming leaning facilities highlighting that back in 2019 paid at maturity and pre-cancer roughly a total of three hundred sixty-six million dollars after Q4. We pay down $25 million more jobs. They're forty of standing maturity for twenty twenty Seventy-Six million dollars, despite the challenging situation Argentina. We continue receiving support from a capital markets. We recognize Pampas credit extending the maturity by the insurance of a 10-year International going for $300 back in July.

You know these two new bank in debt in pesos for $74 million dollars.

Therefore the Consolidated gross debt including Affiliates at ownership remain at two point four billion dollars twenty-five million dollars lower than September 2019. It in or three portions of on bonds and loan amortization Consolidated gross that is 93% The nominating US Dollars same as the wage order to closing bearing on an average interest rate of 7.7% and 75% is placed at the parent company the Irish life remain around five point four years completed cash amount of $719 Which is higher than the 699 million dollars in September 2019 due to the lower capex and collection of brackets consolidating a restricted group remained unchanged at one point seven and one point two billion dollars respectively more over to led a remaining

At one point eight times at Consolidated level and 2.2 times at restricted group.

Doing 2019 Wilson continue with the company's share buyback program started almost three years ago buying back further 10% of the outstanding Capital stock with considerable discount to the intrinsic value and 5% of the notional value of the company's funds based on our conviction on campus Financial strength. We which includes a sustainably generation of funds strongest position and convertible debt maturities profile this allow us to undergo the volatility and uncertainty with the the impact possible and leverage our position to analyze acquisition opportunities opportunities if they are right? Meanwhile we have also analyzed the Aveo will return it is for cash allocation and have concluded that the return equation favors the investment in our own assets.

since the first

No problem. We have acquired a $2 18 million years that is 22% of the initial Capital stock of 83 million years, excluding Capital reductions and shares held in treasury the outstanding Capital amounts to 65 Million Years also campus board approved the 6 share buyback program for $27 with a price cap of for the $14 for a VR.

So this concludes our presentation now, we'll send the word to the operator who will open the floor for questions. Thank you.

Thank you for us now open for questions. If you have a question, please press * then 1 on your touchtone phone at this or any time. If at any point your questions answered, you may remove yourself from the queue by pressing star then two questions will be taken in the order. They are received we do ask when you pose your question that you pick up your hands to provide Optimum sound quality. Please hold while we pull for questions.

Our first question comes from Bruno on tonight with Morgan Stanley, please go ahead.

Good morning. Thanks for taking the question. I have two questions first. I believe the company prior to this downturn was considering perhaps to move a little bit more to oil Investments taking advantage of the better for the Mentos now, I think with the the decline in the commodity probably that no longer makes sense. I was wondering if we could get an idea of what is the priority Capital location at least in 2020, which would be super helpful and then second question. I think the company is in a very good job on executing the Bible is not only announcing but Falling following through with it, but how much of of the total cash position would the company be willing to to deploy on the BuyBacks? Say over the next 1/2 Years. Thank you very much.

Hi Bruno. Umani speaking. How are you? Thank you for the question regarding the

third question regarding our oil Investments going forward. We we did our first month. Well in Rincon de rande late last year and he started and we started production early this year with excellent result in the same way that we we did our first two wheels in the Shale formation in back to the office window in elementary show also in the second semester of last year with excellent excellent results as well. I initially was to do another two or three exploration wells in Rincon de rande that that is on the birth.

This year we are.

Operators of Rincon de rande but and we are partners with a total.

And we wanted to do two or three more. Well this year but total was on the way more conservative that has than us and didn't want to gain go forward so decision. Yeah, so and we didn't want to do it on a sole risk basis. So often those who else has have has been postponed So currently we don't have any new wells to be drilled this year on the page on the old window in in Buckhead MARTA.

actually, we are very so we are not planning new wells on the on on gas either this year because of the price environment and we will look forward to

more certainty and price signal from from the government going forward. Otherwise, we don't have any new wells to be drilled either in Iraq or in Oregon gas and we have a stock of gas Wells to be completed that we may do so long as the winter approached in Argentina, but it will depend also on the the pricing scenario, which we are we have currently uncertainty month.

So a very modest Capital deployment on the on the EMP business going forward this year off on the same card can be say about power generation where we are finishing in a few months. It will start operation off the the new Canal what plan the new combined-cycle that he didn't mention that is almost 95% already everything paid off small amount of money remaining to to be paid to complete that that expansion that will provide New Media in the second semester of Faith here. The decision that we have taken together with y p f is to move forward in starting the closing of the cycle of a Central Terminal, the Paragon.

But you said subsidiary fifty percent owned by each of us. It's it's a project that requires about two hundred million dollar of of investigating but with the cash position the company already has that it's like twenty Million Dollar Plus the cash generation of the company going forward that topic seized by this subsidiary is already it's it's fully funded. So it will not require a capital deployment from from bumper or from from y p s so all-in-all in terms of capex. We are going to be very conservative this month until the scenario is a new

This a new scenario regarding sorry. Yeah, the buyback you ask how much of the of the cash back we are planning to use and then and I don't have an answer to to that question because we will monitor as long as a year advances. We feel that the company is producing a healthy free cash flow from home. So using part of that free cash flow to buy back our stock or or our debt depending on on on price wage movement. So wise thing to do how aggressively it will depend on on on pricing and on the scenario Thursday.

We see we see in the in the future. So unfortunately, I cannot give you I have no figure but it's something we will Monitor and we will continue as long as we feel comfortable.

That's very helpful very much.

Our next question comes from Jamie Nicholson with Credit Suisse, please go ahead. I thank you so much for the call. I have two questions my first relates to the fact that you have fought back, and I'm just wondering if that's accounted for on your balance sheet in financial assets at fair value, or if you've canceled the debt off. That's my first question, and then my second question is if you could update us on any payment delays, you're seeing some come ASA if you're seeing trade receivables increasing or if you're monitoring the the payment from the camisa. Thank you.

Hey, Jamie, good morning. So regarding the bounced that we repurchased to do we have 84 million face value that they are net in our loans that I show me the balance sheet. We put a footnote as well. So they are net. They're not canceled. But their next it's lesser debt at face value. Okay, then, during the payment delays. There's a thing tomorrow. I think we have the January maturity of the transaction for power off and forgot as well during 2019. We've been selling the gas through our facilities for our power generation. Very little was sold directly to Kumasi. So the days we're like very similar, but now we have C power generation will have higher delays than than gas or vice versa today power generation is Kerry Smith.

7570

A little bit above 70 days of delays. This is as of the December 10th section. So it's just one correction is not 70 days of Belarus. It's 37 days off late because camisa paid forty forty two days. That's that's the rule that's been in place since the nineties so long. So it's 30 days of delays at camisa Spain currently compared to last year. That was so that's it off. Well, we've been hearing from gas producers that they sold to commit they directly last year that they haven't been collected in three days delay. They have been collecting a little bit more, So we'll see so far right now. There are very possible.

Okay. Thanks. That was helpful color. Thank you very much for the call.

Our next question comes from Lawrence with Millis, please. Go ahead.

Double things for the going on for taking my questions just one question regarding the oil and gas business. We already show a very good production in a natural gas maybe from some Works made on Mangrove over here, and also in 2018. What's your expectation on on production for this year is not respecting also reduce some level of topics. Thank you.

Then I think things for the question know as I try to explain on my first answer because of the lack of ability and the uncertainty specially today after this this event that we we all know about we also have uncertainty about what's going to happen with the all prices. But what concerns us more because eighty percent of what we sell is is natural gas to you said uncertain uncertain environment regarding Natural Gas.

And we are since we are not drilling new new wells and we don't know whether we will put in operation the way just talk of Wells that we have already drilled, but we have not completed today. What is expectable is our production. Will Decline and yeah, I was I was and not the decline of fraction for for the year going forward.

the

The situation in industry is that oil? All the players are in the same situation that that we are.

So that nobody stealing new wells and although we don't expect a Major Impact this winter. It will certainly may have a high impact on on 20-21 if this situation is not reversed, so we hope that the authorities yeah, cause I know that they're they're aware of the situation. They understand that now total production Argentina more than fifty percent comes from unconventional production, which as you know declines much more quickly that conventional production. So with no new investments in the in the industry the the local production of gas sooner or later will start to decline at that higher rate that had been a decline in the past when when we face this problem.

I don't know ten years ago. So I hope that

so we're not going to face. We're not going to repeat exactly the same problem and I hope that the authorities react.

as soon as possible, but that as much as I can tell you and and

and we have a set a very uncertain scenario.

Okay. Thank you. Thank you so much.

Our next question comes from Carolina, Romero with Credit Suisse, please go ahead.

Hi guys, good morning. Thank you for the call. I just wanted to know if there are any updates in regards to the discussion for the vad of transmission tariffs update after the third freezes set last December. Do you have any time line or possible calendar for Thursday discussions of the future tariff increase. Thank you.

No, there's no Talent at all about this it's and and when we we speak with government officials on the technical level, they are all aware that they need to face. They need to change.

They need to get rid of the frees of tariff as soon as possible because the country also fix the fiscal restraint. So with this Hai ye Asian environment the 5th of tariff is very painful for the and and will soon impact the the bank account but it's the politicians who take the decision and so far they they they have announced that we have a free sort of of sorry for at least not sorry for up to a hundred and eighty days but

Yeah.

since December, but we

although we when when the law was published with this up to 180 days of freezing of tariff, we felt very optimistic that wage and that they they were aware of the problem and they would try to stop the freeze sooner than the country and eighty days today. We are not that optimistic and within that we don't expect any news on on the terrorist front until the June of this year.

Okay. Thank you.

Our next question comes from Alejandro Aranda with a towel, please. Go ahead.

Hi Natalia. Thank you for for the call in the past. We have the government requesting those endless excels to fill out with information in order to to be able to figure out what to do in policy terms at this point. Have you been approached by by government officials requesting that kind of information from you? Are they moving ahead or is it just stun till standstill till the debt is solved?

We haven't been approached with with those kind of requests, you know, not at all. So I yeah, I think I think solving the issue is number one priority today and but but it's not a bulb that the rest of the government is is on the paralysis until that is sold and I'm sure that the energy team is working on on explain the situation to

Their bosses and and and and making proposals but so far yet. We haven't heard of any they haven't wage express any decision regarding these matters.

Okay.

If you have a question, please press star on one then one on your touchtone phone.

Our next question comes from Lawrence with it lists, please. Go ahead.

Hi again, and just a question regarding the the use of cash as you are making some share buyback programs. Are you expecting to to back to the Bone by fax or at current levels? You will need that. We will wait a little more. Thank you.

well, my question was whether we will buy back bonds again again, it will will depend on the

On prices, we we bought this $85 million. So face value of of that. I think it was in September or was in August of last year at an average price of $0.75 after this week's Event prices have fallen not not yet reached that level. So again, we will monitor the the the situation but we don't disregard that we might do bonds buyback.

If prices for 4, okay, thank you.

Our next question comes from Chris to Cheerio with Marathon, please. Go ahead.

Yeah, hi. Just wanted to know if there was any update or if you had any maybe further discussions with government authorities. Let's say this year relating to sort of the future disposition of the epa's any renegotiation of the epa's you know, whether that's the 287 the resolution 21, there's a 220s just anything that you know may may have transpired and that front this year so far and also if your outlook for those has changed at all.

Our vision has not changed and I think we have been saying for for a while for a long time. The same thing is that is basically that

making changes to those PPS on a unilateral basis. It's going to be very yeah, very painful or will have implications down the road that are going to be very very bad for Argentina. So as you know, since I'm basically since 2001 because from two thousand and one from the crisis of 2001 until 2010, there was no new install a person Tina since 2010 until today all the new installed capacity was done through bpa's the country song.

Because of the the the capacity of the building in the last few years and because of the recession and the height in tariff, the demand is not growing So currently our dinner doesn't need new capacity.

but if

Things reverse sooner rather than later and also keep in mind that doing a combined-cycle. It's a project that takes at least three years since the moment that you start thinking about it. So at some point in the next couple of years and then dinner will need to begin thinking about new installed capacity in in a situation and if they touch the unilateral the PPA so they will have a problem attracting the private sector wage do those Investments. So I think that they despite all that has been talked about last year. I think that this Administration understands this month.

which

that means that epa's are Untouchable know it will depend on on the degree of the macro deterioration in Argentina. What happens with the month? We did that restructuring, etc. Etc. So we believe that the government will do an effort to maintain the the epa's without without touching them, but it will depend on how it goes with the with the wrong with the micro situation.

and and that degree of the deterioration basically

got it. Thank you.

Our next question comes from Antonella wanna with Santander, please. Go ahead. Hi David. Thank you for the call. I just need to know on the generation segment two things. If you could give us some guidance of the impact of the price guide and the specification of the Legacy energy from last February how much that would be the impact in in everything and then basis if you could give us some some guys and the second question is on the internet. I recall you said it's about two hundred million dollars, but I was wondering if this page of this is Alex or two hundred million dollars includes also parts. And also, when do you plan to move for Thursday?

With you said Works in as in Ireland. Thank you.

Okay, the works at the Sonata and we have taken the decision a couple of weeks ago and has they have already started off? It's less than two hundred million dollar the total cupcakes and and and Anna said already fully fully financed with.

So no.

Oregon will not need Capital. Yeah for the car people from from the shareholder.

The first part of the question was yeah, the Legacy will be something that they impact for us. We estimate that will be around 5:30 million dollar of a less ebda in 2020.

That's that would and obviously will depend on the availability of the of the equipment and the availability on the the high requirements open. Yeah, it will depend on on several things. Also how how how we move the the inflation vis-a-vis the the official exchange rate exceeds an extra but we are assuming something around three million dollars less than three minutes left.

Great. Thank you.

This concludes the question and answer session.

At this time, I would like to turn the floor back to mrs. Lang for any closing remarks.

Thank you so much for joining our call. Please take care anything you may need just contacts. We are more than available for you. Thank you and have a good day.

The conference has now concluded you may now disconnect.