Q4 2019 Earnings Call

please please refer to the

Investors support section on the company's corporate website at ww.w will be accessible by accessing the webcast of the investor support section of the central Puerto corporate website before we proceed please note that certain statements. Maybe she made by the company during this conference call are forward-looking statements. And we refer you to the forward-looking statements section of our earnings release and recent filings with the SEC Sentra Puerto Rican assumes no obligation to update forward-looking statements except as required under applicable Securities laws. In addition. I'll Financial Figures were prepared in accordance with the IFRS in our state is in the Argentinian Pesos unless otherwise, no dead.

For follow the discussion better, please download the webcast presentation available on the company's website. Please be aware that choice of the numbers mentioned during the call may be rounded in order to simplify the discussion on the call today for Central Puerto is Jorge, chief executive officer and chief of financial officer Milagros Grande Financial Manager manager off and the Mazda real an investor relations officer and now I will turn the conference over to her hair Mr. Ravel you may begin

Thank you. We are joining you today with our management team from Cyrus Argentina to report on the results of the fourth quarter 2019 and the answer any questions you may have our agenda for today's call as you see on page tools will begin with the update of the extension project development during the fourth quarter, 2013 and 2015. And then continue with the operative figures of the quarter. Finally Fernando will analyze the financial results of the Porter and the full and explain the recent changes in the tire for an effective as from February 1st 2020.

As you can see on page 3 of the presentation during 2019. We have managed to expand our installed capacity 12% including the 367 May. Well what normally when is 94 Meg was from renewable wind farms. As you may remember from our prior calls during the second part of the 2018 with purchase the Brigadier Lopez plans and in the three quarter 2018 the wind farms, like I said too and like, you know, we were to commands their commercial operations off.

During the fourth quarter.

How can I steam we also have good advances for example, as you can see on page for the new new Honda Cruiser for Generation units started offering reservations on February five seven weeks before the schedule agree with comments adding $95 what our in-store capacity the early initiation of its own operation represented around seven million dollars in additional income because that affects our generation unit. This machine is among the most efficient of the system with Iraq and the whole year as a matter of fact that the part of this new unit you're able around a hundred and eighty deal with ours. We also continue with the development of the terminal 6 and Lorenzo project tools that you can see on page five of the presentation if you need without 330 birth

And more importantly, we provide an electric energy and steamed with high-efficiency for our customers. We have already completed around sixty percent of the construction if you decommitted with Samantha is on September 2024 the complete project and we expect the gas store going to be operational in may we also have the news on the renewable energy projects as you can see on page six the market products started operation for Palm installed capacity. In December 2019 and completed the construction of total installed capacity of 56. May I watch during the current War?

Additionally during February 2020 close early was commenced commercial operations adding 23 megawatts to our installed capacity.

With the construction of the VIN available one when Farm which will have 88 mail was told our installed capacity under the rental program in New Jersey have received a net and started in November. We have received $76 billion loan from the international Finance Corporation to support this project and a private club instructor. The contractor Tod of this project was made 2020 it maybe the day during the recent outbreak of the coronavirus which may affect some of our suppliers is probably include affects the other product terminal steaks and probably as well, especially further restrictions are applied to International many of the technical specialist required for the stock of the public are very important.

Bolinao our key performance indicators of the Clutter as you can see on page eight energy generation during the four-quadrant was 4.1 month on our electricity 18% higher than the fourth quarter of 2018.

Please increase what first you to a 17 increase in Hydro generation from General Electric Guitar related to higher water flow in the limit and Columbia rivers and secondly em from the renewal over the email also increased 17% mainly due to the positive impact of the purchase of the Brigadier Lopez Plan and the New Generation unit wage project.

Additionally generation from our thermal units increased $47 46% mainly due to a positive impact of the new wind farms like a pleasure George able to which began commercial operation in the third quarter 2018 adding $56. What do our renewable energy for for you on Man Cave which club operation with the mail during December 2018 still uses users under the term Mark regulatory framework regarding the projects and the dysregulation which are off today have all reached their commercial operation. We have happy to announce that a hundred percent of the energy from them already been contracted directly with large users with prior to setting US dollars in long-term TPA.

Regarding our thermal unit as you can see on the graphic on the right in the same page. We continue to show an excellent track in terms of availability of reaching 92% oil life percentage points higher than the same quarter of 2018 sticker is 10% points above the average availability of thermal units of the total Market wage in Centreport of competitive Advantage. Now, I will turn the cool off the Fernando which command on the financial highlights. Thank you for call before starting is worth noting that the financial statement for the year end on December Thirty One 2018 include the effect of inflation adjustment flying International Accounting standard number 29, accordingly the financial figure that I will mention have been state in terms of version ten pesos.

Oh the end of the recording. Including the data from previous previous previous and the grill comparison here mentioned consequently, they compared the information off the financial statement for the quarter ended on December twenty 1018 is not comparable to the financial statement previously published by that. I will further refer to the results for quarter 2018 as compared to the forequarter 2018 the result from our operation during the forequarter of 2018 when in line with our life.

You can see on page ten a revenues increase 52% to 11.4 billion pesos in the fourth quarter compared to seven point five million during the forequarter of 2018 mainly driven by an increase in sales and the contract which amount to 3.1 billion pesos during the forequarter of 2019 as compared to eight hundred million pesos in the forequarter of 2018 mainly due to the revenues related to real Elvis plant, acquiring June 2019. The energy generation from wind farms, like efficient are two can over to one man cave, which is Terry operation during June September and December 2018 package and the new unit which start operation in October 2018.

Please in revenues for the total 7.8 billion pesos as compared to 6.3 billion pesos in the fourth quarter 2018. Maybe do the higher generation for immunity and the least regulatory framework and the income related to sell Supply fuel which amounts 3.6 billion during the forequarter of 2018 compared to two point two billion during the forequarter of 2018 going to page eleven. We can see the change in our adjusted a bit. Wage reflect the increase in our gross profit which in the quarter write 22% as compared to the same period of 2018. It was due to the increase in revenues mentioned before and was partially offset by an increase of cost of sale that total

two point six point two three billion pesos compared to 3.2 billion pesos in the third quarter of 2018 increase in the cost of sale was primarily driven by

an increase in the use of sense of Life, you'll use for both the production of his team or to replace part of the fuel process previously supplied by, Lisa Fong you need

and he has a framework which total 3.2 billion during the third quarter of two thousand two thousand eighteen as compared to one point seven billion pesos in June of 2018 the increase in our topics related to the new terminal and renewable energy plans and certain depreciation increase in eight hundred million you to the new terminal renewal project.

Operating income before operating results net increase 22% to 4.3 billion pesos compared to three point five billion in the fourth quarter of 2018. This increase was due to

hello, Sean increase in gross profit and second and approximately proportional increase in a missile defense living expenses that total 840 million per month and 20% increase as compared to seven hundred million in the forequarter of 2018. Mainly related to the new generation project.

Finally auto racing results net decrease 304 the medium the forequarter mainly do an important and impairments or in a property plant and Equipment, which is 3.4 billion pesos in the quarter you to have discounted rate and the changes in energy in a regulatory framework. This was partially offset by the same point five billion in foreign exchange different associated with the phony and similar programs trade receivable, which are denominated in u.s. Dollar as compared to a loss of 8.4 billion in the fourth quarter 2018.

The glance of these variations the Justice of India was around four point two billion pesos in the forequarter of 2018 increasing from 2.9 billion pesos in the forequarter of 2018 income was 1.3 billion pesos compared to 1 billion in the forequarter of 2018. In addition to the factors mentioned before the net income was mainly affected by the higher Financial expenses that amount 2.3 billion pesos in the fourth quarter 2018 compared to 840 Jeff Bezos in the Fort Worth a 2018 mainly due to interest and foreign exchange rate difference accrued on the higher net debt position during the period related to birth. It also obtained for the talmud and renewable energy Expansion Project and the condition of his plans most of which are denominated in US dollars.

Just to remind Financial figures of the Year 2019. Please refer to page twelve our net income was 8.7 billion pesos worth of 58.5 pesos compared to the net income in 2018 is important to recall that on 2015. We had an extraordinary one-time game Associated to the update of video reveals, which amount to $17 billion pesos before, which explain both of the drop in our adjusted every day and net income of 2019.

Yeah, just that was positively impact by the new project. We was partially offset by the impairment in some of our thermal assets due to a higher discount rate and some change in a few of us a framework going to page thirteen.

You can see our cash flow for 2019.

Discuss provided by operating activities was eleven point nine billion during 2019 this cash flow arrives from the operating income mentioned before on the net cash provided like Financial activities was seventeen billion in 2019. This amount was result of 19.6 billion in Long received principal repayment related to expansion projects mentioned before mainly related like decision of real of this power plant. You can the cushion Generations unit and like a station too long, you know the old one and let you know what you wind farms.

Miscast use for Catholics and investing activities was 27.9 billion in 2019. Finally latest mentioned something changes reducing for unit. And then if you have a summary of which you can see in place fifteen of our presentation.

you need energy and here variable prices remained almost unchanged of dog denominated in Argentine pesos initial power fix prices for thermal units where reduce around 16% initial power fix power prices for hydro plants will reduce it in around 5:45 %

Then he did new regulation creates a new regulation for Generation in the 50 power peak hours of the month which in our estimation should try to mitigate the power fixed prices reduction in a row 30%

The prices are not now sitting urgently basis with an adjustment and monthly adjustment considering as a mix of 60% off the Consumer Price Index and 40% of the wholesale price index.

You can see further details in our last press release as a consequence of these changes. We expect a reduction in our Legacy 15% and off with this reduction, then it have a say in a RAV4 2020 will drop from 40 to 36%

It's important to note that this price change only affect the spot says that is the sales under the ppas and the cash flow from phone in payments and monthly payments are not affected by this change. Thank you. And now we invite you to ask any questions to our team.

We will now begin the question-and-answer session to ask a question. You may press * then 1 on your touchtone phone. If you using a speaker phone, please pick up your handset before pressing the key to withdraw your question, please press * then two at this time. We will pause momentarily to assemble our roster.

again, if you have a question, please press * then 1

is this time? There's no question. So this concludes a question-and-answer session of now like to turn the conference back over to mr. Robot for any closing remarks. Go ahead. I'm sorry. I see that these are question from Magan.

calling for

Waiting for opportunity to ask a question.

Yes, I'm sorry. I didn't see him. Okay. The next question is from Frank McGarry from Bank of America. Go ahead. Hi, excuse me. Good good. Good afternoon. I'm just a one quick question you the present age is very clear and complete at the end. You mentioned something would be down forty fifty percent. I just wanted to check what what that referred to.

And yeah what we are seeing in our energy.

Okay, thirty-eight million dollars an hour for this new resolution. Okay, perfect. Okay. Thank you much. That's it.

Go ahead. Mr. Frank.

No, no, I'm I'm finished. Thank you very much. That was very helpful.

again, if she want to ask a question, please press * then 1

okay, I would now like to turn the conference back over to mr. Robin for closing remarks.

Thank you to everyone for your interest in Jaguar to encourage you to call us at any time for any information that you may need. Thank you, and have a good afternoon.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.