Q2 2020 Central Puerto SA Earnings Call
Good morning, and welcome to the Central part, though conference call. Following the results announcement for the quarter ended on June Thirtyth 2020.
All participants will be in listen only mode. So do you need assistance. Please go I come from specialist.
Starkey followed by zero.
Today's presentation, there will be an opportunity to ask questions.
Yes, this is being recorded.
You do not have a copy of the press release, please refer to the Investor support section on the Companys corporate website at Www Dot central part till Dot com.
A replay of today's call may be accessed by accessing the webcast in the investor support section.
The central Porto corporate web site.
For your precede please be aware that all financial figures were prepared in accordance with that I have for us.
Instead, it and Argentinian pesos, unless otherwise noted it's worth noting that the financial statements for the quarter ended on June Thirtyth 2020 include the effects of the inflation adjustment.
Accordingly, the financial figures mentioned during the call, including the data from previous periods in growth comparisons have been stated in terms of Argentinian pesos oaky and that they're reporting period.
Also please note that certain statements made by the company during the conference call.
Forward looking statements and we refer you to the forward looking statements section of our earnings release recent filings with the FCC.
Central part, though assumes no obligation to update forward looking statements, except as required under a clip.
Applicable securities laws.
The following discussion better please download the webcast presentation available on the company's website.
Please be aware that some of the numbers mentioned during the call maybe around it in order to simplify the discussion.
On the call from Central Corridor is Jorge Roberts, Chief Executive Officer, Fernando Bonnet, Chief operating officer, no corresponding financial manager and Tomorrow Dogma, Investor Relations Officer, and now I'll turn the call over to Jorge Robert Mr., Robert You may begin.
Thank you very much good morning, I would like to begin today's call that a license in the middle Miss on the cycle work.
Comment, though bounces all expansion projects in my life still break state we're supposed to work.
So when Dan or like how much was also worked or kind of announced for any questions document.
Yes, you know to could be making quite [laughter] sold the war good reaction Peter.
Communication measures he should by the federal government Kuczynski stay at home corridor current trends have remained in place.
No.
The degree of fixing mutation an exception have recently been approved.
As a consequence, yes, you can see I'm basically electric energy demand decreased 11% in April 7th on 6% make some 20 as compared to the same bulk youre wherever it might increase 1.2 in June you do how your economic activity and lower average temperatures.
Therefore going into second quarter 2020.
Could you do the mom decreased 5.5% as compared to same period.
Additionally in July Dumont increased 1.5%, however, it's worth noting that the increases unless of course coming back into income generation companies. The case of renewable energy you want me to they have an effect. It seems they have dispatch priority. So they come so what does your.
They did electricity the case, what kind of what do you want he's they have a higher proportion income associated to fixed power migration, which is not related to the energy generation.
Additionally.
My decreases.
Do you need the stocks right instead of just the force tend to be the older inefficient. Once you want these received by lower amortization underpinning. The framework has come back to the U.S.P. She wants that have a higher amortization gone truck.
So no less power purchase agreements Oh PPI.
[laughter] going no before as you may recall, the mesh are set up to prevent the spread out the Cobiz 19 virus has any impact on the promise of power projects under construction with a one far and tell me how safe nuclear generation you ended the quarter, we continue with the boxes in the project under strict how safe.
Protocols to predict our personnel and the community.
Taking a so called the consequences on time.
Energy Secretary I started coming up extended do they put the commercial operation date or see ordeal to projects.
How did that 85 days, regardless the regulatory framework for dinner he wants to yours as we mentioned our prior course February 27 to go so to the sick or the other energy insurance solutions.
Q1, which changed the price it's hard to you on it.
Which we're setting ourselves with a monkey adjustment you see that mix between the consumer price index.
Horse, So price index whoever [laughter] Wendy.
The real energy in the call picks up the Cobiz 19 crisis inspected commissionable, Poland before the nobody's such as Justin.
Today, the mechanism remain [laughter] finally regarding our renewable energy to be shown on June 24, 20 to board of directors ourselves and transport, though with the aim of increasing the exposure to company segment also rush to purchase on the minority shareholder stake of she'd be rental property.
Oh, the since our board will now 100% stake in the company.
He be renaud loveless, owing to a special purpose Baker subsidies subsidiaries five when Oh, we.
We have total installed capacity deal 200 unfold for me.
All of them are fully operational outperforming a bulk effected low Parker and how long term power power purchase agreement under which they sell their electricity production.
Following the same trend of the rest of the war renewable energies rapidly gaining ground in Argentina metrics. It doesn't 618.
Renewable generation, Argentina represented 5.8% total production is expected to increase significantly to go south, but which sometimes workable is one of the leading companies.
Well, we know to our key performance indicators for the quarter as you can see on page five energy generation. During the second quarter was <unk> 0.7, terawatt hours electricity, 18% lowered them. The same Peter I was like D.
These wants to a large extent you do they want to show combined cycle, which became available in mid April do do a significant deep <unk> in its main transformer.
On July 16.
Yes to replacing did that much.
Men with a backup transformer story now were but aside from the when he became online again.
Downtime in quite a reduction of energy generation empowered availability, which has a significant to you in economic impact during the second quarter, but will be mitigated.
By a comprehensive operational risk and lost profit sure. It skewed a decent energy generation decreased zero on five terawatt hours in the second quarter to does sometimes gets compares with the same period to previous year at least an idea to date back to where I find the rest of to talk about you want me to reduce the energy generation.
246, you know what how worse.
On the other half renewable energy increased hasn't 68 megawatt hour due to the positive impact Oh, My gosh agenda. Today, we went to Mccandless elite was when cars regarding our Tom are you on is the availability dropped to 82% as a consequence of the done much inventory and the crucial common cycle now.
I would turn to quote over to Fernandez with comments on the financial highlights.
Thank you Jorge I will first referred to the result of the second quarter of 2020 as compared to the second part that if it doesn't team as you can see on page six revenues were 7.2 beyond the quarter, a 14% decrease compared to 8.3 billion during the second quarter of 2015.
Yes degrees was driven by the discontinuation of a few opportunities operation.
We do you ended 2019, you didn't you, ladies and gents or like the fuel for chase for all generators incomes.
As a safer presented.
2.3 billion by region during the second quarter. Excluding this effect revenues for the second quarter doesn't 20 were 7.2 billion compared to 6 million in the second quarter of 2019. This increase was mainly driven by an increasing so what's under contract which alone.
Two three began during the second quarter. This doesn't 20 as compared to Cedar point, a beyond the same Peter if we use year, mainly due to their revenues related to be there lupus power plant, which wasn't acquiring Jones with those cementing the new home because you're going to originate unit, which its operations October does.
As a team that we're firms like ours is not too.
To my can't leave US, which is the operations during June September and December 2019.
On February 2020, respectively.
This increase was partially offset by increasing so some of those give up the framework 1.9 billion due to a degree comprises four unit there yeah, what's it or will it 30 framework. It's obviously with solutions that he wants it doesn't 24 since February one doesn't swing.
And did he green energy generation on certain loved units availability, mainly due to the failure in the main transformative mendosa combined cycle as Curt mentioned before.
Going to pay seven we can see the changes in our EBITDA, which was around 7.6 beyond the second quarter, two dozen swimming compared to 4.4 billion. The second we're past the dose and let him.
It was due to first a 5% increase in our gross profit as compared to the same Peter 2019. This was due to the reservation revenues mentioned before and was partially improved by 28%.
Degrees in the cost of so the total 3.4 be young compared to 4.7 billion pesos in December you doesn't.
The decrease in the cost of sale was primarily driven by 79% degrees indifferent Chase a fuel over the course did a continuation of these operations.
In this quarter according to the Neuromodulation.
This was partially offset by.
36% increase in no fuel related cost of production, mainly due to an increase in our installed capacity follow we do see show you love is on.
This year.
Renewable energy plants.
Gross profit margin totaled 53% during the second quarter as compared to 44 in December 2019. This change was mainly a consequence of operational chase of sell to fly fuel, which was the imports during 2000.
Finally, other operating result, Smith was two point to be on higher in the quarter, mainly due to the foreign exchange the French operation or bridging is it mainly driven by since our was over do you got to trade receivables due to a 9.3.
Person depreciation of the auctions ambitious during the behavior as compared to a 2% appreciation during the same feel that doesn't it.
Which was partially offset by.
He burmans in property plant and equipment utilization for body of certain guests the revised stuff we held Mr Rush.
And go into page eight because.
Got it was 2.2 billion pesos compared to 1.9 began in December 2019. In addition to the factors mentioned before the net income was mainly affected by a higher financial expenses, which increased 4.3 billion due to the loans then.
For the terminal in renewable energy special brushing.
Under the decision of every area the opus power plant and the lower share real Friess associates, mainly due to a weaker results from tecogen.
Yes, the things world, where partially compensated by a favorable net monetary position during the quarter, resulting in again, we are well. This situation was the opposite during the second quarter after dosing that Dean and Cedar point 6 billion increase insight in financial income.
Go into base now you can see our cash flow for the second quarter, though sense when the test for life.
Operating activities was 8.2 billion. These include 1.3 billion in collection from CV always thought moments, which is not contained in day EBITDA.
Because slow thrown operations was partially offset by 3 billion capex invested in the expansion projects.
4.2 billion use in financing activities.
No reason iOS, another 2020, CMB National security regulator approved a showing wrote off what our domestic bonus for the company shows by CP Mccann FCB Olivos two wholly owned subsidiaries of Cbram He will.
For up to $80 million you said the first the therefore to bonnie's tries to get lost their financing for these proceeds.
Thank you I know, we invite you to ask any questions to our team.
Thank you you will now begin the question and answer session.
Yes. Good question you May Press Star then one on your Touchtone phone. If you are using the speakerphone. Please pick up your handset before pressing the key to withdraw your question. Please press Star then to at this time, we'll pause momentarily to assemble the roster.
Your first question today comes from Frank Mcgann of Bank of America. Please go ahead.
Yes. Thank you very much just two questions. If I could one I was just wondering in terms of as you're looking forward demand seems to be recovering yeah are you seeing any kind of mix change that might have a effect on unprofitability, perhaps in terms of.
Where are your generator or how how you're saying the mix, but almost or clients and then in terms of payments. How are you, saying you know payments from commission payments from.
The your your customers and jet are all your thing more delays given.
The weakness in the economy, the currency effects customer cashless. Thanks.
Okay I will answer this question.
Thanks, Frank for 42.
The first thing I have to say stuff. That's you mentioned the demand for electricity. That's still recovering in fact in July we had 1.5% above the level we had in there.
Same you month in the last year. So they don't start to recover, albeit obviously industrial demolished below the liberty Todd the last year due to increase its mostly driven by day I, probably should any of them on but.
We see I mean, basically what we are operating today. He is oh were renewable plants, which have a priority in terms of the patch. So they have it there are unaffected and we are operating base. He did go to cycle common cycles and I work for generation plant in adult stuff.
So operation Thats, not a mainly been effect I did decrease of demand we had in the previous two or three miles nowadays it modest recovery and probably the most important thing to mention is that the I wouldn't want operations not based on <unk>, but mostly on availability. So we don't expect any kind.
<unk> impact because of the of any kind of Africa patient himself FEMA suites recovering and if it didn't we wouldn't have any kind of impact.
And the second question you mentioned Amen basically what happened in the market is that the government has seen trugreen increase in subsidies. So even though the distribution companies are paying below the 100%.
There's been more or less in average a 17% <unk> taught out would be they are receiving month. After month. They go in has intervened in order to keep the payment not much. So we have not been affected by the current time since it's not you stop and in fact today would have a.
Payment, which is it even.
Better than the one we have in March for example.
Okay, great. Thank you very much.
You're welcome.
Your next question is from Izzy kill Fernandez balance. Please go ahead.
Good morning, everybody. Thank you a quarter time on the material.
For questions. If you don't mind I would like to go one by one Oh. The first one is related to the.
On the crucial incident I wanted to know if you have any idea about what could be their recovery that you might get from insurance on that in terms of equipment and income loss.
But I do want to answer.
Yeah Yeah.
Thank you for Ruskin, Yeah in terms of of the reinsurance we haven't issue around that covered the property losses, and then a beneficial they beneficial though so we are thinking that it is really not because we don't coveted closing that yeah easy Jay.
But we think that we can cover that Neil we are buying and you're trying to former.
Well I ended up format. So we think that we can yeah received almost I think it Uh huh.
All of the over them out.
Deduction, so on the dangerous, but we think that we've gotten cogs.
Robert.
At least 80% between 75 and 80% of the there.
The cost.
In terms of <unk> beneficial, though we have a a deductible they're all 30 days.
And they don't tell the time that they did the unique to us out was around.
Two months I mean, how flow dream up so.
We recover these additional one month or two months.
Okay. That's helpful profit.
The situation when we did with insurance right now of course, we need to close to.
And she then it would then I said the we have.
I I mean and report that say that these was on I mean, she then color by the secured Ngls, but we need to go into them.
I think we want to do that in that mix too much.
And after that you have some delay on them to pay him in a round three months I think we will recover them up.
There's obviously they mix.
Because at the end of the year or the eating out the next month.
Okay perfect I don't know if you can comment on a monetary value for all that.
Please.
It's too early it took it out and if.
We can do some numbers it together.
Good.
They do the loss of Brophy these are the ones around.
Seeks.
And just dollar.
Good.
[noise] aimed at talked a lot of profit ER and the cost of the new equipment needs around $1.6 million. So.
These are the call shape so.
Okay perfect.
And well I wanted to know if you have.
An updated guidance on the how much capex is left or.
No way on colors.
Okay, if I'm not going away right. We are almost finished because it's a route.
No.
Something like.
15 between 15, and an $18 million.
And in in I mean, we are very very close to finish.
In the in.
In terminal seeks and salary and so is more open because yeah [laughter] any issue also we travel I know these goals that every day I don't know Providence with them. So we've done that relationship. So it's very difficult to say the fight.
Fine number or or an exact number but it will be around they are seeing.
You mean, the Iranian show.
50 range of 50 $55 million.
Okay. That's very helpful. My sort of course, you know related to <unk>.
I don't know Islam.
You are still committed after everything that's been going on.
And if so one could works start sort of closing.
I don't know vocal cord, if if you want to okay, well and the first time, we are going to our punish the finished first or a project we have in I mean, not six which is our priority.
And we are promoted be evaluating the mom and good to go ahead with that with the closing of that site can we haven't started doing.
Only depressed federation of existing assets and waiting for the moment to start I mean, obviously did she question is not the best one and we are giving priority to closing that the plants. We are currently in construction.
Okay. Thank you my final question is related to the.
And our worked out you know a receivable or is it fair to say that.
End of the second quarter or the outstanding receivable was a 440 million so to speak.
So sorry could you repeat.
Yeah, the outstanding amount of the since that I will tell you all 20 million Brazil.
At the end of the second quarter was it 450 million is that correct.
Yeah.
No look at USA.
Yes.
Oh, yes.
That's a that's all from my side. Thank you very much.
Hello.
Ken If you have a question. Please press Star then one the next question comes from much yes, that's not of a our partners. Please go ahead.
Hey, good morning, I want to thank you of course for your four they called <unk>.
I have three question you don't mind.
Let's say the now.
Well well the purchase of the 30% of CPR during the second quarter Scottsville.
Then.
If we have any news related we did target.
Yep.
We will be if we start over hedging. These these quota.
Or in the that's for this year I'm not lead.
If you could be well.
Back in so we see from there been officials.
It used to the anybody.
I mean, I really do.
Units, how big will show.
Okay, I I told them sort of it last.
Let's start with the last one day.
There's been a fish I'll note was around six.
Million dollar exporting $2 million.
In the in total, but if you go lives, but we have on it I knew that the old for that for the insurance one mile. So that recovery will be based on that.
Yeah and goes into in the last one the other one was around what's out there you can only about two okinawan answer it you know one.
Yes about that.
I want to know.
It would be.
You know basin in the.
Third quarter on Sunday, Monday, or the last quarters.
No we are thinking to copy operation on October <unk> this year.
And then the other one was about <unk> superior about sorry could you repeat the first one.
Yeah.
Yeah, I you they purchase Oh.
And what's reflected in the second quarters, gosh, though will be reflected in.
The third quarter.
Yeah, it's what's what's reflected in the into second quarter, but as we pay in the she is in our financial asset we that we.
Hey, we've done it reflected in the definitely itself do you have on a nodes in the financial statement that express that.
In the second work is.
Okay. Thank you very much.
No one.
This concludes our question and answer session I would like to turn the conference back over to Mr. Robert for any closing remarks.
Thank you to everyone for your interesting sometimes portal, we encourage you to coalesce for any information that you may need how about the great day look like.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.