Q1 2022 Central Puerto SA Earnings Call
[music].
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Yes.
Good morning, and welcome to the central part of it.
Conference call. Following the results announcement for the first quarter ended on March 31 2022.
All participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
After todays presentation, there will be an opportunity to ask questions. Please.
Please note this event is being recorded.
If you do not have a copy of the press release, please refer to the Investor support section on the company's corporate website.
Www dot central Presto Dot com a replay of today's call may be accessed by accessing the webcast in the investor support section of the central part, though corporate website.
Before we proceed please be aware that all financial figures were prepared in accordance with the Ifr S understated in Argentinean pesos.
Unless otherwise noted.
It's worth noting that the financial statements for the first quarter ended on March 31, 2022 include the effects of the inflation adjustments occur.
Accordingly, the financial figures mentioned during the call, including the data from previous periods and the growth comparisons have been stated in terms of Argentine pesos at the end of the reporting periods.
Also please note that certain statements made by the company during the 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.
Central Puerto assumes no obligation to update forward looking statements, except as required under applicable securities law.
To follow the 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 round it to simplify the discussion.
On the call today from Central character as Fernando Bonnet, Chief Executive Officer, and <unk>, Chief Financial Officer Milagros Grande.
Onshore manager.
And now I will turn the call over to Fernando Bonnet missed.
Mr. Bennett you may begin.
Thank you so much good morning.
Jonathan do today with our management team from Mercedes is Andina to report results for the third quarter 2022.
After the presentation, we will answer any question you may have.
I would like to begin the call by highlighting the recent events the industry in general and finally, the operating theater.
First quarter 2022, one.
1% the most recently NASA.
Okay.
First I would like to comment on the latest regulatory news in the industry.
On April 21.
Energy issued the resolution 238 does enter into which updates remuneration practices for energy and capacity of units in there and it gave us literally framework.
Emulation balance increase by 30% retroactively to February 2022.
An additional 10% increase will become effective in June 2022.
The resolution also eliminates the use factor adjustment that reduced the capacity payment calculation for the units with lower dispatch.
Our steam turbines with low these but these changes in place and improving of our bromine approximately 30% in the capacity payments.
Now I would like to comment on the main metrics of the industry as you can see on page four.
In terms of its own capacity the system reach.
42871 megawatts in the first quarter 2022, resulting in a one 4% increase compared to the first quarter of 2021, mainly based in a new renewal project developed.
As of March 31, 2022 things don't capacity continue to be.
59% thermal 25% hydro, 12% renewables and 4% nuclear.
In the first quarter 2022 energy generation increased 1% to 35719.
<unk> G O what hour compared to 35.
And 332 <unk> in the first quarter of 2021.
Mainly due to <unk>.
37% increase in nuclear 24% increase in renewables.
<unk>, 2% decrease in Paramount, partially offset by a decrease.
25% in hydro.
Renewables rise was due to a new installed capacity and nuclear is due to a higher to Chihuahua and attitude of IW.
Our thermal units there was an overall lower availability.
76% for the first quarter 2022.
<unk>, 281% in the first quarter of 2021.
During the first quarter 2022 main sources of energy generation continue to be served with a 65% share in hydro and renewables represented.
13, 9% and 13, 6%.
When you blend was seven 3%.
Finally, as you can see on page five energy demand increase four 3% up to 34520, <unk> compared to 73087 G O what hour in the first quarter of 2021.
We're a commercial use of grew 7% residential grew 5% reduce it grew 4% and industry keep same level as the first quarter of 2021.
Races in different demand segments in the first quarter of 2022 were related to the recovery of the economy activity and lower COVID-19 related restrictions.
A soft first quarter of 2022 demand instructors, 45% represented by residential users, 29% by commercial activity and the remaining 26% is related to industrial and commercial grade demands.
Well, we now cover key performance indicators for the quarter as you can see on page five energy generation. During the first quarter of 2022 was 4585 gigawatts hour of electricity.
82% higher than the same period of 2021.
The increase was mainly caused by <unk>.
Cities, 36% increase in energy generation for government sources.
Specifically terminal six San Lorenzo polar plan collaborations as combined cycle and higher dispatch.
Central part the steam turbines due to a higher demand, partially offset by certain ally levy and availability of leukemic Boucher cogeneration.
26% increase in peanut allergy.
You too commits us decision to increase dispatch, regardless, the low water inflows, reducing the dam level.
Our steam production during the first quarter of 2021 increase.
76% totaling.
461000 tons produced.
Due to terminal six San Lorenzo power plants full operation and good performance of who can they push a cogeneration plant.
Regarding the availability of our tomo units during the first quarter of 2022, you've reached 84% in line with the strong of I love in the history of some third quarter weakness as.
As a reference the market dominance availability for thermal units for the first quarter 2022 was 76% according to the different companies.
And now I will turn the call over Managua's, who will comment on the financial highlights.
Okay.
I would like to comment on financial information related to mitigate any end market.
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He told me in.
Okay.
And you have nothing.
Guang.
All of them what kind of thing.
Can you one P M E.
We're at eight 2 million.
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He quite to that made it look like.
Five or six things.
You can find them.
Turning to Utah and host company named <unk>.
The management team.
And now we come in and he has helped.
In fact cleanup painting.
What we know today.
Thanks, Kevin.
Yes.
Two.
People.
Compared to $15 8 million in fact clients to me anyway.
8.8.
Mainly due to <unk>.
Testing.
Yeah.
It's Paul here.
Hum.
Compared to 6 million.
People in FY 'twenty one.
The 19% increase in.
In generation.
And then you have 238.
Painting, which is lower than inflation that reached $55 one in Nashville.
Awesome.
An interesting thing.
Entrees, which totaled 9 billion pesos in the current climate change Haynesville.
Two eight.
In the first quarter.
One mainly due to net foreign T O.
Yeah.
Representing an increase in generation of five kind of empty.
A gli power compared to 35 P M.
Well I don't think in 'twenty one.
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In pain, which teladoc team up on.
And in fact quite painful and consenting.
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Thank you Tiger team.
Moving now to page eight.
Thank you anyway.
Any damage and plenty of ex defense anything which was nice.
That's quite a tiny tiny compared.
Compared to $10 2 billion pesos in the first quarter of 2021.
And he said I think sleep well.
And named by J D.
Our 6% decreasing cost of it till then.
One 6 million people.
Quite a painful.
Compared to seven point.
In the first quarter containing mainly due to our nation.
But anything can happen.
He talked about 1 billion.
Thanks Angel.
One point toward the hearing quite up to anyone and finally to our 22% in the third it until that point.
Unified plan two compared to <unk>.
Six.
Mainly due to an insurance recovery related to unequal.
Yes.
On page nine.
Net income.
$4 8 million compared to company.
Of 1 billion pesos.
Anyone in any sense.
Before then any debate.
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Multifamily.
And it's a marquee four points.
Quite a pain painful.
10.8.
Well he obtained any one mainly due to a reduction.
I'm Nicolas inkjet.
At BD by higher income tax audit opinions, which grew from zero up understanding.
In FY 2021 compared to one 8 billion pesos.
In effect.
NATO and.
And then also related to expulsion changing by empowering poverty Pilgrim's viewpoint, one medium paper compared to 0.8 P. M.
Quite how painting.
Any collection related to the Chinese evil.
Glenn.
In the first quarter, two compared to $1 10, and began quite obtained to anymore.
Fabienne.
According to the contract.
Boeing today.
You can see our cash coupon class quiet all changing now.
Net cash provided by operating activities.
Eight 1 billion faithful lease, including 2 billion.
Oh My God.
Net cash used by ETP.
6 million pesos, they immediately have shown.
Chuck.
Thank you and now he might inflect any question you may have.
To ask a question you May press star one on your Touchtone phone.
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To withdraw your question. Please press Star and then two.
At this time, we will pause momentarily to assemble our roster. Once again. Please press star one if you have a question at this time.
And we did have a question come in.
The first question is coming from Martin our insert from balanced capital.
Martin Your line is lapsed.
Thanks.
So to hear from Roth capital.
Paul.
Congratulations.
Those folks.
Slide four shows I would like to.
111 is such a thing.
My first question is we saw another great quarter on total revenue.
Getting you to sign some of these spreads.
Yeah.
Spread that Opex will have legs one hospital.
What's the assumption for election.
Opex will slot swap runoff block on fuel.
Two question please.
Okay.
You might be part of your question regarding the dispatch.
Joe My view on it.
We haven't seen.
We have.
Well in the call malware.
Hydraulics, we see.
Much more niche Bradshaw power steam turbines.
In the past years.
So we are and and additionally, the more.
Beyond that we are you seeing because of the lack of gas.
We haven't seen much.
Most of these bunch of our steam turbines not be called.
Hi, Ben.
It did their cost because.
In terms of.
This is deemed in the region.
We have seen.
It's baked so.
We maintain that draw in there.
It always maintaining that come our way we wouldn't see the.
More or less the same these budget seemed to lives.
And additionally, the other the other important things.
The gas natural gas.
Entity.
If we see we start seeing more LNG coming from Escobar.
The unit will receive that these cuts, but depending on that depending on the.
Our hydraulics and come our way.
And that will get Saturday level.
In Santa Fe regions.
Yeah.
They are there the other thing is the opex.
We could see perhaps a little bit more.
Laura Opex, but not nothing I think significantly.
Talking about the seem to rise.
We can see.
So I mean, Greece, especially in.
It seemed to buy number eight and number seven.
Nothing.
Significantly.
Yes.
We we need space.
Yeah, but the next one it's lumpy when before in 2025.
The combined cycle.
We will need to play.
Lifetime extension.
For 'twenty two.
Yes.
Okay.
My question is about the other guy.
T shirts.
And she saw fit to put a lot of that you can from the shelf.
Are you seeing in D. C to ensure that we will solve or you've seen them.
Extra 2000 six's.
No.
Yeah. So as you mentioned we have.
Extraordinary maintained notes.
Cogeneration plant in Uganda, Cushaw visco changed somewhat.
There are nine in 2019, it's in year, one so we didn't expect that failure.
We are doing with that.
The amount of factor.
And how do you see some of what's happening with the disease.
He was a failure in the Gi bulks.
It's already sold that will solve it.
January .
We are liking did.
What's happening with that chief Bulks, but it's not.
No law failure. So the jet boats was the plate it until we have a new one.
What was the cost of debt.
We are not expecting any additional failures there.
Okay. Thanks.
I'm not sure if my circles.
Is it a bunch of shows.
We will go to the.
Maturity base according to regulations can be.
Yes to the school and so besides all the option.
The concession on school should be up to the next couple of months.
Sure.
Well you mean.
On the we contractually we don't have an option to extend so we said negotiation that we need to have.
With the government with the National government.
One the big Army.
One that that he brought to the conversation.
The contract that says specifically fit.
What that allows us to extend automatically so we need to discuss with Dan when we are entering in discussion of course, but that's it.
You can imagine.
All the problems.
That doesn't mean duration.
That discussion and it'll be the Buck.
They they don't think colonsay shutdown specifically.
In the case of BLA.
I know you lapped ease after the lakeshore.
The 2023 election, and even after the change of government because it after that.
So I don't know.
We are talking with the government.
That will be.
Do you have any.
Any advances in terms of the negotiation, we are talking to each other and the intent so.
Technical things like what we need to do if we extend the conversation on what Capex, we need to do.
But nothing specific I E.
Having any an advance in terms of a.
A new consultation period.
Okay. So it would be less too.
A lot of money on my last question My last question.
Any updates on like a bunch of expansions.
Bye.
And a little bit slower.
Oh.
Sure.
Yes, yes, we are.
It seems that the COVID-19 issue and something that is.
No, we really control, but it's already not a big issue like in the past, we havent seen yet we're still finalizing that.
Close enough.
Yeah, there's a little bit combined cycle.
We are in the early stages, because we need to go back with the EPC constructors have seen of course, we have a much more information because we already operate the unit. So we got about 24 I mentioned that in the past so we need to go back to the.
On the MPC call strike, but at that time.
Start working again.
Yeah.
Which.
The capex that we need to go.
And the process itself because you can always have you stepped down.
Crap.
Oh last day.
Everything in terms of Capex, so it's much more.
TV works on.
And labor that we need to put that in but yes, we haven't really seen again.
It's a possibility.
Of course, we don't see nothing this year, but could be next one.
So it could be something that you could settle in the next quarter slate.
Sorry can you repeat.
I think it will be something that you've tackled in the next quarters.
Yes, yes, but we are in very early stages right now.
Okay.
Thanks, that's all my thoughts.
Okay.
Thank you again, if you have a question. Please press Star then one.
And we did have another question coming from John Barnett from Barnett and Associates, John Your line of lives.
Thank you I was wondering if you.
You guys can.
Provide some commentary regarding your capital expenditure requirement and is there any deferred capital expenditures that you guys have been holding off on and if theres any.
Sort of forward looking plan for.
Expansion.
Capital expenditures thank you.
Sure.
Okay. Thank you for your question.
We are in terms of rig would have capex at El Monte.
Maintenance Capex.
Got it.
Yeah.
You need to separate the combined cycles, which which we have a contract with a manufacturer with the audit.
That yeah.
We expand the carpet.
Capex.
And so how how many hours we operate so they are we don't have any.
Thanks.
As I mentioned previously in the year 'twenty 'twenty, four and 'twenty five.
And we need to do one and then shortly and any Capex, which is the lifetime is things show of this company take political Mitek went up what I say to think on my telco Mendoza.
So.
But we are not postpone.
Bonnie and any capex hopeful in terms of combined cycles in terms of I think two banks.
You May now these are units that are have more than 50 or so so we are.
Performing all the capex to keep them operate in operation, but of course, if you want to extend the lifetime of that unit.
It's something completely different than the amounts that are not covered.
I do think that regulation.
So in terms of day by day operation in the Rice. We are we are doing there.
The things to keep them over rate.
Good operation.
We kind of assume that these will keep that unit's operating for four or five.
Five or 10 years, if you want to do so because I really want to do that we need to talk about different remuneration.
And in terms of expansion as I mentioned, we are starting to loosen again, they the close of the close enough.
Yeah, Theyre Lopez, when she said well I know planning cycle that we have.
And we want to close.
They combined cycles, we already have the steam turbine. They are so the main capex up that these are related to that installation.
It works.
And that is around we are not having the quotation Newport They show from the <unk>.
They'd be see constructor side, we are talking about.
All that off.
Wow.
$50 million.
But he's not for D C as I mentioned previously.
Apart from that we are losing.
Additional renewable projects, but we are not having any concrete brushy.
We have all the development, but not nothing concrete floor for this quarter or the next one.
Yeah.
Okay.
Yeah.
This concludes our question and answer session I would like to turn the conference back over to Mr. Bennett for any closing remarks.
Thank you everyone for your interesting chart portal, we encourage you to call that for any information that you would maybe have a great day. Thank you.
Yeah.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Okay.