Q3 2022 Central Puerto SA Earnings Call
Good morning, and welcome to Central Puerto Conference call. Following the results announcement for the third quarter ended on September 32022.
All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the stocky followed by that right. After.
After todays presentation, there will be an opportunity to ask questions. 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 at Www Dot central Puerto Dot Com.
A replay of today's call may be accessed by accessing the webcast in the investor support section of the central Puerto corporate website.
Before we proceed please be aware that all financial figures were prepared in accordance with the Ifr S and are stated in Argentinian pesos.
Unless otherwise noted it's worth noting that the financial statements for the third quarter ended on September 32022 include the effects of the inflation adjustment.
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 period also please note that certain statements made by the company. During this conference call are forward looking statements and we refer you to the forward looking statements section.
Our earnings release, and recent filings with the SEC.
Central part, though assumes no obligation to update forward looking statements, except as required under applicable securities laws.
To follow up 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 may be around it to simplify the discussion.
On the call today from Central Puerto is Fernando Bonnet, Chief Executive Officer, and Federico Basore financial controller.
And now I will turn the call over to Federico for sorry, Mr. <unk> you may begin.
Thank you very much.
Good morning, and welcome we are joining you today with our management team from our side of the group.
Throughput.
Third quarter.
Sure.
October condition.
You May go.
I would like to begin today's call.
Recently the industry in general.
The figures of the third.
Third quarter.
I would like to mention the following.
Is that anything goes wrong.
So therefore, maybe gummies.
Okay.
But.
Our focus on our clients.
And their mother framework.
And San Carlos.
The road.
Regarding the MLP.
Negotiating with energy companies.
The war.
With the completion of the call.
One cycle power plant from the fourth quarter.
On.
Okay.
Operating subsidiary decided to modify the long term.
The company.
April .
Hi, Greg.
So, let's see what he's done.
With a very high.
Great.
On a quarter per view.
Moving to the company.
Our group Deputy General issued by the company.
Sure.
For sure.
America.
Yes.
On the New York stock exchange up to a maximum.
167 per share.
Okay.
On September 30th.
To the shareholders.
I'm in the spectrum of the company.
Regarding corporate book.
With the aim of not only cutting upfront.
Isn't it.
And to grow the scope and consider industries such as mining.
Gotcha.
Now I would like to comment on the main metrics.
As you can see on page three.
In terms of capacity the system reached 42899 megawatts compared to 42589 megawatts in the third quarter of Citron into one.
Something a 1% increase mainly base new renewable projects.
As of September of the third.
The input capacity continue to be.
9%, 25%, 12% renewal on 4% new growth.
In the third quarter of 2000.
Energy generation decreased 7% to 33450 <unk>.
Compared to 37000.
Nine in the third quarter.
One.
Mainly due to <unk>.
31% decrease per month.
<unk>.
19% decrease in user.
Partially offset by an increase of talks with them.
3% and renewal.
Third months decrease was mainly due to a lower dispatch related to an increase of hydro these plus and minus to a lower EBITDA offset.
Offset for machines.
Regarding the generation from nuclear.
Increase was engaged with the shutdown maintenance of.
<unk>.
Nuclear power plant.
We have brought them with Abu Douglas.
In contrast, the increase in the hydro generation is mainly related with increase of that we work with what component that waterflood.
And that drove about their reach and have experienced last year.
As part of the renewable energy the increase in generation was created with the increase in the <unk>.
So capacity subsequent to demand.
During the third quarter of business into the main sources of energy to our region continues to be thermal and hydro with us here.
57% and 22%, respectively, while renewals were up 14% on newco was 7%.
Finally energy demand increased 1% up to 34730 gigawatts compared to.
34454, gigawatts in the third quarter of the transition to one where commercial demand grew 5%.
One person.
As of the third quarter of it.
The demand structure.
6% represented by residents have user 7% by commercial acuity.
And the remaining 27% was related to a great demand industrial large commercial.
Going now to our key performance indicators for the quarter as you can see on page five energy generation during the third quarter of business, we need to do.
<unk> 3932 tier 114% higher than the same period roughly 2021.
The increase was mainly caused by FERC.
Seven 2% increase in energy generation from thermal units may be from Jeremy I would say due to <unk>, but related to the combined cycle full operation on higher dispatch.
Seems to me personally.
Partially offset by the extraordinary one thing in 77 of lukewarm deepwater cogeneration.
Second 21% increase in air deterioration from the hydro plant.
Due to higher water flows hopefully might we will compare with the third quarter.
<unk>.
On a per cent decrease in energy generation from renewable unit due to lesser Wildwood solar micro play those through some one zone.
Regarding the availability of our thermal unit during the third quarter of this and to do it with 81% in line with a strong history of business report was equipment.
At <unk> the market average iwc thermal units for the third quarter of <unk>.
78%.
Adding to that from coming to them.
Similar to increased 90% totaling.
568557 tons.
During the third quarter of expenses into two compared to 298997 times.
Third quarter or equivalent to one due to the commissioning of the terminal space Cogeneration plant.
And now I will comment on the results of the third quarter.
<unk>.
Goldman a good result for this quarter. So you can see on page seven our revenues were pesos 23 billion as compared to pesos to $4 3 billion during the third quarter of two one.
The 17% decrease was mainly due to first.
45% decrease in spot.
You're about to say.
Which totaled pesos seven 5 billion in the third quarter of between the two as compared to $11 5 billion third quarter, obviously ended in Q1.
Due to heightened stations on the price adjustment and scheduled maintenance of certain.
From the site.
Second.
A 2% decrease in sales on the contract which amounted to <unk> 11, 2 billion during the third quarter of liquidity too.
Ah compared to pesos 11, 4 billion in the third quarter, which ended in Q1.
A higher inflation adjustment over the base of the precision in the period.
Also keep looking positive.
The nature of <unk>.
PPA contract in August .
Of the 2022.
Partially offset by increases in sales.
These combined cycle completion.
Partially offset by a 50.
<unk>, 50% increase in sales, which totaled pesos 0.9 billion in the third quarter of <unk> compared to pesos.
$8 billion in the third quarter of expenses into one.
Due to a 90% production increase.
Going to page seven we can see the changes.
Excluding impairments.
Effective interest, which was pesos 13.
Dean.
In the third quarter.
Compared to <unk> 11, 8 million in the third quarter of 2021.
This 16% increase was driven by the following changes.
Sure.
Seven 2% decrease.
Revenue expense before partially.
Partially offset by.
13% decrease in the cost of sales that totaled pesos 11, 1 billion compared to pesos $12 7 billion in the third quarter of 2021.
Mainly due to a decrease in amortization charge decreasing maintainer of expenses and decrease cost.
I think the 6% decrease in administrative and selling expenses that totaled pesos, one 5 billion in the third quarter of 2022.
Primarily driven by decrease in fees and room renovation for services and decreases in taxes among other expenses.
Adjusted EBITDA was pesos $20 7 billion in the third quarter of 2022 compared to pesos $14 6 million in the third quarter with roughly 2021.
This increase was mainly due to the above mentioned variations.
Our 5.1 billion increase in putting in exchange difference on operating assets, mainly related to receivables that generated pesos, six 8 million compared to pace of $1 7 billion gain during the third quarter.
Due to a higher depreciation of the Argentine peso during the quarter and lower trade receivables balance is maintained.
Third at 74% increase in interest from clients, which totaled $2 1 billion during the third quarter of the two.
To compare two pesos, one 7 billion from the third quarter of Nutrisystem D. One.
Mainly related to an increase in the interest rate applied by Gamesa copayments delay.
As of September 30, the debate was could delay.
For an increase in other operating result, mainly due to lower loan regained Greece recovered in the fourth quarter of 2021.
Zero.
FX differences on accounts receivable.
<unk> 5 billion increase in commercial interests from autonomous.
While these variations were partially offset by a 7% decrease in depreciation and amortization that total vehicles for <unk> billion during the third quarter of fiscal <unk> as compared to pesos four 3 billion in the third quarter of the trend in Q1.
As a result.
EBITDA, excluding FX difference and interest related to foreign currency loss on impairment of property plant and equipment was pesos $13 8 billion in the third quarter of sequences.
Copper two pesos 11 8 billion in the third quarter of the 2021.
Continue we can see.
Consolidated net income was pesos $4 5 billion in the third quarter of two.
Compared to a consolidated net income of pesos for $90 million in the same period of entrants into one <unk>.
In addition to the above mentioned factors.
Income was negatively impacted by first.
An increase in financial expenses, which amounted to pesos three regions during the third quarter of this with the diesel compared to pesos three 8 billion.
Third quarter office when there is only one main.
Due to an increase in quoting and accenture different mainly due to a higher depreciation of the partnering Facebook during the quarter.
Second an increase of net monetary position loss of $8 2 billion, which amounted to pesos eight 5 billion during the third quarter of <unk> due.
Due to a higher patient during the third quarter of liquidity due to a higher balance of monetary asset partially offset by the share of profit of associates with pesos.
Zero 2 billion gain during the third quarter of two.
Compared to a gain of pesos needle <unk> 3 billion.
Third quarter of two one.
So an increase on income tax expenses amounted to pesos.
<unk> billion in the third quarter of electricity, we do compare to pesos, one 9 billion in the third quarter of 2021.
And positively impacted by first.
An increase in finance income that amounted.
Amounted to $9 4 billion in the third quarter updates individual compared to finance income basis, $12 5 million in the third quarter.
One mainly due to higher financial assets results in the third quarter.
Two of pesos eight 6 billion.
Second higher fixed fee and interest in Florida with Cielo in pesos.
Four 5 million.
Clinical it sounds right to privacy seals or with all the other plan total pesos to five in the third quarter of 2032 as compared to $5 eight in the third quarter of 2021.
The amounts are being collected on time and according to the time going to page 13, you can see our cash flow for nine months of liquidity.
Net cash provided by operating activities was pesos $35 2 billion during the nine months of the tenders Institute.
These cash flow arises from fiscal.
This was $21 2 billion from the other operating results net obtained during the nine months opportunities into two.
Second.
<unk> eight 2 billion in collection of interest from clients, including the one from <unk>.
$2 2 billion evaluation in other non financed with positive on inventory.
For insurance recoveries of pesos 1 billion unsafe.
Adjustments to reconcile profit for the year before income tax with net cash flows.
Which was.
Pesos 11.
<unk>, which was partially offset by vessels $4 60 as seen by region in trade accounts payable.
Home sales.
Nonplanar celebrities and employee benefit plan.
And income tax expense of basis, $3 8 billion.
Net cash used in investing activities was pesos 25 points.
In nine months of the 2022 this amount was mainly due to first.
Pesos $34 8 million losses from the investment in short term financial passes.
Second basis to $12 5 billion in payment.
Payments for the purchase of property plant and equipment, which was partially offset by.
Pesos.
0.1 billion obtained in the sale of property plant and equipment and Basil.
<unk> 1 billion in dividends collected.
Net cash used in financing activities was <unk> nine.
$9 3 billion in the nine months of the 2022.
This amount was mainly the result positive basis.
12, 6 billion bank and investment account overdraft space.
Set by pesos five 8 billion in loan space, mainly related to the dose. We see is for expansion projects and pesos three 8 billion in interest and financing expenses paid mainly related to those loans.
Thank you and now we invite you to ask any.
Any questions you may have.
Thank you very much we will now begin the question answer session to ask a question you May Press Star and then one on your Touchtone. If you are using to speak if I am pleased pick up your handset before pressing the keys to withdraw your question. Please press Star and then case.
At this time, we will pause momentarily to assemble our roster.
Thank you. Your first question is coming from Martin answered from balance capital Martin Your line is live.
Okay.
Hi.
First of all thank you for the multiyear controllers.
I have four questions sorry for this.
I would like to go over them one by one if that's okay.
My first question is no loan income.
Doing some extensions or let's call it.
With one full socials to 'twenty to 'twenty five.
Could you give us any update on the discussions regarding.
And if you think you will see us Sean.
Okay. Thank you Martin for your questions.
Yes, we can go one by one.
The first one regarding the sequencer.
The concession of the airline.
Hydro plant.
We talking with the government.
With the new <unk>.
<unk> energy.
Our field.
You will get in place because we assume a few months ago. So we are analyzing the point.
Kind of a push.
Different approach.
The previews.
30 of energy.
So they want to analyze indeed, all of the all the consequences of that.
To extend the concession hard to not to extend which is related to the claims that they all do.
The owners of the concession will have.
Related to the freezing of the prices on the restriction to construct the <unk> of those.
Power plant that was allowed in the original concession so theyre analyzing this.
We'll come to us with a completion per account as early as the beginning of the year or early next year.
Today, we don't have any.
Inside of low how theyre going to proceed we assume that we kind of assume that whenever the timing of the realization get close.
We use that one year.
Extension that you mentioned.
Yes.
Gaining time to finalize the analysis, but we don't have any information yet.
Create information to conclude that.
Okay very clear.
My second question, then throughout the day or the other.
Lucas project.
If you could comment on unexpected PLD.
Price for energy company the payments.
Okay in terms of regalia Luke.
So the convention, we are working with <unk>.
Supervisor Engineering company too.
2000, and a contract to close the cycle.
With Siemens also which is the <unk>.
<unk> provider we.
We don't have yet.
In closing.
Closing, we expect to.
Have.
A close contact with them.
The end of the year or the beginning perhaps.
Generally next year so.
We can expect.
Okay.
The timing for the completion.
In terms of BT.
Between 20 to 24 months from that from when we close the contract so that could be the timing. So we don't have yet the confirmation because as I mentioned, we don't.
Close the deal but.
You can go see it.
20 to 24 months after we signed the contract.
In terms of.
And the other part of your question was about the PPA sorry.
Yes, no as you can.
In terms of the payments.
The BPA regarding them together look as you mentioned.
Yes.
Okay, Yes.
Whenever we close.
The cycle.
Combined cycle, we start receiving a PPA.
And for this team to <unk> not only has two binding as to right.
The PPA related to we have to finish.
On August this year, so right now the <unk>.
Receiving the.
Payments.
And if you have lots of payments.
Whenever we close the combined cycle.
We are still receiving a PPA for 10 years related to this team to <unk>.
The BPA is around $22000 for Maryland.
With capacity.
Sure.
Hmm.
Sorry.
Okay.
Hopefully that answers.
Good luck.
April .
We will catch up to keep up with maintenance or is there a room to two.
To go with us as we have been cut.
A couple of years.
Okay.
Well it depends on the units in terms of his.
Q2 volumes.
We need to do to do some maintenance.
Yes.
Terms of keep them operating operation.
And we expect to have some some maintenance related to the to the PVC.
<unk> 2006.
We expect to have maintained most of our combined cycle next year.
When I say this combined cycle next year.
The next one in 2024.
Discussing with all of our mat.
Additional remote iteration two.
Those maintain especially the combined cycle, which is.
Which imply.
Life extension in fact, so we need to maintain.
Maintain and seen the volume later.
Maintaining some avoided.
We are talking with the orphan related to have an additional remuneration to cover that.
That's the life extension maintained is.
Is the same it's not always and therefore, the same of all the combined cycles that the worst installed.
In late 90 to the beginning of 2000.
All of these combined cycle are reaching the lifetime limit so they need an extension.
Because of that all the generators are working together, so let's have a remuneration or additional remuneration to cover those those maintained.
But this is more or less what we are talking about in terms of maintains.
The combined cycle of Windows.
Lifetime extension comes in 2025.
So we're not expecting big maintenance on.
These combined cycle.
For these two years to come.
Okay sorry.
I understand it correctly.
And additional payments only four months away.
Smoke like that.
Do you expect to like last formulation to to grow below inflation.
Right.
No yes it does.
There are two parts of it.
Moderation, we are we are of course.
Talking with the environment in terms of increased or to maintain the remuneration in real terms.
But we haven't taken additional maintain this is part of the normal operations. So we are.
Yes, so again, we there are enough.
Related to additional increase in this year for the for the resolution to Javier.
That implies the maintainer Assembly operation the current maintenance on the current operation.
In place.
Life extension of the combined cycles.
Since we expect we don't have a coffee mentioned, yet, but we expect another increase in the.
Asset prices for this year and we are talking about what's going to happen in the next year trying to sense.
Sure.
Increases.
In advance.
Working.
So the inflation.
What's happened this year so.
We're working towards that.
We expect to.
To have a cold.
Information for our new increased these.
This year and then said.
Our past increases for the next one.
Okay Thats helpful. My last question then if you are considering paying dividends next year.
Yes.
And the analysis.
We are giving them all the information and all the.
The consideration related to that to our shareholders.
It's a possibility it's not closed yet, but we need to discuss that with our shareholders.
So basically the simple point of.
Positive cash flow generation, so is there a possibility yes.
Well. Thank you very much further in time and that's all on my side.
Thank you for your question.
Ladies and gentlemen, if you do have any questions or comments. Please press star one on your phone at this time.
Okay. There appears to be no further questions in the queue. This concludes our question and answer session I would like to turn the conference back over to Mr. <unk> for any closing remarks.
Thank you to everyone for your interest in since our portal. We encourage you to call us for any information that you may need to have a great day.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Okay.