Q3 2023 Central Puerto SA Earnings Call
Good morning, ladies and gentlemen, welcome to Central Cortez third quarter 2023 earnings webcast, all participants will be in a listen only mode should you need assistance. Please signal conference specialist by pressing the Starkey followed by zero.
Speaker 1: Good morning, ladies and gentlemen. Welcome to Central Porto's third quarter 2023 earnings webcast. 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 today's conference, all participants will be able to make a comment on today's webinar.
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 Relations support section on the company's corporate website at Www Dot central Puerto and Dotcom.
Speaker 1: company's corporate website at www.centralplace.com.
Speaker 1: In addition, a replay of today's call may be assessed by assessing the webcast link at the same section of the central.
In addition, a replay of today's call maybe assessed by assessing the webcast link at the same section of the central part of this website.
Speaker 1: Before we proceed, please be aware that all financial figures were prepared in accordance with IFRS and were converted from Argentine pesos to U.S. dollars for comparison purposes only. The exchange rate
Before we proceed please be aware that all financial figures were prepared in accordance with I F. R. S.
Were converted from Argentine pesos to U S dollars for comparison purposes only.
The exchange rate used to convert Argentine pesos to U S dollars, what's the reference exchange rate reported by the Central Bank for U S dollars for the end of each period.
Speaker 1: presented in U.S. dollars is for the convenience of the reader only, and you should not consider these translations.
The information presented in U S dollars is for the convenience of the reader only and you should not consider these translations to be reference sensations that the Argentine peso amount actually represent these U S dollar amounts or could be converted into U S dollars at the rate indicated.
Speaker 1: Argentine peso amounts actually represent these U.S. dollar amounts or could be converted into U.S.
Finally, it is worth noting that the financial statements for the third quarter ended on September 30th 2023 include the effects of the inflation adjustment.
Speaker 1: Finally, it is worth noting that the financial statements for the third quarter ended on September 30, 2023.
Speaker 1: Also, please take into consideration that certain statements made by the company during this conference call and answer to your questions may include.
Also please take into consideration that certain statements made by the company. During this conference call and answer to your questions May include forward looking statements, which are subject to risks and uncertainties that could cause actual results to be material to materially different from the expectations contemplated by industry Earmarks does refer you to.
The forward looking statements section of our earnings release and recent filings with the SEC.
Speaker 1: OPERATO assumes no obligation to update forward-looking statements except as required under applicable securities laws.
Central Puerto assumes no obligation to update forward looking statements, except as required under applicable securities laws.
To follow the discussion better please download webcast webcast presentation available on the company's website.
Speaker 1: Please be aware that some of the numbers mentioned during the call may be rounded to simplify the discussion. On the call today from Suento Porto is Fernando Bonnet, Chief Executive Officer.
Please be aware that some of the numbers mentioned during the call may be rounded to simplify the discussion.
On the call today from Central part out as Fernando Bonnet, Chief Executive Officer, Enrique Triennial, Chief Financial Officer, and Pablo called around corporate Finance and Investor Relations manager.
And now I will turn the call over to Pablo called around please.
Please Pablo you may begin.
Thank you very much and good luck.
Turning to Europe.
Speaker 2: We are joining you today with our management team from Buenos Aires, Argentina, to comment on our result of the third quarter of 2023.
We are joining you today with our management team from both sides Hudson Peter to comment on our results for the third quarter of 2023.
Speaker 2: Taking a moment of your attention to review today's agenda, I would like to begin the presentation by addressing shortly the main figures of the quarter, followed by a quick update of the regulatory framework of the Argentine NSE sector, and then move on to analyze the evolution of our financial results.
Taking a moment of your attention to review today's agenda I would like to begin the presentation by addressing shortly the main figures of the quarter followed by a quick update on how to get it to reframe would've argued that NFC sector, and then move on to analyze the evolution of our financial results.
Speaker 2: Finally, at the close of my presentation, we will be happy to address any questions that you may have.
Finally at the close of my presentation, we will be happy to address any questions that you may have.
Speaker 2: Before going into a more exhaustive analysis of the evolution of our main financial and operational data, let me briefly review the main figures of the Central Puerto Group during the third quarter of 2023.
Before going into a more exhaustive analysis of the evolution of our main financial and operational that though let me briefly review the main figures of the central part of the group during the third quarter of 2023.
Speaker 2: As you may know, with the acquisition of Central Costanera performed earlier this year, the group's system capacity has increased by 48% year-over-year to 7,138.
You may know with the acquisition of some circled Sunnyvale performed earlier this year. The groups you think capacity has increased by 48% year over year.
7000, Huntington 13 megawatts. Furthermore, and after generation amounting to 5721, she got what's been our being a 46% increase with respect to the same video tend to do it.
Speaker 2: Furthermore, energy generation amounting to 5,721 gigawatts per hour, being a 46 percent increase with respect to the same period of 2022. It is worth noting that with the acquisition of Centrecos Tenera and the more recent acquisition of the solar farm Juan Isul 2A, the group has become the largest energy generation company in Argentina, both in terms of system capacity and energy generation.
It is worth noting that the acquisition is from Douglas tornado in the more recent acquisition of the solar fun. When he sold two eight the group has begun the largest energy generation company in Argentina, both in terms of capacity and energy generation.
Speaker 2: with a diversified portfolio of assets across all power generation technologies.
Did you buy the C five portfolio of assets across all power generation technologies.
Speaker 2: With regards to our financials of the quarter, revenues amounted to $166 million, increasing 21% compared to the same period of the previous year, while adjusted EBITDA, total $89 million, being 5% below the one of a year ago.
With regard to our financials of the quarter revenue amounted $266 million, increasing 21% compared to the same below the previous year.
While adjusted EBITDA totaled 18, 9 million, though that's being 5% below the one of a year ago.
Speaker 2: net income for the period was positive in 11 million dollars, recording a decrease of 66% as to the same period of 2022.
Net income for the period was positive $11 million recording a decrease of 66% up to the same be offended when they do.
Speaker 2: Finally, while we continue the leveraging the company during the quarter and net debt has been substantially reduced.
Finally, while we continue deleveraging the company during the quarter, our net debt has been substantially reduced.
Speaker 2: The last November 2, the board as a director of the company approved a dividend distribution of 29.7 pesos per ordinal share to be paid on November 16.
The last November to the water. So you take the company I broke it even distribution of 29 seven vessels, but are there other share to be paid on November 16th.
Speaker 2: This way, when we exclude the dividend amount from our cash and equivalents in a pro forma basis, our net debt would result in a slight $21 million increase with respect to December 2022.
This way when we exclude Disney within our model and our cash and equivalence in a pro forma basis. Our net debt will result in a slight $21 million increase.
With respect to December 2022.
Speaker 2: Now, moving to the most recent regulatory update, it is worth mentioning the following resolution.
Now moving to the most recent regulatory update it as Warner mentioned in the following resolutions.
Speaker 2: On September 6 of 2023, the Secretariat of Energy issued Resolution Number 750, which updated remuneration prices for energy generation and power capacity for units not committed in a power purchase agreement, increasing by 23 percent remuneration values since September
On September six 2023.
The Secretary of energy issued resolution number 750.
Updated remuneration prices for energy generation power capacity 40 units not as committed in our power purchase agreements increasing by 23% remuneration values since September 2023.
Speaker 2: Furthermore, on November 2, the Secretary of the Treasury issued Resolution 869 which updates remuneration prices for the same generation units which are not committed to PPAs.
Furthermore, on November 2nd the secret they have a flashy issued resolution 869, which updates rumination prices.
For the same generation units, which are not committed to be b H.
Speaker 2: and the resolution increased remuneration values by 28% since November 2023. On July 26,
And there are solution inquiries of amortization values by 28% seen in November 2023.
26.
Speaker 2: The National Secretariat of Energy, through the Solution 621, announced a national and international open call, called TERCOMF, for the submission of offers for new thermal plants or use with certain characteristics, with the aim of incorporating approximately 3,000 megawatts of firm and reliable thermal power generation capacity to the national interconnected system.
That's a good thing in our finishing three resolutions 621 national and international is open cold called.
The comps for the submission of offers for new thermal plants or use with certain characteristics with the aim of incorporating our Brooklyn about 3000 megawatts of friends and reliable power generation capacity to the national interconnected system.
Speaker 2: the successful bidders under this standard will enter into a PPA with Kamesh.
Access would be those under this tender will enter into a P. P. A with gamesa. So it's Michele a bit took place on September 26, while the technical qualification was carried out on October 26.
Speaker 2: Submissions of BIT took place on September 26, while the technical qualification was carried out on October 25, and the opening of Economic BITs on October 30.
And the opening of its going to be big on October 27th.
Speaker 2: Kamesa will evaluate the economic offers based on different factors, such as efficiency of the plan, price offer, node where to be connected, and age of the machine. The combination of these different factors will define the final price with which the project will compete.
Got myself whenever they're ready they're gonna make offers based on different factors such as efficiency of the planned price offer node whether to be connected in Asia. The machine. The combination of these different factors that will define the final price what the brush it will compete.
Speaker 2: To date, CAMESA has not issued a decision on the awarding of projects.
Do they come into the house not issue a decision on the water brush it.
Speaker 2: As part of this bidding process, the group presented process in Central Puerto for 312 megawatts and in Central Costanera for 516 megawatts.
I suppose it would be these discrete and process the group presented brushes and since like what are the board's behind them 12 megawatts and even since I got data for 516 megawatts.
Speaker 2: Continuing with our strategy to diversify our energy matrix and consolidate in the renewable energy market, on October 18th, 2023, PRONER, one of our subsidiaries, directly acquired 100% of the capital votes and stock of Cordillera Solar and Escatet Equinor Solutions, owners and operator, respectively, of the solar power plant Juan Isul II-A.
Continuing with our strategy to diversify our energy matrix and consolidate in there when you have an energy market on October 23.
One of our subsidiaries directly acquire 100% of the capital boats out of stock of cordless hit us and it's good that we know solutions owners and operator respectfully set up our plan when he sold second eight.
Speaker 2: The solar power plant is located in the province of San Juan and has a nominal capacity of 105 megawatts, generating approximately 300 gigawatts per hour in a year.
The solar power plant is located in the brothers listen one phenomena of capacity.
Five megawatts generating approximately 300, gigawatts, but I want.
Speaker 2: The plan comes with over 358,000 solar panels and covers a total area of 270 hectares, being the third largest solar farm in Argentina.
The blend guns with over 358000 solar panels and covers the total area of 270 hectares being the third largest solar farm in Argentina.
Speaker 2: the solar farm has a capacity factor of around 33%, exceeding the average for the region and positioning it as one of the farms with the best capacity factor in the world, which allows it to produce energy to supply the demand of approximately 86,000 homes.
The solar farm I forgot about the factor of around 73% exceeding the average for the region and positioning it as one of the problems with the best capacitive up during the war, which allows it to produce energy to supply the demand of approximately 86000 homes.
Speaker 2: The remuneration scheme of the power plant is a PPA with CAMESA of around 20 years maturity under the program Renovar 2.5. With this acquisition, Centroamfuerto will generate approximately 10 percent of the country's total solar capacity, reaching a total renewable energy capacity of 475 megawatts, of which 80 percent correspond to wind.
Denim renovations scheme on the power plant you said D. P. A with Gamesa off around 20 years maturity under the program quite a lot of Dupont fight with this acquisition since I'm affordable will generate approximately 10% of the gun to tell us, but that's what I've got capacity.
The renewable energy and capacity of 475 megawatts of which 80% correspond to win.
Speaker 2: energy and 20 percent to solar energy. Now, let's use the next two slides to analyze the evolution of the Argentine energy market during this quarter.
Energy and 20% to sort out our energy now let's use the next two slides to analyze the evolution of the Argentine energy market during this quarter.
Speaker 2: As we can see in slide 7, the country's installed generation capacity has increased by 1 percent or 554 megawatts, reaching a total of 43,453 megawatts compared to 42,889 megawatts in the third quarter of 2022. This increase in capacity was mainly due to the incorporation of 424 new megawatts from renewable sources, increasing 8 percent vis-a-vis the same period of 2022.
As we can see in slide seven the country's installed generation capacity has increased by 1% or 554 megawatts, reaching a total of 43453 megawatts compared to 42889 megawatts in the third quarter of 'twenty you can do this increasing capacity.
Mainly due to the incorporation of 424, new Mega Watts affirmed on your own sources, increasing 8% beside me the same period of 2022.
Speaker 2: of which 235 megawatts correspond to solar for 83, to wind farms.
275 megawatts correspond to solar for the Q3, two wind farms Dream and I'll watch to biomass I'm finally, two megawatts OBO gas generation unit in.
Speaker 2: 3 megawatts to biomass, and finally 2 megawatts of biogas generation unit.
Speaker 2: In turn, thermal capacity sources recorded a net 0.5 percent increase, or 130 megawatts, as a combination of incorporation to the system of 735 megawatts of new combined cycles and the decommissioning of 567 megawatts and 38 megawatts of gas turbines and diesel engines respect.
In turn set them on capacity associates recorded in net suitable find per cent increase or a hunter and uncertainty may I'll watch that's a combination of incorporation to the system of 775 megawatts of new combined cycles and the commissioning of 567 megawatts 78 megawatts of gas turbines.
And diesel engines, respectively.
Speaker 2: Now, let's move to the analysis of the power generation and demand of the PV.
Now, let's move to the analysis of the power generation and demand of the period.
Speaker 2: in the third quarter of the year, energy generation increased 7% to 35,861 gigawatts per hour compared to 33,454 gigawatts in the third quarter of 2022.
In the third quarter of the year energy generation increased 7% to certify a foundry in 61 gigawatts per hour compared to 73 454 gigawatts in the second quarter that have tended to do so.
Speaker 2: It was mainly due to a strong increase of 63% in hydro generation, followed by a rise of 6% in the supply of renewable energy, which resulted in a lower requirement of thermal and nuclear generation, which decreases of 12% and 6%.
It was mainly due to a strong increase of 63% hydro generation followed by a rise of 6% in the supply of renewable energy, which resulted in a lower requirement of thermal and nuclear generation, which decreases of 12% and 6%.
Speaker 2: The higher power generation in third quarter 2023 vis-a-vis the same period of last year was a direct consequence of a 1% increase in energy demand, which was essentially driven by a 4% increase in residential consumption.
Hey, How're you bought with generation in third quarter 'twenty didn't degrade vis vis the same period of last year. What are the consequence of a 1% increase in energy demand.
Which was essentially driven by a 4% increase in residential consumption.
Speaker 2: It is worth mentioning that residential demand decreased during July and remained almost flat during August due to milder temperatures. However, lower temperatures recorded during September 2023 boosted residential consumption by 14% on a year-over-year basis, being partially offset by 6% construction in industrial demand due to a drop in major user consumption through the distribution network.
It is worth mentioning that residential demand decrease it during July and remain almost flat.
All of those due to milder temperatures.
However, lower temperatures regardless during September 'twenty, 'twenty, three boosted recognize how consumption by 14% on a year over year basis, being partially upset by 6% construction and industrial demand due to a drop in measures user consumption through the distribution networks.
Speaker 2: The slightly higher demand was mainly covered with more generation from hydro and renewable sources, as previously stated. In the first case, the increase in generation was a direct result of higher flow rates, mostly in the Comau region of the provinces of Neuquén and Rio <expletive> . Comparing the third quarter 23 with third quarter 22, flow rates of the rivers Colón-Culá, Futaleufo, Limay, and Neuquén rose by 86, 83, 64, and 167 respectively.
They're slightly higher demand wasn't really called out with more generation from hydro and wind resources as baby.
As stated in the first case, the increasing generation western they reckless out of higher flow rates, mostly in Tacoma region of the provinces of Ontario <expletive> comparing the third quarter. The degree with kind of wasn't ready to flow rates of the reworks column called out verbally before they might have no gun rose by 86.
It gives me 6400 67, respectively.
Speaker 2: Flow rates of Uruguay and Paraná rivers were also higher, but the increments were much lower in comparison.
Fill rates of unify them partner of yours, what also higher but the incrementals were much lower in comparison.
Speaker 2: It is worth to mention that during the third quarter of 2023, the flow rate of the Colón-Cura River was higher than the historical rate for that period.
It is worth to mention that during the third quarter of 2023, the flow rate of ecological right, where you want it wasn't higher than historical.
For that period.
Speaker 2: with peaks even higher than the historical maximum flow rate recorded for September . In the second case, the growth in generation was a direct consequence of new capacity added to the system, as detailed above. The higher hydro and renewable generation prompted lower thermal dispatch, which was also impacted by lower availability levels, mostly from steam.
With pigs, even higher than historical maximum flow rates of recording for September in the second game the growth and generation.
Consequently, also new capacity added to the system as a detail about the higher hydro generation prompted lowest talking about dispatch, which was also impacted by lower availability levels.
Mostly from steam and gas turbines.
Speaker 2: This resulted in a decrease in fuel consumption, especially for fuel oil of around 69% in a year-over-year and diesel of 16% on a year-over-year basis.
This resulted in a decrease in fuel consumption, especially for formula one off of around 69% in a year over year and diesel of 16% on a year over year basis.
Speaker 2: The higher supply of hydraulic and renewable generation also prompted lower nuclear dispatch, primarily for Embalse and Atucha I power plants, since Atucha II was under maintenance work.
The higher supply of exotic and renewable generation also broke didnt lower dispatch.
<unk> four embodies each of one power plant it seems like your job to what's under the main thing is works.
Speaker 2: Going now to our key performance indicators for the quarter, on slide 9 we can see that power generated by Central Puerto rose by 46 percent to 5721 gigawatts per hour compared to 3932 gigawatts in the same quarter of 2022.
Going now to our key performance indicators for the quarter on slide nine we can see the power generated by Central corridor rose by 46% to 5721, gigawatts, but our compared to 3972 gigawatts in the same quarter of.
Plenty to do.
Speaker 2: It should be noted that this increase includes the incorporation of 767 gigawatts per hour generated by Central Costanera, which was acquired at the end of the first quarter of this year and is not included in the third quarter 2022 figures. Thus, when analyzing the energy generated in the quarter, excluding data from Central Costanera.
You Shouldnt be noted that this increase includes the incorporation of <unk>.
767 gigawatt hour generated by some struggles to haneda.
It was a quite a at the end of the first quarter of this year.
Not included in the third quarter 'twenty than you do figures, that's when analyzing the energy generated in the quarter, excluding that difference in dugald tomato, either qualitative or quantitative comparison decreased reached to 26% to 4953. So you got what you put out one.
Speaker 2: In the quarter over quarter comparison, the increase reached to 26 percent to 4,953 gigawatts per hour. Higher generation explains most of the 46 percent increase in gigawatts per hour production in the quarter.
Regeneration explained most of the 46% increase in DIY, but I Wanna production the quad.
Speaker 2: Piedra del Águila hydropower plant increased 248% its energy production, which was a direct result of the rise in the flows of the rivers Colón Cura and Limay, compared to the same period of 2022, as previously mentioned. The flow rate of the Colón Cura river was higher than the historical average for the period, with peaks even higher than the historical maximum flow rate recorded for September , as previously mentioned as well.
But like you know hydropower plant increased 248% each center she production, which was as a result of the rising the flows of the reverse Colombo that LMI compared to the same period. So they didn't do as previously mentioned the slow rate of economical or even it was higher than historical averages for the bill with pigs, even katja.
They still got maximum flow rate recorded for September Aspira has mentioned as well.
Speaker 2: Renewable energy, as a whole, increased 1% between Q3 2022 and Q3 2023, mainly explained by La Castellana II and Genoeva I and to a lesser extent
Renewable energy as a whole increased 1% between the quantity and quality of 2023, mainly explain by like us to send it to them kind of about one.
And to a lesser extent mom get out or leave us with regarding heightened with resources and availability of wind turbines.
Speaker 2: which recorded high wind resources and availability of wind turbines.
Speaker 2: Regarding thermal generation, it rose 9% between Q3 2022 and Q3 2023, which includes the energy produced by Central Costanera.
Regarding Sheila so much innovation it rose, 9% between 1000, and the third quarter 'twenty, three which includes the energy produced by some type of Anita.
Speaker 2: If this power generation is excluded, thermal generation actually decreased 17% in the third quarter of 2023 when compared with the same period of 2020.
It is my worst generation is excluded so demand generation actually decreased 17% in the third quarter that extended industry when compared with the same period of the Australia does he do.
Speaker 2: This situation is basically explained by the much higher hydrogeneration of the period, as previously mentioned, which prompted lower thermal dispatch, particularly in the port side.
The situation is basically explained by the much higher hydro generation of the period, especially dimension, which prompted lower thermal dispatch, particularly in the border to site.
Speaker 2: Some steam turbines, mainly at the Central Puerto, Costanera and Mendoza plants, were also unavailable during the quarter, while on the other hand, some gas turbines of Mendoza and the one of Rigadero Lopez plant increased substantially their energy generation during the period.
Thomas steam turbines, mainly at the Central Board of course, then it out I mean does Atlanta, where I'm sort of antibody level during the quarter, while on the other hand, some gas turbines of Mendoza under wonder when he got there Lucas plant increase substantially their energy generation during the period.
Speaker 2: the generation from San Lorenzo plant, shunk in this period because of gas scarcity.
In addition from salary and supplant shrunk in this period because of gas and scarcity.
Speaker 2: In terms of availability, Central Porta's performance continues to be better than the market when we exclude Central Costanera since this power plant has been carrying out several maintenance programs.
In terms of how the ability since I bought the performance because you're going to be better than the market. When we exclude synthetic we'll send it out soon this power plant has been carrying out separate them on things programs.
Speaker 2: Finally, steam production declined 12% during the third quarter of 2023, which is explained by a 28% contraction in the salaried and increase of 16% in the Mendoza coaching generation plan.
Finally steam production declined 12% during the third quarter of 2023, which is explained by a 28% contraction in this alone an increase of 16% in them and those are co generation plant.
Speaker 2: Now, summing in our revenue analysis, as you can see on a slam 10, this amounted to $166.5 million in the quarter as compared to $137.7 million in the same period of 2022.
No. So many in our revenue as you can see on this long term this amounted $266 $5 million in the quarter as compared to $877 7 million got us into some brito for 2022.
Speaker 2: First, it should be noted that in this quarter revenues of the Central Porto Group include those corresponding to the acquisitions of Central Costanera and the forestry companies, which contributed with $21.2 and $8.2 million suspected.
First it should be noted that in this quarter revenues of the synthetic portfolio include those corresponding to acquisitions Austin cycles tornado and of course your companies, which contributed with 21 point due in April 2 million respectively.
Speaker 2: Thus, when excluding these effects, the variation in revenues would be a slight decrease of 0.4% or 0.6 million dollars as a combination of the following factors.
Thus when excluding these effects they've already shown revenues would be a slight decrease of <unk>, 4% at Sito boys $6 million is a combination of the following factors.
Speaker 2: First, a 23% or $11.5 million increase in spot legacy energy sales, which amounted to $62.2 million in the third quarter of 2020.
First at 23% or 11 $5 million increase in our spot legacy energy cells, which amounted to $62 $2 million in itself quite a bit of 20th television.
Speaker 2: compared to 50.7 million dollars in the third quarter 2020.
Compared to $57 million in the third quarter 'twenty than diesel.
Speaker 2: This was driven by a higher energy dispatch from Piedra del Águila Hydropower Plant, a higher thermal availability from Central Portos Combined Cycle, and the end of the Brigadier López gas turbine PPA contract in August 2022, when it began to be remunerated in the sport market. All of this being partially offset by a lower generation from thermal units on the back of a higher hydro resource and a lower remuneration in dollars.
It was driven by a higher energy dispatch from Bureau, allowing the hydropower plant and how are you.
Termite availability for instance, third part of the combined cycle.
And the end of it but he got there a little bit that's disturbing PPA contract in our study are indeed do they've begun to be women as they did in the sport market. Although this being partially upset by lower generation from settlement of units on the back of the higher hydro resource on the lower remuneration in dollars.
Speaker 2: a 28% or $1.9 million increase in steam sales, which total $8.5 million in the quarter, compared to $6.6 million in the same period 2022. This was due to a combination of better prices in dollars, a 12% decline in volumes produced, as previously mentioned, and a revenue adjustment with a negative impact in the revenues of the third quarter of last year.
At 28% or $1 $9 million increase in our steam sales, which totaled $8 $5 million in the quarter compared to $6 6 million that I seem to St. Peter when he didn't do.
This was due to a combination of better prices in dollars and.
12% decline in volumes produced at origination and a revenue adjustment with a negative impact in the revenues of the third quarter of last year.
Speaker 2: Finally, a 16% or $12.7 million reduction in sales under contracts with total $63.6 million in the quarter compared to $76.3 million in the third quarter of 2022. This was mainly the result of the end of the Brigadier López PPA contract in August 2022, as previously mentioned.
Finally, S, 16% or $12.7 million reduction in sales under contract with total $63 $6 million in the quarter compared to $76 $3 million in the third quarter 'twenty. Two this was mainly the result of the end of it because they're a little bit PPA contract. You know it wasn't you didn't do us Privy to mentioned.
Speaker 2: Jumping now to slide 11 for a better understanding of the evolution of our Adjusted EBITDA. During the third quarter 2023, the group Adjusted EBITDA amounted to $88.8 million, including the Adjusted EBITDA from Central Costanera and the forestry companies of $6.6 and $4 million respectively.
Jumping now to slide 11 for a better understanding of the evolution of our adjusted EBITDA.
During the third quarter trended industry the group adjusted EBITDA amounted to $88.8 million, including adjusted there would be differences in drug will send it up on the floor as the companies of 6.6 and $4 million respectively than on a consolidated basis. Adjusted EBITDA was laguardia recorded at a construction.
Speaker 2: Then on a consolidated basis, the adjusted EBITDA of the quarter recorded a contraction of 5% compared to the $93.8 million in the third quarter of 2020.
5% compared to the $93 $8 million in the third wanted us to do it in detail when analyzing their adjusted EBITDA exclusive excluding acquisition, we kind of settled on the valuation is mainly explained by the better we do mention dropping revenue in 'twenty, one or 10 $3 million increase in cost of sales displaying framework.
Speaker 2: When analyzing the adjusted EBITDA excluding acquisition, we can observe that the variation is mainly explained by the previously mentioned drop in revenues, a $21 or $10.3 million increase in cost of sales, explained primarily by a higher consumption of materials and spare parts due to the continued maintenance performed on the gas turbines at the Luján de Cuyo plant.
And by a higher consumption of materials and spare parts due to their continuum of dana's perform on the gas service, they look under which a plant.
Speaker 2: a 15% increase or $1.3 million in SG&A, mainly driven by higher personal costs, maintenance activities, and taxes on bank accounts.
10% increase or one $3 million in S E N a.
Driven by higher personnel costs maintain his duties and taxes on banking accounts.
Speaker 2: And finally, a 22% increase, or $3.3 million, in other operating results net, mainly due to higher interest from operating net.
Finally at 22% increase or $3 $3 million, you know that upgrades into something that's mainly due to higher interest from the operating activities.
Speaker 2: Moving to the next slide, consolidating net income for the quarter amounted to $10.6 million, decreasing 66% on a year-over-year basis. In addition to the lower adjusted EBITDA of the period, the net income was impacted by a combination of the following factors.
Moving to the next slide consolidated net income for the quarter amounted to $10.6 million.
Decreasing 66% on a year over year basis. In addition to the lower adjusted EBITDA for the period. The net income was impacted by a combination of the following factors.
Speaker 2: First, a higher loss on net monetary position of $40 million, which was partially offset by better results on our associated companies. A decrease of $18 million in net financial results, mainly due to the higher negative effect differences, partially offset by a gain in financial assets measured at set value.
First a higher loss on net monetary position of $40 million. When he was partially upset by better results.
I say these companies and degrees of $18 million in net financial result, mainly due to the higher negative effect differences, partially upset by a gain on financial assets measured at fair value.
Speaker 2: All of this being partially offset by a higher positive foreign exchange differences and interest related to the FONI receivables for $25 million, and higher positive results from an increase in the variation of the fair value of the biological assets from our forestry segment for $16 million, and finally a lower income tax of $2 million due to the lower earnings before taxes of the FONI.
All of these being partially upset by higher positive foreign exchange differences I need that isn't related to the funny receivables for $25 million and higher positive yourself from an English and the variation of the fair value of the biological assets from our forestry segment for $60 million I'm finally, a lower income tax of $2 million.
Due to the lower earnings before taxes of the period.
Speaker 2: Going on to slide 13, we can see the evolution of our cash flow during the first nine months of the year.
Going on to slide 13, we can see the evolution of our cash flow during the first nine months of the year.
Speaker 2: Cash flow provided by operating activities amounted to $171 million, arising mainly from the adjusted EBITDA generated in the period, and a $42.1 million in collection of interest from clients, including those of the FONI program, being all this partially offset by income tax payments of $54.3 million and $6.2 million in negative working capital variation.
Cash flow provided by operating activities amounted $271 million alrighty, mainly from the adjusted EBITDA generated in the period and if 42 1 million in collection of interest from clients, including those of the funny brought them.
This partially upset by.
Income tax payments of $54 $3 million and $6 2 million in negative working capital variations.
Speaker 2: net cash used by investing activities total $78 million.
Net cash used by investing activities totaled $78 million.
Speaker 2: It was mainly due to the acquisition of the companies made along the year, coupled with $11.5 million in investment in property plan and equipment, $1.8 million from the selling of short-term financial assets, and $1.7 million from the shared buyback program implemented in the quarter. All of this being partially offset by a collection of $2.2 million in dividends during the pandemic.
It was mainly due to the acquisition of the company's made along the year, coupled with 11 5 million in even best property plant and equipment.
1.8 million from the selling of short term financial assets and $1 7 million from the share buyback program implemented in the quarter.
All of these being brushing upset by a collection of two 2 million in dividends during the period net.
Speaker 2: Net financing was negative in $85 million. It was basically the result of almost $78 million in debt-serving amortization, primarily related to the Brigadier Lopez syndicated loan and the principal majority of the Manque and Olivos dollar-linked bond in last September .
And that's financing wasn't they've got deep in $85 million.
It was basically the result of almost 70 million in debt side with amortization primarily related to live together a syndicate the lung and it brings you bought the majority of the monkey.
Dollar linked bonds in last September.
Speaker 2: along with $28.3 million in interest and other financial costs related to the loan-to-loans, $12.1 million related to bond buybacks, and the cancellation of overdrafts in checking accounts for another $2.4 million. All of these were partially offset by $41.4 million in finance in obtaining the period. It was mainly due to the issuance of our Class A notes for $37.2 million in last September .
Along with 20 million.
Millions of dollars in interest and other financial costs related to the Atlanta loans $12 1 million was related to bond buybacks and the cancellation of all the drops in chicken a golf for another $2 4 million. Although this was partially offset by 41 4 million in financing obtaining the period there was mainly due to that issue.
Most of our class a notes for $37 $2 million in September.
Speaker 2: Consequently, our cash position as of September 30, 2023 amounted to $58.2 million.
Consequently, our cash position as of September 30, Twenty's and discrete amounted to $58 $2 million.
Speaker 2: At current investment in financial assets, our total current liquidity amounts now to $317 million.
At current investment in financial assets, our total current liquidity of months now to $317 million.
Speaker 2: To conclude with the presentation, in this slide, I would like to bring to you our debt maturity schedule, but in particular, I would like to highlight the successful liability management carried out during September and October , and that will considerably alleviate our debt maturities for the year 2022.
To conclude the presentation at this slide I would like to bring to you our debt maturity schedule, but in particular I would like to highlight the successful liability management cut it out during September and October.
We'll consider that really elevate our then Madrid is for the year 'twenty 'twenty four.
Speaker 2: In that connection, on October 17th, the company issued its first international bond for a total amount of $50 million, with a two-year tenure at a rate of 10%.
In that connection on October 17th the company issued its first international bond for a total amount of $50 million with a two year tenure at a rate of 10%.
Speaker 2: This allowed us to partially repay, only two days later, $49 million of the outstanding $55 million of the syndicated loan signed with Citibank, Shippey Morgan and Morgan Stanley , remaining now only $6 million to be paid in January 24.
These allow us to partially repay only two days later 14 $8 million all of that was done in $55 million syndicated loan signed with Citibank she'd be more than a Morgan Stanley remaining now only $6 million to be paid in January 24.
Speaker 2: This not only permitted us to refinance short-term debt maturities, extending the debt life and reducing financial costs, but also helped us to lift dividend payment restrictions that were imposed as covenants of the syndicated loan.
These not only permitted us to refinance short term debt maturities extending their life and reducing financial goals, but also help us to lift the dividend payment restrictions that were imposed let's call it and all of a syndicated loan.
Speaker 2: In that connection, and as previously explained, the company has announced that it will be distributing dividends to our shareholders with a combination of Argentine pesos and securities on November 16.
In that connection and it's pretty well explained the company has announced that will be distributed in dividends to our shareholders with a combination of <unk> business and securities under the 16th.
Speaker 2: This way, maturities for 2024 amounts now only to $38 million, being manageable and clearing short-term uncertainties.
These way my duties for 'twenty 'twenty, four amounts now only $238 million being manageable and cleaning short term uncertainties.
Speaker 2: It is also worth mentioning that on September 14, the company issued the Class A note denominated integrated and payables in U.S. dollars for a total amount of $37.2 million.
It is also worth mentioning that on September 14th the company issued the class a notes denominated integrated umbrella yellows in U S dollars for a total amount of 37.2.
Speaker 2: at a rate of 7% and matured in 2025.
Are the range of 7% and maturity.
In 2025.
Speaker 2: These classes notes were reopened on October 20th for an additional $10 million, issued at a price of $102.9.
This class is known well reopen on October 24, and an additional $10 million you should at the price of it.
Did I do Paul Knight.
Speaker 2: With this, I would like to conclude the presentation. And now, we invite you to ask any question to our management team. Thank you for your attention.
With this I would like to conclude the presentation and now when by you to ask any questions to our management team. Thank you for your attention.
Speaker 1: We will now begin the question and answer session. To ask a question, you may press star then 1 on your touch tone.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
Speaker 1: If you are using a speakerphone, please pick up your handset before pressing the keys to withdraw your question. Press star 2 to remove your question from the queue. At this time, we will pause momentarily to assemble a rocket.
If you are using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question Press Star two.
Maybe a question from the queue at this time for a pause momentarily to assemble our roster.
Yeah.
Speaker 1: Your first question is coming from Rodrigo, Mr. with Latin Securities. Please pose your question. Your line is open.
Your first question is coming from Rodrigo Mr. With Latin Securities. Please pose your question your line is live.
Speaker 3: Good morning everyone. Thank you for the opportunity. So given the change in the government in 2024, how you're modeling the impact on energy regeneration, what scenarios are being considered in terms of regulatory changes and how this might affect your strategy for your thermal projects? Thank you.
Okay.
Good morning, everyone and thank you for the opportunity.
Given the change is going to be very very poor.
While the impact from legacy energy refrigeration what scenarios.
Being negotiated and done so really leveraging shoes on how this might affect your strategy.
Oh My brother.
Speaker 2: Hi, Rodrigo. Thank you for your question. I can hear you very well. I assume that you're asking for Energy Advancement Remuneration Framework for 2024, correct?
Thank you for your working against you very well.
That's what you're asking for and if you have lost their remuneration framework for 2024, that's correct.
Yes can you hear me better.
No.
Speaker 4: Okay, yes, well, as you know, the Energía Basa Remuneration Framework is a framework in which we receive the amounts in pesos and the Secretary of Energy established the tariff.
Okay Yeah.
Yes.
Well as you know.
These are.
Didn't he loves the remuneration framework a framework.
Rich when you receive the mountain Batesville Sunday. So you can tell your friends when she had stoppages.
Speaker 4: and make the adjustment of that tariff in terms of inflation. Right now we are reaching with the last increase on November , we are reaching an increase this year of 150%.
And maybe the adjustment.
In terms of inflation right now we are reaching with the largest increase in November we are reaching a 90 degrees zero one time, you know 50%.
Speaker 4: for this year. We are trying to push for another increase in December .
And here, we are trying to do.
Bush for another increase in December trying to gouge, all the inflation.
Speaker 4: trying to catch all the inflation of this year, but we don't know now if we can get it or not, because, of course, we need to wait until the elections if we...
But we don't know.
Now if we can get it or not because of course, we need to wait until the elections. If if we have the same cyclicality of synergy or the same government or where we need to do these calls with a new one but we are going to be named by the weekend.
Speaker 4: have the same Secretary of Energy or the same government, or we need to discuss with a new one. But we are confident that we can at least cap the inflation this year. Next one depends on the new administration coming, if they're going to establish a regular basis adjustment, which is what we want.
<unk> got the inflation is eating next one.
Davidson.
The new administration coming in.
But you're going to establish a regular legacy adjustment, which is what we want to go into combo I know there might be a judgment.
Speaker 4: trying to have an automatic adjustment in trying to cover inflation, not going step-by-step, discussing every three months the adjustment.
Trying to govern inflation not well we.
David discussing every few months.
The adjustment.
Speaker 4: is which we have right now. So we are confident to try to set a scheme of adjustment automatically established trying to
The EZ, which we felt right now so we are going to add in.
Just try to set a new scheme of adjustment so I'm happy that E.
Establish trying to.
Speaker 4: to catch the inflation, as I mentioned, automatically. We talk with the relay.
Gotcha inflammation as we measure them two months ago.
We do.
Hey.
Speaker 4: possible ministry or secretary of energy and they are aware about that, they know that we need to to have that. We told me the
Both people, maybe three or four energy.
Be aware about.
They know that when you do.
To cut that we thought we'd be.
I have to say.
Speaker 4: actual secretary of foreign and she knows the same, that we need to have an adjustment more automatically than we have now and I think this will be the challenge for
And she knows it saying, we need to cover and adjustment in a more of a two months ago. So no.
Are you seeing.
These would be the challenge, Florida four four.
Speaker 4: for the next, perhaps, quarter. Of course, first, they need to adjust the tariff, the end-user tariff. We need to have the same, like, or a scheme which is in order with that. So first, they need to solve, I think, the problems to establish a new tariff, end-user tariff scheme. And then we can discuss how we can enter in that scheme and come in an automatic arrangement.
It makes us wonder of course first they need to adjust.
And you said Charlie.
We need to compensate.
Yeah.
Or are the scheme that you've seen northern we'd done so firstly I need to sell less in the.
The problems due to establish a new studies and you say I'm sorry from scheme of it.
He's got all weekend and to yourselves.
The scheme.
I don't want to go there.
Speaker 4: So that is our idea about how we can discuss the future in terms of legacy energy.
So that's our.
So we kind of discussed the future.
In terms of energy.
Okay, and I have a second question because I mean, if you could outline.
Speaker 3: And I have a second question if I may. If you could outline Central Portal's investment plans for 2024, including potential acquisition targets, progress in transitioning to combined cycles, and your expectations for the upcoming NFC options under impact on the company's position and performance.
And therefore, those who investment planned for 30 34, including a potential acquisition target strollers. He got featuring two combined cycle.
And your expectations for the upcoming energy auctions on their impact on the company as well.
So a lot of money.
Thank you.
Speaker 4: Okay, the first thing that we have ready to start is the López Closing Combined Cycle.
Okay.
The third thing doesn't recover.
Ready to get started.
The other Lopez closing.
Thank you.
Speaker 4: which is in the finish. We are finishing the discussion with EPC constructor in this month, I think, and we'll start the construction perhaps early January . So this is the first.
Which is in the <unk>.
The fees, we are finishing the discussion with E. B C. Constructor in these months and things have really started to construction.
Ellie.
January.
So this is the first or more.
Speaker 4: investment in CAPEX, new investment in CAPEX. This will be around – it's not really – it's not fully closed, but it will be around $140 and $150 million in CAPEX, and around 20 months of construction. We will reach an output of 400 megawatts in this combined cycle that we have in Santa Fe.
P. R investment you got big you envision any topics.
We'll be around it's not really it's not really close but it will be around 110, 40 and $150 million.
And around 2020 months of construction, we will reach.
Oh, who drove 400 and they're watching these combined cycle doesn't resolve in front of it.
Speaker 4: And then in terms of new projects, as you know, we are participating in a dealing process and the thermal process, thermal auction.
And then in terms of new Brushy.
You know we have been in.
Maybe you didn't grosses.
And it would be term loan grosses thermal option.
Speaker 4: and we are confident that we can at least reach two projects there. It's not fully finished, we expect that to have an announcement perhaps this week or the next one.
I mean, we are confident that we can at least reach two projects there is not.
To fully finish.
You've got an announcement this week or the next one.
Speaker 4: But, of course, that will depend on also, I think, the ending of the result of the lecture.
But of course that will depend on also everything.
The result of religion.
Speaker 4: And in terms of acquisitions, we are still looking in new capacity renewables, we are seeing
And in terms looks like P. T shirts weird C U E.
And you've got a bunch of few renewals we are seeing.
Speaker 4: projects there but we don't have any clear view about how we can continue the process because we are in early stages. We are still looking possibilities in mining but also in early stages so we don't have another...
Perfect there, but we don't have any clear view about how we can continue.
It will simply because we are in early stages.
No.
We are still getting a boost to really be seen mining, but also in early stages, though.
We don't cover.
Yeah.
Those.
We'll see really teaching them soon.
Speaker 4: I think the earlobes is the more clear one, and second, the...
It seemed to be a local team.
Clear one and second it does.
Speaker 4: the thermal options coming is another clear possibility.
<unk> got I mean, it's an obvious vehicles.
That was a really helpful. Thank you.
Speaker 1: is coming from Martin Aranta with Balance Capital. Please put your question in your line.
Your next question is coming from Martin, Iran set with balanced capital. Please pose your question your line of sight.
Speaker 3: Thank you very much for the materials and for taking my questions.
Hi, Thank you.
Thank you very much who flew materials and for taking my questions.
Speaker 3: I have three questions. I would like to run them one by one also, if that's okay.
Like how sleepwear surf or we like to run them on my World. So that's okay.
Speaker 3: First, now that you have paid the syndicated loan, what could we expect in dividends or share repurchases for next year?
First now that you have made the decision.
So we could be below.
With respect to those or share repurchases school next year.
Speaker 4: Well, as you mentioned, right now we don't have any limitation to pay dividends, so we want to come back to the regular basis payments as we have in the past. So the amount will, of course, depend on the tariff adjustment, how many MW we get award in the term of auction.
Well as you mentioned and we are right now we don't have any indication to believe it and so we wanted to come back to me.
These payments that's when we can.
So having the bus so.
Mom really of course, the Green zone.
Yes men and how maybe you know once we get the award.
Talking about auction.
Speaker 4: And of course, the possibility of receiving financing in the future, but.
And of course, the possibility of receiving financing in the future but.
Speaker 4: Having said that, we want to come back to regular racist pain.
So you definitely want to come back really lazy space.
Yeah.
Speaker 3: Very clear, thanks. And then you already mentioned something about it, but I was wondering if you have any news on the evaluation of mining projects, if you think that Central Protocol will close a deal next year.
Or are you already mentioned something about it.
I was wondering if you have you sold a devaluation of my imperfect if you've got some tough political who close the deals next year.
Speaker 4: Well, for sure, we're going to put focus on that. As I mentioned, we are in the early stages, so I cannot comment on how...
Well sure do we when are we gonna booths Logan zoomed up as I mentioned, we are in the early stages. So I cannot comment on.
How oh, when we got to get to the closing bugs.
Speaker 4: or when we can get the closing, but we want to put focus on CE alternatives in that sector.
We want them to focus on one of them I don't.
See I don't know if you've seen the.
That's it from us.
Speaker 3: Okay, thanks. And my last question, while you were one of the main leaders in the recent formal auction, and of course we are still waiting for the results, what IRR were you aiming for, and do you see a risk on financing rates for next year if the new government removes capital controls?
Oh, great things on my last question.
Well you were one of the main leaders who can do we can put them on auction and of course, we are still awaiting Peru's holds.
What are you at all where you're waiting for and do you see at least 1092 grade school your new government removes Gupta with Kohl's.
Okay.
Speaker 4: Okay, well, as you know, it's an open process right now, so I cannot comment specifically.
Okay.
As you know always in an open process right now so I cannot comment specifically.
Speaker 3: But I can say that they, of course, are related to the Argentine risk and the risk you mentioned of the financing, perhaps limitations of financing situation that we can face in the near future. So the returns are according to that, but I cannot go forward because it's an open process. Okay, very helpful. Thank you.
Oh, you are suddenly we are seeing but I can say is that you of course are related to the auction and we use the rigs you mentioned well.
Financing.
The limitations of biopsy.
Situations that we can face in the near future. So the lead times are according to that but I can.
Oh, well because there's an open process.
Okay, but it's a really cool thank you.
Thank you for your interest.
Once again, if you do have any questions or comments. Please press star then one to enter the queue. Please hold them on that while we poll for any additional questions.
Speaker 5: Star then.
This concludes our question and answer session I would like to turn the conference back over to Mr. Fernando.
Speaker 6: This concludes our question and answer session. I would like to turn the conference back over to Mr. Fernando Bonacci.
Closing remarks.
Speaker 4: Thank you to everyone for your interest in Central Puerto. We encourage you to call us for any information that you may need. Have a great day.
Okay. Thank you to everyone in Florida are interesting since our board. So we encourage you to call us for any information that you may need to have a great day.
Right.
Thank you. This does conclude today's conference call have a wonderful day.