Q1 2024 Central Puerto SA Earnings Call
Operator: Good morning, ladies and gentlemen, and welcome to Central Puerto's first quarter 2024 earnings webcast. All participants will be in listen-only mode.
Good morning, ladies and gentlemen, and welcome to Central Park, those first quarter 'twenty 'twenty four earnings webcast.
Speaker Change: All participants will be in listen only mode.
Operator: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded.
Speaker Change: Should you need assistance. Please signal a conference specialist by pressing the sterchi followed by zero.
Speaker Change: After todays presentation, there will be an opportunity to ask questions. Please note. This event is being recorded.
Operator: 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.centralpuerto.com. In addition, a replay of today's call may be accessed by accessing the webcast link in the same section of Central Puerto's website. Before we proceed, please be aware that all financial figures were prepared in accordance with IFRS and were converted from Argentine pesos to US dollars for comparison purposes only. The exchange rate used to convert Argentine pesos to U.S. dollars Dollars was the reference exchange rate reported by the Central Bank for U.S. Dollars at the end of each period.
Speaker Change: 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.
Speaker Change: Www Das Central Presto Dot com.
Speaker Change: In addition, a replay of today's call may be accessed by accessing the webcast link at the same section of the Central Park those websites.
Speaker Change: Before we proceed please.
Speaker Change: Please be aware that all financial figures were prepared in accordance with <unk> for us.
Speaker Change: And were converted from Argentine pesos to U S dollars for comparison purposes only.
Speaker Change: The exchange rate used to convert Argentine pesos to U S. Dollars was the reference exchange rate reported by the Central Bank for U S dollars pretty end of each period.
Operator: The information presented in U.S. dollars is for the convenience of the reader only and should not consider these translations to be representations that the Argentine peso amounts actually represent these U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated. Finally, it is worth noting that the financial statement for the first quarter ended on March 31st, 2024 includes the effects of the inflation adjustment. Also, please take into consideration that certain statements made by the company during this conference call and in answer to your questions may include forward-looking statements, which are subject to risk and uncertainties that could cause actual results to be materially different from the expectations contemplated by industry remarks.
Speaker Change: The information presented in U S dollars is for the convenience of the reader only and you should and should loss considered these translations to be representation is that the Argentine peso amounts actually represents these U S dollar amounts or could be converted into U S dollars at the range indicated.
Speaker Change: Finally, it is worth noting that the financial statements for the first quarter ended on March 31st 2024.
Speaker Change: The effects of the inflation adjustment.
Speaker Change: Also please take into consideration that certain statements made by the company. During this conference call and answer to your questions.
Making to forward looking statements, which are subject to risks and uncertainties that could cause actual results to be materially different from the expectations contemplated by industry remarks.
Operator: Thus, we refer you to the forward-looking statement section of our earnings release and recent filings with the SEC. Central Puerto Rico assumes no obligation to update forward-looking statements, except as required under applicable securities laws. 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 may be round to simplify the discussion. On the call today from Central Puerto is Fernando Bonnet, Chief Executive Officer, Enrique Taranio, Chief Financial Officer, and Alejandro Diaz-Lopez, Chief Finance and Investor Relations Coordinator. Now, I will turn the call over to Alejandro Diaz-Lopez. Please Alejandro, you may begin.
Speaker Change: Thus, we refer you to the forward looking statements section on our earnings release.
Speaker Change: Recent filings with the SEC.
Speaker Change: Central Puerto assumes no obligation to update forward looking statements.
Speaker Change: Sept as required under applicable securities laws.
Speaker Change: To follow the discussion better please download the webcast presentation available on the company's website.
Speaker Change: Please be aware that some of the numbers mentioned during the call may be rounded to simplify the discussion.
Speaker Change: On the call today from Central Presto, as Fernando Bonnet, Chief Executive Officer, Enrique Toronto, Chief Financial Officer, and Alejandro the Oslo face, Chief Finance and Investor Relations coordinator.
Speaker Change: Now I'll turn the call over to Alejandro the Oslo pass.
Speaker Change: Alejandro you may begin.
Alejandro Diaz-Lopez: Thank you very much and good morning to you all. Thank you for joining us today for our earnings presentation, where our management team from Buenos Aires, Argentina, is going to comment on our financial results for the first quarter of 2024. I would like to take a moment of your attention to review today's agenda. I will begin the presentation by briefly addressing the main figures of the first Q2024, followed by a quick update of the regulatory framework in use.
Speaker Change: Thank you very much and good morning to you all thank you for joining US today I don't know what earnings presentation with our management team from <unk> Andina is going to come in on our financial results. The first quarter of 'twenty 'twenty four I would like to take them on any of your attention to reveal.
Speaker Change: Agenda I will begin the presentation by addressing probably the main figures of the first Q 'twenty 'twenty four followed by a quick update there.
Speaker Change: At the risk framework.
Alejandro Diaz-Lopez: Then, I will give an overview of the Argentine energy sector, moving on to our operational and financial results. And, finally, at the end of the presentation, we will be happy to address any questions you may have.
Speaker Change: Then they will show an overview the Argentine energy sector, well, we announced it a worse to our operational and financial results.
Speaker Change: Finally at the end of the presentation, we will be happy to address any question you may have.
Speaker Change: Yeah.
Alejandro Diaz-Lopez: Before going into a more exhaustive analysis of our financial and operational results, let me briefly review Central Puerto's main figures for the first few months of 2024. As you may recall, with the acquisition of Central Costanera, performed in mid-February of 2023, and the Juan Israel Sodal Farm in October of 2023, the group's installed capacity has jumped 49% to 7,173 megawatts. Furthermore, energy generation amounted to 5,520 GWh during the first three months of 2024, which means an increase of 8%.
Speaker Change: Before going into more exhaustive analysis of our financial and operational results.
Alejandro Diaz-Lopez: These figures make Central Puerto the largest private energy generation company in Argentina, both in terms of installed capacity and energy generation, with a well diversified portfolio of assets across almost all power generation technologies. As regards our financial results, It should be noted that after the sharp devaluation that happened in December of 2023, the exchange rate kept almost flat during the first three months of 2024, while inflation, though decreasing from December of 2023, was significantly higher. This dynamic has generated inflation in dollars in Argentina.
Speaker Change: Let me briefly review central part the main figures for the first few upstream to eat pork.
Speaker Change: As you may recall with the acquisition of Santiago.
Speaker Change: In February of 'twenty, 'twenty, three and they want to sell a farm you know dollar of 'twenty to 'twenty three.
Speaker Change: The group's installed capacity has shrunk 14, 9% to 7173 megawatts.
Speaker Change: Furthermore, energy generation amounted to 5510 days you know what our during the first three months of 'twenty 'twenty four.
Speaker Change: Which means an increase of 8%.
Speaker Change: These figures make central park, the largest probably but energy is in an Asian company and Argentina, both in terms of installed capacity and energy generation.
Speaker Change: Our well diversified portfolio of assets across almost all power generation technologies.
Speaker Change: Regarding our financial results it should be no did that after the sharp devaluation that happened in December of 'twenty to 'twenty three the exchange rates kept almost flat during the first three months of 'twenty 'twenty four.
Speaker Change: While inflation, though decreasing from December of <unk> 23 was significantly higher.
Speaker Change: These dynamics generated inflation in dollars in Argentina.
Alejandro Diaz-Lopez: Due to Central Puerto's accounting methodology, all items in pesos must be adjusted for inflation to the end-of-the-quarter local currency, while the company reports its results in dollars by converting them at the end of the period official exchange rate, I mean the so-called central bank's 3500 exchange rate. This causes a non-cash impact that affects, positively or negatively, as appropriate, our financial results. Revenues for the first Q of 2024 amounted to $150 million, increasing 15% compared to the first Q of 2023, while adjusted EVDA reached $84 million, a growth of 36% compared to the first three months of 2023.
Speaker Change: Need to central part of accounting methodology, all items in past us now.
Speaker Change: Be adjusted for inflation to the end of the quarter local currency, while the company reports its results in dollars by converting them at the end up to be a official exchange rate.
Speaker Change: I mean, the so called center, a 3500 exchange rate.
Speaker Change: This is a noncash impact that affect positively or negatively as appropriate our financial results.
Speaker Change: Revenues for the first few upstream between before amounted to $115 million, increasing 15% compared to the first SKU upstream D 23.
Speaker Change: While adjusted EBITDA reached $84 million a growth of 36% versus the first three months of 2023.
Alejandro Diaz-Lopez: Net income for the period was positive by 32 million dollars, rising almost six times on a year-over-year basis. Finally, after debt consolidation as a result of M&A operations, loan repayments, and dividend payments, our net debt as of March the 31st of 2024 amounted to $326 million, a decrease of $100 million. This means a net debt to adjusted EVDA ratio of 1.1 times.
Speaker Change: Net income for the period was tested at $32 million.
Speaker Change: <unk> seen almost six times on a year over year basis.
Speaker Change: Finally, after a debt consolidation as a result of M&A operations.
Loan repayments dividend payments, our net debt as of March 3rd.
Speaker Change: The first of 24.
Speaker Change: Two $326 million decrease of $100 million.
Speaker Change: This means and net debt to adjusted EBITDA ratio of one point to one times.
Speaker Change: Yeah.
Alejandro Diaz-Lopez: Now let's move to the most recent regulatory updates and relevant facts. We anticipated in our last call the Resolution 9 issue by the Secretary of Energy in February of 2024. We should take into account that this resolution applies as of February the 1st of 2024, so it affects positively our revenues for the period. On April the 22nd of 2024, our subsidiary, Proenair, entered into a common share subscription agreement with our silver resource corporation, which is a Canadian company listed on the Canadian stock market. This agreement granted Praner a 4% interest in the share capital of the aforementioned company that owns the silver-gold project Diablices, which is located in the northeast region of Argentina.
Speaker Change: Now, let's move to the most recent or are there any updates on Fox.
Speaker Change: We have anticipated in our last call. There are solution nine issued by the Secretary of energy in February of 'twenty 'twenty four.
Speaker Change: We should take into account that these <unk> solution applies as of February the first of 2024, so it affects positively our revenues for the period.
Speaker Change: On April 22nd upstream D 24 hour subsidiary, Brian Anna entering into E Commerce share subscription agreement with Albert <unk> Resource Corporation, which.
Speaker Change: He is a Canadian company listed in the Canadian market.
Speaker Change: These agreements granted primarily with a 4% interest in the share capital of that formation company.
Speaker Change: The silver Gold project delicious, which is located in the northeast region of Argentina.
Speaker Change: Yeah.
Alejandro Diaz-Lopez: Finally, we should highlight resolution 58 issued by the Secretary of Energy a couple of days ago. This resolution establishes the payment mechanism for trade receivables accrued in December of 2023, January of 2024, and February of 2024 that are still unpaid. These receivables, as of March the 31st, amount to $102,123 million pesos, or approximately $119 million dollars. The third mechanism establishes that receivables accrued in December of 2023 and January of 2024 will be paid with an Argentine Republic USD bond at face value, while receivables accrued in February of 2024 will be paid with funds available in Cameza Bank's Central Puerto Rico is analyzing the impact of the resolution and assessing all the necessary measures that could be taken to preserve its rights.
Speaker Change: Finally, we should highlight the resolution of the D E issue by the Secretary of energy a couple of days ago.
Speaker Change: These are a solution that's our mind the payment mechanism for trade receivables outgrew in December of 'twenty to 'twenty three January of 'twenty, 'twenty, four and February of 'twenty 'twenty four.
Steve.
Speaker Change: Yeah.
Speaker Change: These receivables as of March 31st amounted to 102000 123 million pesos or approximately 109.
Speaker Change: $19 million.
Steve: Does that mechanism establishes that receivables a crew in December of 2023 in January of 'twenty 'twenty four will debate.
Argentine Republic USD bond at face value while receivable at two in February of 'twenty 'twenty four will debate with Fone available income S. S Bank.
Steve: Among sarcone on transfer made by the National government to the stabilization fund.
Speaker Change: So in the report, though is analyzing the impact.
Speaker Change: After a solution and assessing all the necessary measures that could be taken to preserve its fried.
Alejandro Diaz-Lopez: As of the day of the resolution, if the aforementioned mechanism was put in place, the company would have an estimated economic loss of approximately $24,450 million or approximately $29 million without including any default interest. Now, let's skip to the Argentine energy market picture for this quarter, which will be shown on slides 6 and 7. By the end of the first quarter of 2024, the country's installed capacity reached 43,873 megawatts, which means an increase of 1% or 595 megawatts compared to the 43,278 megawatts recorded as of March 31st, 2023.
Speaker Change: As of the day of their solution is the aforementioned mechanism was put in place. The company would have an estimated economic loss of approximately 24000 450 million pesos or approximately $29 million without including any default interest.
Speaker Change: Now, let's skip to the Argentine energy market picture of this quarter that will be shown on slides six and seven.
Alejandro Diaz-Lopez: The growth in capacity was basically due, first, to the incorporation of 680 megawatts, which means a growth of 13%, from renewable sources, of which 378 megawatts correspond to wind farms, 290 megawatts to solar projects, and 12 megawatts to biogas power plants. Finally, a net decrease in thermal sources of 85 MW, representing a contraction of 1%, which includes the addition of 387 MW of combined cycles and a decommissioning of 345 MW and 137 MW of gas turbines and diesel engines, respectively.
By the end of the first quarter of 'twenty 'twenty four the country's installed capacity of which 43873 megawatts, which means an increase of 1% or 595 megawatts compared to that 43278 megawatts.
Recorded as of March 31st 2023.
Speaker Change: The worlds in capacity be it was basically due to first the incorporation of 680 megawatts, which means a growth of 13%.
Speaker Change: From renewable sources of which 378 megawatts corresponds to wind farms 290 megawatts of solar projects and 12 megawatts to biogas power plants.
Speaker Change: Finally, our net decrease in a thorough amount sources of 85 megawatts, representing a contraction of 1% which includes the addition of 397 megawatts of combined cycles and if the commission off 345 megawatts and 137.
Speaker Change: Megawatts of gas turbines and diesel engines, respectively.
Alejandro Diaz-Lopez: All of these figures may include megawatts of new facilities, as well as adjustments and repowering of power plants that were already in operation. Regarding energy generation in the first queue of 2024, it increased 2% to 39,285 GWh compared to the 38,629 GWh generated during the first queue of 2023. While thermal sources continue to be the backbone of the Argentine electricity sector, this type of generation dropped 9% year-over-year, and its participation share in the energy matrix declined 6 percentage points year-over-year to 54%.
Speaker Change: These figures may include megawatts up new facilities as well as Jasmine, a repowering of power plants that were already in operation.
Speaker Change: Regarding energy generation in the first you after indeed and four it increased 2% to 39285 gigawatt hour compared to the 38000 602019, what our generated during the first Q2023.
Speaker Change: Why is there a mile source continues to be the backbone of the origin dynamic sector. This type of generation dropped 9% year over year any participation and share in the energy matrix declined six percentage point year over year too.
Speaker Change: 54%.
Alejandro Diaz-Lopez: Nuclear power plants generated 71% more year over year while their participation share was 8%, followed by renewables with a participation share of 14% and a 20% increment in generation, and hydroelectric power with a participation share of 23% and a 5% growth in generation. Lastly, it's worth mentioning that the increase in nuclear generation during the quarter was basically explained by the reincorporation of a 2J2 power plant in August of 2023, being a maintenance shutdown before then. Also, the lower thermal dispatch during the first queue of 2024 triggered lower alternative fuel consumption. I mean a decrease of 96% in fuel oil and a contraction of 83% in diesel.
Speaker Change: Nuclear power plants generate 71% more year over year, while their participation share was 8% foil why renewables with a participation share of 14% and 20% increment in generation.
Speaker Change: Joe with the participation of 23% and 5% growth in generation.
Speaker Change: Lastly, it's worth to mention.
Speaker Change: That the increase in nuclear generation along the quarter was basically explained by the Rand Corporation to jet choose power plant in August of 2023, B and a maintenance shutdown before then.
Speaker Change: Also the lower thermal dispatch during the first you after indeed in default trigger lower alternative fuels consumption.
Speaker Change: I mean, a decrease of 96% of fuel oil and a contraction of 83% of diesel.
Alejandro Diaz-Lopez: Focusing now on the demand, as you can see in the first Q of 2024, dropped 4% vis-a-vis the first Q of 2023, prompting a 6% shrink in residential consumption. The first Q of 2023 as a whole was exceptionally warmer than the first Q of 2024, especially March. This configuration boosts a trend-decreasing demand along the quarter. I mean the first Q of 2024.
Focusing now on the demand as you can see in the first Q after indeed and before dropped 4% vis vis the first you often <unk> three.
Speaker Change: By a 6% shrink in University, then shanklin assumption the first SKU of 2023 as a whole was exceptionally warmer than the first SKU often decent for especially March this configuration, but a trend decreasing demand along the quarter I mean, the first SKU often D 24.
Alejandro Diaz-Lopez: But on February the 1st of 2024, a new historical power demand peak was recorded, 29,572 MW. Shifts in temperatures and specific conditions of generation units allow energy export in January and net imports in February and March. We now go to slide 8 to our key operating indicators for the quarter. We can see that energy generated by Central Puerto rose 8% to 5,520 GWh compared to 5,122 GWh in the first queue of 2023.
Speaker Change: On February the first of 2024 and your historic power demand peak was recorded 29572 megawatts shifts in temperatures and a specific condition of generation units, although an energy expert in January our net imports.
Speaker Change: In February and March.
Speaker Change: We now go to slide eight to our key operating indicators for the quarter were.
Speaker Change: We're going to see that energy generated by since our part the rose 8% to 5500 and change did you go with our compared to 5122 gigawatt hour in the first SKU of 2023.
Alejandro Diaz-Lopez: It should be noted that this increase includes the incorporation of 714 gigawatt-hour generated by Central Costanera, which was acquired in mid-February of 2023, as well as 82 gigawatt-hour produced by Guanuizuil Solar Farm, acquired in October of 2023. During the first queue of 2024, hydro energy generation from Piedra del guila decreased 5% or 40 gigawatt-hour as compared with the This was a direct result of lower water availability for generation and a trend of decreasing demand during the quarter.
Speaker Change: It should be noted that these increase in close the incorporation of 714 G O a hour generated by synthetic castaneda.
Speaker Change: Which was acquired in mid February of 'twenty, three as well as 82 N G O. What our produced by one Sweal Solar farm acquired in October of 2023 during the first SKU of 'twenty 'twenty four.
Speaker Change: Energy generation from butadiene decreased 5% or 40 gigawatt hour as compared with the first SKU to indeed to indeed three levels.
Speaker Change: This was indeed of course, all of lower water availability for generation and a trend decreasing demand along the quarter with regards to renewables.
Alejandro Diaz-Lopez: With regard to renewables, except for the incorporation of the Guanoinsuil solar plant, there was a slightly higher wind generation as a result of higher wind results during the period, which represented a 3% difference compared to the first year of 2023. The generation from Central Costanera represented 54% of our total thermal generation.
Speaker Change: <unk> for the incorporation of wondering Sweal solar plant there was a slightly higher wind generation as a result of higher wind resource during the period.
Which represented a 30% difference if compared to the first SKU. After indeed 23, the generation from Central Castaneda represented.
The 4% of our total thermal generation it is worth to mention.
Alejandro Diaz-Lopez: It is worth to mention the performance of the Buenos Aires combined cycle, which increased its generation by 78% or 73 GWh compared to the first year of 2023 due to a deep maintenance and rehabilitation program put in place. These figures take into account that Central Costanera began to be operated by Central Puerto by mid-February of 2023. The energy generated by this site was partially offset by lower dispatch and the availability of other units.
Speaker Change: The performance of that when a site is combined cycle, which rose its generation by 78% or 73 Gigawatts hour if compared to the first you obtain decent three you do a deep maintenance and rehabilitation program put in place.
Speaker Change: These figures take into account that since <unk> began to be operated by central corridor by mid February of 2023.
The energy generated by this site was partially upset by lower dispatch and availability of other units.
Alejandro Diaz-Lopez: Finally, we should highlight the good availability figures for the quarter, both against the market average and against Central Puerto's own metrics for the first Q of 2023. Now, let's move to our revenue breakdown. As you can see on slide 9, this amounted to $150 million in the quarter, as compared to $130 million in the same period of 2023. It should be noted that the gap between inflation and devaluation in the period has positively affected the first Q24 figures at the non-cash level due to the company's accounting methodology and the conversion into dollars using the end of the period official exchange rate, making the comparison with the first Q of 2023 more complex to
Speaker Change: Finally, we should highlight the good availability figures for the quarter both against the market average and again since you reported the metrics for the first SKU. After indeed 23.
Alejandro Diaz-Lopez: Thus, having in mind this effect, the variation in revenues is mainly due to a growth in spot sales of 14% or $9 million driven by the Central Costanera acquisition, with full impact in the comparison of January and February figures. This increase was partially offset by lower remuneration in U.S. dollars, partially offset with resolution 59 issue last year, and Lower Dispatch, basically Thermal X Central Costanera. Then, we have a 16% or $9 million increase in sales under contract, mainly explained by the recent acquisition of the solar farm Juan y Suil, which contributed sales of $4 million in the quarter and higher sales of cogeneration units; sales of wind farms were slightly higher due to higher wind results. Finally, we have a 229% or $3 million increase in forestry revenues as a consequence, basically of a Basa Group acquisition in May of 2023. On slide 10, we can see the dynamic of our adjusted EVDA.
Speaker Change: Now, let's move to our revenues breakdown.
Speaker Change: As you can see on slide nine these amounted to $150 million in the quarter as compared to $130 million in the same period of 2023.
Speaker Change: It should be noted that the gap between inflation and devaluation in the period has positively affected the first SKU 24 figures at the noncash level. These are the company's accounting methodology and the conversion into dollars using the end of the peer official exchange rate.
Speaker Change: The comparison with the first SKU of 2023 more complex to analyze thus having in mind. This effect the variation in revenues is a consequence, mainly off.
Speaker Change: A graph in spot sales of 14% or $9 million driven by central costs on an acquisition, which will impact the comparison of January and February figures. These.
Speaker Change: This increase was partially upset by lower ammonia nation in U S dollars, partially upset with resolution denying issue last year.
Speaker Change: Lower dispatch basically of therma ex central got Nader.
Speaker Change: Then we have a 16% or 9 million increase in sales under contracts mainly explained by the recent acquisition of the solar farm in <unk>, Sweden.
Speaker Change: Which contributed with sales of $4 million in the quarter and higher sales of cogeneration units.
Speaker Change: Sales of wind farms were slightly higher you do higher wind resource.
Speaker Change: Finally, we have a 229%.
Speaker Change: Four 3 million increase in Florida, three revenues as a consequence.
Speaker Change: Equally of a box that group acquisition in May of 'twenty to 'twenty three.
Speaker Change: On slide 10, we can see the dynamic of our adjusted EBITDA.
Alejandro Diaz-Lopez: During the first quarter of 2024, the group's adjusted EBITDA amounted to $84 million, including results of Central Costanera and the forestry companies. Thus, on a consolidated basis, the adjusted EBITDA of the quarter recorded a rise of 10%, or $8 million, compared to the $75 million in the first quarter of 2023. When analyzing the adjusted EVDA, we can observe that the variation is mainly explained by the previously stated higher aggregate sales driven by spot sales and sales under contract and a positive non-cash effect on the gap between inflation and currency devaluation.
During the first quarter of <unk> and before the group's adjusted EBITDA amounted to $84 million, including results of central costs I need at the forestry companies that's on a consolidated basis.
Speaker Change: The adjusted EBITDA after quarter recorded a rise of 10% or $8 million compared to the $75 million in the first Q of 2023.
Speaker Change: When analyzing the adjusted EBITDA, we can observe that the variation is mainly explained by the.
Speaker Change: The previously stated higher aggregate sales driven by our spot sales and sales on the contract and the positive noncash effect on the gap between inflation and currency devaluation.
Alejandro Diaz-Lopez: Then we have a 14% or $7 million rise in cost of sales, explained basically by higher employee compensation, higher energy and power purchases, higher maintenance expenses, and higher consumption of materials and spare parts, driven basically by the Central Costanera acquisition and also a negative non-cash effect on the gap between currency devaluation and inflation.
Speaker Change: Then we have a 14% or $7 million rise in cost of sales explained basically by higher employee compensation higher energy and power purchases higher maintenance expenses and higher consumption of materials and spare parts.
Speaker Change: Driven basically by San Diego, San acquisition, and Oh, So and they've got they've noncash effect on the gap between currency devaluation and inflation.
Alejandro Diaz-Lopez: We had an increase of 34%, or $4 million, in SG&A, mainly driven by lower interest from clients and a negative non-cash effect on the gap between currency devaluation and inflation. Finally, other operating results net in the first queue of 2024 were increased 18% or $2 million, basically as a consequence of higher compensation to employees, higher fees and compensation for services, and taxes, all driven by central costs and acquisition, also a negative non-cash effect on the gap between currency devaluation and inflation.
Speaker Change: We have an increase of 34% or $4 million in the SG&A, mainly driven by lower interest from clients.
Speaker Change: And they've got the noncash effect on the gap between currency devaluation and inflation.
Speaker Change: Finally, other operating results net in the first Q of 'twenty 'twenty, four were increased 18% or $2 million basically.
Speaker Change: As a consequence of <unk>.
Speaker Change: Higher compensation to employees higher fees and compensation for services and taxes, all driven by us and Douglas dynamic precision.
Speaker Change: Also and they've got the noncash effect when they've got between currency devaluation and inflation.
Alejandro Diaz-Lopez: Moving to the next slide, Deconsolidated Net Income. During the first quarter of 2024, Central Puerto's net income amounted to $32 million, increasing by almost six times on a year-over-year basis. Despite the higher adjusted EVTA of the period, the net income was positively impacted by, Non-cash effects increased 48 million dollars driven by basically results generated by the change in purchasing power of the currency and variation on biological assets. Net financial results increased $16 million driven by lower foreign exchange differences on financial liabilities and lower bank commissions.
Moving to the next slide the consolidated net income.
Alejandro Diaz-Lopez: These effects were partially offset by a negative variation in the fair value of financial assets. Finally, with a negative impact, we had lower phony FX difference and interest, mostly explained by lower FX difference due to lower exchange rate variation and a higher net income tax.
Speaker Change: During the first SKU of 'twenty 'twenty, four central quarters, net income amounted to $32 million, increasing by almost six times on a year over year basis. Despite the higher adjusted EBITDA of the period. The net income was positively impacted by.
Speaker Change: Noncash effects increased.
Speaker Change: $48 million driven by basically results generated by the change in purchasing power of the currency variation on buyer unless you've got assets.
Speaker Change: Net financial results increased $16 million, driven by lower foreign exchange differences on financial liabilities and lower bank commissions.
Speaker Change: These effects were partially upset by and they've got everybody Asia in the fair value of financial assets finally, with a negative impact we had lower phony FX difference on interest mostly explained by lower FX difference due to lower exchange rate.
Speaker Change: Variation.
Speaker Change: The higher net income tax.
Alejandro Diaz-Lopez: Finally, on slide 12, we have the cash flow dynamic during the first queue of 2024. Net cash provided by investing activities was $9 million during the first queue of 2024. This amount is mainly explained by positive results from the sale of financial assets and dividends collected, being all partially offset by capex apply in the San Lorenzo facility and capex apply in the Brigadier Lopez facility. Operating cash flow was negative $19 million, which is mainly explained by lower revenue collection, higher income tax, being all partially offset by a higher adjusted EBITDA of the period.
Speaker Change: Finally on slide 12, we have the cash flow dynamic during the first SKU of 'twenty 'twenty four.
Speaker Change: Net cash provided by investing activities was $9 million during the first SKU of 'twenty 'twenty four.
Speaker Change: The amount is mainly explained by positive results from the sale of financial assets and dividends collected being only partially upset by capex apply in San Lorenzo facility and Capex apply embraer yellow based facility.
Speaker Change: Operating cash flow was negative $19 million, which is mainly explained by <unk>.
Speaker Change: Lower funding collection.
Speaker Change: Higher income tax being all partially upset by a higher adjusted EBITDA of the period finally financing cash flow was negative $4 million during the first SKU after indeed before.
Alejandro Diaz-Lopez: Finally, financing cash flow was negative by $4 million during the first Q of 2024. This is basically the result of long-term loan repayments and interest and dividend payments being all partially upset by lower bank and investment account overdraft and lower long-term loan disbursements. Consequently, our cash position as of March the 31st of 2024 amounted to $6 million. However, if financial assets are included, our total current liquidity amounts to approximately $100 million. On slide 13, we present our financial debt repayment schedule as of March the 31st, 2024. With this, I conclude the presentation, and now we invite you to ask any question you may have to our team. Thank you so much for your attention.
Speaker Change: Basically the result of long term loan repayments and interest.
Dividends payment being all partially upset by lower bond and investment account overdraft and lower longtime alone disbursement. Consequently, our cash position as of March 31st of 'twenty 'twenty four amounted to $6 million.
Speaker Change: Financial assets are included our total current liquidity amounts to approximately $100 million.
Speaker Change: On slide 13, we present, our financial debt repayment schedule as of March 31st of 'twenty 'twenty four.
Speaker Change: With this I conclude the presentation and now we invite you to ask any question you may have to our team.
Speaker Change: Thank you so much for your attention.
Operator: Thank you. We will now begin our question and answer session. To ask a question, you may press the star key and then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the start button. To withdraw your question, please press the star key, then 2. At this time, we will pause momentarily to assemble our office. Thank you. We have a question from Martin Arancet with Balance Capital. Your line is live.
Speaker Change: Thank you.
Speaker Change: I will begin our question and answer session.
Speaker Change: I asked the question you May press the therapy and then one on your Touchtone phone.
Speaker Change: If youre using a speakerphone please pick up your handset before pressing the star keys.
Speaker Change: To withdraw your question. Please press Star then two.
Speaker Change: At this time, we were pause momentarily to assemble our roster.
Speaker Change: Thank you.
Speaker Change: We have a question from Martin our run site with balanced capital Your line is life.
Martin Arancet: Hi, well, first of all, as always, thank you for the presentation. I have four questions. I would like to run them one by one, if that's okay.
Well first of all what's always.
Martin: Please proceed good evening.
I have four questions I would like to run them one by one if that's okay.
Unknown Executive: First, through Resolution 45, the government extended until mid-July the time to sign the PPAs of the Tarkov Auction, and you were one of the main winners of that auction, so I was wondering what your expectations are for those PPAs and whether, in your opinion, Soletario Anarqua could decide to move forward and sign those PBAs. Because, as far as we know, CETE did not like that the CEREL project would use engines instead of turbines, and they also preferred that CAMESA did not sign any new contracts. But at the same time, some projects seem key to the sustainability of the system.
Martin: First who a solution on the 45 the government extended until mid July.
Martin: Time to sign the PPA yourself the vocals of auction.
Martin: And you were one of the main we know so far the oxo and so I was wondering what are your expectations for those ppas.
Martin: If in your opinion.
You could decide to move forward on sign those ppas.
Martin: Because as far as we know.
Martin: Like that's a person who will use in June instead of turbines on the also prefer the gutless, so basketball time any new contracts.
Martin: At the same time, some perfect seems key to sustainability of the system.
Unknown Executive: Okay, thank you. Thank you, Martin, for your questions. Yes, as you mentioned, this extension was a little bit of a surprise for us because, as you mentioned, the government is more in line with trying to promote private PPAs instead of public-private like in the former government. And on the other hand, they started to analyze the possibility to extend because they... They still have under analysis the needs of the system, especially in terms of AMBA, the AMBA region.
Speaker Change: Okay. Thank you. Thank you Martin for your questions. Yes. As you mentioned these are these extension.
It's a little bit surprise for us because as you mentioned that the government are.
Speaker Change: Are more in line with trying to promote private ppas and instead of.
Speaker Change: Public private like in in the form of government.
Speaker Change: They're in New York on the do you start to analyze the possibility to extend because the.
Speaker Change: Do you still have on their analyses the needs of the of the of the system, especially in terms of.
Speaker Change: A region.
Unknown Executive: And the technicians of CAMESA are asking for additional capacity in AMBA, so they want to keep analyzing the possibility of this auction to move forward with this auction. But right now, we don't have any additional insight from them in terms of moving forward, really moving forward in that direction. So I think they still are doing the analysis, and the other thing is how fast they can move with the new regulations in order to promote the private DPA. I think they feel that they are moving, or they have another priority in terms of subsidies, reorganization, and so on.
Speaker Change: And the technicians of committees are asking for four additional capacity number so they they want to keep analyzing the possibility of these oh.
Speaker Change: <unk> shown them to move forward with this auction, but right now we are not worried.
Speaker Change: Don't have any additional insights for them from them in terms of moving we're really moving forward in that direction.
Speaker Change: So I think they feel they have the they still are making the analysis.
Speaker Change: And the other thing is how fast they got them.
Speaker Change: Move with the new regulations in order to promote the priority between Dave.
Speaker Change: We feel that the.
Speaker Change: They are moving out of the curve on other priorities in terms of.
Speaker Change: The subsidies.
Speaker Change: Reorganization on them and so on but.
Unknown Executive: But, Right now, we do not have an insight if they're going to move forward after these 60 days or not. Additionally, we are seeing a little bit of change, not a little bit, but a change on how they are approaching all the solutions with CAMESA debt. So this will perhaps impact how we can move forward with these new contracts or not. So I think we are staying and how we can handle the situation with CAMESA, and then we will see after that if we can continue with the scheme or not.
Speaker Change: Right now we are we are not I mean, sorry, if theyre going to move forward after the 60 days or not.
Speaker Change: Additionally, we are we are seeing a.
Speaker Change: Break ups are a little bit.
Speaker Change: Change not a little bit, but the change on the how they are.
Speaker Change: Approaching the all the solution, we've got Mezz debt. So these will perhaps impact.
How we can.
Move forward with these new contracts or not so I think we are in it.
Speaker Change: Stain and how we can handle this situation would come in and then we will see after that.
Speaker Change: We can continue with these scheme or not.
Unknown Executive: Very clear, thanks. And since you touched on the Camisa delays, for what I saw, they also, and you mentioned a little bit in the presentation, they also We didn't make the payments or some of the payments for FONI, and it's the first time ever that FONI is... [inaudible]
Speaker Change: They agree or things and see if it does the the governmental delays.
Speaker Change: Well, what I saw they also and you mentioned a little bit on the puts and takes can be also.
Speaker Change: It doesn't make the payments or some of the basins for pony.
Speaker Change: The first time ever that funny.
Not good right.
Speaker Change: I don't know if you could share with us.
Speaker Change: Your opinion or 40 payments if they are going to assume because that's what I was like no. They are not considering this new oilfield solutions.
Unknown Executive: Yes, as you mentioned, this or the last month was the first time that the FONI didn't pay on time. And the thing that we have been talking with Kamesa and the Secretary of Energy is the funny payments that we are not included in the resolution scheme, the resolution. 58 Scheme. So we expect to get collect or start collecting the phony money in the near days or perhaps this month we can collect two installments and the regularization could happen in the next month and we can get the funding back on time since, I think, June.
Speaker Change: Yes, as you mentioned is this or are the last.
Speaker Change: Who was the first time that the phony doesn't die.
Speaker Change: And the thing that we have been talking with with Gamesa and Secretary of energy is the funny payments. We are not included in the resolution a scheme and the resolution.
Speaker Change: 58 scheme, so we expect to get collect or to start collecting the funny in the knee or in any other days or perhaps in these months, we can collect too.
Speaker Change: Two installments under Regularisation could happen in the next month and a week I can get it for you back on time.
Speaker Change: It seems I think June.
Speaker Change: Okay. Thanks.
Speaker Change:
Unknown Executive: Okay, thanks. Then, regarding your, well, you mentioned the Abra Silver investment; I think that you invested $7 million there to acquire that 4% stake. Then, Bloomberg disclosed a possible investment in another copper project owned by another Canadian company that is looking for a $130 million investment. So I was wondering what your plans are for AbraSilver if you are considering increasing investment depending on some results, maybe, and on the other hand, how advanced are the talks to invest in other projects, and how much are you considering investing in these mining projects in dollars?
Speaker Change: Then.
Speaker Change: Regarding your well you mentioned the Yamana silver investment 19 7 million.
Speaker Change: There are about 4% stake.
Speaker Change: Then Bloomberg school disclose a possible investment.
Speaker Change: Other corporate perfect on one another little Canadian company that is looking for work I know Unfortunately, your marine business.
Speaker Change: So I was wondering where are your plans for I would have Subaru yogurts hearings in Greece and investment.
Speaker Change: Depending on the sound results maybe on the other side.
Speaker Change: Our bonds are the talks to the other projects.
Speaker Change: How much are you going to see her Betsy with Miami budgets and daughter.
Unknown Executive: Okay, in terms of Fabra Silver, the money that we invest and the other company, King Ross, also invests in feasibility studies and other operating costs. So we expect, with that money, that Abrazil can perform the feasibility studies and maintain the operational costs. And we are not, in the near term, expecting additional money. So, after the feasibility study, of course, if we can move to the production stage, it will require more money, but I think it's not in the, for sure not this year, but it could be next one or the other. And in terms of other investments in the mining sector, we are not so close. We are analyzing other alternatives, but nothing really, really close.
Speaker Change: Okay.
Speaker Change: In terms of our Brazil alert the money that we.
Speaker Change: We invest and the other company King Rose also east for the feasibility studies and other operating costs. So we expect with the money that Brazil would come performed the feasibility studies.
Speaker Change: And maintain the operational cost and we are not in the near term we are not expecting additional and return the money.
Speaker Change: So after the feasibility study of course, if we can move to the production stage. It will require more money, but I think he is not in the in for sure not this year could be mix, one or the other.
Speaker Change: And the.
Speaker Change: In terms of other investments in mining sector. We are not so close we are analyzing all the alternatives, but no nothing really really close.
Unknown Executive: Okay, thanks. Then, my last question.
Speaker Change: Okay and then my last question earlier this year since the birth of his clothes.
Unknown Executive: Earlier this year, Central Puerto disclosed its annual plan for investment and divestment. There, you mentioned a possible merger with Pharma or other subsidiaries. I was wondering if you plan to buy the remaining shares of Central Costanera for the merger or a possible exchange for Central Puerto shares? Also, in the same text, you open the possibility of crossing the border with new power plants. I don't know if there is any particular country where you would consider investing. And since this document is an annual plan, I was wondering if we could see these things happening in 2024.
Speaker Change: Meanwhile per annum for investments and divestments, there you mentioned a possible merger with a fair amount of our subsidiaries.
Speaker Change: I'm wondering do you plan to buy the remaining shares of some type of scenario for the merger or a possible change for Sundar broke with shares also in the sense that you open the possibility of crossing the border with power plants.
Speaker Change: I don't know if there was any particular country, where you will goes youre investing.
Speaker Change: And it seems to be still Gormandize, an annual plan.
Speaker Change: We can see these things happening in Pennsylvania.
Unknown Executive: Yes, first of all, yes, we are moving forward with the reorganization in terms of the [inaudible] block of capacity. So it's not only administrative, but it's also operating and commercial.
Speaker Change: Yes first of all yes, we are we are moving forward with the reorganization and in terms of.
Speaker Change: Our renewables this is something that.
Speaker Change: Is it necessary in order to reduce the administrative cost.
Speaker Change: Be more effective in terms of selling as a as a unique E.
Speaker Change: Look I don't know of a capacity. So it is a not only a miss or these bodies operate and also in commercial so we're going to move forward with this.
Unknown Executive: So we're gonna move forward with these reorganizations. And in terms of moving abroad, in terms of having other plans outside Argentina, I think with all of this happening in Argentina today, and I think for this year, I think we cannot be able to perform an operation, an important operation abroad. So I think we're going to concentrate our effort in terms of Argentina operating, bringing a different alternative in order to install new capacity in the way of PPAs with the government or perhaps in private PPAs, and also in terms of developing our capacity or renewable capacity. So I don't think I'll see an operation abroad this year, no.
Speaker Change: Reorganizations.
Unknown Executive: Okay, thank you. One last question, sorry, if I may, regarding CapEx, I was wondering how much CapEx you expect for 2024 and if you could split that between San Lorenzo, Villareal, and Martin Anzaluca.
Speaker Change: And in terms of.
Moving moving abroad without.
Speaker Change: With in terms of.
Speaker Change: Having our other plants, so say, Argentina I think.
Speaker Change: We.
Speaker Change: With all of these companies in Argentina today, and I think we for this year I think we cannot being able to perform right now.
Speaker Change: Operation are important operation abroad. So I think we're gonna.
Speaker Change: Concentrate our effort in terms of.
Speaker Change: Yeah, Argentina, operating bringing bringing a different alternative in order to install new capacity in the way of Ppas with the government or perhaps even private ppas.
Speaker Change: And also in terms of the emerging hour or capacity or renewable capacity.
Speaker Change: And so I think I don't see operating abroad easier on our preparation abroad. This year now.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: One last question I'm, sorry, if I may I'm regarding Capex I was wondering how much capital you expect before it comes in before and if you could break that between.
Speaker Change: So where are you on.
Speaker Change: And once it does come.
Unknown Executive: OK, in terms of Brigade López. As you may know, we start the construction of the combined cycle or the closing of the combined cycle, in fact. And this, we already made a 30% advance payment to the construction company. And we expect another, perhaps this year, another 30 or 50, between 30 and 50% more of the total CAPEX, which is around $150 million. And in terms of regular CAPEX, we expect important maintenance in our combined cycle in Buenos Aires, but this is covered by the regular payments that we make in terms of the maintenance contract with GE.
Speaker Change: Okay in terms of Oh.
Speaker Change: Hum.
Speaker Change: It's really a lot basis, assuming no. We started the construction of the combined cycle or the closing to combined cycle effect.
Speaker Change: And these we already make a fairly person advanced payment to do a construction company.
Speaker Change: We expect I know there because this year, another 30 or 50 between 30 and 50% more of the of the total capex, which is around $150 million.
Speaker Change: And in terms of regular Capex, we expect unimportant maintain and seen our combined cycle in more serious but D. CS go over by the regular payments that we made in terms of the maintenance contract with GE.
Unknown Executive: And we are not seeing a huge or big maintenance bill for this year. Perhaps next year is the time for the Costanera combined cycle, and the Mitsubishi combined cycle, and we need to make payments in advance, perhaps the last quarter of this year around 15 million dollars, but not more than that.
Speaker Change: And we are not seeing a huge or rig maintenance.
Speaker Change: For this year, but next year is the time of of course, the Haneda combined cycle, Mitsubishi combined cycle and we need to.
Speaker Change: Make a payment in advance of the last quarter of this year.
Speaker Change: Around 50 $50 million, but not more than that.
Unknown Executive: Okay, and on San Lorenzo, sorry if I miss it.
Speaker Change: Yeah, Okay and so.
Speaker Change: So yeah.
Unknown Executive: San Lorenzo already did the big maintenance in the first quarter, so we are not expecting for San Lorenzo any additional CAPEX this year. Oh, okay.
Speaker Change: And it's accelerating so across the already have they already did the big maintains the hood that's past maintain them in the first quarter. So we're not as big deal for us on a range of additional Capex this year.
Unknown Executive: Okay, thank you very much. That's all on my side.
Speaker Change: Okay. Thank you very much that's all on my side.
Speaker Change: Okay. Thank you.
Operator: Thank you. If you have any remaining questions or comments, please indicate so now by pressing star 1 on your telephone. Okay, as we have no questions on the lines at this time, I would like oh, we're sorry we've got a question come in, from Eva Lawrence with Iron Group. Your line is live. Yes, can you hear me?
Speaker Change: Thank you.
Speaker Change: If you have any remaining questions or comments. Please indicate so now by pressing star one on your telephone keypad.
Speaker Change: Okay as we have no questions on the lines at this time I would like Oh, we do sorry, we've got a question coming from Eva Lawrence with Orange.
Eva Lawrence: Your line is now.
Eva Lawrence: Yes can you hear me.
Eva Lawrence: I E.
Eva Lawrence: I just would like to ask how about your financing plans how are you financing some of this.
Eva Lawrence: <unk> said you are currently doing and you will do.
Unknown Executive: Okay, okay, thank you for your question, and we are working on two projects right now, big projects. One is the San Lorenzo, I'm sorry, it's the Villar López Closing of the Combined Cycle.
Speaker Change: Okay. Okay. Thank you for your question.
Speaker Change: Yeah.
Speaker Change: Now we are.
Unknown Executive: And the other one is a solar project, 15 megawatts. So we are financing that project with our cash flow. So we have our cash and cash flow enough to cover the two projects. If we need to move forward with the project that we get awarded in the auction, the last auction that we talked about in the previous question, for sure we need to go to the market to get some debt, additional debt, because they are, we are talking about, in terms of the two projects, the Costanera project, around three or three and fifty hundred million dollars.
We're getting two project big projects. One is the is there a similar range so I'm sorry.
Speaker Change: Lopez closing of commodity cycle and the other one is a solar our solar approaching 15 megawatts. So we are performing that proceeds with our cash flow.
Speaker Change: So we felt that our cash and cash flow enough to cover the two projects.
Speaker Change: We need to move forward with the project that we get awarded in the in the auction last auction that we have been talking in the previous question for sure we need to go to the market to do to get some additional debt because they are.
Speaker Change: We are talking about in terms of the two groceries kosten at a brochure around.
Three or 350 <unk> hundred million dollars.
Unknown Executive: So in that case, it's not sure because the awarding is, as we talked about in the last question, kind of in analysis. But in that case, we need to move forward to the market. But with a project that is already under construction, we have enough cash and cash flow to cover it.
Speaker Change: So in that case, there's no cure because their worthiness as we took the last question is kind of in an L.
Speaker Change: But in that case, we will need to move forward to the to the market, but with the project that already are under construction we felt.
Speaker Change: Cash and cash flow to cover it.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: Youre welcome.
Speaker Change: Yes.
Speaker Change: Thank you.
Fernando Bonnet: As we have no further questions, I would like to turn the conference back over to Mr. Fernando Bonnet for any closing remarks. Thank you.
Speaker Change: As we have no further questions I would like to turn the conference back over to Mr. Fernando on it.
Fernando Bonnet: He goes I don't know.
Fernando Bonnet: 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!
Thank you to everyone for your interest in since referred to we encourage you to call us for any information that you may need to have a great day.
Operator: Thank you. This concludes our question and answer session and their conference. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation.
Fernando Bonnet: Thank you. This concludes our question and answer session and our conference.
Fernando Bonnet: You may disconnect your lines at this time and have a wonderful day, we thank you for your participation.