Q3 2024 Central Puerto SA Earnings Call
Unknown Executive, Pablo Calderone Unknown Executive, Pablo Calderone Unknown Executive, Pablo Calderone Unknown Executive, Pablo Calderone
Unknown Executive, Pablo Calderone
Unknown Executive, Pablo Calderone
Speaker Change: Good morning, ladies and gentlemen, welcome to Central Puerto's third quarter of 2024 earnings conference call. A slide presentation is accompanying today's webcast and is also available on the investor section of the company's website at www.centralpuerto.com.in investors.
Speaker Change: All participants will be in listen-only mode during the presentation. After that, there will be an opportunity to ask questions. Please note, this event is being recorded.
Speaker Change: In addition, a replay of today's call may be accessed by accessing the webcast link at the same section of Central Portal's website.
Unknown Executive, Pablo Calderone
Speaker Change: Before we proceed, please be aware that all financial figures were prepared in accordance with IFRS and were converted from Argentinian 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 for the end of each period.
The information presented in U.S. dollars
Speaker Change: is for the comparison of the readers only and you should not consider these translations to be representations that the Argentina Pesos amounts actually represent these US dollars amounts or could be converted into US dollars at the rate indicated.
Speaker Change: Finally, it's worth noting that the financial statements for the third quarter ended on September 30, 2024, include 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 answers to your questions may include forward-looking statements.
Speaker Change: which are subject to risks and uncertainties that could cause actual results to differ materially from the expectations contemplated by industry remarks.
Speaker Change: Thus, we refer you to the forward-looking statement section of our earnings release and recent dealings with the SAC.
Speaker Change: Central Puerto assumes no obligation to update forward-looking statements except as required under applicable securities laws.
Speaker Change: 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 rounded to simplify the discussion.
Speaker Change: On the call today is from Central Puerto is Fernando Bonet, Chief Executive Officer, Enrique Terrano, Chief Financial Officer, and Alejandro Diaz Lopez, Corporate Finance and Investor Relations.
Speaker Change: And now, I will turn the call over to Alejandro Diaz-Lopez. Please, Alejandro, you may begin.
Thank you very much and good morning, everybody.
Alejandro Diaz-Lopez: Thank you for joining us today on a new session of earnings presentation, where we are going to discuss our financial results of the third quarter of 2024.
Alejandro Diaz-Lopez: Before we get started, I would like to take a moment to review today's agenda.
Alejandro Diaz-Lopez: I will begin the presentation by addressing shortly the main figures of the third quarter of 2024, followed by a quick update of the regulatory framework and relevant news.
Alejandro Diaz-Lopez: Then, I will show an overview of the Argentine electricity industry, moving afterwards to our operational and financial results. Finally, at the end of the presentation, we will be happy to address any questions you may have.
Alejandro Diaz-Lopez: Before going into a more exhaustive analysis of our financial and operational results, let me briefly review Central Portal's main figures for the third quarter of 2024.
Alejandro Diaz-Lopez: The group's installed capacity is 6,703 megawatts and energy generation amounted to 5,685 gigawatt-hour during the third quarter of 2024, decreasing 1% year over year.
Alejandro Diaz-Lopez: Regarding our financial results, it should be noted that due to Centro Sporto's accounting methodology, all items in pesos must be inflation-adjusted to the end of the quarter local currency.
Alejandro Diaz-Lopez: While the company reports its results in dollars by converting them at the end of the period official exchange rate, the so-called central bank a 3500 exchange rate.
Alejandro Diaz-Lopez: This causes a non-cash impact that affects positively or negatively as appropriate our financial metrics.
Alejandro Diaz-Lopez: Revenues for the third quarter of 2024 amounted to $185 million, increasing 14% year over year compared to the third quarter of 2023 results.
Alejandro Diaz-Lopez: Net income for the period was positive in 40 million dollars, doubling year over year.
Alejandro Diaz-Lopez: Finally, after debt consolidation as a result of M&A's operation, loan repayments and dividend payments, net debt as of September the 3rd of 2024 amounted to $149 million.
Alejandro Diaz-Lopez: A reduction of $137 million vis-a-vis December of 2023, showcasing a net debt-to-adjusted EVTA ratio of 0.5 times.
Alejandro Diaz-Lopez: Now let's move to the most recent regulatory updates and news.
Alejandro Diaz-Lopez: We have anticipated in our last call the cancellation of the thermal generation tender called Tercomp by means of Resolution 151 issued by the Secretary of Energy on July the 8th.
Alejandro Diaz-Lopez: After the price adjustment established last June through resolution 99, we were granted with a 3% increase in August with resolution 193, a 5% increase in September with resolution 233,
and a 3% increase in October with resolution 285.
Alejandro Diaz-Lopez: Please take into account that this last resolution has no impact for the third quarter of 2024 figures.
Resolution 294 deserves a special mention.
Alejandro Diaz-Lopez: It was established a contingency plan for the electricity industry with the aim to mitigate possible critical situations during the period December 2024, March 2026.
Alejandro Diaz-Lopez: with Action Plans for Generation, Transmission, and Distribution, as well as for Major Demand.
Alejandro Diaz-Lopez: Regarding generation, an additional complementary and exceptional remuneration for power and energy is established, with the purpose of ensuring the availability of equipment in critical months and hours.
Alejandro Diaz-Lopez: The scheme is for thermal power plants located in critical nodes to termine in Annex I of the set resolution.
Alejandro Diaz-Lopez: that do not have PPAs nor have adhered to the resolution 59. As you remember, this was established for combined cycles.
Alejandro Diaz-Lopez: This exceptional compensation will be in place for summer periods, December, January, February and March between 12pm and 10pm.
Alejandro Diaz-Lopez: and winter periods, June, July and August, between 6pm and 11pm.
Alejandro Diaz-Lopez: To get the additional remuneration, a generator must declare a committed power. The remuneration for both energy and power is affected by the node criticality factor, which can vary between 0.75 and 1.25.
Alejandro Diaz-Lopez: To determine the power from moderation, it is also considered the real availability of the generation unit, which is measured during the aforementioned month and hour.
Alejandro Diaz-Lopez: Central Puerto's eligible units to adhere to this resolution include steam turbines located in Buenos Aires and Lujan de Cuyo, gas turbines located in Lujan de Cuyo,
Alejandro Diaz-Lopez: as well as the Brigadier Lopez thermal power plant. For Central Puerto, the additional remuneration for power varies from $2,000 to $2,500, depending on month and units considered.
Unknown Executive, Pablo Calderone
Speaker Change: Finally, some key points of the contingency plan include a preventive scheme with backup transformers and mobile generating units in critical nodes.
Speaker Change: Also a demand management system is implemented. For certain time slots, may your user with a declared maximum requirement greater than 10 megawatts may propose a reduction in their loads.
. . . . . . . . . .
Unknown Executive, Pablo Calderone
Speaker Change: Continuing with news and regulatory updates, you should take into account that a new adjustment in spot remuneration was determined by means of Resolution 20, establishing a 6% rise since November 1st.
Speaker Change: As with resolution 285 recently mentioned, this has also no impact in the third quarter of 2024 figures.
Speaker Change: Regarding the situation of the Piedra del Aguila hydro operation, the concession was extended for one year by means of Presidential Decree No. 718, issued on August 12.
Speaker Change: The last thing to be mentioned. A couple of days ago, the Board of Directors decided to pay dividends, distributing 39.47 pesos per share.
Speaker Change: Finally, a concluding remark with regards to the investment project currently in execution. I mean, the San Carlos solar farm and the Brigadier Lopez combined cycle.
Both projects are on schedule and on budget.
Speaker Change: Work on both projects is progressing as planned and at a good pace without setbacks.
Speaker Change: The solar farm is expected to be completed by the second quarter of 2025, whereas the combined cycle COD is planned for the fourth quarter of 2025.
Unknown Executive, Pablo Calderone
Speaker Change: Now let's skip to the Argentine electricity market picture of this quarter that will be shown on slides 7 and 8.
Unknown Executive, Pablo Calderone
Speaker Change: By the end of the third quarter of 2024, the country's installed capacity reached 42,919 megawatts.
Speaker Change: which means a decrease of 1% or 533 megawatts compared to the 43,452 megawatts recorded as of September the 30th of 2023.
Speaker Change: The variation results from the installation of new power facilities and adjustments and repowering of power plants that were already in operation.
The contraction of 533 megawatts is decomposed as follows.
first
Speaker Change: an addition of 902 megawatts of renewable resources, of which 622 megawatts corresponds to wind farms.
Speaker Change: 273 megawatts to solar plants, including 76 megawatts of new capacity installed during the third quarter of 2024.
and eight megawatts to biogas power plants.
Speaker Change: Then we have a reduction of 1,195 megawatts in hydro sources.
Speaker Change: And finally, a net decrease of 240 megawatts in thermal sources, where a reduction
Speaker Change: of 295 megawatts corresponds to gas turbines, a contraction of 470 megawatts.
Speaker Change: being all partially upset by a rise of 624 megawatts in combined cycles.
Unknown Executive, Pablo Calderone
Speaker Change: It is worth to highlight that the decline of 1,195 megawatts in hydro installed capacity is basically explained by our assessment of Shatigata's power available between Argentina and Paraguay.
Speaker Change: Since August of 2024, 50% of Yacyretas installed capacity is allocated to Argentina, whereas it used to be approximately 88% before them.
Unknown Executive, Pablo Calderone
Speaker Change: Generations shrank 3% during the third quarter of this year on a year-over-year basis.
Speaker Change: The decrease was driven mainly by hydrogenation that shrunk 33% due to a combination of two factors.
Speaker Change: One, the step change in the allocation of Yacyretas installed capacity between Argentina and Paraguay, and a reduction of river flows.
Speaker Change: A contraction of 60% was recorded in Neuquen River, a 55% in the Cochoncura River, a 38% in the Limay River,
Speaker Change: 26% in the Uruguay River, and finally, a contraction of 22% in the ParanĂ¡ River.
Unknown Executive, Pablo Calderone
Speaker Change: Nuclear generation rose 7%, basically as a result of higher availability and generation of Atucha-2, as a result of the reincorporation of this power plant, which was in maintenance shutdown during the first half of 2023.
Speaker Change: This performance was partially offset by Embalse power plant, which entered into maintenance shutdown in September of 2024 and resumed operations last October.
Speaker Change: Given the low hydro generation and the moderate supply of nuclear and renewable sources, a higher thermal dispatch was required to cover the electricity demand. The 13% growth in thermal generation led to higher
Speaker Change: fuel consumption, a 16% rise in diesel consumption, a 9% rise in natural gas consumption, and a 3% for fuel oil.
Unknown Speaker 0
Unknown Executive, Pablo Calderone
Speaker Change: Focusing now on the demand, as you can see, electricity demand increased one percent.
Unknown Executive, Pablo Calderone
Speaker Change: to 35.6 terawatt hour compared to 35.2 terawatt hour recorded during the third quarter of 2023, which is basically explained by a rise in residential consumption due to weather conditions.
Speaker Change: which then contracted in September as a result of milder temperatures compared to equal month of 2023. For the whole third quarter of 2024, residential consumption rose 3%.
Unknown Executive, Pablo Calderone
Speaker Change: With regards to industrial demand, slightly higher consumption was recorded for the first time in many quarters, especially for food and beverage.
Speaker Change: remains to be seen if this represents a strong trend for upcoming months.
Speaker Change: The figures are similar to residential pattern, positive year-over-year growth rate during July and August, then decreasing in September.
Speaker Change: Finally, the electricity trade balance resulted in a net import situation.
Unknown Executive, Pablo Calderone
Unknown Executive, Pablo Calderone
Speaker Change: We now go to slide nine to our key operating indicators for the quarter.
Unknown Executive, Pablo Calderone
Speaker Change: We can see that electricity generated by Central Puerto diminished 1% to 5,685 GWh compared to 5,721 GWh in the third quarter of 2023.
Speaker Change: Hydro energy generation from Piedra del Aguirre dropped 35%, reaching 1,405 GWh from 2,151 GWh in the third quarter of 2023.
Speaker Change: This decline was primarily due to a 55% reduction in water levels of the Cochoncura River, which resulted in lower water available for regeneration.
Wind generation decreased 4%.
Speaker Change: reaching 386 gigawatt hour in the third quarter of 2024 compared to 404 gigawatt hour in the same period of 2023.
Speaker Change: This decline is mostly explained by lower wind resource and also to some extraordinary maintenance works, including those performed in several blades of La Castellana II.
Speaker Change: Thermal generation increased 21% during the third quarter of 2024 compared to the third quarter of 2023, reaching 3,832 gigawatt hour from
3166 J-hour recorded during the third quarter of 2023.
Speaker Change: The growth was mainly due to higher dispatch of some units at Puerto site and higher availability and dispatch at Costanera site.
Speaker Change: Co-generation units in Lujan de Cuyo and Brigadier Lopez Open Cycle also had higher availability and dispatch.
Speaker Change: Finally, as you can see, availability figures remain strong for the whole group for the quarter, both against the market average and against Central Puerto on metrics when compared to the third quarter of 2023.
Speaker Change: Special mention deserves the performance of Central Costanera, which availability figures have been improving constantly since Central Puerto's took over.
Speaker Change: This is the consequence of several deep maintenance programs, changes in the operations, and efficiency gains with the merger.
Unknown Executive, Pablo Calderone
Unknown Executive, Pablo Calderone
Now let's move to our revenues breakdown.
Speaker Change: As you can see on slide 10, this amounted to $185 million in the quarter, as compared to $162 million in the same period of 2023.
The variation in revenues is a consequence mainly of.
Speaker Change: and 11% or $9 million increase in spot market revenues driven mainly by.
Speaker Change: Spot remuneration increases that were higher than currency devaluation during the period under analysis.
Speaker Change: Higher thermal generation, especially in Brigadier Lopez, Puerto and Costanera sites.
Speaker Change: Higher availability of some thermal units, especially in Costanera and Brigadier Lopez.
Speaker Change: and a non-cash effect on the gap between currency devaluation and inflation.
Speaker Change: Also, in the revenues variation during the period, we should mention a 12% or $8 million increase.
Speaker Change: In sales under contract, mostly driven by the solar farm acquired on October.
of last year.
Higher availability and energy sales of cogeneration units.
Speaker Change: Lujan de Cuyo and San Lorenzo plants and the so-called non-cash effect on the gap between currency devaluation and inflation.
Speaker Change: This was all partially upset by lower wind generation, mainly due to the extraordinary maintenance in some places of La Castellana II, as we previously mentioned.
Unknown Executive, Pablo Calderone
Finally,
We have
Speaker Change: A 41% or $3 million increase in steam sales driven by higher steam production in both Lujan de Cuyo and San Lorenzo facilities as a consequence of higher demand from clients in both places.
Speaker Change: We expect that steam demand will continue to be higher in the future, showing a new trend due to new economic activity levels in some industries, remarkably in oil and gas.
Unknown Executive, Pablo Calderone
Unknown Executive, Pablo Calderone
Speaker Change: On slide 11, we can see the dynamic of our adjusted FPGA.
Speaker Change: During the third quarter of 2024, the group's adjusted EBITDA amounted to $93 million, remaining almost flat when compared to the third quarter of 2023.
Speaker Change: When analyzing the adjusted BTA we can observe that the variation is mainly explained by
Speaker Change: The previously stated higher aggregate sales driven by spot sales and sales under contract.
Speaker Change: Spot remuneration increases higher than the currency devaluation and a positive non-cash effect on the gap between currency devaluation and inflation.
Speaker Change: Then a 24% or $17 million increase in cost of sales explained basically by
Speaker Change: Insurance and compensation to employees being both mostly explained by the real appreciation of the Argentine peso.
Speaker Change: On the other hand, production costs were also negatively impacted by a non-cash effect on the gap between currency devaluation and inflation.
Speaker Change: Fees and compensation for services related to one-time projects and compensation to employees being both mostly impacted by the real appreciation of the Argentine peso.
Speaker Change: Similar to production cost, HG&A were also negatively impacted by a non-cash effect due to the gap between currency devaluation and inflation.
Finally.
Other Operating Results, NET
Speaker Change: in the third quarter of 2024 were lower than the third quarter of 2023 figures by 23 percent or $3 million, basically as a consequence of.
Speaker Change: Lower interest from clients due to lower commensal delays and lower positive effects difference.
Speaker Change: Also, other operating results net were negatively impacted by a non-cash effect on the gap between currency devaluation and inflation.
Unknown Executive, Pablo Calderone
Moving to the next slide, the consolidated net income.
Speaker Change: During the third quarter of 2024, Central Puerto's net income amounted to $40 million, jumping 100% or $20 million on a year-over-year basis.
Speaker Change: The net income was positively impacted by non-cash effects including better results generated by the change in purchasing power of the currency because of lower inflation and lower DNA.
Speaker Change: These items were partially offset by lower phony FX difference and interest.
Speaker Change: Net income was also positively impacted by the adjusted EBITDA and the net financial results.
and higher share of the profit of associates.
Speaker Change: Finally, income tax was higher due to higher income before tax.
Unknown Executive, Pablo Calderone
Unknown Executive, Pablo Calderone
Unknown Speaker 0
Unknown Executive, Pablo Calderone
Speaker Change: Lastly, on slide 13, we have the cash flow dynamic during the ninth month of 2024.
Net cash provided by operating activities amounted to $184 million.
Interest earned from clients.
and Insurance Recovery.
being all partially upset by tax payments.
Net cash used by investment activities amounted to
119 million dollars.
Speaker Change: This amount is mainly explained by the CAPEX allocated to San Carlos and Brigadier Lopez projects.
Speaker Change: and the acquisition of financial assets, being all partial upset by dividends collected and the sale of financial assets.
Finally, financing cash flow was negative in 78 billion dollars.
Speaker Change: Dividend payments being all partially offset by bank and investment accounts overdraft net and long-term long disbursement.
Speaker Change: Consequently, our cash precision as of September the 30th of 2024 amounted to $7 million.
Speaker Change: If financial assets are included, our total current liquidity position amounts to $245 million.
Speaker Change: With this, I conclude the presentation, and now we invite you to ask any questions to our team. Thank you very much for your attention.
Unknown Executive, Pablo Calderone
Speaker Change: Thank you very much for the presentation. We'll now begin the Q&A session for investors and analysts. If you wish to ask a question, please press the raise hand button. If your question has not been answered, you can leave the queue by clicking on the same button. Wait while we pull for questions.
Unknown Executive, Pablo Calderone
Unknown Speaker 0
Speaker Change: Unknown Executive, Pablo Calderone Unknown Executive, Pablo Calderone Unknown Executive, Pablo Calderone Unknown Executive, Pablo Calderone Unknown Executive, Pablo Calderone Unknown Executive, Pablo Calderone
Unsafe from Balance. Please, Mr. Martin, your microphone is open.
Unknown Executive, Pablo Calderone
Hi, can you hear me?
Yes, very well. Okay. Thanks. Thank you. Hi.
Speaker Change: Thank you for the presentation. I have three questions or topics, actually, that I want to discuss, and if okay, I will run them one by one. The first one is regarding the new options for hydro assets.
Speaker Change: that, if I'm not mistaken, include Piedra del Aguila, and they should happen by first quarter 25. But before that...
Speaker Change: I think it will be important to settle some things like the pricing, whether CAMESA will be...
Speaker Change: and intermediary and probably some guarantees that the terms of the concessions will be fulfilled this time. So, my question there is, do you think that it can all be ready by first quarter 25?
Speaker Change: How much do you think these assets should get paid compared to the current situation? And finally, if you have any additional color or thoughts on these options.
[inaudible]
Okay, thank you, Martin, for your interest.
Unknown Executive, Pablo Calderone
As you mentioned, the government established 108...
Speaker Change: There is a period to launch this auction to make a new concession.
Speaker Change: They are working, so we have been talking with them, they are working, this new unit, occupied by
Speaker Change: the government assets are taking the control of the process with the Secretary of Energy. So they are working hard in order to accomplish that 180 days.
Speaker Change: The points and the discussion right now is how to balance establish a competitive auction with competitive price to bring
Speaker Change: New participants, not only the ones that are operating right now.
Speaker Change: And, of course, how this new price impact in the actual prices of electricity, as you know, the price right now that they are paying for the hydros are very low, around $13 per megawatt, which is a lot.
Speaker Change: a very, very low price, and this price not being attracted for a new option. So they are discussing the scheme and the pricing for this new tender option that they will call a...
Unknown Executive, Pablo Calderone
Speaker Change: next year but they don't have a definition yet so we are talking with them and they don't have a definition.
Speaker Change: Of course, this not only implies the GPA, it implies the prices for all the electricity that we sell in the market, not only the hydros, the thermal, so they need to balance the whole scheme, the phoning plans also, the pricing for that.
So it's not only the hybrids, they need to...
Speaker Change: to work on the whole tariff scheme for the generation and the system, but they are confident that they will have the new tender ready for the second quarter of this new, the next year.
Speaker Change: Okay, right. Well, regarding that of the, well, the regulatory change for the whole system.
Speaker Change: There are also some rumors regarding probably a regulatory change that would allow thermal generation to sign private PPAs.
Speaker Change: So I was wondering, as far as you know, is the government working on a change of that sort? And also, where are you and other formal generators convened to discuss this change?
and they are thinking in establishing a new private market.
Speaker Change: Of course, there are some contracts that are still in place with Kamesa, so they will maintain that. But in talking about the spot market, the actual spot market, they...
Speaker Change: want to allow the contractualization between between the generators and the demand at least the big demand, the big users
Speaker Change: and open the market that we have for the renewables right now to a market that the thermal units can enter in.
Speaker Change: The timing of that, we are analyzing the timing for that, if it could be perhaps a transition, because when you are talking about a thermal contract, we need to talk about also the
Speaker Change: the fuel that the thermal unit consumes. So as you know, right now, the fuel are all bought by Kamesa, and they give us the fuel to generate the gas, and the diesel, and fuel oil also.
So they are also analyzing how they can start.
dismantling that or giving this or transmit that to the
Speaker Change: to an open possibility for for the generators to buy their own fuel. So they are working on these two sides of the of the same problem which is open the market in terms of generation, electricity and in terms of a
of fuel, diesel, and gas.
Unknown Executive, Pablo Calderone
Yeah, yeah.
And regarding that, I'll just follow up on that.
Speaker Change: Well, you mentioned that they are working on this regulatory change, but I'm guessing that probably efficient thermal units will be competitive to sign these new private PPAs, but probably more inefficient ones.
they won't, but they are still necessary for...
Speaker Change: for the system. I don't know if you share that view and if you think that current legacy prices are enough for those legacy units.
Unknown Speaker 8.25
Speaker Change: No, I don't think that we we need to separate inefficient or inefficient. The thing that we need to understand here is you have in the electricity sector, you have two
Speaker Change: components. You know, you cut the energy itself and you cut the power.
Speaker Change: And when you talk about energy, of course, you need to talk about the fission. And there we have, as you know,
Speaker Change: Very efficient combined cycles, selling the electricity at the spot market right now with the tariff that is
Speaker Change: The prices are very, very low, so the prices need to go up a little bit to maintain that efficient energy and efficient energy for a long period of time.
Speaker Change: You talk about less efficient unit like, you know, open cycle DG steam turbines that we already have. So
Speaker Change: And that is not easy to construct in a private, in the private market, you know, because it's something that you will have as a backup of the system when the system goes up in terms of demand because, you know, the climate change or a specific period of time. So it's not easy.
Speaker Change: to establish a private contract regarding about that. So in that sense, this is the something that the system operator in this in this case Kamesa or any system operator in other countries
Speaker Change: make some specific allocations to provide power, you know, for peaks. And to have the backup of the system, this is our unit that have a low dispatch, perhaps 10% of the time, less than 10%, 5%.
Speaker Change: So in that sense, for sure, you need to increase the prices. The prices that are paid already are not...
Speaker Change: to have new power or maintain the power that we have we have been operating right now so
Speaker Change: for sure you need to think in new prices. That prices are the same that you saw in the last tender, the telecom, you know, that are prices for...
Speaker Change: for power, not specifically for energy. So prices for not high efficient units. So you need to consider that. I think with electricity and energy, we can talk about private contracts.
Speaker Change: and in terms of power you will need some aggregator in the system that's establishing new options for power and with prices that are going up from the prices that we are seeing now.
Unknown Executive, Pablo Calderone
Speaker Change: Okay, very clear. And my final question then, while you have a strong cash position and low debt levels,
Speaker Change: I don't know what can you share regarding investment plans for the next couple of years and if you are considering an investment under the RIG scheme.
Unknown Executive, Pablo Calderone
Speaker Change: Oh yes, yes, for sure. In terms of new power and internal power, we are expecting, we have been talking with the government and we are expecting a new tender for power.
More focusing on specific points in AMBA.
Speaker Change: So we are we are ready to participate there and we want to continue the replacing of our units in AMBA.
Speaker Change: In terms of renewables, we are seeing opportunities and we have been talking with the customers in terms of providing a solution for mining companies in the north.
Speaker Change: Not only providing the electricity, providing the transmission line they need for connecting to the grid. We are talking with the lithium mining companies in the north.
Speaker Change: So, we expect that if the lithium continue growing in the north and we can find an agreement with the mining companies that we can enter there in a construction of transmission line and providing the...
Speaker Change: The renewable energy they want for the mining mining companies in the north. We are looking for that. And that are a big, big project for us.
Speaker Change: Then we are looking, as you may see, we are looking at opportunities in the mining sector.
Unknown Executive, Pablo Calderone
Speaker Change: So we are we are looking opportunities in in in in as you saw entering in a in a silver and gold mining company.
Speaker Change: and we are we are trying to look at additional opportunities there and also we are seeing something in lithium.
We are trying to develop our forest business, trying to...
Speaker Change: Of course, it's not easy. The forest, as you know, the forest business in Argentina is complicated because the logistic cost.
Speaker Change: Logistics are higher, much more higher than anywhere in the world. But we are trying to look opportunities there to industrialize a portion of our production.
Speaker Change: And of course, we are also seeing opportunities in the electricity sector, opportunities to acquire or increase our megawatts in renewables also, and of course, internal opportunities that we are looking and seeing.
Speaker Change: Great, just one little follow-up. Do you have any timeline expected for the...
New Auction for Farmer Units
Speaker Change: No, no, no, in fact, but we expect if we if we understand what the government are saying, not specifically days, but they are want to.
Speaker Change: to move forward previous to the end of the year, but we don't have any specific dates or timing. Okay, well, very soon. Well, that's all on my side, thank you very much.
Unknown Executive, Pablo Calderone
Speaker Change: Our next question comes from Ludovic Cazrouge from Nautonomy. Please Mr. Ludovic, your microphone is open.
Unknown Executive, Pablo Calderone
Yeah, good morning and congratulations for the results.
Speaker Change: My question was about the contingency plan from December 2024 to March 2026.
Speaker Change: and that you would receive a higher remuneration for some poor plants.
Unknown Executive, Pablo Calderone
Well, we are not expecting a huge impact because it's
Speaker Change: It's a small remuneration for the steam turbines and the gas turbine operating in an open cycle.
Speaker Change: and also this brings a new capex, a new opex for this unit, so we are not expecting...
Speaker Change: a huge or a big impact in our EPA. No, no, no, basically will be less than, than, I don't know, Ricky, remember me, but it's 10 million dollars or around that, but more than that.
Speaker Change: Prevent for downgrading of our old units that have been downgrading for a lot of years since that their moderation are freeze.
Speaker Change: since I think 2019 or 2018, but it's not big, big amount.
Okay. Okay. Thanks very much.
Unknown Executive, Pablo Calderone
Unknown Executive, Pablo Calderone
Speaker Change: Our next question comes from Gustavo Faria from Bank of America.
Unknown Executive, Pablo Calderone
[inaudible]
Speaker Change: Thank you for taking my question. Just a quick thing on our side, if you expect any increase in the thermal power plants dispatch or availability given the ongoing gas pipelines projects in Argentina, so does higher gas availability for your thermal power plants. And do you think it could be enough to replace all the power imports of Argentina?
Unknown Executive, Pablo Calderone
Speaker Change: Okay, in terms of in terms of our units, I think.
Speaker Change: could be, but marginally because our units are or most of our units are dual fuel. So they, when we don't have gas, they consume.
Unknown Executive, Pablo Calderone
Speaker Change: this will imply an impact on cost, for sure, in the cost reduction.
Speaker Change: because, as you know, the price of gas is much cheaper than fuel or diesel oil. But we are not expecting a huge impact on our dispatch. In terms of...
I don't remember, sorry, the second question.
Ah, okay, yes, yes, yes, imports.
Speaker Change: In terms of importation of electricity, I don't think so, because, as you know, we are in terms of peak periods, especially in summer.
Speaker Change: So we, depending on, of course, on the temperature of, of, of, of summer.
Speaker Change: But for this year, until we don't have this new telecom or tender offer for new power in AMBA, we are seeing importation from Brazil of electricity during the peak periods.
Speaker Change: independent of the gas pipelines. For sure, when you have the turn off and you have a new capacity entering, would be in a couple of years, would be a reduction. But this also depends on the evolution of...
Speaker Change: of the demand in Argentina, if we start growing again and the industry starts growing again.
Unknown Executive, Pablo Calderone
Unknown Executive, Pablo Calderone
Okay, thank you.
Unknown Executive, Pablo Calderone
Unknown Executive, Pablo Calderone
Unknown Executive, Pablo Calderone
Speaker Change: Our next question comes from Matias Gattarussi from EDCAP Securities. Please, Mr. Matias, your microphone is open.
Hi, everyone. I'm Matias.
and it's overall financial performance and do you have an
Forecast for the following quarter and the next year.
Speaker Change: And as well, I got another question about the dividends policy. You've been giving some dividends over the end of the last year, and now you've paid dividends.
Speaker Change: Again, are you going to insert a rule of dividends or these are just return retained earnings that you're facing out?
Unknown Executive, Pablo Calderone
Speaker Change: Okay, going for the first question, in terms of operation during the summer, of course, as you know, we have
Speaker Change: a very short backup in terms of capacity in AMBA, specifically in AMBA region. So for sure, we expect our units operating
Speaker Change: Operating in a higher level this summer. Of course depending on the climate and the temperature, you know. But in the temperature that we are expecting that is a high temperature for summer, we expect
Unknown Executive, Pablo Calderone
Speaker Change: that are the spot market, but it's not a game changer. So we don't expect the higher impact of, you know, in our BDA. And then the end.
And then dividends. Yes, in terms of dividends.
Speaker Change: As you know, we are growing and we expect to grow in terms of capacity and in terms of investments. We're investing in closing our Brigadier Lopez Open Cycle. We are investing in a new solar project. We are looking for new opportunities.
Speaker Change: So we are paying dividends in trying to consider that. So as you mentioned, we don't have a strict policy of paying dividends yet. And because we are in a growing
Speaker Change: face of the company and trying to catch opportunities. But in terms of our having say that.
Speaker Change: Every year, at the end of the year, when we analyze our cash flows and we see some cash that is available to pay dividends, we want to pay dividends and we go for that.
Speaker Change: but this is more or less how we work in terms of policy. Of course, when we have a more established path in terms of growth and in terms of opportunities in the market, we...
Speaker Change: How many cash we have available at the end of the year and we pay, we used to pay that amount.
Speaker Change: Great. And one last question. Can you give us more guidance on next quarter and the following year in terms of FIBIDA?
Unknown Executive, Pablo Calderone
Speaker Change: Yes, we are not seeing a different or a change, a big change until we can, the government established this new scheme of new possibilities of signing PPAs or changes in the regulatory framework. We are seeing more or less the BDDA that we are having.
Speaker Change: The acquisition of fuel, of course, we are expecting that the DPDA will be very different from that we have right now.
Speaker Change: But it's not easy to establish a number because we are not having the regulatory change on the table right now.
Okay, great. Thank you so much.
Unknown Executive, Pablo Calderone
Unknown Executive, Pablo Calderone
Speaker Change: Once again, if you wish to ask a question, please press the raise hand button. Wait while we pull for questions.
Unknown Executive, Pablo Calderone
Speaker Change: This does conclude the Q&A session. I would like to turn the conference back over to Mr. Fernando Bonet.
for any closing remarks. Please go ahead, sir.
Unknown Executive, Pablo Calderone