Q1 2025 Central Puerto SA Earnings Call
Good morning, ladies and gentlemen, welcome to the Central point of those first quarter of 'twenty 25 earnings conference call our slides.
Unknown Executive: Good morning, ladies and gentlemen. Welcome to Central Puerto's first quarter of 2025 earnings conference call. A slide presentation is accompanying today's webcast and will also be available on the investor section of the company's website, www.centralpuerto.com Thank you. All participants will be in a listen-only mode during the presentation. After that, there will be an opportunity for you to ask questions. Please note this event is being recorded. If you do not have a copy of the press release, please refer to the Investor Relations Support section on the company's corporate website at www.centralpuerto.com. In addition, a replay of today's call will be available in upcoming days by accessing the webcast link at the same section of the Central Puerto website.
Slide presentation is accompanying today's webcast and will also be available on the investors section of the company's website www dot syndrome, with the Dot com Slash E N slash investors.
All participants will be in a listen only mode during the presentation.
After that there will be an opportunity for you to ask questions. Please.
Please note this event is being recorded.
If you do not have a copy of the press release, please refer to the Investor Relations support section on the company's corporate website at Www Dot Central Porto Dot com.
In addition, a replay of today's call will be available in upcoming days by assessing the webcast link at the same section of the central put it those website.
Before we proceed please be aware that all financial figures were prepared in accordance with I F. R S and where it converted from Argentine peso to U S dollars for comparison purposes only Dx.
Unknown Executive: Before we proceed, please be aware that all financial figures were prepared in accordance with IFRS and were converted from Argentine Pesos to U.S. Dollars, for comparisons purposes only. 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 is for the convenience of the reader only and you should not consider these translations to be representations that the Argentine Pesos amount actually represents this U.S. Dollars amount or could be converted into U.S.
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 four at the end of each period.
The information presented in U S dollars is for the convenience of the reader only and you should not consider this translation to be representation that the Argentine peso as the amount actually represents these U S dollars amount or could be converted into U S dollars at their rate.
Unknown Executive: Dollars at the rates indicated.
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Finally, it is worth noting that the financial statements for the first quarter ended on March 31st 2025 include the effects of the inflammation adjustment.
Unknown Executive: Finally, it is worth noting that the financial statements for the first quarter ended on March 31, 2025, include the effects of the inflammation adjustment.
Also please take into considerations that certain statements made by the company. During this conference call and answers to your questions May include forward looking statements, which are subject to risks and uncertainties that could cause actual results to be materially.
Unknown Executive: Also, please take into consideration that certain statements made by the company during this conference call and answer to your questions may include forward-looking statements which are subject to risks and uncertainties that could cause actual results to be materially different from the expectations contemplated by industry remarks. Thus, we refer you to the forward-looking statement sections of our earnings release and recent filings with the SEC. Central Puerto assumes no obligation to update forward-looking statements, except as required under applicable securities 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 rounded to simplify the discussion.
Different from the expectations contemplated by industry remarks.
We refer you to the forward looking statements sections of our earnings release and recent filings with the FCC.
Central Puerto 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 maybe round it to simplify the discussion.
Alejandro Diaz-Lopez: On the call today from Central Puerto is Fernando Bonnet, Chief Executive Officer, Enrique Terraneo, Chief Financial Officer, and Alejandro Diaz Lopez, Head of Corporate Finance and Investor Relations Officer. 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. Thank you for joining us today on a new session of earnings presentation, where we are going to discuss our financial results for the first quarter of 2025. As usually, I will begin the presentation by addressing shortly the main figures of the quarter, followed by a quick update of the regulatory framework and relevant news.
Fernando Bonnet: On the call today from Central Puerto is Fernando Bonnet, Chief Executive Officer, and <unk>, Chief Financial Officer, and now they find their ideas lepus head of head of corporate Finance and Investor Relations Officer.
Speaker Change: And now I will turn the call over to Alejandro the US office. Please Alejandro you may begin.
Alejandro: Thank you Barry match and good morning, everybody.
Alejandro: Thank you for joining us today on a new session earnings presentation, while we are going to this gas our financial results for the first quarter of 'twenty 'twenty five.
Alejandro: As usually I will begin the presentation by addressing a short the main figures of the quarter followed by a quick update of their or what other new framework and brought upon us.
Alejandro: Then I will show an overview of the Argentine electricity the industry moving afterwards to our operational and financial results.
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: Finally at the end of the presentation, we will be happy to address any question you may have.
Alejandro: Before going into EMR exhaustive analysis of our financial and operational results.
Alejandro Diaz-Lopez: Before going into a more excessive analysis of our financial and operational results, let me briefly review Central Puerto's main figures for the first quarter of 2025. The group's installed capacity remains at 6,703 megawatts and energy generation amounted to 5.7 terawatt hour during the first quarter of 2025, increasing 4% year over year. Regarding our financial results, it should be noted that 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 it results in dollars by converting them at the end of the period official exchange rate.
Alejandro: The breadth of reviews and our board does main figures for the first quarter <unk> 25.
Alejandro: The group's installed capacity will remain.
Alejandro: <unk> thousand 793 megawatts and energy generation amounted to buy 0.7 Terawatt hour during the first quarter of 'twenty 25, increasing 4% year over year.
Alejandro: Regarding our financial results. It should be noted that you choose in their alberto's accounting methodology, while items in peso must be adjusted for inflation to the end of the quarter local currency, while the company reports its results in dollars.
Alejandro: Converting them at the end of the period official exchange rate.
Alejandro Diaz-Lopez: I mean the so-called central bank. 1,500 exchange rate. This causes a non-cash impact that affects positively or negatively as appropriate our financial metrics and affects the comparability. Revenues for the first quarter of 2025 amounted to $196 million, increasing 31% year-over-year compared to the first quarter of 2024. while adjusted EVDA rose 8% year-over-year for the first quarter of 2025 to $90 million. Net income for the first three months of 2025 was positive in $18 million, raising 150% year over year. Finally, net debt as of March the 31st of 2025 amounted to $132 million, keeping almost constant vis-a-vis December of 2024, showcasing a net debt ratio to adjusted VTA of about 0.5%.
Alejandro: I mean, the so called Central Bank a.
Alejandro: Yes.
Alejandro: <unk> thousand by hand and exchange rate.
Alejandro: These causes and noncash impacts that affect positively or negatively as appropriate our financial metrics and affects the comparability.
Alejandro: Revenues for the first quarter of 2025 amounted to $196 million, increasing 31% year over year compared to the hardest quarter of 'twenty 'twenty four.
Alejandro: While our adjusted EBITDA rose, 8% year over year for the first quarter of 2020 by $219 million.
Alejandro: Net income for the first three months.
Alejandro: Month of 2025 was positive in $18 million rising 150% year over year.
Alejandro: Finally, net debt as of March 31st.
Alejandro: D 25 amounted to $132 million, keeping almost constant vis vis December of 'twenty, 'twenty, four showcasing and net debt.
Alejandro: Ratios to adjusted EBITDA of about syrup volume five time.
Speaker Change: Now, let's move to the mouse recent Craig will gradually updates and news.
Alejandro Diaz-Lopez: Now let's move to the most recent regulatory updates and news. During the first quarter of 2025, spot prices have been adjusted once a month, 4% in January and February and 1.5% in March. As of the date of this conference call for April and May, we have a cumulative increase of 3.5%. Regarding our investment project currently in execution, Brigadier Lopez keeps status. It is on a schedule moving at a good pace. Important milestones have been accomplished with regards to water intake, the electromechanical works, and the installation of the heat recovery steam generator. About San Carlos, let me tell you that after solving out some issues, the project is back on track.
Speaker Change: During the first quarter of 'twenty 'twenty five as spot prices have been adjusted once a month for bar scene in January and February and one 5% in March.
Speaker Change: As of the date of this conference call for April and May we have a cumulative increase of three 5%.
Speaker Change: Regarding our investment in project currently in execution rigor that'll office keeps its status. It is on a scalable moving at a good pace.
Speaker Change: Northam milestones have been accomplished with regards to what our intake electromechanical works and the installation of the heat recovery steam generator.
Speaker Change: About San Carlos Let me tell you that.
Speaker Change: After saw me now some issues there.
Speaker Change: The project is back on track.
Speaker Change: Expected C O D for bigger that lupus is the end of a 2025, while four San Carlos is the end of the third quarter of 2025.
Alejandro Diaz-Lopez: Expected COD for Brigadier Lopez is the end of 2025, while for San Carlos is the end of the third quarter of 2025.
Speaker Change: As you may recall in our last call. We commented our most recent acquisition in the mining sector, we increased our equity stake in <unk> from 4% to nine 9% as a result of the new share subscription agreement.
Alejandro Diaz-Lopez: As you may recall, in our last call, we commented on our most recent acquisition in the mining sector. We increased our equity stake in our field from 4% to 9.9% as a result of the new share subscription agreement. Continuing with news and regulatory updates, as you may know, the Secretary of Energy aims to deregulate the industry and normalize the wholesale market. We discussed in our last conference call the well-known Resolution 21 issue last January and the so-called lineamientos de camisa. As a result of Resolution 21, we see some interesting and possible opportunities in the management of alternative fuels, as well as with natural gas, though more marginal in this later case, given the existence of the plant .
Speaker Change: Okay.
Yeah.
Continuing with news and a regulatory update.
Speaker Change: As you May know the secretary of energy aims to deregulate the industry and normalize the wholesale market we.
Speaker Change: We discussed in our last conference call the well known resolution 21 issued last January and the so-called lithium in das They got Mesa.
Speaker Change: As a result of resolution 21, we see some interesting and possible opportunities in the management of our government the fuels as well as with natural gas do more marginal in these later case given the existence of the plan gas.
Speaker Change: We have been strongly working on these and of course, we will continue doing so.
Alejandro Diaz-Lopez: We have been strongly working on this, and of course, we will continue doing. With respect to delineamientos de CAMESA and the potential new regulatory framework, the Secretary of Energy continues working on this. We also anticipated in our last presentation the startage of On April the 22nd, CAMESA issued a note amending some terms and conditions, including the submission and awarding date. As we mentioned previously, we are carefully analyzing this project theme. We are interested in participating in this project.
Speaker Change: With respect to the linear Meehan Dornoch, I mean, Sam and the potential new regulatory framework. The secretary of energy continues working on these subjects.
Speaker Change: We also anticipated in our last presentation the storage auction.
Speaker Change: On April 22nd Cummins that issue and nodes amending some terms and conditions, including decimation in awarding dates.
Speaker Change: As we've mentioned previously we are carefully analyzing this project being we are interested in participating in this process.
Speaker Change: The last concluding remark concerning the industry.
Alejandro Diaz-Lopez: The last concluding remark concerning the industry. the Hydro Tender Pro. by means of Presidential Decree No. 263. A new extension for the process was set, 15 days. As we publicly commented in several opportunities, we will carefully analyze the terms and conditions of this process, since we are interested in operating hydro.
Speaker Change: The Hydra tender process by means of a presidential decree number 263.
Speaker Change: A new expansion for the process was set 15 days.
Speaker Change: As we've publicly commented in several opportunities we would carefully analyze the terms and conditions of these process seems we are interest in operating hydro assets.
Speaker Change: Yeah.
Alejandro Diaz-Lopez: Moving now to Central Puerto's corporate news and updates. Let me summarize some recent corporate organizations. on January the 1st. The merger of Vientos La Genoveva II and Manke, Los Olivos and CPR Energy Solutions. being Viento La Genoveva to the Absorbing Camp. Then on March the 31st, the Board of Directors approved our organization subject to approval by a shareholders meeting and the Argentine Securities and Exchange Commission whereby Central Puerto will absorb CEPE renovables assets and liabilities and also Central Puerto will spin part of the assets to be absorbed by ECOGAS in Brazil.
Speaker Change: Moving now to central part of corporate news and updates let me summarize some recent corporate reorganization.
Speaker Change: On January the first the.
Speaker Change: The merger of <unk>, among LASA leave us on Sept battery energy solutions being being done locking away about chewed up Sorrowing company.
Then on March 31st to.
Speaker Change: The board of directors approved our organization subject to approval by a shareholders' meeting and the Argentine Securities and Exchange Commission, whereby since our board adult will absorb say better than our wireless assets and liabilities and also central portal will spin off.
Speaker Change: Part of it assets to be absorbed by a glass in Brazil honest.
Speaker Change: Finally on March 31st the board of directors of in Brazil that are they sort of Indiana, but I thought our Indiana. It sounds, yes, allina and let me see honest.
Alejandro Diaz-Lopez: Finally, on March 31, the Board of Directors of Empresas Verdes Argentina, Forestal Argentina, Estancia Celina, and Las Misiones approved a corporate organization whereby, subject to approval by the shareholders' meetings of the involved companies, EVASA will absorb the assets and liabilities of all of the above-mentioned Now let's skip to the Argentine electricity market picture for this quarter that will be shown on slide eight and nine. By the end of the first quarter of 2025, the country's installed capacity reached 43,554 megawatts, which means a decrease of 1% or 319 megawatts compared to the 43,873 megawatts recorded as of March the 33rd of 2024.
Speaker Change: Approved a corporate reorganization whereby subject to approval by their shareholders meetings of the bulk companies.
Speaker Change: About that will absorb the assets and liabilities of all of the above mention company.
Speaker Change: Okay.
Speaker Change: Now, let's skip to the Argentine electricity market picture for this quarter that will be shown on slides eight and nine.
Speaker Change: By the end of the first quarter of 2025, the country's installed capacity will reach 43554 megawatts, which means a decrease of 1% or 319 megawatts.
Speaker Change: Compared to the 43873 megawatt regarded as of March the third part of 'twenty 'twenty four.
Alejandro Diaz-Lopez: The variation results from the installation of new power facilities, a reduction in installed capacity and adjustment and repowering to power plants already in operation. The contraction of 319 megawatts is decomposed as follows. A reduction of 1,195 megawatts in hydraulic sources, a reduction of 224 megawatts in thermal sources, being all partially offset by the addition of 637 megawatts of wind farms. Then the addition of 423 megawatts of solar plants where 205 megawatts were installed during the first quarter of 2025. The addition of 37 megawatts of biomass facilities all during the first quarter of 2025. And the addition of.
Speaker Change: They've already Asia results from the installation.
Speaker Change: Of new power facilities, a reduction in installed capacity would be an adjustment a repowering two power plants already in operations.
Speaker Change: The contraction of 319 megawatts is the composed as follows.
A reduction of 1195 megawatts in hydraulic sources.
Speaker Change: A reduction of 224 megawatts in thermal sources being or partially offset by the addition of 637 megawatts of wind farms.
Speaker Change: Of these 23 megawatts worrying now during the first quarter of 2025.
Speaker Change: Then the addition of 400 and.
Speaker Change: 23 megawatts of solar plans were 205 megawatt were installed during the first quarter of 2025.
Speaker Change: The addition of <unk>.
Speaker Change: 37 megawatts of biomass facilities.
Speaker Change: During the first quarter of 2025 and the evolution of.
Alejandro Diaz-Lopez: 4 megawatts of biogas power plant. It is worth to highlight that the decline of 1,195 megawatts in hydro installed capacity is basically explained by a assessment of Chacireta's power availability between Argentina and Paraguay. Since August of 2024, 50% of Yacyretas installed capacity is allocated to Argentina, whereas it used to be approximately 88% before. Electricity generation shrank 1% during the quarter on a year-over-year basis. The contraction was driven by nuclear and hydro generation. Nuclear generation decreased basically by the two year maintenance shutdown of Atucha-1, which started in November of 2024. Hydrogenerations rank due to a combination of facts.
Speaker Change: Four megawatt biogas our plan.
Speaker Change: It is worth to highlight that the decline of 1195 megawatts in high joins talk capacity is basically explained by your assessment of chassis to advanced power availability between Argentina and Paraguay.
Speaker Change: Since August of 'twenty 'twenty, 450% of just eat at that installed capacity is allocated to Argentine now, whereas it used to be approximately 88% before them.
Okay.
Speaker Change: Electricity generation of Frank 1% during the quarter on a year over year basis. The contraction was driven by a nuclear and hydro generation.
Speaker Change: Nuclear generation decrees basically by the two year maintenance shut down too.
Speaker Change: Two channel, one which started in November of 'twenty 'twenty four.
Speaker Change: Zero generation frame due to a combination of factors.
Alejandro Diaz-Lopez: First, the aforementioned change in the allocation of shazirataz installed capacity and energy generation upon Paraguay's claim and a reduction of river flows. Renewable and thermal generation rose 10% and 9% respectively. The growth in thermal generation led to a rise of 9% in natural gas consumption. alternative fuels consumption was significantly low. Focusing now on the demand, as you can see, electricity demand rose one percent during the first three months of 2025, vis-a-vis the same period of 2024. There was a slight contraction in residential consumption that was totally upset by commercial and mayor demand. Big industrial user consumption rose during the whole quarter, reflecting stronger economic activity levels.
Speaker Change: First the aforementioned change in the allocation of shares ebitdas in selling capacity and energy generation. Our bonds are wise claim and a reduction of rigler flows.
Speaker Change: Renewable and thermal generation rose, 10% and 9% respectively. The growth in thermal generation led to a rise of 9% in natural gas consumption.
Speaker Change: Alternative fuels can Samsung was significantly lower.
Speaker Change: Focusing now on the demand as you can see electricity demand rose 1% during the first three months of 2025 P series.
Speaker Change: The same period of 2024.
Speaker Change: There was a slight contraction universities Ashok on the Samsung that was totally upset by commercial unmet demand big.
Big industrial user Samsung rose during the whole quarter, reflecting stronger economic activity levels. It was especially a remarkable four mining trade on the services of some of the for them beverage.
Alejandro Diaz-Lopez: It was especially remarkable for mining, trade and services, automotive and food and beverage. Finally, the electricity trade balance resulted in a net import situation during the whole quarter, with a peak in February.
Speaker Change: Finally, the electricity trade volumes resulted in a net importer situation during the whole quarter with the peak in February.
Speaker Change: We now go to slide 10.
Alejandro Diaz-Lopez: We now go to slide 10. to our key operating indicators for the poor. We can see that electricity generated by Central Puerto rose 4% to 5,731 gigawatt hour compared to 5,520 gigawatt hour during the first quarter of 2024. Hydro energy generation from Piedra del Aguirre dropped 2%, reaching 793 gigawatt hour from 807 gigawatt hour in the first quarter of 2024. This decline was primarily due to a reduction in river flows, 27 percent in the Cochoncura River and 25 percent in the Limay River. These resulting in lower availability of water for generation. Wind generation rose 3%, reaching 373 gigawatt hours during the first quarter of 2025, compared to 358 gigawatt hours during the same period of 2024.
Speaker Change: To our key operating indicators for the quarter.
Speaker Change: We can see that electricity generated by since our part a rose 4% to 5731 gigawatt hours compared to 5500 and trainee gigawatt hour during the first quarter of two indeed 24.
Speaker Change: Hydro energy generation from <unk> to allow you to drop 2% reaching.
Speaker Change: 793 gigawatt hour from 807 gigawatt hour in the first quarter of two indeed 24.
Speaker Change: This decline was primarily due to a reduction in derivative flows 27% in the question got a river and 25% in the Lima rebirth.
Speaker Change: These resulting in lower availability of water for generation.
Speaker Change: [noise] wind generation rose.
Speaker Change: 3%, reaching 373 gigawatt hour during the first quarter of 2020 by compared to 358 gigawatt hour during the same period of 2024.
Speaker Change: These increments was mainly due to higher generation from <unk> like I said, China, one <unk> two wind farms as a consequence of better operational performance.
Alejandro Diaz-Lopez: This increment was mainly due to higher generation from Achiras, La Castellana 1 and La Castellana 2 wind farms as a consequence of better operation performance. We should recall that during the same period of 2024, these facilities were either out of service or with reduced operation because of some maintenance works and failure. On the other hand, solar energy generation reached 78 gigawatt hour during the first quarter of 2025, compared to 82 gigawatt hour in the same period of 2024. basically as a result of some restriction in the know of injection and also weather conditions. Finally, thermal generation increased 5% during the first three months of 2025 compared to the same period of previous year.
Speaker Change: Was it recall that during the same period of 'twenty to indeed for these facilities were either out of service or reduce operation because of some maintenance works compilers.
Speaker Change: On the other hand solar energy generation reached 78 gigawatt hour during the first quarter of 'twenty 25, compared to 82 gigawatt hour in the same period up to indeed for.
Speaker Change: Basically as a result of some restriction in the now of injection and also weather conditions.
Speaker Change: Finally, a thorough margin innovation increased 5% during the first.
Speaker Change: Three months after indeed, when the five compared to the same period of previous year.
Speaker Change: Reaching 4000 or handed and 87 Gigawatts hour from 4272 gigawatt hour.
Alejandro Diaz-Lopez: reaching 4,487 gigawatt hour from 4,272 gigawatt hour. The growth was mainly due to higher dispatch. some steam turbines in Puerto and Costanera sites and some steam and gas turbines in Lujan de Cuyo as well as higher generation registered in the combined cycle of Santa Fe.
Speaker Change: The growth was mainly due to higher this switch.
Speaker Change: Some steam turbines in war torn castaneda sides, and some steam and gas turbines, England, the closure as well as higher generation reducer in the combined cycle of Santa Fe.
Alejandro Diaz-Lopez: To a lesser extent, a higher availability was recorded in the Buenos Aires Combined Cycle and a higher dispatch was registered for the Mitsubishi Combined Cycle, both located in the Costa Now let's move to our revenues breakdown. As you can see on slide 11, this amounted to $196 million in the quarter, as compared to $150 million in the same period of 2024. The variation in revenues is a consequence mainly of. A $36 million increase in spot market revenues driven by A cash effect on the gap between currency devaluation and spot remuneration increases. Higher formal generation, mainly in some turbines located in Lujan de Cuyo, Puerto and Costanera sites.
Speaker Change: Or does it extend a higher availability was regarded in the water side as combined cycle and a higher this stretch was registered for the Mitsubishi combined cycle, both located in the <unk> side.
Speaker Change: Now, let's move to our revenues breakdown.
As you can see on slide 11, these amounted to $196 million in the quarter as compared to $150 million in the same period of 2024.
Speaker Change: The variation in revenues is a consequence, mainly off.
At $36 million increase in spot market revenues driven by <unk>.
Speaker Change: A cash effect on the gap between currency devaluation on our spot from one in Asia and increases.
Speaker Change: Hired a thermal generation mainly in some to Ryan's located in La and of course your board Don Carson at our sites.
Alejandro Diaz-Lopez: and a non-cash effect on the gap between currency devaluation and inflation. also a $5 million increase in sales under contract driven by higher energy sales of San Lorenzo cogeneration plant and higher wind generation of Achiras, La Castellana 1 and 2.
Speaker Change: And then on cash effect on the gap between currency devaluation and inflation.
Speaker Change: Also a $5 million an increase in sales under contract driven by higher energy sales of San Lorenzo Cogeneration plant.
Speaker Change: Wind generation of Adidas, and I got the San Juan and to.
Alejandro Diaz-Lopez: Finally, it was also important a non-cash effect on the gap between currency devaluation and On slide 12, we can see the dynamic of our adjusted EVDA. During the first quarter of 2025, the group's adjusted EBITDA amounted to $90 million, rising 8% or $6 million when compared to the first quarter of 2024. 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. A $27 million increase in cost of sales explained basically by higher maintenance expenses and consumption of materials.
Speaker Change: Finally, it was also important in noncash effects on the gap between currency devaluation and inflation.
Speaker Change: On slide 12, we can see the dynamic of our adjusted EBITDA.
Speaker Change: During the first quarter of 2025, the group's adjusted EBITDA amounted to $19 million, rising, 8% or $6 million when compared to the first quarter of 'twenty 'twenty four.
Speaker Change: When analyzing the adjusted EBITDA, we can observe that the variation is mainly explained by.
The previously stated higher aggregate sales driven by a spot sales and sales under contract.
Speaker Change: The $7 million increase.
Speaker Change: In our cost of sales explained basically by higher maintenance expenses and consumption of materials.
Alejandro Diaz-Lopez: due to higher dispatch. higher operating costs, mostly related to the real appreciation of the Argentine peso and a non-cash effect on the gap between currency devaluation and inflation. SG&A rose $5 million, mainly by the real appreciation of the Argentine peso. Similar to production costs, SG&A were also negatively impacted by a non-cash effect on the gap between currency devaluation and inflation. Finally, there was a negative impact of $8 million in other operating results net, basically as a consequence of lower interest from clients due to lower commission delays and and negative non-cash effect on the gap between currency devaluation and inflation.
Speaker Change: Due to higher dispatch.
Speaker Change: Higher operating costs, mostly related to the real appreciation of the Argentine peso and a noncash effect on the gap between currency devaluation and inflation.
Speaker Change: SG&A rose $5 million, mainly by the real appreciation of the Argentine peso.
Speaker Change: Similar to production cost S E N E, where all of a sudden negatively impacted by a noncash effect when the gap between currency devaluation and inflation.
Speaker Change: Finally, there was a negative impact of $8 million in other operating results net basically as a consequence of lower interest from clients due to lower companies have delays and.
Speaker Change: And negative noncash effect on the gap between currency devaluation and inflation.
Speaker Change: Moving to the next slide the consolidated net income.
Alejandro Diaz-Lopez: Moving to the next slide, the consolidating net income. During the first quarter of 2025, Central Puerto's net income amounted to a gain of $18 million. This is basically the result of. that previously explained adjusted VTA dynamics. and the Net Financial Results. which were driven by lower foreign exchange differences on financial liabilities, lower interest on loans. higher share of the profit of associates, higher holding results on financial assets. These effects were partially offset by a non-cash effect, driven by lower FX difference due to lower FX variation, lower variation in biological assets, and result driven by the change in the purchasing power.
Speaker Change: During the first quarter of 2025 and that our board does net income amounted to a gain of $18 million.
Speaker Change: This is basically the result of that.
Speaker Change: <unk> previously explained adjusted EBITDA dynamic.
Speaker Change: And the net financial results.
Speaker Change: Which were driven by lower foreign exchange differences on financial liabilities.
Speaker Change: Lower interest on loans.
Speaker Change: Higher share of profit of associate higher holding results on financial assets.
Speaker Change: These effects were partially upset by a noncash effect driven by lower FX difference usual lower FX variation.
Lower variation in biological assets and result, driven by the change in depreciation power of the currency.
Speaker Change: Yeah.
Speaker Change: Lastly on slide 14, we have the cash flow dynamics during the first three months of 2025.
Alejandro Diaz-Lopez: Lastly, on slide 14, we have the cash flow dynamic during the first three months of 2025. Net cash provided by operating activities was $44 million. This cash flow arises mainly from $106 million of net income for the period before income tax, properly adjusted to reconcile with net cash flows. $4 million in collection of interest from clients and $3 million in insurance recovery. These cash flows were partially offset by $18 million in working capital variations and $1 million in income tax and other taxes. then the net cash used by investing activities was $60 million. This amount is mainly explained by $44 million in acquisitions of property, plants and equipment and inventory and $27 million in acquisition of other financial assets.
Speaker Change: Net cash provided by operating activities was $44 million.
Speaker Change: These cash flow arises mainly from $106 million of net income for the period before income tax appropriately adjusted to reconcile with net cash flows.
Speaker Change: $4 million in collection of interest from clients.
Speaker Change: And a $3 million in insurance recoveries.
Speaker Change: Cash flows were partially offset by $18 million in working capital variations.
Speaker Change: And a $1 million in income tax and a lot of taxes payments.
Speaker Change: Then the net cash used by investing activities was $60 million.
Speaker Change: This amount is mainly explained by $44 million in acquisitions of property plant and equipment and inventory.
Speaker Change: And $27 million in acquisition of other financial assets.
Alejandro Diaz-Lopez: being all partially upset by $11 million in dividends collected. Finally, we have the net cash provided by financing activities that was $6 million. This is basically the result of $8 million in long term debt repayment. $6 million in interest and other long-term debt costs paid, being all partial offset by $20 million in banks and investment accounts overdrafts received next. Consequently, our cash position as of March the 31st of 2025 amounted to $6 million. If financial assets are included, our total current liquidity amounts to $250 million.
Speaker Change: Being all partially offset by $11 million in dividends collections.
Speaker Change: Finally, we have the net cash provided by financing activities was $6 million.
Speaker Change: This is basically the result of $8 million in long term debt repayments.
Speaker Change: $6 million in interest and other long term debt cost pay bean or partially offset by $20 million in banks and investment accounts our drops received net.
Speaker Change: Consequently, our cash position as of March 31st of 2025 amounted to $6 million.
Speaker Change: <unk> financial assets are included our total current liquidity amounts to chew handed them $50 million.
Speaker Change: With this I conclude the presentation.
Alejandro Diaz-Lopez: With this, I conclude the presentation. Now we invite you to ask any question to our team. Thank you very much for your attention.
Speaker Change: Now we vote you to ask any questions to our team.
Speaker Change: You very much for your attention.
Speaker Change: Thank you very much for the presentation. We will now begin the Q&A section for investors and analysts if you wish to ask a question. Please press the button reaction and then click on raise hand.
Unknown Executive: Thank you very much for the presentation.
Unknown Executive: We will now begin the Q&A section for investors and analysts. If you wish to ask a question, please press the button Reaction and then click on Raise Hand. If your question has already been answered, you can leave the queue by clicking on put your hand down. Please hold while we poll for questions.
Speaker Change: If your question has already been answered you can leave the Q by clicking on put your handout.
Speaker Change: Please hold while we poll for questions.
Speaker Change: Our first question comes from marketing and such with balanced capital.
Martin Arancet: Our first question comes from Martin Arancet with Balance Capital. Hi. Well, thank you for the presentation as always. I have three questions. I would like to run them one by one, if that's okay.
Speaker Change: Hi.
Speaker Change: Thank you for the presentation as always.
Speaker Change: I have three.
Speaker Change: Two questions I would like to run them one by one if that's okay.
Speaker Change: My first question is regarding the possible hydro auction that is coming soon.
Martin Arancet: My first question is regarding the possible hydro auction that is coming soon. I don't know if the Secretaría de Energía or CAMESA disclosed the possible pricing conditions or if you have any guesses on pricing. Because on one hand, we understand that the government wants to be as as free as possible in terms of a free market. But at the same time, hydro, low pricing is what is keeping Well, it's pushing down tariffs for regulated consumers. So I think that there is a trade-off there that I don't know how the government is going to tackle that.
Speaker Change: I don't know if.
Speaker Change: The cigarette that he had up here.
Speaker Change: So I'll disclose.
Speaker Change: The possible pricing conditions or if you have any guesses.
Speaker Change: All on pricing because on one hand, we understand that the government wants to be us.
Speaker Change: As free as possible in terms of our fruit market.
Speaker Change: At the same time hydro.
Speaker Change: Low pricing is what is keeping.
Speaker Change: Yeah.
Speaker Change: Well at least pushing down tariffs or for regulated consumer. So I think that there is a trade off there, but I don't know how the government is going to tackle that.
Speaker Change: Yeah.
Martin Arancet: And also, regarding the same subject, we have seen other companies interested in participating in the auction. I don't know if you expect a lot of competition. Thanks. Okay, this is the first one.
Speaker Change: And also regarding the same subject we have seen other companies in.
Speaker Change: Interested in participating in the auction I don't know if you.
Speaker Change: If you expect a lot of competition.
Speaker Change: Thanks.
Speaker Change: Okay. This is the first one thank you mark.
Alejandro Diaz-Lopez: Thank you, Martin, for your interest and your questions. Yes, as you mentioned, in terms of pricing, we don't have a confirmation about the pricing yet because it's not that the auction is being delayed or the process is being delayed. The government wants to agree some scheme with the two provinces where the hydros are placed and the process is being delayed a few days. I don't know when they are planning to make public the conditions of the auctions. But as you mentioned, we hear the same point that you see, which is if they increase the price, the actual price of the remuneration, of course, it will impact on the tariff at the end.
Speaker Change: Thanks for your interest and your questions. Yes, as you mentioned in terms of pricing, we don't have a confirmation about.
Speaker Change: Pricing because it's not that the auction has been delayed.
Speaker Change: The process.
Speaker Change: Processes being delayed the government want to.
Speaker Change: Some scheme with the two provinces.
Speaker Change: With the heightened sort of places.
Speaker Change: The process has been delayed.
Speaker Change: A few days I don't know when Wendy.
Speaker Change: Do.
Speaker Change: To be made probably the conditions of the auction but.
Speaker Change: As you mentioned.
Speaker Change: We hear this thing.
Speaker Change: Boeing.
Speaker Change: Youll see we choose.
Speaker Change: If they increase the price the actual Brian.
Speaker Change: The remuneration of course with impact.
Speaker Change: <unk> and <unk>.
Alejandro Diaz-Lopez: And on the other hand, they want to go to a free market sooner or later. So the thing that we hear is they're planning to establish a pricing similar More or less, that we have right now, but in a transition scheme in which we can sell some portion of the generation to a private, in a private contract, starting with the 5% of the generation of the hydros, and then going to I think 5% each or 10% additionally each two years and then reach 50% and so on. So they are thinking in that mix between a fixed price, similar or in there, perhaps a little bit higher than that we have right now, but then a transition to a private contract scheme increasing a percentage every two years to reach perhaps 100% of the 10 years after.
Speaker Change: The other hand, they want to go to a free market sooner or later so.
Speaker Change: The thing that we hear about is they're planning to establish as pricing similar.
Speaker Change: More or less.
Speaker Change: We have right now, but in a transition as gaming, which we can sell some portion of the of the.
Speaker Change: Generation two private in the Brexit concerns.
Speaker Change: Our team with a 5% of the generation of the hybrids and then going to.
Speaker Change: I see.
Speaker Change: Five person each or 10%. Additionally, each two years and then reach.
Speaker Change: 50%.
Speaker Change: And so on so they are thinking that mix between.
Speaker Change: Our fixed price similar or is there, perhaps a little bit higher than that we have right now, but then <unk>.
Speaker Change: Transitions with Brian withdrawn drugs.
Speaker Change: Schemes, increasing burden days.
Speaker Change: Two years to reach.
Speaker Change: 100% year sector. So that is the idea.
Martin Arancet: So that is the idea that they are thinking on, but it's not public yet. So it's only things that we heard. Oh, okay. Thanks.
Speaker Change: But it's not public yet so.
Speaker Change: Being said we sure.
Speaker Change: Okay. Thanks, just a follow up on that.
Alejandro Diaz-Lopez: I just a follow up on that. I probably A point to be careful there is the guarantees, right? I don't know if have you been talking about possible guarantees that this 5% is going to increase globally and that is going to be respected or something like that. Yeah, we don't talk about that. Guarantees, they are thinking to establish that in the... in the auction. But they are not talking about any additional guarantee. That is something that we need to consider at the moment of setting prices.
Speaker Change: Probably.
Speaker Change: They point to to be careful there is the time all the time.
Speaker Change: Guarantees right I don't know.
Speaker Change: Have you been talking about possible guarantees.
Speaker Change: This 5% is going to increase scale that.
Speaker Change: That is going to be respected or something to that.
Speaker Change: We don't talk about that guarantees they are thinking to establish.
Speaker Change: Yeah.
Speaker Change: In the in the auction.
Speaker Change: But Dr will not they are not talking about any additional R&D. Okay that is something that we need to consider at the moment.
Speaker Change: Yeah, Yeah sure.
Alejandro Diaz-Lopez: Just the last point, regarding competition, I don't know if you are seeing a lot of interest in the auction. For sure, the hydros are very efficient equipment. Also, you need to have some experience to operate it. So I think that the people with experience, the ones that have the concession, or even had another hydros being operating here, of course, will be possible competition. We hear from another. guarantees or certainties. But for sure, the locals, the big locals, we're going to see the auction and perhaps have some interest in participating. Yes. Okay, thank you.
Sorry, just the last point.
Speaker Change: Competition I don't know CJR CNI was of interest in in the auction.
Speaker Change: For sure the hydro's very efficient equip men also they have a need to have some experience to operate it. So I think the people with experience at ones that have the concession or even kind of northern hired hydro's being operating here of course would be boswell competition.
Speaker Change: We're here for another.
Speaker Change: Generates a big generators in Argentina.
Speaker Change: Im going to see.
For now we are not here any external or foreign companies, but depending on the conditions you know.
Speaker Change: One point that you mentioned is <unk> no.
Speaker Change: Internationally the company's needs.
Speaker Change: Yes.
Speaker Change: <unk>.
Speaker Change: Guarantees are certainties.
Speaker Change: For sure the logos the big logos.
Speaker Change: To see the ocean.
Speaker Change: Perhaps an interest in participating.
Speaker Change: Okay, well, thank you very much.
Martin Arancet: Then my second question, I'm sorry, if you already mentioned this, but I was wondering if you could give us some additional color on why did we see lower availability in Brillo Lopez in the first quarter? If you expect this to continue this year, or it should be solved? Or if it's something related to the construction of the closed cycle? No, no, no, it was not related to the construction. We have a big maintenance. We want the gas turbine to be ready for the combined cycle. And we made a big maintenance there. So we have, I don't remember exactly the dates, but more than 40 days in maintenance.
Speaker Change: Second question I'm, sorry, if you already met.
On this but I was wondering if you could give us some additional color or what.
Speaker Change: Why did we see a lower reliability lupus in the first quarter.
Speaker Change: If you expect these to continue this year or it should be solid or something related to the construction of the closed cycle.
Speaker Change: No no no. It was not related vehicles thresholds. Then we are look we have a big maintainer.
Speaker Change: We want to divest to buy and be ready for the combined cycle.
Speaker Change: And we may even be maintained in there. So we have I don't remember exactly the days with more than 40 days.
Speaker Change: And maintain them.
Speaker Change: And we have that.
Alejandro Diaz-Lopez: And we have that done. So we don't expect additional work.
Speaker Change: So we don't expect that the additional.
Alejandro Diaz-Lopez: Thank you. perhaps an availability from Brigada de Lopez and we expect that entering a combined cycle at the end of the year with full dispatch and full speed so we don't see additional maintenance coming in the next years for Brigada de Lopez.
Speaker Change: Sure.
Speaker Change: It helps.
Speaker Change: And availability from from <unk>, we expect that.
Speaker Change: Answering the combined cycle at the end of the year with who.
Speaker Change: These <unk>. So we don't see additional maintain is coming in the next years for the other Lucas.
Martin Arancet: Okay, thanks.
Speaker Change: Great. Thanks, and my last question, then regardless of the liberalization of the market.
Martin Arancet: And my last question then regarding the utilization of the market. I was wondering what do you think or what is your point of view regarding the schedule, if you think that it is possible to have this fully implemented by year end, or if you think that that is probably too optimistic. And since it's a big change, I think that, well, it could have some, it could present some issues at the time of implementation. We think that they're going to move forward in stages, like not everything at the same time. So we are, as Alejandro mentioned, we are seeing some deregulation in terms of fuel, especially liquid fuels that we can acquire and we can buy by ourselves.
Speaker Change: Yes.
Speaker Change: I was wondering what what do you think or what is your point of view regarding the schedule. If you think that it is possible to have this fully implemented by year end.
Speaker Change: Or if you think that that is probably too optimistic on San Jose a civic changed anything that well equal to carve some percent.
Speaker Change: Some issues at the time of implementation.
Speaker Change: We think that they're going to move forward in these days.
Like not everything at the same time, so we are a.
Speaker Change: As <unk> mentioned, we are seeing some deregulation in terms of fuel, especially liquid fuels.
Speaker Change: We can.
Speaker Change: Acquire and we can be.
Bye bye, everyone sales and companies like even the space there for us.
Alejandro Diaz-Lopez: And CAMESA is giving space there for us. In terms of natural gas, which is the main fuel that we use, we need to wait. And for the full liberalization there, we need to wait until the ending of the plant gas, because CAMESA, with the plant gas contracts until 2028, are the main buyers. So there is small room for us to buy when they have that contract. And they require a reduction in that price to buy if we want to buy. And you only have spot volumes, you know, so it's not easy for us to start moving forward there.
Speaker Change: In terms of natural gas, which is the main fuel that we use.
Speaker Change: We need to wait for the full liberalization there we need to wait until the end of the plan gas because companies with the blend gas contracts until 2028 out of the main by year. So it's small.
Speaker Change: Room for us to buy when they have that contract.
Speaker Change: And there would require a reduction in net price to buy.
Speaker Change: If we want to buy.
Speaker Change: Only half of spot volumes you know so.
Speaker Change: No D C.
Speaker Change: <unk> two to start moving forward then so if you don't have a liberalization of the absolutely us is difficult to be regulate all day.
Alejandro Diaz-Lopez: So if you don't have a liberalization of the natural gas, it's difficult to deregulate all the... the legacy market, you know, if we cannot buy the gas, it's very difficult to sign a contract for the legacy equipment, you know. But on the other hand, they are willing to move forward, as I mentioned, in liquid fuels, give some space for perhaps a new capacity that we can sign contracts directly with the demand. We are seeing some additional, moving forward, some signers moving forward to contract with the with the distribution companies in all related to this new option of batteries, you know that they're willing to set contracts between generators and distribution companies.
Speaker Change: You know the.
Speaker Change: The legacy market do you know if we cannot buy the gas.
Speaker Change: It's very difficult to sign a contract.
Speaker Change: Therefore, the legacy equipment.
Speaker Change: But in the other candidate and are willing to move forward.
Speaker Change: And in liquid fuels deep solid space for perhaps a new capacity that we can sign contracts directly.
Speaker Change: With the demand.
Speaker Change: We are seeing some.
Speaker Change: Additional moving for some sign as to moving forward to contract with the.
Speaker Change: With the distribution companies in all related to these new option of.
Speaker Change: Of batteries, you know that they're willing to set contracts between generates or some infusion company. So that is a good good signs to move forward, but we are not seeing perhaps.
Alejandro Diaz-Lopez: So that is a good sign to move forward. But we are not seeing perhaps a completely turnover in the free market at once. We are seeing some improvements and some deregulation, perhaps schemes, but not in one shot.
Speaker Change: A completely turnover.
Speaker Change: In the free market.
Speaker Change: The ones, we are seeing some improvements in some of the regulation.
Speaker Change: Okay.
Speaker Change: Schemes, but not in the one one shot.
Martin Arancet: Okay, very clear.
Speaker Change: Okay very clear.
Martin Arancet: Well, I have one additional question, but I don't want to catch all your attention. So I will wait until the end of the call if anyone else wants to make a question.
Speaker Change: When I answered my question, but I don't want to to catch hold irritation. So I will wait until the end of the call if anyone else wants to make a question.
Unknown Executive: Okay, thanks.
Speaker Change: Hey.
Speaker Change: Thanks.
Speaker Change: Yeah.
Speaker Change: Please hold while we poll for questions. Once again, if you have a question. Please press the button reaction and then click on race hand.
Unknown Executive: Please hold while we poll for questions. Once again, if you have a question, please press the button Reaction, and then click on Raise Hand.
Unknown Executive: Please hold while we poll for questions.
Speaker Change: Please hold while we poll for questions.
Speaker Change: Okay normal with your modeling you can answer your last one.
Martin Arancet: Okay, if there are no more questions, Martin, you can answer your last one. So, yes, thank you. Just last one question regarding your projects. I mean, you are moving forward with Ricardo Lopez, San Carlos. and I understand that you have intention to participate well if we have a new formal auction, the battery auction and also the hydro auction, but I guess that all of them are somehow are centered. We don't know the pricing yet and the conditions and if you're going to get awarded and everything. So I was wondering if you are targeting possibly other projects beyond those and probably this year.
Sorry, yes. Thank you just a last one question regarding your projects.
Speaker Change: You are moving forward with regard to a low base.
Speaker Change: San Carlos.
Speaker Change: And I understand that your cabbie attention to participate well, if we carve and youll firm at auction.
Speaker Change: The battery auction and also the hydro auction, but I guess that all of them are.
Speaker Change: Shall cows are Samsung and.
Speaker Change: We are now.
Speaker Change: The pricing yet other conditions on if youre going to get awarded on everything. So I was wondering if your target team, possibly other projects beyond dose.
Speaker Change: Probably this year.
Alejandro Diaz-Lopez: As you mentioned, the ones that you mentioned are the most important ones for us, so those are the most important, but also we are developing some wind farms in Vallablanca City. the starting of the construction of that project is the end of the year or perhaps the beginning of the next one but for for this year we the ones that you mentioned are the bigger ones we're also looking for opportunities in in solar and wind but nothing certainly yet, so the ones that you mentioned are the bigger ones, the most relevant.
Speaker Change: As we mentioned that we are.
Speaker Change: The one that you mentioned are the most important one for us so.
Speaker Change: The most important but also we are developing some.
Speaker Change: The wind farm.
Speaker Change: In the <unk>.
Speaker Change: We have this.
Speaker Change: The starting of the construction of that project.
Speaker Change: The end of the year or perhaps the beginning of the next one but for this year.
Speaker Change: The ones that you mentioned.
Speaker Change: We're also looking for opportunities.
Speaker Change: In solar and wind.
Speaker Change: But nothing certainly so the ones that you mentioned that there maybe other ones yet you're most worried about.
Speaker Change: Okay. That's helpful. Thank you very much.
Martin Arancet: Okay, that's all.
Unknown Executive: Thank you very much.
Unknown Executive: Thank you.
Speaker Change: Thank you.
Speaker Change: Okay.
Speaker Change: This concludes the question and answer session I would like to turn the conference back over to Mr. Fernando <unk> for any closing remarks.
Fernando Bonnet: This concludes the question and answer session.
Unknown Executive: I would like to turn the conference back over to Mr. Fernando Bonnet for any closing remarks. 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.
Speaker Change: Thank you to everyone for your interest in Central report.
Speaker Change: We encourage you to call us for any information that you may need to have a great day.
Speaker Change: Send that I'll put it this conference call is now closed.
Central Puerto's conference call is now closed. Goodbye.
Speaker Change: Goodbye.