Q2 2026 Central Puerto SA Earnings Call
[Company Representative] (Central Puerto): On the investment side, capital expenditures for H1 2026 totaled $421.9 million. This included $245.0 million for the Piedra del Águila concession, $50.0 million for the acquisition of the oil and gas blocks, $106.0 million for our battery storage projects, and $20.9 million in maintenance and other capital expenditures. Net financial leverage stood at 1.2x adjusted EBITDA, with net financial debt of $493.4 million and last 12-month adjusted EBITDA of $403.8 million. Funny collections from CAMMESA were $16.0 million in the quarter, and outstanding credit was $104.8 million. On the financing front, in April, we issued our Class B notes for $130.1 million at a 6% rate. In July, after quarter end, we issued our Class E notes for $94.3 million at a 5.5% rate. We also continued strengthening our commercial position.
Speaker #1: On the investment side, capital expenditures for the first half of 2026 totaled 421.9 million dollars, this included 245.0 million dollars for the Piedra del Águila concession, 50.0 million dollars for the acquisition of the oil and gas blocks, 106.0 million dollars for our battery storage projects, and 20.9 million dollars in maintenance and other capital expenditures.
Speaker #1: Net financial leverage stood at 1.2 times adjusted EBITDA, with net financial debt of $493.4 million and last 12 months adjusted EBITDA of $403.8 million.
Speaker #1: Phoney collections from CAMESA were $16.0 million in the quarter, and outstanding credit was $104.8 million. On the financing front, in April we issued our Class D notes for $130.1 million at a 6% rate.
Speaker #1: In July, after quarter-end, we issued our Class E notes for $94.3 million at a 5.5% rate. We also continued strengthening our commercial position: our average market share in the Resolution 400 Term Market, or MAT, reached more than 35% in the second quarter.
[Company Representative] (Central Puerto): Our average market share in the Resolution 400 Term Market, or MAT, reached more than 35% in Q2. We now serve more than 120 large industrial customers, plus 16 distribution and sub-distribution companies. All together, contracted sales combining PPAs, MAT, and MATER represented 55% of our total sales volumes and 48% of our total revenues, including hydro sales under the terms of the concession. On our growth project, our battery storage system projects are on schedule. Construction is 69% complete at Nuevo Puerto and 54% complete at Central Costanera, with major equipment delivered or in transit and installation progressing on schedule. We expect the projects to be energized between October and November, with commercial operation in Q4 of this year. Once operational, we expect these projects to contribute between $25 and $27 million to the adjusted EBITDA in 2027.
Speaker #1: We now serve more than 120 large industrial customers, plus 16 companies. Altogether, contracted sales—combining PPAs, MAT, and MATR—represented 55% of our total sales volumes and 48% of our total revenues, including hydro sales under the terms of the concession.
Speaker #1: On our growth projects, our battery storage system projects are on schedule: construction is 69% complete at Nuevo Puerto and 54% complete at Central Costanera.
Speaker #1: With major equipment delivered or in transit, and installation progressing on schedule, we expect the projects to be energized between October and November, with commercial operation in the fourth quarter of this year.
Speaker #1: Once operational, we expect these projects to contribute between $25 and $27 million to the adjusted EBITDA in 2027. In April, we closed the acquisition of the oil and gas blocks. For now, we are maintaining technical due diligence prior to the CENTRAL.
[Company Representative] (Central Puerto): In April, we closed the acquisition of the oil and gas blocks. For now, we are maintaining technical due diligence previous to the CENG. Let's move to slide 4 for more detail on generation and our commercial development. In Q2, total energy offered into the Argentine grid was 36,724 gigawatt hours, made up of 34,954 gigawatt hours of local generation, plus approximately 1,770 gigawatt hours of imports. Central Puerto held more than 35% of the Resolution 400 term market share in Q2. Looking at the monthly trend, our share increased significantly through the quarter, reaching 35% in June, reflecting the continued progress of our commercial contracting efforts. Turning to slide 5, let's look at revenues in more detail. Revenues were $453.3 million, up 82.3% quarter on quarter and 165.8% year on year. Two things drove that growth.
Speaker #2: Let's move to slide 4 for more detail on generation and our commercial development. In the second quarter, total energy offered into the Argentine grid was 36,724 gigawatt-hours, made up of 34,954 gigawatt-hours of local generation, plus approximately 1,770 gigawatt-hours of imports.
Speaker #2: Central Puerto held more than 35% of the Resolution 400 term market share in the second quarter. Looking at the monthly trend, our share increased significantly through the quarter, reaching 35% in June, reflecting the continued progress of our commercial contracting efforts.
Speaker #2: Turning to slide 5, let's look at revenues in more detail. Revenues were $453.3 million, up 82.3% quarter on quarter, and 165.8% year on year.
Speaker #2: Two things drove that growth. First, contracted sales increased, primarily due to a full quarter of revenues from the Briazier López plant under its power purchase agreement; higher contracted energy and capacity sales in the term market from Central Puerto, Central Costanera, Piedra del Águila, and Luján de Cuyo; and the reclassification of Piedra del Águila's hydro sales as contracted sales beginning in 2026, reflecting the pricing mechanism established under Article 9 of the concession terms.
[Company Representative] (Central Puerto): First, contracted sales increased, primarily due to a full quarter of revenues from the Brigadier Lopez plant under its power purchase agreement. Higher contracted energy and capacity sales in the term market from Central Puerto, Central Costanera, Piedra del Águila, and Luján de Cuyo, and the reclassification of Piedra del Águila's hydro sales as contracted sales beginning in 2026, reflecting the pricing mechanism established under Article 9 of the concession terms. Second, spot sales increased due to higher capacity revenues resulting from seasonal capacity remuneration parameters applicable during the winter months, as well as the fuel cost component that is reflected in revenues when we self-procure fuel for spot generation. In Q2, this included approximately $174 million of NG, LNG, and liquid fuels purchased directly.
Speaker #2: Second, spot sales increased due to higher capacity revenues resulting from seasonal capacity remuneration parameters applicable during the winter months, as well as the fuel cost component that is reflected in revenues when we self-procure fuel for spot generation.
Speaker #2: In the second quarter, this included approximately $174 million of NG/LNG and liquid fuels purchased directly. When CAMMESA supplied the fuel under the gas acuerdo program, that cost is managed by CAMMESA and, therefore, is not recognized as revenue by the company.
[Company Representative] (Central Puerto): When CAMMESA supplies the fuel under the Gas Acuerdo program, that cost is managed by CAMMESA, and therefore is not recognized as revenue by the company. Now to slide 6 for the adjusted EBITDA of the quarter. Adjusted EBITDA was $145.0 million, up 20.1% quarter on quarter and 136.2% year on year. The improvement was mainly driven by the margin captured on self-procured liquid fuels and seasonal spot prices, together with new contracted thermal energy in the MAT. Let's move to slide 7, co-generation and availability. Total generation was 5,250 gigawatt hours this quarter. Compared to the first quarter, a few things moved in different directions. Generation from our legacy steam turbines was down 17%, while Piedra del Águila more than doubled its output, up 112.9%, reflecting stronger hydrology.
Speaker #1: Now to slide 6 for the adjusted EBITDA of the quarter. Adjusted EBITDA was $145.0 million, up 20.1% quarter on quarter, and 136.2% year on year.
Speaker #1: The improvement was mainly driven by the margin captured on self-procured liquid fuels and seasonal spot prices, together with new contracted thermal energy in the MAT.
Speaker #1: Let's move to slide 7, Core Generation and Availability. Total generation was 5,250 gigawatt-hours this quarter. Compared to the first quarter, a few things moved in different directions.
Speaker #1: Generation from our legacy steam turbines was down 17%, while Piedra del Águila more than doubled its output, up 112.9%, reflecting stronger hydrology. Renewable generation was down 17.0% quarter-on-quarter, and the Luján de Cuyo gas turbine unit was still out of service, following the generator failure that occurred in the first quarter of last year.
[Company Representative] (Central Puerto): Renewable generation was down 17.0% quarter on quarter, and the Luján de Cuyo gas turbine unit was still out of service following the generator failure that occurred in the first quarter of last year. Our thermal fleet remained reliable. Total thermal availability of combined cycles was 87.0%, and steam production totaled 781,742 tons, up 45.4% quarter on quarter, but down 16.0% year on year. Central Puerto represented approximately 15% of total generation on Argentina's grid, or 15.9% including our Funny plants at our working interest. Turning to slide 8, total capital expenditures for the H1 of the year were $421.9 million. This includes $245.0 million for the Piedra del Águila concession, $50.0 million for the oil and gas block acquisition, $106.0 million for our battery storage projects, and $20.9 million for maintenance and other items.
Speaker #1: Our thermal fleet remained reliable. Total thermal availability of combined cycles was 87.0%, and steam production totaled 781,742 tons, up 45.4% quarter on quarter, but down 16.0% year on year.
Speaker #1: Central Puerto represented approximately 15% of total generation on Argentina's grid, or 15.9% including our FONI plants, at our working interest. Turning to slide 8, total capital expenditures for the first half of the year were $421.9 million. This includes $245.0 million for the Piedra del Águila concession.
Speaker #1: $50.0 million for the oil and gas block acquisition, $106.0 million for our battery storage projects, and $20.9 million for maintenance and other items.
Speaker #1: The battery energy storage system projects have already executed 81% of the project's total capital budget. Construction is 69% complete at Nuevo Puerto, and 54% at Central Costanera.
[Company Representative] (Central Puerto): The battery energy storage system projects have already executed 81% of the project's total capital budget. Construction is 69% complete at Nuevo Puerto and 54% at Central Costanera. Major equipment has either been delivered or is in transit, and installation is progressing on schedule. We expect commercial operation in the Q4 of 2026. Once running, we expect these projects to add between $25 and $27 million EBITDA in 2027. Now to slide 9 on our balance sheet and financial flexibility. As of 30 June, our total outstanding financial debt was $671.9 million against cash equivalents, and financial current assets of $178.4 million. That leaves us with net debt of $493.4 million. Measured against our last 12 months adjusted EBITDA of $403.8 million, our net leverage ratio was 1.2 times, a healthy level that gives us financial flexibility.
Speaker #1: Major equipment has either been delivered or is in transit, and installation is progressing on schedule. We expect commercial operation in the fourth quarter of 2026. Once running, we expect these projects to add between $25 million and $27 million EBITDA in 2027.
Speaker #2: Now to slide 9, on our balance sheet and financial flexibility. As of June 30, our total outstanding financial debt was $671.9 million, against cash, cash equivalents, and financial current assets of $178.4 million. That leaves us with net debt of $493.4 million.
Speaker #2: Measured against our last 12 months adjusted EBITDA of $403.8 million, our net leverage ratio was 1.2 times—a healthy level that gives us financial flexibility.
Speaker #2: On our debt maturity profile, we hold $178.4 million in cash and financial current assets today, and our maturities are well spread out over time, with $176.4 million coming due later this year.
[Company Representative] (Central Puerto): On our debt maturity profile, we hold $178.4 million in cash and financial current assets today, and our maturities are well spread out over time, with $176.4 million coming due later this year, followed by moderate amounts in 2027 and 2028 and larger maturities in 2029 and 2030. On financing activity, in April, we issued our Class D notes for $130.1 million at a 6.0% rate with a 48-month bullet maturity. In July, after the quarter closed, we issued our Class E notes for $94.3 million at 5.5% with a 36-month bullet maturity, mainly to fund working capital and fuel procurement needs. Thank you very much for your time and for your continued confidence in Central Puerto. Operator, please open the line for questions.
Speaker #2: This will be followed by moderate amounts in 2027 and 2028, and larger maturities in 2029 and 2030. On financing activity, in April we issued our Class D notes for $130.1 million at a 6.0% rate, with a 48-month bullet maturity.
Speaker #2: In July, after the quarter closed, we issued our Class E notes for $94.3 million at 5.5%, with a 36-month bullet maturity. This was mainly to fund working capital and fuel procurement needs.
Speaker #2: Thank you very much for your time, and for your continued confidence in Central Puerto. Operator, please open the line for questions.
Speaker #3: Thank you very much for the presentation. We will now begin the Q&A session for investors and analysts. If you wish to ask a question, please press the "Reaction" button and then click on "Raise Hand." If you have a question that has already been answered, you can leave the queue by clicking on "Put Hand Down." Our first question comes from Matías Cataruzzi with Edge Cap. Your microphone is open.
Operator: Thank you very much for the presentation. We will now begin the Q&A session for the 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 Hand Down. Our first question comes from Matías Cattaruzzi with Adcap. Your microphone is open.
Matías Cattaruzzi: Hi, team. Congratulations on the quarter. I got a question on the material contribution from the self-procurement of fuels in Q2. How will we see it in the future? In Q3, we will be seeing something similar in revenues, or it depends on the fuel procurement in each quarter? If in Q4, if it is going to be lower or as analysts, what do we need to keep in mind to get a better understanding of it and to project it better on our models?
Speaker #4: Hi team, congratulations on the quarter. I have a question on the material contribution from the self-procurement of fuels. In the second quarter, how will we see this in the future? In the third quarter, will we be seeing something similar in revenues, or does it depend on the fuel procurement in each quarter? And if in the fourth quarter it's going to be lower, what should analysts keep in mind to get a better understanding of it and to project it better in our models?
Speaker #5: Okay. Thank you, Matías, for your question and your interest in Central. Regarding the fuel consumption and self-procurement, we see in July similar levels to what we saw in June.
Fernando Bonnet: Okay. Thank you, Matías, for your question and your interest in Central Puerto. Regarding the fuel consumption and self-procurement, we see in July similar levels that we see in June. I know this is very early to have a final view. If this cold winter continues, perhaps we will see not as the same as June and July, but perhaps a little bit less, but some, of course, self-procurement of natural gas and a small portion of liquid fuels. We do not see a lot of liquid fuels coming on forward. So for Q3, you can expect during July same levels of self-consumption than in June. I know it was less, perhaps a little bit less, a half would be a good number in terms of LNG. Not the same as liquid that, as I mentioned, we do not see a lot of liquid during August.
Speaker #5: In August, it's still very early to have a final view. If this cold winter continues, perhaps we will see not the same as June and July, but perhaps a little bit less. But there will still be, of course, some self-procurement of natural gas.
Speaker #5: And a small portion of liquid fuels—we don't see a lot of liquid fuels coming forward. So for the third quarter, you can expect during July the same levels of self-consumption.
Speaker #5: Then in June and August, perhaps a little bit less—a half could be a good number in terms of LNG. It's not the same as liquid; as I mentioned, we don't see a lot of liquid during August.
Fernando Bonnet: For sure, in terms of the fourth quarter, until we can start buying our own natural gas, local natural gas, which is not the case today because the Plan Gas 4 is still in place, it is not easy that the producers break that contract with CAMMESA and start signing new contracts with us. Because of that, we see a reduction in Q4 of self-procurement fuel. We are starting conversation with different providers, so we can do something in terms of local gas, buying our own local gas, but not for all of our consumption. We see that we start seeing some Providers and oil companies start going out for the Plan Gas at the end of the year and perhaps more heavily during the next one. Making a wrap-up, you will see less own fuel consumption during the last quarter of this year.
Speaker #5: And for sure, in terms of the fourth quarter, until we can start buying our own local natural gas—which is not the case today because the plant gas Cuatro is still in place—and it's not easy for the producers to break that contract with CAMMESA and start signing new contracts with us.
Speaker #5: So, because of that, we see a reduction in the fourth quarter of self-procurement fuel. We are starting conversations with different providers so we can do something in terms of locally buying our own gas.
Speaker #5: But not for all of our consumption. So, we see that we start seeing some providers and oil companies start going out for the plant gas at the end of the year, and perhaps more heavily during the next one.
Speaker #5: But, to wrap up, you will see less own fuel consumption during the last quarter of this year.
Matías Cattaruzzi: A follow-up on self-procurement of fuels. Is there any way that we can see how it impacts on the EBITDA compared to previous quarters? We have seen it with the revenues, disaggregated from the revenues, but it is not visible in the cost part, the self-procurements, just for us to
Speaker #4: And then a follow-up on self-procurement of fuels. Is there any way that we can see how it impacts EBITDA compared to previous quarters?
Speaker #4: We've seen it, as with the revenues, this is aggregated from the revenues, but it's not visible in the cost part—the self-procurements—just for us to...
Fernando Bonnet: No, yes.
Speaker #5: No, yeah, yeah.
Matías Cattaruzzi: measure the. Yeah.
Speaker #4: Measure the yeah.
Speaker #5: Yes, you can show it in our cost because that's open in our accountability. So you can see how this cost of sales increases during winter compared to summer.
Fernando Bonnet: Yes. You can see it in our cost because that is open in our accountability. So you can see how this cost of sales increased during winter and compared to summer. But you need to consider both effects in order to estimate the future EBITDA, because during winter, we also have not only the self-procurement margin that we made there, but you have also the marginal income that we receive from the new regulation when our equipment is cheaper than the last unit entering in the market. So you need to have both effects combined. So when you go to summer, anyone has expensive fuel like diesel oil or LNG, so the margin of all the systems gets reduced, not only the ones that we do not acquire our own fuel.
Speaker #5: But you need to consider both effects in order to estimate the future EBITDA, because during winter we also have not only the self-procurement machine that we made there, but you also have the marginal income that we receive from the new regulation when our equipment is cheaper than the last unit entering the market.
Speaker #5: So you need to have both effects combined. So when you go to summer, which doesn't—anyone has fuel, expensive fuel like diesel oil or LNG.
Speaker #5: So the margin of all the system gets reduced, not only the ones where we don't acquire our own fuel.
Speaker #4: Okay, great. Thank you so much.
Matías Cattaruzzi: Okay, great. Thank you so much.
Operator: Our next question comes from Martin Arancet with Balance Capital. Your microphone is open.
Speaker #3: Our next question comes from Martin Arenset with Balance Capital. Your microphone is open.
Martin Arancet: Hi. Thank you for the presentation and for taking my questions. I have only two questions. I would like to run them one by one, if that's okay. First, regarding growing opportunities, I was wondering, where do you see growing opportunities in the future? You renewed the concession of Piedra del Águila, now you are with the battery project. I was wondering, where do you see growing opportunities after that? Also, we heard that the government could be working on a new auction for thermal and probably renewable plus batteries before year-end. I was wondering if you had more information on that. I do not know if it could be something where you could add capacity to some of your thermal assets.
Speaker #6: Hi, well, thank you for the presentation and for taking my questions. I have only two questions. I would like to run them one by one, if that's okay.
Speaker #6: First, regarding growing opportunities, I was wondering, where do you see growing opportunities in the future? You renewed the concession of Piedra El Águila, and now you are moving forward with the battery project.
Speaker #6: But I was wondering, where do you see growing opportunities after that? And also, we heard that the government could be working on a new auction for thermal and probably renewable plus batteries before E&N.
Speaker #6: I was wondering if you had more information on that. And I don't know if it could be something where you could add capacity to some of your thermal assets.
Speaker #5: Okay, thank you, Martin, for your question and your interest. As for the first one, the growing opportunities, as you mentioned, we are seeing different opportunities coming from different processes.
Fernando Bonnet: Okay. Thank you, Martin, for your question and your interest. Going to the first one, the growing opportunities, as you mentioned, we are seeing different opportunities coming in from different processes. One is that you mentioned the government is analyzing, they are in the final stages of analysis. The new capacity perhaps will be not an option, like we saw in the past. I think they are thinking on a regular scheme, perhaps quarterly scheme, or perhaps biannual scheme, in which generators could present projects in order to increase the capacity of the system. It will be capacity schemes, not energy capacity. They are already doing the last adjustment of that scheme, and we think that would be online perhaps during this quarter or the next one, not more than that. There, we are, of course, developing different projects.
Speaker #5: One is that you mentioned the government is analyzing, and they are in the final stages of analysis. The new capacity perhaps will not be an option like we saw in the past.
Speaker #5: I think they are thinking of a regular scheme, perhaps a quarterly scheme or perhaps a biannual scheme, in which generators could present projects in order to increase the capacity of the system.
Speaker #5: We'll be capacity schemes, not energy capacity. But they are already doing the last, perhaps, adjustment of that scheme, and we think that would be online perhaps during this quarter or the next one — not more than that.
Speaker #5: And there we are, of course, developing different projects. We have all the development that we did in 2023 for the thermal capacity auction. If you remember, there we got awarded in two projects.
Fernando Bonnet: We have all the development that we have done in 2023 for the thermal capacity auction, if you remember. There, we get awarded in two projects. These projects are fully developed, but we want to maintain and present in this new scheme one of the two of those projects. We are also developing new ones for capacity in different places. One are the ones that we have capacity here in Buenos Aires, but we are also looking in other places. The other opportunity that we are seeing is, as you mentioned, batteries. We present in the AlmaGBA scheme several projects that get close or get out, but by close margin of the ones that were awarded. We want to maintain those projects alive and try to present them in new coming auctions.
Speaker #5: So, these projects are fully developed and we want to maintain and present in this new scheme one or two of those projects. And we are also developing new ones for capacity in different places.
Speaker #5: Ones are the ones that we have capacity for here in Buenos Aires, but we are also looking in other places. And the other opportunity that we are seeing is, as you mentioned, batteries. We presented in the Almazadi scheme several projects that got close or got out, but by a close margin, of the ones that were awarded.
Speaker #5: So we want to maintain those projects alive and try to present them in upcoming auctions. Perhaps the government wants to introduce a scheme similar to the one we have been discussing for thermal—not a specific auction, but perhaps a regular scheme of presenting opportunities, where the generators present opportunities and the government then decides if they want to make an auction after that or not.
Fernando Bonnet: Perhaps the government wanted to introduce this perhaps similar scheme that we have been talking for thermal, not an auction, a specific auction, but perhaps regular scheme of presenting the possibilities that they generate, or presenting opportunities there. The government decide if they want to make an auction after that or not. We are willing to maintain those battery projects alive and look for the opportunities to present them again and try to make them feasible in the near future. We also see opportunities in different perhaps sellings of government asset that will come, like centrales of ONEM or similars. We see opportunities there. We also are keeping developing the transmission line in the north that we are working with YPF S.A. in order to provide electricity to the lithium companies in the north of the country.
Speaker #5: So, we are willing to maintain those battery projects alive and look for opportunities to present them again and try to make them feasible in the near future.
Speaker #5: And also, we see opportunities in different, perhaps, sales of government assets that will come, like Centrales of Juanmin Men, or similar. So we see opportunities there.
Speaker #5: And we are also keeping, we are also developing the transmission line in the north, that we are working with YPF in order to provide electricity to the lithium companies in the north of the country.
Speaker #5: That is something that, with the actual lithium price, is starting to move on again and with good perspective. So, this will be another opportunity for growth, not only for the transmission line itself, but also for the provision of electricity, perhaps mainly renewables.
Fernando Bonnet: That is something that with the actual lithium price, start moving on again and with good perspective. This will be another opportunity to grow, not only the transmission line itself, but also the provision of electricity, perhaps mainly renewables. This will perhaps give us the opportunity to keep building renewable projects also. We are working in different bidding processes or budgeting processes for mining companies to provide the electricity and capacity. That will be another opportunity for growth. There are a lot of projects who are wanting to have energy provision, the same as also data center that, of course, these are in very early stage, but they are coming also to ask and try to work for developing that capacity and electricity provision. We see a lot of opportunities moving forward.
Speaker #5: So, this will perhaps give us the opportunity to keep building renewable projects as well. We are also working in different bidding processes or budgeting processes for mining companies to provide the electricity and capacity.
Speaker #5: So that will be another opportunity for growth. There are a lot of projects that want to have energy provision. The same also with data centers that, of course, this is already at a very early stage, but they are also coming to ask and try to work on developing that capacity and electricity provision.
Speaker #5: So, we see a lot of opportunities moving forward.
Martin Arancet: Very clear. Thanks. Just a small follow-up. I guess that is still too early to have a timeline, regarding when we could see, I do not know, a closure of the deal or something similar for the new projects and for mining companies, right?
Speaker #6: Very clear, thanks. Just a small follow-up: I guess that it is still too early to have a timeline regarding when we could see, I don't know, a closure of the deal or something similar.
Speaker #6: For the new projects, and for mining companies, right?
Speaker #5: Yeah. Yeah, I think it's early stage, because they are all big companies and big projects, so they are working on the feasibility phase.
Fernando Bonnet: Yeah. I think it is early stage because they all are big companies and big projects, so they are working on the feasibility phase, and try to get that feasibility first and then start signing the contracts. I think we are going to see perhaps next year, the first big contracts. In terms of transmission line, I think we can see something earlier, perhaps at the end of this year. As I mentioned, they need to finalize the feasibility studies and have all the financing, commit, and then after that, they are going to start signing the electricity provision contracts.
Speaker #5: And try to get that feasibility first, and then start signing the contracts. So I think we want to see, perhaps next year, the first big contracts.
Speaker #5: In terms of the transmission line, I think we could see something earlier, perhaps at the end of this year. But as I mentioned, they need to finalize the feasibility studies and have all the financing committed, and then after that, they're going to start signing the electricity provision contracts.
Martin Arancet: Okay. Very clear. Thanks. My second question, you were really commercially successful signing new PPAs for thermal assets after the regulatory change. You were trying to, you already had contracted the 20%, as far as I know, the 20% that you are allowed with industrial consumers, but you were trying to get to 100% with distribution companies. I was wondering, how is that moving forward, if there has been any progress on that? Also, we have seen a spike on spot prices in this winter. If you think that it is still more profitable to sign a new PPA or to get the exposure to the spot market.
Speaker #6: Okay, very clear, thanks. My second question, then: while you were really commercially successful signing new PPAs for formal assets, after the regulatory change—and you were trying to—well, you already had contracted the 20%, as far as I know.
Speaker #6: The 20% that you are allowed with industrial consumers, but you were trying to get to 100% with distribution companies. I was wondering, how is that moving forward? Has there been any progress on that?
Speaker #6: And also, we have seen a spike in spot prices this winter. Do you think it is still more profitable to sign a new PPA, or to get exposure to the spot market?
Speaker #5: Okay. Thank you. Yes, as you mentioned, we moved very fast in order to get that 20% allowed contracted. In the past, we have we were the first or the bigger contractor in Argentina talking about during the 2020, 2010, then when we can make freely contracts with the demand.
Fernando Bonnet: Okay. Thank you. Yes, as you mentioned, we moved very fast in order to get that 20% allowed contracted. In the past, we were the first or the bigger contractor in Argentina. I am talking about during 2010, when we can make freely contracts with the demand. So we maintained the team, and we maintained the contact, and of course, we enlarged the team, when we saw the regulation going to change. So we moved very fast, and we are very confident in our team to get the best contracts possible. As you mentioned, we want to enlarge that 20%. I do not know if we are going to reach the 100%. That is not perhaps the idea. The idea is to get, first, the best contract distribution companies possible. So we are choosing, we are not going to any distribution companies.
Speaker #5: So we maintained the team, and we maintained the contact. And of course, we enlarged the team when we saw the regulation was going to change.
Speaker #5: So we moved very fast, and we are very confident in our team to get the best contracts possible. And as you mentioned, we want to enlarge that 20%.
Speaker #5: I don't know if we're going to reach 100%. That is not, perhaps, the idea. The idea is to first get the best contract distribution companies possible.
Speaker #5: So, we are choosing—we are not going to any distribution company. As you know, the distribution companies, after 20 years of regulation and controls and all that, you know.
Fernando Bonnet: As you know, distribution companies, after 20 years of regulation and controls and all that, there are different situations in each provinces, and internal of the different provinces have different situations regarding distribution companies cooperatives and those that we can contract if we want to go to the 100%. At the beginning, we decided to move forward with tuition companies because, as you mentioned, perhaps during the winter, the prices are higher to stay in, and the spot market are higher, but the rest of the year are prices that goes very below than what you can contract in a full year base.
Speaker #5: There are different situations in each province, and within the different provinces there are different situations as well. Regarding the distribution companies, cooperatives, and those that can contract, if we want to go to the 100%.
Speaker #5: So, beginning at the beginning, we decided to move forward with distribution companies because, as you mentioned, perhaps during the winter the prices are higher—to stay at the spot market, the prices are higher.
Speaker #5: But the rest of the year, there are prices that go very below what you can contract on a full-year basis. So you need to have the better mix between having some megawatts exposed to the spot market and making the catch-up when those prices go up during winter.
Fernando Bonnet: You need to have the better mix between having some megawatts exposed to the spot market and have to make the catch-up of those prices going up during winter, but also have the good prices or a base of contract energy that cover the prices when the prices goes down very strongly during summer, and September, April, and those months. We are trying to have the better balance possible, having some exposure to the spot market to make that catch-up during the worst days of winter, and hours, because it's not all the day, as we see the prices every hour. We want to have some exposure of that, yes, and make the better margin during the cold days or the cold hours of the day. But we also want to have a good price, a stable price for the rest of the year.
Speaker #5: But also have good prices or a base of contract energy that covers the prices when they go down very strongly during summer.
Speaker #5: And September, April, and those months. So we are trying to have the best possible balance, having some exposure to the spot market to make that catch-up during the worst days of winter.
Speaker #5: And hours, because it's not all day. As we see, we see the prices every hour. So we want to have some exposure to that, yes.
Speaker #5: And maybe achieve better margins during the cold days or the cold hours of the day. But we also want to have a stable price, a good price, for the rest of the year.
Speaker #5: So we are working on that, in a sense trying to have a better mix—having the flexibility to get good prices during winter, but not going in summer with prices that are below the market.
Fernando Bonnet: We are working on that sense, trying to have the better mix of having the flexibility to have good prices during winter, but not going in summer on prices that are below the market. I don't see that we're going to reach 100% of contractualization, but we also are working on increase that to, in overall, have a better margin than if we stay fully to a spot. Also we see in the future, that the prices during winter need to go down because we're going to reduce the consume of liquid fuels and LNG in the future when DGS expansion will be done. And of course, if TGN expansion come online, the prices during winter will need to be reduced for sure.
Speaker #5: So, I don't see that we're going to reach 100% of contractualization. But we are also working on increasing that to, overall, have a better margin than if we stay fully in spot.
Speaker #5: And also, we see in the future that the prices during winter need to go down because we're going to reduce the consumption of liquid fuels and LNG in the future when the TGS expansion will be done, and of course, if the TGN expansion comes online, the prices during winter will need to be reduced for sure.
Speaker #6: Yeah, I think it's a temporary thing. Just a small follow-up on that: Do you see interest from good distribution companies to sign new PPAs?
Martin Arancet: Yeah, I think it's a temporary thing. Just a small follow-up on that. Do you see interest from good distribution companies to sign new PPAs? I know that you're going to have some exposure to the spot, but do you think that probably this year you could sign new PPAs with distribution companies?
Speaker #6: I mean, I know that you're going to have some exposure to the spot, but do you think that probably this year you could sign new PPAs with distribution companies?
Speaker #5: It could be. It could be, yes. We are working with some big distribution companies in that sense. I cannot say that it is fully clear that we can finalize this year, but we are working on it.
Fernando Bonnet: It could be, yes. We are working with some big distribution companies in that sense. I cannot say that it's fully clear that we can finalize this year, but we are working on it.
Speaker #6: Okay. Thank you. Thank you very much.
Martin Arancet: Okay. Thank you. Thank you very much.
Speaker #1: Our next question comes through the Q&A, from Marco Cerro with Alaria. Thank you for the presentation. I want to ask the following questions. Could you give us an approximate—
Operator: Our next question comes through Q&A test, with Marcos Sero with Alaria. Thank you for the presentation. I want to ask the following questions. Could you give us an approximate of the split between the energy and capacity in spot avenues? How do you see the ramping in self-supply fill through 2027? How much EBITDA should we expect from the BESS project once it is fully operational? Should we expect dividend payments this year? Thank you.
Speaker #1: Of the split between the energy and capacity in spot avenues, how do you see the ramping in self-supplies fill through 2027? How much EBITDA should we expect from the BASS project once it is fully operational?
Speaker #1: Should we expect dividend payments this year? Thank you.
Speaker #5: Okay, thank you. Thank you for your question, Marcos. Talking about the first question, approximately, the split between energy capacity and spot revenues, I could say that it depends—that depends, as I mentioned, on what part of the year you are looking at, because that's when the variable margin starts increasing. When you compare, as I mentioned, the operating cost of a more inefficient equipment or using liquid fuels goes up, and the variable part of the remuneration goes up, while the capacity payment stays fixed.
Fernando Bonnet: Okay. Thank you. Thank you for your question, Marcos. Talking about the first question, that approximately split between energy capacity in spot revenues, I could say that is depending, as I mentioned, where part of the year you are looking, because that is when the variable margins start increasing, when you compare, as I mentioned, the operating cost of more inefficient equipment or using liquid fuels goes up, and the variable part of the remuneration goes up, and the capacity payment stays fixed. But talking about in general, could be like to say right now, in the past was more heavy, the capacity payment than the variable payment. Right now it is the opposite. We can say 60 variable, 40, in general terms, 40 capacity payment. Depends, as I mentioned. This will change, depends on the month of the year, but in general, I could say that.
Speaker #5: But talking about it in general, you could say that right now, in the past, the capacity payment was heavier than the variable payment.
Speaker #5: Right now, it's the opposite. So, we can say 60 variable, 40. In general terms, 40 capacity payment depends—as I mentioned, this will change depending on the month of the year, but in general, we could say that.
Fernando Bonnet: The second one, how do you see the self-procurement ramping during 2007? As I mentioned, I think that we are going to maintain the procurement as this year of liquid fuels and LNG, this will be maintained for the next one, and the part that will increase for sure in the next year will be the local natural gas self-procurement. As I mentioned, that is something that we are working on. I do not see that we can reach 100% of self-procurement of local natural gas, but we will be happy that we can have at least three hot cycles, three middle cycles, combined cycles, operating with our own natural gas. This will be between 4 or 5 million cubic meters per day average. That will be something that we will be happy to have. It is less than, perhaps it is more like a third or 40% of our coal consumption.
Speaker #5: And the second one, how do you see the ramping in the self-procurement ramping in during 2007? As I mentioned, I think that we're going to maintain the procurement at this year's level, of liquid fuels and LNG.
Speaker #5: This will be maintained for the next one, and the part that will increase for sure next year will be the local natural gas self-procurement. As I mentioned, that's something that we are working on.
Speaker #5: I don't see that we can reach 100% of self-procurement of natural gas local natural gas. But we will be happy that we can have at least three half cycles three like middle cycles combined cycles operating with our own natural gas this will be like between four or five million cubic meters per day.
Speaker #5: Average. That will be something that we will be happy to have. It's less than—perhaps it's more like a third or 40% of our whole consumption.
Speaker #5: And then, when we get close, perhaps in 2028, when we get close to the finalization of Plan Gas, for sure we will go forward for the whole natural gas self-consumption.
Fernando Bonnet: When we get close, perhaps in 2028, when we get close to the finalization of Plan Gas 4, for sure, we will go forward for the whole natural gas self-consumption. Sorry, another one. The last one was the EBITDA estimated of BESS projects. We are seeing that around in a full year operation, in between $25 million, $27 million per year.
Speaker #5: Sorry, there is another one. The last one was the EBITDA estimate of the best projects we are seeing, which is around $25–27 million per year with a full year of operation.
Speaker #1: Again, if you have a question, please press the button, select 'Reaction', and then click on 'Raise Hand.' This concludes our Q&A session. I would like to turn the conference back over to Mr. Fernando Bennett for any closing remarks.
Operator: Again, if you have a question, please press the button Reaction, and then click on Raise Hand. This concludes our Q&A session. I would like to turn the conference back over to Mr. Fernando Bonnet for any closing remarks.
Fernando Bonnet: Thank you. To wrap up, this was another quarter of a strong execution for Central Puerto. We delivered solid financial results, continued to strengthen our commercial position, maintained a disciplined balance sheet, and made meaningful progress across our strategic growth initiatives. Looking ahead, we are focused on bringing our battery storage projects in operation and scale, advancing and developing all our new acquired Vaca Muerta assets, and continuing to pursue new business expansion opportunities to create long-term value for our shareholders while preserving financial flexibility. I would like to thank our people for their commitment, our customers and business partners for their trust, the financial sector and our shareholders for their continued support. See you soon. Thank you for joining us today, and we can disconnect. Thank you.
Speaker #4: This was another quarter of strong execution for Central Puerto. We delivered solid financial results, continued to strengthen our commercial position, maintained a disciplined balance sheet, and made meaningful progress across our strategic growth initiatives.
Speaker #4: Looking ahead, we are focused on bringing our battery storage projects into operation on schedule, advancing the development of our newly acquired Vaca Muerta assets, and continuing to pursue new business expansion opportunities to create long-term value for our shareholders while preserving financial flexibility.
Speaker #4: I would like to thank our people for their commitment, our customers and business partners for their trust, the financial sector, and our shareholders for their continuous support.
