CENTRAL PUERTO S.A. 1Q24 Consolidated Results
May 2024
Central Puerto 1Q24 Earnings Release
Stock information:
New York Stock Exchange
Ticker: CEPU
1 ADR = 10 ordinary shares
Bolsas y Mercados Argentinos
Ticker: CEPU
Contact information:
Chief Financial Officer
Enrique Terraneo
- Tel:
Buenos Aires, May 10th - Central Puerto S.A ("Central Puerto" or the "Company") (NYSE: CEPU), the largest private sector power generation companies in Argentina, reports its consolidated financial results for the First Quarter 2024 ("1Q24"), ended on March 31st, 2024.
A conference call to discuss the 1Q24 results will be held on May 13th, 2024, at 11 AM Eastern Time (see details below). All information provided is presented on a consolidated basis, unless otherwise stated.
• | Email: | Financial statements as of March 31st, 2024, | |||
inversores@centralpuerto.com | include the effects of the inflation adjustment, | ||||
• | Investor Relations Website: | ||||
applying | IAS 29. | Accordingly, | the financial | ||
https://investors.centralpuerto.com/ | |||||
statements have been stated in terms of the | |||||
measuring unit current at the end of the | |||||
reporting | period, | including the | corresponding |
financial figures for previous periods reported for comparative purposes. Growth comparisons refer to the same periods of the previous year, measured in the current unit at the end of the period, unless otherwise stated. Consequently, the information included in the Financial Statements for the period ended on March 31st, 2024, is not comparable to the Financial Statements previously published by the company. However, we presented some figures converted from Argentine Pesos to U.S. dollars for comparison purposes only. The exchange rate used to convert Argentine Pesos to U.S. dollars was the reference exchange rate (Communication "A" 3500) 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 may defer in such conversion for each period is performed at the exchange rate applicable at the end of the latest period. You should not consider these translations to be representations that the Argentine Peso amounts actually represent these U.S. dollars amounts or could be converted into U.S. dollars at the rate indicated.
Definitions and terms used herein are provided in the Glossary at the end of this document. This release does not contain all the Company's financial information. As a result, investors should read this release in conjunction with Central Puerto's consolidated financial statements as of and for the period ended on March 31st, 2024, and the notes thereto, which will be available on the Company's website.
Consolidated Results 1Q24
A. Regulatory Updates and Relevant Facts
Resolution SE N°9/2024
On February 8th, 2024, the Secretariat of Energy updated remuneration prices for energy and power of generation units not committed in a PPA. Remuneration values increased by 74% since February 1st, 2024.
Status on CAMMESA's delayed payments
On May 6 th, 2024, the Secretariat of Energy issued Resolution SE No. 58/2024, which determined the payment mechanism for trade receivables accrued on Dec-23,Jan-24 and Feb-24 that are still unpaid. The said payment mechanism stablishes that after each generator determines with CAMMESA the owed balances and an agreement between parties is signed, CAMMESA will proceed with payments as follows:
- Trade receivables accrued on December 2023 and January 2024 will be paid with Argentine Republic USD bond at face value (the AE38).
- Trade receivables accrued on February 2024 will be paid with funds available in CAMMESA's bank accounts and transfers made by the National Government to the Stabilization Fund.
The Company is analyzing the impacts of the Resolution and assessing all the necessary measures that could be taken to preserve its rights. As of the date of the Resolution, if the aforementioned mechanism was put in place, the Company would have an estimated economic loss of approximately ARS 24,450 million (USD 29 million), without including any default interest.
Acquisition of interest in AbraSilver
On April 22, 2024, our subsidiary Proener entered into a common shares subscription agreement with AbraSilver Resource Corp. (a Canadian company listed in the Canadian stock market) ("AbraSilver"), granting Proener a 4% interest in the share capital of AbraSilver, which is the owner of the silver-gold project Diablillos, located in the northeastern of Argentina. In turn, and in conjunction with Central Puerto, Kinross Gold Corporation, a major Canadian mining company, (NYSE: KGC, TSX: K) also acquired a 4% interest on similar terms.
Consolidated Results 1Q24
B. Argentine Market Overview
The table below sets forth key Argentine energy market data for 1Q24 compared to 4Q23 and 1Q23.
1Q24 | 4Q23 | 1Q23 | Δ % | |||||||
1Q24/1Q232 | ||||||||||
Installed capacity (MW; EoP1) | 43,873 | 43,773 | 43,278 | 1% | ||||||
Thermal | 25,448 | 25,437 | 25,533 | 0% | ||||||
Hydro | 10,834 | 10,834 | 10,834 | 0% | ||||||
Nuclear | 1,755 | 1,755 | 1,755 | 0% | ||||||
Renewable | 5,836 | 5,747 | 5,156 | 13% | ||||||
Installed capacity (%) | 100% | 100% | 100% | N/A | ||||||
Thermal | 58% | 58% | 59% | (1 p.p.) | ||||||
Hydro | 25% | 25% | 25% | 0 p.p. | ||||||
Nuclear | 4% | 4% | 4% | 0 p.p. | ||||||
Renewable | 13% | 13% | 12% | 1 p.p. | ||||||
Energy Generation (GWh) | 39,285 | 34,865 | 38,629 | 2% | ||||||
Thermal | 21,355 | 14,168 | 23,418 | (9%) | ||||||
Hydro | 9,055 | 12,114 | 8,602 | 5% | ||||||
Nuclear | 3,225 | 2,811 | 1,889 | 71% | ||||||
Renewable | 5,650 | 5,772 | 4,720 | 20% | ||||||
Energy Generation (%) | 100% | 100% | 100% | N/A | ||||||
Thermal | 54% | 41% | 61% | (6 p.p.) | ||||||
Hydro | 23% | 35% | 22% | 1 p.p. | ||||||
Nuclear | 8% | 8% | 5% | 3 p.p. | ||||||
Renewable | 14% | 17% | 12% | 2 p.p. | ||||||
Energy Demand (GWh) | 37,884 | 33,258 | 39,496 | (4%) | ||||||
Residential | 18,289 | 14,700 | 19,429 | (6%) | ||||||
Commercial | 10,452 | 9,576 | 10,654 | (2%) | ||||||
Major Demand (Industrial/Commercial) | 9,143 | 8,982 | 9,413 | (3%) | ||||||
Energy Demand (%) | 100% | 100% | 100% | N/A | ||||||
Residential | 48% | 44% | 49% | (1 p.p.) | ||||||
Commercial | 28% | 29% | 27% | 1 p.p. | ||||||
Major Demand (Industrial/Commercial) | 24% | 27% | 24% | 0 p.p. |
Source: CAMMESA; company data.
- As of March 31st, 2024.
- Rounded.
Consolidated Results 1Q24
Installed Power Generation Capacity: By the end of the first quarter of 2024 (1Q24), the country's installed capacity reached 43,873 MW, which means an increase of 1% or 595 MW compared to the 43,278 MW recorded as of March 31st, 2023. The growth in capacity was mainly due to: (i) the incorporation of 680 MW (+13%) from renewable sources, of which 378 MW corresponds to wind farms, 290 MW to solar photovoltaic projects and 12 MW to biogas power plants and (ii) a net decrease in thermal sources of 85 MW (-1%), which includes +397 MW of combined cycles and a decommission of 345 MW and 137 MW of gas turbines and diesel engines, respectively. All of these figures may include MW of new facilities and adjustments and repowering of power plants that were already in operation.
Power generation & demand: During the 1Q24, energy generation increased 2% to 39,285 GWh, compared to 38,629 GWh generated during the 1Q23. While thermal source continues to be the backbone of the Argentine electricity sector, this type of generation dropped 9% year-over-year (y/y) and its participation share in the energy matrix declined 6 p.p. y/y to 54%. Nuclear power plants generated 71% more y/y while their participation share in the energy matrix was 8%, followed by renewables (+20% of generation y/y) with a participation share of 14% and hydro (+5% generation y/y) with a participation share of 23%.
The demand of the 1Q24 dropped 4% vis-à-vis the 1Q23, prompted by a 6% decrease in residential consumption. But along the quarter, the demand and the supply behaviors changed as a result of shifts in temperatures and specific conditions of generation units.
During January 2024, the demand was lower than the same month of previous year due to basically lower residential demand on the back of low temperatures for the period (the average temperature for Great Buenos Aires + Litoral areas was equal to or lower than 26.1°, the historical mean for January in the interconnected system). Major users demand through distribution systems was also lower as a consequence of weak economic activity. Nuclear generation rose by 80% y/y, hydro by 42% y/y and renewables by 21% y/y. The growth in nuclear and hydro sources prompted lower thermal dispatch (-17% y/y). The high levels of supply boosted exports during the month.
By the end of January, temperatures began to rise. In February, demand grew by 8%, driven by a 12% increase in residential consumption (on February 1st, a new historical power demand peak was recorded: 29,572 MW). Hydro supply began to shrink by the mid of the quarter, so the demand was covered with an increase of nuclear generation (+59% y/y), renewable generation (+12% y/y), hydro generation (+8% y/y) and thermal generation (+8% y/y). Notwithstanding, imports were also needed.
During March 2024, generation and demand were lower than those recorded in March 2023 (-9% y/y and -15% y/y, respectively). The 1Q23 as a whole was exceptionally
Consolidated Results 1Q24
warmer than the 1Q24, especially March. During this month, nuclear generation increased by 73% y/y and renewables by 26% y/y. On the other hand, hydro generation decreased by 26% y/y and thermal dispatch declined by 14% y/y.
Finally, it is worth to mention that the increase in nuclear generation along the quarter was basically explained by the reincorporation of Atucha II power plant, which was in maintenance shutdown during the 1Q23. This power plant resumed operations in August 2023. Also, the lower thermal dispatch during the 1Q24 triggered lower alternative fuels consumption (-96% y/y of fuel oil and -83% y/y of diesel).
Energy Demand per type (TWh)
Local energy Demand (TWh)
Consolidated Results 1Q24
C. Central Puerto S.A.: Main operating metrics
The table below sets forth key operating metrics of the Central Puerto group for 1Q24, compared to 4Q23 and 1Q23:
1Q24 | 4Q23 | 1Q23 | Δ % | |
1Q24/1Q23 | ||||
Energy Generation (GWh) | 5,520 | 5,168 | 5,122 | 8% |
Thermal | 4,272 | 3,007 | 3,926 | 9% |
Hydro | 807 | 1,678 | 847 | (5%) |
Wind | 358 | 410 | 349 | 3% |
Solar | 82 | 73 | - | n.a |
Installed capacity (MW) | 7,173 | 7,173 | 4,809 | 49% |
Thermal | 5,253 | 5,253 | 2,994 | 75% |
Hydro | 1,441 | 1,441 | 1,441 | 0% |
Wind | 374 | 374 | 374 | 0% |
Solar | 105 | 105 | - | n.a |
Thermal availability (1) | ||||
Central Puerto CC - global | 90% | 82% | 93% | -3% |
Central Puerto CC - standalone | 93% | 92% | 93% | 0% |
Central Puerto turbines - global | 68% | 73% | 48% | 20% |
Central Puerto turbines - standalone | 76% | 79% | 48% | 28% |
Steam production (Ktn) | 574 | 297 | 529 | 9% |
Source: CAMMESA; company data.
- On February 22, 2024, it was published in the Official Gazette of the Republic of Argentina, the request submitted by Central Costanera for the decommissioning of steam generation units COSTTV04 and COSTTV06, for a total installed capacity of 120 MW and 350 MW, respectively.
Thermal availability(1)(2)
(%)
Steam & gas turbines
Consolidated Results 1Q24
Combined Cycles
- Availability weighted average by power capacity. Off-time due to scheduled maintenance agreed with CAMMESA is not considered in the ratio.
- Central Costanera figures does not consider the power capacity values of the steam generation units COSTTV04 and COSTTV06
During 1Q24, Central Puerto's operated power generation increased by 8% to 5,520 GWh, compared to 5,122 GWh in 1Q23.
It should be noted that this increase includes the consolidation of the energy generated by Guañizuil II A solar plant (+82 GWh), acquired in October 2023, and Central Costanera (+714 GWh), acquired by mid- February 2023.
In 1Q24, hydro energy generation from Piedra del Aguila decreased 5% as compared with 1Q23 levels, reaching 807 GWh from 847 GWh, as a direct result of lower water availability for generation and a trend decreasing demand along the quarter.
With regards to renewables, energy generation increased 26% in 1Q24 compared to 1Q23, being mainly explained by the 82 GWh generated by Guañizuil II A solar plant and by a slightly higher wind generation as a result of higher wind resource during the period, which represented a 3% difference if compared to 1Q23.
Regarding thermal generation, it increased by 9% in 1Q24 compared to 1Q23, basically as a result of the acquisition of Central Costanera; the generation from this site represented 54% of our total thermal generation. It is worth to mention the performance of the Buenos Aires Combined Cycle, which rose its generation by 78% (+73 GWh) if compared to 1Q23, due to a deep maintenance and rehabilitation program put in place (this figures take into account that Central Costanera begun to be operated by Central Puerto by mid-February 2023). This was partially offset by lower dispatch and availability of some units.
Finally, steam production increased 9% during 1Q24, explained by a 2% increase in San Lorenzo cogeneration plant and a 16% increase in Lujan de Cuyo. The growth in the later case is basically explained by higher availability of gas turbines (maintenance finished by mid-2023, which highly improved operation performance since then).
Consolidated Results 1Q24
D. 1Q24 Analysis of Consolidated Results
Important notice: The results presented for the 1Q24 are positively or negatively affected, as appropriate, by a non-cash effect, given by the fact that inflation rates were greater than currency depreciation rates during the quarter. Since the functional currency of Central Puerto is the Argentine peso, our Financial Statements are subject to inflation adjustment, while Company's figures are converted into US dollars using the end of period official exchange rate. Thus, given the significant disparity between inflation and devaluation for the period, it might affect comparability.
Main financial magnitudes of continuing operations (1)
Main Financial Figures | 1Q24 | 4Q23 | 1Q23 | Δ % |
(unaudited figures in US$ millions) | 1Q24/1Q23 | |||
Revenues | 150 | 98 | 130 | 15% |
Operating Income | 84 | 202 | 98 | (14%) |
EBITDA | 111 | 227 | 126 | (12%) |
Adjusted EBITDA | 84 | 45 | 76 | 10% |
Net Income | 32 | 156 | 1 | 5061% |
FONI trade receivables | 246 | 254 | 298 | (18%) |
Total Debt | 432 | 415 | 415 | 4% |
- The FX rate used to convert Argentine Pesos to U.S. dollars is the reference exchange rate reported by the
Central Bank (Communication "A" 3500) as of March 31st 2024 (AR$857.42 to US$1.00) - See "Disclaimer-EBITDA & Adjusted EBITDA" on page 19 for further information.
During 1Q24, revenues totaled US$150 million increasing 15% compared to US$130 million in the 1Q23.
Consolidated Revenues Breakdown | 1Q24 | 4Q23 | 1Q23 | Δ % |
(unaudited figures in US$ millions) | 1Q24/1Q23 | |||
Total Revenues | 150 | 98 | 130 | 15% |
Spot market revenues | 73 | 48 | 64 | 14% |
Sales under contracts | 65 | 43 | 56 | 16% |
Steam sales | 6 | 4 | 6 | (2%) |
Forestry activity revenues | 4 | 2 | 1 | 229% |
Resale of gas transport and distribution capacity | 0 | 0 | 1 | (45%) |
Revenues from CVO thermal plant management | 2 | 1 | 2 | (17%) |
Consolidated Results 1Q24
This was mainly due to a combination of:
- A 14% or US$9 million increase in Spot/Legacy energy sales which amounted to US$73 million in 1Q24 compared to US$64 million in the 1Q23, driven by a combination of the consolidation of Central Costanera's revenues which contributed with sales of US$24 million, partially offset by a lower remuneration measured in US dollars and a lower dispatch of some units (thermal ex Central Costanera).
- A 16% or US$9 million increase in sales under contracts, which totaled US$65 million in 1Q24 compared to US$56 million in 1Q23, mainly explained by the recent acquisition of the solar farm Guañizuil II A, which contributed with sales of US$4 million in the quarter, and higher sales of cogeneration units. Sales of wind farms were slightly higher due to higher wind resource.
- A 229% or US$3 million increase in Forestry revenues as a result of EVASA group acquisition on May 2023.
- A positive non-cash effect on the gap between currency devaluation and inflation.
Operating cost, excluding depreciation and amortization, in 1Q24 amounted to US$59 million, increasing by 14% or US$7 million when compared to US$52 million in 1Q23.
Production costs rose primarily due to: (i) higher employee compensations; (ii) energy and power purchases; (iii) maintenance expenses and (iv) consumption of materials and spare parts, being all driven by CECO acquisition. Production cost were also negatively impacted by a non-cash effect on the gap between currency devaluation and inflation.
In addition, SG&A, excluding depreciations and amortizations, increased by 34% or US$4 million in the quarter basically as a result of: (i) higher compensations to employees, (ii) fees and compensation for services and taxes, all driven by CECO acquisition. As previously stated, the non-cash effect on the gap between currency devaluation and inflation also fueled SG&A
Other operating results net (excluding FONI and variation of biological assets) in 1Q24 were positive in US$7 million, diminishing 18% or US$2million compared to 1Q23. This
is mainly explained by (i) lower interest from clients and (ii) a negative non-cash effect on the gap between currency devaluation and inflation.
Consolidated Results 1Q24
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Central Puerto SA published this content on 13 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 May 2024 13:08:10 UTC.
