Central Puerto (CEPU) Q2 2024 earnings summary

Executive summary

• Installed capacity reached 6,703 MW, down 6% year-over-year due to the disconnection of two steam turbines at Central Costanera, which did not impact revenues as they were already inactive.

• Energy generation increased 5% year-over-year to 4,985 GWh, led by a 94% surge in hydro output and a 5% rise in renewables.

• Revenues rose 15% year-over-year to $168 million, driven by higher spot, contract, and hydro sales.

• Adjusted EBITDA fell 27% to $46 million and net income dropped to $8 million, impacted by non-cash effects from inflation, currency devaluation, and regulatory changes.

• Maintained a leading position in private power generation with a diversified asset portfolio.

Financial highlights

• Net debt reduced to $229 million as of June 30, 2024, with a net debt to adjusted EBITDA ratio of 0.9x.

• Net cash from operations in H1 2024 was $67 million; cash position at June 30, 2024 was $5 million, with total liquidity including financial assets at $158 million.

• Gross income nearly doubled year-over-year to $65 million, supported by improved hydro generation and cost controls.

• Operating costs (excluding D&A) fell 18% year-over-year, with reductions in employee compensation and materials.

• Net financial results were negative $21 million, $6 million worse than 2Q23, due to lower interest earned and fair value changes.

Outlook and guidance

• Construction of San Carlos Solar Farm and Brigadier López Combined Cycle projects are on schedule and on budget, with completion expected in 2025.

• CapEx for Diego de Alvear combined cycle and San Carlos solar project expected at $90 million and $13 million, respectively, through 2025.

• Regulatory updates increased spot market remuneration by 25% in June and 3% in August 2024.

• No immediate plans to tap debt markets; focus remains on ongoing projects.

• Transition period for certain regulatory contracts extended to December 28, 2024.