Central Puerto: 2Q2020 Results
Central Puerto S.A. (NYSE:CEPU) reported a significant 18% decline in energy generation for 2Q2020, totaling 2,673 GWh, primarily due to lower energy demand amid COVID-19 quarantine measures and the unavailability of a key thermal unit. Revenues fell 14% to Ps. 7,183 million, largely affected by the abrogation of Resolution No. 70/2018. Despite the challenges, the company expanded its renewable energy portfolio, acquiring a 100% stake in CP Renovables. Adjusted EBITDA increased 72% to Ps. 7,594 million, while consolidated net income reached Ps. 2,189 million.
- Acquisition of 100% stake in CP Renovables, enhancing renewable energy exposure.
- Adjusted EBITDA increased by 72% to Ps. 7,594 million.
- Consolidated net income rose to Ps. 2,189 million.
- Energy generation decreased 18% to 2,673 GWh.
- Revenues dropped 14% to Ps. 7,183 million, impacted by the abrogation of Resolution No. 70/2018.
- Unavailability of thermal unit LDCUCC25 caused significant operational impact.
BUENOS AIRES / ACCESSWIRE / August 26, 2020 / Central Puerto S.A ("Central Puerto" or the "Company") (NYSE:CEPU), a leading power generation company in Argentina, reports its consolidated financial results for the Second Quarter 2020 ("Second Quarter" or "2Q2020", and "First Half" or "1H2020", respectively).
A conference call to discuss the results of the Second Quarter 2020will be held on August 27, 2020 at 10:00 Eastern Time (see details below). All information provided is presented on a consolidated basis, unless otherwise stated.
Financial statements as of and for the quarter and six-month period ended on June 30, 2020 include the effects of the inflation adjustment, applying IAS 29. Accordingly, the financial 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 informed for comparative purposes. Growth comparisons refer to the same period of the prior 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 quarter and the six months period ended on June 30, 2019,are not comparable to the Financial Statements previously published by the company.
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 quarter and six months period ended on June 30, 2020 and the notes thereto, which will be available on the Company's website.
A. 2Q2020 Highlights
2Q2020 energy generation decreased
Thermal units availability was
"Despite the current challenges, we continue developing our operations and expansion plans for both our thermal and renewable energy projects, serving our clients and the community."
Jorge Rauber, CEO of Central Puerto
Effects of the Quarantine measures due to the Covid-19 crisis. On March 20, 2020 the Argentine Government issued Decree No. 297/2020 establishing a preventive and mandatory social isolation policy ("the Quarantine") as a public health measure to contain the effects of the COVID-19 outbreak.
Consequently, electric energy demand decreased
Additionally, in July 2020, demand increased
Regarding the expansion projects, the construction of private sector energy infrastructure was not included initially as an exemption to the Quarantine but was included on April 7, 2020. Consequently, after taking all necessary precautions and implementing corresponding protocols to protect the personnel and the community where the projects are developed, the construction of La Genoveva I wind farm and Terminal 6-San Lorenzo new plant was resumed on April 9, 2020, and on April 27, 2020, respectively.
Due to these restrictions, the CODs of La Genoveva I and Terminal 6-San Lorenzo are expected to be delayed and depend on the evolution of the situation in the regions in which both projects are located and the measures implemented by the government.
According to the general situation, the Energy Secretariat issued a 185 days extension in the due date for the project completions (COD) for all projects under construction.
Conventional Energy
Unavailability of unit LDCUCC25 (306.4 MW). During April 2020, the Siemens branded combined cycle of the Luján de Cuyo plant became unavailable due to significative failure in its main transformer. On July 16, 2020, after replacing the damaged equipment with a backup transformer stored in the Buenos Aires plant, the unit became online again. The downtime implied a reduction of the energy generation and power availability, which had a significative economic impact during the 2Q2020. However, the Company has a Comprehensive Operational Risk and Loss of Profits insurance that mitigates such losses.
Suspension of price adjustment for units under Energía Base regulatory framework. On February 27, 2020 the Secretariat of Energy issued Res. 31/2020, which replaced the price scheme for the Energía Base generation units. The prices were set in pesos with a monthly adjustment using the following formula: (i)
Renewable Energy
Purchase of CP Renovables S.A. minority stake. On June 24, 2020, the Board of Directors of Central Puerto, with the aim of increasing the exposure of the company to the renewable energy generation segment, authorized the purchase of the minority shareholder's stake of CP Renovables S.A. ("CP Renovables"), holding Central Puerto now
Following the same trends of the rest of the world, renewable energy is rapidly gaining ground in the Argentine matrix, displacing the least efficient generation. In a context of lower electricity demand, renewable energy projects, are not affected since they have dispatch priority, and therefore, they sell
Renewable energy projects have a series of advantages that make this opportunity attractive:
- Lower scale and complexity than thermal plants, and can be operated with less capital and risk, even in times of crisis, such us the current Covid-19 pandemic.
- Access to international sources of financing under project finance structures that maximizes the leverage and efficiency in the use of capital.
- The contracts (PPAs) under the RenovAr regulatory framework including, in the case of CP Renovables, La Castellana I and Achiras, have a payment guarantee from the FODER fund with the participation as guarantor of the World Bank.
- In the case of the rest of the wind farms that operate under the Term Market for Renewable Energy (MATER) regulatory framework, which include La Castellana II, Manque and Los Olivos, they sell energy directly to Large Users, usually with high credit rating, under long term PPAs.
- Stable cash flows based on their priority to dispatch to the grid, and long-term PPA contracts.
B. Main operating metrics
The table below sets forth key operating metrics for 2Q2020, compared to 1Q2019 and 2Q2019, and 1H2020, compared to 1H2019:
Key Metrics | 2Q 2020 | 1Q 2020 | 2Q 2019 | Var % (2Q/2Q) | 1H 2020 | 1H 2019 | Var % (1H/1H) |
Continuing Operations | |||||||
Energy Generation (GWh) | 2,673 | 3,908 | 3,256 | ( | 6,581 | 6,806 | ( |
-Electric Energy Generation- Thermal* | 1,707 | 2,686 | 2,444 | ( | 4,393 | 4,991 | ( |
-Electric Energy Generation - Hydro | 661 | 929 | 665 | ( | 1,589 | 1,511 | |
-Electric Energy Generation - Wind | 305 | 294 | 147 | 599 | 304 | ||
Installed capacity (MW; EoP1) | 4,316 | 4,316 | 4,082 | 4,316 | 4,082 | ||
-Installed capacity -Thermal (MW) | 2,589 | 2,589 | 2,493 | 2,589 | 2,493 | ||
-Installed capacity - Hydro (MW) | 1,441 | 1,441 | 1,441 | 1,441 | 1,441 | ||
-Installed capacity - Wind (MW) | 286 | 286 | 148 | 286 | 148 | ||
Availability - Thermal2 | (10 p.p.) | (6 p.p.) | |||||
Steam production (thousand Tons) | 260 | 255 | 266 | ( | 515 | 543 | ( |
Source: CAMMESA; company data. * Includes generation from Brigadier López starting on April 2019.
1 EoP refers to "End of Period".
2 Availability weighted average by power capacity. Off-time due to scheduled maintenance agreed with CAMMESA is not considered in the ratio.
In the 2Q2020, energy generation decreased
The decrease in the energy generated by Central Puerto was due to:
a) a
b) a
This was partially offset by,
c) a
Steam production decrease
In the 1H2020, energy generation decreased
The decrease in the energy generated by Central Puerto was due to:
a) a
This was partially offset by,
b) a
c) a
C. Financials
Main financial magnitudes of continuing operations
Million Ps. | 2Q 2020 | 1Q 2020 | 2Q 2019 | Var % (2Q/2Q) | 1H 2020 | 1H 2019 | Var % (1H/1H) |
Unaudited, subject to limited review according to rule ISRE 2410 | Unaudited1 | Unaudited, subject to limited review according to rule ISRE 2410 | Unaudited, subject to limited review according to rule ISRE 2410 | Unaudited, subject to limited review according to rule ISRE 2410 | |||
Revenues | 7,183 | 8,436 | 8,307 | ( | 15,619 | 18,056 | ( |
Cost of sales | (3,375) | (3,497) | (4,680) | ( | (6,872) | (10,400) | ( |
Gross profit | 3,808 | 4,939 | 3,628 | 8,747 | 7,656 | ||
Administrative and selling expenses | (554) | (660) | (601) | ( | (1,214) | (1,311) | ( |
Operating income before other operating results | 3,254 | 4,279 | 3,027 | 7,532 | 6,344 | ||
Other operating results, net | 3,120 | 2,385 | 900 | 5,505 | 5,406 | ||
Operating income | 6,374 | 6,664 | 3,927 | 13,037 | 11,750 | ||
Depreciations and Amortizations | 1,220 | 1,224 | 488 | 2,444 | 1,240 | ||
Adjusted EBITDA | 7,594 | 7,888 | 4,415 | 15,481 | 12,990 | ||
1. Includes, among others, the following concepts: | |||||||
● Foreign Exchange Difference and interests related to FONI trade receivables | 3,204 | 2,680 | 538 | 5,885 | 5,111 | ||
● Impairment on property, plant and equipment | (436) | (816) | - | N/A | (1,252) | - | 0 |
Adjusted EBITDA excluding FX difference and interests related to FONI trade receivables and Impairment on property, plant and equipment | 4,826 | 6,022 | 3,877 | 10,848 | 7,879 | ||
Average exchange rate of period | 67.74 | 61.42 | 44.01 | 67.74 | 44.01 | ||
Exchange rate end of period | 70.46 | 64.47 | 42.46 | 70.46 | 42.46 |
NOTE: Exchange rates quoted by the Banco de la Nación Argentina are provided only as a reference. The average exchange rate refers to the average of the daily exchange rates quoted by the Banco de la Nación Argentina for wire transfers (divisas) for each period.
See "Disclaimer-Adjusted EBITDA" below for further information.
1 1Q2020 figures are stated in the measuring unit current as of June 30, 2020, calculated as the results for the 1H2020 minus the 2Q2020.
Adjusted EBITDA Reconciliation
Million Ps. | 2Q 2020 | 1Q 2020 | 2Q 2019 | Var % (2Q/2Q) | 1H 2020 | 1H 2019 | Var % (1H/1H) |
Unaudited, subject to limited review according to rule ISRE 2410 | Unaudited2 | Unaudited, subject to limited review according to rule ISRE 2410 | Unaudited, subject to limited review according to rule ISRE 2410 | Unaudited, subject to limited review according to rule ISRE 2410 | |||
Consolidated Net income for the period | 2,189 | 1,008 | 1,930 | 3,197 | 3,853 | ( | |
Loss on net monetary position | (155) | (331) | 1,685 | ( | (485) | 3,770 | ( |
Financial expenses | 5,025 | 4,589 | 734 | 9,495 | 3,024 | ||
Financial income | (1,387) | (137) | (794) | (1,532) | (1,392) | ||
Share of the profit of an associate | 89 | (57) | (341) | ( | 32 | (493) | ( |
Income tax expenses | 612 | 1,717 | 713 | ( | 2,330 | 2,988 | ( |
Depreciation and amortization | 1,220 | 1,224 | 488 | 2,444 | 1,240 | ||
Adjusted EBITDA | 7,594 | 8,013 | 4,415 | 15,481 | 12,990 | ||
1. Includes, among others, the following concepts: | |||||||
● Foreign Exchange Difference and interests related to FONI trade receivables | 3,204 | 2,680 | 538 | 5,885 | 5,111 | ||
● Impairment on property, plant and equipment | (436) | (816) | - | N/A | (1,252) | - | 0 |
Adjusted EBITDA excluding Foreign Exchange Difference and interests related to FONI trade receivables and Impairment on property, plant and equipment | 4,826 | 6,149 | 3,877 | ( | 10,848 | 7,879 |
2 1Q2020 figures are stated in the measuring unit current as of June 30, 2020, calculated as the results for the 1H2020 minus the 2Q2020.
2Q 2020 Results Analysis
Revenues decreased
Without considering fuel remuneration, Revenues for the 2Q2020 would have been Ps. 6,961 million, compared to Ps. 5,760 million. This increase was mainly due to:
(i) an increase in Sales under contracts, which amounted to Ps. 3,769 million during the 2Q2020, as compared to Ps. 779 million in the 2Q2019, mainly due to the revenues related to the Brigadier López Plant, which was acquired in June 2019, the new Luján de Cuyo cogeneration unit, which started operations on October 2019, and the wind farms La Castellana II, La Genoveva II, Manque and Los Olivos which started operations during June 2019, September 2019, December 2019, and February 2020, respectively;
This increase was partially offset by:
(i) a decrease in Spot Sales/Energía Base (Revenues from Resolution 1, Resolution 31, Resolution 19, SGE Resolution 70/2018 and amendments) which, without considering the remuneration associated to the self-procured fuel under Res. 70/18 mentioned above, was Ps. 2,747 million in the 2Q2020 as compared to 4,673 million in the 2Q2019, mainly due to the:
(a) a decrease in prices for units under the Energía Base Regulatory framework established by Res. 31/2020, in force since February 1, 2020,
(b) the unavailability of the combined cycle LDCUCC25 between April 12 and July 16, 2020 mentioned above, which reduced revenues from power availability and the energy generation from this unit in 491 GWh (part of which may be mitigated by the Comprehensive Operational Risk and Loss of Profits insurance, see section A. 2Q2020 Highlights), and
(c) a 291 GWh reduction in energy generation from the rest of the units under this segment, mainly due to the effect of the Quarantine measures on the thermal units.
3 On December 30, 2019, through Resolution No. 12/2019, the Ministry of Productive Development abrogated Resolution SE No. 70/2018 (Res. 70/18), which allowed generators to purchase their own fuel, and reinstated effectiveness of section 8 of Resolution No. 95/2013 and section 4 of Resolution No. 529/2014, centralizing fuel purchases through CAMMESA, who provides the fuel without a charge to generators.
Gross profit was Ps. 3,808 million in the 2Q2020, compared to Ps. 3,628 million in 2Q2019. This increase was due to (i) the above-mentioned variation in revenues, and (ii) a
(i) A
This was partially offset by:
(i) a
Gross Profit Margin totaled
Operating income before other operating results, net, was Ps. 3,254 million, compared to Ps. 3,027 million in the 2Q2019. This increase was due to (i) the above-mentioned increase in gross profits, and (ii) a
Adjusted EBITDA was Ps. 7,594 million in the 2Q2020, compared to Ps. 4,415 million in the 2Q2019. This increase was mainly due to (i) the increase in operating results before other operating income, net mentioned above, which includes an increase in depreciations and amortizations that totaled Ps. 1,220 during the 2Q2020, as compared to Ps. 488 million during the 2Q2019, mainly related to the new renewable and thermal plants. Additionally, foreign exchange difference on operating assets, mainly related to FONI trade receivables generated a Ps. 3,093 million gain during the 2Q2020, compared to a loss of Ps. 1,001 million during the 2Q2019. The increase in the Adjusted EBITDA was partially offset by a Ps. 436 million non-cash loss related to the property, plant and equipment impairment accrued during the 2Q2020 on two Siemens branded generating groups stored in the supplier's facilities and one General Electric branded generating group stored in Central Puerto's Nuevo Puerto plant, which were valued using the fair value less cost of sale approach; and (iv) lower interests on trade receivables, mainly from CAMMESA, which during the 2Q2020 amounted Ps. 642 million, as compared to Ps. 2,069 million in the 2Q2019 due to a lower trade receivables balance maintained and lower interest rates during the period.
Consolidated Net income was Ps. 2,189 million and Net income for shareholder was Ps. 2,194 million or Ps. 1.46 per share or Ps. 14.6 per ADR, in the 2Q2020, compared to Ps. 1,930 million and 1,654 million, respectively, or Ps. 1.10 per share or Ps. 11.0 per ADR, in the 2Q2019. In addition to the above-mentioned factors, net income was (i) negatively impacted by higher financial expenses that amounted to Ps. 5,025 million in the 2Q2020, compared to Ps. 734 million in the 2Q2019, mainly due to the interest accrued on a higher debt balance during the period, related to the loans obtained for the thermal and renewable energy expansion projects and the acquisition of the Brigadier López plant, and the foreign exchange difference on such loans, which are mostly denominated in US dollars, and (ii) a Ps. 89 million loss during the 2Q2020 from the share of profit of associates, compared to a gain of Ps. 341 million during the 2Q2019, mainly due to lower results from the operations of Ecogas. This was partially offset by (ii) higher financial income which amounted to Ps. 1,387 million during the 2Q2020, compared to Ps. 794 million in the 2Q2019, mainly due to higher mark-to market results on financial assets (which excludes FONI and other trade receivables) , measured in argentine pesos. As a reference, during the 2Q2020, the peso depreciated
Finally, the gain on net monetary position totaled Ps. 155 million during the 2Q2020, as compared to a loss on the net monetary position of Ps. 1,685 million in the 2Q2019.
FONI collections totaled Ps. 1,322 million in the 2Q2020, -including VAT, associated to the FONI trade receivables for Vuelta de Obligado Plant.
1H2020 Results Analysis
Revenues decreased
Without considering fuel remuneration, Revenues for the 1H2020 would have been Ps. 15,084 million, compared to Ps. 11,555 million. This increase was mainly due to:
(ii) an increase in Sales under contracts, which amounted to Ps. 7,339 million during the 1H2020, as compared to Ps. 1,588 million in the 1H2019, mainly due to the revenues related to the Brigadier López Plant, which was acquired in June 2019, the new Luján de Cuyo cogeneration unit, which started operations on October 2019, and the wind farms La Castellana II, La Genoveva II, Manque and Los Olivos which started operations during June 2019, September 2019, December 2019, and February 2020, respectively;
This increase was partially offset by:
(ii) a decrease in Spot Sales/Energía Base (Revenues from Resolution 1, Resolution 31, Resolution 19, SGE Resolution 70/2018 and amendments) which, without considering the remuneration associated to the self-procured fuel under Res. 70/18 mentioned above, was Ps. 6,903 million in the 1H2020 as compared to 9,372 million in the 1H2019, mainly due to the:
(a) a decrease in prices for units under the Energía Base Regulatory framework established by Res. 31/2020, in force since February 1, 2020,
(b) the unavailability of the combined cycle LDCUCC25 between April 12 and July 16, 2020 mentioned above, which reduced revenues from power availability and the energy generation from this unit, which during the 1H2020 was 439 GWh lower than the 1H2019 (part of which may be mitigated by the Comprehensive Operational Risk and Loss of Profits insurance, see section A. 2Q2020 Highlights), and
(c) a 478 GWh reduction in energy generation from the rest of the units under this segment, mainly due to the effect of the Quarantine measures on the thermal units and, to a lesser extent, a lower dispatch in some of the thermal units.
Gross profit increased
(i) A
This was partially offset by:
(ii) a
Gross Profit Margin totaled
Operating income before other operating results, net, was Ps. 7,532 million, compared to Ps. 6,344 million in the 1H2019. This increase was due to (i) the above-mentioned increase in gross profits, and (ii) a
Adjusted EBITDA was Ps. 15,481 million in the 1H2020, compared to Ps. 12,990 million in the 1H2019. This increase was mainly due to (i) the increase in operating results before other operating income, net mentioned above, which includes an increase in depreciations and amortizations that totaled Ps. 2,444 during the 1H2020, as compared to Ps. 1,240 million during the 1H2019, mainly related to the new renewable and thermal plants. Additionally, foreign exchange difference on operating assets, mainly related to FONI trade receivables generated a Ps. 5,650 million gain during the 1H2020, compared to Ps. 3,075 million during the 1H2019. The increase in the Adjusted EBITDA was partially offset by a Ps. 1,252 million non-cash loss related to the property, plant and equipment impairment accrued during the 1H2020 on two Siemens branded generating groups stored in the supplier's facilities and one General Electric branded generating group stored in Central Puerto's Nuevo Puerto plant, which were valued using the fair value less cost of sale approach; and (iv) lower interests on trade receivables, mainly from CAMMESA, which during the 1H2020 amounted Ps. 1,450 million, as compared to Ps. 2,553 million in the 1H2019 due to a lower trade receivables balance maintained and lower interest rates during the period.
Consolidated Net income was Ps. 3,197 million and Net income for shareholder was Ps. 3,177 million or Ps. 2.11 per share or Ps. 21.1 per ADR, in the 1H2020, compared to Ps. 3,853 million and 3,624 million, respectively, or a gain of Ps. 2.41 per share or Ps. 24.1 per ADR, in the 1H2019. In addition to the above-mentioned factors, net income was (i) negatively impacted by higher financial expenses that amounted to Ps. 9,495 million in the 1H2020, compared to Ps. 3,024 million in the 1H2019, mainly due to the interest accrued on a higher debt balance during the period, related to the loans obtained for the thermal and renewable energy expansion projects and the acquisition of the Brigadier López plant, and the foreign exchange difference on such loans, which are mostly denominated in US dollars, and (ii) a Ps. 32 million loss during the 1H2020 from the share of profit of associates, compared to a gain of Ps. 493 million during the 1H2019, mainly due to lower results from the operations of Ecogas. This was partially offset by (ii) higher financial income which amounted to Ps. 1,532 million during the 1H2020, compared to Ps. 1,392 million in the 1H2019, mainly due to higher mark-to-market results on financial assets (which excludes FONI and other trade receivables) , measured in argentine pesos. As a reference, during the 1H2020, the peso depreciated
Finally, the gain on net monetary position totaled Ps. 485 million during the 1H2020, as compared to a loss on the net monetary position of Ps. 3,770 million in the 1H2019.
FONI collections totaled Ps. 2,987 million in the 1H2020, -including VAT, associated to the FONI trade receivables for San Martín, Manuel Belgrano, and Vuelta de Obligado Plants.
Financial Situation
As of June 30, 2020, the Company and its subsidiaries had Cash and Cash Equivalents of Ps. 2,132 million, and Other Current Financial Assets of Ps. 4,437 billion.
The following chart breaks down the Net Debt position of Central Puerto (on a stand-alone basis) and its subsidiaries:
Million Ps. | As of June 30, 2020 | |||||||
Cash and cash equivalents (stand-alone) | 10 | |||||||
Other financial assets (stand-alone)4 | 2,351 | |||||||
Financial Debt (stand-alone) | (23,131 | ) | ||||||
Composed of: Financial Debt (current) (Central Puerto S.A. stand-alone) | (11,307 | ) | ||||||
Financial Debt (non-current) (Central Puerto S.A. stand-alone) | (11,824 | ) | ||||||
Subtotal Central Puerto stand-alone Net Debt Position | (20,771 | ) | ||||||
Cash and cash equivalents of subsidiaries | 2,123 | |||||||
Other financial assets of subsidiaries | 2,086 | |||||||
Financial Debt of subsidiaries Composed of: | (19,160 | ) | ||||||
Financial Debt of subsidiaries (current)4 | (1,701 | ) | ||||||
Financial Debt of subsidiaries (non-current) 4 | 17,459 | ) | ||||||
Subtotal Subsidiaries Net Debt Position | (14,951 | ) | ||||||
Consolidated Net Debt Position | (35,722 | ) | ||||||
4 Excludes intercompany loans.
Cash Flows of the 1H2020
Million Ps. | 1H 2020 ended on June 30, 2020 | |||
Cash and Cash equivalents at the beginning | 1,697 | |||
Net cash flows provided by operating activities | 8,206 | |||
Net cash flows used in investing activities | (3,045 | ) | ||
Net cash flows used in financing activities | (4,213 | ) | ||
Exchange difference and other financial results | (364 | ) | ||
Loss on net monetary position by cash and cash equivalents | (148 | ) | ||
Cash and Cash equivalents at the end | 2,132 | |||
Net cash provided by operating activities was Ps. 8,206 million during the 1H2020. This cash flow arises from (i) Ps. 13,037 million from the operating income obtained during the 1H2020, (ii) Ps. 8,514 million due to a decrease in the stock of trade receivables, mainly related to the FONI collections, (iii) Ps. 1,282 million in collection of interests from clients, including the ones from FONI, during the period and (iv) a Ps. 1,252 million non-cash impairment of property, plant and equipment charge included in the operating income, which was partially offset by (v) a Ps. 5,650 million non-cash foreign exchange difference on trade receivables, (vi) Ps. 2,225 million from income tax paid, and (vii) a 5,650 million reduction in trade and other payables, other non-financial liabilities and liabilities from employee benefits mainly due to (a) the payment of the self-procured fuel purchased prior to the abrogation of the Res. 70/18, as mentioned above, and (b) the cancellation of non-financial liabilities associated to the construction of the expansion projects.
Net cash used in investing activities was Ps. 3,045 million in 1H 2020. This amount was mainly due to (i) Ps. 5,929 million in payments for the purchase of property, plant and equipment for the construction of the renewable and thermal projects, which was partially offset by (ii) Ps. 2,767 million obtained from the sell of short-term financial assets, net and (iii) Ps. 118 million in dividends collected from TJSM and TMB, the companies that operate the San Martín and Manuel Belgrano combined cycle plants from the FONI program.
Net cash used in financing activities was Ps. 4,213 million in the 1H 2020. This amount was mainly the result of Ps. 2,001 million Bank and investment accounts overdrafts paid, net, (ii) Ps. 719 million in loans paid, mainly related to the loans received for the expansion projects, and (iii) Ps. 1,441 million in interest and financial expenses paid, mainly related to those loans.
D. Tables
a. Consolidated Statement of Income
| 2Q 2020 | 2Q 2019 | |||||||
| Unaudited, subject to limited review according to rule ISRE 2410 | Unaudited, subject to limited review according to rule ISRE 2410 | |||||||
| Thousand Ps. | Thousand Ps. | |||||||
Revenues | 7,183,422 | 8,307,463 | ||||||
Cost of sales | (3,375,264 | ) | (4,679,682 | ) | ||||
Gross income | 3,808,158 | 3,627,781 | ||||||
Administrative and selling expenses | (554,457 | ) | (600,616 | ) | ||||
Other operating income | 3,731,721 | 1,068,666 | ||||||
Other operating expenses | (175,701 | ) | (168,491 | ) | ||||
Property plant and equipment impairment | (435,663 | ) | - | |||||
Operating income | 6,374,058 | 3,927,340 | ||||||
Gain (loss) on net monetary position | 154,666 | (1,685,120 | ) | |||||
Finance income | 1,386,934 | 793,929 | ||||||
Finance expenses | (5,024,751 | ) | (734,201 | ) | ||||
Share of the profit of associates | (89,025 | ) | 341,403 | |||||
Income before income tax | 2,801,882 | 2,643,351 | ||||||
Income tax for the period | (612,475 | ) | (713,193 | ) | ||||
Net income for the period | 2,189,407 | 1,930,158 | ||||||
Net total comprehensive income for the period | 2,189,407 | 1,930,158 | ||||||
Attributable to: | ||||||||
-Equity holders of the parent | 2,194,480 | 1,653,872 | ||||||
-Non-controlling interests | (5,073 | ) | 276,286 | |||||
| 2,189,407 | 1,930,158 | |||||||
Earnings per share: | ||||||||
Basic and diluted (Ps.) | 1.46 | 1.10 | ||||||
| 1H 2020 | 1H 2019 | |||||||
| Unaudited, subject to limited review according to rule ISRE 2410 | Unaudited, subject to limited review according to rule ISRE 2410 | |||||||
| Thousand Ps. | Thousand Ps. | |||||||
Revenues | 15,618,868 | 18,055,908 | ||||||
Cost of sales | (6,872,064 | ) | (10,400,232 | ) | ||||
Gross income | 8,746,804 | 7,655,676 | ||||||
Administrative and selling expenses | (1,214,422 | ) | (1,311,219 | ) | ||||
Other operating income | 7,105,762 | 5,628,328 | ||||||
Other operating expenses | (349,515 | ) | (222,582 | ) | ||||
Property plant and equipment impairment | (1,251,730 | ) | - | |||||
Operating income | 13,036,899 | 11,750,203 | ||||||
Gain (loss) on net monetary position | 485,227 | (3,770,239 | ) | |||||
Finance income | 1,531,899 | 1,391,699 | ||||||
Finance expenses | (9,495,089 | ) | (3,023,663 | ) | ||||
Share of the profit of associates | (31,979 | ) | 492,525 | |||||
Income before income tax | 5,526,957 | 6,840,525 | ||||||
Income tax for the period | (2,329,885 | ) | (2,987,539 | ) | ||||
Net income for the period | 3,197,072 | 3,852,986 | ||||||
Net total comprehensive income for the period | 3,197,072 | 3,852,986 | ||||||
Attributable to: | ||||||||
-Equity holders of the parent | 3,177,244 | 3,623,720 | ||||||
-Non-controlling interests | 19,828 | 229,266 | ||||||
| 3,197,072 | 3,852,986 | |||||||
Earnings per share: | ||||||||
Basic and diluted (Ps.) | 2.11 | 2.41 | ||||||
b. Consolidated Statement of Financial Position
| As of June 30, 2020 | As of December 31, 2019 | |||||||
| Unaudited, subject to limited review according to rule ISRE 2410 | Unaudited, subject to limited review according to rule ISRE 2410 | |||||||
| Thousand Ps. | Thousand Ps. | |||||||
Assets | ||||||||
Non-current assets | ||||||||
Property, plant and equipment | 67,066,257 | 64,403,725 | ||||||
Intangible assets | 7,099,914 | 8,029,670 | ||||||
Investment in associates | 3,769,902 | 3,919,621 | ||||||
Trade and other receivables | 26,396,121 | 27,545,418 | ||||||
Other non-financial assets | 533,241 | 782,868 | ||||||
Inventories | 155,762 | 163,766 | ||||||
| 105,021,197 | 104,845,068 | |||||||
Current assets | ||||||||
Inventories | 884,140 | 746,983 | ||||||
Other non-financial assets | 1,021,426 | 1,143,030 | ||||||
Trade and other receivables | 14,460,513 | 17,767,078 | ||||||
Other financial assets | 4,436,505 | 8,745,249 | ||||||
Cash and cash equivalents | 2,132,306 | 1,696,935 | ||||||
| 22,934,890 | 30,099,275 | |||||||
Total assets | 127,956,087 | 134,944,343 | ||||||
Equity and liabilities | ||||||||
Equity | ||||||||
Capital stock | 1,514,022 | 1,514,022 | ||||||
Adjustment to capital stock | 21,126,025 | 21,126,025 | ||||||
Legal reserve | 3,202,398 | 2,702,087 | ||||||
Voluntary reserve | 40,450,730 | 30,114,738 | ||||||
Other equity accounts | (1,640,520 | ) | - | |||||
Retained earnings | 3,177,244 | 10,836,303 | ||||||
Equity attributable to shareholders of the parent | 67,829,899 | 66,293,175 | ||||||
Non-controlling interests | 71,627 | 898,203 | ||||||
Total Equity | 67,901,526 | 67,191,378 | ||||||
Non-current liabilities | ||||||||
Other non-financial liabilities | 4,741,259 | 4,946,614 | ||||||
Other loans and borrowings | 29,283,170 | 34,858,710 | ||||||
Compensation and employee benefits liabilities | 280,929 | 260,446 | ||||||
Provisions | 32,297 | 10,621 | ||||||
Deferred income tax liabilities | 7,417,832 | 7,167,934 | ||||||
| 41,755,487 | 47,244,325 | |||||||
Current liabilities | ||||||||
Trade and other payables | 2,019,064 | 6,701,367 | ||||||
Other non-financial liabilities | 1,125,985 | 1,970,105 | ||||||
Other loans and borrowings | 13,007,827 | 9,116,881 | ||||||
Compensation and employee benefits liabilities | 595,612 | 793,687 | ||||||
Income tax payable | 1,523,250 | 1,895,412 | ||||||
Provisions | 27,336 | 31,188 | ||||||
| 18,299,074 | 20,508,640 | |||||||
Total liabilities | 60,054,561 | 67,752,965 | ||||||
Total equity and liabilities | 127,956,087 | 134,944,343 |
c. Consolidated Statement of Cash Flow
| 1H 2020 | 1H 2019 | |||||||
| Unaudited, subject to limited review according to rule ISRE 2410 | Unaudited, subject to limited review according to rule ISRE 2410 | |||||||
| Thousand Ps. | Thousand Ps. | |||||||
Operating activities | ||||||||
Income for the period before income tax | 5,526,957 | 6,840,525 | ||||||
Adjustments to reconcile income for the period before income tax to net cash flows: | ||||||||
Depreciation of property, plant and equipment | 1,470,027 | 923,325 | ||||||
Amortization of intangible assets | 973,744 | 316,359 | ||||||
Property, plant and equipment impairment | 1,251,730 | - | ||||||
Discount of trade and other receivables and payables, net | 39,019 | 39 | ||||||
Interest earned from customers | (1,450,213 | ) | (2,552,831 | ) | ||||
Commercial and fiscal interests lost | 295,274 | 120,944 | ||||||
Financial income | (1,531,899 | ) | (1,391,699 | ) | ||||
Financial expenses | 9,495,089 | 3.023.663 | ||||||
Share of the profit of associates | 31,979 | (492,525 | ) | |||||
Stock-based payments | 1,396 | 17,138 | ||||||
Movements in provisions and long-term employee benefit plan expenses | 56,651 | 110,414 | ||||||
Foreign exchange difference for trade receivables | (5,649,993 | ) | (3,074,724 | ) | ||||
Loss on net monetary position | (4,428,558 | ) | (3,841,108 | ) | ||||
Working capital adjustments: | ||||||||
Decrease in trade and other receivables | 8,513,917 | 9.355.767 | ||||||
Decrease in other non-financial assets and inventories | 203,059 | 90,645 | ||||||
(Decrease) Increase in trade and other payables, other non-financial liabilities and liabilities from employee benefits | (5,649,782 | ) | 610,649 | |||||
| 9,148,397 | 10,056,581 | |||||||
Interest received from customers | 1,282,441 | 2,425,474 | ||||||
Income tax paid | (2,225,333 | ) | (8,753,407 | ) | ||||
Net cash flows provided by operating activities | 8,205,505 | 3,728,648 | ||||||
Investing activities | ||||||||
Purchase of property, plant and equipment | (5,929,490 | ) | (7,986,902 | ) | ||||
Acquisition of Brigadier L??pez plant | - | (9,617,330 | ) | |||||
Dividends received | 117,634 | 133,163 | ||||||
Sale of available-for-sale assets, net | 2,766,959 | 708,415 | ||||||
Net cash flows used in investing activities | (3,044,897) | (16,762,654) | ||||||
Financing activities | ||||||||
Banks and investment accounts overdrafts received (paid), net | (2,000,857 | ) | 821,758 | |||||
Long term loans received | - | 14,811,924 | ||||||
Long term loans paid | (718,619 | ) | (527,172 | ) | ||||
Interests and other loan costs paid | (1,440,690 | ) | (1,647,749 | ) | ||||
Contributions from non-controlling interests | - | 220,272 | ||||||
Dividends paid | (52,555 | ) | (26,388 | ) | ||||
Net cash flows used in financing activities | (4,212,721) | 13,652,645 | ||||||
Increase in cash and cash equivalents | 947,887 | 618,639 | ||||||
Exchange difference and other financial results | (364,199 | ) | 9,201 | |||||
Monetary results effect on cash and cash equivalents | (148,317 | ) | 129,030 | |||||
Cash and cash equivalents as of January 1 | 1,696,935 | 401,819 | ||||||
Cash and cash equivalents as of June 30, 2020 | 2,132,306 | 1,158,689 | ||||||
E. Information about the Conference Call
There will be a conference call to discuss Central Puerto's Second Quarter 2020 results on August 27, 2020 at 10:00 New York Time / 11:00 Buenos Aires Time.
The conference will hosted by Mr. Jorge Rauber, Chief Executive Officer, and Fernando Bonnet, Chief Operating Officer. To access the conference call, please dial:
United States Participants (Toll Free): 1-888-317-6003
Argentina Participants (Toll Free) : 0800-555-0645
International Participants : +1-412-317-6061
Passcode : 5307307
The Company will also host a live audio webcast of the conference call on the Investor Relations section of the Company's website at www.centralpuerto.com. Please allow extra time prior to the call to visit the website and download any streaming media software that might be required to listen to the webcast. The call will be available for replay on the Company website under the Investor Relations section.
You may find additional information on the Company at:
Glossary
In this release, except where otherwise indicated or where the context otherwise requires:
- "CAMMESA" refers to Compañía Administradora del Mercado Mayorista Eléctrico Sociedad Anónima;
- "COD" refers to Commercial Operation Date, the day in which a generation unit is authorized by CAMMESA (in Spanish, "Habilitación Comercial") to sell electric energy through the grid under the applicable commercial conditions;
- "CVP" refers to Variable Cost of Production of producing energy, which may be declared by the generation companies to CAMMESA;
- "CVO effect" refers to the CVO receivables update, and interests triggered by the CVO Plant Commercial Operation Approval;
- "Ecogas" refers collectively to Distribuidora de Gas Cuyana ("DGCU"), Distribuidora de Gas del Centro ("DGCE"), and their controlling company Inversora de Gas del Centro ("IGCE");
- "Energía Base" (legacy energy) refers to the regulatory framework established under Resolution SE No. 95/13, as amended, currently regulated by Resolution SE No. 31/20;
- "FONINVEMEM" or "FONI", refers to the Fondo para Inversiones Necesarias que Permitan Incrementar la Oferta de Energía Eléctrica en el Mercado Eléctrico Mayorista (the Fund for Investments Required to Increase the Electric Power Supply) and Similar Programs, including Central Vuelta de Obligado (CVO) Agreement;
- "MATER", refers to Mercado a Término de Energía Renovable or Term Market for Renewable Energy, and is the regulatory framework that allows generators to sell electric energy from renewable sources directly to large users.
- "p.p.", refers to percentage points;
- "PPA" refers to
Disclaimer
Rounding amounts and percentages: Certain amounts and percentages included in this release have been rounded for ease of presentation. Percentage figures included in this release have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason, certain percentage amounts in this release may vary from those obtained by performing the same calculations using the figures in the financial statements. In addition, certain other amounts that appear in this release may not sum due to rounding.
This release contains certain metrics, including information per share, operating information, and others, which do not have standardized meanings or standard methods of calculation and therefore such measures may not be comparable to similar measures used by other companies. Such metrics have been included herein to provide readers with additional measures to evaluate the Company's performance; however, such measures are not reliable indicators of the future performance of the Company and future performance may not compare to the performance in previous periods.
OTHER INFORMATION
Central Puerto routinely posts important information for investors in the Investor Relations support section on its website, www.centralpuerto.com. From time to time, Central Puerto may use its website as a channel of distribution of material Company information. Accordingly, investors should monitor Central Puerto's Investor Support website, in addition to following the Company's press releases, SEC filings, public conference calls and webcasts. The information contained on, or that may be accessed through, the Company's website is not incorporated by reference into, and is not a part of, this release.
CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION
This release contains certain forward-looking information and forward-looking statements as defined in applicable securities laws (collectively referred to in this Earnings Release as "forward-looking statements") that constitute forward-looking statements. All statements other than statements of historical fact are forward-looking statements. The words ‘‘anticipate'', ‘‘believe'', ‘‘could'', ‘‘expect'', ‘‘should'', ‘‘plan'', ‘‘intend'', ‘‘will'', ‘‘estimate'' and ‘‘potential'', and similar expressions, as they relate to the Company, are intended to identify forward-looking statements.
Statements regarding possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition, expected power generation and capital expenditures plan, are examples of forward-looking statements. Forward-looking statements are necessarily based upon a number of factors and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
The Company assumes no obligation to update forward-looking statements except as required under securities laws. Further information concerning risks and uncertainties associated with these forward-looking statements and the Company's business can be found in the Company's public disclosures filed on EDGAR (www.sec.gov).
Adjusted EBITDA
In this release, Adjusted EBITDA, a non-IFRS financial measure, is defined as net income for the year, plus finance expenses, minus finance income, minus share of the profit of associates, minus depreciation and amortization, plus income tax expense, plus depreciation and amortization, minus net results of discontinued operations.
Adjusted EBITDA is believed to provide useful supplemental information to investors about the Company and its results. Adjusted EBITDA is among the measures used by the Company's management team to evaluate the financial and operating performance and make day-to-day financial and operating decisions. In addition, Adjusted EBITDA is frequently used by securities analysts, investors and other parties to evaluate companies in the industry. Adjusted EBITDA is believed to be helpful to investors because it provides additional information about trends in the core operating performance prior to considering the impact of capital structure, depreciation, amortization and taxation on the results.
Adjusted EBITDA should not be considered in isolation or as a substitute for other measures of financial performance reported in accordance with IFRS. Adjusted EBITDA has limitations as an analytical tool, including:
- Adjusted EBITDA does not reflect changes in, including cash requirements for, working capital needs or contractual commitments;
- Adjusted EBITDA does not reflect the finance expenses, or the cash requirements to service interest or principal payments on indebtedness, or interest income or other finance income;
- Adjusted EBITDA does not reflect income tax expense or the cash requirements to pay income taxes;
- although depreciation and amortization are non-cash charges, the assets being depreciated or amortized often will need to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for these replacements;
- although share of the profit of associates is a non-cash charge, Adjusted EBITDA does not consider the potential collection of dividends; and
- other companies may calculate Adjusted EBITDA differently, limiting its usefulness as a comparative measure.
The Company compensates for the inherent limitations associated with using Adjusted EBITDA through disclosure of these limitations, presentation of the Company's consolidated financial statements in accordance with IFRS and reconciliation of Adjusted EBITDA to the most directly comparable IFRS measure, net income. For a reconciliation of the net income to Adjusted EBITDA, see the tables included in this release.
Contact information:
Chief Operting Officer
Fernando Bonnet
Investor Relations Officer
Tomás Daghlian
Tel (+54 11) 4317 5000 ext.2192
inversores@centralpuerto.com
www.centralpuerto.com
SOURCE: Central Puerto S.A
View source version on accesswire.com:
https://www.accesswire.com/603520/Central-Puerto-2Q2020-Results
FAQ
What were Central Puerto's financial results for 2Q2020?
How much did energy generation decline in 2Q2020 for Central Puerto?
What factors affected Central Puerto's revenues in 2Q2020?
What was the growth in adjusted EBITDA for Central Puerto in 2Q2020?
Did Central Puerto acquire any new assets recently?
