Pampa Energia Announces Fiscal Year and Fourth Quarter 2023 Results

Rhea-AI Summary

Pampa Energía S.A. announces fiscal year and Q4 23 results with a 19% year-on-year sales decrease, a $155 million loss attributable to shareholders, and a net debt decrease to $613 million. The company achieved a solid balance sheet with a net leverage ratio of 0.9x.

Positive

• Pampa Energía S.A. reported a 19% year-on-year sales decrease, reaching $362 million in Q4 23.
• The company's adjusted EBITDA in Q4 23 was $129 million, 30% lower than Q4 22.
• Pampa Energía recorded a $155 million loss attributable to shareholders in Q4 23.
• The company's net debt decreased to $613 million, the lowest in the last 5 years.
• Pampa Energía achieved a solid balance sheet with a net leverage ratio of 0.9x.

Negative

• None.

Insights

Financial Analyst

The reported 19% year-on-year decrease in sales for Pampa Energía, primarily driven by lower gas sales, thermal and petrochemicals dispatch, indicates a significant shift in the company's revenue streams. This decline in sales, coupled with a 30% drop in oil and gas, has contributed to a reduced Adjusted EBITDA, which is a crucial measure of a company's operating performance. The sharp depreciation of the Argentine peso has further diluted the inflation-adjusted results of affiliates like TGS and Transener, exacerbating the impact on the company's financials.

Moreover, the substantial net debt reduction to the lowest level in five years is a positive signal to investors and creditors, as it suggests improved financial stability and debt management. The decrease in gross debt, aided by the dilution of AR$ denominated debt, alongside an increase in cash and cash equivalents, has led to a net leverage ratio of 0.9x. This ratio is indicative of the company's leverage and its ability to meet its debt obligations, which is a key metric for assessing financial health. The solid balance sheet positions Pampa Energía favorably for future operations and potential investments.

Economist

The Argentine peso's steep depreciation against the US dollar has had a pronounced effect on Pampa Energía's financial results. The devaluation impacts not only the local currency tax valuation but also the accounting valuation of property, plant and equipment (PPE), leading to a significant non-cash deferred income tax charge. This situation reflects the broader economic challenges faced by companies operating in volatile currency environments, where inflation and currency risk can distort financial outcomes.

Furthermore, the 21% average inflation adjustment in the fourth quarter of 2023 for Transener and TGS has been insufficient to counteract the currency devaluation. This scenario underscores the importance of considering both inflation and foreign exchange risks when evaluating a company's performance and potential investment in emerging markets. It also highlights the complexities of operating in economies with high inflation rates, where financial results can be significantly affected by non-operational factors such as exchange rate movements.

Market Research Analyst

The energy sector is highly sensitive to fluctuations in commodity prices and economic conditions. Pampa Energía's performance, as reflected in the reported financial results, suggests a challenging environment for the energy market in Argentina. The decrease in sales across gas, thermal and petrochemicals dispatch points to a potential decline in demand or pricing pressures within these segments. This information is crucial for stakeholders to understand the market dynamics that are currently affecting the company's operations.

Additionally, the noted improvements in power generation and petrochemicals, which partially offset the overall decrease in Adjusted EBITDA, indicate areas of resilience or strategic focus for the company. It is essential for investors to monitor these segments closely, as they could represent key growth areas for Pampa Energía moving forward, especially in light of the broader economic pressures.

BUENOS AIRES, ARGENTINA / ACCESSWIRE / March 6, 2024 / Pampa Energía S.A. (NYSE:PAM)(Buenos Aires Stock Exchange:PAMP), an independent company with active participation in the Argentine electricity and gas value chain, announces the results for the fiscal year and quarter ended on December 31, 2023.

Pampa's financial information adopts US$ as functional currency, converted into AR$ at transactional nominal exchange rate (‘FX'). However, our affiliates Transener and TGS's figures are adjusted for inflation as of December 31, 2023, and translated into US$ at the period's closing FX. The reported figures in US$ from previous periods remain unchanged.

The impact of the local currency depreciation

The steep US$ quote increase from AR$350 to AR$808 on December 13, 2023, mainly affected the tax valuation as it reports under local currency. Despite being adjusted for inflation, it was diluted by the AR$ depreciation, temporarily diverging from the accounting valuation of PPE and accruing a non-cash deferred income tax. Regarding Transener and TGS, the 21% average inflation adjustment on the fourth quarter 2023 (‘Q4 23') flows failed to offset the AR$ devaluation.

Q4 23 main results[1]

19% year-on-year sales decrease, recording US$362 million^[2] in Q4 23, explained by lower gas sales, thermal and petrochemicals dispatch.

Operating performance highlighted by Ensenada Barragán Thermal Power Plant (‘CTEB')'s Combined Cycle (‘CCGT') and hydros:

Adjusted EBITDA^[3] reached US$129 million, 30% lower than Q4 22, explained by reductions of US$46 million in holding and others, as the sharp AR$ devaluation significantly diluted the adjusted by inflation results of TGS and Transener, and a 30% drop in oil and gas. These decreases were partially offset by improvements of 10% in power generation and 33% in petrochemicals.

The income attributable to the Company's shareholders recorded a US$155 million loss, briefly explained before by lower sales and affiliates' equity income, in addition to US$151 million of higher non-cash deferred income tax charges due to the temporary lag between the accounting and tax valuation of PPE. It is worth noting that the accounting valuation is based on the US$ as functional currency, while the tax reporting is in AR$, which inflation adjustment was diluted by the sharp devaluation impact towards the end of Q4 23. Gains from holding financial securities partially offset these losses.

Net debt decreased to US$613 million, reaching the lowest in the last 5 years. This substantial decrease was mainly explained by an interannual reduction of US$165 million in gross debt, due to principal cancellations and dilution of the AR$ debt. Moreover, a US$135 million increase in cash and cash equivalents was recorded, resulting in a net leverage ratio of 0.9x and accomplishing a solid balance sheet.

Consolidated balance sheet

(As of December 31, 2023 and 2022, in millions)

Consolidated income statement
(For the fiscal year and quarters ended on December 31, 2023 and 2022, in millions)

Note: 1: It considers the Employee stock-based compensation plan shares, which amounted to 3.9 million common shares as of December 31, 2022 and 2023.

For the full version of the Earnings Report, please visit Pampa's Investor Relations website: ri.pampaenergia.com/en.

Information about the videoconference

There will be a videoconference to discuss Pampa's Q4 23 results on Thursday, March 7, 2024, at 10:00 a.m. Eastern Standard Time/12:00 p.m. Buenos Aires Time. The hosts will be Gustavo Mariani, CEO, Nicolás Mindlin, CFO, Horacio Turri, executive director of E&P and Lida Wang, investor relations and sustainability officer at Pampa.

For those interested in participating, please register at bit.ly/Pampa4Q2023VC.

For further information about Pampa:

investor@pampaenergia.com
ri.pampaenergia.com/en
www.argentina.gob.ar/cnv
www.sec.gov

[1] The information is based on financial statements (‘FS') prepared according to International Financial Reporting Standards (‘IFRS') in force in Argentina.
[2] It does not include sales from the affiliates CTBSA, Transener and TGS, shown as ‘Results for participation in joint businesses and associates'.
[3] Consolidated adjusted EBITDA represents the results before financial items, income tax, depreciations and amortizations, extraordinary and non-cash income and expense, equity income and other adjustments, and includes affiliates' EBITDA at our ownership. Further information on section 3.1.

SOURCE: 1/3 Pampa Energía S.A.

View the original press release on accesswire.com

FAQ

What was Pampa Energía's year-on-year sales decrease in Q4 23?

Pampa Energía reported a 19% year-on-year sales decrease, reaching $362 million in Q4 23.

What was the company's adjusted EBITDA in Q4 23?

The company's adjusted EBITDA in Q4 23 was $129 million, 30% lower than Q4 22.

How much was the loss attributable to shareholders in Q4 23?

Pampa Energía recorded a $155 million loss attributable to shareholders in Q4 23.

What was Pampa Energía's net debt in Q4 23?

The company's net debt decreased to $613 million, the lowest in the last 5 years.

What was Pampa Energía's net leverage ratio in Q4 23?

Pampa Energía achieved a solid balance sheet with a net leverage ratio of 0.9x.