Good morning, and welcome to the Central Puerto Conference Call following the results announcement for the quarter ended on June 30, 2019. All participants will be in listen-only mode. [Operator Instructions]. After today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded.

If you do not have a copy of the press release, please refer to the investor support section on the company's corporate website at www.centralpuerto.com. A replay of today's call may be accessed by accessing the webcast in the investor support section of the Central Puerto corporate website.

Before we proceed, please note that certain statements made by the company during this conference call are forward looking statements and we refer you to the Forward-Looking Statements section of our earnings release and recent filings with the SEC.

Central Puerto assumes no obligation to update forward-looking statements except as required under applicable securities laws. In addition, all financial figures were prepared in accordance with IFRS and are stated in Argentinean pesos unless otherwise noted.

On the call from Central Puerto is the Jorge Rauber, Chief Executive Officer; Fernando Bonnet, Chief Financial Officer; [indiscernible], Corporate Finance Manager; and Tomás Daghlian, Investor Relations Officer. And now, I will turn the call over to Jorge Rauber. Mr. Rauber you may begin..

Thank you. We are joining here today with our team from Buenos Aires, Argentina to report on results of the second quarter 2019 and to answer any questions you may have regarding the current situation. Yesterday was a difficult time for our company and the Argentinean stock market in general.

We want to ensure you that our team is closely looking at the situation in order to mitigate any impact from the recent events. That said, I will refer first to the operating figures of the quarter and then continue with some recent news regarding Central Puerto. Finally, Tomás will analyze the financial results.

During the second quarter, we generated 3.3 terawatt hours of electricity, a 4% increase as compared to the same quarter 2018.

This increase was mainly due to 16% increase in thermal generation which in the second quarter 2018 was affected by the maintenance of our Central Puerto Combined Cycle and 147 gigawatt hour of additional energy from the wind farms Achiras and La Castellana, which started operating during the third quarter 2018.

This increase was partially offset by a 36% decrease in energy generation from hydro power plants due to less waterflow. For the general market, electricity generation during the quarter decreased 9.1% compared to the same period of the previous year according to CAMMESA mainly due to a decrease in the demand by residential and industrial customers.

Our thermal units reached 92% availability in the period, increasing 13 percentage point from the level of time during the second quarter 2018. As a comparison, the average availability of the thermal units during the second quarter 2019 was 80% according to CAMMESA. We continue with the construction of our thermal and renewable energy projects.

Regarding the Luján de Cuyo we expect that the unit to start commercial operations in November this year and the Terminal 6 San Lorenzo project to start the operation during the second quarter of 2020. We have good advances in our renewable energy projects too.

On July 16th the wind farm La Castellana II commenced its operations and we expect the same for La Genoveva II during the next weeks. Regarding the Manque projects, we have recently changed the schedule for the construction and we expect it to start to commercial operation in November this year instead of September as originally planned.

The batches for this project remain the same. The rest of the renewable energy projects had also good advances in their construction schedule and are within budget as well.

Regarding the projects under the term market regulatory framework it’s important to mention that we have already sign contract for 79% of our expected electricity generation from them. These are long-term bilateral contracts entered into directly. This is our customers with prices set in U.S dollars.

During this quarter, we signed a transfer of the Brigadier López power plant adding 280 megawatt to our current installed capacity. The results associated to the Brigadier López plant have been included on Central Puerto’s income statements starting from June 2018.

Finally, we continue with the collection of the monthly installations of the Vuelta de Obligado agreement as scheduled. Additionally, during June and July, we collected Ps. 2,562 million and Ps.

825 million including value-added tax related to installments corresponding to the first through 10th installment of this agreement respectively which totaled approximately equivalent of $57.2 million and $19.8 million using the exchange rate up-to-date of each collection.

And now, I will turn call over to Tomás who will comment on the financial highlights of the quarter..

A, positively impacted by lower financial expenses that amounted to Ps. 590 million in the second quarter of 2018, compared to Ps. 2.1 billion in the second quarter of 2018; And B, negatively impacted by lower financial income which amounted to Ps. 556 million during the second quarter of 2019 compared to Ps. 1.4 billion in the second quarter of 2018.

In each case -- in both cases, in A and B, mainly due to the foreign exchange difference over U.S. dollar denominated debt and financial assets respectively which excludes FONI and other trade receivables. Additionally the results from the share of profit of associates decreased to Ps. 240 million in the second quarter of 2019 as compared to Ps.

484 million in the second quarter of 2018, mainly due to weaker results from Ecogas. Finally, results for exposure to the exchange rate to the change in the purchasing power of of currency totaled Ps. 1.2 billion during the second quarter of 2019 as compared to Ps. 770 million in the second quarter of 2018.

During the second quarter of 2019, we received loans to finance our expansion projects. We received $100 million for the acquisition of Brigadier López plant, $44 million for the Luján de Cuyo project, $37.5 million for La Genoveva II and $12.5 million for La Castellana II.

We used the proceeds of these loans for the expansion of our current installed capacity including the acquisition of the Brigadier López plant and the thermal and renewable energy projects. Thank you. And now, we invite you to ask any questions to our team..

We’ll now begin the question-and-answer session. [Operator Instructions]. And our first question today comes from Frank McGann of Bank of America. Please go ahead..

I just was wondering how you are thinking about your investment program and as you’re looking at the uncertain environment here, the market itself has already been somewhat I guess soft because of a little bit of excess capacity.

But I was wondering if you had any just thoughts on how the current uncertainty and perhaps your views on possible policy going forward could impact those investment plans?.

Okay. Thanks, Frank. I will answer this question if I can. The first thing to say is that we assume -- our expectation is that the government if changes, it’s expected will not change the regulation regarding the PPAs which are currently setting us. All our expansion planning is based on PPAs paid in dollars and we don’t expect any kind of change.

Why because it’s what they did in the past, in fact they were in power for a long time and would comply with the rules regarding the PPAs. So our expansion plan, the units that we're building today, the renewable projects and the power plants, we continue basically as expected without any kind of change.

Partly the regulation will change or this -- for the existing plants perhaps there is some risk of pacification. But that will just target the -- which is called the legacy capacity and not the expansion of all the units of the system. Change in regulation regarding the PPAs will have a very bad impact on the market.

There are a lot of projects under construction and the changed regulation regarding this will be very bad signal for the market. And we don't expect them to take this kind of measure. .

Okay. If I could just follow-up.

In terms of FONINVEMEM payments, is it correct to say that in the past -- since they started that plan under the Cristina government anyways, that -- and they paid all the amounts that were due at the time that, that you would not expect any change in payments that would come from remuneration from that plan?.

No, for sure, they created that scheme. So this -- I mean our contract was signed with them. And for the years that we were related to that kind of program, with that government they always comply with the installments. They duly paid all the amounts that were agreed. So we don't expect changes regarding this. I mean it was a project created by them. .

Yes. And -- but I think to consider regarding that is, the amount that is still unpaid is significant, the amount for the government. There is no portion. We have in our balance sheet $417 million, we have to dig it. So the remaining portion of that FONINVEMEM scheme is not relevant for the government..

Thank you. [Operator Instructions]. Our next question today will come from Ezequiel Fernández of CrediCorp. Please go ahead..

Hi, good day. This is Ezequiel Fernández from CrediCorp Capital. A couple of questions have been already addressed. Thank you. I'd like to go back to the FONINVEMEM receivable. If you could give us a little bit more color on what is the legal structure of the agreement, it's a contract between private parties.

Any sense of what could make this solid would be helpful? Thank you. .

It’s basically -- I think Ezequiel, it's basically agreement between the government and private generators in order to invest account receivables which were outstanding at that time. So it's basically this.

I mean after that it was implemented through a trust but it's basically agreement between the government and the private generators signed by I mean the administration which was previous to Mauricio, the Cristina administration..

Thank you. Yes, I'm more or less aware of the layers of history with the FONINVEMEM.

But I wanted to know if the contract is precisely with the federal government or being with CAMMESA side, can we see a contract with -- between private entities or not?.

I mean our agreement is directly with the government. After that it was implemented through an agreement, a contract between trust and CAMMESA in order just to collect the money that after that is sent to pay us. But our agreement is with the government. .

[Operator instructions]. We have a question from Arthur Byrnes of Deltec Asset Management. Please go ahead. .

I wanted to ask a question.

Assuming your revenues continue to be honored going forward, does the 20 odd percent devaluation of the currency affect in any way your ability to repay debt?.

No, because our debt is very small in comparison with our revenues today. We are below 1.5, yes, 1.4 times EBITDA. So we don't see any problem to repay our debt..

And we expect that for next year 65% of our EBITDA will come from the PPA contracts which are not subject to changes in there for us and the currency in which they are fit. So we think that we are in a good position and beside we have the 20 million in cash flow..

Ladies and gentlemen, this will conclude our question-and-answer session. At this time, I’d like to turn the conference back over to Mr. Rauber for closing remarks..

Thank you to everyone and for your interest in Central Puerto. We encourage you to call us at anytime for any information that you may need. Thank you and have a good afternoon..

Ladies and gentlemen, the conference has now concluded. And we thank you for attending today's presentation. You may now disconnect your lines..