Good morning, ladies and gentlemen, and welcome to Central Puerto's First Quarter 2024 Earnings Webcast. [Operator Instructions] Please note, this event is being recorded. If you do not have a copy of the press release, please refer to the Investor Relations support section on the company's corporate website at www.centralpuerto.com.

In addition, a replay of today's call may be accessed by accessing the webcast link at the same section of the Central Puerto's website. .

Before we proceed, please be aware that all financial figures were prepared in accordance with IFRS and were 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 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 you -- and should not consider these translations to be representations that the Argentine peso amounts actually represents these U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated. .

Finally, it is worth noting that the financial statement for the first quarter ended on March 31, 2024, include the effects of the inflation adjustment.

Also, please take into consideration that certain statements made by the company during this conference call and answer to your questions may include forward-looking statements, which are subject to risks and uncertainties that could cause actual results to be materially different from the expectations contemplated by industry remarks.

Thus, we refer you to the forward-looking statements section on 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. .

To follow the discussion better, please download the webcast presentation available on the company's website. Please be aware that some of the numbers mentioned during the call may be rounded to simplify the discussion. .

On the call today from Central Puerto is Fernando Bonnet, Chief Executive Officer; Enrique Terraneo, Chief Financial Officer; and Alejandro Díaz López, Chief Finance and Investor Relations Coordinator. .

And now I will turn the call over to Alejandro Díaz López. Please, Alejandro, you may begin. .

Thank you very much, and good morning to you all. Thank you for joining us today on our earnings presentation, where our management team from Buenos Aires, Argentina, is going to comment on our financial results of the first quarter of 2024. I would like to take a moment of your attention to review today's agenda.

I will begin the presentation by addressing shortly the main figures of the first Q 2024, followed by a quick update of the regulatory framework and news. Then I will show an overview of the Argentine energy sector moving afterwards to our operational and financial results.

Finally, at the end of the presentation, we will be happy to address any questions you may have. .

Before going into a more exhaustive analysis of our financial and operational results, let me briefly review Central Puerto's main figures for the first Q of 2024. As you may recall, with the acquisition of Central Costanera performed in February of 2023 and Guañizuil solar farm in October of 2023.

The group's installed capacity has [indiscernible] 49% to 7,173 megawatts. Furthermore, energy generation amounted to 5,520 gigawatt hour during the first 3 months of 2024, which means an increase of 8%.

These figures make Central Puerto the largest private energy generation company in Argentina, both in terms of installed capacity and energy generation with a well-diversified portfolio of assets across almost all power generation technologies. .

Regarding our financial results, it should be noted that after the sharp devaluation that happened in December of 2023, the exchange rate kept almost flat during the first 3 months of 2024, while inflation though decreasing from December of 2023 was significantly higher. This dynamic generated inflation in dollars in Argentina.

Due to Central Puerto's accounting methodology, all items in pesos must be adjusted for inflation to the end of the quarter, local currency. While the company reports its results in dollars by converting them at the end of the period, official exchange rate. I mean the so-called Central Bank A 3500 exchange rate.

This causes a noncash impact that affects positively or negatively as appropriate our financial results. .

Revenues for the first Q of 2024 amounted to $150 million, increasing 15% compared to the first Q of 2023, while adjusted EBITDA reached $84 million, a growth of 36% versus the first 3 months of 2023. Net income for the period was positive in $32 million, rising almost 6x on a year-over-year basis.

Finally, after debt consolidation as a result of M&A operations, loan repayments and dividend payments, our net debt as of March 31, 2024, amounted to $326 million, a decrease of $100 million. This means a net debt to adjusted EBITDA ratio of 1.1x..

Now let's move to the most recent regulatory updates and [ runaround ] facts. We have anticipated in our last call, the Resolution 9 issued by the Secretary of Energy in February of 2024. We should take into account that this resolution applies as of February 1, 2024, so it affects positively our revenues for the period.

On April 22, 2024, our subsidiary, Proener entered into a common share subscription agreement with AbraSilver Resource Corporation, which is a Canadian company listed in the Canadian stock market.

This agreement granted Proener with a 4% interest in the share capital of the aforementioned company that owns the silver-gold project Diablillos, which is located in the northeast region of Argentina. Finally, we should highlight the resolution of PPA issued by the Secretary of Energy a couple of days ago.

This resolution determines the payment mechanism for trade receivables accrued in December of 2023, January of 2024 and February of 2024, that are still unpaid. These receivables as of March 31 amount to ARS 102,123 million or approximately $119 million.

The set mechanism establishes that receivables accrued in December of 2023 and January of 2024 will be paid with Argentine Republic USD bond at face value, while receivable accrued in February of 2024 will be paid with funds available in CAMMESA's bank account and transfer made by the National Government to the Stabilization Fund.

Central Puerto is analyzing the impact of the resolution and assessing all the necessary measures that could be taken to preserve its right.

As of the day 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 or approximately $29 million without including any default interest. .

Now let's skip to the Argentine energy market picture of this quarter that will be shown on Slides 6 and 7. By the end of the first quarter of 2024, the country's installed capacity reached 43,873 megawatts, which means an increase of 1% or 595 megawatts compared to the 43,278 megawatts recorded as of March 31, 2023.

The growth in capacity was basically due to, first, the incorporation of 680 megawatts, which means a growth of 13%. From renewable sources, of which 378 megawatts corresponds to wind farms, 290 megawatts to solar projects and 12 megawatts to biogas power plant.

Finally, a net decrease in the thermal sources of 85 megawatts, representing a contraction of 1%, which includes the addition of 397 megawatts of combined cycles and the commission of 345 megawatts and 137 megawatts of gas turbines and diesel engines, respectively.

All of these figures may include megawatts of new facilities as well as adjustment and repowering of power plants that were already in operation. .

Regarding energy generation in the first Q of 2024, it increased 2% to 39,285 gigawatt hour compared to the 38,629 gigawatt hour generated during the first Q of 2023.

While thermal source continues to be the backbone of the Argentine energy sector, this type of generation dropped 9% year-over-year and its participation share in the energy metrics declined 6 percentage point year-over-year to 54%.

Nuclear power plants generated 71% more year-over-year, while their participation share was 8%, followed by renewables with a participation share of 14% and a 20% increment in generation and hydro with a participation share of 23% and a 5% growth in generation.

Lastly, it's worth mention that the increase in nuclear generation along the quarter was basically explained by the reincorporation of Atucha II power plant in August of 2023, being in maintenance shutdown before the end. Also, the lower thermal dispatch during the first Q of 2024 triggered lower alternative fields conception.

I mean a decrease of 96% of fuel oil and a contraction of 83% of diesel. .

Focusing now on the demand, as you can see in the first Q of 2024, dropped 4% vis-à-vis the first Q of 2023, prompt by 6% shrink in residential consumption. The first Q of 2023 as a whole was exceptionally warmer than the first Q of 2024, especially in March.

This configuration posts a trend decrease in demand along the quarter, I mean the first Q of 2024. But on February 1, 2024, a new historical power demand peak was recorded 29,572 megawatts. Shifts in temperatures and specific condition of generation units allow an energy export in January and net imports in February and March. .

We now go to Slide 8 to our key operating indicators for the quarter. We can see that energy generated by Central Puerto rose 8% to 5,520 gigawatt hour compared to 5,122 gigawatt hour in the first Q of 2023.

It should be noted that this increase includes the incorporation of 714 gigawatt hour generated by Central Costanera which was acquired in mid-February of 2023 as well as 82 gigawatt hour produced by Guañizuil solar farm acquired in October of 2023.

During the first Q of 2024, hydro energy generation from Piedra del Aguila decreased 5% or 40 gigawatt hour as compared with the first Q of 2023 levels. This was a direct result of lower water availability for generation and a trend decrease in demand along the quarter. .

With regards to renewables, except for the incorporation of Guañizuil solar plant, there was a slightly higher wind generation as a result of higher wind results during the period, which represented a 3% difference if compared to the first Q of 2023. The generation from Central Costanera 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% or 73 gigawatt hour if compared to the first Q of 2023 due to a deep maintenance and rehabilitation program put in place. These figures take into account that Central Costanera began to be operated by Central Puerto by mid-February of 2023.

The energy generated by this site was partially offset by lower dispatch and availability of other units. Finally, we should highlight the good availability figures for the quarter, both against the market average and against Central Puerto [ all ] metrics for the first Q of 2023. .

Now let's move to our revenues breakdown. As you can see on Slide 9, this amounted to $150 million in the quarter as compared to $130 million in the same period of 2023. It should be noted that the gap between inflation and devaluation in the period has positively affected the first Q '24 figures at a noncash level.

These are the company's accounting methodology and the conversion into dollars using the end of the period official exchange rate, making the comparison with the first Q of 2023, more complex to analyze.

Thus, having in mind this effect, the variation in revenues is a consequence mainly of a growth in spot sales of 14% or $9 million driven by Central Costanera acquisition, with full impact in the comparison of January and February figures. This increase was partially offset by lower remuneration in U.S.

dollars partially offset with Resolution 59 issued last year and lower dispatch, basically thermal ex Central Costanera.

Then we have a 16% or $9 million increase in sales under contract, mainly explained by the recent acquisition of the solar farm Guañizuil which contributed with sales of $4 million in the quarter and higher sales of cogeneration units. Sales of wind farms were slightly higher due to higher wind results.

Finally, we have a 229% or $3 million increase in Forestry revenues as a consequence basically of EVASA Group acquisition in May of 2023. .

On Slide 10, we can see the dynamic of our adjusted EBITDA. During the first quarter of 2024, the group's adjusted EBITDA amounted to $84 million, including results of Central Costanera and the Forestry companies.

Thus, on a consolidated basis, the adjusted EBITDA of the quarter recorded a rise of 10% or $8 million compared to the $75 million in the first Q of 2023.

When analyzing the adjusted EBITDA, we can observe that the variation is mainly explained by the previously stated higher aggregate sales driven by a spot sale and sales under contract and a positive noncash effect on the gap between inflation and currency devaluation. .

Then we have a 14% or $7 million rise in cost of sales explained basically by higher employee compensation, higher energy and power purchases, higher maintenance expenses and higher consumption of materials and spare parts, driven basically by Central Costanera acquisition and also a negative noncash effect on the gap between currency devaluation and inflation.

We have an increase of 34% or $4 million in the SG&A, mainly driven by lower interest from clients and a negative noncash effect on the gap between currency devaluation and inflation.

Finally, other operating results net in the first Q of 2024 were increased 18% or $2 million, basically as a consequence of higher compensation to employees, higher fees and compensation for services and taxes, all driven by Central Costanera acquisition. Also, a negative noncash effect on the gap between currency devaluation and inflation. .

Moving to the next slide, the consolidated net income. During the first Q of 2024, Central Puerto's net income amounted to $32 million, increasing by almost 6x on a year-over-year basis.

Despite the higher adjusted EBITDA of the period, the net income was positively impacted by noncash effects increased $48 million, driven by basically results generated by the change in purchasing power of the currency and variation on biological assets.

Net financial results increased $16 million, driven by lower foreign exchange differences on financial liabilities and lower bank commissions. These effects were partially offset by a negative variation in the fair value of financial assets.

Finally, with a negative impact we had lower FONI FX difference and interest, mostly explained by lower FX difference due to lower exchange rate variation and a higher net income tax. .

Finally, on Slide 12, we have the cash flow dynamic during the first Q of 2024. Net cash provided by investing activities was $9 million during the first Q of 2024.

This amount is mainly explained by positive results from the sale of financial assets and dividends collected, being all partially offset by CapEx applied in San Lorenzo facility and CapEx applied in Brigadier Lopez facility.

Operating cash flow was negative in $19 million, which is mainly explained by lower funding collection, higher income tax, being all partially offset by a higher adjusted EBITDA of the period. Finally, financing cash flow was negative in $4 million during the first Q of 2024.

This is basically the result of long-term loan repayments and interest and dividend payment, being all partially offset by lower bank and investment account overdraft and lower long-term loan disbursement. Consequently, our cash position as of March 31, 2024, amounted to $6 million.

If financial assets are included, our total current liquidity amounts to approximately $100 million. .

On Slide 13, we present our financial debt repayment [ schedule ] as of March 31, 2024. With this, I conclude the presentation. And now we invite you to ask any questions you may have to our team. Thank you so much for your attention. .

[Operator Instructions] We have a question from Martin Arancet with Balanz Capital. .

Well, first of all, as always, thank you for the presentation. I have 4 questions. I would like to run them one by one, if that's okay. First, through Resolution 45, the government extended until mid-July, the time to sign the PPAs of the -- the [indiscernible] auction. And you were one of the main winners of that auction.

And -- so I was wondering what are your expectations for those PPAs. If in your opinion [indiscernible] could decide to move forward and sign those PPAs. Because as far as we know, [indiscernible] did not like that [indiscernible] project we will use engines instead of turbines, and we also prefer that CAMMESA does not sign any new contracts.

But at the same time, some projects seems key to sustainability of the system. .

Okay. Thank you. Thank you, Martin, for your questions. Yes, as you mentioned, this extension was a little bit surprise for us because, as you mentioned, the government are more in line with trying to promote private PPAs instead of public, private, like in the former government.

And on the other hand, they start to analyze a possibility to extend because they have -- they still have under analysis, the needs of the system, especially in terms of the [ AMBA ] -- the [ AMBA ] region, and the technicians of CAMMESA are asking for additional capacity in [ AMBA ].

So they -- they want to keep analyzing the possibility of this auction -- to move forward with this auction. But right now, we are not -- we don't have additional insights from them in terms of moving -- really moving forward in that direction. So I think they still -- they have -- they still are making analysis. .

And the other thing is how fast they can move with the new regulations in order to promote the private PPA. I think they feel that they are moving -- or they have another priorities in terms of the subsidies, reorganization and so on. But right now, we are -- not have an insight if they're going to move forward after the 60 days or not.

Additionally, we are seeing perhaps a little bit changed -- not a little bit, but a change on how they are approaching the -- all the solution with CAMMESA [ debt ], so this will perhaps impact how we can move forward with these new contracts or not.

So I think we are in a -- we are saying how we can handle the situation with CAMMESA and then we will see after that, if we can continue with this scheme or not. .

Very clear. And since you touched the CAMMESA delays, for what I saw, they also -- and you mentioned a little bit on the presentation, they also -- [ you haven't made ] the payments or some of the payments for FONI, and it's the first time ever that FONI is not get paid.

I don't know if you could share with us their opinion on fund payments if they are going to be with [ you ] because as far as I know, they are not considering this new offer of Resolution 58. .

Yes. As you mentioned, this -- or the last month was the first time that the FONI doesn't paid on time. And the thing that we have been talking with CAMMESA and Secretary of Energy is the FONI payments. We are not included in the resolution scheme, in the Resolution 58 scheme.

So we expect to get collect -- or to start collecting the FONI in the near days or perhaps in these months, we can collect 2 -- 2 installments and the regularization could happen in the next month, and we can get the FONI back on time since, I think, June. .

Okay. Then regarding your -- well, you mentioned the AbraSilver investment. I think that you [ invested ] $7 million. They are to acquire that 4% stake. Then Bloomberg disclosed a possible investment in another copper projects on another Canadian company, that is looking for a $130 million investment.

So I was wondering what are your plans for AbraSilver if you are considering to increase investment depending on some results maybe.

And on the other hand, how advanced are the talks to invest in other projects? And how much are you considering investing in these mining projects in total?.

Okay. In terms of AbraSilver, the money that we invest, and the other company Kinross also is for the feasibility studies and other operating costs. So we expect with that money, the AbraSilver can perform the feasibility studies and maintain the operational cost. And we are not in the near term -- we are not expecting additional -- additional money.

So after the feasibility study, of course, if we can move to the production stage, it will require more money, but I think it's not in the -- for sure, not this year, could be next one or the other. And in terms of other investments in mining sector, we are not so close. We are analyzing other alternatives, but no, nothing really, really close. .

Okay. Then my last question. Earlier this year, Central Puerto disclosed its annual plan for investment and divestments. There you mentioned a possible merger with [indiscernible] subsidiaries. I was wondering, do you plan to buy [indiscernible] shares of Central Costanera for the merger or a possible exchange for Central Puerto shares.

Also, in the same text you opened the possibility of crossing the border with new power plants. I don't know if there is any particular country where you will consider investing. And since this [indiscernible] is an annual plan, I was wondering if we could see these things happening in 2024. .

Yes. First of all, yes, we are moving forward with the reorganization in terms of renewables. This is something that is necessary in order to reduce all the administrative costs and being more effective in terms of selling as a unique block of capacity. So it's not only administrative but is operating also and commercial.

So we're going to move forward with these reorganizations. .

And in terms of moving abroad with -- in terms of having other plants outside Argentina, I think we -- with all of these happening in Argentina today and I think we -- for this year, I think we cannot be able to perform an operation -- important operation abroad.

So I think we're going to concentrate our effort in terms of Argentina operating bringing a different alternative in order to install new capacity in the way of PPAs with the government or perhaps in private PPAs and also in terms of demerging our capacity -- or renewable capacity.

So I think I don't see operating abroad this year or -- operation abroad this year now. .

Okay. One last question, sorry, if I may. Regarding CapEx, I was wondering how much CapEx do you expect for 2024.

And if you could break that between San Lorenzo, Brigadier and maintenance CapEx?.

Okay. In terms of Brigadier Lopez. As you may know, we start the construction of the combined cycle or the -- closing the combined cycle, in fact.

And this -- we already make a 30% advance payment to a construction company, and we expect another perhaps this year, another 30% or 50% -- between 30% and 50% [ amount ] of the total CapEx, which is around $150 million..

And in terms of regular CapEx, we expect an important maintenance in our combined cycle in Buenos Aires, but this is covered by the regular payments that we made in terms of the maintenance contract with GE. And we are not seeing a huge -- or big maintenance for this year.

Perhaps next year, is the time of Costanera combined cycle, Mitsubishi combined cycle, and we need to make payments in advance perhaps the last quarter of this year in around $15 million, but not more than that. .

Okay. And on San Lorenzo [indiscernible]. .

San Lorenzo has the -- already has the -- already did the big maintenance. They -- they [indiscernible] fast maintenance in the first quarter. So we are not expecting for San Lorenzo additional CapEx this year. .

[Operator Instructions] Okay, as we have no questions on the line at this time, I would like -- we do -- sorry, we've got a question coming from Eva Lawrence with [indiscernible] Group. .

Yes.

Can you hear me? I just would like to ask about your financing plans, how are you financing some of these projects that you're currently doing and that you will do?.

Okay. Okay. Thank you for your questions. We -- right now, we are working in 2 projects, big projects. One is the San Lorenzo -- sorry, is the Brigadier Lopez, closing of combined cycle. And the other one is a solar -- a solar project, 15 megawatts. So we are performing that project with our cash flow.

So we have our cash and cash flow enough to cover the 2 projects.

If we need to move forward with the project that we get awarded in the auction -- last auction that we have been talking in the -- in the previous questions, for sure, we need to go to the market to get some debt -- additional debt because they are -- we are talking about in terms of the 2 projects, Costanera project around [indiscernible].

So in that case, it's not sure because this -- the wording is -- as we talked in the last question is kind of in analysis. But in that case, we need to move forward to the market. But with the project that already are under construction, we have enough cash and cash flow to cover it. .

As we have no further questions, I would like to turn the conference back over to Mr. Fernando Bonnet for any closing remarks. .

Thank you to everyone for your interest in Central Puerto. We encourage you to call us for any information that you may need. Have a great day. .

Thank you. This concludes our question-and-answer session and our conference. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation..