Central Puerto ((CEPU)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Central Puerto’s recent earnings call presented a mixed sentiment, reflecting both progress and challenges. The company demonstrated advancements in strategic projects and maintained a strong financial position. However, it faced significant hurdles with a decline in adjusted EBITDA and generation volumes, coupled with unexpected maintenance costs.
Revenue Increase Despite Challenges
Central Puerto reported revenues of $179.6 million for Q2, marking a 7% increase compared to the same quarter last year. This growth occurred despite an 8% decrease from the previous quarter, showcasing the company’s resilience in navigating market challenges.
Significant Project Progress
The Brigadier Lopez combined cycle and San Carlos solar projects are nearing completion, with approximately 80% of the work finished. These projects are expected to be operational by year-end, adding 155 megawatts to the company’s installed capacity, which underscores Central Puerto’s commitment to expanding its energy portfolio.
Strong Financial Position
Central Puerto maintains a robust financial standing, with a net leverage ratio of 0.56x the last 12-month adjusted EBITDA. The company holds cash and cash equivalents totaling $235 million, reflecting its solid financial health and capacity to invest in future projects.
Ongoing Growth Strategy
The company is actively pursuing growth through increased capacity and new projects, including Brigadier Lopez, San Carlos, and Alamitos, as well as participating in battery storage tenders. This strategy highlights Central Puerto’s proactive approach to expanding its market presence.
Decrease in Adjusted EBITDA
Adjusted EBITDA for Q2 was $61.4 million, representing a 32% decrease from the previous quarter. This decline poses a challenge for the company, indicating areas that may require strategic adjustments.
Significant Decrease in Generation Volumes
Total generation volumes fell to 4,372 gigawatt hours, a 24% decrease from the first quarter and a 12% year-on-year decline. This reduction was primarily due to scheduled upgrades and maintenance, impacting the company’s overall output.
Unplanned Maintenance Costs
Unplanned maintenance in Central Costanera’s boilers led to additional costs of approximately $18-$20 million. These unexpected expenses have impacted the company’s revenues, highlighting the need for improved maintenance planning.
Forward-Looking Guidance
Looking ahead, Central Puerto anticipates completing key projects by the end of the year, which will add significant capacity to its operations. The company remains focused on strategic growth, with ongoing investments in projects and participation in regulatory processes to adjust spot prices for inflation. These efforts are expected to bolster the company’s financial and operational performance in the coming quarters.
In summary, Central Puerto’s earnings call conveyed a balanced sentiment, with notable achievements in project progress and financial stability, countered by challenges in EBITDA and generation volumes. The company’s forward-looking strategies and strong financial footing position it well for future growth, despite the current operational hurdles.