Central Puerto Q3 2025 Earnings Call Transcript

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Provided by Quartr
November 12, 2025

Key Takeaways

  • Positive Sentiment: Adjusted EBITDA rose to $101.1 million, up 64% quarter-over-quarter and 8% year-over-year, while revenue increased 30% sequentially to $233.9 million. Growth was supported by fuel-cost pass-through, higher renewable generation, and Central Costanera’s return from maintenance.
  • Positive Sentiment: Management expects Argentina’s market liberalization under Resolution 400 to potentially increase EBITDA by 20%–25%, excluding additional upside from contracting with large users. Dollar-denominated spot pricing and greater flexibility to sell directly to industrial customers and distributors are expected to reduce currency risk and support long-term value creation.
  • Positive Sentiment: Central Puerto won both submitted AlmaGBA battery-storage projects, adding 205 MWh of contracted BESS capacity with expected completion by mid-2027. Combined estimated capital expenditure is $130 million–$140 million, while San Carlos Solar and the Brigadier López combined-cycle expansion are nearing commercial operation.
  • Neutral Sentiment: Total generation declined 20% year-over-year to 4,539 GWh because of weak hydrology at Piedra del Águila, although thermal-unit availability remained strong at 88% and combined-cycle availability reached 96%.
  • Positive Sentiment: The company maintained a strong balance sheet, with $159.9 million of net debt and net leverage of just 0.5x adjusted EBITDA; Moody’s initiated an assessment at AA+ and FIX SCR upgraded Central Puerto to AA.
AI Generated. May Contain Errors.
Earnings Conference Call
Central Puerto Q3 2025
00:00 / 00:00

There are 6 speakers on the call.

Operator

Good morning, ladies and gentlemen. Welcome to Central Puerto's third quarter of 2025 earnings conference call. A slide presentation is accompanying today's webcast and will be also available on the investor section of the company's website, centralpuerto.com/en/investors. All participants will be in listen-only mode during the presentation. After that, 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 relations support section on the company's corporate website at centralpuerto.com. In addition, a replay of today's call will be available in upcoming days by accessing the webcast link at the same section of Central Puerto's website.

Operator

Our host today will be Mr. Fernando Bonnet, Central Puerto CEO, Mr. Enrique Terraneo, the company CFO, Mrs. Maria Laura Feller, Head of Investor Relations, and Mr. Alejandro Díaz López, Head of Corporate Finance. Maria Laura, please go ahead.

Speaker 1

Thank you very much. Good morning and welcome. We are joining you today with our management team from Buenos Aires to report on the results of the third quarter of the year 2025, and then answer any question you may have. During the third quarter, adjusted EBITDA reached $101.1 million, up 64% quarter-on-quarter, and 8% increase year-on-year. Revenues totaled $233.9 million, up 30% quarter-on-quarter, mainly reflecting higher contract sales from renewables and thermal fuel cost pass-through, and up 26% year-on-year, mostly reflecting additional revenues in this quarter from fuel cost pass-through and also Central Costanera successfully resuming activities after the maintenance works. Total generation was 4,539 GWh, 4% up from second quarter 2025, but 20% down year-on-year, mostly due to the low hydrology at Piedra del Águila.

Speaker 1

From financial standpoint, our net leverage ratio remains very healthy at 0.5 times adjusted EBITDA, underscoring our strong balance sheet and financial flexibility. Also good news for our credit rating. Moody's has initiated the credit assessment with a double A plus, FIX SCR, upgrading our rating to double A from double A minus. Third quarter 2025 CapEx amounted to $76.1 million, which includes the acquisition of Cafayate Solar Farm at $48.5 million. Final works for the closing of the Brigadier López Combined Cycle and San Carlos Solar Farm, which are very near COD, as well as maintenance CapEx. Moving to a key development for the quarter. In August, our company successfully participated in AlmaGBA battery energy storage system bidding process, BESS. We were awarded both projects we submitted, which collectively represent 205 MWh of new BESS capacity. The projects are scheduled to be fully operational by mid-2027.

Speaker 1

A significant full quarter outlook, the Energy Secretariat released Resolution 400 in October. This resolution marks a pivotal step in the liberalization of the power market and creates a strong business outlook for our company. Going now to page 4 for the earnings summary. Our adjusted EBITDA came in strong at $101.1 million, reflecting the effective fuel cost pass-through to revenues and solid operational performance in both our renewable portfolio and at Central Costanera. In this quarter, our revenue mix was 53% spot and 47% contracted, with 63% of total revenues denominated in dollars. Renewable generation revenues increased by 24% this quarter, supported by a 21% rise in generation volumes quarter-on-quarter. This strong performance was driven by our wind farms and the contribution from the newly acquired Cafayate Solar Farm. On the thermal side, contracted revenues benefited from additional fuel cost pass-through at Terminal 6.

Speaker 1

Thermal revenues also rose in both the spot and contract markets, reflecting the positive impact of Central Costanera, which successfully completed maintenance works in the second quarter, as well as fuel cost pass-through effects. Now turning to page 5, let's look at our generation and availability performance. Total generation for the quarter was 4,539 GWh, composed of thermal, hydro, and renewable sources. Volumes were up 4% quarter-on-quarter. Thermal generation represented the largest share, followed by hydro and renewables. Thermal and renewable volumes grew, while hydro volumes decreased due to low hydrology in the Comahue region. Availability rates for all our thermal units remain strong at 88%, with combined cycles rated at a very competitive level of 96%. We continue executing our growth strategy. The Brigadier López Combined Cycle and San Carlos Solar Farm are very near COD.

Speaker 1

In August, we acquired the 80 MW Cafayate Solar Farm, and also we secured two BESS projects totaling 205 MW and 15-year contracts. Central Puerto Complex will add 150 MW of lithium battery storage, and the offtaker will be the distribution company Edenor. Central Costanera Complex will have 55 MW, and the offtaker will be Edesur. Estimated CapEx is between $130 million and $140 million for both projects combined. on October 21st, and already effective since November 1st, the Energy Secretariat issued the new framework to reform the Argentine wholesale electricity market. The core objective of Resolution 400 is to liberalize such market through a progressive transition. The new spot revenues incorporate a margin on top of variable production costs, supporting long-term value creation for generators. Also, there is a significant shift for revenues in the spot, now denominated in dollars, mitigating currency and inflation risk.

Speaker 1

Thermal generators gain significant flexibility, allowing them to trade capacity and energy in the new thermal term market. We can sell up to 20% of our production to large users and the remaining up to 100% to distribution companies or the spot market. Spot market energy remuneration will capture marginal rent on top of the variable cost of producing the energy. Capacity payment in the spot market is now $12 per megawatt of capacity per month and is weighted by a factor based on fuel requirement and fuel management approach. Also, it is added the reliability reserve. During a fuel management transition period until Plan Gas contracts naturally expire, CAMMESA continues as supplier of the contracted capacity of Plan Gas, which ends December 2028. From 2029, generators will be fully responsible for their own fuel management. For renewables, existing renewable contracts will be enforceable until natural expiration.

Speaker 1

Then generators will trade in the MAT. Our total financial debt at quarter end stood at $452 million. Cash and cash equivalents totaled $292 million, resulting in net debt of $159.9 million. Net leverage ratio stood very healthy at 0.5 times adjusted EBITDA. In October, we issued a new corporate bond, raising $89 million in capital and also repaid $90 million of maturing debt, including the repayment of our Class B corporate bond and the legacy debt associated with the Guañizuil Solar Farm. Total installed capacity in Argentina as of September 2025 was approximately 43,887 megawatts. Energy generation during the third quarter was 34,342 GWh, while domestic demand reached 35,255 GWh. Going now to page 10 for key takeaways. 3Q 2025 adjusted EBITDA of $401.1 million and 3Q 2025 last month adjusted EBITDA of $317.5 million reflect solid operations and a starting point in this new market environment.

Speaker 1

Central Puerto was awarded both projects submitted under the AlmaGBA battery energy storage system tender. This means we added 205 megawatts of new capacity. These strategic projects notably boost our growth path and provide additional operational capabilities needed in the future of power generation. Our growth pipeline is delivering results with the acquisition of Cafayate Solar Farm, which added 80 megawatts of installed capacity to our portfolio since August 2025. Additional growth will be provided by ongoing projects, the Brigadier López Combined Cycle crossing and the San Carlos Solar Farm very near COD. Central Puerto's business outlook has gained significant growth momentum driven by the Energy Secretariat's Resolution 400. This resolution formalizes the market liberalization roadmap, representing a pivotal step towards entering long-term value creation for us. This context reinforces our positive outlook for 2026 and our long-term company mission.

Speaker 1

Thank you for your time and your confidence in Central Puerto. Operator, please open the line for questions.

Operator

Thank you very much for the presentation. We will now begin the Q&A section for investors and analysts. If you wish to ask a question, please press the button Reaction and then click on Raise Hand. If your question has already been answered, you can leave the queue by clicking on Put Hand Down. The first question comes from Mr. Martín with Balanz Capital. Please, Mr. Martín, go ahead.

Speaker 2

Hi, can you hear me?

Speaker 3

Yes. Hi, Martín.

Speaker 2

Hi. Thank you. Thank you for the presentation and for taking my questions. I have two topics that I would like to discuss. I will run them one by one, if that's okay. First, regarding the market liberalization, I was wondering if you could provide any guidance on how much do you expect this to improve your results, over the next 2 years. Also, if you are considering any improvement to your legacy fleet, given this enhance in revenues, and how likely do you think it will be to contract that 20% with large users? Thanks.

Speaker 3

Hi, Martín. Thank you for your interest and your questions. Well, going to the first one, the impact of the new deregulation of the sector, in terms of cash, we are seeing that depend on the dispatch, on the use consumer fuels, but we can expect around between 20% and 25% of increase in our EBITDA. Could be, as I mentioned, could be 20%, 25%, depending on the dispatch of the units and the fuel consumption. Talking about the other improvements that the regulation brings that are important, also as important as the pricing, as Maria Laura Feller has mentioned, is very important for us to have the denominations of these new prices in dollars. So we cannot need to wait until the government resolution month by month for price increase, which was the case in the past.

Speaker 3

For us, it's very important to keep the remuneration at least attached to dollars, updated. The other big improvement, and is related to your question, is that we can sell part of our production in private terms, private out takers. As you mentioned, it's 20% for big users, big consumers, but we have no limitation to sell it, any percentage to sell it to distribution companies. In terms of this 20%, we are start selling. The situation right now is the big consumers are very contract. The biggest ones are very contract with renewables, so, we are trying to find the ones that are not contracted and the small, going down to small ones, the GUME and GUIS. For that, we have been selling since the regulation was issued.

Speaker 3

To be completely honest with you, the market right now is trying to understand how the price is going to move with these new regulations, how CAMMESA is going to set the prices, and the Secretariat of Energy going to set the prices for spot basis of the spot market, and for the GUIS that are still in the distribution companies that right now the prices is still setting by resolutions and the scheme of every quarter setting by Secretariat of Energy and CAMMESA. We are very confident that whenever these are more or less clear by the demand, the demand are going to start to contract because the prices of the spot during winter times will be much more higher than now. Because of that, they're going to prefer to cap that increase on winter times and set contract with generators.

Speaker 3

We are very confident that during this year, we're going to reach that 20% and we expect more with the distribution companies. Distribution companies needs also to set with each regulator, each province regulator. A national regulator in the case of Edenor and Edesur, said how they're going to make the pass through of these contracts or new contract that the distribution companies will establish with the generator. Everything is under and is moving, but we are confident that this new market, MAT, as the regulation mention it, going to start, and we have a good pace to contract our production during this year.

Speaker 2

Right. Just a couple of follow-up questions. First, you mentioned $20 million to $25 million of additional EBITDA per year. I was wondering if that's not considering the 20% that you could sell to big users, and if so-

Speaker 3

No. Sorry, Martín.

Speaker 2

Yeah.

Speaker 3

It's not $20 million, it's 20% increase.

Speaker 2

Oh, 20% to 25%. Okay. Right.

Speaker 3

This increase is more than around $70 million-$80 million.

Speaker 2

Great. Thanks. That's without the 20%, so if you are successful in selling that 20% to industrials, we could see an even further improvement, right?

Speaker 3

Yes.

Speaker 2

Okay. Great. An actual follow-up question regarding, you mentioned distribution companies. Probably it's too soon, but do you foresee a new option for distribution companies next year or in the near future?

Speaker 3

You are talking about the capacity option or batteries?

Speaker 2

An option to sell the other 80%, I mean. If I ask correctly.

Speaker 3

No, this will be by each distribution company process. It's not centralized like batteries or like a capacity contract. Any distribution company can go for. This regulation established that CAMMESA is going to provide around 75% or between 70% and 75% of the distribution company's demand, and the rest could be contract by distribution companies itself direct with generators. We are seeing some distribution companies asking for quotations and start a conversation for provide this 20% or 25% of their demand. But it's not centralized. It will be each by distribution companies, and there will be a negotiation directly between generators and distribution companies.

Speaker 2

Okay. Thank you for clarifying. Yes. We could expect also beyond the 20% some distribution companies probably in 2026, 2027, contracting additional energy.

Speaker 3

Yeah.

Speaker 2

Well, great. Thanks. The second topic that I would like to discuss was regarding the recent hydro auction. I don't know if you could provide any color on that, probably the targeted assets and expected timeline for awarding these assets.

Speaker 3

Yeah. As you know, we participate with Central Puerto and Central Costanera. We expect that have more news in coming weeks. First, CAMMESA, Secretariat of Energy are evaluating the capacity and the documentation, and the either's provide. I think between, as you mentioned, next week and the other one, we will have a clearer view of the competition or the ones are available to compete. Then, for sure in previous to middle of December, we will have the results, the final results.

Speaker 2

Okay. Thank you very much. Very clear. That is all on my side.

Speaker 3

Thank you. Thank you for your interest.

Operator

Thank you. Our next question comes from Mr. Matheus Tostes with Citi. Please go ahead.

Speaker 4

Hi, and thanks for taking my question. Congratulations on the result. My question is, first, on capital allocation. We have been seeing a lot of re-rating of Argentinian assets over the last couple of weeks. So in that context, are you evaluating, maybe some portfolio recycling with some of your assets in forestry, perhaps in mining already, or would you rather wait for a longer cycle to engage on that front, especially considering now there may be some more projects looking interesting as investment opportunities? And yes, my second question would be, conceptually speaking, where do you see the stabilizing for the term market price, which today is about $60 per megawatt hour, but you will get an ever-growing supply of power there. On the other hand, you may also have increasing demand from distributors for those PPAs. So where do you see that stabilizing over the short term?

Speaker 4

Those will be my 2 questions. Thank you.

Speaker 3

Okay, thank you. Going to the first one, we are not evaluating right now a reallocation of our assets or selling. We think that they have a lot of room to increase price, because of that, we are waiting for a longer period of growth. We are also evaluating a possibility of if we improve the value by some developments around those assets. Right now we are not looking to reallocate that assets or sell it. In terms of the second one, talking about prices, in the short term, for sure, we are seeing some reduction around those $60 with perhaps moving between $57, $55, $36, in the short term when this new offer come to the market.

Speaker 3

But in the long run, we are not seeing a huge reduction on those values because you will have to increase the capacity of Argentina and the prices for new capacity are going up. All the data centers boom and the demand of Middle East are rocketing the prices of the GTs and the delivery time. Perhaps we see some reduction at the beginning in order to stabilize that new market, new MAT. But, in the long run, we are seeing prices around $60.

Speaker 4

Thank you. Thank you very much. That was very helpful. If I may add a quick one, now that thermal projects, with the new rules, should have better rates of return, very likely. What would you say are the key projects in the thermal side of the business that Central Puerto is looking into?

Speaker 3

Well, this new regulation, I think it's not enough yet to bring new project from zero, from scratch. It's not easy to set a big combined cycle, I don't know, 800 megawatts and sell it to the market. We are not there yet. As I mentioned, the price will be much more than 50 something. I think the new projects coming will be perhaps at the beginning of the next year, some options that the government are planning to set in terms of capacity. Small open cycles and machines are working as peakers. I think this is what we are seeing coming, with centralized auctions. But not huge combined cycles selling to privates. I mentioned new ones. We are not there yet.

Speaker 4

Okay, thank you.

Operator

Our next question comes from text. Hi, this is Ezequiel Harari from Adcap Grupo Financiero. In the release, we saw that the installed capacity of San Carlos, Cafayate, and Brigadier López is already available. Could you provide some color on how much of the capacity will actually be operating or contributing to generation during Q4? And what we could expect in terms of revenues or margin uplift, both from this additional capacity and from the recent steps toward electricity market deregulation?

Speaker 3

Okay, thank you. Thank you for your question. In terms of new capacity entrance, San Carlos and Brigadier López, as you mentioned, are right now entering. San Carlos is entering, I think this week or the beginning of the next month. So the impact in our revenues for the fourth quarter will be like half of November and full December. In respect of Brigadier López, which is a closing of combined cycle, we are expecting the COD. We are right now in the end of the commissioning phase, but we need to make a lot of tests to be online and to be producing energy and to be receiving the payment. So in the case of Brigadier López, we expect the middle of December, perhaps 20 something of December. So the impact on our revenues in the fourth quarter will be not significant.

Speaker 3

But talking about full year basis, we expect, in terms of Brigadier López, around an additional EBITDA of $60 million-$65 million. And San Carlos around between $3 million and $5 million more, full year basis. I do not know if I forget a question or one part.

Operator

Thank you. Our next question comes from Ludovic Kasrut with Autonomy Capital. Please go ahead.

Speaker 5

Hi, do you hear me?

Speaker 3

Yes. Clear.

Speaker 5

Yes. Good morning, and congratulations for the results. My question was about the CapEx. Which level of CapEx do you expect for next year?

Speaker 3

Okay, thank you for your question. In terms of CapEx, we are finishing, as I mentioned, Brigadier López and San Carlos, so we are not expecting big CapEx for that part. The CapEx that we are entering on right now and will be continuing next year is the BESS projects that we get awarded in last quarter. This will be around $130 million, $140 million for both projects, the Central Puerto and Costanera projects. Sorry?

Speaker 5

Just for 2026?

Speaker 3

Yes. We expect the completion of those projects in 2026. Yes.

Speaker 5

Okay. Just thinking, could we expect an extra dividend distribution for the end of this year?

Speaker 3

That depends on the results of the hydro auction. That will depend on that.

Speaker 5

Okay. Thanks a lot.

Speaker 3

Thank you.

Operator

Thank you. This concludes our Q&A session. I would like to turn the conference back over to Mr. Fernando Bonnet for any closing remarks.

Speaker 3

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. Bye-bye.

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