Despite change of ownership, largest power plant still in the red

The "new" Central Costanera , which passed from the hands of the Enel Groupto the owners of Central Puerto, had a negative performance during the first $1,743 million against a profit of $4,663 million for the same period of the previous year.

Likewise, it had lower revenues by 8%, from $12,8223 million in 2022 to $11,819 million; an Ebidta of $3,127 million against one of $7,253 million, which marked a drop of 57%, plus a loss for the period of $2,952 million against a profit of $7,795 million, which marked a collapse of 138%.

On the positive side, its net debt fell 24%, from $1,667 million in 2022 to the current $1,263 million, while investments were reduced by 67%, since in the last six months they were $675 million against $2,020 million last year.

Sale and IPO

Central Puerto is currently controlled by Carlos Miguens Bemberg (former Quilmes); the Escasany family (Banco de Galicia); Guillermo Reca (former executive of Merrill Lynch investment bank) and the Ruete Aguirre brothers (former Banco Roberts).

In a report sent by the former Enel Generación Costanera to the National Securities Commission (CNV), to inform about its condensed interim financial statements as of June 30, it reminded that "in order to comply with the provisions of the Capital Markets Law and the CNV Regulations, Proener S.A.U. promoted and carried out a Takeover Bid to all the holders of voting shares of Central Costanera S.A.".

This offer was open from May 30 until June 12 and the Notice of Results was published on June 13, 2023, by virtue of which it was informed that 65,100 shares of the company participated in the process.

On the other hand, the shares of the holders of the company's shares that did not participate in the tender offer continue to be outstanding in Bolsas y Mercados Argentinos SA (BYMA).

As a result of the tender offer, Proener S.A.U.'s shareholding increased from 531,278,928 shares to 531,344,028 shares, representing 75.69% of the company's capital stock.

Following these transactions, the company reported that its revenues recorded a decrease of 8% during the first half of the year , mainly due to the updating of the remuneration values below the inflation rate, the unavailability of the combined cycle I - Siemens due to corrective maintenance and, to a lesser extent, due to a 5% decrease in electricity generation, in line with the lower energy demand of the period.

Standards to be met

It should be recalled that on April 18, 2022, Resolution SE No. 238/2022 was issued, which updated the values of the remuneration to generators of Resolution SE No. 440/2021, by means of a linear increase of 30% retroactive to February 2022 and of an additional 10% as from June 2022.

Additionally, on December 14, 2022, Resolution SE No. 826/22 was published, which provided for two increases for generators for this year, totaling 60%, in line with the inflation projected in the National Budget. One in February 2023 of 25% and another of 28% in August 2023.

At the same time, retroactive increases were approved for 2022 of 20% as from September and 10% in December.

On February 7, 2023, Resolution No. 59/2023 ("Resolution 59") was published in the Official Gazette enabling generators with combined cycle units to adhere to the Power Availability and Efficiency Improvement Agreement. The purpose is to encourage the necessary investments for major and minor maintenance of the machines.

Through this agreement, the adherent generators commit themselves to reach, at least, 85% of monthly average power availability in exchange for a new power and energy price composed, in part, with sums established in dollars.

Then, on April 25, CAMMESA accepted the subscription to the agreement presented by the company for the Mitsubishi combined cycle unit.

Therefore, as from the March transactions, there was an increase in the remuneration of such unit for its sales to the spot market, as mentioned in the previous paragraph.

Regarding the second combined cycle unit (Combined Cycle I - Siemens), CAMMESA accepted the subscription to the agreement on July 28, effective as from the transactions of the same month, after the conversion to mono fuel was arranged with the Energy Secretariat.

That is to say, an operation only with natural gas, eliminating the possibility of using diesel oil, and the adaptation of the installed power in line with the real technical possibility of electric power production of the combined cycle.

To date, this unit is concluding corrective maintenance tasks; therefore, increases in the remuneration of this unit will be obtained once the aforementioned maintenance works are completed.

The operating result worsened as a result of higher "other operating expenses", mainly due to the write-off of intangible assets corresponding to software licenses, in addition to the drop in revenues.

At the same time, there were higher depreciations in the period, as a result of which EBITDA contracted by 57% compared to the same period of the previous year.

According to the report, the result for the period also decreased with respect to the same period of the previous year, mainly due to the operating loss recorded, together with a lower gain due to the inflation adjustment, partially offset by lower net financial costs.

Maintain investments

Investments amounted to $675 million and were earmarked for the maintenance of the generating units, with the purpose of optimizing the plant's availability and reliability. This figure includes the acquisition of motor generators from Enel Generación El Chocón.

Meanwhile, net debt decreased, as a result of the lower debt recorded, while the energy generated by Costanera decreased by 5% to 2,636 GWh compared to the 2,782 GWh generated in the same period of 2022.

This is due to a lower dispatch requirement by CAMMESA, together with a lower availability of the Combined Cycle I -Siemens mainly due to corrective maintenance tasks.

Similarly, there was an increase in electricity demand in the country of 4% with respect to the same period of the previous year, although there was a drop in demand of 6% with respect to the same period of the previous year, mainly due to a drop recorded in the residential area and to a lesser extent in the commercial and industrial activity, as a result of milder temperatures recorded in May and June.