Central Puerto’s Mixed Earnings Call: Growth Amid Challenges

Central Puerto ((CEPU)) has held its Q4 earnings call. Read on for the main highlights of the call.

Central Puerto’s recent earnings call painted a mixed picture of the company’s financial health and strategic direction. While the company celebrated significant revenue growth and an increase in adjusted EBITDA, these positives were somewhat overshadowed by a net income loss for the quarter. The call highlighted promising renewable energy initiatives and a reduction in net debt, but also acknowledged challenges such as project delays and a decline in hydro energy generation.

Significant Revenue Growth

Central Puerto reported impressive revenue growth for the fourth quarter of 2024, with revenues reaching $168 million, marking a 71% increase compared to the same period in 2023. The annual revenue figure also saw a substantial rise of 25%, totaling $671 million. This growth underscores the company’s ability to enhance its financial performance despite a challenging economic environment.

Increase in Adjusted EBITDA

The company achieved a 44% year-over-year increase in adjusted EBITDA for the fourth quarter of 2024, amounting to $65 million. On an annual basis, adjusted EBITDA rose by 4% to $288 million. This improvement in EBITDA reflects Central Puerto’s operational efficiency and cost management strategies.

Reduction in Net Debt

Central Puerto successfully reduced its net debt to $132 million by the end of 2024, a significant decrease of $154 million compared to the previous year. This reduction resulted in a favorable net debt to adjusted EBITDA ratio of about 0.5 times, indicating a stronger financial position and improved leverage.

Renewable Energy Initiatives

The company announced ambitious renewable energy initiatives, including a high-voltage transmission line project in Northwestern Argentina and increased equity in mining projects, notably a 27.5% stake in a lithium project. These initiatives highlight Central Puerto’s commitment to expanding its renewable energy footprint and diversifying its investment portfolio.

Net Income Loss

Despite the positive revenue and EBITDA figures, Central Puerto reported a net income loss of $28 million for the fourth quarter of 2024. However, the fiscal year ended on a positive note with a net income of $52 million, suggesting resilience in the face of quarterly challenges.

Hydro Energy Generation Decline

The earnings call revealed a decline in hydro energy generation from the Piedra del Aguila plant, which dropped by 31%. This was attributed to a 7% reduction in water levels of the Collón Curá River and a 22% decrease in the Limay River, impacting the company’s overall energy output.

Project Delays

Central Puerto faced delays in the San Carlos Solar plant project, although the Brigadier Lopez combined cycle project remains on schedule. These project timelines are crucial for the company’s strategic growth and energy production capabilities.

Forward-Looking Guidance

Looking ahead, Central Puerto’s installed capacity remains steady at 6,703 megawatts, with energy generation increasing by 5% year-over-year to 5.4 terawatt hours in the fourth quarter. The company anticipates further regulatory changes by November 2025, which could impact the electricity industry. Additionally, the introduction of a new regulatory framework aims to deregulate the sector, potentially offering new opportunities for growth.

In summary, Central Puerto’s earnings call highlighted a blend of achievements and challenges. While the company demonstrated strong revenue growth and reduced net debt, it also faced a net income loss and project delays. The focus on renewable energy initiatives and strategic investments suggests a forward-thinking approach, positioning Central Puerto for future success in the evolving energy market.