Business Context and Reporting Period
Company: Central Puerto S.A. (Port Central S.A.), the largest private sector power generation company in Argentina.
Filing Type: Form 6-K (Report of Foreign Private Issuer).
Reporting Period: Second Quarter (2Q) and First Half (1H) ended June 30, 2019.
Purpose: Supplemental information providing pro forma financial results for the Brigadier López Power Plant, acquired from state-owned IEASA on June 14, 2019, with legal effects retroactive to April 1, 2019.
Key Financial Metrics
Note: All figures in Millions of Argentine Pesos (Ps.) unless otherwise noted. Data reflects "Acquisition Adjusted" figures including pro forma results for April and May 2019.
| Metric | 2Q 2019 | 1H 2019 |
|---|---|---|
| Revenues | 5,819 | 12,648 |
| Cost of Sales | (3,278) | (7,285) |
| Gross Profit | 2,541 | 5,363 |
| Operating Income (Reported) | 2,825 | 8,316 |
| Adjusted EBITDA (Reported) | 3,167 | 9,184 |
| Acquisition Adjusted EBITDA | 3,800 | 9,817 |
| Acquisition Adj. EBITDA (excl. CVO/FX effects) | 3,423 | 6,237 |
| Acquisition Adj. EBITDA (US$ Convenience) | $81 | $147 |
Liquidity and Debt: The filing text does not provide specific values for total debt, cash flow from operations, or liquidity ratios. It notes that trade receivables and payables for April/May 2019 were included in the fair value of assets/liabilities acquired.
Material Changes vs. Prior Period
- Revenue Growth: Revenues increased 74% in 2Q2019 and 95% in 1H2019 compared to the prior year periods, driven by the inclusion of the Brigadier López plant.
- EBITDA Decline (Reported): Reported Adjusted EBITDA decreased 64% in 2Q2019 and 63% in 1H2019 year-over-year. This decline is primarily attributed to the removal of significant "Other operating results" (CVO effect and foreign exchange differences on FONI receivables) which were present in 2018 but absent or reduced in 2019.
- EBITDA Growth (Adjusted): When excluding CVO and FX effects, Acquisition Adjusted EBITDA increased 91% in 2Q2019 and 54% in 1H2019, indicating strong underlying operational performance.
- Cost of Sales: Increased 82% in 2Q2019 and 120% in 1H2019, consistent with the expansion of operations.
Outlook, Risks, and Unusual Items
- Acquisition Impact: The Brigadier López plant acquisition is the primary driver of financial changes. While legally effective April 1, 2019, IFRS 3 accounting rules required results to be recognized starting June 2019. The pro forma adjustments allow for a full quarter comparison.
- Unusual Items: Significant volatility in "Other operating results" due to the CVO (Cambio de Valor Operativo) effect and foreign exchange differences on FONI trade receivables. These items caused a sharp drop in reported Operating Income and Adjusted EBITDA compared to 2018.
- Exchange Rate Risk: The Argentine Peso depreciated significantly. The average exchange rate for 1H2019 was 44.01 ARS/USD compared to 21.63 in 1H2018. As of August 15, 2019, the rate was 57.25 ARS/USD.
- Forward-Looking Statements: Management notes that future results depend on regulatory changes, power generation levels, and capital expenditure plans. The company assumes no obligation to update forward-looking statements.
Investor Verification Checklist
- Verify the reconciliation of Net Income to Adjusted EBITDA in the primary August 12, 2019 press release, as this filing only provides supplemental pro forma data.
- Confirm the specific impact of the CVO effect and FONI receivables on cash flow, as these are non-operating items excluded from the "core" EBITDA metric.
- Monitor the Argentine Peso exchange rate volatility, which significantly impacts USD-denominated financial metrics and debt servicing costs.
- Review the Consolidated Financial Statements for the six-month period ended June 30, 2019, for detailed debt and liquidity positions not included in this summary.
- Assess the sustainability of the 91% growth in core EBITDA (excluding FX/CVO) in the context of Argentina's regulatory environment.