After having closed the purchase of the former Central Costanera from the Italian group Enel, Central Puerto, Argentina’s largest power generator is now planning new investments in the sector this year hand in hand with the “benefits” it will obtain from this operation.
The company is owned by the Sadesa energy group, which has among its main shareholders Carlos Miguens Bemberg, (33.9%); William Reca, (22.5%); the Escasany family, (13.6%) and the Ruete Aguirre brothers, (7%), among others.
Central Puerto uses afforestation in its investment plan
Its shareholders anticipate that during this year, Central Puerto will focus on continuing to improve its efficiencynot only with regard to the management of the generation units, but also in the administration of its resources, “in order to continue positioning itself as one of the leading companies in the electricity and forestry sector in Argentina.”
The scenario is described by the company as part of a document that it sent to the National Securities Commission (CNV), to report on the economic results of the first quarter of this year, which returned an operating profit of $20,413 million, which was significantly lower than the $26,422 million for the same period in 2022.
In this sense, during the first months of this 2023, the company already added the thermal generation plants belonging to Central Costanera SA, made up of six turbo-steam units with an installed capacity of 1,131 MW and two combined cycle power plants whose power is 1,173 MW.
It also incorporated the activities of the companies Empresas Verdes Argentina SA; Las Misiones SA and Estancia Celina SA that own more than 88,000 hectares of forestry assets.
At the beginning of the year, Central Puerto acquired the shares of the former Central Costanera from the Italian group Enel
“In this way, Central Puerto will continue concentrating on the expansion of its electricity generation capacity and forest production thus consolidating itself as one of the leading companies in the electricity and forestry sector”, argue its executives in the report.
In this context, plans to increase the power availability of Central Costanera’s machines to strengthen and cover the national demand of the plant located in the City of Buenos Aires, which reaches almost a 6% share of SADI’s total installed capacity and generates the energy demanded by 3.5 million homes throughout the country.
The energy producer explained the reasons for its fall in 2023
The document also mentions the main causes that contributed to the lowest operating profit recorded so far this year.
In this sense, it identifies the lower income from ordinary activities mainly due to the termination of the Brigadier Lopez power plant contract and the lower availability of the turbo-steam units; andl Higher cost of sales due to an increase in depreciation of property, plant and equipment and by the incorporation of forest production and silviculture expenses.
These effects were partially offset by income from forestry activity and higher income from net exchange differences and interest mainly from CVO loans.
In addition, it is highlighted that the operating profit is diminished by the financial results, whose main causes are the negative result for exposure to change in purchasing power of the currency; the highest negative result due to exchange difference; higher interest on loans; the negative result from interest rate swaps and the negative result in the participation in the results of its associated companies.
Despite the new investments, Central Puerto registered lower profits so far in 2023, compared to 2022.
These consequences were offset by the higher positive result, due to the holding of financial assets at fair value and the higher result from interest earned.
As a result of this situation, Central Puerto registered a net profit before taxes for the first quarter of fiscal year 2023 of $1,514 million, while in the same period of fiscal year 2022 it had reached $13,470 million.
In summary, the main causes of the decrease in net income for the period were lower income from ordinary activities; higher cost of sales; negative result due to the exposure to the change in the purchasing power of the currency and the greater negative result due to the exchange difference.
Central Puerto, benefited by the Argentine government
The company benefited from two measures of the Ministry of Energy, that will impact its results in 2023, such as SE Resolution No. 826/2022 and Resolution 59/2023.
The first was the increase in energy rates capacity power and power generation under the Base Energy scheme. The Resolution increases, retroactively, 20% as of September 2022 and additional increases of 10% as of December 2022, 25% as of February 2023, and 28% as of August 2023.
The second authorizes the generators that have combined cycle units to adhere to the Energy Availability and Efficiency Improvement Agreement with the aim of encouraging the necessary investments for major and minor maintenance of the machines. Through this agreement, the affiliated generators undertake to achieve, at least, 85% monthly average power availability in exchange for a new power and generation price.
Central Puerto also added three companies in the forestry sector that added more than 88,000 hectares of assets.
Both regulations represent a significant increase in the income of the thermal units, the effects of which will be fully evidenced in the period 2023,
