Pampa Energia(US:PAM)2022-08-12 19:46Financial Data and Key Metrics Changes - Revenues increased by 28% year-on-year to $587 million, driven by rising gas output, commodity prices, and higher regulated prices, although lower income from certain PPAs offset these increases [5][6] - Adjusted EBITDA amounted to $253 million, up 6% year-on-year and 13% quarter-on-quarter, attributed to better operating margins despite increased maintenance costs and inflation [6][14] - CapEx in Q2 was up 49% year-on-year and 30% quarter-on-quarter, mainly due to gas commitment and power expansions [6] Business Line Data and Key Metrics Changes - Power generation EBITDA was $99 million, down 18% year-on-year and quarter-on-quarter, primarily due to PPA maturities and higher local currency expenses, despite improved thermal margins [7][8] - Gas production reached a record 11.2 million cubic meters per day in June, growing 38% year-on-year and 14% quarter-on-quarter, with significant contributions from the El Mangrullo block [11][12] - Petrochemicals delivered an adjusted EBITDA of $19 million, up from $16 million year-on-year, driven by broader margin spreads and increased demand [18][21] Market Data and Key Metrics Changes - The company reported a free cash flow outflow of $62 million, mainly due to working capital impacts from seasonal billing and payment delays from CAMMESA [22][23] - Gross debt remained at $1.5 billion, with a net leverage ratio of 1.3 times, reflecting a stable debt profile despite cash outflows [24][25] Company Strategy and Development Direction - The company aims to maintain gas production levels of 11 million cubic meters per day and is preparing for a new gas treatment plant to increase capacity [30][31] - Expansion projects include the Ensenada Barragán and PEPE III wind farm, with expected completion dates in early 2023 [10][37] - The company is optimistic about the new pipeline's impact on production capacity and is actively discussing PPA adjustments with authorities [70][71] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the energy sector's direction, citing recent government measures to reduce subsidies and improve tariff structures [54][78] - The company anticipates a strong performance in the petrochemical segment for the remainder of the year, despite some segments slowing down [41][42] - Future production growth is contingent on the new gas pipeline's completion and market conditions [39][40] Other Important Information - The company successfully refinanced its 2023 maturity, allowing it to focus on growth and production [77][78] - The company is currently facing delays in payments from CAMMESA, which have increased to approximately 90 days [45][62] Q&A Session Summary Question: Expectations for oil and gas output over the next two to three years - Management indicated that production growth is dependent on new transportation capacity and ongoing discussions with partners regarding drilling plans [29][30] Question: Scheduled maintenance for power plants - Maintenance is typically scheduled for Q3, focusing on combined cycles and turbines [35] Question: Changes in PPAs expected in 2022 and beyond - Management confirmed ongoing work with YPF to finalize a new PPA for the Ensenada Barragán project, with no maturities expected until 2026 [36][38] Question: Impact of new gas pipeline on production growth - Production growth is fully dependent on the new pipeline, with current evacuation capacity reached [39][40] Question: Outlook for petrochemical business amid margin decreases - Management remains optimistic for Q3, though visibility for Q4 is less certain [41][42] Question: Reasons for slight increase in net debt - The increase is attributed to working capital issues and high CapEx expenditures [43][44] Question: Buildup of accounts receivable and collection days from CAMMESA - Collection days have increased to nearly 90 days due to seasonal delays [45][46] Question: Expectations for gas exports during off-peak season - The company expects to export around 2 million cubic meters of gas per day during the off-peak season [58][59] Question: Expectations for additional gas production next winter - Management anticipates the possibility of increasing production to 16-17 million cubic meters per day, depending on market conditions [59][60] Question: Percentage of revenues from state counterparts - Approximately 70% of revenues are affected by state payment delays [62] Question: CapEx planning for E&P business - CapEx for E&P is projected at around $350 million for the year, with expectations for a decrease next year [64][65] Question: Commercialization plans for Loma De La Lata and Piquirenda - Upon PPA expiration, production will migrate to the spot market [67] Question: Expectations for new gas supply options - A new pipeline is expected to increase capacity significantly by 2024 [68][69] Question: Adjustments to legacy capacity remuneration - Management is optimistic about potential adjustments to legacy capacity remuneration due to inflation [71][72] Question: Reduction in payment days from CAMMESA - Management is hopeful for improved collection days due to seasonal factors and increased consumer payments [72]