Pampa Energia(US:PAM)2020-08-13 05:00Financial Data and Key Metrics Changes - Revenues fell year-on-year by 40% to $544 million, primarily due to a collapse in gas prices and a tariff freeze impacting regulated businesses [11][12] - Adjusted EBITDA decreased year-on-year by 56% to $120 million, mainly due to lower E&P prices and volumes, and tariff freezes [12][13] - Net income attributable to the owners of the company was reported at $4 million, a significant drop from $400 million in the same period last year [44] Business Line Data and Key Metrics Changes - Power generation segment posted an adjusted EBITDA of $95 million, similar to Q2 2019, despite lower margins and volumes sold [17] - E&P segment reported an adjusted EBITDA of $6 million, down 88% year-on-year, with production decreasing 10% year-on-year but only 5% quarter-on-quarter [31][32] - CapEx decreased significantly compared to last year, primarily due to the completion of the Genelba Plus expansion project and halted drilling activities in E&P [14] Market Data and Key Metrics Changes - Average demand in the Argentine power grid reached 13 GW, 6% lower than last year, with a 13% drop compared to pre-crisis levels in 2018 [15] - Domestic gas demand dropped year-on-year by 8% in Q2, mainly due to lower industrial consumption and economic downturn [29] - The average price for gas was $2 per million BTU, 37% lower year-on-year, driven by reduced demand and lower CAMMESA tender prices [39] Company Strategy and Development Direction - The company is focusing on maintaining operations under COVID-19 protocols while managing costs and capital expenditures prudently [8][10] - Future drilling activities will depend on market signals and pricing, with a focus on tight gas reserves rather than unconventional wells for the remainder of 2020 [54][56] - The commissioning of the second CCGT at Genelba is a significant milestone, enhancing the company's capacity and efficiency in power generation [24][26] Management's Comments on Operating Environment and Future Outlook - Management noted that the economic environment remains challenging due to COVID-19, but collection rates have improved across all businesses [10][6] - The company remains cautious about future investments, with a focus on maintaining liquidity and managing debt effectively [49][50] - There is optimism regarding the recovery of gas demand as winter approaches, although prices remain low [30][101] Other Important Information - The company has a share buyback program with a price cap of $13 per ADR, with $38 million outstanding [51] - The gross debt is primarily denominated in U.S. dollars, with a significant portion of cash reserves maintained [48][49] Q&A Session Summary Question: When are you planning to go back to drilling new unconventional wells? - The company has a stock of 11 wells but will wait for better pricing signals before proceeding with new drilling [54] Question: Is the current remuneration for legacy thermal power units enough to sustain plant availability? - Management indicated that they are still making margins, but adjustments for inflation have been postponed due to COVID-19 [57] Question: Any news on asset disposals or M&A? - Currently, there are no plans for asset disposals, but the company is studying potential M&A opportunities [59][60] Question: Why is the gas price lower than peers? - The company attributes the lower price to its exposure to CAMMESA and the lack of benefits from certain government resolutions that peers may enjoy [61][62] Question: What is the outlook for CapEx for the remainder of 2020? - The forecast for E&P CapEx is $65 million, with minimal CapEx expected in power generation due to completed projects [69][70]