CEPU — Central Puerto S.A.

Central Puerto (CEPU) Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• 2025 Revenues: $782.8 million, up 17% year-over-year.
• Q4 2025 Revenues: $172.8 million, down 26% quarter-on-quarter, but up 3% year-on-year.
• 2025 Adjusted EBITDA: $337.2 million, a 17% increase year-over-year.
• Q4 2025 Adjusted EBITDA: $84.7 million, down 16% quarter-on-quarter, but up 30% year-on-year.
• Total Generation: 18.6 terawatt hours, down 14% year-over-year, primarily due to low hydrology at Piedra del Aguila.
• Net Leverage Ratio: 0.3x annual adjusted EBITDA as of December 2025.

2. Strategic Updates and Business Highlights

• Market Position: Maintained a 14% market share in total SADI generation.
• Concession Extension: Secured a 30-year extension for the Piedra del Aguila hydroelectric facility, with a fee payment of $245 million due in January 2026.
• CapEx: Total capital expenditures for 2025 were $202.4 million, focusing on completed projects and future growth, including the Brigadier Lopez combined cycle and San Carlos solar farm.
• Renewable Energy Growth: Increased total renewable capacity by 20% with new solar projects, contributing to overall generation.
• Thermal and Renewable Availability: Thermal availability at 77% and combined cycle availability at 89%.

3. Forward Guidance and Outlook

• 2026 Expectations: Anticipate an increase in thermal generation as maintenance issues from 2025 are resolved.
• PPA Growth: Expect to contract more than the current 20% of thermal capacity with private consumers; discussions ongoing with distribution companies for additional contracts.
• EBITDA Projections: Expected improvements in EBITDA driven by new PPAs, market normalization, and operational efficiencies, with potential increases of $150 million to $160 million projected for 2026.

4. Bad News, Challenges, or Points of Concern

• Q4 EBITDA Decline: The significant quarter-over-quarter decline in EBITDA was attributed to extensive maintenance on key combined cycle plants, which limited revenue capture from the new regulatory environment.
• Generation Volatility: Total generation decreased significantly due to low water inflows and maintenance works, raising concerns about reliability and revenue consistency.
• Market Competition: Increased competition from thermal and hydro sources may pressure pricing and margins, complicating the ability to secure new PPAs.
• Regulatory Uncertainty: The slow pace of regulatory discussions regarding distribution contracts could hinder growth opportunities.

5. Notable Q&A Insights

• Maintenance Impact: Management confirmed that maintenance on key plants affected Q4 performance but expected recovery in Q1 2026.
• PPA Contracting: Discussions with distribution companies are ongoing, but progress is slow due to regulatory complexities.
• Growth Opportunities: Management highlighted potential growth in battery storage and new demand from sectors like mining and oil and gas, despite challenges in securing new renewable PPAs.
• Dividend Discussion: Future dividends will be evaluated by the Board, with no current guidance provided.
• Gas Price Outlook: No significant reduction in gas prices expected until existing contracts expire, limiting cost benefits from the TGS pipeline expansion.

Overall, Central Puerto demonstrated solid growth in 2025 despite operational challenges, with a strong focus on strategic expansions and market normalization as it moves into 2026.