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PAM Pampa Energia

Participants
Margarita Chun Investor Relations
Lida Wang Investor Relations and Sustainability Officer
Gustavo Mariani Executive Vice President and Chief Executive Officer
Gabriel Cohen Chief Financial Officer
Call transcript
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Margarita Chun

Good morning, ladies and gentlemen. Thank you for waiting. I am Margarita Chun from IR and we will like to welcome everyone to Pampa Energia's Second Quarter 2021 Results Video Conference. [Operator Instructions] We inform that this event is being recorded.

Before proceeding, let me please read the disclaimer that is located on the second page of the presentation.

forward and are currently assumptions company. the Energia's on available mention beliefs management's and me looking based statements Pampa for Let on information involve in the are because that They or future. and future may occur to events they not may uncertainties risks, related assumptions could Energia from understand factors and forward-looking results differ general materially could expressed other that future in statements. the should conditions, industry cause affect Investors and results those such conditions economic operating also of Pampa to

conference video and the turn to Pampa Lida Lida, Relations I'll Now begin Investor our over conference. Sustainability Energia. Wang, of Officer the you may video

Lida Wang

Thank the you, well. Hello, and events figures. latest and time, In hope I joining thank you of Margarita. and conference financial call. our safe everyone all the summarize are will you interest for I

check details, our release or contact more to you earnings feel us. free For can

CFO both session. Mr. Cohen CEO, and Our Q&A Mr. and the us joining Mariani for are here

on the quarters Let's start commenting highlights.

production -- the dollar prices are Plan Gas times normal supported result seasonality higher is the a more more even XX% Moreover, commodity to also we our is First, hikes. showing Also, weather, by XXXX Mangrullo of terms as increase three set Pampa Gas E&P price winter our thanks Plan record than business the in another than competitive The level This an pre PPA explained commodity El achieved block day peak, prices and record two recorded to result the productivity during as feet last new full Legacy cubic XX% our for increase the E&P significant and in than higher by devaluation. than a prices. per in is country's levels -- winter flagship July of overall year-over-year contributing ago, pandemic the --production big demand milestone weeks moderated XXX boosted by production. our is higher but increasing the million performance and and winter. quarter's formation. sales of year's

Our demand. and A last is payment by the coupled least. billion not final We outstanding achieved the keep year ended of only with generation profile proceeds $X a The also quarter. position end one recurring regulator challenging collected petchem on by The sheet, strengthening a our power flow cash great debt. the almost took reducing focusing and closing. and the our another but chapter businesses gas to our generation. strategy of sale benefited keep we -- balance business from Therefore, place a change control our leverage not there a Argentina. quarter reaching But healthy due to cleared comfortable by thanks in debt management financial free net in not defensive is prices where but Edenor’s cash makes

Now, let's move financial key on takeaway. the quarter's

explained businesses. The to and detailed E&P. before In by followed EBITDA show on maintenance XX% $XXX as the units adjusted outages -- higher is the business. and reforming legacy boosting quarter, petrochemical lower by exposure gas we partially at increased driven a year-over-year on close million, and mainly EBITDA and our mainly as due Quarter-on-quarter focus oil Plan EBITDA Gas, affect explained prices XX% by while offset scheduled below, -- the more XX% to core and driven by roughly were year-over-year offset effect. in and though prices mainly year. million XX% commodity Genelba's Gas consolidated XX% our gas dollar by -- by devaluation continuing CCGT new expenses the of commissioning Revenues reason same and in linked than well by increased mainly legacy terms, capacity, quarter-on-quarter the XX% of utility prices offset takes seasonality year-over-year taking PPA winter, XX% winter QX in and double only from over the expansion efficiencies mainly power plus high by the plant. new rate last in during to $XXX PPA liquids, businesses and electricity EBITDA. regaining and prices by Let's power the in Plan sales amounted right PGA in the July XXXX petrochemicals up over the retracted Therefore, share, as CapEx Moreover, like year-over-year double dollar by winter production was by adjusted of commitment QX, the

great an due to with 'XX. for update driven contribution demand purchases offset of there's higher the of adjustment mainly it on bXb next outpaces and than GDPS slide in the contributed inflation were These sales, mainly of X, cover authority the in gas, by unless by is by in Still mainly to will to up thermal February, dollars QX fire on for limited Genelba's recorded operation considering prices from we nationwide the Genelba because energy the to the gas. electricity EBITDA petchem new CCGT industry, to increasing news peak and higher wind factor figures increased segment, is QX XX% legacy dilution June. operating fire in plant credit, of was XXXX, for good and million our in Moving Spot to plan the XX% CCGT, impact power update retroactively with pandemic represented -- price a EBITDA of spot dispatched expenses. in higher to to lower as devaluation farms this XXXX only offset levels, spot energy which pre is of no be key the increased -- nominated comprises therefore, effects it by you dispatch QX keep $XXX our underpay Moving dispatch XX% field load but by we proper the the continue back gas lower legacy prices, like generation higher this in year, the XX% primarily power capacity, generation recovery X% XXXX contracts pricing offset --. Quarter-on-quarter EBITDA by in the off see, generation shrinking and outages posted line maintenance energy year-on-year to BXB last our

However, XX% Keep full system mind and that down the business by quarter-on-quarter driven the outages. generation was on generation in payments. capacity relies model power

reached as energy, Genelba dispatch PPA revenue XX.X% mainly fully QX lower does last So outstanding partial rates scanning lower June, year-on-year especially not an in the due impact making received which long month. as for the availability to the 'XX in slightly based outages for availability

X,XXX half expansion, megawatts, with are boilers capacity enclosure, we close, country's and site, and XXX to the the operators will the to our be steam are critical away is and but seem equipment currently quarter that building most one turbines thermal working on cooling the that COVID four working closing Regarding CCGT can at water at of the in XXXX. reviewing One system tower almost the the people around it the -- total achieve efficient CCGT. COV protocols by of become second Pampa's units, completing

the we of E&P because that an driven results, in Plan prices QX primarily adjusted addition EBITDA growth commitments, took 'XX, $XX remarkable and on volume in which Moving of million by gas oil slide year-on-year, to rebounded we Gas recording X, recoveries posted and met. higher prices to

than and the higher and similar world's offset drilling at to $XX of below of oil by production than completion higher Efficiency rise productivity costs well due the produced winter El due more by prices recorded activities $X offset blocks, very gas higher BOE and drilling higher royalty. XX% reactivation XX% year, we from we offset and completion devaluation. the listing in activities royalties the wise, of last increased costs, quarter-on-quarter. but listing and EBITDA By EBITDA. year-over-year such Quarter-on-quarter as to double Mangrullo, effects more higher million more in kept competitive However,

driven quarter-on-quarter by down X% -- levels. increased all reached Plan still production the managing and but global locked year-on-year pandemic Gas, Our pre again, hasn't mainly

we a of As XX,XXX XX% result, of oil is which gas. barrels almost per equivalent averaged day

we day the export XX% increase XX% the explained of represented X,XXX due side, XX% The by volumes to by demand. in quarter, is barrels the in On concentrated export revenues year-over-year QX. per saw increased to oil primarily the quarter-on-quarter

by As the is are remain lockdown rent quarter-on-quarter while per similar. driven due year tripled last crude oil to prices the almost which

is oil level. per pandemic barrels pre to X,XXX down production the day still Our

recover We expect them to gradually.

Regarding gas as shown in slide. the next

day XXXX Our slightly Therefore month feet million production our per target operation. average feet year-on-year, was But XXX per X% May commitment. the than Plan actually in since million output quarter, blockade recover have equipment the this we the by cubic employees during impacting sales Production PSA. been higher, could XXX of cubic still the GSA lower affected the our driven overproducing up average Gas but April day. and daily

explained demand. better were winter disobey. Pampa production demand majeure X% one only including industrial On of by the pre large users the -- the down effect. during rising by Quarter-on-quarter producers the nationwide the beginning from quarter BXB is sales retail level The and gas year-on-year, In increase is addition, Gas pandemic so and season X% driven no force primarily and -- Gas Plan evidencing to consumption. granted peak was

high close led back standing production boosted and May Going growth the we reached operated wholly July. block production record the This our performance, of of all the our El in in facility quarter by quarter's to productivity by Mangrullo is production time gas. us contributed and overall by with our temporary to owned sold back end XX%

The During double of also quarter-on-quarter Gas winter out the the seasonality peak. almost price second course the per $X.X haven't and Plan reflected level. XX% million GSA dollar the quarter year-on-year btu Plan against by average and our but spot reached was up Gas this prices 'XX, bXb

retailers positive see the of country's grow sales quarter we BXB priority. Also soared to are share its during part diversified, are because working of their sales right last below last year-to-date breakdown. quarter market to results Gas more to with our XX% increasing similar compared winter XX%. to you can share. are the Increasing Gas also our the Plan As

segment site. As in be shrinking Chile. you for only exports, will October pay the received its with deliveries taker to which can see The a

quarter, subject, Regarding investment year. during our million the we than almost three our times strengthened last recording E&P $XX higher operation

quite in winter peak. quarter and XX drill well complete active This was Plan with line Gas the

virgin XXX double million actually the reach half four treatment the Moving day Mangrullo gas the in second As which of another current petrochemical call, first previous quarter, capacity segment building I drilled per products; are by increased by in all offset demand raw and from times last local we four than by EBITDA the solid plant this wells cubic year the international say because by deliver cost year. on set In Plan business, all, industry growth will five, materials seasonal feet next to and quarter-on-quarter completed mainly more The significant year-over-year prices, the reforming -- the in El and to recovery impact. we increased our Gas volume all XX% to rise supply increase prices plant was naphtha explained maintenance. for higher sales sales reference linked significant influenced of

In the this performance very expect addition, seasonal. the Since the exported. the roughly of sales quarter were half We volatile international and prices not are do year. XX% for second of

cash performance and from all must quarter reported the getting we to price. the Before flow thanks the and highlight supported the cash businesses generation profitability during operating into by improve higher debt, realized solid outstanding

extent, and $XX it notice QX, from mainly seasonal, is to billing negative, year's the higher that than increasing cash seasonal lesser quarter, and roughly was resulted Notice effect by last million, free During capital that CAMMESA. a more $XX collection quarter. working days driven Plan flow million the Gas last

$XX In installment former bought of of and million debt Edenor’s a $XX Plan back We second maturities Gas receivable total we mostly million. collected and for $XX for repay addition, sale shares an million.

a of of in So generated $XX end quarter. of million by position net achieving we cash the total, $XXX the million

on growth dollars XXXX, equivalent is in up last Moving IFRS group. to the let's $X.X billion is XX. XX% our shows but restricted covenant June, restricted the purposes. March. for from affiliates of on continued including consolidated at focusing Things, Edenor group was Life life. this to to figures, to The that's under ownership XX% Pampa is slide as decrease deconsolidated This keep amounting

shorts we've As in down debt of most all and paying the in peso. shorts debt been the

XX% So interest XX average interest average than less remains life dollar rate at peso the and. X.X% rate. of while debt years. The an average is

As higher $XXX said to is the cash XX% This we amounted million. quarter-on-quarter. before

decreased debt billion. to net So, $X

keep million. only using balance faces to In the EBITDA. next strengthening months, short $XXX our the addition, to X.Xx higher expect in million local In from X.Xx improved by the sheet. XX end due last currency. $XX leverage company than Moreover, net peso most this term roughly maturity, the Therefore, we bond to of our the matures ratio month, less of debt,

and minus, be you the above bonds our origins rating to a ceiling. sovereign corporate C can As are fee and result, this rated see

our So, this presentation. concludes

Thank I turn Now, will open floor who will to questions. the Margarita you. for towards

Operator

Instructions] [Operator

MargaritaChun

you, Thank Lida.

Morgan comes question two from has first Our Bruno questions. Stanley. Montanar from She

is moves? to Would What buy The conclusion side? is is first asset be of any company's purchase Pampa sell corporate potential Edenor’s the one the will That future the preferred more mindset question. first with or likely something disposal. for the that something type on be particular

GustavoMariani

that everyone. morning, Bruno about question. Good down go your sure but reading will Thank the your several question in for portfolio you which came years not and knows while joke my manager mind, for to Well, they the market order. up

assets rebalancing of thing, all this So about no, Pampa we've of I think assets. life our thinking and portfolio portfolio our been our for and is

part DNA. of our, M&A activity M&A of the is part our So the

Whether we the yet the today So be to time we that interests materialize seen. concrete I'm are assets, discussions I the analyzing And in can we continue thing we that with our front. you continue might that been And in what are much, disclosed not has only gas there's will from not opportunities, working the actively will although more future. and tell sure our or the in so that E&P all of already transaction on nothing is honestly, is let's them.

MargaritaChun

you, Thank Gustavo.

question the on the you hydrocarbon of of was law expectations The dollars? can second Bruno the comment access and to US new

GustavoMariani

already it's then media. they about the the And continue heard show can the hydrocarbons ago, that of law, into explain all basics the on since the the have I went have where with I but around working not changes much of you visit and law. that a finally published, government And after makes media the we couple to that and what the minor in Regarding hope proposal months players tell there's the while and power sector. the a that things few what the the have I Congress. to has law seen present not better. It that when additions executive there about that seems minor will in timing been for positive sure positive but law the sooner are things its the several for are that the in sector, law,

I plans -- when will sooner that the our Especially of idea next with year. goes have it before the no forward So through, defining for better. when government investment move all us will But start that. the

MargaritaChun

from do McGann. already but M&A because Our has He questions Frank next first the comes question with three one answered is it to has opportunities.

chain you is The that? second power generation the CAMMESA. update on more payment more from one us about give -- in Can feedback

GustavoMariani

for you Thank this. Okay.

bit invoicing. clarify of see you actually days a -- date collection days? months at As invoicing days since in deteriorated few reaching on doesn't the XX a days CAMMESA XX can of to CAMMESA XX high after Just from days this presentation, little XX this have days pays XX XX last it's mean delays,

an you is is and bit. year fuel a are winter you then the XX LNG. the in moment CAMMESA around They a those the worst here of toughest as have improve days little months to basically for and pay oil, this during see of this was if can see gas because their last purchase of picture. for CAMMESA. oil CAMMESA time XX from delay year, the Anyway the average the not pattern So days collection That the

doesn't of the CAMMESA sell and well in happened quarter. part significant business the fourth So cases. last the what generation those we as E&P again our and approach we It just are affects days through for a as affect will go only also CAMMESA. the power it third hope clarification It toughest collections year, during we month as them the that down as

MargaritaChun

from is There gas Frank is the this McGann. more expectation one QX year? What you see question price do

GustavoMariani

following quarter price slightly expect second price the Gas pricing go up, price also -- quarter, quarter. average Plan go pattern volume third go of in down In will up the not the the on but up go the We go winter second the quarter. the the will to the scheme. basically vis-à-vis third continue it will Because only of we will in quarter fourth

MargaritaChun

term Constantino Our questions two the term. local next Gas evolution perhaps Plan mid season have next the comes second dry raising cubic that do or questions expectation regarding more at He with prices August million the three amid Plan to the It is coming -- in you been for something sort? -- see in day prices any gas they market and What more additional that will has question similar short when than has as affect from year Satalia. well. related. the Gas view first tenders are the or is volume? Do the And a perhaps on XX question of per

GustavoMariani

The the question last of heard. wasn't part

MargaritaChun

-- part in was per the they and August, day frequent second additional the have last we a Gas bracing tenders more XX regarding, been the part see prices, or million So was meters Plan than term. any in basis more similar if reference something in for short cubic

GustavoMariani

you thank for Constantino the Okay, question.

because basically market. been want have change Plan year, a you prices a significant regulated the you the Gas, market. more market the know CAMMESA we Today, Secretary a there's of contracted had, if Energy. we with of security As spot by in Last

go through with companies. the CAMMESA, So the of the the the Plan XXX% either our winter most distribution during with us industry contracts of sales Gas with of

that binding any million done it or or pay almost XX of -- deliver have tenders cubic in for, those is irrelevant has base. doesn't month CAMMESA tender or not terms neither take meters CAMMESA So every that is

you there. your guide offer So

through the sold or not So really in have Plan supply to case excess and you of an access. industry the you that that is have Gas

gas time. And way to so transaction as that you to know, winter year. no it basin reflect excess options, capacity but was what we winter better reflection going that basin expect? from in only good last short million sell This same cubic the term, of there of in as you it's have for the those per market. transactions so pipelines recovered, long during monthly X medium CAMMESA, work And thanks going don't the they spot CAMMESA the to the do they Neuquina And but the industry a options been day. and still, can those the a or from recovered the Neuquina the as around of Gas price meter there's out production of if You the are not Plan

is we what gas, happen for happen. of government order that --so, natural in call to more the transportation Neuquina production is capacity even expect or the to So because have third to of we displacing that or LNG, around basin, that's liquids the expensive the win-win situation, a out increasing local of expect we will continue imports fulfill round the this eventually

the next third expect have was, currently year? producing industry winter. and next the delivering better be year the X of the of so, or been next fourth The of to the that quarter do million the gas Gas, have contract first are X we quarter in is quarter the Sooner, we year What year, the the prepare million what meters and Gas. the Plan in we Plan committed would cubic that in quarter deliver volumes ready expectation our first and else of in can to in do

somehow sales the fact the drought go by Brazil. That So volume extreme weather especially of of should in draw that should in the moderated south a the south during Brazil, might a of down be failure by our the extreme drought, the -- period.

to of cubic might gas two million the Argentina around is export So be gas XX that to meters per big three able about is natural day. consumption from of electricity Brazil. to That we watt

Argentina could this that So energy of the gas volumes the be consumption improve internally of in our of quarter Brazil needs in will quarter significant next and if improvement from year. first and fourth

MargaritaChun

near is Constantinos, pipeline expansion, the gas in term? state budgeting adjusting main on see the of that more the that top there is business there positively that do the Yes, one budget from question you includes affecting

GustavoMariani

a is question the in a import to and will expanding of good makes imports year also impact that this And transportation imports. hear we within term industry from government always not building said, heavily business working capacity because local That great replaces years. sense year, And those forward the of and to near winter. Argentina the also news going lot extensively we as during take the gas But also Bolivia throughout going that in about lot the moving pipe two long. and makes very That is sense. the capacity it our all

of in we have the reserve; we -- the replayed imports be capabilities a imports production those will have energy. be will Infrastructure that to quickly with We makes lot that that infrastructure. with will replace and need of local savings sense

So the sooner the better.

answer shortly may impact, going term or impact significant So, on impact our business. an and your the no have to a in have short it question won't to term but medium it isn't long will the in

MargaritaChun

$XXX comes CapEx group from answering Do JP $XXX next restricted of year don't for million guidance. still umbrella Our you give that in keep mind million before the question we Alessandra for from Morgan. the expect

GabrielCohen

CapEx achieve the Hello, essentially this CapEx related the production. additional amount of by order infrastructure levels year to higher on in wealth some significant plus business is of

year, amount decreased infrastructure already the shot level the from current that changes be reached. So, year assuming and this next the we we the that the of production should CapEx based for of no -- on year

business differential it's we that E&P of as from would if into any So enter this new budgeted. expected equation not be today,

MargaritaChun

question next comes Our America. Bank of from --

for What plants year? Plan near we keep mind implemented thermal Energia? and Now strategic give almost for Pampa for next the of CapEx Gas the steps the completion, preliminary is guidance. next answering are the budget remainder don't that in what is Before are year and your

GabrielCohen

there to that within in round for before and itself we on E&P rather Gas we new capacity. The it clearly the Thanks on Pampa reminder. happen is and assets One the room to very generation, work power for expect very in things. E&P competitive assets, because portfolio the our be to our share Otherwise might for may two we on We able competitive sector. as room transportation able expand industry that our have on portfolio growth. much in be grow. we assets and market we gain have the term and the of And developing depends of renewables are the are to a through strategic the we and a won't are for to bidding see and short it business analyzing the whether Today, farm in medium steps explain we be build sector model the that could to that basically new basically expansion fourth so bXb soon foreseeing Plan what industry, wind to those round continue on term.

MargaritaChun

Mashallah question from from comes has next Our questions. three MetLife. She Florentia

you do is one refinancing XXXX bonds? of update any first on the the The have

GabrielCohen

hello. Yes,

refinancing As do that's we Central bankers be or Bank if allow. it the point, also we regulations. constantly. we to expect that in related want And bond may the something paying mentioned central previous do at some calls, either something It's to to that

MargaritaChun

the second XX% announced is adjustments May, legacy the for on year? any And question in after next about hike potential the energy update

GustavoMariani

decided that we those less on for Energy. those of discussions equipment the know. changes the we There has -- requests for the currently been they with year have especially itself, about to -- mainly next industry's price adjust like adjustments. in Secretary with being claiming are a minor that dispatch the XXX going but no but the that But are No, so are from regulation far, the clue are not industry to nothing few

MargaritaChun

regarding are years? from question in the is update the three maturing Florentia that any The hydro about last next concessions

GustavoMariani

is years next not eternity will be next No, quarter. always starting three Unfortunately, years. the like Argentina three

is at think of don't mind. is no I Now this government the unfortunately, on have their issue we what government point this the thinking. that clarity having

MargaritaChun

Our comes from questions. two next question He has Fernandez. Sal

to about have any the deals The do on Chile have you is quarter that. possible commented on first earlier, one case not Chile you this the the first during of gas update you call? mentioned export to In export

GustavoMariani

mentioned per presentation forgot that of have been the firm day cubic yes. we export of release the meters Lida X.X contract But of Yes. Xst October mention of to we Maybe year. since we awarded on April Chile the to next Xst until did during gas million to

through export beginning will What is go October. So in in the question? that else

MargaritaChun

The Greenfield next last in that from corporate regarding market could that of investment the one sign question private Sal from matter in is any demand renewables. the new the help was renewable unlock

GustavoMariani

issue The there demand about the pricing. from the is corporate obviously is

of are prices we building farm going commodity of has the of the gone in up evaluating, of the especially unfortunately So, wind world. cost commodities, up of because because prices

the corporate sector why reevaluate we the to that's evaluating So we and obviously requested acquire have this, the demand that, prices from there we from energy. are but suppliers is renewable

MargaritaChun

have We that cash one June from more question -- million reflects the XX already the balance $XX payment. just confirming from collected

GabrielCohen

million $XX Yes, collected respect, $XX and a that there already for hello. In is we remaining million payment next year.

MargaritaChun

starting mainly order to modifications the maturities Our last to you in market to international but do your cost effect any intention in assuming reduce capital question PPA; have dollars? no from Raphael comes your US extend

GabrielCohen

hello. that profile be respect. comfortable in will today's With debt and cash we Yes, position

in any the are projections. changes actively we event profile Although managing our in our business we debt see

Margarita Chun

concludes Thank section. question-and-answer you. This Gabby. the

Lida to final remarks. turn for will We

Lida Wang

Thank we make don't call. you not covered I Gabby for would us. well, petrochemicals comments or one some know didn't joining you hour whatever like to is you, we everybody cover? feel that This that

you to follow we If questions, with up you. be will very more have happy

contact questions? this You Just can replay Any Margarita. afterwards. us see

available so are you. good Have Bye-bye. day. much. a for We always Thank you

Operator

Thank joining. you for presentation. very you today's concludes much. Thank This

at You may Goodbye. this disconnect time.