Central Puerto S.A.

Good morning and welcome to the Central Puerto's conference call following the results announcement for the fourth quarter ended on December 31st, 2021 and full year 2021. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. If you do not have a copy of the press release, please refer to the investor support section on the company's corporate website at www.centralpuerto.com. A replay of today's call may be accessed by accessing the webcast in the investor support section of the Central Puerto's corporate website. Before we proceed, please be aware that all financial figures were prepared in accordance with the IFRS and are stated in Argentinian pesos unless otherwise noted. It is worth noting that the financial statements for the fourth quarter, ended on December 31, 2021, include the effects of the inflation adjustment. Accordingly, the financial figures mentioned during the call, including the data from previous periods and the growth comparisons, have been stated in terms of Argentine pesos of the end of the reporting period. Also, please note that certain statements made by the company during the conference call are forward-looking statements, and we refer to you to the forward-looking statements section of our earnings release and recent filings with the SEC. Central Puerto assumes no obligation to update forward-looking statements except as required under applicable securities laws. To follow the discussion better, please download the webcast presentation available on the company's website. Please be aware that some numbers mentioned during the call may be rounded to simplify the discussion. On the call today from Central Puerto is Fernando Bonet, Chief Executive Officer, Enrique Teranillo, Chief Financial Officer, Milagros Grande, Financial Manager, and Nicolas Macchi, Investor Relations Officer. And now we'll turn the call over to Fernando Bonet. Mr. Bonet, you may begin.

Thank you very much. Good morning and welcome. We are joining you today with our management team from Buenos Aires, Argentina to report on the results of the fourth quarter 2021 and the full year, and then answer any questions you may have. I would like to begin today's call by analyzing the recent events, the industry in general, and finally the operating figures of the fourth quarter and full year 2021. Milagros will present the most recent financial news and results. First of all, I would like to comment on the last development in the industry. As you can see on page 3, in terms of installed capacity, the system reached 42,989 MW in the fourth quarter of 2021, resulting in a 2% increase compared to the fourth quarter of 2020. Mainly based in new renewable projects, which added 1,000 MW to the system, with a breakdown of 70% wind and 30% solar. As of December 31, 2021, the installed capacity continues to be 59% thermal, 25% hydro, 12% renewals and 4% nuclear. In the fourth quarter of 2021, energy generation increased 1% to 35,530 GWh compared to 35,133 GWh in the fourth quarter of 2020, mainly due to 1% increase in hydro, 22% increase in renewables, and 45% increase in nuclear, partially offset by a decrease of 7% in thermal. Renewables rise was due to a new installed capacity and nuclear's improvement is due to a higher availability of Atucha II, which had its maintenance during fourth quarter 2020. For thermal, there was an overall lower availability 78% for the fourth quarter of 2021 compared to 82% from the third quarter of 2021 and 79% in the fourth quarter of 2020. During the fourth quarter of 2021, the main sources of energy generation continue to be the thermal and hydro, with a share of 60% and 18% respectively. Meanwhile, renewables keep growing and represent 14%, 2% more than in the fourth quarter of 2020. Finally, on page four, energy demand increased 6% up to 33,472 gigawatts hour compared to 31,432 gigawatts in the fourth quarter of 2020. Where the industry and great demand rise 7%, the commercial demand grew seven percent and the residential demand increased in six percent. There were increases in all demand segments. The rise in commercial and industrial demand in the fourth quarter of 2021 is attributed to a recovery of the economy activity and lower restriction imposed by the government. All three months of the quarter show comparative increases. As of fourth quarter of 2021, and in terms of demand structure, 44% is represented by residential users, 28% is represented by commercial, and the remaining 27 is related to great demand and industrial. Going now to our key performance indicator for the quarter, as you can see on page 5, energy generation during the fourth quarter of 2021 was 3,727 GWh of electricity, 2% lower than in the same period of 2020. The decrease was mainly caused by a 29% drop in energy generation from Piedra del Agla plant due to a significant decrease of water inflow as the result of the draw in Argentina and the region. And two, 3% decrease on renewable generation mainly due to a lower wind in some of our wind farms. This was partially offset by a decrease by an increase, sorry, of 5% from our thermal units due to Terminal 6 full operation and a higher availability of our Mendoza steam and gas turbines. Steam production during the fourth quarter 2021 increased 36%, totaling $368 million. 1,411 tons produced due to a good performance of Lujan de Cuyo cogeneration plant and Terminal 6 full operation. Regarding the availability of our thermal units during the fourth quarter of 2021, it increased 88% in line with the strong availability history of Central Puerto's equipment. As a reference, the market average availability for the thermal units for the fourth quarter of 2021 was 78%, according to data from CAMESA. Finally, I will refer to our key performance indicators of the full year as stated on page 6. In 2021, generation remained stable with 4,392 GW produced compared to 4,331 GW for the same period of 2020. Where the main variations were an increase of 7% or 697 GW in the thermal machines due to Terminal 6 production, The recovery to average operation of the Siemens brand combined cycle in Lujan de Cuyo from the failure occurred in the second quarter of 2020, and a higher generation from the steam and gas turbines from Mendoza Power Plant and Buenos Aires Power Plant. And two, 18% or 240 GW increase in renewables as a result of the full previous operation of Genoveva I, Manque, and Olivos. This was partially offset by a 25% or 1,877 GW decrease in hydro generation from Piedra del Aguila due to a lower water flow as explained before. Steam production improved 12% and reached 1,208,923 tons during 2021 compared to 1,081,959 tons of 2020 as a result of Luján de Cuxo good performance and Terminal 6 full operation. During 2021, availability of our thermal diuretics remained stable, 89%, same as the same period of 2020, showing a robust average availability in the last years and performing above the average of the market, which was 81% for the whole system. And now I will turn the call over to Milagros who will comment on the financial highlights.

Thank you, Fernando. I will now comment on the results of the fourth quarter of 2021 and the full year. Going now to the results for this quarter, as you can see on page 8, our revenues were $14.1 billion as compared to $14 billion during the fourth quarter of 2020. This 1% increase was mainly due to First, a 32% increase in sales under contract, which totaled 9.5 billion pesos in the fourth quarter of 2021, as compared to 7.2 billion pesos in the fourth quarter of 2020, mainly due to the full COD of Terminal 6 and La Genoveva 1. And second, a 6% increase in steam sales, which totaled 0.38 billion pesos in the fourth quarter of 2021, compared to 0.36 billion from the same period of 2020. Higher inflation adjustment over the peso depreciation during this period concealed a 36% increase of the steam production as per Terminal 6, COD and Mendoza's good performance. This was partially offset by a 36% decrease in spot sales which resulted in a 3.9 billion pesos in the fourth quarter of 2021 as compared to 6 billion pesos in the fourth quarter of 2020 due to a lower hydro generation and a decrease in production from Central Puerto combined cycle and some of its steam turbines. These were partially offset by the temporary additional income related to Resolution 1037. It is important to highlight that during fourth quarter of 2020, Terminal 6 produced as an open cycle and was remunerated under Energías Bases resolution. Going to page 9, we can see the changes in our EVDA excluding impairment and funding effects difference and interest, which was 11.1 billion pesos in the fourth quarter of 2021 compared to 9.2 billion pesos of fourth quarter of 2020. This 26% increase was driven by the following changes. First, a 29% decrease in administrative and selling expenses totaling 0.9 billion pesos in the fourth quarter of 2021 as compared to 1.3 billion pesos in the fourth quarter of 2020. This was mainly due to a 0.2 billion pesos drop in taxes and a 0.1 billion pesos reduction in maintenance expenses. Second, an 11% in depreciation and amortization that totaled 2.8 billion pesos during the fourth quarter of 2021. Third, 285% decrease in foreign exchange difference on operating assets, mainly related to trade receivables due to a lower depreciation of the Argentine peso in this quarter. Fourth, the reverse of CAMESA's penalty related to Terminal 6 totaling $4.4 million. And fifth, the positive result from the sale of property plant and equipment. On page 10, we can see that consolidated net income was 0.85 billion pesos compared to a consolidated net income of 0.82 billion pesos in the same period of 2020. In addition to the factors mentioned before, the net income was affected by, first, a lower financial income that amounted 1.3 billion pesos in the fourth quarter of 2021 compared to 3.5 billion pesos in the fourth quarter of 2020, mainly due to the reductions of net gains on financial assets at fair value. Second, a higher income tax for the period, which grew 50% as total 2.4 billion pesos in the fourth quarter of 2021 compared to 1.6 billion pesos in fourth quarter of 2020. This was mainly due to the changes in the corporate income tax rate and the cancellation of certain deferred tax assets. And third, it was positively impacted by lower financial expenses, which amounted to 2.7 billion pesos during the fourth quarter of 2021 as compared to 9 billion pesos in the fourth quarter of 2020. as there were less foreign exchange differences due to a lower depreciation of the Argentine pesos during the quarter and a lower U.S. dollar-denominated debt balance. Funding collections totaled 1.87 billion pesos in the fourth quarter of 2021, including VAT, associated with the funding trade receivables for Vuelta Obligado plan. The amounts are being collected on time and according to the signed contract. Going to page 11, you can see our cash flow for 2021. Net cash provided by operating activities was 26 billion pesos. This included 8.9 billion pesos in collection from Vuelta Obligado installments. Net cash used by investing activities was 6.9 billion pesos, mainly due to the construction of Terminal 6, lost from the sale of short-term financial assets, partially offset by the sale of property, plant, and equipment. Additionally, on the financing side, 19.2 billion pesos were used to loan payments for 12.9 billion pesos and interest payments for 4.2 billion pesos. Finally, on page 12, we can see the key financial figures for the full year. Revenues decreased 1%, to 57.1 billion pesos for 2021 compared to 57.5 billion during 2020. The decline in revenues was mainly affected by a lower hydro generation as described before, offset by a greater production from thermal and renewable sources, mainly due to Terminal 6 and La Genoveva 1. Another positive impact that couldn't offset inflation impact on costs was the 29 percent tariff increase for Energia Base and the temporary additional income related to 1037 resolution during the last quarter of the year. Adjusted EBITDA impairment and FONI effects Adjusted EBITDA excluding impairment and funding effects different and interest for the 2021 reached 35.3 billion pesos compared to 39.4 billion pesos in 2020, mainly due to lower gross profit and operating income as a result of the higher cost of sales related to more purchase of fuel and spare parts and increase of cost production. Also, it was negatively impacted by a lower effects difference and interest on trade receivables. Finally, consolidated net loss was 0.6 billion pesos in 2021 compared to a gain of 10.5 billion pesos in 2020, mainly due to losses on net monetary position, less financial income as a result of lower gains on financial assets, higher taxes, and losses from associates, particularly from ECOGAS. All this was partially offset by lower financial expenses. Phony collections totaled $8.2 billion during 2021. Thank you, and now I invite you to ask any questions to our team.