Central Puerto S.A. American Depositary Shares (each represents ten Common Shares)

Good morning, ladies and gentlemen. Welcome to Central Porto's third quarter of 2025 earnings conference call. A slide presentation is accompanying today's webcast and will be also available on the investor section of the company's website, centralporto.com slash en slash investors. All participants will be in listen-only mode during the presentation. After that, 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 Relations Support section on the company's corporate website at centralporto.com. In addition, a replay of today's call will be available in upcoming days by accessing the webcast link at the same section of the Central Porto's website. Our host today will be Mr. Fernando Bonet, Central Portal CEO, Mr. Henrique Terranio, the company CFO, Mrs. Maria Laura Feller, Head of Investor Relations, and Mr. Alejandro Diaz-Lopez, Head of Corporate Finance. Maria Laura, please go ahead.

Thank you very much. Good morning and welcome. We are joining you today with our management team from Buenos Aires to report on the results of the third quarter of the year 2025 and then answer any question you may have. During the third quarter, HSTA BTA reached $101.1 million. up 64% quarter-on-quarter and 8% increase year-on-year. Revenues total $233.9 billion, up 30% quarter-on-quarter, mainly reflecting higher contract sales from product renewables and thermal fuel cost path through. and up 26% year-on-year, mostly reflecting additional revenues in this quarter from fuel cost path through and also Central Costanera successfully resuming activities after the maintenance works. Total generation was 4,539 GWh, 4% up from second quarter 2025, but 20% down year-on-year mostly due to the low hydrology at Piedra del Aguila. From a financial standpoint, our net leverage ratio remains very healthy at 0.5 times as just the EBITDA, underscoring our strong balance sheet and financial flexibility. Also good news for our credit rating, Moody's has initiated the credit assessment with the AA+, a fixed SER upgrading our rating to AA from AA-. Third quarter 2025 capital expenditures amounted to $76.1 million, which includes the acquisition of Cajate Solar Farm at $48.5 million, final works for the closing of the Brigadier López Combined Cycle and San Carlos Solar Farm, which are very near COD, as well as maintenance capex. Moving to the key development for the quarter, in August our company successfully participated in Alma GBA Battery Energy Storage System bidding process. We were awarded both projects we submitted, which collectively represent 205 MWh of new PES capacity. The projects are scheduled to be fully operational by mid-2027. As a significant four-quarter outlook, the Energy Secretariat released Resolution 400 in October. This resolution marks a pivotal step in the liberalization of the powered market and creates a strong business outlook for our company. Going now to page 4 for the earnings summary. Our HSDA VTA came in strong at $101.1 million, reflecting the effective fuel cost path through to revenues and solid operational performance in both our renewable portfolio and at Central Costanera. In this quarter, our revenue mix was 53% spot and 47% contracted, with 63% of total revenues denominated in dollars. Renewal generation revenues increased by 24% this quarter, supported by a 21% rise in generation volumes quarter-on-quarter. This strong performance was driven by our wind farms and the contribution from the newly acquired Cafachate Solar Plant. On the thermal side, contracted revenues benefited from additional fuel cost pass-through at Terminal 6. Thermal revenues also rose in both the spot and contract markets, reflecting the positive impact of Central Costanera, which successfully completed maintenance works in the second quarter as well as fuel cost pass-through effects. Now, turning to page 5, let's look at our generation and availability performance. Total generation for the quarter was 4,539 GWh, composed of thermal, hydro and renewable sources. Volumes were up 4% quarter-on-quarter. Thermal generation represented the larger share, followed by hydro and renewables. Thermal and renewable volumes grew, while hydro volumes decreased due to low hydrology in the Comagua region. Availability rates for all our thermal units remain strong at 88%. The combined cycles rate at a very competitive level of 96%. We continue executing our growth strategy. The Adelope combined cycle and Zancamba solar farm are very near COD. In August, we acquired the 80 MW Capachate solar farm and also we secured two best projects totaling 205 MW and 15 year contracts. Central Porto Complex will have 150 MW of lithium battery storage and the uptaker will be the distribution company Elenor. Central Costanera complex will have 55 MW and the uptake will be a result. Estimated capital expenditure is between 130 and 140 million dollars for both projects combined. On October 21st and already effective since November 1st, the Energy Secretariat issued the new framework to reform the Argentine's wholesale electricity market. The core objective of Resolution 400 is to liberalize such market through a progressive transition. The new spot revenues incorporate a margin on top of variable production costs, supporting long-term value creation for generators. Also, there is a significant shift for revenues in the spot, now denominated in dollars, mitigating currency and inflation risk. Thermal generators gain significant flexibility, allowing them to trade capacity and energy in the new thermal term market. We can sell up to 20% of our production to large users and the remaining up to 100% to distribution companies or the spot market. Spot market energy remuneration will capture marginal rent on top of the variable cost of producing the energy. Incapacity payment in the spot market is now $12 per megawatt of capacity per month, and is weighted by a factor based on fuel requirement and fuel management approach. Also, it is added a reliability reserve. During a fuel management transition period until planned gas contracts naturally expire, CAMESA continues as supplier of the contracted capacity of planned gas, which ends December 2028. From 2029, generators will be fully responsible for their own fuel management. For renewables, existing renewable contracts will be enforceable until natural expiration. Then generators will trade in the matter. Our total financial debt at quarter end stood at $452 million. Cash and cash equivalents totaled $292 million, resulting in net debt of $159.9 million. Net leverage ratio stood very healthy at 0.5 times adjusted BTA. In October, we issued a new corporate bond, raising $89 million in capital and also repaid $90 million of maturing debt, including the repayment of our Class B corporate bond and the legacy debt associated with the Guanizu Hill solar farm. Total installed capacity in Argentina of September 2025 was approximately 43,887 MW. Energy generation during the third quarter was 34,342 GWh, while domestic demand reached 35,255 GWh. Going now to page 10 for key takeaways. 3Q25 adjusted VTA of $101.1 million and 3Q25 last-month adjusted VTA of $317.5 million reflect solid operations and a starting point in this new market environment. Central Port was awarded both projects submitted under the Alma GBA Battery Energy Storage System tender. This means we added 205 MW of new capacity. These strategic projects notably boost our growth path and provide additional operational capabilities needed in the future of power generation. Our growth pipeline is delivering results, with the acquisition of Cafachate Solar Farm, which added 80 MW of installed capacity to our portfolio since August 2025. Additional growth will be provided by ongoing projects, the Brigadier López Combined Cycle Crossing and the San Carlos Solar Farm, very near COD. Central Puerto's business outlook has gained significant growth momentum. Driven by the Energy Secretariat's Resolution 400, this resolution formalizes the market liberalization roadmap, representing a pivotal step towards strengthening long-term value creation for us. This context reinforces our positive outlook for 2026 and our long-term company vision. Thank you for your time and your confidence in Central Porto. Operator, please open the line for questions.

Thank you very much for the presentation. We will now begin the Q&A section for investors and analysts. If you wish to ask a question, please press the button Reaction and then click on Raise Hand. If your question has already been answered, you can leave the queue by clicking on Put Hand Down. The first question comes from Mr. Martin Arancet with Balance Capital. Please, Mr. Martin, go ahead.

Hi, can you hear me?

Hi, thank you. Thank you for the presentation and for taking my questions. I have two topics that I would like to discuss. I will run them one by one, if that's okay. First, regarding the market liberalization, I was wondering if you could provide any guidance on how much do you expect this to improve your results? over the next two years. Also, if you are considering any improvement to your legacy fleet, given these inhales in revenues, and how likely do you think it will be to contract that 20% with large users? Thanks.

Hi, Martin. Thank you for your interest and your questions. Well, I'm going to the first one, the impact of the new deregulation of the sector in terms of cash. We are seeing that's dependent on the dispatch, on the use, consumer fuels, but we can expect around between 20 and 25 of increase in our EBITDA. could be, as I mentioned, could be 20, 25, depending on the dispatch of the units and the fuel consumption. Talking about the other improvements that the regulation brings that are important, also as important as the pricing, as Maria says, mentioned, is very important for us to have the the denominations of these new prices in dollars, set in dollars. So we cannot need to wait until the government resolution month by month for price increase, which was the case in the past. So for us, it's very important to keep the remuneration at least attached to dollars updated. And the other big improvement, and it's related to your question, is that we can sell part of our production in private terms, private outtakers. As you mentioned, it's 20% for big users, big consumers, but we have no limitation to sell it in the percentage to sell it to distribution companies. So, in terms of this 20%, we are start selling. The situation right now is the big consumers are very, very contracted. The biggest ones are very contracted with renewables. So, we are trying to find the ones that are not contracted and the small, going down to small ones, you know, the women's and goodies. But for that, we have been selling since the regulation was issued. But to be completely honest with you, the market right now is trying to understand how the price is going to move with these new regulations. How Kamesa is going to set the prices and the Secretary of Energy is going to set the prices for the spot basis of the spot market. and for the goodies that are still in the distribution companies that right now the prices is still setting by resolutions and the scheme of every quarter setting by secretary of energy and . But we are very confident that we Whenever these are more or less clear by the demand, the demand is going to start to contract because the prices of this fall during winter times will be much more higher than now. And because of that, they're going to prefer to cap that increase on winter times and set contract with generators. So we're very confident that During this year, we're going to reach that 20% and we expect more with the distribution companies. Distribution companies needs also to set with each regulator, each province regulator and national regulator in the case of Northern Azul, set how they're going to make the pass-through of these contracts or new contracts that the distribution companies will established with the generator. So everything is moving, but we are confident that this new market, as the regulation mentioned, is going to start and we have a good pace to contract our production during this year.

Right, just a couple of follow-up questions. First, you mentioned $20 to $25 million of additional NDPTA per year. I was wondering if that's not considering the 20% that you could sell to big users.

No, sorry, Martín, it's not 20 million, it's 20% increase.

Oh, 20 to 25%, okay, right.

It's more than around $70, $80 million.

Great, thanks. And that's without the 20%. So if you are successful in selling that 20% to industries, we could see any further improvement, right? Yes. Okay, great. And then an initial follow-up question regarding you mentioned distribution companies. Probably it's too soon, but do you foresee a new option for distribution companies next year or in the near future?

You're talking about a capacity auction or batteries?

An auction to sell the other 80%, I mean, if I understood correctly.

Yeah, this will be by each distribution company process. It's not centralized like batteries or like a capacity contract. Any distribution company can do, go for this regulation established that Kamesa is going to provide around 75 or between 70 and 75 percent of the distribution companies demand, and the rest could be contract by distribution companies itself direct with generators. So we are seeing some distribution companies asking for quotations and start the conversation for for provide this 20 or 25% of their demand. But it's not centralized, will be each by distribution companies. And there will be a negotiation directly between generators and distribution companies.

Okay, thank you for clarifying. So we could expect also beyond the 20% some distribution companies probably in 2026, 2027, contracting additional energy. Yeah. Well, great. Thanks. Then the second topic that I would like to discuss was regarding the recent hydro auction. I don't know if you could provide any color on that, probably the targeted assets and expected timeline for awarding these assets.

Yes. As you know, we participate with Central Puerto and Costanera. We expect to have more news in the coming weeks. First, the CAMESA are evaluating, the CAMESA Secretary of Energy are evaluating the capacity and the documentation that the heaters provide. And then I think between, as I mentioned, next week and the other one, we will have a clear view of the competition or the ones are available to compete and then for sure in previous to middle of December we will have the results, the final results.

Okay, thank you very much, very clear, that's all on my side.

Thank you, thank you for your interest.

Thank you. Our next question comes from Mr. Matheus Tostes with Citi. Please go ahead.

Hi, and thanks for taking my question. Congratulations on the result. My question is first on capital allocation. I mean, we have been seeing a lot of re-rating of Argentinian assets over the last couple of weeks. So in that context, are you evaluating maybe some portfolio recycling with some of your assets in forestry, perhaps in in mining already, or would you rather wait for a longer cycle to engage on that front, especially considering now there may be some more projects looking interesting as investment opportunities? And yes, my second question would be, conceptually speaking, where do you see the... stabilizing for the term market price, right? Which today is about $60 per megawatt hour, but you will get an ever growing supply of power there. On the other hand, you may also have increasing demand from distributors for those PPAs. So where do you see that stabilizing over the short term? Those will be my two questions, thank you.

Okay, thank you. Going to the first one, we are not evaluating right now a reallocation of our assets or selling. We think that they have a lot of room to increase price. And so because of that, we are waiting for a longer period of growth. And we are also evaluating a possibility of if we improve the value by some developments around those assets. So right now we are not looking for reallocating that assets ourselves. In terms of the second one, talking about prices, we are seeing some in the short term, For sure, we are seeing some reduction around those $60, perhaps moving between $57, $55, $56 in the short term when this new offer comes to the market. But in the long run, we are not seeing a huge reduction on those values because You will have to increase the capacity of Argentina and the prices for new capacity are going up. All the data centers boom and the demand of Middle East are rocketing the prices of the GTs and the delivery time. So perhaps we see some reduction at the beginning in order to stabilize that market, that new market, new math. But in the long run, we are seeing prices around 60%.

Thank you. Thank you very much. That was very helpful. If I may add a quick one, now that thermal projects should have, I mean, with the new rules, should have better rates of return, very likely, what would you say are the key projects in the thermal side of the business that Central Porto is looking into?

Well, this new regulation, I think it's not enough yet. to bring new project from zero, from scratch. It's not easy to set a big command cycle, I don't know, 800 megawatts and sell it to the market. We are not there yet. As I mentioned, the price will be much more than 50 something. So I think the new projects coming will be perhaps at the beginning of the next year, some that the government are planning to set in terms of capacity. Small open cycles and machines working as pickers. I think this is what we are seeing coming with centralized auctions. But not huge command cycles selling to privates. I think we are new. I mentioned new ones. We are not there yet.

Okay, thank you.

Our next question comes from text. Hi, this is Ezequiel Harari from AGTEP Grupo Financeiro. In the release, we saw that the installed capacity of San Carlos, Cafayate and Brigadier Lopez is already available. Could you provide some color on how much of the capacity will actually be operating or contributing to generation during Fort Q? and what we could expect in terms of revenues or margin uplift, both from this additional capacity and from the recent steps toward electricity market deregulation?

Okay, thank you. Thank you for your question. In terms of new capacity entrance, San Carlos and Brigado Lopez, as you mentioned, are Right now entering, San Carlos is entering, I think, this week or the beginning of the next one. So the impact in our revenues for the fourth quarter will be like half of November and full December. In respect of Brigadier Lopez, which is the closing of combined cycle, We are expecting the COD, we are right now in the commission, in the end of the commissioning phase, but we need to make a lot of tests to be online and to be producing energy and to be receiving the payment. So in the case of Ria de Lopez, we expect the middle of December, perhaps 20, 20 something of December. So the impact on our revenues will be not significant. But talking about full year basis, we expect around, in terms of Ria de Lopez, around an additional EBITDA of 60, 65 million dollars, and San Carlos around three, between three and five million dollars more. Full year basis. I don't know if I forget a question or one part.

Thank you. Our next question comes from Ludovic Casruge with Autonomy Capital. Please go ahead.

Hi, do you hear me? Yes, yes, clear. Good morning and congratulations for the results. My question was about the CAPEX. Which level of CAPEX do you expect for next year?

Okay, thank you for your question. In terms of CAPEX, we are finishing, as I mentioned, Brienne Lopez and San Carlos, so we are not expecting big CAPEX for that part. The CAPEX that we are entering on right now and will be continuing in the next year is the base project that we get awarded in last quarter. And this will be around $130, $140 million for the both projects, the Central Puerto and Costanera projects. Sorry?

Just for 2026.

Yes, yes, we expected the completion of those projects in 2026, yes.

Okay. And just thinking, could we expect an extra dividend distribution for the end of this year?

Well, that depends on the results of the Hydro option. That will depend on that.

Okay. Thank you.

Thank you. This concludes our Q&A session. I would like to turn the conference back over to Mr. Fernando Bonet for any closing remarks.

To everyone for your interest in Central Puerto, we encourage you to call us for any information that you may need. Have a great day. Bye-bye.