Central Puerto reported a drop in its net profits: how its shares reacted

During the first nine months of fiscal year 2023, the Central Porta leading company in electricity generation and forestry, registered a operating profit of $127,498 million, slightly above the same period last year, when said result was $120.67 billion. While the net profit before taxes was $24,649 million, less than half of the result that the company had in the same period of fiscal year 2022which was $50,447 million.

With everything, Its shares gained 1.5% this Friday on Wall Street (they fell a slight 0.2% in the after market) and They rose 9% in the Buenos Aires stock market.

The company reported in the balance sheet it presented to the Stock Exchange that the net profit for the first nine months of fiscal year 2023 was equivalent to $7.37 per sharealmost the third of the net profit of $22.48 per share for the same period in 2022.

The company explained in its balance sheet for the third quarter of the year that the operating profit result was due to the higher income from sales to the spot market as a result of the acquisition of Central Costanera, due to the sale of forestry activity and a growth in income from net exchange differences and interest, mainly due to commercial loans and the higher result from the possession of biological assets.

These effects were partially offset by lower sales income from contracts mainly for the termination of the contract of the Brigadier López Central and the drop in steam sales at the San Lorenzo power plant, the higher cost of salesmainly due to an increase in the depreciation of property, plant and equipment, due to greater consumption of materials and spare parts and due to higher forestry and forestry production expenses and the lower result from insurance recovery.

Central Puerto: factors that affected its operating profit

Thus, they pointed out that “the operating profit was reduced by financial resultsaffected by exposure to the change in purchasing power of the currency, exchange difference, higher interest on loans (due to rate increases) and the lower positive result from interest rate swaps.

They explained that “these effects were offset by the greater positive result from the holding of financial assets at fair value and the highest result from interest earned”.

In summary, they indicated that the main causes of the decrease in net profit for the period were:

• Lower income from ordinary activities mainly due to the termination of the contract for the Brigadier López plant and the lower sale of steam at the San Lorenzo plant, the higher cost of sales,
• The Rnegative result due to exposure to the change in purchasing power of the currency and the largest negative result due to the exchange difference of financial liabilities.

Central Puerto: future plans

“To future, The company will focus on continuing to improve its efficiency, not only with regard to the management of the generation units, but also in the administration of its resources, in order to continue positioning itself as one of the leading companies in the electrical and forestry sector in Argentina,” they anticipated.

In this sense, they highlighted that, During fiscal year 2023, they have incorporated:

• the thermal generation plants belonging to Central Costanera SA, made up of six turbo-steam units with an installed capacity of 1,131 MW and two combined cycle power plants whose power is 1,173 MW,
• the companies Empresas Verdes Argentina SA, Las Misiones SA and Estancia Celina SA (which own more than 88,000 hectares of forestry assets)
• a solar park located in the province of San Juan with a power of 105 MW.

Consequently, they assured that will continue to focus on expanding their electricity generation capacity and forestry production thus consolidating itself as one of the leading companies in the electrical and forestry sector.