Pampa & Edenor Joint Q4 17 Results Call March 13, 2017 10 AM - - PowerPoint PPT Presentation

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Pampa & Edenor Joint Q4 17 Results Call March 13, 2017 10 AM - - PowerPoint PPT Presentation

Pampa & Edenor Joint Q4 17 Results Call March 13, 2017 10 AM EST / 11 AM ART Disclaimer The material that follows is a presentation of general background information about Pampa Energa SA as of the date of the presentation. It is


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Pampa & Edenor Joint Q4 17 Results Call

March 13, 2017 10 AM EST / 11 AM ART

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The material that follows is a presentation of general background information about Pampa Energía SA as of the date of the

  • presentation. It is information in summary form and does not purport to be complete. It is not intended to be relied upon as advice

to potential investors. This presentation is strictly confidential and may not be disclosed to any other person. No representation or warranty, express or implied, is made concerning, and no reliance should be placed on, the accuracy, fairness, or completeness of the information presented herein. This presentation contains information and statements that are forward-looking within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended (the 'Securities Act') and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. Forward-looking statements are statements that are not historical facts. These statements are only predictions based on our current assumptions, expectations and projections about future events. Forward-looking statements may be identified by the words 'believe', 'expect', 'anticipate', 'target', or similar expressions. While Pampa' s management believes that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and are generally beyond the control of Pampa, which could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include, but are not limited to, changing business, regulatory, political or other market conditions in Argentina and elsewhere, the completion of our new generation projects, the completion of our distribution and transmission subsidiaries' tariff revision process, the prospects for growth anticipated by our management, and the other risks and uncertainties discussed in our reports and other documents filed with the U.S. Securities and Exchange Commission. Further, Pampa undertakes no obligation to publicly update its forward-looking statements, whether as a result of new information, future events, or otherwise, nor makes any representation or warranty, expressed or implied, as to the accuracy or completeness of the information contained herein, and nothing contained herein is, or shall be relied upon as a promise

  • r representation that any such forward looking statements will be achieved. Management is not making and you should not infer

any representation about the likely existence of any particular future set of facts or circumstances. This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities. Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. Securities may not be offered or sold in the United States unless they are registered or exempt from registration under the Securities Act. Any

  • ffering of securities to be made in the United States will be made by means of a prospectus or offering prepared in connection with

any such offering.

Pampa Energía ● Q4 2017 Earnings Call

Disclaimer

2

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  • Edenor, presented by Leandro Montero, CFO
  • Pampa, presented by Lida Wang, IRO
  • Q4 17 results by business segment
  • Power Generation
  • Oil & Gas Upstream
  • Refining & Distribution
  • Petrochemicals
  • Holding & Others
  • Cash and Debt

Pampa Energía ● Q4 2017 Earnings Call 3

Today’s Agenda

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SLIDE 4

Edenor Investor Day 2017

4

Relevant Events

New Tariff Scheme

  • New Prices for Energy & Transportation
  • New Distribution Fee:
  • Dic’17 (1): 18% tariff increase + 11.6% inflation adjustment (1st semester 2017)
  • Feb’18 (2): 18% tariff increase + 10.9% inflation adjustment (2nd semester 2017) – 2.51% Stimulus factor (“E”)

Controlling Company’s Merger Process

  • January 18, 2018: the merger of Central Térmica Loma de la Lata (“CTLL”) with IEASA and EASA was unanimously

approved by CTLL’s shareholders’ meeting

  • September 22, 2017: the Board of Directors of Pampa Energía (PESA) approved the merger of CTLL (acquiring

company of EASA) and other subsidiaries as the acquired or absorbed companies, into PESA, as the acquiring or absorbing company

  • After the registration of the full merging process, PESA will hold direct control on Edenor

Moody’s Latin America’s rating upgrade

  • 2022 Corporate Bonds:
  • Local: from Baa2.ar to Aa3.ar; stable Outlook
  • Global: from B3 to B1; stable Outlook
  • Shares: Category 2 to Category 1

E a r n i n g s R e l e a s e | 4 Q 2 0 1 7

(1) Set forth by Resolution No 603/2017; (2) Set forth by Resolution No 33/2018

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SLIDE 5

Edenor Investor Day 2017

4.0 2.7 1.3 0.6 (1.3) (2.4) (0.1) 1.1 (0.3) (0.3)

  • 500,0

1.000,0 1.500,0 2.000,0 2.500,0 3.000,0 3.500,0 4.000,0 4.500,0 Revenue from sales Energy purchases Gross margin Operating expenses Other op. expenses Results due to Resolutions Net op. income (loss) Financial Results, net Income Tax Net income (loss)

6.8 3.2 0.7 0.02 (3.6) (2.4) (0.1) (0.4) (0.2)

  • 1.000,0

2.000,0 3.000,0 4.000,0 5.000,0 6.000,0 7.000,0 8.000,0 Revenue from sales Energy purchases Gross margin Operating expenses Other op. expenses Results due to Resolutions Net op. income (loss) Financial Results, net Income Tax Net income (loss)

5

Fourth Quarter Results

(ARS billion & %)

4Q 2016 4Q 2017

E a r n i n g s R e l e a s e | 4 Q 2 0 1 7

QoQ %

+71% +177% +19% +1.2% N/A

  • 50%
  • 59%
  • 49%
  • 45%
  • 97%
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SLIDE 6

Edenor Investor Day 2017

2,866 2,950

2000,0 502000,0 1002000,0 1502000,0 2002000,0 2502000,0 3002000,0 3502000,0 Dec'16 Dec'17

6

Energy Sales Evolution

Turnover b/ type of customer │ QoQ (in GWh) Customers Evolution

(in thousands)

E a r n i n g s R e l e a s e | 4 Q 2 0 1 7

Q4 2017 Q4 2016 Q4 2016 Q4 2017

5,139 5,064

Quarterly Energy Sales (in GWh)

+ 0.2%

  • 3.9%

+ 0.8% + 1.7%

  • 3.7%

+ 0.4%

500 1000 1500 2000 2500

Others Small Commercial Industrial Wheeling System Medium Commercial Residential

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SLIDE 7

Edenor Investor Day 2017

4.0 2.7 1.3 0.6 (1.3) (2.4) (0.1) 1.1 (0.3) (0.3)

  • 500,0

1.000,0 1.500,0 2.000,0 2.500,0 3.000,0 3.500,0 4.000,0 4.500,0 Revenue from sales Energy purchases Gross margin Operating expenses Other op. expenses Results due to Resolutions Net op. income (loss) Financial Results, net Income Tax Net income (loss)

6.8 3.2 0.7 0.02 (3.6) (2.4) (0.1) (0.4) (0.2)

  • 1.000,0

2.000,0 3.000,0 4.000,0 5.000,0 6.000,0 7.000,0 8.000,0 Revenue from sales Energy purchases Gross margin Operating expenses Other op. expenses Results due to Resolutions Net op. income (loss) Financial Results, net Income Tax Net income (loss)

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Fourth Quarter Results

(ARS billion & %)

4Q 2016 4Q 2017

E a r n i n g s R e l e a s e | 4 Q 2 0 1 7

QoQ %

+71% +177% +19% +1.2% N/A

  • 50%
  • 59%
  • 49%
  • 45%
  • 97%
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Edenor Investor Day 2017

Q4 2016 Q4 2017

Adjusted EBITDA

(in ARS million)

794 1,465

E a r n i n g s R e l e a s e | 4 Q 2 0 1 7

In million of Pesos Q4 2016 Q4 2017 Net operating income before res. 32/15 154.5 646.2 (+) Depreciations 94.0 119.9 (+) Penalty interests 48.1

  • EBITDA

296.7 766.1 (+) Resolution 32/15 and Recognition of Income from Remedies 1,125.9

  • (+) Commercial Interests

42.9 27.5 Adjusted EBITDA 1,465.5 793.6

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Edenor Investor Day 2017

64% 69% 36% 31% Q4 2016 Q4 2017

9

Capital Expenditures

(in ARS million & %)

1,292 694

E a r n i n g s R e l e a s e | 4 Q 2 0 1 7

Expansion Maintenance

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Edenor Investor Day 2017

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Energy Losses

E a r n i n g s R e l e a s e | 4 Q 2 0 1 7

14,5% 18,2% 18,9% 16,2% 16,2% 17,2% 18,4% 16,4%

1Q 2Q 3Q 4Q

2016 2017

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Edenor Investor Day 2017 295 286 209 191 191 176 176 2011 2012 2013 2014 2015 2016 Dec'17

50

ICBC Loan

Oct ‘17

Indebtedness

(in USD million)

E a r n i n g s R e l e a s e | 4 Q 2 0 1 7

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574 1,419 1,464 794 2,297 2,348 70 (38) (221) 248 (79) 405

4,101 5,180

Q4 16 Q4 17

Pampa Energía ● Q4 2017 Earnings Call 13

Adjusted EBITDA1

In million AR$

Q4 17 Consolidated Results

Q4 17 Q4 16

(1) Consolidated adjusted EBITDA represents the consolidated results before net financial results, income tax and minimum notional income tax, depreciations and amortizations, non-recurring incomes and expenses and non-controlling interests, and includes other incomes not accrued and other adjustments from the IFRS implementation, as well as affiliates EBITDA’s at ownership. For more information, please refer to section 3 of the Earnings Release.

Segment Q4 16 Q4 17 Power Generation 574 1,419 845 +147% Electricity Distribution 1,464 794 (671)

  • 46%

Oil & Gas* 2,297 2,348 51 +2% Refining & Marketing* (79) 405 484 NA Petrochemicals 70 (38) (108) NA Holding and Others (221) 248 469 NA Eliminations (4) 5 9 NA Total 4,101 5,180 1,079 +26% * Includes discontinued operations, pending of closing Assets sold to Vista & Trafigura

+26%

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+845 (671) +51 +484 (108) +478

4,101

1 2 3 4 5 6 7 8

Pampa Energía ● Q4 2017 Earnings Call 14

Adjusted EBITDA

In million AR$

Q4 17 Consolidated Results

Q4 16

Power Generation Electricity Distribution Oil & Gas Refining & Marketing Petro- chemicals Holding, Others & Eliminations

Q4 17

1,419 794 2,348 405 (38) 253

  • Adj. EBITDA

Q4 17

5,180

+26% qoq

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SLIDE 15

79.7% 81.0%

Q4 16 Q4 17

3,469 2,693

Q4 16 Q4 17

574 1,419

Q4 16 Q4 17

3,756 MW

Pampa Energía ● Q4 2017 Earnings Call 15

Generation Performance

In GWh

Availability Performance

In % to Installed Capacity

Adjusted EBITDA

In million AR$

  • Commissioning of the new thermal power plant CTIW for 100

MW

  • Development of two new wind farms for a total of 100 MW
  • Repair of the technical problem at CTGEBA

News Update

Power Generation

Q4 17 Q4 16

New pricing scheme for legacy capacity AR$ devaluation New PPAs in force  Technical problem at CTGEBA & lower dispatch at CPB  Programmed maintenance service at CTLL Commissioning of CTPP, CTLL’s TG05 & CTIW Higher generation at HPPL

Q4 17 Q4 16

3,451 MW

Q4 17 Q4 16

Commissioning

  • f CTPP, CTLL’s

TG05 & CTIW

+147%

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5,139 5,064

Q4 16 Q4 17

2.87 2.95

Q4 16 Q4 17

1,464 794

Q4 16 Q4 17 Pampa Energía ● Q4 2017 Earnings Call 16

Sales Performance

In GWh

  • Semiannual Remuneration Update, Increase in the VAD and

the Electricity Seasonal Price as from December 2018  2nd VAD increase of 18% retroactive to Nov-17  CPD’s semiannual update of 11.6% retroactive to Aug-17

  • Merger completion of CTLL, EASA and IEASA
  • ENRE Resolution No. 33/18 as from February 2018

 New electricity seasonal price  3rd VAD increase of 17.8%, collecting full fare  CPD’s cumulative update of 22.5% since Jan-17  Beginning of accrual of deferred amounts in 48 installments

News Update Adjusted EBITDA

In million AR$

Number of End-Users

In million

Electricity Distribution

Implementation

  • f RTI’s first &

second tariff increase with CPD update CAMMESA’s recognition of injunctions and FOCEDE accrual in Q4 16

Q4 17 Q4 16 Q4 17 Q4 16

 Impact from tariff increase, especially in residential segment  Mild weather conditions

Q4 17 Q4 16

Recovery of energy losses

  • 46%
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SLIDE 17

25.6 19.4

Q4 16 Q4 17

77.1 68.0

Q4 16 Q4 17

292 284

Q4 16 Q4 17

2,297 2,348

Q4 16 Q4 17 17

Total Production Performance (Argentina + Abroad)

In kboe per day

Argentina Crude Oil Production Performance

In kb/d

Adjusted EBITDA

In million AR$

Argentina Gas Production Performance

In mcf/d

Oil & Gas

Q4 17 Q4 16

Gas: better sale prices in US$ and AR$ With OldelVal’s EBITDA @23.1%  End of service at Medanito La Pampa in Oct-17  Divestments in Oct-16  End of service at Medanito La Pampa in Oct-17  Divestments in Oct- 16 Higher gas production at El Mangrullo & Río Neuquén

Q4 17 Q4 16 Q4 16 Q4 17 Q4 17 Q4 16

6.2 57.1 54.9

Pampa Energía ● Q4 2017 Earnings Call Average Price

5.8

 Effect from divestments in October 2016 Better prices (Plan Gas and price hikes to demand) End of service at Medanito La Pampa Lower prices converging to international references

+2%

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PELSA 16% Pampa 84% Liquids 25% Natural Gas 75% Argentina 100%

%

201 (57) 144 +23 167 Stock @ Dec 31, 2015 Production/ Sale of blocks/ Additions Stock @ Dec 31, 2016 Production/ Concession extension/ Additions Stock @ Dec 31, 2017

  • New natural gas prices for residential and gas for cars as from Dec-17
  • Advances at Parva Negra Este block
  • Sale of oil-bearing assets to Vista Oil & Gas, pending of closing
  • Direct ownership of 58.88% at Pelsa, 3.85% at Entre Lomas, Bajada del Palo and Agua Amarga blocks, and

100% at Medanito S.E. and Jagüel de los Machos blocks

  • Pampa’s certified proven reserves evolution:

Pampa Energía ● Q4 2017 Earnings Call 18

News Update

Oil & Gas

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SLIDE 19

213 202 145 118 71 65 42 54 4 4

476 443

Q4 16 Q4 17

(79) 405

Q4 16 Q4 17 Pampa Energía ● Q4 2017 Earnings Call 19

Sales Performance

In thousand m3

Adjusted EBITDA

In million AR$

  • Sale of Refining & Marketing Segment Assets to Trafigura
  • The discontinued operations are: the Ricardo Eliçabe refinery, the lubricant plant, the storage facility at Caleta Paula

and the network of gas stations

  • The continuing operations are our participation in Refinor and the storage facility at Dock Sud

News Update

Downstream: Refining & Marketing

Q4 17 Q4 16

Lower cost of crude oil Higher sale prices: fuels & IFOs With Refinor’s EBITDA @28.5% Lower demand

Q4 17 Q4 16

Crude Oil Other distillates Fuel Oil, IFOs & Asphalts Gasolines Diesel Oil  Lower demand  Lower load factor at refinery  Lower diesel imports

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37 32

7 9

83 63

127 104

Q4 16 Q4 17

70 (38)

Q4 16 Q4 17 Pampa Energía ● Q4 2017 Earnings Call 20

Sales Performance

In thousand ton

Adjusted EBITDA

In million AR$

  • No news

News Update

Downstream: Petrochemicals

Q4 17 Q4 16 Q4 17 Q4 16

Other SBR Styrene & Polystyrene  Higher operating and raw material’s cost  Excludes ex PZE contingency  Lower domestic sales of reforming products & styrene Higher exports of SBRs

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952 1,581

Q4 16 Q4 17

140 1,241

Q4 16 Q4 17 (501) (482) 37 327 243 403

(221) 248

Q4 16 Q4 17

Pampa Energía ● Q4 2017 Earnings Call 21

Affiliates’ EBITDA Performance @ 100% Ownership

In million AR$

Adjusted EBITDA

In million AR$

  • Tariff increases in TGS and Transener
  • Corporate Reorganization
  • The new corporate reorganization process
  • Status of merger with former Petrobras Argentina

News Update

Holding & Others

TGS Transener Holding

Q4 17 Q4 16 TGS Transener Q4 16 Q4 16 Q4 17 Q4 17

RTI RTI (1st & 2nd hike) Better pricing and higher volume sold of NGLs

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SLIDE 22

+985

982

+646 +365 (388) (41) (1,037)

Pampa Energía ● Q4 2017 Earnings Call 22

Net Income to Shareholders

In million AR$

Q4 17 Consolidated Results

1,512 Q4 16

Power Generation Electricity Distribution Oil & Gas Refining & Marketing Petro- chemicals Holding, Others & Eliminations

Q4 17

1,085 581 727 (267) (159) (455)

Reported Q4 17 NI to Shareholders

+54% qoq

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5 207 52 147 34 1 107 29 31 6 314 81 212 122 189 513 18 13 13 750 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 US$ US$ Link AR$

Pampa Energía ● Q4 2017 Earnings Call 23

  • Convertible corporate bond status
  • Moody’s credit rating upgrade to

Pampa and subsidiaries’ corporate bonds News Update Debt Profile as of December 31, 20171

In US$ million

Gross Debt Breakdown by Currency Gross Debt Breakdown by Company

Cash & Debt

Notes: (1) FX AR$18.65/US$. (2) TGS, Transener, Greenwind, OldelVal and Refinor, it does not consider debt interest.

Gross Consolidated Debt = US$2.2 billion Less Cash = US$0.9 billion Net Debt, incl. affiliates @ O/S = US$1.3 billion

Current Credit Ratings for Pampa B+ B2 BB- AA- (arg)

AR$ 8% US$ Link 1% US$ 91%

%

Pampa 84% Gencos 2% Edenor 10% TGS 2% Transener 1% Refinor 1%

%

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Pampa Energía ● Q4 2017 Earnings Call

Thank you! Any Questions?

For further information, contact:

  • Gustavo Mariani

Vice President

  • Ricardo Torres

Vice President

  • Mariano Batistella

Planning, Strategy & Related Companies Executive Director

  • Lida Wang

Investor Relations Officer Pampa Energía Building, Maipú 1 (C1084ABA), Ciudad Autónoma de Buenos Aires, Argentina +54 (11) 4344 6000 http://www.pampaenergia.com/ir investor@pampaenergia.com @PampaEnergia

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