Q2 2019 Results Call August 13, 2019 10 AM EST / 11 AM ART - - PowerPoint PPT Presentation

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Q2 2019 Results Call August 13, 2019 10 AM EST / 11 AM ART - - PowerPoint PPT Presentation

Q2 2019 Results Call August 13, 2019 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 information in summary form


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Q2 2019 Results Call

August 13, 2019 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 or 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 offering 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. Solely for the convenience of the reader and better analysis, should Q2 2019’s figures follow US$ as functional currency, we have prepared Q2 2018’s figures using nominal terms under AR$ functional currency, translated into US$ by average exchange rate of the period quoted by Banco de la Nación Argentina. Moreover, should Q2 2019’s figures follow AR$ as functional currency, we have prepared Q2 2018’s figures adjusted as

  • f June 2019, translated into US$ by closing exchange rate of the period quoted by Banco de la Nación Argentina. These conversions should not

be considered representations that any such amounts have been, could have been or could be converted into U.S. Dollars at that or at any other exchange rate. Moreover, as a result of fluctuations in the Dollar Peso exchange rate, the exchange rate used in the conversion may not be indicative of current or future exchange rates.

Pampa Energía ● Q2 2019 Earnings Call

Disclaimer

2

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  • Reporting considerations to take into account
  • Q2 2019’s key takeaways
  • Results & news by business segment

 Power generation  Electricity distribution  Oil & gas upstream  Petrochemicals  Holding and Others

  • Q2 2019 consolidated net income
  • Cash and debt
  • Q&A session

Pampa Energía ● Q2 2019 Earnings Call 3

Today’s Agenda

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Pampa Energía ● Q2 2019 Earnings Call 4

Reporting Considerations to Take Into Account

FC = Functional Currency 2019 2018 As Reported As Reported Chosen Proxy to Compare Pampa stand-alone, gencos and

  • ther

subsidiaries FC US$ FC AR$, adjusted by inflation as

  • f December

31, 2018 Q2 2018 to Dec 18 Inflation = 33% Devaluation = 60% Nominal AR$ as reported at avg FX ≈ FC US$ Edenor TGS Transener Refinor OldelVal FC AR$ @ June 30, 2019 (IAS 29) FC AR$ @ December 31, 2018 (IAS 29) FC AR$ @ June 30, 2019 (IAS 29)

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53 49 57 151 99 123

204 148 180

Q2 18‡ … Q1 19* Q2 19*

Edenor Pampa stand-alone

300 218 266 32% 27% 29%

10% 20% 30% 40% 50% 60% 70% 80% 50 100 150 200 250 300 350

Q2 18‡ … Q1 19* Q2 19*

EBITDA margin

939 811 912

Q2 18‡ … Q1 19* Q2 19*

Pampa Energía ● Q2 2019 Earnings Call 5

Consolidated Adjusted EBITDA1, US$ million Consolidated Adjusted EBITDA Breakdown1,2 Revenues1, US$ million Capex Pampa Stand-Alone + Edenor, US$ million

Q2 2019’s Key Takeaways

Q2 19*

Oil & Gas 32% Electricity 68%

E&P 20% TGS3 12% Power 37%

EDN 26%

TRX3 4% *Under FC US$, AR$ FC adjusted by inflation as of June 2019. ‡For convenience purposes only, if Q2 19 is under FC US$, Q2 18 is shown in nominal AR$ converted into US$ at average FX AR$23.58/US$; for results under AR$ FC in Q2 19, Q2 18’s adjusted to inflation as of June 2019, translated in US$ at closing FX AR$42.46/US$. (1) Incl. affiliates at O/S (under IFRS, Greenwind, OldelVal, Refinor, Transener and TGS are not consolidated in our FS). (2) It does not include pure holding, eliminations and petrochemicals. (3) Adjusted by our ownership.

%

Q2 19* Q2 19*

  • 3% yoy

+12% qoq

  • 11% yoy

+22% qoq

  • 12% yoy

+21% qoq

 Lower E&P & genco’s legacy prices  FX over inflation for AR$ revenues 413 MW added since June 2018 Fuel pass-through at gencos  Lower prices in E&P & genco’s legacy Lagged revenues accrued in Edenor Lower AR$-link costs  Lower expansion capex in E&P  Commissioning

  • f PEMC wind

farm Genelba CCGT expansion Edenor

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Pampa Energía ● Q2 2019 Earnings Call 6

Adjusted EBITDA, in US$ million

Q2 2019’s Key Takeaways

Q2 18‡

Power Generation1 Electricity Distribution Oil & Gas2 Petro- chemicals Holding, Others3 & Eliminations

Q2 19*

100 71 53 3 39

  • Adj. EBITDA

Q2 19*

266

*Under FC US$, AR$ FC adjusted by inflation as of June 2019. ‡For convenience purposes only, if Q2 19 is under FC US$, Q2 18 is shown in nominal AR$ converted into US$ at average FX AR$23.58/US$; for results under AR$ FC in Q2 19, Q2 18’s adjusted to inflation as of June 2019, translated in US$ at closing FX AR$42.46/US$. (1) Incl. Greenwind at O/S. (2) Incl. OldelVal at O/S. (3) Incl.TGS, Transener and Refinor at O/S.

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106 97 100 64% 46% 49%

10% 30% 50% 70% 90% 110% 130% 150% 92 94 96 98 100 102 104 106 108

Q2 18‡ … Q1 19* Q2 19*

EBITDA margin

98.2% 95.5% 95.4%

Q2 18 … Q1 19 Q2 19

Hydro 10% 12% 6% Wind 1% 2% 5% Thermal 88% 85% 90%

3,659 3,913 3,727

Q2 18 … Q1 19 Q2 19 4,751 MW

Pampa Energía ● Q2 2019 Earnings Call 7

Generation Performance, in GWh Availability Performance, in % to Installed Capacity Adjusted EBITDA1, in US$ million

  • Joint acquisition of Ensenada de Barragán
  • Collection of legacy credits
  • Expansions’ status: Genelba CCGT

News Update

Power Generation

3,771 MW

  • 6% yoy

+2% qoq Q2 19*

 Lower legacy capacity prices Additions of PEPE wind farms & Genelba Plus’ GTs Incl. PEMC’’s 50% O/S EBITDA

+2% yoy

  • 5% qoq

Q2 19 Q2 19 3,871 MW

 Strategic outages at CTG  CPB technical failure at one unit Commissioning of PEPE’s wind farm (106 MW), Genelba Plus’ GTs (207 MW) and

  • peration of CTEB

(567 MW) Operation of wind farms & Genelba Plus’ GTs Higher dispatch at CPB  Lower generation at CTP, CTG and CTPP (higher variable cost)  Low water levels in Mendoza dams

*Under FC US$. ‡For convenience purposes only, Q2 18 is shown in nominal AR$ converted into US$ at average FX AR$23.58/US$. (1) Includes EBITDA from Greenwind at 50% ownership.

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Power Generation

Genelba Expansion: 383 MW, first milestone 207 MW open cycle online since June 2019

Pampa Energía ● Q2 2019 Earnings Call 8

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16% 8% 15% 61 29 71

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
  • 10
20 30 40 50 60 70 80

Q2 18‡ … Q1 19* Q2 19*

EBITDA margin

2.98 3.07 3.09

Q2 18 … Q1 19 Q2 19

43% 41% 42% 16% 17% 16% 35% 36% 35% 6% 6% 7%

5,344 5,018 4,849

Q2 18 … Q1 19 Q2 19

Pampa Energía ● Q2 2019 Earnings Call 9

Sales Performance , in GWh

  • New regulatory entity and settlement of regulatory liability

News Update Number of End-Users, in million

Electricity Distribution

Q2 19

 Lower demand  Mild weather  Economic recession  Price-demand elasticity

  • 9% yoy
  • 3% qoq

Public lighting & shantytowns Industries SMEs Residential Market discipline actions Installation of MIDEs  Lower commercial and industrial clients

+4% yoy +1% qoq

*Under AR$ FC adjusted by inflation as of June 2019. ‡For convenience purposes only, Q2 18’s adjusted to inflation as of June 2019, translated in US$ at closing FX AR$42.46/US$.

Q2 19 Q2 19*

Lagged sales from 2017-18 (shantytowns & social tariff) Lower AR$-link costs  9% lower demand  CPD lagging behind AR$ inflation & deval  Higher energy losses

Adjusted EBITDA, in US$ million +17% yoy +148% qoq

Lagged sales 33

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79 48 53 52% 42% 47%

10% 30% 50% 70% 90% 110% 130% 150%
  • 10
20 30 40 50 60 70 80 90

Q2 18‡ … Q1 19* Q2 19*

EBITDA margin

45.9 46.8 48.5

Q2 18 … Q1 19 Q2 19

4.8 5.4 4.8

Q2 18 … Q1 19 Q2 19

10

Domestic Production Performance, in kboe/d Adjusted EBITDA1, in US$ million

Oil & Gas

63.2 54.4

Pampa Energía ● Q2 2019 Earnings Call

  • 34% yoy

+11% qoq +6% yoy +4% qoq Q2 19* Q2 19 Q2 19 60.0

Price  Export parity Production Marginal increase

*Under FC US$, AR$ FC adjusted by inflation as of June 2019. ‡For convenience purposes only, if Q2 19 is under FC US$, Q2 18 is shown in nominal AR$ converted into US$ at average FX AR$23.58/US$; for results under AR$ FC in Q2 19, Q2 18’s adjusted to inflation as of June 2019, translated in US$ at closing FX AR$42.46/US$. (1) Includes EBITDA from OldelVal at 2.1% in Q2 19 and Q1 19, and at 23.1% in Q2 18.

Average Price in US$ per bbl

 Lower prices in US$  End of Plan Gas 2 Higher production Higher intersegment sales Incl. OldelVal’s EBITDA @ 2.1%

Argentina Crude Oil Production Performance, in kb/d +0% yoy

  • 10% qoq
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4.7 4.8 5.0 4.7 4.8 4.8 4.5 3.4 3.1

3.1

3.8 4.2 4.5 4.4

Q1 Q2 Q3 Q4

Pampa Energía ● Q2 2019 Earnings Call 11

Weighted Average Gas Price for Pampa, without Subsidy, in US$/MBTU

  • Partial deferral of gas bills for retail users
  • Collection of Plan Gas 2017
  • Stake increase at OCP
  • Operating update

News Update Argentina Gas Production Performance, in mcf/d Destination of our Production1

Oil & Gas

(1) Summer quantities are estimated.

247 249 262

Q2 18 … Q1 19 Q2 19 Q2 19 5.5 3.1 3.1 +6% yoy +5% qoq 2017 2018 2019

75% 70% 80% 82%

April '19 May '19 June '19 Summer '19-20

Price in US$/MBTU  End of Plan Gas 2  Excess of supply  CAMMESA & industries Production El Mangrullo  R. del Mangrullo, Sierra Chata & Aguaragüe

2016

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2% 3% 3% 2 2 3

0% 1% 2% 3% 4% 5%
  • 1
1 2 2 3 3

Q2 18‡ … Q1 19* Q2 19*

EBITDA margin

35% 29% 28%

8% 7% 7%

56% 63% 65%

95 83 95

Q2 18 … Q1 19 Q2 19

Pampa Energía ● Q2 2019 Earnings Call 12

Sales Performance, in thousand ton

  • No news

News Update

Petrochemicals

1,161 955 Adjusted EBITDA, in US$ million

Fixed costs’

  • ptimization

Lower AR$-link costs Lower gas cost  Lower int’l sale prices in US$  Lower demand  Export duty

+47% yoy +26% qoq Q2 19*

*Under FC US$. ‡For convenience purposes only, Q2 18 is shown in nominal AR$ converted into US$ at average FX AR$23.58/US$.

956

Higher reforming destined to domestic market  Lower demand of styrene products and SBR  Closing of Zárate & San Lorenzo

Q2 19* +0% yoy +15% qoq

Other SBR Styrene & Polystyrene

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37 30 33 12 12 11

(1) 1 1

51 42 40

4 (5)

Q2 18‡ … Q1 19* Q2 19*

Pampa Energía ● Q2 2019 Earnings Call 13

  • TGS: tender for new pipeline
  • Transener: major power outage
  • Holding: status of share repurchase program

News Update Adjusted EBITDA2, in US$ million Affiliates’ EBITDA Performance @ 100% Ownership, in US$ million

Holding & Others

*Under FC US$, AR$ FC adjusted by inflation as of June 2019. ‡For convenience purposes only, if Q2 19 is under FC US$, Q2 18 is shown in nominal AR$ converted into US$ at average FX AR$23.58/US$; for results under AR$ FC in Q2 19, Q2 18’s adjusted to inflation as of June 2019, translated in US$ at closing FX AR$42.46/US$. (1) Includes EBITDA from TGS at 25.55% ownership, Transener at 26.3% ownership and Refinor at 28.5% ownership.

Q2 19*

TGS Transener

45 44 42

Q2 18 … Q1 19 Q2 19

143 117 129

Q2 18 … Q1 19 Q2 19

(5) 2 3

Q2 18 … Q1 19 Q2 19

Refinor

YoY  Higher AR$ depreciation and lagging inflation Lower labor and AR$-link costs YoY  Lower NGL pricing in US$  Higher AR$ depreciation and lagging inflation Lower gas cost in US$ YoY Higher refining spread Lower AR$-link costs

  • 21% yoy
  • 5% qoq

Refinor Transener TGS Holding

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Pampa Energía ● Q2 2019 Earnings Call 14

Net Income to Shareholders, in US$ million

Q2 2019’s Key Takeaways Results compared as reported

394 Q2 18†

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

Q2 19*

73 131 25 (3) 168

Reported Q2 19* NI to Shareholders

*Under FC US$, AR$ FC adjusted by inflation as of June 2019. ‡For convenience purposes only, if Q2 19 is under FC US$, Q2 18 is shown in nominal AR$ converted into US$ at average FX AR$23.58/US$; for results under AR$ FC in Q2 19, Q2 18’s adjusted to inflation as of June 2019, translated in US$ at closing FX AR$42.46/US$.

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68 155 93 8 508 10 34 13 25 164 25 128

66 62 28 33 36

92 224 183 234 536 41 163 24 740 300 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Pampa Edenor Transener @ O/S TGS @ O/S Other affiliates @ O/S

Pampa Energía ● Q2 2019 Earnings Call 15

Summary @ June 30, 20191, in US$ million

Strong Cash & Debt Position

Principal Debt Profile as of June 30, 20191

In US$ million

Current Credit Ratings for Pampa B B2

Notes: Affiliates CTEB, PacoGen, TGS, Transener, Greenwind, OldelVal and Refinor are included at O/S. (1) FX AR$42.46/US$. (2) Includes financial interests. (3) Excludes net debt from affiliates US$265 million and Edenor US$127 million.

Gross Debt by Currency Gross Debt by Company

Pampa US$300m @ 9⅛ Redeemed debt after Q2 19 closing: Pampa: US$44m

Consolidated debt from FS US$1,871 million + Affiliates' debt @ O/S US$422 million Gross debt as of June 2019 US$2,293 million

  • Debt reduction after June 2019

3

US$(44) million + 2029 bond issuance

4

US$300 million Pro-forma gross debt2 US$2,549 million Consolidated cash from FS US$450 million + Affiliates' cash @ O/S US$156 million Cash as of June 2019 US$607 million

  • Debt reduction after June 20193

US$(44) million + 2029 bond issuance

4

US$300 million Pro-forma cash US$863 million Consolidated net debt2 US$1,686 million Net Debt/LTM Adj. EBITDA 1.7 x Stand-alone net debt2,3 US$1,294 million Net Debt/LTM Adj. EBITDA 2.0 x

B AA- (arg)

AR$ 1% US$ Link 1% US$ 98%

%

Pampa 75% Greenwind 2% Edenor 8% TGS 5% Transener 1% Refinor 1% CTEB 8%

%

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Pampa Energía ● Q2 2019 Earnings Call

Thank you! Any Questions?

For further information, contact:

  • Gustavo Mariani

CEO

  • Ricardo Torres

Vice President

  • Mariano Batistella

Executive Director of Planning, Strategy, Downstream & Affiliates

  • Lida Wang

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

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