UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
SECURITIES EXCHANGE ACT OF 1934
For the month of May, 2017
(Commission File No. 001-34429),PAMPA ENERGIA S.A.
(PAMPA ENERGY INC.)
(PAMPA ENERGY INC.)
Argentina
(Jurisdiction of incorporation or organization)
Ortiz de Ocampo 3302
Building #4
C1425DSR
Buenos Aires
Argentina
Building #4
C1425DSR
Buenos Aires
Argentina
(Address of principal executive offices)
(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)
Form 20-F ___X___ Form 40-F ______
Form 20-F ___X___ Form 40-F ______
(Indicate by check mark whether the registrant by furnishing the
information contained in this form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under
the Securities Exchange Act of 1934.)
Yes ______ No ___X___
(If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82- .)
registrant in connection with Rule 12g3-2(b): 82- .)
Stock Information | ||
 | Buenos Aires Stock Exchange | Main Results for the First Quarter of 2017 (‘Q1 17’)1 |
New York Stock Exchange | Consolidated sales revenues of AR$15,166 million2for the quarter ended on March 31, 2017, compared to AR$4,227 million for the first quarter 2016 (‘Q1 16’), mainly explained by increases of AR$1,078 million in power generation, AR$2,377 million in electricity distribution, AR$3,420 million in oil and gas, AR$3,991 million in refining and distribution, AR$1,807 million in petrochemicals and AR$87 million in holding and others segment, partially offset by higher eliminations from intersegment sales of AR$1,821 million. Consolidated adjusted EBITDA3 of AR$3,861 million for the quarter ended on March 31, 2017, compared to an adjusted EBITDA of AR$1,589 million for Q1 16, mainly due to increases of AR$556 million in power generation, AR$1,511 million in oil and gas segment, AR$269 million in refining and distribution, AR$98 million in petrochemicals and AR$26 million in intersegment eliminations, partially offset by reductions of AR$52 million in electricity distribution and AR$135 million in holding and others. Consolidated gain of AR$2,295 million for the quarter ended on March 31, 2017, of which AR$1,901 million are attributable to the owners of the Company, AR$1,293 million higher compared to the gain of AR$608 million attributable to the owners of the Company in the Q1 16, explained by reported higher earnings in our segments of power generation (AR$1,017 million), electricity distribution (AR$546 million), oil and gas (AR$852 million), refining and distribution (AR$217 million), petrochemicals (AR$64 million) and intersegment eliminations (AR$26 million), partially offset by reported higher losses in our segment of holding and others (AR$1,429 million). | |
Outstanding Shares: Capitalization: AR$67,767 million / For further information, contact: Gustavo Mariani Ricardo Torres Mariano Batistella Lida Wang The Pampa Energía Building Tel: +54 (11) 4344-6000 investor@pampaenergia.com www.pampaenergia.com/ir | ||
1The financial information presented in this document for the quarters ended on March 31, 2017 and of 2016 are based on unaudited financial statements prepared according to the IFRS accounting standards in force in Argentina.
2Under the IFRS, Greenwind, OldelVal, Refinor, Transener and TGS are not consolidated in Pampa’s income statement and balance sheet, being only its equity income shown as ‘Results for participation in associates’ and ‘Results for participation in joint businesses’. For more information, please refer to section 3 of this Earnings Release.
3 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 interest, and includes other incomes not accrued and other adjustments from the IFRS implementation. For more information, please refer to section 3 of this Earnings Release.
Pampa Energía • Q1 2017 Earning Release • 1 |
Table of Contents
Main Results for the First Quarter of 2017 | 1 | ||
1. | Relevant Events | 3 | |
1.1 | Empresa Distribuidora y Comercializadora Norte S.A. (‘Edenor’)’s Relevant Events | 3 | |
1.2 | Transener: Motion for Reconsideration of the Full Tariff Regime applicable for the | ||
2017 - 2021 Period | 4 | ||
1.3 | RTI Process for Transportadora de Gas del Sur S.A. (‘TGS’) | 4 | |
1.4 | Debt Securities Transactions by Pampa and Our Subsidiaries | 5 | |
1.5 | Appointment of Members of Pampa Energía’s Board of Directors and Audit Committee | 5 | |
2. | Financial Highlights | 6 | |
2.1 | Consolidated Balance Sheet | 6 | |
2.2 | Consolidated Income Statement | 7 | |
2.3 | Cash and Financial Borrowings | 8 | |
3. | Analysis of the First Quarter 2017 | 9 | |
3.1 | Analysis of the Power Generation Segment | 10 | |
3.2 | Analysis of the Electricity Distribution Segment | 12 | |
3.3 | Analysis of the Oil and Gas Segment | 14 | |
3.4 | Analysis of the Refining and Distribution Segment | 16 | |
3.5 | Analysis of the Petrochemicals Segment | 17 | |
3.6 | Analysis of the Holding and Others Segment | 18 | |
3.7 | Analysis of the Quarter, by Subsidiary | 20 | |
4. | Information about the Conference Call | 21 | |
Pampa Energía • Q1 2017 Earning Release • 2 |
1. Relevant Events
1.1 Empresa Distribuidora y Comercializadora Norte S.A. (‘Edenor’)’s Relevant Events
1.1.1 Full Tariff Review (‘RTI’) Process
On March 28, 2017, the Secretariat of the World Bank’s International Centre for Settlement of Investment Disputes (‘ICSID’) entered the discontinuation of the arbitration proceeding brought in August 2003 by EDF International and Electricidad Argentina (‘EASA’, Edenor’s largest and controlling shareholder) regarding the breach of the latter’s Concession Agreement as a result of the passing of Public Emergency and Exchange Rate Regime Reform Act No. 25,561.
The claimants’ waiver was a condition set by Edenor's Contract Renegotiation Memorandum of Understanding that should be met after the issuance of the tariff scheme resulting from the RTI, which was approved pursuant to Resolution No. 63/17 and amended in 92/17 by the National Electricity Regulatory Agency (‘ENRE’), effective as from February 1, 2017.
Furthermore, on April 26, 2017, Edenor was notified that the Ministry of Energy and Mining (‘MEyM’) provided that the Secretariat of Electric Energy (‘SEE’), with the participation of the Under Secretariat of Coordination of Tariff Policies and the ENRE, should determine within a term of 120 days the existence of outstanding obligations as of the entry into force of the tariff schemes resulting from the RTI, pursuant to the Memorandum of Agreement executed on February 13, 2006. In such case, the treatment to be afforded to such obligations will be determined.
1.1.2 Corporate Reorganization: Merger of CTLL, EASA and IEASA
On December 7 and 22, 2016, the Board of Directors of Central Térmica Loma de la Lata (‘CTLL’), EASA and IEASA S.A. (‘IEASA’, EASA’s largest shareholder) resolved to initiate all necessary tasks and procedures for the merger through absorption among CTLL, as continuing company, and EASA and IEASA, as absorbed companies, effective as from January 1, 2017.
As part of the analysis of this reorganization and in order for the process to be feasible, EASA’s management concluded that the debt EASA held with holders of Series A and B Discount Corporate Bonds (‘CBs’) issued on July 19, 2006 and maturing in 2021 should be exchanged for equity. On March 27, 2017, EASA’s Extraordinary General Meeting of Shareholders decided that all CBs should be swapped for equity. The swap was accepted by Pampa Inversiones S.A. (‘PISA’), a subsidiary of Pampa, in its capacity as sole holder of said debt.
At their meetings held on March 29, 2017, the Boards of Directors of EASA, IEASA and CTLL approved such merger conditional upon the passing of the corresponding Meeting of Shareholders’ resolutions and the applicable approvals by the regulatory authorities, in which case the absorbed companies will be dissolved without going into liquidation, pursuant to section 82 and related sections of the Business Organizations Act, section 77 and following Income Tax Act No. 20,628 as amended, the CNV Rules, and the MerVal Listing Regulations.
Furthermore, it should be noted that Pampa Energía is the controlling shareholder, either directly and/or indirectly, of these companies, and that effective as from January 1, 2017, CTLL is Edenor’s controlling shareholder. Pursuant to the regulations in force, on March 30, 2017 Edenor and EASA requested the ENRE’s authorization.
Pampa Energía • Q1 2017 Earning Release • 3 |
1.1.3 Deferral of the Mandatory Capital Stock Reduction
According to Edenor’s financial statements for the period ended on December 31, 2016, the losses consumed reserves and more than 50% of the capital stock and, therefore, Edenor fell within the grounds for the mandatory capital stock reduction set forth by section 206 of the Business Companies Act.
In light of ENRE’s Resolution No. 63/17 and amended by 92/17, approving a new tariff scheme applicable to Edenor as from February 1, 2017, the impact of which on the company’s financial position is still uncertain, on April 18, 2017, Edenor’s General Meeting of Shareholders approved the deferral of the mandatory capital stock reduction and instructed Edenor’s Board of Directors to call for an Extraordinary Meeting of Shareholders to analyze this issue should Edenor still fall within the grounds for mandatory capital stock reduction in the quarters ended on March 31 and June 30, 2017.
As of March 31, 2017, Edenor’s retained earnings improvement was enough to avoid the mandatory capital stock reduction situation.
1.2 Transener: Motion for Reconsideration of the Full Tariff Review Applicable for the 2017 - 2021 Period
Due to the differences between the tariff proposals submitted under the RTI process initiated by the ENRE and the granted tariff schemes, on April 7 and 21, 2017, Transener and Transba, respectively, filed a Motion for Reconsideration and Appeal against ENRE’s Resolutions No. 66/17, 84/17 and 139/17, and No. 73/17, 88/17 and 138/17, whereby the ENRE approved the tariff review applicable for the 2017/2021 period to Transener and Transba, respectively. In consolidated basis, the Motion mainly request to further increase the granted capital base by approximately 50% and regulatory revenues by 28%.
1.3 RTI Process for Transportadora de Gas del Sur S.A. (‘TGS’)
Regarding the RTI, the National Gas Regulatory Agency (‘ENARGAS’) issued Resolution No. I-4362/17 approving:
i. A new tariff scheme applicable to TGS, in which it grants an increase of 214.2% and 37% (in the event that it has been granted in a single installment as from April 1, 2017) on the tariff of the natural gas transportation service and the Charge for Access and Use (“CAU”), respectively, hence the annual regulatory revenues are around AR$8,400 million;
ii. A granted regulatory asset base of AR$31,874 million as of December 2016 and a regulatory after tax return of 8.99%;
iii. A Five-Year Investment Plan (April 2017 through March 2022) to be conducted by TGS for approximately AR$6,786 million, representing up to four times the level of investments made in this business segment during the past five years; and
iv. A non-automatic mechanism for updates every six months in tariffs linked to the Wholesale Price Index published by the National Institute of Statistics and Censuses (‘INDEC’).
Though the RTI process ended, it is subject to the approval of several governmental authorities involved, including the National Congress, and up to the National Executive Branch to approve and ratify the 2017 Contract Renegotiation Memorandum of Understanding signed by TGS.
Moreover, the MEyM issued Resolution No. 74/17, pursuant to the new transitory agreement (the ‘2017 Transitory Agreement’) executed on March 30, 2017 between TGS and the National Government, setting a limitation on tariff increases resulting from the RTI process, which will be applied in three stages. The first stage will be effective as from April 1, 2017 and involves a 58% average tariff increase, which represents a 6% increase in the final residential end-user bill. The remaining tariff increases will be granted as from December 1, 2017 and April 1, 2018.
Pampa Energía • Q1 2017 Earning Release • 4 |
1.4 Debt Securities Transactions by Pampa and Our Subsidiaries
1.4.1 PampaEnergía
On April 7, 2017, the Meeting of Shareholders approved the extension of the CBs Program for up to US$2 billion and the amendment of its terms and conditions so as to authorize the issuance of simple CBs (non-convertible into shares) or convertible into common shares or American Depositary Shares (‘ADRs’) (the ‘Convertible Bond’).
The issuance program for this Convertible Bond will have a face value of up to US$500 million and the right to dividends will accrue as from the conversion date. Furthermore, pursuant to the terms of issuance, ADRs should have a minimum quoted price of US$60 per ADR at the time of approval by the Board of Directors, and the strike value may not be lower than the ADR’s quoted price at the time of issuance plus a 30% conversion premium.
1.4.2 CTLL
On February 2 and 7, 2017, CTLL fully redeemed the principal and interest balance of Series 3 and Series C CBs for a total amount of AR$51 million and AR$258 million, respectively. The redemption was performed pursuant to each Prospectus Supplement’s specific terms and conditions and was paid using own funds.
Furthermore, on May 11, 2017, CTLL fully redeemed outstanding CBs at Par maturing in 2017 and originally issued by EASA for a face value of US$4 million plus interest.
1.4.3 Petrolera Pampa
On February 24, 2017, Petrolera Pampa fully redeemed the principal balance of floating-rate Series 7 CBs for a face value of AR$310 million and originally maturing on August 3, 2017, and floating-rate Series 14 Short-Term Debt Securities (‘VCPs’) for a face value of AR$296 million and originally maturing on April 15, 2017.
Furthermore, on March 15, 2017, Petrolera Pampa settled the whole loan executed with Banco Santander on June 10, 2016 for an amount of US$105 million and originally maturing on December 31, 2017.
Lastly, on May 8, 2017 Petrolera Pampa fully redeemed the principal balance of floating-rate Series 8 CBs for a face value of AR$403 million and originally maturing on June 22, 2017.
1.5 Appointment of Members of Pampa Energía’s Board of Directors and Audit Committee
On April 7, 2017, Pampa’s Ordinary and Extraordinary Meeting of Shareholders approved the appointment of Miguel Ricardo Bein as Independent Director in replacement of Julio Suaya de María, whose term of office had expired on December 31, 2016. In turn, Victoria Hitce and Nicolás Mindlin were appointed as Non-Independent Alternate Directors, and Héctor Mochón and Diana Mondino, as Independent Alternate Directors. Furthermore, Ricardo Torres and Gustavo Mariani’s terms of office as Non-Independent Directors were renewed, the latter also being appointed as Board of Directors’ Vice Chairman. At the Audit Committee, José María Tenaillon, Diana Mondino and Héctor Mochón were appointed as alternate members.
Pampa Energía • Q1 2017 Earning Release • 5 |
2. Financial Highlights
2.1 Consolidated Balance Sheet (AR$ Million)
| As of 3.31.17 | As of 12.31.16 |
ASSETS | ||
Participation in joint businesses | 4,157 | 3,699 |
Participation in associates | 798 | 787 |
Property, plant and equipment | 42,160 | 41,090 |
Intangible assets | 1,946 | 2,014 |
Other assets | 12 | 13 |
Financial assets with a results changing fair value | 150 | 742 |
Investments at amortized cost | 10 | 62 |
Deferred tax assets | 1,686 | 1,232 |
Trade receivable and other credits | 4,946 | 4,469 |
Total non-current assets | 55,865 | 54,108 |
Other Assets | - | 1 |
Inventories | 3,577 | 3,360 |
Financial assets with a results changing fair value | 8,438 | 4,188 |
Investments at amortized cost | 75 | 23 |
Financial derivatives | 6 | 13 |
Trade receivable and other credits | 14,623 | 14,144 |
Cash and cash equivalents | 3,069 | 1,421 |
Total current assets | 29,788 | 23,150 |
Non-current assets held for sale | 18 | 19 |
Total assets | 85,671 | 77,277 |
| As of 3.31.17 | As of 12.31.16 |
EQUITY | ||
Share capital | 1,938 | 1,938 |
Share premium and other reserves | 4,974 | 4,963 |
Repurchased shares | (72) | - |
Statutory reserve | 232 | 232 |
Voluntary reserve | 3,862 | 3,862 |
Retained earnings | 1,890 | (11) |
Other comprehensive result | (17) | 70 |
Equity attributable to | 12,807 | 11,054 |
Non-controlling interests | 3,363 | 3,020 |
Total equity | 16,170 | 14,074 |
LIABILITIES | ||
Accounts payable and other liabilities | 5,483 | 5,336 |
Borrowings | 26,445 | 15,286 |
Deferred revenues | 200 | 200 |
Salaries and social security payable | 100 | 94 |
Defined benefit plan obligations | 975 | 921 |
Deferred tax liabilities | 4,405 | 3,796 |
Income tax and minimum expected profit tax liability | 1,292 | 934 |
Tax payable | 502 | 306 |
Provisions | 4,843 | 6,267 |
Total non-current liabilities | 44,245 | 33,140 |
Accounts payable and other liabilities | 13,449 | 12,867 |
Borrowings | 6,694 | 10,686 |
Deferred income | 26 | 1 |
Salaries and social security payable | 1,498 | 1,745 |
Defined benefit plan obligations | 110 | 112 |
Income tax and minimum expected profit tax liability | 558 | 1,454 |
Tax payable | 2,153 | 2,392 |
Provisions | 768 | 806 |
Total current liabilities | 25,256 | 30,063 |
Total liabilities | 69,501 | 63,203 |
Total liabilities and equity | 85,671 | 77,277 |
Pampa Energía • Q1 2017 Earning Release • 6 |
2.2 Consolidated Income Statement (AR$ Million)
| 1st Quarter | |||
| 2017 |
| 2016 | |
Sales revenue | 15,166 | 4,227 | ||
Cost of sales | (10,491) | (3,279) | ||
| ||||
Gross profit |
| 4,675 |
| 948 |
| ||||
Selling expenses | (1,196) | (342) | ||
Administrative expenses | (1,199) | (448) | ||
Exploration expenses | (13) | - | ||
Other operating income | 1,377 | 966 | ||
Other operating expenses | (989) | (187) | ||
Results for participation in joint businesses | 283 | (30) | ||
Results for participation in associates | 11 | (3) | ||
| ||||
Operating income |
| 2,949 |
| 904 |
| ||||
Financial income | 321 | 99 | ||
Financial costs | (1,276) | (646) | ||
Other financial results | 677 | 409 | ||
Financial results, net | (278) | (138) | ||
| ||||
Profit before tax |
| 2,671 |
| 766 |
| ||||
Income tax and minimum expected profit tax | (376) | (93) | ||
| ||||
Net income for the period |
| 2,295 |
| 673 |
| ||||
Attributable to: | ||||
Owners of the Company | 1,901 | 608 | ||
Non-controlling interests | 394 | 65 | ||
| ||||
Net income per share for the period attributable to the owners of the Company | ||||
Basic and diluted income per share |
| 0.9819 |
| 0.3585 |
Pampa Energía • Q1 2017 Earning Release • 7 |
2.3 Cash and Financial Borrowings (AR$ Million)
Cash(1) | Consolidated Financial Statements | Ownership Adjusted |
(as of March 31, 2017) | ||
Power Generation | 2,487 | 2,254 |
Electricity Distribution | 1,737 | 895 |
Refining & Distribution | 25 | 25 |
Petrochemicals | - | - |
Holding and Others | 4,495 | 4,495 |
Oil and gas | 2,838 | 2,669 |
Total | 11,582 | 10,337 |
Bank and Financial Debt | Consolidated Financial Statements | Ownership Adjusted |
(as of March 31, 2017) | ||
Power Generation(2) | 2,468 | 2,449 |
Electricity Distribution | 2,801 | 1,443 |
Refining & Distribution | - | - |
Petrochemicals | - | - |
Holding and Others | 22,533 | 22,533 |
Oil and gas | 2,623 | 1,259 |
Total | 30,425 | 27,684 |
(1) It includes cash and short-term investments. (2) It does not include regulatory debt held against CAMMESA of AR$2,714 million.
2.3.1 Summary of Listed Debt Securities
Subsidiary | Security | Maturity | Amount Issued | Amount Outstanding | Coupon |
In US$ |
|
|
|
|
|
Transener1 | ON Series 2 | 2021 | 101 | 99 | 9.75% |
Edenor | ON par at fixed rate | 2022 | 300 | 176 | 9.75% |
CTG | ON Series VIII US$-Link2 | 2020 | 1 | 1 | 7% |
CTLL | ON Series 4 US$-Link3 | 2020 | 34 | 34 | 6.25% |
TGS1 | ON par at fixed rate | 2020 | 192 | 192 | 9.625% |
Pampa Energía | ON Series T at discount & fixed rate | 2023 | 500 | 500 | 7.375% |
ON Series I at discount & fixed rate | 2027 | 750 | 750 | 7.5% | |
In AR$ |
|
|
|
|
|
CTG | ON Series VII | 2018 | 173 | 173 | Badlar Privada + 3.5% |
Loma de la Lata | ON Series A | 2018 | 282 | 282 | Badlar Privada |
ON Series E | 2020 | 575 | 575 | Badlar Privada |
Note: (1) Affiliates are not consolidated in Pampa’s financial statements, according to the IFRS standards. (2) Bond Note dollar-link, with initial FX rate of AR$14.7908/US$. (3) Bond Note dollar-link, with initial FX rate of AR$8.4917 /US$.
Pampa Energía • Q1 2017 Earning Release • 8 |
3. Analysis of the First Quarter 2017
Consolidated sales revenues of AR$15,166 million for the quarter ended on March 31, 2017, compared to AR$4,227 million for the first quarter 2016 (‘Q1 16’), mainly explained by increases of AR$1,078 million in power generation, AR$2,377 million in electricity distribution, AR$3,420 million in oil and gas, AR$3,991 million in refining and distribution, AR$1,807 million in petrochemicals and AR$87 million in holding and others segment, partially offset by higher eliminations from intersegment sales of AR$1,821 million.
Consolidated adjusted EBITDA of AR$3,861 million for the quarter ended on March 31, 2017, compared to an adjusted EBITDA of AR$1,589 million for Q1 16, mainly due to increases of AR$556 million in power generation, AR$1,511 million in oil and gas segment, AR$269 million in refining and distribution, AR$98 million in petrochemicals and AR$26 million in intersegment eliminations, partially offset by reductions of AR$52 million in electricity distribution and AR$135 million in holding and others.
Consolidated gain of AR$2,295 million for the quarter ended on March 31, 2017, of which AR$1,901 million are attributable to the owners of the Company, AR$1,293 million higher compared to the gain of AR$608 million attributable to the owners of the Company in the Q1 16, explained by reported higher earnings in our segments of power generation (AR$1,017 million), electricity distribution (AR$546 million), oil and gas (AR$852 million), refining and distribution (AR$217 million), petrochemicals (AR$64 million) and intersegment eliminations (AR$26 million), partially offset by reported higher losses in our segment of holding and others (AR$1,429 million).
Consolidated Adjusted EBITDA Calculation, in AR$ million | 1T17 | 1T16 | ||
Consolidated operating income | 2,949 | 904 | ||
Consolidated depreciations and amortizations | 1,230 | 269 | ||
Consolidated EBITDA under IFRS standards |
| 4,179 |
| 1,173 |
| ||||
Adjustments from generation segment |
| (174) |
| (1) |
Deletion of profit from tax amnesty | (174) | - | ||
Others (recovery of insurance) |
| - |
| (1) |
Adjustments from distribution segment |
| (303) |
| 354 |
Adjustments from retroactive penalties |
| (333) |
| 337 |
Late payment interests |
| 30 |
| 18 |
Adjustments from oil and gas segment |
| (17) |
| - |
Post-closing of Río Neuquén's sale CAPEX and OPEX recovery |
| (29) |
| - |
Adjustments from OldelVal |
| 11 |
| - |
OldelVal's EBITDA adjusted by 23.1% direct ownership |
| 13 |
| - |
Deletions of results from share in associates |
| (2) |
| - |
Adjustments from refining and distribution segment |
| 18 |
| - |
Update of contingencies from former Petrobras Argentina |
| 15 |
| - |
Adjustments from Refinor |
| 3 |
| - |
Refinor's EBITDA adjusted by 28.5% direct ownership |
| 12 |
| - |
Deletions of results from share in associates |
| (9) |
| - |
Adjustments from holding and others segment |
| 159 |
| 63 |
Deletion of profit from tax amnesty |
| (128) |
| - |
Adjustments from TGS |
| 120 |
| 3 |
TGS's EBITDA adjusted by 25.5% indirect ownership |
| 293 |
| - |
Deletions of results from share in joint ventures/associates |
| (173) |
| 3 |
Adjustments from Transener |
| 142 |
| 72 |
Transener's EBITDA adjusted by 26.3% indirect ownership |
| 252 |
| 42 |
Deletions of results from share in joint ventures |
| (110) |
| 30 |
Others (update of contingencies from Petrobras Argentina, recovery of expenses) |
| 25 |
| (12) |
|
|
|
|
|
Consolidated adjusted EBITDA |
| 3,861 |
| 1,589 |
Pampa Energía • Q1 2017 Earning Release • 9 |
3.1 Analysis of the Power Generation Segment
Power Generation Segment, Consolidated | 1st Quarter | ||
2017 | 2016 | ∆ % | |
Sales revenue | 1,848 | 770 | +140.0% |
Cost of sales | (1,087) | (343) | +216.9% |
Gross profit | 761 | 427 | +78.2% |
Selling expenses | (18) | (7) | +157.1% |
Administrative expenses | (81) | (108) | -25.0% |
Other operating income | 317 | 4 | NA |
Other operating expenses | (100) | (24) | NA |
Operating income | 879 | 292 | +201.0% |
Finance income | 188 | 77 | +144.2% |
Finance costs | (237) | (127) | +86.6% |
Other financial results | (13) | 106 | NA |
Profit before tax | 817 | 348 | +134.8% |
Income tax and minimum expected profit tax | 459 | (87) | NA |
Net income for the period | 1,276 | 261 | NA |
Attributable to: | |||
Owners of the Company | 1,244 | 227 | NA |
Non-controlling interests | 32 | 34 | -5.9% |
Adjusted EBITDA | 885 | 329 | +169.1% |
Increases in property, plant and equipment | 1,190 | 220 | NA |
Depreciation and amortization | 180 | 38 | NA |
In Q1 17, power generation gross margin was AR$761 million, 78.2% higher than the same period of 2016, mainly due to the addition as of August 2016 of Pichi Picún Leufú Hydroelectric Plant (‘HPPL’), Genelba Thermal Power Plant (‘CTGEBA’) and EcoEnergía Co-Generation Plant (‘EcoEnergía’), which during Q1 17 contributed sales by 1,674 GWh over the total of 4,276 GWh sold.
Pampa’s power generation during Q1 17 increased 87% compared to Q1 16, mainly due to the inclusion of former Petrobras Argentina’s assets, as well as higher dispatch at CTLL (+103 GWh) due to the commissioning of the 105 MW TG04 in July 2016, greater water inputs at HINISA (+56 GWh), higher dispatch and lesser maintenance stops and unavailability rates at CTG and CTP (+136 GWh) and CPB (+55 GWh). These increases were partially offset by a minor dispatch at HIDISA (-6 GWh) due to lower water inputs. In operating terms, the performance of the assets CTGEBA, HPPL and EcoEnergía was lower compared to the same period of 2016, mainly due to the lower dispatch of Genelba Plus at CTGEBA (-98 GWh) and minor maintenance works at HPPL (-22 GWh).
Pampa Energía • Q1 2017 Earning Release • 10 |
Summary of | Hydroelectric | Thermal | Total | |||||||
HINISA | HIDISA | HPPL1 | CTLL2 | CTG3 | CTP | CPB | CTGEBA1 | Eco- | ||
Installed Capacity (MW) | 265 | 388 | 285 | 645 | 361 | 30 | 620 | 825 | 14 | 3,433 |
Market Share | 0.8% | 1.1% | 0.8% | 1.9% | 1.0% | 0.1% | 1.8% | 2.4% | 0.04% | 9.9% |
First Quarter |
|
|
|
|
|
|
|
|
|
|
Net Generation Q1 17 (GWh) | 274 | 178 | 96 | 1,065 | 500 | 46 | 412 | 1,377 | 26 | 3,974 |
Market Share | 0.8% | 0.5% | 0.3% | 3.0% | 1.4% | 0.1% | 1.2% | 3.9% | 0.1% | 11.2% |
Sales Q1 17 (GWh) | 274 | 178 | 96 | 1,065 | 627 | 46 | 412 | 1,552 | 26 | 4,276 |
Net Generation Q1 16 (GWh) | 218 | 184 | - | 961 | 369 | 41 | 357 | - | - | 2,130 |
Variation Net Generation Q1 17 v. Q1 16 | +25.9% | -3.5% | na | +10.7% | +35.5% | +11.6% | +15.5% | na | na | +86.5% |
Sales Q1 16 (GWh) | 218 | 184 | - | 961 | 506 | 41 | 357 | - | - | 2,268 |
Avg. Price Q1 17 (US$/MWh) | 14.8 | 19.9 | 30.3 | 25.7 | 33.9 | 44.4 | 17.4 | 31.2 | 65.6 | 27.7 |
Avg. Gross Margin Q1 17 (US$/MWh) | 7.6 | 10.6 | 14.6 | 22.7 | 15.2 | na | 3.7 | 12.0 | 21.6 | 14.1 |
Avg. Gross Margin Q1 16 (US$/MWh) | 6.5 | 5.4 | na | 22.5 | 16.1 | na | (2.6) | na | na | 14.1 |
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Note: Gross margin before amortization and depreciation. FX rate of AR$/US$: Q1 17 – 15.68; Q1 16 – 14.49. (1) The figures from HPPL, CTGEBA and EcoEnergía accounts from the closing of the acquisition in August 2016. (2) The installed capacity of CTLL includes 105 MW from the new gas turbine that commissioned in July 2016. (3) CTG’s average gross margin considers results for CTP.
The increase in gross margin is also explained by the update in legacy capacity remuneration scheme by the application of SEE Res. No. 19E/17. Pursuant to this resolution, as from February 2017 the remuneration is US$-denominated for power capacity and dispatched energy, gradually increased from minimum remuneration discriminated by technology and scale, followed by an increase to base remuneration with availability commitment in May 2017, and reaching to the full and final remuneration scheme as from November 2017. During the same period of 2016, the remuneration scheme for the legacy capacity was AR$-denominated pursuant to SE’s Resolution No 482/15 and later updated as from February 2016 in accordance with 22/16.
Moreover, the increase in gross margin is explained by the devaluation in the nominal exchange rate with impact mainly on our Energy Plus and SE’s Resolution No. 220/07 power supply contracts. These increases were partially offset by higher labor costs and expenses for scheduled maintenance services.
Net operating costs increased 103% compared to Q1 16, mainly due to higher labor costs and the inclusion of HPPL, CTGEBA and EcoEnergía power plants.
Net financial results had a higher loss of AR$118 million compared to Q1 16, recording a loss of AR$62 million in Q1 17, mainly due to higher interest losses on financial liabilities and loan agreements with CAMMESA, in addition to a lower profit from the holding of financial instruments. These negative variations were partially offset by lesser net exchange difference losses due to the lower devaluation of the local currency against the US dollar and the recognition of net interests to the credits held against CAMMESA by the former Petrobras Argentina’s generation assets.
Adjusted EBITDA increased by 169% over Q1 16, mainly due to the inclusion of former Petrobras Argentina's generation assets since August 2016, together with a better price remuneration for legacy capacity, Peso devaluation, recognition of a higher price for assignments of gas, partially offset by higher labor and maintenance costs. Adjusted EBITDA does not include profit from the recovery of provisions as a result of the tax amnesty for AR$174 million in Q1 17.
Pampa Energía • Q1 2017 Earning Release • 11 |
The following table shows a summary of the committed expansion projects:
Project | MW | Equipment Provider | Marketing | Awarded Price | Estimated Capex in | Date of Commissioning | ||
Capacity | Variable | Total | ||||||
Thermal |
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Loma de la Lata | 15 | MAN | Res. SEE N° 19/17 | na | na | na | 18 | Q4 2017 |
105 | GE | US$ PPA for 10 years | 23,000 | 7.5 | 39.0 | 90 | Q3 2017 | |
Parque Ind. Pilar | 100 | Wärtsilä | US$ PPA for 10 years | 26,900 | 15 - 16 | 52 | 103 | Q3 2017 |
Piedra Buena | 100 | Wärtsilä | US$ PPA for 10 years | 21,800 | 12 - 15 | 42 - 45 | 90 | Q4 2017 |
Renewable |
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Pampa Eólico I (Corti) | 100 | Vestas | US$ PPA for 20 years | na | na | 58 | 135 | Q2 2018 |
Total | 420 |
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| 436 |
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*Amounts withoutVAT
3.2 Analysis of the Electricity Distribution Segment
Electricity Distribution Segment, Consolidated | 1st Quarter | ||
2017 | 2016 | ∆ % | |
Sales revenue | 5,367 | 2,990 | +79.5% |
Cost of sales | (3,585) | (2,645) | +35.5% |
Gross profit | 1,782 | 345 | NA |
Selling expenses | (499) | (289) | +72.7% |
Administrative expenses | (323) | (227) | +42.3% |
Other operating income | 23 | 526 | -95.6% |
Other operating expenses | (164) | (125) | +31.2% |
Operating income | 819 | 230 | +256.1% |
Finance income | 59 | 26 | +126.9% |
Finance costs | (402) | (392) | +2.6% |
Other financial results | 193 | (329) | NA |
Profit before tax | 669 | (465) | NA |
Income tax and minimum expected profit tax | (234) | 89 | NA |
Net income for the period | 435 | (376) | NA |
Attributable to: | |||
Owners of the Company | 231 | (315) | NA |
Non-controlling interests | 204 | (61) | NA |
Adjusted EBITDA | 617 | 669 | -7.8% |
Increases in property, plant and equipment | 760 | 629 | +20.8% |
Depreciation and amortization | 101 | 85 | +18.8% |
In Q1 17, net sales increased AR$2,377 million in relation to Q1 16, mainly due to the tariff increase from the application of MEyM’s Resolutions No 6 and 7/16 as from February 2016, which impact on Q1 16 was not affected by the injunctions, in addition to the first stage 42% tariff increase as from February 2017, as a result of the new tariff scheme from the RTI, pursuant to ENRE’s Resolution No 63/17 and later amended 92/17. As of March 31, 2017, the amount generated by the gradual application of the tariff increase amounts to AR$933 million approximately, which is recognized by ENRE but, in accordance with the accounting standards, it is not recognized in Edenor’s financial statements. This gradual amount is payable in 48 installments as from February 1, 2018 and will be included in the resulting distribution tariff at that date. Moreover, as a consequence of the RTI implementation in Q1 17 it was recorded a lower amount for the Fund for Electricity Distribution Expansion and Consolidation Works Trust (‘FOCEDE’), posting an amount of AR$148 million.
Pampa Energía • Q1 2017 Earning Release • 12 |
These increases were partially offset by lower electricity sales in Q1 17, which decreased by 2% in GWh terms compared to the same period in 2016. At the same time, Edenor's customers increased by 1%.
Edenor's Sales | 2017 | 2016 | Variation | |||||
In GWh | Part. % | Clients | In GWh | Part. % | Clients | % | % Clients | |
First Quarter |
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Residential | 2,391 | 43% | 2,510,825 | 2,397 | 42% | 2,472,349 | -0.2% | +1.6% |
Commercial | 936 | 17% | 362,395 | 963 | 17% | 362,233 | -2.8% | +0.0% |
Industrial | 959 | 17% | 6,861 | 977 | 17% | 6,753 | -1.8% | +1.6% |
Wheeling System | 997 | 18% | 712 | 1,062 | 19% | 715 | -6.1% | -0.4% |
Others | ||||||||
Public Lighting | 152 | 3% | 21 | 155 | 3% | 21 | -1.9% | - |
Shantytowns and Others | 91 | 2% | 411 | 111 | 2% | 409 | -18.0% | +0.5% |
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Total | 5,527 | 100% | 2,881,225 | 5,666 | 100% | 2,842,480 | -2.5% | +1.4% |
Net operating costs, excluding energy purchases, increased by 40% compared to Q1 16, mainly due to higher salary costs, partially offset by a lower penalties’ charge due to a change in the valuation criteria. Energy purchases increased by 92% compared to Q1 16, due to the increase in electricity prices as subsidy are being removed gradually and the increase in electricity losses, which posted 16.2% of the demanded electricity in Q1 17 in comparison to 14.5% reached in Q1 16.
Operating result increased by AR$589 million compared to Q1 16, mainly due to the RTI’s new tariff scheme application, set forth in ENRE’s Resolution 63/17 as from February 2017, partially offset by higher operating expenses and no income recognition in account of the RTI and MMC due to the implementation of the MEyM’s Resolution No 7/16.
During Q1 17, losses on net financial results decreased by AR$545 million to a loss of AR$150 million, mainly due to minor net foreign exchange rate losses as a result of a lower devaluation of the local currency against the US dollar, currency in which Edenor’s financial liabilities are denominated, partially offset by lower profit from the holding of financial instruments.
Adjusted EBITDA in Q1 17 for our electricity distribution segment posted a gain of AR$617 million, which includes late payment penalties collected from customers for AR$30 million and excludes the profit from the recovery of penalties for the period of September 2015 – February 2016, for an amount of AR$414 million, as penalties calculation method changed. In addition, it was also excluded the principal update for penalties carried out in other periods of AR$81 million. In Q1 16 the adjusted EBITDA amounted to AR$669 million and included AR$18 million of late payment penalties, a positive adjustment due to a modification in the retroactive penalties’ measuring method of AR$249 million and it excludes the principal update for penalties from other periods of AR$87 million.
Pampa Energía • Q1 2017 Earning Release • 13 |
3.3 Analysis of the Oil and Gas Segment
Oil & Gas Segment, Consolidated | 1st Quarter | ||
2017 | 2016 | ∆ % | |
Sales revenue | 3,898 | 478 | NA |
Cost of sales | (2,649) | (314) | NA |
Gross profit | 1,249 | 164 | NA |
Selling expenses | (186) | (46) | NA |
Administrative expenses | (259) | (69) | +275.4% |
Exploration expenses | (13) | - | NA |
Other operating income | 706 | 421 | +67.7% |
Other operating expenses | (243) | (35) | NA |
Results for participation in associates | 2 | - | NA |
Operating income | 1,256 | 435 | +188.7% |
Finance income | 45 | - | NA |
Finance costs | (151) | (172) | -12.2% |
Other financial results | 80 | 1 | NA |
Profit before tax | 1,230 | 264 | NA |
Income tax and minimum expected profit tax | (129) | (81) | +59.3% |
Net income for the period | 1,101 | 183 | NA |
Attributable to: | |||
Owners of the Company | 943 | 91 | NA |
Non-controlling interests | 158 | 92 | +71.7% |
Adjusted EBITDA | 2,092 | 581 | +260.0% |
Increases in property, plant and equipment | 723 | 451 | +60.3% |
Depreciation and amortization | 853 | 146 | NA |
The total production of oil and gas of Pampa in Q1 17 increased by 57.7 kboe/day in relation to Q1 16, mainly due to the inclusion of former Petrobras Argentina assets since August 2016, essentially through its activities in the Neuquén Basin, which contributed 50.5 kboe/day out of the 72.0 kboe/day produced in Q1 17.
Only for operating comparison purposes, the production of gas in Q1 17 from these assets including PELSA was 29% lower in comparison to the same period in 2016, mainly due to the divestments in Río Neuquén, Aguada de la Arena and Colpa y Caranda. These decreases were partially offset by higher production as a result of improvements in average sales prices and larger unconventional production at the Neuquén Basin, resulting in 4.9 million m3/day in Q1 17 and 6.9 million m3/day in the comparative period (Q1 16 includes 0.3 million m3/day from Bolivia). Moreover, crude oil production decreased to 21.0 kb/day, in comparison to 29.9 kb/day in Q1 16 (it includes 1.7 kb/day and 2.6 kb/day of foreign production in Q1 17 and Q1 16, respectively), mainly due to the cease of operations at Jagüel de los Machos block in the province of La Pampa in September 2015 as well as the cease of Medanito La Pampa in October 2016.
Moreover, Petrolera Pampa’s gas production increased from 2.4 million m3/day in Q1 16 to 3.0 million m3/day in Q1 17, while the oil production increased from 0.2 kb/day in Q1 16 to 3.7 kb/day in Q1 17, mainly as a result of our partnership with YPF in the Rincón del Mangrullo block and the service provided in Medanito La Pampa.
On March 31, 2017, we accounted 1,927 productive wells in Argentina, in comparison to 1,924 as of December 2016.
Pampa Energía • Q1 2017 Earning Release • 14 |
Oil & Gas Production | Oil | Gas | LPG | Total | ||||||
Petrolera | Pampa | PELSA | Total | Petrolera | Pampa | PELSA | Total | Total | ||
First Quarter |
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Volume Q1 17 |
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In thousand m3/day | 0.6 | 1.9 | 1.1 | 3.7 | 3,005.9 | 4,202.7 | 684.8 | 7,893.3 | 117.6 | |
In thousand boe/day | 3.7 | 12.1 | 7.2 | 23.0 | 17.7 | 24.7 | 4.0 | 46.5 | 0.7 | 70.2 |
In million cubic feet/day | 106.2 | 148.4 | 24.2 | 278.8 | ||||||
Avg. Price Q1 17 |
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In US$/bbl | 58.7 | 53.0 | 57.0 | 55.2 | ||||||
In US$/MBTU | 7.4 | 5.2 | 5.7 | 6.1 | ||||||
In US$/ton | 308.4 | |||||||||
Volume Q1 16 |
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In thousand m3/day | 0.0 | - | - | 0.0 | 2,391.4 | - | - | 2,391.4 | ||
In thousand boe/day | 0.2 | - | - | 0.2 | 14.1 | - | - | 14.1 | 14.3 | |
In million cubic feet/day | 84.5 | - | - | 84.5 | ||||||
Variation Q1 17 v. Q1 16 | na | na | na | na | +25.7% | na | na | +230.1% | na | +391.9% |
Avg. Price Q1 16 |
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In US$/bbl | 66.9 | - | - | 66.9 | ||||||
In US$/MBTU | 7.5 | - | - | 7.5 | ||||||
Variation Q1 17 v. Q1 16 | -12.2% | na | na | -17.5% | -2.1% | na | na | -19.7% | na | |
Note: Pampa and PELSA’s volume accounts from the closing of the acquisition of former Petrobras Argentina in August 2016. The production considers the 100% contribution of Medanito La Pampa, a block that Petrolera Pampa is currently providing a service. Moreover, the production does not consider 277 m3/day of oil from Venezuela in Q1 17. FX rate of AR$/US$: Q1 17 – 15.68; Q1 16 – 14.49.
In Q1 17 the gross margin from our oil and gas segment increased by AR$1,085 million compared to Q1 16, mainly due to the inclusion of the former Petrobras Argentina’s assets as from August 2016, in addition to production increase and the oil and gas price improvements in Argentine Peso, as an effect of the devaluation in the nominal exchange rate. These effects were partially offset by higher fixed assets amortization costs, higher gas production, transportation and royalties’ costs from higher production and inflation levels in Argentine Peso, in addition to the effect of the exchange rate variation over the costs denominated in US$.
The compensation received through the Natural Gas Surplus Injection Promotion Program SE’s Res. No. 1/13 and for the Companies with Natural Gas Reduced Injection SE’s Res. No. 60/13 (‘Plan Gas’) was the main reason for other operating income positive variation, increasing by AR$179 million to al total amount of AR$599 million in the Q1 17, being Petrolera Pampa’s stake AR$404 million, in comparison to the AR$420 million posted in Q1 16.
Net financial results decreased during the Q1 17 by AR$145 million to a loss of AR$26 million, mainly due to lower losses from interests in financial liabilities and lower accrual of losses as a result of net exchange difference.
The adjusted EBITDA of our oil and gas segment increased by AR$1,511 million, posting an amount of AR$2,092 million in the Q1 17, mainly due to the inclusion of former Petrobras Argentina’s E&P assets as of August 2016, in addition to higher sales volume and the effect of the exchange rate variation in our sales price. The adjusted EBITDA does not consider the recovery of investments and operating expenses post-closing of the Río Neuquén asset’s sale to Petrobras Operaciones S.A. and YPF for AR$29 million, and in turn considers the proportional EBITDA of OldelVal, an oil transportation company, in which Pampa holds a direct participation of 23.1%.
Pampa Energía • Q1 2017 Earning Release • 15 |
3.4 Analysis of the Refining and Distribution Segment
Refining & Distribution Segment, Consolidated | 1st Quarter | ||
2017 | 2016 | ∆ % | |
Sales revenue | 3,991 | - | NA |
Cost of sales | (3,393) | - | NA |
Gross profit | 598 | - | NA |
Selling expenses | (435) | - | NA |
Administrative expenses | (13) | - | NA |
Other operating income | 56 | - | NA |
Other operating expenses | (19) | - | NA |
Results for participation in associates | 9 | - | NA |
Operating income | 196 | - | NA |
Finance income | 3 | - | NA |
Finance costs | (3) | - | NA |
Other financial results | 26 | - | NA |
Profit before tax | 222 | - | NA |
Income tax and minimum expected profit tax | (5) | - | NA |
Net income for the period | 217 | - | NA |
Adjusted EBITDA | 269 | - | NA |
Increases in property, plant and equipment | 37 | - | NA |
Depreciation and amortization | 55 | - | NA |
Refining and distribution segment comes from the acquisition of Petrobras Argentina, which was not a shared business within the original portfolio of assets of Pampa.
In operating terms and not considering Pampa’s consolidation effect, sales volume of refined products totaled 473 thousand m3 in Q1 2017, a similar level to 485 thousand m3 in Q1 16. The amounts corresponding to Pampa are shown below:
Refining & Distribution | Products | |||||
Crude Oil | Diesel Oil | Gasolines | Fuel Oil, IFOs & Asphalts | Other distillates | Total | |
First Quarter |
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Volume Q1 17 (km3) | 4 | 188 | 119 | 77 | 85 | 473 |
Average Price Q1 17 (US$/m3) | 318 | 577 | 667 | 389 | 353 | 538 |
Note: Pampa’s volume accounts from the closing of the acquisition of Petrobras Argentina in August 2016. FX rate of AR$/US$: Q1 17 – 15.68.
The gross margin during Q1 17 increased to 15% over sales, in comparison to 3% of gross margin reached in Q1 16, mainly explained by improvements in sales prices of diesel oil and gasoline, which are mainly sold to brokers and gas stations, and IFOs and fuel oil sold to the shipping sector and the energy industry, respectively, and lower costs from the purchase of barrels of crude oil, which began its convergence toward export parity, partially offset by higher nominal exchange rate, larger operating costs and increase in the diesel oil imports’ price.
The adjusted EBITDA of our refining and distribution segment considers the EBITDA adjusted by ownership of Refinor, a company where Pampa holds 28.5% stake, and does not consider the charge for higher contingencies from the former Petrobras Argentina’s assets.
Pampa Energía • Q1 2017 Earning Release • 16 |
3.5 Analysis of the Petrochemicals Segment
Petrochemicals Segment, Consolidated | 1st Quarter | ||
2017 | 2016 | ∆ % | |
Sales revenue | 1,807 | - | NA |
Cost of sales | (1,646) | - | NA |
Gross profit | 161 | - | NA |
Selling expenses | (58) | - | NA |
Administrative expenses | (11) | - | NA |
Other operating income | 17 | - | NA |
Other operating expenses | (38) | - | NA |
Operating income | 71 | - | NA |
Finance income | 3 | - | NA |
Other financial results | (10) | - | NA |
Profit before tax | 64 | - | NA |
Income tax and minimum expected profit tax | - | - | NA |
Net income for the period | 64 | - | NA |
Adjusted EBITDA | 98 | - | NA |
Increases in property, plant and equipment | 21 | - | NA |
Depreciation and amortization | 27 | - | NA |
As refining and distribution, petrochemicals segment also comes from the acquisition of Petrobras Argentina and was not a shared business within the original portfolio of assets of Pampa.
In operating terms and not considering Pampa’s consolidation effect, total sales volume of our petrochemicals segment increased by 5% in Q1 17, totaling 123 thousand tons in Q1 2017 compared to 117 thousand tons in Q1 16. These increases mainly respond to higher exports because of improvements in the international prices, partially offset by lower domestic sales due to decrease in local demand and competition with import products. The amounts corresponding to Pampa are shown below:
Petrochemicals | Products | |||
Styrene & Polystyrene1 | SBR | Other | Total | |
First Quarter |
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Volume Q1 17 (kton) | 38 | 9 | 77 | 123 |
Average Price Q1 17 (US$/ton) | 1,438 | 2,184 | 543 | 934 |
Note: Pampa’s volume accounts from the closing of the acquisition of Petrobras Argentina in August 2016. FX rate of AR$/US$: Q1 17 – 15.68. (1) Includes Propylene, Ethylene and BOPs.
The gross margin in Q1 17 declined to 9% over sales in comparison to 19% margin reached in the same period of 2016, mainly due to higher costs of sales outpaced the increase in the average sales price, partially offset by the improvement of international commodity prices, as well as depreciation of Argentine Peso in Q1 17 since prices that are nominated in US dollars.
Pampa Energía • Q1 2017 Earning Release • 17 |
3.6 Analysis of the Holding and Others Segment
Holding & Others Segment, Consolidated | 1st Quarter | ||
2017 | 2016 | ∆ % | |
Sales revenue | 106 | 19 | NA |
Cost of sales | (1) | (2) | -50.0% |
Gross profit | 105 | 17 | NA |
Administrative expenses | (519) | (49) | NA |
Other operating income | 258 | 15 | NA |
Other operating expenses | (425) | (3) | NA |
Results for participation in joint businesses | 283 | (30) | NA |
Results for participation in associates | - | (3) | -100.0% |
Operating income | (298) | (53) | NA |
Finance income | 62 | 3 | NA |
Finance costs | (522) | 38 | NA |
Other financial results | 401 | 631 | -36.5% |
Profit before tax | (357) | 619 | NA |
Income tax and minimum expected profit tax | (467) | (14) | NA |
Net income for the period | (824) | 605 | NA |
Adjusted EBITDA | (125) | 10 | NA |
Increases in property, plant and equipment | 17 | - | NA |
Depreciation and amortization | 14 | - | NA |
During Q1 17, the gross margin from our holding and others segment increased by AR$88 million compared to the same period of 2016, mainly explained by higher income from fees charged to our subsidiaries.
However, not considering the results from our participation in joint businesses (Transener and TGS), the operating income recorded a loss of AR$581 million in comparison to the loss of AR$20 million for the same period in 2016, mainly due to the inclusion of former Petrobras Argentina’s corporate segment since August 2016, which contributed higher operating expenses of AR$502 million.
The losses in net financial results increased by AR$731 million compared to the same period of 2016, registering a AR$59 million loss in the Q1 17, mainly due to higher losses incurred from interests and exchange rate difference as a consequence of our financial liabilities. Moreover, in Q1 16 it was registered a profit of AR$216 million due to the holding of CIESA’s Trust.
The adjusted EBITDA of our holding and others segment fell by AR$135 million in the Q1 17, recording a loss of AR$125 million. Moreover, the adjusted EBITDA removes equity income from Transener and TGS, and in turn, it considers a consolidation of EBITDAs adjusted by indirect ownership participation in these businesses.
In Q1 17 the EBITDA adjusted by indirect ownership of 25.5% over TGS was AR$293 million, which means an implicit total of AR$1,148 million, a higher amount compared to Q1 16, mainly due to the transitional tariff increase of 200.1% for gas transportation business and the margin improvement in the liquids segment, which was due to prices as well as nominal exchange rate.
Pampa Energía • Q1 2017 Earning Release • 18 |
In the case of Transener, the EBITDA adjusted by stake ownership of 26.3% is AR$252 million (implicit total of AR$957 million) and includes the difference between collected amounts and accrued sales corresponding to CAMMESA’s credit regarding the Instrumental Agreement. In Q1 17 the accrued amounts of AR$312 million as capital and AR$8 million as interests due to the acknowledgment of higher costs were lower than the collected amounts during the quarter, therefore the total adjustment for Transener was positive for AR$301 million, in comparison to AR$171 million of positive adjustment registered in Q1 16.
Furthermore, the adjusted EBITDA of our holding and others segment does not consider the recovery of provisions because of the tax amnesty for AR$128 million, as well as former Petrobras Argentina’s contingencies’ update for AR$25 million.
Pampa Energía • Q1 2017 Earning Release • 19 |
3.7 Analysis of the Quarter, by Subsidiary (AR$ Million)[4]
| 1st Quarter 2017 | 1st Quarter 2016 | ||||||
Subsidiary | % Pampa | Adjusted EBITDA | Net Debt4 | Net Income5 | % Pampa | Adjusted EBITDA | Net Debt4 | Net Income5 |
Power Generation Segment |
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Diamante | 56.0% | 22 | (134) | 16 | 56.0% | 10 | (94) | 18 |
Los Nihuiles | 47.0% | 25 | (271) | 30 | 47.0% | 13 | (186) | 35 |
CPB | 100.0% | (1) | 519 | (31) | 100.0% | (41) | 279 | (56) |
CTG | 90.4% | 138 | (94) | 84 | 90.4% | 102 | 13 | 73 |
CTLL1 | 100.0% | 405 | 531 | 722 | 100.0% | 247 | 879 | 177 |
Pampa Energía | 100.0% | 310 | - | 462 | 0% | - | - | - |
Other companies, adjustments & deletions2 | 100.0% | (14) | (571) | (38) | 100.0% | (2) | (662) | (20) |
Subtotal Power Generation |
| 885 | (19) | 1,244 |
| 329 | 230 | 227 |
Electricity Distribution Segment |
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Edenor1 | 51.5% | 611 | 1,064 | 421 | 51.5% | 674 | 929 | (125) |
EASA1,3 | - | - | - | 100.0% | 4 | 1,829 | (249) | |
Adjustments & deletions2 | 50% | 6 | - | (190) | 50% | (9) | (1,962) | 59 |
Subtotal Electricity Distribution |
| 617 | 1,064 | 231 |
| 669 | 796 | (315) |
Oil & Gas Segment |
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Petrolera Pampa | 49.5% | 669 | 2,369 | 242 | 49.6% | 579 | 2,317 | 183 |
PELSA | 58.9% | 354 | (435) | 104 | 0% | - | - | - |
Pampa Energía (Stand-Alone)1 | 100.0% | 1,072 | 576 | 765 | 0% | - | - | - |
OldelVal | 23.1% | 58 | (112) | 12 | - | - | - | |
Non-controlling stake adjustment | (45) | 86 | (9) | - | - | - | ||
Subtotal OldelVal | 23% | 13 | (26) | 3 | - | - | - | |
Adjustments & deletions2 | 100% | (17) | (2,725) | (171) | 100% | 2 | - | (92) |
Subtotal Oil & Gas |
| 2,092 | (241) | 943 |
| 581 | 2,317 | 91 |
Refining & Distribution Segment |
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Pampa Energía | 100.0% | 256 | (25) | 215 | 0% | - | - | - |
Refinor | 28.5% | 43 | (52) | (30) | - | - | - | |
Non-controlling stake adjustment | (31) | 37 | 21 | - | - | - | ||
Subtotal Refinor | 29% | 12 | (15) | (8) | - | - | - | |
Adjustments & deletions2 | 100% | 1 | - | 10 | 100% | - | - | - |
Subtotal Refining & Distribution |
| 269 | (39) | 217 |
| - | - | - |
Petrochemicals Segment |
|
|
|
|
|
|
|
|
Pampa Energía | 100.0% | 99 | - | 64 | 0% | - | - | - |
Adjustments & deletions2 | 100% | (1) | - | 0 | 100% | - | - | - |
Subtotal Petrochemicals |
| 98 | - | 64 |
| - | - | - |
Holding & Others Segment |
|
|
|
|
|
|
|
|
Pampa Energía (Stand-Alone)1 | 100.0% | (653) | 19,075 | (836) | 100.0% | (28) | (652) | 86 |
Transener | 26.3% | 957 | 1,055 | 423 | 26.3% | 159 | 1,153 | (112) |
Non-controlling stake adjustment | (705) | (777) | (312) | (117) | (849) | 83 | ||
Adjustments & deletions2 | 26% | - | (3) | - | 26% | - | (24) | - |
Total Transmission | 26% | 252 | 275 | 111 | 42 | 279 | (30) | |
TGS | 25.5% | 1,148 | 483 | 665 | 0% | - | - | - |
Non-controlling stake adjustment | (855) | (360) | (495) | - | - | - | ||
Total Gas Midstream | 26% | 293 | 123 | 170 | - | - | - | |
Other companies, adjustments & deletions2 | 100% | (17) | (1,037) | (269) | 100% | (4) | (288) | 549 |
Subtotal Holding & Others |
| (125) | 18,437 | (824) |
| 10 | (660) | 605 |
Deletions | 100% | 26 | (358) | 26 | 100% | - | (279) | - |
Total Consolidated Amounts to the Owners |
| 3,861 | 18,844 | 1,901 |
| 1,589 | 2,403 | 608 |
Total Adjusted by Ownership |
| 3,043 | 17,347 | 1,901 |
| 953 | 996 | 608 |
1 Non - consolidated amounts.2 The deletions in net debt correspond to inter-companies and debt repurchases.3 As from January 1, 2017, EASA was merged by absorption by CTLL. 4 Net debt includes holding companies and does not consider financing from CAMMESA in the power generation segment. The deletions in net income mainly correspond to non-controlling interest.5 CTLL, EASA and Pampa Energía (stand-alone) do not include results from its subsidiaries.
Pampa Energía • Q1 2017 Earning Release • 20 |
4. Information about the Conference Call
There will be a conference call to discuss Pampa and Edenor’s first quarter 2017 results on Friday May 12, 2017 at 10:00 a.m. New York Time / 11:00 p.m. Buenos Aires Time.
The hosts will be Mr. Leandro Montero, CFO of Edenor and Ms. Lida Wang, Investor Relations Manager at Pampa. For those interested in participating, please dial 0-800-444-2930 in Argentina, +1 (844) 854-4411 in the United States or +1 (412) 317-5481 from any other country. Participants of the conference call should use the identification password Pampa Energía / Edenor and dial in five minutes before the scheduled time. There will also be a live audio webcast of the conference atwww.pampaenergia.com/ir.
You may find additional information on the Company at:
ü www.pampaenergia.com/ri
ü www.cnv.gob.ar
ü www.sec.gov
Pampa Energía • Q1 2017 Earning Release • 21 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: May 11, 2017
Pampa Energía S.A. | ||
| By: | /s/ Ricardo Torres | |
Name: Ricardo Torres Title: Co-Chief Executive Officer | ||
FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates offuture economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will a ctually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.