2018 Results Conference Call March 27, 2019
Disclaimer This earnings presentation contains forward-looking statements that are based on our current expectations, assumptions, estimates and projections about us and our industry. These forward-looking statements can be identified by words or phrases such as “anticipate,” “forecast”, “believe,” “continue,” “estimate,” “expect,” “intend,” “is/are likely to,” “may,” “plan,” “should,” “would,” or other similar expressions. The forward-looking statements included in this presentation relate to, among others: (i) our business prospects and future results of operations; (ii) the implementation of our combined cycle expansion project; (iii) the implementation of our financing strategy and the cost and availability of such financing; (iv) the competitive nature of the industries in which we operate; (v) future demand and supply for energy and natural gas; (vi) the relative value of the Argentine Peso compared to other currencies; (vii) weather and other natural phenomena; (viii) the performance of the South American and world economies; and (ix) developments in, or changes to, the laws, regulations and governmental policies governing our business, including environmental laws and regulations. These forward-looking statements involve various risks and uncertainties. Although we believe that our expectations expressed in these forward looking statements are reasonable, our expectations may turn out to be incorrect. Our actual results could be materially different from our expectations. In light of the risks and uncertainties described above, the estimates and forward-looking statements discussed in this release might not occur, and our future results and our performance may differ materially from those expressed in these forward-looking statements due to, inclusive, but not limited to, the factors mentioned above. Because of these uncertainties, you should not make any investment decision based on these estimates and forward-looking statements. The forward-looking statements made in this earnings release relate only to events or information as of the date on which the statements are made in this report. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events. This presentation does not constitute or form any part of any offer or invitation or inducement to sell or issue, or any solicitation of any offer to purchase or subscribe for, any senior notes or other securities of the Company.
MSU Energy - 2018 Highlights State of the Art Power Generation Portfolio Solid operational performance amongst the top performers of Resolution 21 Expansion project fully funded and advancing according to schedule Phase I, the addition of a fourth gas turbine per site, going through hot commissioning and final checklist before commercial operation. Our installed capacity will increase to 600MW Phase II, the conversion to combined cycle on target for first quarter of 2020; works on the pilots and foundations of the cooling tower and steam turbine in progress By first quarter of 2020, our aggregate capacity will reach 750MW and 100% of our capacity will operate under combined cycle and be fully contracted under long term dollar denominated take or pay contracts Effective January 1 st 2019, the three Entities were merged into MSU Energy, key to simplify operation and gain efficiencies 3
Solid Operational Performance Commercial Availability Availability factor, key performance driver, has reached 100% in 4Q18 Average Availability Factor since COD General Rojo Plant (COD June 2017) 99.7% Barker Plant (COD December 2017) 99.8% Villa Maria Plant (COD January 2018) 91.8% Lower than expected dispatch levels are explained by: (i) lower than expected energy demand as a result of the economic slow-down; (ii) below average temperatures and (iii) new scheme for gas cost allocation which affects General Rojo and Villa Maria Plants 4Q18 Average = 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 99% 97% 97% Availability Factor 54% 48% 38% 30% 29% 25% 25% 19% 18% 18% 17% 17% 14% 12% 8% 8% Jan-18 Feb-18 Mar-18* Apr-18* May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dic-18 Jan-19 Feb-19 General Rojo Barker Villa María Average dispatch * Villa Maria was affected by mechanical event on GT#1. Issue was fixed in April, performing at 100% thereafter. 4
Stable and predictable dollar denominated revenues 2018 Monthly Sales Breakdown – USD millions Sales – USD millions 9.9 9.8 9.7 9.5 9.5 9.4 9.1 8.9 8.8 Total Revenues in 4Q18 reached USD 27.3 million and USD 106.8 8.4 7.5 million in fiscal year 2018 6.2 Fixed Capacity payments represent 93% of total revenues US dollar denominated contracts paid monthly at previous day fx rate Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec General Rojo Barker Villa Maria* Total Revenues by Type * Villa María plant reached COD on January 25, 2018. During March, Villa Maria experience a mechanical failure on GT#1. This issue was resolved by GE at the end of April according to the construction guarantee. Fixed Capacity payment Variable Payment Other revenues 106.8 Quarterly Sales by Plant – USD millions 10.0 10.0 9.8 9.4 9.4 9.1 9.1 9.0 9.0 8.6 8.6 93% 29.0 27.7 27.3 4.9 22.8 1Q18 2Q18 3Q18 4Q18 1Q18 2Q18 3Q18 4Q18 2018 General Rojo Barker Villa Maria 5
Efficient costs structure Costs – USD millions Breakdown - USD mm 2018 % Cost / Revenues = 19% Labor cost explained by salaries, social contributions and benefits Labor cost 6.8 34% Maintenance expenses related to Contract Service Agreement with GE Professional fees mainly related to audit, tax, legal services, project Maintenance 6.0 30% advisory. In 4Q18, includes non-recurrent expenses related to corporate reorganization. Professional fees 2.1 11% Approximately 50% of cash costs are denominated in US dollar Taxes, rates and contributions 1.6 8% Insurance 1.2 6% Headcount - # as of December 31, 2018 Vehicles and Travel 0.7 4% Barker O&M Selling Expenses 0.6 3% #21 Office 0.6 3% General Rojo Villa Maria O&M O&M Other 0.4 2% #23 #21 #104 Total 20.1 G&A #39 Highly Efficient Operations Total MW per employee = 4.3 6
Financial performance in line with full year forecasts EBITDA as of December 31, 2018 – USD millions Combined EBITDA during 4Q18 reached USD20.7 million, 28% lower than 3Q18. This is explained by: 3Q18 includes a USD 4.1 million gain in General Rojo, related to Other Income in connection to GE’s compensation for late COD (liquidated damages) 91.4 Dispatch levels on General Rojo and Villa Maria Plants affected by new scheme for gas cost allocation One time non-recurrent expenses related to the merge of the 28.7 23.5 three OpCos and labor costs adjustments to mitigate inflation 20.7 18.5 Combined EBITDA as of December 31, 2018 stands at USD 91.4 1Q18 2Q18 3Q18 4Q18 2018 million, in line with forecasts Net Income as of December 31, 2018 – USD million Combined Net Income during 4Q18 reached USD 8.1 million, USD 9.6 million higher than 3Q18, mainly explained by the appreciation of the Argentine peso during the quarter Combined Net Loss is explained by Depreciation & Amortization of USD 13 million, Financial Losses of USD 83.7 million 8.1 Financial Losses are explained by Net Interest Expenses of USD 43.8 million and non-cash Foreign Exchange losses of USD 39.6 million, driven by the negative effect of the devaluation of the Argentine peso over our VAT tax credits -1.5 -2.9 as of December 31, Financial Expenses breakdown | USD mm 2018 -5.5 -9.2 Interest expense (43.8) 1Q18 2Q18 3Q18 4Q18 2018 Foreign exchange loss (39.6) Others (0.4) Total Financial expenses (83.7) 7
Cash Flow & Balance Sheet highlights Operating Cash Flow * - USD millions 100.1 Operating Cash Flow for 4Q18 reached USD 29.6 million and accumulates USD 100.1 million for fiscal year 2018 As of December 2018, VAT credit amounts USD 46 million. These credits are progressively reimbursed through monthly billing which 29.6 27.9 25.5 17.2 explains why our Operating Cash Flow is higher than EBITDA 1Q18 2Q18 3Q18 4Q18 2018 * Excludes VAT taxes related to capex and debt service Debt Profile - USD millions Net Debt as of December 2018 stands at USD 731 million, consisting of: Debt amortization profile is well aligned with the incremental combined cycle cash flows • USD 600 million International Bond Steep deleveraging curve as of 2020. Net leverage stabilizing below 3.5x • USD 250 million Private Placement Note by 2021 Private Placement Note International Bond Debt Breakdown | USD mm as of December 31, 2018 Senior secured notes * (830) Accrued bond interests (20) 600 Total Financial Debt (850) Cash 119 Net Financial Debt (731) 91 91 68 * Net of capitalized issuance expenses 2019 2020 2021 2022 2023 2024 2025 8
Recommend
More recommend
