Pampa Energy Inc 6-K, filed Mar 11, 2021
Pampa Energy Inc. (PAM)
About this 6-K
Pampa Energy Inc filed this 6-K on March 11, 2021.
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
SECURITIES EXCHANGE ACT OF 1934
For the month of March, 2021
(Commission File No. 001-34429),
PAMPA ENERGIA S.A.
(PAMPA ENERGY INC.)
Argentina
(Jurisdiction of incorporation or organization)
Maipú 1
C1084ABA
City of 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 ______
(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- .)
This Form 6-K for Pampa Energía S.A. (“Pampa” or the “Company”) contains:
Exhibit 1: Earning Release
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: March 11, 2021
| Pampa Energía S.A. | ||
| By: |
/s/ Gustavo Mariani |
|
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Name: Gustavo Mariani Title: 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.
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Pampa Energía, the largest independent energy integrated company in Argentina, with active participation in the country’s electricity and gas value chain, announces the results for the fiscal year and quarter ended on December 31, 2020. |
Buenos Aires, March 11, 2021
 |
Basis of presentation As of January 1, 2019, the Company adopted US$ as functional currency for the reporting of its financial information. The presentation of this information in AR$ is converted at transactional FX. However, Edenor (electricity distribution), Transener, TGS and Refinor (holding and others) record their operations in local currency. Thus, the 2020 figures are adjusted by inflation as of December 31, 2020 (2020: 15.3% and Q4 20: 5.4%), translated to US$ at closing FX of 84.15. Moreover, the 2019 figures are adjusted by inflation as of December 31, 2019 (2019: 21.2% and Q4 19: 5.5%), translated to US$ at closing FX of 59.891. On December 28, 2020, it was announced the sale of the controlling stake in Edenor. Therefore, the electricity distribution segment is shown as discontinued operations for the current and comparative periods2. Main results for the fiscal year 2020 Consolidated
net revenues for continuing operations of US$1,071 million3, 20% lower than
the US$1,338 million recorded in 2019, mainly due to lower gas sales for our power generation, the drop in prices and volumes
sold of hydrocarbons, petrochemical products and spot energy, partially offset by the commissioning of new power generation units
priced under PPA. Consolidated adjusted EBITDA5 of US$750 million, 18% lower than the US$915 million in 2019, due to decreases of 67% in electricity distribution, 48% in oil and gas and 12% in holding and others, partially offset by increases of 6% in power generation and US$13 million in petrochemicals. |
1 For further information, see section 3 of Pampa’s FS.
2 For further information, see section 1.4 of this Earnings Release.
3 It does not include discontinued operations for US$1,085 million. Under IFRS, sales at our ownership from the affiliates Greenwind, OldelVal, Refinor, CTBSA, Transener and TGS are not consolidated in Pampa, being its equity income shown as ‘Results for participation in joint businesses and associates’ (2020: US$400 million and Q4 20: US$94 million).
4 It includes 100% of CTEB and PEMC, assets operated by Pampa but co-controlled by Pampa, with 50% of equity stake.
5 It includes discontinued operations. Consolidated adjusted EBITDA represents the results before financial results, income tax, depreciations and amortizations, extraordinary and non-cash income and expense, equity income and other adjustments from the IFRS implementation, and includes affiliates’ EBITDA at our ownership. For further information, see section 3 of this Earnings Release.
| Pampa Energía ● Q4 20 Earning Release ● 1 |
Consolidated loss attributable to the owners of the Company of US$367 million, lower than the US$692 million profit achieved in 2019, mainly due to the impairment of assets in electricity distribution, power generation and petrochemicals, in addition to lower operating margin and income tax charge. In 2019 an income tax benefit and a US$285 million gain due to Edenor’s regularization of liabilities were recorded.
Main results for the Q4 206
Consolidated net revenues for continuing operations of US$285 million, 10% lower than the US$318 million recorded in Q4 19, mainly due to reduced fuel sales for our thermal power dispatch, lower price and volume sold of hydrocarbons and spot energy, partially offset by the commissioning of the new CCGT Genelba Plus, and to a lesser extent, by higher volumes sold of petrochemical products.
| ð | Power generation of 4,400 GWh from 15 power plants |
| ð | Production of 43.7 thousand boe per day of hydrocarbons |
| ð | Sales of 107 thousand tons of petrochemical products |
Consolidated adjusted EBITDA of US$168 million, 6% lower than the US$179 million in Q4 19, due to decreases of US$24 million in electricity distribution, 24% in holding and others, 7% in oil and gas and US$1 million in intersegment eliminations, partially offset by increases of 13% in power generation and US$12 million in petrochemicals.
Consolidated loss attributable to the owners of the Company of US$463 million, lower than the US$9 million profit recorded in Q4 19, mainly explained by the deterioration of assets in electricity distribution, partially offset by a lower income tax charge.
Information about the videoconference
There will be a videoconference to discuss Pampa’s Q4 20 results on Friday, March 12, 2021, at 10:00 a.m. Eastern Standard Time/12:00 p.m. Buenos Aires Time. The hosts will be Gustavo Mariani, CEO; Gabriel Cohen, CFO and Lida Wang, investor relations and sustainability officer at Pampa.
For those interested in participating, please register at bit.ly/Pampa4Q20VideoCall. The videoconference call will also be simultaneously webcasted at Pampa’s website ri.pampaenergia.com/en.
You may find additional information on the Company at:
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ü ri.pampaenergia.com/en ü www.cnv.gov.ar |
ü www.sec.gov ü www.bolsar.com |
6 The financial information presented in this document for Q4 20 and Q4 19 quarters are based on FS prepared according to IFRS in force in Argentina, corresponding to the fiscal years of 2020 and 2019, and the nine-months period ended on September 30, 2020 and 2019, respectively.
| Pampa Energía ● Q4 20 Earning Release ● 2 |
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Table of contents
| Basis of presentation | 1 |
| Main results for the fiscal year 2020 | 1 |
| Main results for the Q4 20 | 2 |
| Information about the videoconference | 2 |
| 1. Relevant events | 4 |
| 1.1 Oil and gas segment | 4 |
| 1.2 Assignment of fuel supply agreements for thermal power plants | 6 |
| 1.3 Extension of tariff freeze and beginning of the RTI renegotiation | 6 |
| 1.4 Edenor | 7 |
| 1.5 TGS: status of the public tender for the litoral main gas pipeline | 8 |
| 2. Financial highlights | 9 |
| 2.1 Consolidated balance sheet | 9 |
| 2.2 Consolidated income statement | 10 |
| 2.3 Cash and financial borrowings | 11 |
| 2.4 Buyback of own financial securities | 12 |
| 3. Analysis of the Q4 20 results | 14 |
| 3.1 Analysis of the power generation segment | 15 |
| 3.2 Analysis of the electricity distribution segment | 19 |
| 3.3 Analysis of the oil and gas segment | 20 |
| 3.4 Analysis of the petrochemicals segment | 24 |
| 3.5 Analysis of the holding and others segment | 25 |
| 3.6 Analysis of the fiscal year, by subsidiary and segment | 27 |
| 3.7 Analysis of the quarter, by subsidiary and segment | 28 |
| 4. Glossary of terms | 29 |
| Pampa Energía ● Q4 20 Earning Release ● 3 |
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| 1. | Relevant events |
| 1.1 | Oil and gas segment |
Plan Gas.Ar
On November 16, 2020, Plan Gas.Ar was created to promote Argentine natural gas production, reduce and replace imports, provide supply chain predictability and manage the impact of the cost of gas on the tariff of the priority demand. The term for onshore production is four years, with an additional four years for offshore production, as from January 2021 (DNU No. 892/20).
The SE instrumented a tender between producers as sellers, and CAMMESA, natural gas distributors and IEASA as purchasers, for a total base volume of 2.5 bcf/day, extendable for the winter period (May – September), with 100% daily DoP and 75% monthly ToP condition for CAMMESA and quarterly for gas distributors and IEASA. The DoP constitutes 70% of the awardees’ production commitment.
The maximum base price for the Neuquina Basin to tender was US$3.7/MBTU. The awarded price adjusts by a 0.82 factor for the non-winter period, 1.25 for the winter period and 1.30 for the additional volume during winter. The purchasers, CAMMESA and IEASA, will pay each awarded producer’s tendered price; gas distributors will pay the price from the tariff scheme in force into special bank accounts to guarantee payment compliance. Federal Government will offset the balance of the awarded price.
In addition, according to the Plan Gas.Ar framework, the Federal Government created and implemented a guarantee system to secure compensation’s payment, notwithstanding other mechanisms, consisting of fiscal credits as foreign currency-denominated guarantees, which producers may directly apply to fulfill fiscal liabilities in case of Plan Gas.Ar default by the Federal Government. Moreover, the SE will be empowered to make the awardees’ guarantee enforceable before the Federal Administration of Public Revenue (AFIP). The AFIP instrumented said system on March 4, 2021.
On December 15 and 29, 2020, the SE awarded on the first round 2.4 bcf/day of natural gas (55% destined to power plants) at an average annual base price of US$3.5/MBTU, and an additional volume during the winter period of 127 mcf/day at US$4.7/MBTU. Pampa ranked fifth nationwide and third in the Neuquina Basin, being awarded a base volume of 173 mcf/day at US$3.6/MBTU and an additional 35 mcf/day volume during the winter period at US$4.7/MBTU.
On March 9, 2021, the second round of the Plan Gas.Ar tender was awarded, which remunerates additional winter gas volumes for the Neuquina and Austral Basins destined to the priority demand with daily DoP between 75% and 100% for 2021 and 100% for 2022 – 2024, and 75% monthly ToP. The maximum bidding price was equivalent to the awarded price on the first round. A total average volume of 116 mcf/day was granted between May and September of 2021-2024 period at US$4.7/MBTU, being the first delivery in June 2021. Pampa was awarded for an average volume of 29 mcf/day at US$4.7/MBTU.
Therefore, Pampa achieved the highest growth in tendered production, with an investment of more than US$250 million during the four years of Plan Gas.Ar. This winter volume is critical to support the highly seasonal gas demand, reduce gas imports, use alternative fuels and carbon footprint, and moderate foreign currency reserves.
| Pampa Energía ● Q4 20 Earning Release ● 4 |
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Natural gas for power generation
On November 26, 2020, CAMMESA tendered the gas for thermal power plants in December 2020 with 30% DoP, being the average bid price US$2.50/MBTU at wellhead for the Neuquina Basin. Pampa participated in this tender.
As of 2021, most of Pampa’s gas to CAMMESA is channeled through the Plan Gas.Ar, for the volumes committed under said program for a term of 4 years. Through SE Res. No. 354/20 published on December 2, 2020, new reference price at the Transportation System Entry Point (PIST) was set for natural gas production out of Plan Gas.Ar, being US$2.30/MBTU for the summer (October – April) and US$3.50/MBTU for the winter (May – September) for the Neuquina Basin.
It is worth mentioning that CAMMESA’s monthly tender mechanism is still in force, complementary to the Plan Gas.Ar. On December 22, 2020, January 27 and February 24, 2021, CAMMESA tendered gas for the consumptions in January, February and March 2021, respectively. The resulting average price at wellhead was US$2.30/MBTU for Neuquina Basin. For awardees of the Plan Gas.Ar, including Pampa, the tender was on an interruptible basis, whereas the rest was 30% DoP. Pampa participated in these tenders.
| Pampa Energía ● Q4 20 Earning Release ● 5 |
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Natural gas for gas distributors
The National Budget approved on December 14, 2020, abrogated Executive Order No. 1053/18, which established that the Federal Government would bear the FX difference between distributors’ gas purchase price and recognized in final tariffs April 2018 – March 2019 period. The impairment of those credits was already recorded in Pampa’s FS. We are assessing the courses of action to take, as this abrogation does not affect the rights to collect the owed amount that the Federal Government may bear. Over a total amount of AR$1,219 million as of September 2019, Pampa collected only the first installment of AR$41 million by the end of December 2019.
Export of gas
In November 2020, Pampa obtained new permits to export gas to several customers in Chile, on an interruptible basis, for a maximum volume of 155 mcf/day (or until meeting the equivalent total maximum quantity). Maturities will take place between April 2021 and January 2022. Export operations were granted in December 2020. However, given the substantial reduction of domestic production and the power demand growth due to seasonality and to cover power exports to Brazil by the Argentine Electricity Grid (SADI), the gas deliveries to Chile were limited to 0.7 mcf/day during December 2020.
On the other hand, as an awardee of the Plan Gas.Ar, Pampa may export on a firm basis during the off-peak period, extendable to the winter period if there is excess supply in a specific basin, with the prior approval of the applicable authority. It is worth mentioning that natural gas is subject to an export duty rate that, as of this date, amounts to 8%.
| 1.2 | Assignment of fuel supply agreements for thermal power plants |
Through MDP Res. No. 12/19, as from December 30, 2019, fuel commercial management and procurement was centralized again in CAMMESA, a measure not applicable to generators with Energía Plus and SEE Res. No. 287/17 contracts.
Later on, within the framework of the Plan Gas.Ar, generators with Energía Plus and SEE Res. No. 287/17 contracts have the option to adhere to the unified and centralized dispatch provided by SE Res. No. 354/20 published on December 2, 2020, being CAMMESA the gas supplier to cover said obligations. To such effect, affected generators should maintain the necessary natural gas transportation capacity and dismiss their rights to file any claims. The assignment will be effective during the Plan Gas.Ar is in force, and the generator could revoke it with minimum advance notice of 30 business days. Pampa adhered to the unified dispatch, but the PPA addendum reflecting this new supply scheme has not been executed as of the date hereof.
| 1.3 | Extension of tariff freeze and beginning of the RTI renegotiation |
On December 17, 2020, Executive Order No. 1020/20 extended certain aspects of the Solidarity Law: (i) freeze on electricity and natural gas tariffs under federal jurisdiction. The suspension is valid for 90 days or until new transitory tariff schemes are in force; (ii) the Executive Branch’s power to intervene administratively the ENRE and ENARGAS (amended by Executive Order No. 963/20). Also, set the ENRE as Edenor’s regulatory authority for one year or until the RTI is renegotiated.
Said executive order also established the beginning of the RTI renegotiation for a term that may not exceed two years from its publication date, suspending until all agreements under the respective RTI in force with the scopes be determined each case by the ENRE and ENARGAS. The renegotiation process will be completed with the execution of the RTI Final Memorandum of Understanding.
| Pampa Energía ● Q4 20 Earning Release ● 6 |
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On March 3, 2021, the ENRE called for a public hearing to consider the transitional tariff scheme of Edenor (Res. No. 53/21) on March 30, 2021, and for Transener and Transba (Res. No. 54 and 55/21, respectively) on March 29, 2021.
As regards gas utilities, on February 22, 2021, the ENARGAS called for a public hearing on March 16, 2021, to consider the transitional tariff scheme (Res. No. 47/21).
| 1.4 | Edenor |
Sale of controlling stake in Edenor
As part of our strategic investment plan aiming to continue expanding the power generation installed capacity and developing unconventional natural gas reserves, on December 28, 2020, Pampa executed an agreement with Empresa de Energía del Cono Sur S.A. and Integra Capital S.A., Messrs. Daniel Eduardo Vila, Mauricio Filiberti and José Luis Manzano, whereby Pampa agreed to sell its controlling stake in Edenor by transferring the total Class A shares, which represents 51% of the capital stock and voting rights of said company, pursuant to the fulfillment of certain precedent conditions, including but not limited, the approvals of Pampa’s shareholder meeting ¾that was timely granted on February 17, 2021¾ and the ENRE.
The agreed purchase price consisted of (i) 21,876,856 Class B shares of Edenor, representing 2.41% of the capital stock and voting rights; (ii) US$95 million; and (iii) a contingent payment in case of the buyer or Edenor’s change in the control during the first year after the closing of the sale or as long as the balance of the price is pending of settlement for 50% of the generated gain.
The purchase price will be paid in three installments: (i) 2.41% of Edenor’s shares and US$5 million, collected on the execution date of the agreement; (ii) US$50 million on the closing date of the sale, subject to the fulfillment of the precedent conditions; and (iii) US$40 million after one year since the closing of the deal, except in cases of offsetting or prepayment in advance. Said balance of the price would accrue a nominal annual fixed interest rate of 10% as from the sale’s closing date, payable quarterly.
Under IFRS, Pampa has reflected in its FS an accounting impairment of US$382 million for the assets associated with its stake in Edenor, disclosed as discontinued operations. Moreover, as the closing has still not taken place, the economic result will be disclosed in the Company’s FS after closing the sale.
Seasonal programming
Through SE Res. No. 24/21, published in the Public Gazette on January 15, 2021, seasonal programming for the November 2020 – April 2021 period was approved. Seasonal prices remain unchanged until April 2021, with a power capacity reference price at AR$80,000/MW-month and energy (peak) reference price for residential users at AR$1,852/MWh effective as from February 2019, as well as the energy reference prices for GUDI at AR$3,042 and for the rest of the non-residential users at AR$2,122/MWh, effective as from August 2019. The transportation stabilized price for extra-high voltage system and the price for regional distribution based on the distribution company, established by SEE Provision No. 75/18, also remained unchanged.
As of March 2021, according to SE Res. No. 131/21, the reference peak price for GUDI increases to AR$5,748/MWh (except for public health and education bodies and entities), reducing the gap with the actual cost and, therefore, subsidies. In contrast, the rest of the electricity prices applicable to the final demand have not been modified.
Even though said seasonal prices apply to the energy costs of Edenor, the tariff schemes for end-users reflect lower amounts in force as of May 2019, especially for GUDI and the rest of non-residential users detriment to Edenor.
| Pampa Energía ● Q4 20 Earning Release ● 7 |
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Other regulatory news
As regards the debt for electricity purchases that distributors owe CAMMESA as of September 2020, on January 21, 2021, the SE established a Special Liabilities Regularization Scheme, aiming to grant a solution for a sustainable balance sheet and guarantee the service quality in the context of extended tariff freeze exacerbated by the pandemic. The Scheme recognizes receivables to offset debt equivalent to up to 5 times the monthly average bill of the last rolling year or reaching 66% of the existing debt and offers a payment plan for the surplus amount.
Moreover, on January 19, 2021, it was agreed to nullify the transfer of concession jurisdiction of Edenor from the Federal Government to the Province of Buenos Aires and the City of Buenos Aires. Consequently, the ownership and nature of the Granting Power of the public electricity distribution utility in the concession area of Edenor remain in the jurisdiction of the Federal Government.
Finally, on December 16, 2020, the Agreement for the Development of the Preventive and Corrective Work Program for the Electrical Distribution Grid of the Metropolitan Area of Buenos Aires was entered into with the Federal Government and the Province of Buenos Aires. To guarantee electricity supply to low-income neighborhoods of said specific area, the amounts that the Federal Government owed Edenor as of December 31, 2020, for electricity consumption in shantytowns and low-income communities will be applied to the grid’s preventive and corrective maintenance.
| 1.5 | TGS: status of the public tender for the litoral main gas pipeline |
On
December 30, 2020, SE Res. No. 448/20 was issued, abrogating the call for a public tender for the award of a gas transportation
license to connect the town of Tratayén (Province of Neuquén) with the city of San Nicolás de los Arroyos
(Province of Buenos Aires). Moreover, it instructs the Undersecretariat of Hydrocarbons to assess other alternatives for constructing
a new gas pipeline and/or expanding transportation capacities.
| Pampa Energía ● Q4 20 Earning Release ● 8 |
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| 2. | Financial highlights |
| 2.1 | Consolidated balance sheet |
| Figures in million | As of 12.31.2020 | As of 12.31.2019 | ||||
| AR$ | US$ FX 84.15 | AR$ | US$ FX 59.89 | |||
| ASSETS | ||||||
| Property, plant and equipment | 135,445 | 1,610 | 210,056 | 3,507 | ||
| Intangible assets | 3,455 | 41 | 9,068 | 151 | ||
| Right-of-use assets | 867 | 10 | 930 | 16 | ||
| Deferred tax assets | 9,082 | 108 | 1,702 | 28 | ||
| Investments in joint ventures and associates | 46,229 | 549 | 30,638 | 511 | ||
| Financial assets at amortized cost | 8,428 | 100 | 1,048 | 18 | ||
| Financial assets at fair value through profit and loss | 942 | 11 | 671 | 11 | ||
| Other assets | 57 | 1 | 45 | 1 | ||
| Trade and other receivables | 3,631 | 43 | 4,711 | 79 | ||
| Total non-current assets | 208,136 | 2,473 | 258,869 | 4,322 | ||
| Inventories | 9,766 | 116 | 9,175 | 153 | ||
| Financial assets at amortized cost | 2,062 | 25 | 3,224 | 54 | ||
| Financial assets at fair value through profit and loss | 27,382 | 325 | 21,867 | 365 | ||
| Derivative financial instruments | 1 | - | 214 | 4 | ||
| Trade and other receivables | 28,678 | 341 | 33,583 | 561 | ||
| Cash and cash equivalents | 11,900 | 141 | 13,496 | 225 | ||
| Total current assets | 79,789 | 948 | 81,559 | 1,362 | ||
| Assets classified as held for sale | 123,603 | 1,469 | - | - | ||
| Total assets | 411,528 | 4,890 | 340,428 | 5,684 | ||
| EQUITY | ||||||
| Equity attributable to owners of the company | 120,247 | 1,428 | 114,865 | 1,917 | ||
| Non-controlling interest | 28,631 | 341 | 29,397 | 492 | ||
| Total equity | 148,878 | 1,769 | 144,262 | 2,409 | ||
| LIABILITIES | ||||||
| Investments in joint ventures and associates | 161 | 2 | 265 | 4 | ||
| Provisions | 9,326 | 111 | 8,703 | 145 | ||
| Income tax liabilities | 11,004 | 131 | 590 | 10 | ||
| Deferred revenue | - | - | 270 | 5 | ||
| Taxes payables | 128 | 2 | 263 | 4 | ||
| Deferred tax liabilities | 93 | 1 | 22,068 | 368 | ||
| Defined benefit plans | 1,460 | 17 | 1,606 | 27 | ||
| Salaries and social security payable | - | - | 241 | 4 | ||
| Borrowings | 115,428 | 1,372 | 105,629 | 1,764 | ||
| Trade and other payables | 1,418 | 16 | 5,419 | 90 | ||
| Total non-current liabilities | 139,018 | 1,652 | 145,054 | 2,421 | ||
| Provisions | 1,379 | 16 | 1,206 | 20 | ||
| Deferred revenue | - | - | 5 | - | ||
| Income tax liabilities | 897 | 11 | 3,154 | 53 | ||
| Taxes payables | 3,030 | 36 | 4,316 | 72 | ||
| Defined benefit plans | 298 | 4 | 230 | 4 | ||
| Salaries and social security payable | 1,935 | 23 | 3,834 | 65 | ||
| Derivative financial instruments | 40 | - | 204 | 3 | ||
| Borrowings | 20,377 | 242 | 10,974 | 183 | ||
| Trade and other payables | 9,778 | 116 | 27,189 | 454 | ||
| Total current liabilities | 37,734 | 448 | 51,112 | 854 | ||
| Liabilities associated to assets classified as held for sale | 85,898 | 1,021 | - | - | ||
| Total liabilities | 262,650 | 3,121 | 196,166 | 3,275 | ||
| Total liabilities and equity | 411,528 | 4,890 | 340,428 | 5,684 | ||
| Pampa Energía ● Q4 20 Earning Release ● 9 |
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| 2.2 | Consolidated income statement |
| Fiscal year | Fourth quarter | |||||||||||
| Figures in million | 2020 | 2019 | 2020 | 2019 | ||||||||
| AR$ | US$ | AR$ | US$ | AR$ | US$ | AR$ | US$ | |||||
| Sales revenue | 76,639 | 1,071 | 64,699 | 1,338 | 23,067 | 285 | 18,809 | 318 | ||||
| Cost of sales | (46,850) | (663) | (39,169) | (811) | (14,481) | (181) | (12,457) | (216) | ||||
| Gross profit | 29,789 | 408 | 25,530 | 527 | 8,586 | 104 | 6,352 | 102 | ||||
| Selling expenses | (2,680) | (38) | (1,294) | (26) | (503) | (6) | (515) | (9) | ||||
| Administrative expenses | (6,588) | (93) | (5,342) | (105) | (1,740) | (22) | (2,097) | (31) | ||||
| Exploration expenses | (29) | - | (463) | (9) | (8) | - | (308) | (5) | ||||
| Other operating income | 4,056 | 56 | 3,749 | 79 | 1,453 | 18 | 188 | 12 | ||||
| Other operating expenses | (2,550) | (36) | (2,060) | (43) | (738) | (9) | (716) | (11) | ||||
| Results for part. in joint businesses and associates | 6,551 | 85 | 5,854 | 101 | 1,741 | 19 | 2,425 | 39 | ||||
| Impairment of PPE, intangible assets and inventories | (10,351) | (139) | (3,713) | (62) | (6,035) | (72) | (3,713) | (62) | ||||
| Operating income | 18,198 | 243 | 22,261 | 462 | 2,756 | 32 | 1,616 | 35 | ||||
| RECPAM | - | - | - | - | 5 | - | 4 | - | ||||
| Financial income | 686 | 9 | 1,027 | 23 | 157 | 1 | 851 | 2 | ||||
| Financial costs | (12,528) | (177) | (9,005) | (187) | (3,932) | (50) | (2,498) | (40) | ||||
| Other financial results | 6,131 | 84 | 8,680 | 175 | 2,774 | 36 | 4,064 | 66 | ||||
| Financial results, net | (5,711) | (84) | 702 | 11 | (996) | (13) | 2,421 | 28 | ||||
| Profit before tax | 12,487 | 159 | 22,963 | 473 | 1,760 | 19 | 4,037 | 63 | ||||
| Income tax | (3,122) | (35) | 4,531 | 130 | (391) | (1) | (1,633) | (33) | ||||
| Net income for continuing operations | 9,365 | 124 | 27,494 | 603 | 1,369 | 18 | 2,404 | 30 | ||||
| Net income (loss) from discontinued operations | (49,333) | (592) | 11,813 | 197 | (47,568) | (569) | (1,043) | (20) | ||||
| Net income (loss) for the period | (39,968) | (468) | 39,307 | 800 | (46,199) | (551) | 1,361 | 10 | ||||
| Attributable to the owners of the Company | (31,447) | (367) | 33,012 | 692 | (38,603) | (463) | 1,149 | 9 | ||||
| Continuing operations | 9,952 | 132 | 27,057 | 593 | 2,796 | 24 | (4,806) | 24 | ||||
| Discontinued operations | (41,399) | (499) | 5,955 | 99 | (41,399) | (487) | 5,955 | (15) | ||||
| Attributable to the non-controlling interests | (8,521) | (101) | 6,295 | 108 | (7,596) | (88) | 212 | 1 | ||||
| Net income (loss) per share attributable to shareholders | (20.40) | (0.24) | 18.40 | 0.39 | (26.53) | (0.32) | 0.68 | 0.01 | ||||
| From continuing operations | 6.46 | 0.09 | 15.08 | 0.33 | 1.92 | 0.02 | (2.84) | 0.01 | ||||
| From discontinued operations | (26.85) | (0.32) | 3.32 | 0.06 | (28.45) | (0.33) | 3.51 | (0.01) | ||||
| Net income (loss) per ADR attributable to shareholders | (509.97) | (5.95) | 459.90 | 9.64 | (663.30) | (7.96) | 16.95 | 0.14 | ||||
| From continuing operations | 161.39 | 2.14 | 376.94 | 8.26 | 48.04 | 0.41 | (70.88) | 0.36 | ||||
| From discontinued operations | (671.36) | (8.09) | 82.96 | 1.38 | (711.35) | (8.37) | 87.83 | (0.22) | ||||
| Average outstanding common shares | 1,541.6 | 1,541.6 | 1,794.5 | 1,794.5 | 1,455.0 | 1,455.0 | 1,695.1 | 1,695.1 | ||||
| Outstanding common shares by the end of period | 1,453.9 | 1,453.9 | 1,682.1 | 1,682.1 | 1,453.9 | 1,453.9 | 1,682.1 | 1,682.1 | ||||
| Pampa Energía ● Q4 20 Earning Release ● 10 |
| |
| 2.3 | Cash and financial borrowings |
| As of December 31, 2020, in US$ million |
Cash1 | Financial debt | Net debt | |||||||
| Consolidated in FS |
Ownership adjusted | Consolidated in FS |
Ownership adjusted | Consolidated in FS |
Ownership adjusted | |||||
| Power generation | 150 | 144 | 602 | 602 | 453 | 458 | ||||
| Petrochemicals | - | - | - | - | - | - | ||||
| Holding and others | 48 | 48 | - | - | (48) | (48) | ||||
| Oil and gas | 268 | 269 | 1,012 | 1,012 | 744 | 743 | ||||
| Total under IFRS/Restricted Group | 466 | 461 | 1,614 | 1,614 | 1,148 | 1,153 | ||||
| Affiliates at O/S2 | 89 | 89 | 352 | 352 | 263 | 263 | ||||
| Total with affiliates | 554 | 549 | 1,966 | 1,966 | 1,411 | 1,416 | ||||
Note: It does not include discontinued operations. Financial debt includes accrued interests. 1 It includes cash and cash equivalents, financial assets at fair value with changing results and investments at amortized cost; it excludes Plan Gas’ bonds pending collection. 2 Under IFRS, the affiliates Greenwind, OldelVal, Refinor, CTBSA, Transener and TGS are not consolidated in Pampa.
Debt transactions
As of December 31, 2020, Pampa’s financial debt at the consolidated level under IFRS amounted to US$1,614 million[7]. The average interest rate for US$-bearing indebtedness was 7.5%, currency in which 88% of the Company’s gross debt is denominated, mostly at a fixed rate. AR$ indebtedness’s average interest rate was 37.7%. The life of Pampa’s consolidated financial debt averaged approximately 4.8 years.
The following chart shows the debt principal maturity profile, net of repurchases, expressed in million US$ by the end of Q4 20:
During Q4 20, Pampa paid at maturity financings for AR$3,700 million and US$3.9 million, as well as Series V and E CB for a total of AR$1,140 million FV. Moreover, we executed short-term bank loans for AR$3,000 million.
Regarding our affiliates, in Q4 20, CTBSA executed a partial early redemption of US$130 million of its VRDs plus accrued interests, and it was agreed to modify the payment schedule of the remaining VRDs, of which principal amounts to US$94 million. Moreover, Greenwind paid the second amortization of the credit facility executed with the Inter-American Investment Corporation (IIC) for US$1.7 million.
7 It does not consider Edenor classified as discontinued operation in the FS. Thus, Pampa’s consolidated level under IFRS is equivalent to the Restricted Group.
| Pampa Energía ● Q4 20 Earning Release ● 11 |
| |
After the end of Q4 20, the Company paid at maturity bank loans for AR$3,000 million.
As of this Earnings Release issuance, the Company complies with the covenants established in its debt agreements.
Summary of debt securities
| Company In million |
Security | Maturity | Amount issued | Amount outstanding | Coupon |
| In US$ | |||||
| Transener1 | CB Series 2 | 2021 | 101 | 86 | 9.75% |
| TGS1 | CB at discount at fixed rate | 2025 | 500 | 482 | 6.75% |
| Pampa | CB Series T at discount & fixed rate | 2023 | 500 | 390 | 7.375% |
| CB Series I at discount & fixed rate | 2027 | 750 | 636 | 7.5% | |
| CB Series III at discount & fixed rate | 2029 | 300 | 293 | 9.125% | |
| In AR$ | |||||
| Pampa | CB Series VI | 2021 | 6,355 | 6,355 | Badlar Privada + 2.5% |
Note: 1 Affiliates are not consolidated in Pampa’s FS, according to IFRS.
Credit rating
In March 2021, Standard & Poor’s modified the global ratings assigned to the CB issued by Transener from ‘CCC+’ to ‘CCC-’ and local ratings from ‘raBB’ to ‘raCCC’ due to the access restrictions to the Single Free Foreign Exchange Market (MULC) and regulatory uncertainty. The following table shows Pampa Group’s CBs ratings:
| Company | Agency | Rating | |
| Global | Local | ||
| Pampa | S&P | CCC+ | na |
| Moody's | Caa3 | na | |
| FitchRatings | CCC | AA- (long-term) A1+ (short-term) | |
| TGS | S&P | CCC+ | na |
| Moody's | Caa3 | na | |
| Transener | S&P | CCC- | raCCC |
| 2.4 | Buyback of own financial securities[8] |
Pampa
On December 28, 2020, Pampa’s Board of Directors approved the maximum price modification under the eighth share buyback program approved on October 30, 2020, which concluded on March 3, 2021. Moreover, on March 1, 2021, Pampa’s Board of Directors approved the ninth share buyback program under the following terms and conditions:
8 Deemed to be effected transactions. It does not include Edenor, classified as a discontinued operation in the FS.
| Pampa Energía ● Q4 20 Earning Release ● 12 |
| |
| Repurchase program VIII | Repurchase program IX | |
| Maximum amount to buyback | US$30 million | US$30 million |
| Maximum price | AR$85.20/common share or US$15/ADR | AR$92.16/common share or US$16/ADR |
| Period in force | 120 days as from November 3, 2020 | 120 days as from March 4, 2021 |
| Status | Completed | In process |
In Q4 20, the Company indirectly acquired 1,005,424 ADR at an average price of US$11.4/ADR. After the closing of the quarter, the Company indirectly bought 1,351,495 ADR at an average price of US$13.4/ADR.
Moreover, Pampa’s Shareholders’ Meeting held on December 10, 2020, approved the capital stock reduction through the cancellation of 140.8 million treasury shares (or 5.6 million ADR) acquired by Pampa and its subsidiaries. Said reduction is in the process of registration before the Public Registry of Organizations (IGJ). As of March 10, 2021, Pampa’s outstanding capital stock amounts to 1,420.1 million common shares (equivalent to 56.8 million ADR).
In Q4 20, Pampa also indirectly acquired US$8.3 million FV of its 2027 CBs at an average clean price of US$70.1/US$100 FV. As of this date, outstanding 2023, 2027 and 2029 CBs, excluding treasury holdings, amounting to US$389.6 million, US$636.0 million and US$292.5 million, respectively.
TGS
The following table shows the details about the share buyback program in force:
| Repurchase program VII | |
| Maximum amount to buyback | AR$3 billion |
| Maximum price | AR$250/common share or US$8.5/ADR |
| Period in force | 210 days as from August 25, 2020 |
| Status | In process |
In Q4 20, TGS acquired 426,805 ADR and 249,987 common shares, at an average price of US$4.5/ADR and AR$145.1 per share, respectively. As of March 10, 2021, TGS’s outstanding capital stock amounts to 752.8 million common shares (equivalent to 150.0 million ADR).
On the other hand, in Q4 20, Pampa indirectly acquired 0.2 million TGS’s ADR at an average acquisition cost of US$5.4/ADR. After Q4 20, Pampa indirectly acquired TGS’s 1.1 million ADR and 0.1 million common shares at an average price of US$5.1/ADR and AR$160.0 per share, respectively. As of March 10, 2021, the Company’s direct and indirect ownership of TGS amounts to 28.4% of its issued capital stock.
Transener
After the closing of Q4 20, Transener’s subsidiary, Transba, repurchased US$5.5 million FV of Transener’s 2021 CB at an average clean price of US$93.5 per US$100 FV. In this way, as of March 10, 2021, the outstanding 2021 CB amounted to US$86.0 million.
| Pampa Energía ● Q4 20 Earning Release ● 13 |
| |
| 3. | Analysis of the Q4 20 results |
Consolidated net revenues for continuing operations of US$285 million, 10% lower than the US$318 million recorded in Q4 19, mainly due to reduced fuel sales for our thermal power dispatch, lower price and volume sold of hydrocarbons and spot energy, partially offset by the commissioning of the new CCGT Genelba Plus, and to a lesser extent, by higher volumes sold of petrochemical products.
| ð | Power generation of 4,400 GWh from 15 power plants |
| ð | Production of 43.7 thousand boe per day of hydrocarbons |
| ð | Sales of 107 thousand tons of petrochemical products |
Consolidated adjusted EBITDA of US$168 million, 6% lower than the US$179 million in Q4 19, due to decreases of US$24 million in electricity distribution, 24% in holding and others, 7% in oil and gas and US$1 million in intersegment eliminations, partially offset by increases of 13% in power generation and US$12 million in petrochemicals.
Consolidated loss attributable to the owners of the Company of US$463 million, lower than the US$9 million profit recorded in Q4 19, mainly explained by the deterioration of assets in electricity distribution, partially offset by a lower income tax charge.
| Reconciliation of consolidated adjusted EBITDA, in US$ million |
Fiscal year | Fourth quarter | ||||
| 2020 | 2019 | 2020 | 2019 | |||
| Consolidated operating income | 243 | 462 | 32 | 35 | ||
| Consolidated depreciations and amortizations | 205 | 184 | 52 | 49 | ||
| EBITDA | 448 | 646 | 84 | 84 | ||
| Adjustments from generation segment | 126 | 41 | 60 | 57 | ||
| Deletion of equity income | (67) | (13) | (30) | (15) | ||
| Deletion of results for PPE's impairment | 128 | 52 | 72 | 52 | ||
| Deletion of PEPEs' recovery of insurance | (7) | - | - | - | ||
| Deletion of gain from commercial interests | (23) | (49) | (6) | (3) | ||
| Greenwind's EBITDA adjusted by ownership | 12 | 11 | 3 | 3 | ||
| CTBSA's EBITDA adjusted by ownership | 83 | 40 | 21 | 21 | ||
| Adjustments from oil and gas segment | 14 | (11) | (0) | 10 | ||
| Deletion of equity income | 5 | (21) | 1 | - | ||
| Deletion of impairment of receivables from distCos | 13 | - | - | - | ||
| Deletion of gain from commercial interests | (4) | (1) | (2) | (0) | ||
| OldelVal's EBITDA adjusted by ownership | 1 | 1 | 0 | 0 | ||
| Adjustments from petrochemicals segment | 11 | (1) | (0) | 0 | ||
| Deletion of results for inventory impairment | 11 | - | - | - | ||
| Deletion of gain from commercial interests | (0) | (1) | (0) | 0 | ||
| Adjustments from holding and others segment | 99 | 83 | 40 | 19 | ||
| Deletion of equity income | (23) | (67) | 10 | (24) | ||
| Deletion of gain from commercial interests | (2) | (2) | (0) | (1) | ||
| TGS's EBITDA adjusted by ownership | 99 | 106 | 25 | 31 | ||
| Transener's EBITDA adjusted by ownership | 27 | 40 | 5 | 11 | ||
| Refinor's EBITDA adjusted by ownership | (1) | 6 | (0) | 2 | ||
| Consolidated adjusted EBITDA, continuing op. | 699 | 758 | 184 | 171 | ||
| At our ownership | 695 | 748 | 183 | 168 | ||
| + Discontinued op. EBITDA: Edenor | 51 | 157 | (16) | 8 | ||
| Consolidated adjusted EBITDA, cont. and discont. op. | 750 | 915 | 168 | 179 | ||
| At our ownership | 723 | 832 | 175 | 173 | ||
| Pampa Energía ● Q4 20 Earning Release ● 14 |
| |
| 3.1 | Analysis of the power generation segment |
| Power generation segment, consolidated Figures in US$ million |
Fiscal year | Fourth quarter | ||||||
| 2020 | 2019 | ∆% | 2020 | 2019 | ∆% | |||
| Sales revenue | 559 | 819 | -32% | 150 | 188 | -20% | ||
| Cost of sales | (254) | (470) | -46% | (73) | (112) | -35% | ||
| Gross profit | 305 | 349 | -13% | 77 | 76 | +1% | ||
| Selling expenses | (2) | (3) | -33% | (1) | (1) | - | ||
| Administrative expenses | (30) | (32) | -6% | (8) | (10) | -20% | ||
| Other operating income | 35 | 58 | -40% | 10 | 6 | +67% | ||
| Other operating expenses | (6) | (11) | -45% | (1) | (3) | -67% | ||
| Results for participation in joint businesses | 67 | 13 | NA | 30 | 15 | +100% | ||
| Impairment of PPE and intangible assets | (128) | (52) | +146% | (72) | (52) | +38% | ||
| Operating income | 241 | 322 | -25% | 35 | 31 | +13% | ||
| Finance income | 3 | 2 | +50% | - | 1 | -100% | ||
| Finance costs | (73) | (82) | -11% | (31) | (15) | +107% | ||
| Other financial results | 1 | 86 | -99% | 2 | 6 | -67% | ||
| Profit (loss) before tax | 172 | 328 | -48% | 6 | 23 | -74% | ||
| Income tax | (33) | (80) | -59% | 8 | (55) | NA | ||
| Net income (loss) for the period | 139 | 248 | -44% | 14 | (32) | NA | ||
| Attributable to owners of the Company | 147 | 239 | -38% | 20 | (38) | NA | ||
| Attributable to non-controlling interests | (8) | 9 | NA | (6) | 6 | NA | ||
| Adjusted EBITDA | 462 | 434 | +6% | 121 | 107 | +13% | ||
| Adjusted EBITDA at our share ownership | 458 | 424 | +8% | 121 | 105 | +16% | ||
| Increases in PPE, intangible and right-of-use assets | 61 | 240 | -75% | 9 | 58 | -84% | ||
| Depreciation and amortization | 95 | 71 | +34% | 26 | 19 | +37% | ||
In Q4 20, the lower sales accrual for US$38 million is mainly explained by the centralization of fuel procurement again in CAMMESA as of December 30, 2019. This measure applies to all thermal units except for those with Energía Plus and SEE Res. No. 287/17 contracts. Consequently, revenues from the recognition of own fuel in the variable production cost (CVP) decreased by US$43 million compared to Q4 19, and the cost of sales shrunk as well due to lower gas purchases. It is worth highlighting that the fuel trading accrues a minor margin contribution to the segment.
To a lesser extent, a fall in sales is also explained by the lack of inflation adjustment and AR$ depreciation over spot or legacy energy remuneration as of March 2020. Even though spot energy comprises 59% of the 4,955 MW operated by Pampa[9], in Q4 20 it represented 23% of the segment’s sales. SE Res. No. 31/20 modified spot remuneration to an AR$-nominated scheme from February 2020, stipulating a monthly inflation adjustment but halted until further notice. Moreover, said Res. established reductions to the power capacity pricing, though it remunerates an additional compensation for those units required during peak demand periods (HMRT power pricing) and also applies higher discount over the power capacity payment up to 40% for lower dispatch thermal units (CPB and CTG among Pampa’s most affected power plants). In Q4 20, the record low of legacy remuneration was registered: our spot thermal units priced a 41% lower power capacity compared to Q4 19, billing an average price of US$2.9 thousand per MW-month, whereas hydroelectric units decreased by 56% compared to Q4 19, accruing an average price of US$1.9 thousand per MW-month.
Besides, our Energía Plus segment recorded a 27% decrease in the sale prices in line with the activity downturn due to COVID-19, especially large users, a segment where Energía Plus customers are. However, lower gas costs as fuel allowed to maintain the contracts’ margin.
9 Under IFRS, CTEB (567 MW) and PEMC (100 MW) are affiliates; their results are not consolidated in the FS, but they are operated by Pampa and their EBITDA at our equity stake are included in Pampa’s adjusted EBITDA.
| Pampa Energía ● Q4 20 Earning Release ● 15 |
| |
The negative effects were partially offset by the steam turbine at CTGEBA, commissioned on July 2, 2020 (199 MW), which completed the second CCGT. The expansion is priced under PPA (SEE Res. No. 287/17 and Energía Plus). Higher sales in MAT ER and the gradual recovery of Plus contracts at CTG also contributed to a lesser extent.
The power generation operated by Pampa increased by 16% compared to Q4 19, exceeding the grid’s 7% growth, mainly due to a higher dispatch at CTGEBA’s second CCGT (+1,151 GWh), in addition to higher liquid fuel-fired generation at CTPP and CTIW to supply SADI’s exports (+52 GWh), higher water flows at HINISA and HIDISA (+51 GWh), higher wind generation at PEPE II and III because in Q4 19 certain windmills were under repair (+19 GWh), and a slight increase at CTLL’s CCGT dispatch (+17 GWh). These effects were partially offset by a lower dispatch at the following thermal units as a result of the centralization of gas procurement in CAMMESA and the higher supply from the most efficient units: CPB, CTG (worsened by the GT01 unit forced outage) and open-cycle gas turbines at CTLL and CTEB (-629 GWh). Moreover, there was lower water input at HPPL (-50 GWh), lower generation at EcoEnergía due to steam access limitation (-12 GWh).
In Q4 20, all power generation units operated by Pampa reached an average availability rate of 94.1%, lower than the 97.6% recorded in Q4 19, mainly due to overhauls at HINISA, programmed maintenance at CTEB and CTG’s GT01 unit forced outage in Q4 20, partially offset by the programmed maintenance at CTGEBA in Q4 19. Especially, thermal units recorded an availability of 93.4%, lower than the 97.3% recorded in Q4 19.
Net operating costs for Q4 20, excluding depreciations and amortizations, decreased by 53% compared to Q4 19, mainly because in Q4 19 gas purchases for fuel self-procurement captured 59% of the segment’s operating costs and 62% of the gas-fired for dispatch at our thermal power plants, whereas in Q4 20 the fuel procurement was centralized again in CAMMESA, thus own gas purchase was only for specific units with contracts, representing 39% of the segment’s operating costs and 30% of the consumption at our thermal power plants. Lower AR$-nominated expenses due to devaluation also explain the drop in operating expenses. These effects were partially offset by higher costs from the maintenance of new units, higher volume of energy purchase to cover Plus contracts (offset by lower price) and implementation of protocols and measures to mitigate the COVID-19 impact.
The segment’s depreciations and amortizations rose 37% year-on-year due to the commissioning of the CCGT at CTGEBA in July 2020.
| Pampa Energía ● Q4 20 Earning Release ● 16 |
| |
| Power
generation's key performance indicators |
Hydroelectric | Wind | Subtotal hydro +wind |
Thermal | Total | |||||||||||||||||
| HINISA | HIDISA | HPPL | PEMC1 | PEPE22 | PEPE32 | CTLL | CTG | CTP | CPB | CTPP | CTIW | CTGEBA3 | Eco- Energía |
CTEB4 | Subtotal | |||||||
| Installed capacity (MW) | 265 | 388 | 285 | 100 | 53 | 53 | 1,144 | 765 | 361 | 30 | 620 | 100 | 100 | 1,253 | 14 | 567 | 3,811 | 4,955 | ||||
| New capacity (MW) | - | - | - | 100 | 53 | 53 | 206 | 364 | 100 | 30 | - | 100 | 100 | 565 | 14 | 567 | 1,841 | 2,048 | ||||
| Market share | 0.6% | 0.9% | 0.7% | 0.2% | 0.1% | 0.1% | 2.7% | 1.8% | 0.9% | 0.1% | 1.5% | 0.2% | 0.2% | 3.0% | 0.03% | 1.4% | 9.1% | 11.8% | ||||
| Fiscal year | ||||||||||||||||||||||
| Net generation 2020 (GWh) | 481 | 323 | 742 | 409 | 207 | 243 | 2,404 | 4,406 | 368 | 55 | 576 | 193 | 229 | 7,912 | 72 | 255 | 14,065 | 16,470 | ||||
| Market share | 0.4% | 0.2% | 0.6% | 0.3% | 0.2% | 0.2% | 1.8% | 3.3% | 0.3% | 0.0% | 0.4% | 0.1% | 0.2% | 5.9% | 0.1% | 0.2% | 10.5% | 12.3% | ||||
| Sales 2020 (GWh) | 482 | 323 | 737 | 409 | 207 | 246 | 2,404 | 4,399 | 418 | 55 | 575 | 193 | 229 | 7,946 | 89 | 255 | 14,159 | 16,563 | ||||
| Net generation 2019 (GWh) | 499 | 334 | 823 | 383 | 122 | 148 | 2,309 | 5,096 | 755 | 53 | 1,106 | 168 | 312 | 5,550 | 105 | 128 | 13,273 | 15,582 | ||||
| Variation 2020 vs. 2019 | -4% | -3% | -10% | +7% | +70% | +64% | +4% | -14% | -51% | +4% | -48% | +15% | -27% | +43% | -32% | +98% | +6% | +6% | ||||
| Sales 2019 (GWh) | 500 | 334 | 822 | 383 | 130 | 159 | 2,328 | 5,307 | 893 | 53 | 1,107 | 168 | 312 | 5,891 | 83 | 125 | 13,938 | 16,266 | ||||
| Avg. price 2020 (US$/MWh) | 21 | 37 | 16 | 70 | 76 | 68 | 39 | 36 | 42 | 123 | 43 | na | 125 | 27 | 58 | na | 47 | 46 | ||||
| Avg. price 2019 (US$/MWh) | 38 | 58 | 23 | 69 | 61 | 71 | 44 | 53 | 45 | 113 | 62 | na | 107 | 46 | 63 | na | 60 | 58 | ||||
| Avg. gross margin 2020 (US$/MWh) | 8 | 20 | 7 | 62 | 65 | 65 | 29 | 33 | 13 | 90 | 12 | na | 100 | 17 | 19 | na | 36 | 35 | ||||
| Avg. gross margin 2019 (US$/MWh) | 23 | 42 | 15 | 59 | 52 | 62 | 33 | 30 | 26 | 75 | 23 | na | 80 | 17 | 10 | na | 32 | 32 | ||||
| Fourth quarter | ||||||||||||||||||||||
| Net generation Q4 20 (GWh) | 195 | 129 | 160 | 97 | 50 | 64 | 696 | 1,115 | 21 | 15 | 88 | 78 | 87 | 2,211 | 15 | 74 | 3,705 | 4,400 | ||||
| Market share | 0.6% | 0.4% | 0.5% | 0.3% | 0.1% | 0.2% | 2.0% | 3.2% | 0.1% | 0.0% | 0.3% | 0.2% | 0.2% | 6.3% | 0.0% | 0.2% | 10.6% | 12.6% | ||||
| Sales Q4 20 (GWh) | 196 | 129 | 161 | 97 | 52 | 64 | 700 | 1,113 | 64 | 15 | 88 | 78 | 87 | 2,183 | 25 | 74 | 3,727 | 4,427 | ||||
| Net generation Q4 19 (GWh) | 163 | 110 | 210 | 99 | 44 | 52 | 678 | 1,142 | 178 | 15 | 510 | 29 | 85 | 1,061 | 27 | 80 | 3,127 | 3,805 | ||||
| Variation Q4 20 vs. Q4 19 | +20% | +17% | -24% | -2% | +13% | +24% | +3% | -2% | -88% | -4% | -83% | na | +3% | +108% | -45% | -8% | +18% | +16% | ||||
| Sales Q4 19 (GWh) | 163 | 110 | 210 | 99 | 48 | 64 | 694 | 1,142 | 183 | 15 | 510 | 29 | 77 | 1,159 | 9 | 76 | 3,203 | 3,897 | ||||
| Avg. price Q4 20 (US$/MWh) | 12 | 20 | 14 | 71 | 80 | 67 | 32 | 34 | 65 | 113 | 53 | 120 | 88 | 31 | 57 | na | 48 | 46 | ||||
| Avg. price Q4 19 (US$/MWh) | 27 | 43 | 22 | 70 | 68 | 56 | 40 | 55 | 47 | 86 | 46 | na | 117 | 43 | na | na | 66 | 62 | ||||
| Avg. gross margin Q4 20 (US$/MWh) | (1) | 6 | 6 | 61 | 67 | 67 | 22 | 31 | (4) | 85 | (5) | 97 | 75 | 20 | 12 | na | 35 | 33 | ||||
| Avg. gross margin Q4 19 (US$/MWh) | 14 | 29 | 15 | 57 | 59 | 50 | 29 | 32 | 23 | 42 | 13 | na | 80 | 13 | 58 | na | 37 | 36 | ||||
Note: Gross margin before amortization and depreciation. 1 Operated by Pampa (50% of equity stake). 2 Commissioned on May 10, 2019. 3 Capacity increase of GT03 and commissioning of GT04 as from June 2019. Commissioning of ST02 as of July 2, 2020. 4 Pampa is the operator and holds a 50% equity stake from June 26, 2019.
| Pampa Energía ● Q4 20 Earning Release ● 17 |
| |
The Q4 20 financial results amounted to a net loss of US$29 million, US$21 million more than Q4 19, mainly due to lower gain from the holding of financial instruments and higher financial expenses allocated to the segment. Lower FX losses partially offset the effects because a profit previously recorded in Q3 19 from an AR$-nominated intercompany with holding and others segment was reversed in Q4 2019.
In Q4 20, our power generation’s adjusted EBITDA increased by 13% to US$121 million, mainly due to the commissioning of the second CCGT at CTGEBA, higher sales in MAT ER and dilution of AR$-nominated costs due to devaluation effect, partially offset by lower remuneration for spot energy, lower sale prices at Energía Plus and higher operating and maintenance costs due to the increasing number of units, the volume of energy purchases and protocols due to COVID-19. The adjusted EBITDA considers our proportional 50% stake of CTEB (CTBSA), contributing US$21 million in both Q4 20 and Q4 19, and a 50% stake of PEMC (Greenwind) EBITDA, adding US$3 million in both Q4 20 and Q4 19. Moreover, the adjusted EBITDA excludes the recognition of commercial interests from delayed payments, mostly charged to CAMMESA, for US$6 million in Q4 20 and US$3 million in Q4 19.
Finally, investments in PPE and intangibles in Q4 20 decreased by 84% compared to the same period in 2019, mainly explained by the completion of CTGEBA’s CCGT.
Regarding our expansion projects, the following table shows the status summary:
| Project | MW | Marketing | Currency | Awarded price | Estimated capex in US$ million1 |
Date of commissioning | ||||
| Capacity per MW-month |
Variable per MWh |
Total per MWh |
Budget | % Executed @12/31/21 | ||||||
| Loma de la Lata | 15 | SE Res. No. 31/20 | AR$ | 162,000 - 427,500(2) | 324 | 728 | 20 | 97% | Q2 2021 (est.) | |
| Closing to CCGT Genelba Plus | 400 | PPA for 15 years | US$ | 20,500 | 6 | 34 | 350 | 90% | OC: June 12, 2019(3) CC: July 2, 2020 | |
| Closing to CCGT Ensenada | 280 | PPA for 10 years | US$ | 23,962 | 10.5 | 43 | 200 | 19% | Q1 2022 (est.) | |
Note: 1 Amount
without value-added tax. 2 It considers the range of load factor coefficient and the HMRT additional remuneration.
3 201 MW were remunerated under spot energy until July 1, 2020.
| Pampa Energía ● Q4 20 Earning Release ● 18 |
| |
| 3.2 | Analysis of the electricity distribution segment |
On December 28, 2020, we agreed to sell our controlling stake in Edenor[10]. Consequently, under IFRS, the electricity distribution segment is deconsolidated from Pampa’s FS and shown as discontinued operations for the current and comparative periods. The results of the discontinued electricity distribution segment are shown below:
| Electricity distribution segment, discontinued Figures in US$ million |
Fiscal year | Fourth quarter | ||||||
| 2020 | 2019 | ∆% | 2020 | 2019 | ∆% | |||
| Sales revenue | 1,085 | 1,502 | -28% | 220 | 385 | -43% | ||
| Cost of sales | (926) | (1,225) | -24% | (200) | (336) | -40% | ||
| Gross profit | 159 | 277 | -43% | 20 | 49 | -59% | ||
| Selling expenses | (129) | (122) | +6% | (32) | (35) | -9% | ||
| Administrative expenses | (64) | (65) | -2% | (23) | (21) | +10% | ||
| Other operating income | 29 | 19 | +53% | 9 | 1 | NA | ||
| Other operating expenses | (25) | (43) | -42% | (9) | (11) | -18% | ||
| Impairment of PPE and intangible assets | (589) | - | NA | (589) | - | NA | ||
| Effect from regularization of liabilities | - | 285 | -100% | - | 19 | -100% | ||
| Operating income (loss) | (619) | 351 | NA | (624) | 2 | NA | ||
| RECPAM | 115 | 187 | -39% | 36 | 39 | -8% | ||
| Finance income | 1 | 11 | -91% | 1 | 10 | -90% | ||
| Finance costs | (110) | (112) | -2% | (39) | (40) | -3% | ||
| Other financial results | (20) | (62) | -68% | 1 | (9) | NA | ||
| Profit (loss) before tax | (633) | 375 | NA | (625) | 2 | NA | ||
| Income tax | 41 | (178) | NA | 56 | (22) | NA | ||
| Net income (loss) for discontinued operations | (592) | 197 | NA | (569) | (20) | NA | ||
| Net income (loss) for the period | (592) | 197 | NA | (569) | (20) | NA | ||
| Attributable to owners of the Company | (499) | 98 | NA | (487) | (15) | NA | ||
| Attributable to non-controlling interests | (93) | 99 | NA | (82) | (5) | NA | ||
| Adjusted EBITDA, discontinued | 51 | 157 | -68% | (16) | 8 | NA | ||
| Adjusted EBITDA at our share ownership | 28 | 84 | -67% | (9) | 4 | NA | ||
| Increases in PPE, intangible and right-of-use assets | 135 | 173 | -22% | 40 | 48 | -17% | ||
| Depreciation and amortization | 81 | 79 | +3% | 19 | 25 | -24% | ||
The distribution segment’s adjusted EBITDA posted a US$16 million loss in Q4 20, US$24 lower than Q4 19, mainly due to the lack of inflation adjustment on the distribution added value (VAD) from March 2019, higher labor and contractors costs, rise in bad debts impacted by COVID-19 and lower non-residential electricity consumption. Moreover, seasonal prices for electricity purchases destined to non-residential users, effective as of August 2019, are still not reflected in the tariff schemes. These effects were partially offset by lower costs related to energy losses, the higher electricity demand of residential clients, lower penalties due to quality service improvement and lower material consumption.
10 For further information, see section 1.4 of this Earnings Release.
| Pampa Energía ● Q4 20 Earning Release ● 19 |
| |
The operating performance of Edenor is shown below:
| Edenor's key performance indicators |
2020 | 2019 | Variation | ||||||||
| In GWh | Part. % | Clients | In GWh | Part. % | Clients | % GWh | % Clients | ||||
| Fiscal year | |||||||||||
| Residential1 | 9,315 | 46% | 2,786,153 | 8,372 | 42% | 2,758,162 | +11% | +1% | |||
| Commercial | 2,950 | 15% | 358,140 | 3,241 | 16% | 353,113 | -9% | +1% | |||
| Industrial | 3,210 | 16% | 6,860 | 3,503 | 18% | 6,830 | -8% | +0% | |||
| Wheeling system | 3,364 | 17% | 687 | 3,569 | 18% | 684 | -6% | +0% | |||
| Others | |||||||||||
| Public lighting | 676 | 3% | 21 | 713 | 4% | 21 | -5% | - | |||
| Shantytowns and others | 664 | 3% | 482 | 575 | 3% | 469 | +16% | +3% | |||
| Total | 20,179 | 100% | 3,152,343 | 19,974 | 100% | 3,119,279 | +1% | +1% | |||
| Fourth quarter | |||||||||||
| Residential1 | 2,020 | 43% | 2,786,153 | 1,868 | 39% | 2,758,162 | +8% | +1% | |||
| Commercial | 718 | 15% | 358,140 | 803 | 17% | 353,113 | -11% | +1% | |||
| Industrial | 821 | 17% | 6,860 | 883 | 19% | 6,830 | -7% | +0% | |||
| Wheeling system | 911 | 19% | 687 | 913 | 19% | 684 | -0% | +0% | |||
| Others | |||||||||||
| Public lighting | 148 | 3% | 21 | 155 | 3% | 21 | -4% | - | |||
| Shantytowns and others | 134 | 3% | 482 | 124 | 3% | 469 | +8% | +3% | |||
| Total | 4,752 | 100% | 3,152,343 | 4,745 | 100% | 3,119,279 | +0% | +1% | |||
Note: 1 It includes 558,067 and 561,915 clients categorized under Social Tariff as of December 31, 2020 and 2019, respectively.
| 3.3 | Analysis of the oil and gas segment |
| Oil & gas segment, consolidated Figures in US$ million |
Fiscal year | Fourth quarter | ||||||
| 2020 | 2019 | ∆% | 2020 | 2019 | ∆% | |||
| Sales revenue | 294 | 448 | -34% | 68 | 98 | -31% | ||
| Cost of sales | (243) | (313) | -22% | (58) | (81) | -28% | ||
| Gross profit | 51 | 135 | -62% | 10 | 17 | -41% | ||
| Selling expenses | (28) | (12) | +133% | (2) | (5) | -60% | ||
| Administrative expenses | (42) | (47) | -11% | (10) | (15) | -33% | ||
| Exploration expenses | - | (9) | -100% | - | (5) | -100% | ||
| Other operating income | 9 | 5 | +80% | 3 | 1 | +200% | ||
| Other operating expenses | (17) | (11) | +55% | (6) | (3) | +100% | ||
| Results for participation in joint businesses | (5) | 21 | NA | (1) | - | NA | ||
| Impairment of PPE | - | (10) | -100% | - | (10) | -100% | ||
| Operating income (loss) | (32) | 72 | NA | (6) | (20) | -70% | ||
| Finance income | 7 | 17 | -59% | 2 | 2 | - | ||
| Finance costs | (100) | (94) | +6% | (18) | (28) | -36% | ||
| Other financial results | 44 | 89 | -51% | 23 | 42 | -45% | ||
| Profit (loss) before tax | (81) | 84 | NA | 1 | (4) | NA | ||
| Income tax | 23 | (16) | NA | - | 4 | -100% | ||
| Net income (loss) for the period | (58) | 68 | NA | 1 | - | NA | ||
| Adjusted EBITDA | 90 | 173 | -48% | 19 | 20 | -7% | ||
| Increases in PPE and intangible assets | 42 | 191 | -78% | 7 | 46 | -84% | ||
| Depreciation and amortization | 108 | 112 | -4% | 25 | 30 | -17% | ||
In Q4 20, sales from our oil and gas segment decreased by 31% compared to Q4 19, mainly explained by the drop of gas and oil sale prices charged to the demand (US$16 million impact), lower gas exports, a reduction in hydrocarbons production and lower gas trading with third-parties. These effects were partially offset by a higher volume of gas sold to CAMMESA.
| Pampa Energía ● Q4 20 Earning Release ● 20 |
| |
Our accrued gas average sale price was US$2.1/MBTU in Q4 20, 17% lower than the US$2.6/MBTU recorded in Q4 19, mainly explained by lesser exports to Chile (resumed in December 2020[11]), and marginal exposure to the residential segment (which pays higher but in AR$ and bears a riskier credit). The lower gas prices are also imposed by CAMMESA through its tenders, affecting the spot/industries clients, highly correlated to CAMMESA, worsened by the lockdown and the economic crisis. Moreover, lower sale prices are collected due to the off-peak seasonality of gas and electricity between October and November. Thus, CAMMESA awarded average indicative prices of US$2.0/MBTU for Neuquina Basin, a trend that was also observed in the spot market. With the beginning of the peak period in December, CAMMESA recognized in its tender an average price of US$2.5/MBTU for Neuquina Basin.
It is worth highlighting that in Q4 20, 52% of our gas was delivered to CAMMESA, 40% fired at our thermal units (Energía Plus and SEE Res. No. 287/17) and consumed as raw material for our petrochemical plants, and the remaining to spot/industries and exports.
Our oil and gas segment production registered 43.7 kboe/day in operating terms, 8% lower than Q4 19 and 7% lower than Q3 20. Gas production reached 236 mcf/day, 8% lower than Q3 20 due to the end of the winter season, and 8% lower than Q4 19, in line with demand contraction since the lockdown, the collapse in prices and the delay exports shipments, that adjusted downward to moderate the production curtailment. This situation affected our blocks where lifting cost is less competitive: Rincón del Mangrullo and Río Neuquén reduced their production due to lesser drilling and natural decline (-24 mcf/day year-on-year and –6 mcf/day quarter-on-quarter), in addition to a slight decrease at Sierra Chata (-4 mcf/day year-on-year and –0.8 mcf/day quarter-on-quarter). The lower production was partially offset by a year-on-year increase at El Mangrullo (+9 mcf/day), though it was lower than Q3 20 (-14 mcf/day), a quarter that registered the highest production record. In said block, evacuation infrastructure was expanded in line with its productivity and upside potential, recording production of 160 mcf/day in Q4 20 and comprising 68% of our total gas production. Moreover, in Q4 20 4% of Pampa’s gas production came from the Vaca Muerta formation due to the completion of two horizontal wells at El Mangrullo in August 2019.
Oil
production reached 4.3 kbbl/day in Q4 20, 13% lower than Q4 19, mainly explained by the demand fall since the mandatory lockdown,
thus lower market prices affecting production at El Tordillo
(-0.5 kbbl/day), in addition to a slight decrease at Rincón de Aranda, Gobernador Ayala and associated oil from Río
Neuquén (-0.4 kbbl/day), partially offset by conventional oil contribution from Los Blancos (+0.2 kbbl/day)[12].
Compared to Q3 20, production increased 6% (+0.2 kbbl/day) due to better prices correlated with the increase in the international
Brent reference and a gradual recovery of demand, but still below 2019 consumption levels.
Our accrued oil average sale price in Q4 20 was US$41.3/barrel, 18% lower than Q4 19, mainly explained by the drop in international reference prices and domestic demand due to COVID-19. To moderate the impact, we started exporting oil in 2020, covering most of the production. However, the gradual recovery of local consumption resumed sales to the domestic market. Besides, it is worth highlighting that in Q4 19 crude oil prices were negatively affected by SGE measures fixing FX for oil traded prices in the domestic market.
11 For further information, see Section 1.1 of this Earnings Release.
12 On October 15, 2020, the exploitation concession for the lot Los Blancos was granted for 25 years, relinquishing the exploration license over the remaining area of Chirete block.
| Pampa Energía ● Q4 20 Earning Release ● 21 |
| |
| Oil and gas' key performance indicators |
2020 | 2019 | Variation | |||||||||
| Oil | Gas | Total | Oil | Gas | Total | Oil | Gas | Total | ||||
| Fiscal year | ||||||||||||
| Volume | ||||||||||||
| Production | ||||||||||||
| In thousand m3/day | 0.7 | 6,902 | 0.8 | 7,344 | -11% | -6% | -7% | |||||
| In million cubic feet/day | 244 | 259 | ||||||||||
| In thousand boe/day | 4.4 | 40.6 | 45.0 | 5.0 | 43.2 | 48.2 | ||||||
| Sales | ||||||||||||
| In thousand m3/day | 0.7 | 7,190 | 0.8 | 8,367 | -10% | -14% | -14% | |||||
| In million cubic feet/day | 254 | 295 | ||||||||||
| In thousand boe/day | 4.6 | 42.3 | 46.9 | 5.1 | 49.2 | 54.3 | ||||||
| Average Price | ||||||||||||
| In US$/bbl | 39.0 | 53.1 | -26% | -25% | ||||||||
| In US$/MBTU | 2.2 | 3.0 | ||||||||||
| Fourth quarter | ||||||||||||
| Volume | ||||||||||||
| Production | ||||||||||||
| In thousand m3/day | 0.7 | 6,683 | 0.8 | 7,257 | -13% | -8% | -8% | |||||
| In million cubic feet/day | 236 | 256 | ||||||||||
| In thousand boe/day | 4.3 | 39.3 | 43.7 | 5.0 | 42.7 | 47.7 | ||||||
| Sales | ||||||||||||
| In thousand m3/day | 0.7 | 6,772 | 0.8 | 8,524 | -3% | -21% | -19% | |||||
| In million cubic feet/day | 239 | 301 | ||||||||||
| In thousand boe/day | 4.7 | 39.9 | 44.5 | 4.8 | 50.2 | 55.0 | ||||||
| Average Price | ||||||||||||
| In US$/bbl | 41.3 | 50.3 | -18% | -17% | ||||||||
| In US$/MBTU | 2.1 | 2.6 | ||||||||||
Note: Net production in Argentina. Gas volume standardized at 9,300 kilocalories (kCal).
As of December 31, 2020, we accounted for 858 productive wells, 27 less than December 31, 2019. Moreover, Pampa’s proven reserves by the end of 2020 fiscal year amounted to 142 million boe, 5% higher than 2019’s end of the year, mainly due to the better production performance and wells recovery factor at El Mangrullo, and to a lesser extent, the new exploitation concession of Los Blancos. Besides, we recorded shale reserves from the Vaca Muerta formation 2.5 times higher than the volume certified in 2019. Considering the production levels and additional reserves achieved in 2020, the replacement ratio amounted to 1.4 and the average reserve life increased by 11% to 8.6 years approximately.
| Pampa Energía ● Q4 20 Earning Release ● 22 |
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Net operating costs in Q4 20, excluding depreciations and amortizations, decreased 38% year-on-year, mainly because of lower gas purchases to third-parties for trading, driven by the demand’s collapse and the gas procurement in CAMMESA. The downward activity and prices translated into lower third-party and contractor fees, exploration expenses, royalties and taxes, and lesser gas transportation expenses explained by reduced exports (resumed in December 2020). Moreover, the better productivity at El Mangrullo and the dilution of AR$-nominated costs resulting from devaluation also contributed to reducing the operating costs. Higher expenses partially offset these effects due to the execution of COVID-19 protocols. Quarter-on-quarter, net operating expenses decreased 17% mainly because of the impairment on gas distributors receivables for US$13 million made in Q3 20 (excluded at the adjusted EBITDA), and to a lesser extent, off-peak effect in Q4 20, reducing gas production, royalties and taxes due to lower prices. These were partially offset by minor increases in oil production and price. In particular, in Q4 20, the lifting cost[13] reached US$6.0 per produced boe, 34% lower than the US$9.1 per boe recorded in Q4 19 but 9% higher quarter-on-quarter.
In Q4 20, financial results registered a net profit of US$7 million, US$9 million lower than Q4 19, mainly due to lower gains from the holding of financial instruments and FX losses from the higher active net monetary position in AR$ allocated to this segment. These effects were partially offset by lower financial expenses allocated to this segment.
Our oil and gas’ adjusted EBITDA amounted to US$19 million in Q4 20, 7% lower than Q4 19 but similar in absolute terms, mainly due to the collapse of sale prices and demand contraction as a result of the lockdown. These were partially offset by lower costs related to the activity downturn, lower royalties, better productivity at El Mangrullo and the devaluation effect on AR$-nominated expenses. The adjusted EBITDA in Q4 20 excludes the recognition of commercial interests due to collection delays, mostly charged to CAMMESA, for US$2 million.
Finally, the segment’s investment decreased by 84% vs. Q4 19, explained by the uncertain business context and the COVID-19 impact on our activities. In Q4 19, two horizontal shale gas wells were drilled at Sierra Chata block and one horizontal shale oil well was completed at Rincón de la Aranda.
13 Metric equivalent to cost of sales excluding purchase and inventory, royalties, direct taxes and depreciations and amortizations.
| Pampa Energía ● Q4 20 Earning Release ● 23 |
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| 3.4 | Analysis of the petrochemicals segment |
| Petrochemicals segment, consolidated Figures in US$ million |
Fiscal year | Fourth quarter | ||||||
| 2020 | 2019 | ∆% | 2020 | 2019 | ∆% | |||
| Sales revenue | 265 | 321 | -17% | 86 | 81 | +6% | ||
| Cost of sales | (233) | (298) | -22% | (72) | (78) | -8% | ||
| Gross profit | 32 | 23 | +39% | 14 | 3 | NA | ||
| Selling expenses | (8) | (9) | -11% | (3) | (3) | - | ||
| Administrative expenses | (3) | (4) | -25% | - | (1) | -100% | ||
| Other operating income | 2 | 5 | -60% | - | 1 | -100% | ||
| Other operating expenses | (6) | (9) | -33% | (2) | (2) | - | ||
| Impairment of inventories | (11) | - | NA | - | - | NA | ||
| Operating income (loss) | 6 | 6 | - | 9 | (2) | NA | ||
| Finance costs | (3) | (8) | -63% | (1) | 4 | NA | ||
| Other financial results | 5 | 18 | -72% | (1) | 11 | NA | ||
| Profit (loss) before tax | 8 | 16 | -50% | 7 | 13 | -46% | ||
| Income tax | (2) | (5) | -60% | (2) | (4) | -50% | ||
| Net income (loss) for the period | 6 | 11 | -45% | 5 | 9 | -44% | ||
| Adjusted EBITDA | 19 | 6 | +201% | 10 | (2) | NA | ||
| Increases in PPE and intangible assets | 3 | 4 | -28% | 2 | 2 | -20% | ||
| Depreciation and amortization | 2 | 1 | +100% | 1 | - | NA | ||
The adjusted EBITDA of the petrochemicals segment amounted to a US$10 million gain in Q4 20, US$12 million higher than Q4 19, mainly explained by higher sales volume and international spread of styrene, as well as lower raw material costs (gas and virgin naphtha), and to a lesser extent, the dilution of AR$-nominated operating expenses due to devaluation. Lower international reference prices partially offset these effects.
Total volume sold increased by 18% compared to Q4 19, explained by higher exports of SBR to Brazil, a higher volume of styrene and polystyrene sold in the domestic market as a result of the industry recovery and the lockdown easing, and higher exports of reforming products, which was partially offset by a lower volume of octane bases in the domestic market driven by lower gasoline demand due to the lockdown.
| Pampa Energía ● Q4 20 Earning Release ● 24 |
| |
The amounts corresponding to Pampa are shown below:
| Petrochemicals' key performance indicators |
Products | Total | ||||
| Styrene & polystyrene1 | SBR | Others | ||||
| Fiscal year | ||||||
| Volume sold 2020 (thousand ton) | 94 | 37 | 205 | 337 | ||
| Volume sold 2019 (thousand ton) | 99 | 27 | 217 | 343 | ||
| Variation 2020 vs. 2019 | -5% | +39% | -6% | -2% | ||
| Average price 2020 (US$/ton) | 1,195 | 1,302 | 503 | 786 | ||
| Average price 2019 (US$/ton) | 1,319 | 1,623 | 673 | 934 | ||
| Variation 2020 vs. 2019 | -9% | -20% | -25% | -16% | ||
| Fourth quarter | ||||||
| Volume sold Q4 20 (thousand ton) | 29 | 11 | 68 | 107 | ||
| Volume sold Q4 19 (thousand ton) | 28 | 7 | 56 | 91 | ||
| Variation Q4 20 vs. Q4 19 | +3% | +60% | +21% | +18% | ||
| Average price Q4 20 (US$/ton) | 1,252 | 1,401 | 506 | 795 | ||
| Average price Q4 19 (US$/ton) | 1,262 | 1,529 | 639 | 897 | ||
| Variation Q4 20 vs. Q4 19 | -1% | -8% | -21% | -11% | ||
Note: 1 It includes Propylene.
The financial results registered a US$2 million net loss in Q4 20, whereas in Q4 19, a US$15 million net gain was recorded, mainly due to contingencies recovery in Q4 19.
The investments in the segment remained similar in absolute terms, decreasing only US$0.4 million to US$1.6 million in Q4 20.
| 3.5 | Analysis of the holding and others segment |
| Holding and others segment, consolidated Figures in US$ million |
Fiscal year | Fourth quarter | ||||||
| 2020 | 2019 | ∆% | 2020 | 2019 | ∆% | |||
| Sales revenue | 20 | 20 | - | 3 | 6 | -50% | ||
| Gross profit | 20 | 20 | - | 3 | 6 | -50% | ||
| Selling expenses | - | (2) | -100% | - | - | NA | ||
| Administrative expenses | (18) | (22) | -18% | (4) | (5) | -20% | ||
| Other operating income | 10 | 11 | -9% | 5 | 4 | +25% | ||
| Other operating expenses | (7) | (12) | -42% | - | (4) | -100% | ||
| Results for participation in joint businesses | 23 | 67 | -66% | (10) | 24 | NA | ||
| Operating income (loss) | 28 | 62 | -55% | (6) | 25 | NA | ||
| Finance income | 1 | 5 | -80% | - | - | NA | ||
| Finance costs | (3) | (4) | -25% | (1) | (2) | -50% | ||
| Other financial results | 34 | (18) | NA | 12 | 7 | +71% | ||
| Profit (loss) before tax | 60 | 45 | +33% | 5 | 30 | -83% | ||
| Income tax | (23) | 231 | NA | (7) | 22 | NA | ||
| Net income for the period | 37 | 276 | -87% | (2) | 52 | NA | ||
| Adjusted EBITDA | 127 | 145 | -12% | 34 | 44 | -24% | ||
| Adjusted EBITDA at our share ownership | 127 | 145 | -12% | 34 | 44 | -24% | ||
| Increases in PPE and intangible assets | 2 | 3 | -22% | 1 | - | NA | ||
| Depreciation and amortization | - | - | NA | - | - | NA | ||
| Pampa Energía ● Q4 20 Earning Release ● 25 |
| |
In the holding and others segment, without considering the equity income from affiliates (Transener, TGS and Refinor), a positive operating margin of US$4 million was recorded during Q4 20, which represented a US$3 million improvement compared to Q4 19, mainly explained by lower contingencies and fiscal credits, partially offset by lower fees.
During Q4 20, a US$6 million improvement was recorded in the financial results compared to Q4 19, reaching a net gain of US$11 million, mainly due to lower losses from the fair valuation of certain fiscal credits and higher FX gain from the increase in net passive monetary position in AR$. These effects were partially offset by a profit recorded in Q4 19 from reversing FX losses, which were previously accrued in Q3 19 from an inter-company with the power generation segment.
The adjusted EBITDA of our holding and others segment in Q4 20 decreased by 24%, reaching US$34 million. The adjusted EBITDA excludes equity income from our participation in TGS, Transener and Refinor, and in turn, adds the EBITDA adjusted by equity ownership in these businesses. Moreover, adjusted EBITDA excludes commercial interests.
The EBITDA adjusted by our direct and indirect ownership of 27.7% and 27.2% in TGS were US$25 million (implicit total of US$90 million) in Q4 20 and US$31 million (implicit total of US$115 million) in Q4 19, respectively. The decrease of total adjusted EBITDA was mainly due to the tariff lag compared to inflation. The semiannual Wholesale Domestic Price Index (PPI) adjustment of 29%, 21% and 12% are pending, which should have been applied in October 2019 and April and October 2020, respectively, according to the RTI. Moreover, it was affected by the FX depreciation over AR$-nominated regulated revenues (offset by lower AR$-nominated expenses), lower export volume and lower international prices of liquids as a result of COVID-19. These effects were partially offset by the FX depreciation effect over US$-nominated revenues, in addition to lower natural gas cost (in terms of volume and price), and to a lesser extent, a higher volume of liquified petroleum gas (LPG) and ethane traded in the domestic market, and the increase of midstream revenues from higher natural gas transportation and conditioning service in Vaca Muerta.
In Transener, the EBITDA adjusted by our indirect stake ownership of 26.3% in Q4 20 amounted to US$5 million (implicit total of US$19 million) and US$11 million (implicit total of US$42 million) in Q4 19, mainly due to the tariff freeze (pending adjustments of 26% as from February and 12% as from August 2020) which, in an inflationary scenario, harms Transener’s AR$-nominated regulated revenues. The lack of tariffs is worsened by the AR$ devaluation over revenues, though offset by lower AR$-nominated expenses.
In Refinor, the EBITDA adjusted by our stake ownership of 28.5% in Q4 20 recorded a marginal amount, whereas a gain of US$2 million (implicit total of US$5 million) was recorded in Q4 19, mainly explained by the lockdown effect on the refining business, which implied a decline of demand and the dilution on prices, partially offset by lower crude oil costs, which is the primary raw material for the refinery, even though in 2019 the SGE measure to fix FX rate for domestic trading prices was in force.
| Pampa Energía ● Q4 20 Earning Release ● 26 |
| |
| 3.6 | Analysis of the fiscal year, by subsidiary and segment |
| Subsidiary In US$ million |
Fiscal year 2020 | Fiscal year 2019 | |||||||
| % Pampa | Adjusted EBITDA | Net debt3 | Net income4 | % Pampa | Adjusted EBITDA | Net debt3 | Net income4 | ||
| Power generation segment | |||||||||
| Diamante | 61.0% | 6 | (2) | (4) | 61.0% | 12 | (26) | 10 | |
| Los Nihuiles | 52.0% | 4 | (10) | (16) | 52.0% | 11 | (32) | 14 | |
| CPB1 | 100.0% | - | - | - | 100.0% | 27 | 57 | 20 | |
| Greenwind | 24 | 90 | 5 | 22 | 106 | (1) | |||
| Non-controlling stake adjustment | (12) | (45) | (3) | (11) | (53) | 0 | |||
| Subtotal Greenwind adjusted by ownership | 50.0% | 12 | 45 | 3 | 50.0% | 11 | 53 | (0) | |
| CTBSA | 165 | 202 | 129 | 80 | 287 | 40 | |||
| Non-controlling stake adjustment | (83) | (101) | (65) | (40) | (144) | (20) | |||
| Subtotal CTBSA adjusted by ownership | 50.0% | 83 | 101 | 65 | 50.0% | 40 | 144 | 20 | |
| Pampa stand-alone, other companies, adjs. & deletions2 | 100.0% | 358 | 465 | 100 | 100% | 332 | 388 | 175 | |
| Subtotal power generation | 462 | 598 | 147 | 434 | 583 | 239 | |||
| Oil & gas segment | |||||||||
| OldelVal | 55 | (10) | 26 | 47 | (9) | 29 | |||
| Non-controlling stake adjustment | (54) | 9 | (25) | (46) | 9 | (28) | |||
| Subtotal OldelVal adjusted by ownership | 2.1% | 1 | (0) | 1 | 2.1% | 1 | (0) | 1 | |
| Pampa stand-alone, other companies, adjs. & deletions2 | 100.0% | 89 | 744 | (59) | 100% | 172 | 889 | 67 | |
| Subtotal oil & gas | 90 | 744 | (58) | 173 | 888 | 68 | |||
| Petrochemicals segment | |||||||||
| Pampa Energía | 100.0% | 19 | - | 6 | 100.0% | 6 | - | 11 | |
| Subtotal petrochemicals | 19 | - | 6 | 6 | - | 11 | |||
| Holding & others segment | |||||||||
| Transener | 102 | (9) | 49 | 151 | 23 | 67 | |||
| Non-controlling stake adjustment | (75) | 6 | (36) | (111) | (17) | (49) | |||
| Subtotal Transener adjusted by ownership | 26.3% | 27 | (2) | 13 | 26.3% | 40 | 6 | 18 | |
| TGS | 356 | 406 | 39 | 392 | 341 | 214 | |||
| Non-controlling stake adjustment | (257) | (294) | (28) | (285) | (248) | (156) | |||
| Subtotal TGS adjusted by ownership | 27.7% | 99 | 113 | 11 | 27.2% | 106 | 93 | 58 | |
| Refinor | (4) | 27 | (8) | 20 | 14 | (2) | |||
| Non-controlling stake adjustment | 3 | (19) | 6 | (14) | (10) | 1 | |||
| Subtotal Refinor adjusted by ownership | 28.5% | (1) | 8 | (2) | 28.5% | 6 | 4 | (1) | |
| Pampa stand-alone, other companies, adjs. & deletions2 | 100% | 3 | (48) | 15 | 100% | (7) | (43) | 201 | |
| Subtotal holding & others | 127 | 70 | 37 | 145 | 59 | 276 | |||
| Deletions | 100% | - | (263) | - | 100% | - | (299) | - | |
| Total consolidated, continuing operations | 699 | 1,148 | 132 | 758 | 1,232 | 594 | |||
| At our share ownership | 695 | 1,416 | 132 | 748 | 1,557 | 594 | |||
| Discontinued operations | |||||||||
| Edenor | 55.1% | 51 | 21 | (210) | 54.4% | 159 | 111 | 203 | |
| Adjustments & deletions2 | 100% | (0) | (21) | (289) | 100% | (2) | (0) | (105) | |
| Subtotal electricity distribution | 51 | - | (499) | 157 | 111 | 98 | |||
| Total consolidated, continuing and discontinued operations | 750 | 1,148 | (367) | 915 | 1,343 | 692 | |||
| At our share ownership | 723 | 1,416 | (367) | 832 | 1,617 | 692 | |||
Note:
1 Absorbed by Pampa from January 1, 2020. 2 The deletions correspond to other companies or inter-companies or debt
repurchases. 3 Figures in nominal terms. Net debt includes holding companies. 4 Attributable to the owners of the
company.
| Pampa Energía ● Q4 20 Earning Release ● 27 |
| |
| 3.7 | Analysis of the quarter, by subsidiary and segment |
| Subsidiary In US$ million |
Fourth quarter 2020 | Fourth quarter 2019 | |||||||
| % Pampa | Adjusted EBITDA | Net debt3 | Net income4 | % Pampa | Adjusted EBITDA | Net debt3 | Net income4 | ||
| Power generation segment | |||||||||
| Diamante | 61.0% | 1 | (2) | (6) | 61.0% | 3 | (26) | 6 | |
| Los Nihuiles | 52.0% | (0) | (10) | (11) | 52.0% | 3 | (32) | 11 | |
| CPB1 | 100.0% | - | - | - | 100.0% | 7 | 57 | (8) | |
| Greenwind | 6 | 90 | 1 | 6 | 106 | (2) | |||
| Non-controlling stake adjustment | (3) | (45) | (1) | (3) | (53) | 1 | |||
| Subtotal Greenwind adjusted by ownership | 50.0% | 3 | 45 | 1 | 50.0% | 3 | 53 | (1) | |
| CTBSA | 42 | 202 | 59 | 41 | 287 | 33 | |||
| Non-controlling stake adjustment | (21) | (101) | (30) | (21) | (144) | (16) | |||
| Subtotal CTBSA adjusted by ownership | 50.0% | 21 | 101 | 30 | 50.0% | 21 | 144 | 16 | |
| Pampa stand-alone, other companies, adjs. & deletions2 | 100.0% | 97 | 465 | 7 | 100% | 70 | 388 | (62) | |
| Subtotal power generation | 121 | 598 | 20 | 107 | 583 | (38) | |||
| Oil & gas segment | |||||||||
| OldelVal | 13 | (10) | 2 | 13 | (9) | 7 | |||
| Non-controlling stake adjustment | (13) | 9 | (2) | (13) | 9 | (7) | |||
| Subtotal OldelVal adjusted by ownership | 2.1% | 0 | (0) | 0 | 2.1% | 0 | (0) | 0 | |
| Pampa stand-alone, other companies, adjs. & deletions2 | 100.0% | 18 | 744 | 1 | 100% | 20 | 889 | (0) | |
| Subtotal oil & gas | 19 | 744 | 1 | 20 | 888 | - | |||
| Petrochemicals segment | |||||||||
| Pampa Energía | 100.0% | 10 | - | 5 | 100.0% | (2) | - | 9 | |
| Subtotal petrochemicals | 10 | - | 5 | (2) | - | 9 | |||
| Holding & others segment | |||||||||
| Transener | 19 | (9) | 6 | 42 | 23 | 23 | |||
| Non-controlling stake adjustment | (14) | 6 | (4) | (31) | (17) | (17) | |||
| Subtotal Transener adjusted by ownership | 26.3% | 5 | (2) | 1 | 26.3% | 11 | 6 | 6 | |
| TGS | 90 | 406 | (42) | 115 | 341 | 82 | |||
| Non-controlling stake adjustment | (65) | (294) | 30 | (84) | (248) | (60) | |||
| Subtotal TGS adjusted by ownership | 27.7% | 25 | 113 | (12) | 27.2% | 31 | 93 | 22 | |
| Refinor | (0) | 27 | (1) | 5 | 14 | 6 | |||
| Non-controlling stake adjustment | 0 | (19) | 1 | (4) | (10) | (4) | |||
| Subtotal Refinor adjusted by ownership | 28.5% | (0) | 8 | (0) | 28.5% | 2 | 4 | 2 | |
| Pampa stand-alone, other companies, adjs. & deletions2 | 100% | 4 | (48) | 8 | 100% | 0 | (43) | 22 | |
| Subtotal holding & others | 34 | 70 | (2) | 44 | 59 | 52 | |||
| Deletions | 100% | - | (263) | - | 100% | 1 | (299) | 1 | |
| Total consolidated, continuing operations | 184 | 1,148 | 24 | 171 | 1,232 | 24 | |||
| At our share ownership | 183 | 1,416 | 24 | 168 | 1,557 | 24 | |||
| Discontinued operations | |||||||||
| Edenor | 55.1% | (17) | 21 | (186) | 54.4% | 18 | 111 | (14) | |
| Adjustments & deletions2 | 100% | 1 | (21) | (301) | 54% | (10) | (0) | (1) | |
| Subtotal electricity distribution | (16) | - | (487) | 8 | 111 | (15) | |||
| Total consolidated, continuing and discontinued operations | 168 | 1,148 | (463) | 179 | 1,343 | 9 | |||
| At our share ownership | 175 | 1,416 | (463) | 173 | 1,617 | 9 | |||
Note:
1 Absorbed by Pampa from January 1, 2020. 2 The deletions correspond to other companies or inter-companies or debt
repurchases. 3 Figures in nominal terms. Net debt includes holding companies. 4 Attributable to the owners of the
company.
| Pampa Energía ● Q4 20 Earning Release ● 28 |
| |
| 4. | Glossary of terms |
| Term | Definition |
| Q3 20/Q3 19 | Third quarter of 2020/Third quarter of 2019 |
| Q4 20/Q4 19 | Fourth quarter of 2020/Fourth quarter of 2019 |
| ADRs/ADSs | American Depositary Receipts |
| AR$ | Argentine Pesos |
| Bbl | Barrel |
| Bcf | Billion cubic feet |
| Boe | Barrels of oil equivalent |
| CAMMESA | Compañía Administradora del Mercado Mayorista Eléctrico S.A. (Argentine Wholesale Electricity Market Clearing Company) |
| CB | Corporate Bonds |
| 2023 CB | Series T CB issued in 2016 for US$500 million, due 2023 and accrue interest rate of 7.375% |
| 2027 CB | Series I CB issued in 2017 for US$750 million, due 2027 and accrue interest rate of 7.5% |
| 2029 CB | Series III CB issued in 2019 for US$300 million, due 2029 and accrue interest rate of 9.125% |
| CCGT | Combined cycle gas turbine |
| CEO | Chief Executive Officer |
| CFO | Chief Financial Officer |
| COVID-19 | Coronavirus disease |
| CPB | Piedra Buena Thermal Power Plant |
| CTBSA | CT Barragán S.A. |
| CTEB | Ensenada Barragán Thermal Power Plant |
| CTG | Güemes Thermal Power Plant |
| CTGEBA | Genelba Thermal Power Plant |
| CTIW | Ingeniero White Thermal Power Plant |
| CTLL | Loma De La Lata Thermal Power Plant |
| CTP | Piquirenda Thermal Power Plant |
| CTPP | Parque Pilar Thermal Power Plant |
| DNU | Decreto de Necesidad y Urgencia (Necessity and Urgency Decree) |
| DoP | Deliver or Pay |
| E&P | Exploration and Production |
| EBITDA | Earnings before interest, tax, depreciation and amortization |
| EcoEnergía | EcoEnergía Co-Generation Power Plant |
| Edenor | Empresa Distribuidora y Comercializadora Norte S.A. |
| ENARGAS | Ente Nacional Regulador del Gas (National Gas Regulatory Entity) |
| Energía Plus | Energía Plus Program, SE Res. No. 1,281/06 |
| ENRE | Ente Nacional Regulador de la electricidad (National Electricity Regulatory Entity) |
| Est. | Estimated |
| Federal Government | Federal Government of the Republic of Argentina |
| FS | Financial Statements |
| FV | Face Value |
| FX | Nominal exchange rate |
| Greenwind | Greenwind S.A. |
| GUDI | Grandes Usuarios Distribuidoras (Large Distribution Company Users) |
| GWh | Gigawatt-hour |
| Pampa Energía ● Q4 20 Earning Release ● 29 |
| |
| HIDISA | Diamante Hydroelectric Power Plant |
| HINISA | Los Nihuiles Hydroelectric Power Plant |
| HMRT | Horas de Alto Requerimiento Térmico del Mes (Hours of the month with a high thermal demand) |
| HPPL | Pichi Picún Leufú Hydroelectric Power Plant |
| IFRS | International Financial Reporting Standards |
| IEASA | Integración Energética Argentina S.A. (former Energía Argentina S.A.) |
| Kbbl/kboe | Thousands of barrels/thousands of barrels of oil equivalent |
| M3 | Cubic meter |
| Mcf | Million cubic feet |
| MAT ER | Term Market from Renewable Energy Sources |
| MBTU | Million British Thermal Unit |
| MDP | Ministry of Productive Development (former SGE) |
| MW/MWh | Megawatt/Megawatt-hour |
| N.a. | Not applicable |
| O/S | At equity ownership |
| OldelVal | Oleoductos del Valle S.A. |
| Pampa / the Company | Pampa Energía S.A. |
| Pampa Group | Pampa Energía S.A. and its subsidiaries |
| PEMC | Ingeniero Mario Cebreiro Wind Farm |
| PEPE | Pampa Energía Wind Farm |
| Plan Gas.Ar | Argentine Natural Gas Production Promotion Program – 2020 – 2024 Supply and Demand Scheme (DNU No. 892/20 and supplementary regulations) |
| PPA | Power Purchase Agreement |
| PPE | Property, Plant and Equipment |
| RECPAM | Results from a net monetary position |
| Refinor | Refinería del Norte S.A. |
| Res. | Resolution/Resolutions |
| RTI | Integral Tariff Review |
| SBR | Styrene-Butadiene Rubber |
| SE | Secretariat of Energy |
| SEE | Under Secretariat of Electric Energy (former Secretariat of Electric Energy) |
| SGE | Former Government Secretariat of Energy (former Ministry of Energy) |
| Solidarity Law | Social Solidarity and Productive Reactivation Law in the framework of Public Emergency, No. 27,541 |
| TGS | Transportadora de Gas del Sur S.A. |
| Ton | Metric Ton |
| ToP | Take or Pay |
| Transba | Empresa de Transporte de Energía Eléctrica por Distribución Troncal de la Provincia de Buenos Aires Transba S.A. |
| Transener | Compañía de Transporte de Energía Eléctrica en Alta Tensión Transener S.A. |
| US$ | U.S. Dollars |
| VRDs | Debt Securities |
| Pampa Energía ● Q4 20 Earning Release ● 30 |