Central Puerto's Q1 2025: Unraveling Contradictions in Hydro Auction Dynamics and Market Deregulation

Hydro auction timeline and conditions, market deregulation timeline and implementation, payment delays and government financial support, government intentions on hydro auction pricing, and hydro auction pricing conditions are the key contradictions discussed in Central Puerto's latest 2025Q1 earnings call.



Revenue and Earnings Growth:
- Central Puerto reported revenues of $196 million for Q1 2025, increasing 31% year-over-year, and a net income of $80 million, rising 150% year-over-year.
- The growth in revenues was primarily due to a $36 million increase in spot market revenues driven by currency devaluation and higher thermal generation. The net income increase was attributed to higher adjusted EBITDA and lower foreign exchange differences.

Operational Performance and Capacity Expansion:
- Central Puerto's installed capacity remains at 6,703 megawatts, and energy generation was 5.7 terawatt hours, increasing 4% year-over-year.
- The growth in energy generation was driven by increased thermal generation, particularly in steam and gas turbines, as well as higher wind generation from specific wind farms.

Investment Projects and Regulatory Environment:
- Central Puerto is on track with its investment projects, including Brigadier López and San Carlos, with expected completion by the end of 2025.
- The company is closely monitoring regulatory updates, such as the potential hydro auction and the deregulation of the wholesale market, which could present new opportunities for market participation and fuel management.

Outlook and Growth Opportunities:
- Central Puerto is targeting expansion into new projects aside from Brigadier López and San Carlos, with a focus on wind farms in Bahía Blanca, and exploring opportunities in solar and wind power.
- The company is cautiously optimistic about the implementation of a fully deregulated market, with expectations that improvements and deregulation schemes will be implemented gradually.