Pampa Energia SA (PAM) Q3 2024 Earnings Call Highlights: Strong Gas Production and Power ...

GuruFocus News
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In This Article:

  • Adjusted EBITDA: $279 million, up 14% year on year.

  • Power Generation EBITDA: $112 million, a 23% increase year on year.

  • EMP EBITDA: $122 million, down 8% year on year.

  • CapEx: 59% lower year on year.

  • Free Cash Flow: $80 million in Q3.

  • Net Debt: $539 million, down 20% year on year.

  • Cash Position: $1.2 billion by the end of September, a 23% increase compared to last year.

  • Gas Production: Increased 8% year on year.

  • Average Gas Price: $4.4 per MBTU, down 6% year on year.

  • Total Production: Averaged nearly 88,000 BOE per day, 8% higher than last year.

  • Net Debt to EBITDA Ratio: 0.8 times, the lowest in the last eight years.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Pampa Energia SA (NYSE:PAM) reported a solid performance in gas upstream and power generation, overcoming the winter peak with an 8% increase in gas production year-on-year.

  • The company's balance sheet remains strong with extended maturities and improved liquidity, bringing net debt to its lowest level since 2016.

  • Adjusted EBITDA increased by 14% from last year, driven by increased gas deliveries through the new pipeline and higher spot prices.

  • The power generation segment posted a 23% increase in EBITDA year-on-year, supported by higher legacy prices and greater gas and power availability.

  • Pampa Energia SA (NYSE:PAM) successfully completed civil works for the P/E six expansion, with 98% of the project advanced and 114 megawatts operational.

Negative Points

  • Quarter-on-quarter decrease in performance due to warmer September temperatures, gas pipeline curtailments, and higher operating costs.

  • CapEx in Q3 was 59% lower year-on-year, mainly due to the ramp-up of shale gas and construction projects in 2023.

  • Petrochemicals segment posted an 88% drop in EBITDA year-on-year due to higher costs and peak demand downturn.

  • The EMP business saw an 8% decrease in EBITDA year-on-year, largely due to higher operating costs and reduced exports to Chile.

  • The company faces bottlenecks due to delays in the commissioning of compressor plants and soft demand from industries in Chile.

Q & A Highlights

Q: Can you talk about the initial performance of Rincon de Aranda and the drilling plans through the end of 2025? A: Horacio Turri, Executive Director of Exploration and Production, stated that they have two high-spec rigs working and plan to drill 28 wells from November 2024 to December 2025. They expect production to reach 12,000 barrels by April-May 2025 and 18,000 barrels by September 2025.

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