Pampa Energía (PAMP) Q2 2022 earnings summary

Executive summary

• Q2 revenue rose 28% YoY to $587M; adjusted EBITDA increased 6% YoY and 13% QoQ to $253M, led by gas production and seasonal demand.

• Oil and gas contributed 59% of consolidated adjusted EBITDA, led by record gas output; roughly 85% of sales were dollar-linked.

Financial highlights

• Revenue reached $587M, up 28% YoY, reflecting higher gas output, commodity prices, Energía Plus sales and legacy energy at regulated prices; expired PPAs weighed on some assets.

• Adjusted EBITDA was $253M, up 6% YoY and 13% QoQ; stronger gas and petrochemical margins were partly offset by maintenance, contractor and peso-linked costs.

• Free cash flow was negative $62M, mainly from seasonal working capital, CAMMESA payment delays and higher E&P and wind expansion CapEx.

• Cash declined $41M QoQ to $566M; net debt rose to $902M, while net leverage remained 1.3x.

Outlook and guidance

• E&P CapEx for 2022 was forecast at $350M, including ~$200M of expansionary spending; 2023 E&P CapEx was expected to fall to maintenance levels of $200M–$250M.

• 2022 power generation CapEx was forecast at $140M, including $90M for PEPE III expansion and $50M for maintenance.

• Target was to sustain gas output near 11M cu m/day beyond winter; potential capacity could reach 16.5M–17M cu m/day by winter 2023, subject to demand and evacuation capacity.

• Expected firm Chile exports of 1.5M cu m/day from October through April at close to $8/MMBtu; potential incremental revenue was $20M–$25M, with another 0.5M cu m/day under negotiation.

• Petrochemicals were expected to have a strong Q3; Q4 outlook was more uncertain as some product margins softened and longer-term price hedging was limited.