Pampa Energía (PAMP) Q4 2022 earnings summary

Executive summary

• Five-year expansion lifted gas production capacity 120% and power capacity 44%, while net indebtedness fell 25%; shareholder and bond repurchases totaled ~ $1 billion.

• Q4 adjusted EBITDA was $183 million, down 7% YoY; stronger E&P results and spot power partially offset pressure from expiring PPAs, outages, costs, and regulated-tariff exposure.

Financial highlights

• Q4 free cash flow was $101 million; net cash flow was $15 million after debt service, $15 million of early income tax, and the $128 million first installment for Arauco.

• Year-end cash was $700 million; gross debt was $1.6 billion and net debt was $913 million.

• Q4 CapEx rose 13% YoY, primarily as YPF accelerated off-peak activity to meet Plan Gas commitments; PEPE 4 progress partly offset the increase.

Outlook and guidance

• Gas sales expected below 10 million m³/day in Q1–Q2 2023 due to evacuation constraints; after the pipeline starts by mid-winter, output is expected to reach 16 million m³/day in Q3 and 12–13 million m³/day in Q4.

• E&P CapEx is planned at $490 million, mainly to drill and complete 24 Vaca Muerta wells; cumulative investment of $1.1 billion across 2020–2023 supports the gas ramp.

• 2023 power generation CapEx is planned at ~$250 million, including maintenance and PEPE 6; funding is expected from cash flow and local-peso financing.

• PEPE 4 commercial operation was expected by end-Q2 2023; PEPE 6 targets 300 MW total, with its first 95 MW phase targeted for Q3 2024.