Central Puerto Earnings Call Signals Growth With Risks

Central Puerto ((CEPU)) has held its Q1 earnings call. Read on for the main highlights of the call.

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Central Puerto’s latest earnings call painted a broadly upbeat picture, with management highlighting strong growth in revenue and adjusted EBITDA alongside a sharp rebound in power generation. Investors were reminded, however, that this momentum comes with caveats, including heavy capital spending, gas transport bottlenecks ahead of winter and execution risks around new upstream ventures.

Adjusted EBITDA Strong Growth

Adjusted EBITDA surged to $120 million in the first quarter of 2026, up 41.6% from the prior quarter and about 33.4% year over year. Management credited new generation assets, better commercial contracting and the benefits of market normalization under Argentina’s Resolution 400/25 for the step-change in profitability.

Revenue Expansion

Revenues climbed to $248.6 million, rising 43.8% sequentially and 26.7% versus a year earlier as both contracted and spot sales increased. The consolidation of the Brigadier Lopez plant and solar projects acquired in 2025, including Cafayate and San Carlos, added meaningful top-line contributions.

Generation Recovery

Total power generation reached 5,420 GWh, more than 54% higher than in the previous quarter, marking a strong operational recovery. The rebound was driven by restored combined-cycle units at Central Costanera, incremental output from Oxion, Bisolar and Emani, and Brigadier Lopez coming online.

Commercial Market Breakthrough

Central Puerto reported a commercial breakthrough in Argentina’s new contracting framework, securing the top market share in MAT-P for contracted capacity and the second position in MAT-E for contracted energy. Contracted sales represented 44% of first-quarter revenues, underscoring rapid progress in shifting volumes from spot exposure to longer-term deals.

Strategic Asset Wins and M&A

The company locked in a landmark 30-year extension of the Piedra del Aguila hydro concession, securing this core asset through January 2056. It also agreed to acquire Patagonia Energy S.A. for roughly $50 million, gaining exposure to around 27,000 acres in the Vaca Muerta formation with a staged development plan and significant potential upside.

New Capacity and Renewables Contribution

Brigadier Lopez’s combined-cycle plant achieved commercial operation in January, adding about 140 MW of new thermal capacity and lifting installed capacity by roughly 229 MW quarter on quarter. The recently acquired solar farms and existing wind assets also contributed to the quarter’s higher output and revenue mix.

Balance Sheet and Credit Signals

Net financial leverage stood at a modest 1.06 times, with net debt near $390 million against $367.2 million of trailing adjusted EBITDA and total financial debt of about $539.2 million. Ratings agency Moody’s Argentina upgraded Central Puerto to AAA, signaling confidence in its credit profile despite the expansion agenda.

BESS Project Progress

The Battery Energy Storage System project advanced steadily, with about 60% of site works completed and 32 concrete pads in place, alongside completion of Phase 1 of the 132 kV yard. The company invested $66 million in BESS-related capex during the quarter and continues to target mid-2027 for commercial readiness.

Capital-Intensive Quarter

It was a cash-heavy quarter, with total capital expenditures around $311 million that included roughly $245 million tied to the Piedra del Aguila concession transfer. Management acknowledged that this elevated spending temporarily increases cash intensity and constrains near-term liquidity deployment options.

Gas Transport Constraints and Fuel Risk

Gas transportation remains a key operational risk, as the company requested about 1.6 million cubic meters of firm capacity in a recent TGS auction but secured only roughly 400,000. This shortfall, combined with ongoing reliance on Plan Gas, heightens fuel supply risk during an expected 30 to 45 winter days and underscores the need for more direct gas procurement.

Spot Market Reliance and PPA Migration

The rebound in generation is still flowing largely into the spot market because long-term contracting is progressing gradually under the new rules. Only 20% of output can be sold to private consumers and that slice is almost fully contracted, leaving the remaining 80% subject to ongoing negotiations with distribution companies before it can be de-risked via PPAs.

Regulatory and Market Uncertainty

Despite signs of market normalization, management flagged uncertainty around future actions by CAMMESA, including potential capacity auctions, and evolving regulatory rules. Realized prices differ by technology and counterparty, making revenues sensitive to case-by-case negotiations and adding volatility to the company’s commercial outlook.

Vaca Muerta Execution and Timing Risk

The PESA acquisition offers upside exposure to Vaca Muerta but comes with clear execution and timing risks, including a conventional license that runs only through May 2031. The shale pilot program does not yet have firm timelines, and while capex per well is estimated near $17 million, total development costs and commercialization horizons remain uncertain.

Debt and Leverage Sensitivity to M&A

Management emphasized that leverage will remain sensitive to future deals and development choices, as current net leverage is moderate but could rise with additional M&A or large project build-outs. The company signaled an intention to avoid very high gross leverage while staying flexible to pursue auctions, new capacity and potential Vaca Muerta development.

Forward-Looking Guidance

Looking ahead, Central Puerto expects operational strength to continue through 2026, building on first-quarter momentum in EBITDA, revenues and generation as market normalization and stronger contracting progress. Management plans to secure additional PPAs, advance the BESS project toward mid-2027 commissioning, expand firm gas capacity and maintain a prudent balance sheet while selectively pursuing auctions and M&A opportunities.

Central Puerto’s earnings call underscored a company in transition, leveraging new assets, stronger contracts and a renewed hydro concession to drive growth while managing sizable investment needs and regulatory risks. For investors, the story blends strong current momentum with clear execution challenges, making future contracting wins, gas logistics and disciplined capital allocation key watchpoints in coming quarters.