Investors Presentation. June 2009

Transcription

1 Investors Presentation

2 Disclaimer The material that follows is a presentation of general background information about Pampa Energía SA as of the date of the presentation. It is information in summary form and does not purport to be complete. It is not intended to be relied upon as advice to potential investors. This presentation is strictly confidential and may not be disclosed to any other person. No representation or warranty, express or implied, is made concerning, and no reliance should be place on, the accuracy, fairness, or completeness of the information presented herein. This presentation contains statements that are forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended the (Securities Act ), and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are only predictions and are not guarantees of future performance. Investors are cautioned that any such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the operations and business environment of Pampa Energía SA and its subsidiaries that may cause the actual results of the companies to be materially and adversely different from any future results expressed or implied in such forward-looking statements. Although Pampa Energía SA believes that the expectations and assumptions reflected in the forward-looking statements are reasonable based on information currently available to Pampa Energía SA management, such expectations and assumptions are necessarily speculative and subject to substantial uncertainty, and as a result, Pampa Energía SA cannot guarantee future results or events. Pampa Energía SA expressly disclaims a duty to update any of the forwardlooking statements. Securities may not be offered or sold in the United States unless they are registered or exempt from registration under the Securities Act. Any offering of securities to be made in the United States will be made by means of a private placement memorandum that may be obtained from the placement agents. Securities may not be offered or sold within the United States or to U.S. persons, except to qualified institutional buyers (as defined in Rule 144A under the Securities Act) that are qualified purchasers (as defined in the Investment Company Act of 1940, as amendment) in reliance on the exemption from registration provided by Rule 144A under the Securities Act and to certain non-u.s. persons in offshore transactions in reliance on Regulation S. This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities. Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. 2

3 Introduction

4 Company Highlights The largest integrated electricity company in Argentina, controlling: 2,000 MW of generation installed capacity (8% of the market). Co-control of the high voltage transmission company with 16,300 Km (95% of the market). Biggest distribution company with 2.5 million customers (23% of the market). All segments generate positive cash flow and have significant upside potential: Edenor and Transener are awaiting an integral tariff renegotiation. 278 MW of new generation capacity targeted to the Energía Plus Market / Res. 220, of which 100 MW are already in operation. Solid Capital Structure: Transmission and Distribution segments have successfully refinanced their debt, and generation assets are with low or no debt. Experienced and successful management team strongly aligned with our minority shareholders through our compensation scheme. Great opportunity to participate in the normalization of the Argentine electricity sector, through one of the most liquid stocks in the Buenos Aires stock exchange (with 144 A and Regs). 4

5 Relevant Events As a result of the decline in Pampa s shares value, on September 2008, Pampa Energía initiated successive share repurchases, including two tender offers: million shares repurchased as of June 1 st, 2009 (13.5% of Pampa s capital stock). Average price per share of AR$0.97, totaling AR$198.3 million. New share repurchase program for up to AR$ 64 million. Over 50% discount on Pampa s book value per share (indicative of Pampa s assets acquisition cost over the past years). Additionally, Pampa and its subsidiaries began repurchasing its own debt: Acquired as of May 8 th approximately US$230 million face value of bonds of Edenor, EASA, Transener and Central Térmica Güemes at an average price of 53%. Non-core assets and projects have been sold or are under revision to take advantage of strong discount on Pampa s shares and bonds: Alstom turbine sold for US$28.3 million. MAN engines project under revision (US$15 million investment currently postponed). Pampa increased its stake in the Ingentis project due to a lack of payment of US$51 million by Emgasud (project currently under revision). Agreement to sell the Frigorífico La Pampa warehouse for US$6.5 million 5

6 Pampa Energía s Assets Pampa Energía s assets include electricity generation, transmission and distribution Generation MW Transmission Km Distribution Clients Hydroelectric Nihuiles 262 Transener 10,155 Edenor 2,500,000 Hydroelectric Diamante 388 Transba 6,108 Thelmal Plant Güemes Thermal plant Loma la Lata Total 16,263 Thermal Plant Piedra Buena 620 Expansions (*) 400 Total 2,400 (*) 222 MW under the expansion s project are under revision. 6

7 Pampa Energía The Biggest Integrated Electricity Company in Argentina Only one class of shares (1 share = 1vote). Market capitalization 1 of US$388 mm. Pampa is included in the Merval Index of the BASE (5.92% weighting), being one of the most liquid Argentine stocks. Pampa s Assets Breakdown based on Acquisition Value (2) Ownership (3) Public Float Management (5) Generation 46% Distribution 47% 77.36% 22.64% Transmission 7% Total number of shares net of repurchases (4) : 1,320,715,099 (1) As of June 1 st, 2009, AR$1.10 per share and an exchange rate US$/AR$ Calculated over total shares net of repurchases as of June 1 st, (2) Proforma. Contribution adjusted by ownership. (3) Ownership as of March 31 st, 2009, net of repurchases. (4) Net of shares repurchased by Pampa Energía as of June 1 st, (5) Does not contemplate the warrants issued in favor of Pampa s executives. As of December 2008, the controlling group includes the interests held by DOF Distribution LLC, Pampa Holdings LLC, Dolphin Fund Management S.A., Dolphin Créditos S.A., Dolphin Inversora S.A., Marcos Marcelo Mindlin, Damián Miguel Mindlin, Gustavo Mariani, and Ricardo Alejandro Torres. 7

8 Stock Performance Pampa completed four capital increases since 2006, raising approximately US$965 million. AR$ per Share* Volume (AR$ mm) 5,0 4,8 4,6 4,4 4,2 4,0 3,8 3,6 3,4 3,2 3,0 2,8 2,6 2,4 2,2 2,0 1,8 1,6 1,4 1,2 1,0 0,8 0,6 0,4 0,2 0,0 80,0 70,0 60,0 50,0 40,0 30,0 20,0 10,0 0,0 Capital Increase Last Price Acquisition of Nihuiles and Diamante Capital Increase Inflation Adjusted Güemes Acquisition Transener Acquisition Capital Piedra Buena Edenor Increase Acquisition Acquisition Loma la de Lata Acquisition Güemes 100 MW Expansion Loma la de Lata issues US$178 mm bond Pampa begins share repurchases Note: share price adjusted for capital issuances. 8

9 Key Financial Highlights

10 Financial Information (US$ MM) LTM Sales (US$ MM) (As per financial statements as of March 31 st, 2009) (1) 1,190 51% 6% 43% 68% % 5% 56% Generation Transmission¹ Distribution Holding & Deletions Total Financial Ownership Adjusted Statements LTM Gross Margin (US$ MM) 2 (As per financial statements as of March 31 st, 2009) % % Generation Transmission¹ Distribution Holding & Deletions Total Financial Statements 8% 31% 53% 7% 40% Ownership Adjusted 1 Pampa s financial statements include only 50% of Transener s figures. Average LTM exchange rate US$/AR$ Does not include amortizations and depreciations 10

11 Financial Information (US$ MM) Even with the current tariff structures, all of Pampa s business segments are generating positive operating profits and EBITDA LTM EBITDA (US$ MM) (As per financial statements as of March 31 st, 2009) (7) % % % 46% 7% 95 37% 47% Generation Transmission¹ Distribution Holding & Deletions Total Financial Statements Ownership Adjusted 1 Pampa s financial statements include only 50% of Transener s figures. Average LTM exchange rate US$/AR$

12 Financial Information (US$ MM) ASSETS (US$ MM) (As per financial statements as of March 31 st, 2009) 0.5 1, % 54% % 53% % 12% 35% Generation Transmission¹ Distribution Holding & Deletions Total Financial Statements Ownership Adjusted 1 Data of Transener s financial statement. (100% of the value) Exchange rate as of March 31 st, 2009 US$/AR$ 3.72 Note: Generation includes fixed and intangible assets for the hydroelectric plants. 12

13 Financial Information Debt Maturities by Segment No significant maturities until 2013, having the most relevant ones in Investor Presentation * Distribution debt includes Edenor and Easa s debt. Distribution Transmission Generation Total Total Net of Repurchases 13

14 The Electricity Market

15 Argentine Electricity Sector Generation 43 Generators 26,225MW Installed capacity 54% Thermal 42% Hydro 4% Nuclear 87% Privatized Transmission Distribution Consumption One extra high 28 significant Industrial (49%) voltage ( kv) players Residential (36%) transmitter 108,467 GWh/year (Transener) Commercial (12%) 6 regional 70% privatized Other (3%) transmitters (including Transba) (220/132kV) 15

16 Enormous Price Distortion Caused by the 2001 Crisis: Only Partially Resolved Relative Tariffs Relative Price Evolution 25,0 20,0 Residential Expenditure for bimonthly Consumption of 275 kwh/month. 17,9 20,6 22, Wholesale Electricity Price Evolution US$/MW Q USD cents/ Kwh 15,0 10,0 5,0-2,8 Metropolitan Area EDENOR 9,5 Peru España Brasil Chile Q 09 Auction Spot Contracts Spot Argentina Brazil Chile Source: Edenor 16

17 Electricity Sector: Different Electricity Prices Difference between electricity cost and market prices paid by customers requires subsidies by the Government estimated at ~US$4 billion for 2008 U$S/MWh ,71 40,42 14,12 14,82 Ene-06 Jul-06 Ene-07 Jul-07 Ene-08 Jul-08 Ene-09 Marginal Cost of the system (MCS) Spot Price including additional charges for liquid fuels Spot Price (Resolution 240) Seasonal Price Today the deficit generated per MW sold is of US$31. A year ago the system was generating a deficit of approximately US$24 per MW sold. 17

18 Transmission and Distribution: new tariff adjustments were given on July 2008 Investor Presentation Edenor: 17.9% average VAD increase, including residential customers 9.63% CMM increase from May 06 - April 07 and 7.56% CMM increase from May 07 - Oct 07. Still pending 5.79% increase from Nov 07 April 08. Estimated impact on revenues of AR$150mm per year. On October 2008, the Government approved an average tariff increase of 18.2% over the seasonal price in order to decrease subsidies for AR$ 800mm. PUREE: Edenor was authorized to retain this fee to compensate future CMM increases. Transener and Transba: 23% and 28% increase respectively Estimated impact on revenues of AR$60mm per year Integral Tariff Revision process delayed 18

19 Generation Energía Plus On September 2008, Central Térmica Güemes new 100MW turbogenerator began commercial operations FONINVEMEM credits: As of March 31 st, 2009 Pampa had AR$97,4 million under the FONINVEMEM As of the same date CAMMESA owed AR$116 million for 2008 and 2009 inciso C Project filed to recover inciso C credits to be applied to the CTLLL s investment (Pampa has already collected AR$14 mm) 19

20 Pampa s Upside Case

21 Pampa s Upside Opportunities All of Pampa s electricity segments offer significant upside opportunities Distribution Edenor s ROA is a fraction of the ROA of its pears. Integral Tariff Revision is still pending. Generation Pampa targets 278 MW of new generation capacity to sale at the free market pricing of the Energía Plus Plan. 100 MW are already operating at Central Térmica Güemes and 178 MW are expected to be ready for the 3Q2010 at Central Térmica Loma de la Lata. Pampa acquired 1,900 MW at very competitive prices that could benefit from any potential negotiated spot price increase. Transmission Regulated tariff negotiation process is still pending. Completion of the Plan Federal, would add significant revenues. 21

22 Generation: Significant upside from Energía Plus Plan. Pampa s Generation Assets & Energía Plus Projects Current Installed Capacity (MW) New Installed Capacity (MW) Fuel Provision Beginning of Operation Estimated Date Estimated Investment (US$ MM) Estimated Annual Generation GWh Estimated Annual EBITDA (US$ MM) Nihuiles (Hydro) Diamante (Hydro) Güemes (Thermal) Royalty Gas Completed Loma de la Lata (Thermal) TBD 3Q , Piedra Buena (Thermal) Sub Total 1, , Ingentis (Thermal) Royalty Gas 3Q , Under Revision Others (Thermal) - 16 TBD 3Q Under Revision Total 1, ,

23 EDENOR: Significant Tariff up side Potential. Edenor currently has very low returns on its asset base when compared to regional peers Returns on Asset Base (1) (After Tax EBITDA/ Gross PP&E) 16,7% 12,1% 12,3% 9,6% 8,3% 10,4% 10,5% 3,4% EDENOR '97-'01 Avg. EDENOR 2008 Celesc (Brazil) Light (Brazil) Cemig (Brazil) Chilectra (Chile) Electropaulo (Brazil) Copel (Brazil) Significant Upside Potential Gross PP&E (MM) $ 2,706 After Tax Adjusted EBITDA (MM) $ 93 Rate of Return on Gross Assets 3.4% Source: Edenor S.A. and companies records. (1) Note: Post-tax return on our asset base (ROA) = as operating income plus depreciation and amortization charges, less the tax charge resulting from the application to this amount of the federal income tax rate (currently, 35%), divided by the value of our gross asset base (adjusted for inflation). Figures correspond to December 2006 (Full Year for Income Statement) except for Coelce (LTM 3Q 06). Average 2008 exchange rate US$/AR$

24 Conclusions

25 The largest integrated electricity company in Argentina, controlling: 2,000 MW of generation installed capacity (8% of the market). Co-control of the high voltage transmission company with 16,300 Km (95% of the market). Biggest distribution company with 2.5 million customers (23% of the market). All segments generate positive cash flow and have significant upside potential: Edenor and Transener are awaiting an integral tariff renegotiation. 278 MW of new generation capacity targeted to the Energía Plus Market, of which 100 MW are already in operation. Solid Capital Structure: Transmission and Distribution segments have successfully refinanced their debt, and generation assets are with low or no debt. Experienced and successful management team strongly aligned with our minority shareholders through our compensation scheme. Great opportunity to participate in the normalization of the Argentine electricity sector, through one of the most liquid stocks in the Buenos Aires stock exchange (with 144 A and Regs). 25

26 Back Up

27 Electricity Generation Market: Pampa s Participation Pampa s Generation Assets Generation Market Share Installed Capacity (MW) Market Share 1 Pampa, 8% Endesa, 17% Nihuiles (Hydro) % Diamante (Hydro) % Güemes (Thermal) % Loma La Lata (Thermal) % Others, 42% AES, 12% Sadesa, 15% Piedra Buena (Thermal) % Petrobras, 4% Plus Petrol, 4% Total 2, % 1 Calculated over a total installed capacity of MW as of December

28 Pampa s Generation Platform Investor Presentation Pampa s generation assets are strategically located and are ideal candidates for capacity expansion projects. Hidroeléctica Diamante Installed capacity: 388 MW Energy sold 2008: 968 GWh Market share: 1.5% EBITDA 2008: AR$ 49.6 MM Central Térmica Güemes Installed capacity: 261 MW Energy sold 2008: 1,976 GWh New capacity: 100 MW Market share: 1.4% EBITDA 2008: AR$ 107 MM Hidroeléctica Nihuiles Installed capacity: 265 MW Energy sold 2008: 1,256 GWh Market share: 1.0% EBITDA 2008: AR$ 60.8 MM Central Térmica Piedra Buena Installed capacity: 620 MW Energy sold 2008: 3,727 GWh Market share: 2.4% EBITDA 2008: AR$ 62.2 MM Central Térmica Loma de la Lata Installed capacity: 369 MW Energy sold 2008: 1,817 GWh Additional capacity: 178 MW Market share: 1.4% EBITDA 2008: AR$ 38.8 MM Ingentis Project Additional capacity: 205 MW 28

29 Electricity Generation Assets Pampa s Generation Assets Electricity Genration Assets Instalalled Capacity (MW) Net Generation GWH Q2009 Nihuiles Diamante Güemes (1) Loma de la Lata Piedra Buena Total Market Share 7,80% 6,8% 7,1% 7,8% 7,5% 7,9% Source: Pampa Energía S.A. and C.A.M.M.E.S.A. (1)Income from sales of Energía Plus s generation commenced on September

30 Continuous Demand Growth The demand growth of those segments with no tariff adjustment has outpaced the average demand growth. Total Electricity demand in Argentina has grown by 2.7% in 2008 While Edenor s average demand grew 4.1% in 2008, its residential demand grew 6% Generation by Type ( 000 GWh) Imports Nuclear Hydro Thermal % 7% 37% 40% 40% % 6% 34% 54% 52% 51% 56% % 33% 60% 66% [GWh] Residential 7,545 7,148 6, % Small Commercials 1,530 1,485 1, % Shantytowns and others % Public Lightning % Medium Commercial 1,597 1,552 1, % Industrial 6,977 6,739 6, % Total Sales 18,616 17,886 16, % % Demand (GWh 000) Demand Growth (%)

31 Pampa s Energia Plus Projects: Güemes Main characteristics of the project With the presence of Argentine President Cristina Fernández de Kirchner, the project was inaugurated in July 2008 and started commercial operations in September MW additional capacity (GE LMS-100 gas turbine) Advanced Technology for a total investment of USD 65 mm Proved efficiency in many in arduous climates ranging from desert heat and tropical humidity to arctic cold Construction Started: September 2007 Fuel: natural gas Royalty assignment agreement ( m3 daily) with the province of Salta already in place 31

32 Pampa s Energia Plus Projects: Loma de la Lata Characteristics of the Project Plant originally designed to work as a combined cycle, having therefore an adequate lay out and sufficient space Additional capacity of 178 MW State of the art technology (50% heat rate) Steam Turbines uses exhaust gases from the existing gas turbines, no additional gas is required Future Installations Status of the Project An EPC contract has been signed with Isolux Group: 3 heat recovery steam generators, 1 steam turbine and water cooling towers. Beginning of on- site construction work: March 2008 Environmental study already awarded Electricity impact study concluded Commercial operation date: 3Q

33 Pampa s Energia Plus Project: Ingentis Main characteristics of the project Thermal plant located in the province of Chubut 2 GE LMS 100 gas fired turbines, Installed capacity estimated MW Burns natural gas Potential for expansion Royalty assignment agreement with the province of Chubut to receive gas royalties in kind from local gas producers, already in place Total Investment: US$185 mm Commercial Operation Date: 3Q

34 Pampa s Generation Assets Nihuiles & Diamante Assets Highlights Two hydroelectric complexes located in the province of Mendoza Combined installed capacity of 650MW representing 2.5% of installed capacity in Argentina On October 2006, Pampa acquired 46% of Hidroelectrica Nihuiles and 54% of Hidroelectrica Diamante implying an enterprise value of US$90 mm (EV/MW US$139,000) As of December 2008, Pampa has 56% of Hidroelectrica Diamante Concession expires in 2024 EBITDA 2008: US$ 33.5 mm Average 2008 Exchange rate US$/AR$

35 Pampa s Generation Assets Güemes Thermal Plant Acquisition Overview Pampa acquired on January 2007, 58.8% of Güemes for US$16.6mm implying an enterprise value of US$42.9mm (EV/MW US$169,000). As result of the contribution of a gas turbine LMS 100 to CTG, Pampa indirectly increased its capital to 92.3% Thermal generator located in northeast region of Argentina (3 steam turbines). Strategic location due to its proximity to major gas fields in Argentina and to Bolivia, a major gas exporter. Total Installed capacity of 361MW (261 MW old capacity MW of new capacity) representing approximately 1.4% of total generation in Argentina EBITDA 2008: US$ 32 mm. Central Térmica Güemes Corporate Structure National Government 7.7% Central Térmica Güemes Pampa Energía 92.3% Average 2008 Exchange rate US$/AR$

36 Pampa s Generation Assets: Loma de la Lata Acquisition Overview Pampa acquired on May 2007 all the assets of the Loma de la Lata plant for US$60.0mm (EV/MW US$163,000). Thermal generator with an installed capacity of 369MW representing approximately 1.4% of the installed capacity in Argentina. 3 Gas turbines of 123 MW each with and efficiency of 34% Located on top of the largest gas field in Argentina (also named Loma de la Lata). The plant was built in EBITDA 2008: US$ 12 mm. Average 2008 Exchange rate US$/AR$

37 Pampa s Generation Assets: Piedra Buena Thermal Plant Acquisition Overview Pampa acquired on August 2007 the Thermal Plant Piedra Buena for US$85.0mm (EV/MW US$137,000) Thermal generator with an installed capacity of 620MW representing approximately 2.4% of the installed capacity in Argentina Located in the Buenos Aires province, 600 Km from the Capital City. This plant has the capability of burning natural gas and fuel oil. With a limited investment this plant will be able to generate by burning coal. CPB has the largest fuel oil storage capacity in Argentina in two tanks of 30,000 m3 each The plant has first priority use of the docking facilities, in the only deepwater port of Argentina in Patagonia EBITDA 2008: US$ 19 mm. Average 2008 Exchange rate US$/AR$

38 Pampa s Transmission Assets Transener Acquisition Overview Pampa acquired on September 2006, 26.33% of indirect participation in Transener. Argentina s largest electricity transmission company: accounts for 95% of Argentina s electricity flows with 16,300 km of high voltage lines. 5,000km expansion over next 3 years totally financed by Argentine government. Transener collects a 3% supervision fee on the investment Once completed these new lines are incorporated to Transener s grid and collects operation and maintenance fees Debt restructuring in 2005: debt reduced from US$576mm to US$289mm Recently refinanced to 10 years, issuing US$220.0mm with an interest rate of 8.875%. Flexible covenants, among others, Transener has no restrictions to distribute dividends at any time Renegotiated tariff agreement with Government in 2004, including a 31% interim increase; and 23% increase in July EBITDA 2008: US$ 45 mm. Notes: (1) Pampa holds a 89.8% stake in Transelec, which holds a 50.0% stake in Citelec. Citelec owns approximately 52.6% of Transener s capital stock. Average 2008 Exchange rate US$/AR$

39 Pampa s Distribution Assets EDENOR Description Pampa acquired on September 2007, 51% of indirect participation in Edenor. As of December 31 st 2008, Pampa has 53% of indirect participation in Edenor. Edenor is the largest electricity distribution company in Argentina, operating in the country s wealthiest concessions: the northern part of Buenos Aires City and Greater Buenos Aires exclusive concession for 83 years in Buenos Aires 34,584 km of high, medium and low voltage lines 2.5 mm clients, serving 7mm people 51% stake purchased in September 2007 for US$398 mm by Pampa Energía (EDF paid US$800 mm for a 45% stake in 2001) Debt restructuring: 100% creditor acceptance, debt reduced from US$537 mm to US$370 mm, maturities extended to 9 and 14 years Renegotiated tariff agreement with Government including 28% interim increase, and 17.9% VAD increase in July Background 1992: Incorporated as part of the privatization of SEGBA : Controlled by EDFI, Endesa, YPF and SAUR through Electricidad Argentina S.A. (EASA) 2001: EDFI acquired the EASA's and Edenor's shares held by other investors, increasing its ownership to 90% of Edenor 2005: Controlling stake acquired by Dolphin 2006: Successful debt restructuring 2007: Listed in NYSE and BCBA (EDN) 2007: New Bond Issued. 39

40 Corporate Governance

41 Strong Alignment between Management and minority Shareholders Pampa has implemented a corporate governance structure that provides for a strong alignment of interests between management and shareholders Board of Directors Audit Committee Management Compensation 9 permanent members, 3 are independent Elected for 3 year terms (on a staggered basis) independent directors cannot be re-elected Comprised of 3 independent directors. Responsibility for: compensation policy for directors and officers nomination policy for independent directors review and approval of related-party transactions Audit Committee approval required Warrants held by management: Approximately mm, 20% of currently outstanding shares (on a fully diluted basis) 5-year vesting period as from Sep 2009 Strike price equal to US$0.27 per share 41

42 Strong Alignment between Management and minority Shareholders Anti-takeover Protections Others Managers and Directores Tag-along rights for minority shareholders Mandatory public tender for 100% of Company if one person/group acquires more than 35% of the Company s capital Single class of shares (1share= 1vote) Supermajority of 2/3 of shares at shareholders meeting required, but not less than 35% of total shares outstanding Exclusivity and non-compete provisions for Pampa management Principals committed to own at least 45mm shares of Pampa No management fee Board of Directors Management Marcos Marcelo Mindlin President Damián Mindlin Vice-president Gustavo Mariani Director Ricardo Torres Director Brian Henderson Director Diego Salaverri Director Diana Mondino Independent Director Miguel Kiguel Independent Director Alfredo Mac Laughlin Independent Director Marcos Marcelo Mindlin President Ricardo Torres Vice-president & General Manager Gustavo Mariani Vice-president & Business Manager Damián Mindlin Vice-president & Investment Manager 42