Pampa Energía (PAMP) Q1 2025 earnings summary

Executive summary

• Q1 2025 delivered strong operational performance in power generation and utilities, with high thermal availability, new PEPE 6 wind capacity, and higher gas deliveries for thermal generation; a final investment decision was made on the FLNG project, securing a 20% stake.

• Utilities benefited from tariff hikes and regulatory progress, including five-year tariff reviews for TGS and Transener, providing stability until 2030.

• FLNG project will export 6 million tons of LNG per year, requiring 27 million cubic meters of gas per day, with Pampa supplying 6 million cubic meters per day, a 50% increase from current production.

• Net profit attributable to shareholders was US$153 million, down 43% year-over-year, mainly due to lower deferred tax recovery and higher operating costs, despite higher sales and positive financial results.

• Major investments in Rincón de Aranda and new projects impacted free cash flow and net debt.

Financial highlights

• Adjusted EBITDA for Q1 2025 reached US$220 million, up 17% year-over-year, driven by stronger spot prices, higher gas deliveries, and tariff hikes.

• CapEx rose 35% year-over-year to US$193 million, mainly due to Rincón de Aranda development.

• Free cash flow in Q1 was -US$118 million, impacted by Rincón de Aranda capex; cash and equivalents at US$1,114 million.

• Gross debt at quarter-end was US$1.691 billion; net debt increased to US$577 million, with a net leverage ratio of 0.8x.

• Gross margin per MWh in power generation was US$24.6, up 22% year-over-year.

Outlook and guidance

• Rincón de Aranda production expected to ramp from 6,000 barrels/day to 20,000 barrels/day by year-end 2025, with US$800 million capex planned in 2025.

• 2025 CapEx guidance: US$1.1 billion, with US$950 million for E&P (including US$800 million for Rincón de Aranda) and US$120 million for power generation.

• FLNG project first vessel online by late 2027/early 2028, second vessel a year later; estimated US$150 million annual EBITDA contribution at US$7.2/MMBtu FOB price.

• No plans to increase debt for CapEx; funding to come from operating cash flow and cash position.

• Strategic focus on monetizing Vaca Muerta reserves, expanding LNG exports, and infrastructure investments.