Author Topic: CEPU - Central Puerto S.A.  (Read 433 times)

MarkS

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CEPU - Central Puerto S.A.
« on: October 19, 2018, 07:45:49 AM »
Hi everyone,

I just picked up a few shares of CEPU, an Argentine power generator.  Paid a little over $9.00 a share.  There is certainly plenty of country risk and currency risk.  But its a relatively small position and its very cheap on an earnings basis.  Some data from Merrill:

Table 14: Central Puerto           2018E -2020E Estimates
2018E 2019E 2020E
US$ (in millions)                       Old New Ch.              Old New Ch.                    Old New Ch.
Net Revenue                             387 372 -4%            419 389 -7%                   647 610 -6%
Operating Income                      212 215 1%             241 246 2%                    336 338 1%
EBITDA                                     329 329 0%             356 356 0%                    460 457 -1%
EBITDA Margin                           84.9% 88.5% 4%     85.0% 91.7% 8%           71.0% 74.9% 6%
Net income b/f extraordinary      465 406 -13%          211 197 -7%                  297 282 -5%
Net income                                542 482 -11%          234 220 -6%                  345 330 -4%
EPS b/f extraordinary (P$)          3.07 2.68 -13%        1.39 1.30 -7%                1.96 1.87 -5%
EPS (P$)                                   3.58 3.18 -11%         1.54 1.45 -6%                 2.28 2.18 -4%
Source: BofA Merrill Lynch Global Research estimates

Table 15: Central Puerto 2018E -2020E Estimates
                                                 2018E                    2019E                             2020E
P$ (in millions)                     Old New Ch.            Old New Ch.                    Old New Ch.
Net Revenue                        9,418 11,056 17%     12,673 17,230 36%       22,115 30,125 36%
Operating Income                 5,153 6,387 24%       7,297 10,904 49%         11,473 16,706 46%
EBITDA                                7,995 9,783 22%       10,770 15,798 47%       15,704 22,572 44%
EBITDA Margin                      84.9% 88.5% 4%       85.0% 91.7% 8%         71.0% 74.9% 6%
Net income b/f extraordinary 11,309 12,072 7%       6,384 8,731 37%         10,161 13,946 37%
Net income                           13,167 14,345 9%      7,070 9,736 38%          11,774 16,278 38%
EPS b/f extraordinary (P$)     74.70 79.70 7%         42.20 57.70 37%          67.10 92.10 37%
EPS (P$)                               87.00 94.80 9%          46.70 64.30 38%         77.80 107.50 38%
Source: BofA Merrill Lynch Global Research estimates

Buy rating supported by significant growth potential
We remain positive on Central Puerto’s equity, given: (1) expected strong earnings
trends from recently implemented, sharply higher prices for energy from legacy plants;
(2) a 16% increase in new generation capacity over the 2018-2020 period from the
start-up of already awarded new projects at attractive prices; (3) we expect a large
opportunity to add new projects to fuel additional growth in a tight Argentine electricity
system (via government auctions, M&A, etc.); and (4) inexpensive valuation vs. peers,
when adjusted for FONINVEMEM receivables. Risks are further deterioration in the
Argentine economic/regulatory environment, Argentina/emerging markets volatility and
greater competition for new electricity projects in Argentina
« Last Edit: October 19, 2018, 03:09:20 PM by MarkS »


MarkS

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Re: CEPU - Central Puerto S.A.
« Reply #1 on: October 19, 2018, 01:02:43 PM »
When I posted this earlier it looked fine in the preview version, but the columns got screwy in the final posting without my noticing the flaw.  Sorry.