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Pampa Energía S.A. announces results for the six-month period and quarter ended on June 30, 2018

PAM | August 13, 2018

PR Newswire

BUENOS AIRES, Argentina, Aug. 13, 2018

BUENOS AIRES, Argentina , Aug. 13, 2018 /PRNewswire/ -- Pampa Energía S.A. (NYSE: PAM; Buenos Aires Stock Exchange: PAMP), the largest independent energy integrated company in Argentina, with active participation in the country's electricity and gas value chain, announces the results for the six-month period and quarter ended on June 30, 2018. All figures are stated in Argentine Pesos and have been prepared in accordance with International Financial Reporting Standards.

Main Results for the First Semester of 2018 ('1H18') ¹

In order to reflect the financial performance of each business segment, as from 2018 and for the comparative periods, the selling and administrative expenses, as well as the financial results, which used to be assigned to holding and others, will be redistributed among the operating segments.

Consolidated net revenues of AR$39,718 million² , 74% higher than the AR$22,801 million for the first half of 2017 ('1H17'), explained by increases of 113% in power generation, 91% in electricity distribution, 34% in oil and gas, 30% in petrochemicals and 126% in holding and others segment, partially offset by 9% of higher eliminations as a result of intersegment sales.

Power Generation of 7,948 GWh from 12 power plants
Electricity sales of 10,894 GWh to 3 million end-users
Production of 45.9 thousand barrels per day of hydrocarbons
Sales of 182 thousand tons of petrochemical products

Consolidated adjusted EBITDA³ for continuing operations of AR$14,881 million, compared to AR$6,435 million for 1H17, mainly due to increases of AR$2,945 million in power generation, AR$3,438 million in electricity distribution, AR$592 million in oil and gas, AR$6 million in refining and distribution, AR$79 million in petrochemicals and AR$1,425 million in holding and others segment, partially offset by higher intersegment eliminations of AR$39 million.

Consolidated profit attributable to the owners of the Company of AR$352 million, lower than the AR$1,810 million gain in 1H17, mainly explained by AR$13,772 million losses accrued due to 55%⁴ of AR$ depreciation against US$, currency in which most of the Company's financial liabilities are denominated, whereas the FS reports in AR$, without inflation adjustment.

Main Results for the Second Quarter of 2018 (' Q2 18') ⁵

Consolidated net revenues of AR$20,317 million, 74% higher than the AR$11,661 million for the second quarter 2017 ('Q2 17'), explained by increases of 116% in power generation, 78% in electricity distribution, 37% in oil and gas, 57% in petrochemicals and 151% in holding and others segment, as well as 5% of lower eliminations as a result of intersegment sales.

Power Generation of 3,659 GWh from 12 power plants
Electricity sales of 5,344 GWh to 3 million end-users
Production of 45.9 thousand barrels per day of hydrocarbons
Sales of 95 thousand tons of petrochemical products

Consolidated adjusted EBITDA for continuing operations of AR$7,505 million, compared to AR$3,208 million for Q2 17, mainly due to increases of AR$1,643 million in power generation, AR$1,247 million in electricity distribution, AR$486 million in oil and gas, AR$44 million in petrochemicals and AR$944 million in holding and others segment, partially offset by losses of AR$49 million in refining and distribution, and higher intersegment eliminations of AR$18 million.

Consolidated loss attributable to the owners of the Company of AR$2,661 million, higher than the AR$91 million loss in Q2 17, explained by the accrual of AR$11,367 million losses due to 43%⁶ of AR$ depreciation against US$.

Consolidated Balance Sheet
(As of June 30, 2018 and December 31, 2017, in millions of Argentine Pesos)

In AR$ million	As of 6.30.18	As of 12.31.17
ASSETS
Participation in joint businesses and associates	6,589	5,754
Property, plant and equipment	46,467	41,214
Intangible assets	1,570	1,586
Other assets	21	2
Financial assets at fair value with changing results	150	150
Deferred tax credits	1,892	1,306
Trade receivable and other credits	8,274	5,042
Total non-current assets	64,963	55,054
Inventories	4,254	2,326
Financial assets at fair value with changing results	23,089	14,613
Investments at amortized cost	516	25
Financial derivatives	4	4
Trade receivable and other credits	23,431	19,145
Cash and cash equivalents	3,223	799
Total current assets	54,517	36,912
Assets classified as held for sale	1,013	12,501
Total assets	120,493	104,467

EQUITY
Share capital	1,948	2,080
Share premium	5,822	5,818
Repurchased shares	135	3
Cost of repurchased shares	(6,344)	(72)
Statutory reserve	416	300
Voluntary reserve	8,412	5,146
Other reserves	(363)	140
Retained earnings	176	3,243
Other comprehensive result	(198)	252
Equity attributable to owners of the parent	10,004	16,910
Non-controlling interests	1,316	3,202
Total equity	11,320	20,112

LIABILITIES
Investments in joint ventures and associates	350	-
Accounts payable and other liabilities	6,734	6,404
Borrowings	55,165	37,126
Deferred revenues	196	195
Salaries and social security payable	136	120
Defined benefit plan obligations	1,071	992
Deferred tax liabilities	465	1,526
Income tax and minimum expected profit tax liability	925	863
Tax payable	836	366
Provisions	5,386	4,435
Total non-current liabilities	71,264	52,027
Accounts payable and other liabilities	23,431	18,052
Borrowings	8,806	5,840
Deferred income	3	3
Salaries and social security payable	1,508	2,154
Defined benefit plan obligations	99	121
Income tax and minimum expected profit tax liability	1,305	943
Tax payable	2,054	1,965
Financial derivatives	112	82
Provisions	548	798
Total current liabilities	37,866	29,958
Liabilities associated to assets classified as held for sale	43	2,370
Total liabilities	109,173	84,355

Total liabilities and equity	120,493	104,467

Consolidated Income Statement
(For the six-month period and quarter ended on June 30, 2018 and 2017, in millions of Argentine Pesos)

	First Half			Second Quarter
In AR$ million	2018		2017	2018	2017
Sales revenue	39,718		22,801	20,317	11,661
Cost of sales	(24,494)		(15,721)	(12,839)	(8,313)

Gross profit	15,224		7,080	7,478	3,348

Selling expenses	(1,862)		(1,410)	(895)	(698)
Administrative expenses	(2,705)		(2,088)	(1,423)	(1,034)
Exploration expenses	(4)		(13)	(2)	(5)
Other operating income	3,746		1,844	256	603
Other operating expenses	(3,375)		(1,260)	(863)	(535)
Results for participation in joint businesses and associates	632		568	73	274
Operating income	11,656		4,721	4,624	1,953

Financial income	956		664	528	350
Financial costs	(3,066)		(2,410)	(1,631)	(1,143)
Other financial results	(13,341)		(705)	(11,213)	(1,323)
Financial results, net	(15,451)		(2,451)	(12,316)	(2,116)

Profit before tax	(3,795)		2,270	(7,692)	(163)

Income tax	1,936		(112)	2,511	320

Net income for continuing operations	(1,859)		2,158	(5,181)	157

Net income from discontinued operations	3,069		188	2,538	(106)

Net income for the period	1,210		2,346	(2,643)	51

Attributable to:
Owners of the Company	352	-	1,810	(2,661)	(91)
Continuing operations	(2,654)		1,637	(5,198)	(14)
Discontinued operations	3,006		173	2,537	(77)
Non-controlling interests	858		536	18	142

Net income per share attributable to the owners of the Company	0.1731		0.9349	(1.3373)	(0.0469)
Basic and diluted income per share of continuing operations	(1.3048)		0.8378	(2.6122)	(0.0072)
Basic and diluted income per share of discontinued operations	1.4779		0.0971	1.2749	(0.0397)

For the full version of the Earnings Report, please visit Pampa's Investor Relations website: www.pampaenergia.com/ir.

Information about the Conference Call

There will be a conference call to discuss Pampa's Q2 18 results on Tuesday, August 14, 2018 at 10:00 a.m. Eastern Standard Time / 11:00 a.m. Buenos Aires Time.

The host will be Lida Wang, Investor Relations Manager at Pampa. For those interested in participating, please dial 0-800-444-2930 in Argentina, +1 (844) 854-4411 in the United States or +1 (412) 317-5481 from any other country. Participants of the conference call should use the identification password 'Pampa Energía' and dial in five minutes before the scheduled time. Please download the Q2 18 Conference Call Presentation from our IR website. There will also be a live audio webcast and presentation of the conference at bit.ly/PampaQ218Call.

You may find additional information on the Company at:

For further information, contact:

Gustavo Mariani
Executive Vice-president

Ricardo Torres
Executive Vice-president

Mariano Batistella
Executive Director of Planning, Strategy & Affiliates

Lida Wang
Investor Relations Officer

The Pampa Energía Building, Maipú 1 (C1084ABA) Ciudad de Buenos Aires, Argentina
Tel: +54 (11) 4344-6000
investor@pampaenergia.com
www.pampaenergia.com/ir

¹ The financial information presented in this document are based on financial statements ('FS') prepared according to the International Financial Reporting Standards ('IFRS') in force in Argentina, and consequently, the FS discriminates the continuing operations from the assets agreed for sale, which are reported as discontinued operations.
² Under the IFRS, Greenwind, OldelVal, Refinor, Transener and TGS are not consolidated in Pampa's FS, being its equity income being shown as 'Results for participation in associates/joint businesses'.
³ Consolidated adjusted EBITDA represents the results before net financial results, income tax and minimum notional income tax, depreciations and amortizations, non-recurring and non-cash income and expense, equity income and other adjustments from the IFRS implementation, and includes affiliates' EBITDA at ownership. For more information, see section 3 of this Earnings Release.
⁴ 1H18 nominal exchange rate variation.
⁵ The financial information presented in this document for the quarters ended on June 30, 2018 and of 2017 are based on unaudited FS prepared according to the IFRS accounting standards in force in Argentina corresponding to the six-month period of 2018 and 2017, and the quarters ended on March 31, 2018 and 2017, respectively.
⁶ Q2 18 nominal exchange rate variation.