On Monday (NASDAQ:MNDY), BofA Securities updated its outlook on Central Puerto SA (NYSE:NYSE:CEPU), raising the price target to $13.00 from $12.00, while keeping a Neutral rating on the stock. Central Puerto reported an adjusted EBITDA of $93 million for the third quarter of 2024, which remained steady year-over-year and was slightly above BofA Securities' estimates by 2%.
The company's revenue exceeded expectations by 14%, primarily due to increased generation from hydro and renewable sources, as well as higher availability from thermal units, leading to a 14% rise in total power generation compared to the previous quarter.
Despite the revenue beat, Central Puerto faced a surge in manageable expenses, increasing by 13% quarter-over-quarter, which added approximately $25 million more than BofA Securities had anticipated. The financial results for the quarter also reflected the impact of certain one-time items and non-cash adjustments. Notably, there was a $6 million impairment of biological assets and a $15 million positive non-cash effect stemming from adjustments related to the FONI program receivables and foreign exchange differences.
The company's bottom line was affected by a negative financial result of $11 million. Nevertheless, Central Puerto managed to report a net income of $40 million for the quarter. The latest financial figures from Central Puerto provide a mixed picture, with strong operational performance counterbalanced by higher expenses and one-off financial impacts.
In other recent news, Argentine power company Central Puerto reported a mixed bag of results for Q2 2024. Despite a 15% revenue increase to $168 million, the company saw significant drops in net income and adjusted EBITDA, which fell by 49% and 27% respectively, compared to the same period last year. On a positive note, energy generation increased by 5% with a substantial rise in hydro energy output.
The earnings call also revealed Central Puerto's future plans, which include a transmission project to supply energy to mining companies in northern Argentina. Potential collaboration with YPF is being considered, although discussions have not yet begun.
InvestingPro Insights
Central Puerto SA (NYSE:CEPU) continues to show resilience in a challenging market environment. According to InvestingPro data, the company's market capitalization stands at $2.04 billion, reflecting its significant presence in the Independent (LON:IOG) Power & Renewable Electricity Producers industry. The company's financial health appears robust, with a P/E ratio of 10.01, suggesting a potentially attractive valuation relative to its earnings.
InvestingPro Tips highlight Central Puerto's strengths, noting that the company has raised its dividend for three consecutive years, demonstrating a commitment to shareholder returns. Additionally, analysts anticipate sales growth in the current year, which aligns with the revenue beat mentioned in the article. The company's strong performance is further evidenced by its high return over the last year, with a remarkable 120.32% price total return.
It's worth noting that Central Puerto's liquid assets exceed short-term obligations, and it operates with a moderate level of debt, which may provide financial flexibility in its operations and future investments. These factors could be particularly relevant given the company's increased expenses mentioned in the article.
For investors seeking more comprehensive analysis, InvestingPro offers 11 additional tips for Central Puerto, providing a deeper understanding of the company's financial position and market performance.
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