20-F: Central Puerto S.A. Reports Strong Revenue Growth in 2025

Central Puerto S.A. announced a 13% increase in revenues for the year ended December 31, 2025, driven by improved spot prices and expanded renewable energy capacity.

Summary

• Central Puerto S.A. reported a 13% increase in total revenues for the year ended December 31, 2025, reaching Ps. 1,097.42 billion, up from Ps. 971.05 billion in 2024.
• This growth was primarily attributed to higher spot prices, the pass-through of fuel oil costs to spot prices, and increased generation from renewable sources, including the acquisition of the Cafayate solar farm and the completion of the San Carlos solar farm.
• The company's cost of sales increased by 19.93% to Ps. 704.48 billion, mainly due to higher procurement costs, depreciation, maintenance, and spare parts consumption, partially offset by lower forestry-related costs and employee expenses.
• Net income for the year significantly increased to Ps. 352.85 billion, a substantial rise from Ps. 80.58 billion in 2024, largely due to a reversal of impairment losses on property, plant, and equipment.
• Capital expenditures increased by 27.43% to Ps. 335.72 billion, primarily for the San Carlos solar farm, Brigadier Lopez combined cycle conversion, and the Cafayate solar farm acquisition.
• The company secured a new 30-year concession for the Piedra del Águila hydroelectric plant and was awarded two Battery Energy Storage System (BESS) projects, expected to be completed by mid-2027.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this filing as moderately positive, with strong revenue growth and significant net income improvement driven by operational expansion and asset revaluations. However, rising costs and ongoing Argentine economic uncertainties present some headwinds.

Positives

• Total revenues increased by 13% to Ps. 1,097.42 billion in 2025.
• Net income surged to Ps. 352.85 billion in 2025, a significant improvement from Ps. 80.58 billion in 2024.
• The company completed the acquisition of the Cafayate solar photovoltaic plant (80 MW) and started operations at the San Carlos solar photovoltaic plant (15 MW).
• Construction of the Brigadier López combined-cycle expansion project (approximately 140 MW) was completed, commencing commercial operations in January 2026.
• Secured two BESS projects with expected capacities of 150 MW and 55 MW, respectively, with estimated capital expenditures between US$130 million and US$140 million.
• Took over a new 30-year concession for the Piedra del Águila hydroelectric plant for US$245 million.
• The company's financial position remains adequate with a low net leverage ratio.
• The company's operational performance and track record support consistent capacity availability and dispatch performance, enabling stable cash flow generation.
• Strong corporate governance practices are maintained through a corporate governance code, code of ethics, and internal conduct code.

Negatives

• Cost of sales increased by 19.93% to Ps. 704.48 billion, driven by higher procurement, depreciation, maintenance, and spare parts costs.
• Other operating expenses more than doubled, increasing by 106.47% to Ps. 111.84 billion, primarily due to losses from the revaluation of biological assets and disposal of property, plant, and equipment.
• The company recognized an impairment charge of Ps. 11.75 billion on the San Carlos Solar Park due to additional construction costs exceeding its budget.
• The company's functional currency is expected to change from Argentine Pesos to US Dollars effective January 1, 2026, due to changes in underlying economic conditions, which may impact financial reporting.
• The company's operations are heavily reliant on the Argentine economic and regulatory environment, which has historically been volatile and subject to government intervention.

Risks

• Exposure to country-specific risks in Argentina, including macroeconomic, political, regulatory, and social conditions.
• The Argentine Peso's qualification as a currency of a hyperinflationary economy requires restatement of historical financial statements, potentially affecting results.
• Significant fluctuations in the value of the peso could adversely affect the Argentine economy and the company's results.
• Exchange controls and restrictions on capital inflows and outflows could limit access to international credit and threaten the financial system.
• The Argentine government's intervention in the electric power sector and potential changes in regulatory frameworks could affect financial condition and results.
• The company has experienced past delays in collecting payments from CAMMESA and other customers in the electric power sector.
• Energy transmission and distribution limitations in Argentina can adversely affect the capacity of generators to deliver energy, resulting in reduced sales.
• Restrictions on energy supply could negatively affect Argentina's economy.
• The company operates in a heavily regulated sector that imposes significant costs and could lead to fines and liabilities.
• Technological changes in the energy market pose risks to the business.
• Competition in the electric power sector in Argentina may adversely affect results.
• The company's results depend largely on the remuneration scheme established by the Secretariat of Energy and collections received from CAMMESA.
• Factors beyond the company's control may affect or delay the completion of awarded projects or alter expansion plans.
• The company's business may require substantial capital expenditures for maintenance and expansion.
• Covenants in the company's indebtedness could restrict financial and operating flexibility.
• The company may be unable to refinance outstanding indebtedness or may face materially less favorable refinancing terms.
• Future changes in rainfall amounts in the Limay River basin could adversely affect revenues from the Piedra del Águila concession.
• The profitability of wind and solar farms is highly dependent on weather conditions, and climate change could affect the business.
• Power plants and forest assets are subject to mechanical/electrical failures and catastrophic events.
• Insurance policies may not fully cover all damages, and the company may not be able to obtain insurance against certain risks.
• The company may be exposed to lawsuits and administrative proceedings that could adversely affect its financial condition.
• Energy demand is seasonal and influenced by climate conditions.
• Acquisitions and investments to expand operations could result in operating difficulties.
• The company depends on senior management and key personnel for its performance.
• Material actions taken by trade unions could affect the company.
• The company's equipment, facilities, and operations are subject to environmental, health, and safety regulations.
• The company is subject to anti-bribery, anti-corruption, anti-money laundering, and other laws and regulations.
• A cyberattack could adversely affect the company's business, balance sheet, results of operations, and cash flow.
• The company's thermal generation plants require a continuous supply of natural gas and liquid fuels, the availability and cost of which are subject to factors beyond its control.
• The company may incur losses as a result of natural disasters affecting its forestry assets.
• It may be difficult for shareholders to obtain or enforce judgments against the company in Argentina.
• Restrictions on foreign exchange transfers and capital repatriation from Argentina may impair shareholders' ability to receive dividends and proceeds from sales.
• The company's shares and ADSs trade on multiple markets, which may result in price variations and difficulties in moving shares between markets.
• Shareholder rights under Argentine Corporate Law may be fewer or less well-defined than in other jurisdictions.
• U.S. holders of common shares and ADSs may not be able to exercise preemptive or accretion rights.
• Voting rights and other rights with respect to ADSs are limited by the terms of the deposit agreement.
• The relative volatility and illiquidity of Argentine securities markets may limit ADS holders' ability to sell shares at desired prices and times.
• Substantial sales of common shares or ADSs could cause the price to decline.
• Shareholders may be subject to liability for certain votes of their securities.
• As a foreign private issuer, the company is exempt from several U.S. securities laws rules, potentially limiting available information.
• As a foreign private issuer, the company is not subject to certain NYSE corporate governance rules applicable to U.S. listed companies.
• The market price for common shares or ADSs could be highly volatile.
• Failure to maintain an effective system of internal control over financial reporting could lead to inaccurate financial reporting or fraud.
• Protections afforded to minority shareholders in Argentina are different from and more limited than those in the United States.
• Holders of common shares may determine not to pay any dividends.
• The company may be a passive foreign investment company (PFIC) for U.S. federal income tax purposes.
• The requirements of being a public company may strain resources and distract management.

Future Outlook

The company expects to benefit from increased power generation capacity through ongoing BESS projects and the acquisition of new assets. The company also anticipates further growth in cash flow due to new capacity, the renewed hydro concession, and the new regulatory framework for the energy market. Expansion plans will be financed through market alternatives, including loan agreements and capital markets.

Management Comments

• We believe we are well-positioned to identify and execute new growth opportunities.
• We believe that our scale, asset quality, and commercial expertise provide a competitive advantage in building and managing a robust generation portfolio, enabling us to take advantage of market liberalization measures while reinforcing our position as a leading power generation company in Argentina.
• Our management has a solid understanding of Argentinas historically volatile business environment.
• We intend to continue focusing on improving our efficiency, not only with regards to the management of the generation units, but also in the administration of our resources, in order to continue working towards positioning ourselves as one of the leading companies in the electrical and forestry sectors in Argentina.

Industry Context

StockSavvy.ai notes that Central Puerto's performance reflects broader trends in Argentina's energy sector, including the increasing role of renewable energy and the ongoing regulatory reforms aimed at liberalizing the market. The company's diversification into forestry and mining also aligns with strategies to leverage Argentina's comparative advantages.

Comparison to Industry Standards

• Central Puerto's thermal plant availability rates in 2025 were: Puerto Complex (combined cycle 95.3%, steam turbines 49.0%), Central Costanera (combined cycle 79.4%, steam turbines/gas turbines 59.3%), Luján de Cuyo (93.6%), and San Lorenzo (96.9%). These figures are generally competitive within the industry, though steam turbine availability at Puerto Complex appears lower.
• The company's thermal generation capacity relies heavily on natural gas (96.3% in 2025), which is standard in the industry, but also exposes it to fuel price volatility.
• The company's renewable energy capacity (wind and solar) represented 8.3% of its total installed capacity in 2025, aligning with the global trend towards renewable energy adoption, though the specific percentage may vary by region.
• Central Puerto's total installed capacity of 6,933 MW as of December 31, 2025, makes it one of the largest private sector power generators in Argentina, comparable to major players like Pampa Energía S.A. (4,991 MW) and YPF EE (3,679 MW) in terms of market share within the private sector.

Corporate Governance

Legal Proceedings

• Income Tax - Fiscal Year 2014: Administrative proceedings initiated by the tax authority alleging infringement related to inflation adjustment; case pending before the National Tax Court.
• Income Tax Refund Claim - Fiscal Year 2011: Favorable ruling obtained, confirmed on appeal and by the Supreme Court; amount collected in March 2024.
• Income Tax Refund Claims - Fiscal Years 2009, 2011, and 2012: Claims filed for overpaid income tax due to non-application of inflation adjustments; some resolved favorably and collected, others pending.
• Income Tax Refund Claim - Fiscal Year 2015: Favorable first-instance court ruling obtained in December 2025.
• Income Tax Refund Claim - Fiscal Year 2016: Claim filed in January 2022, pending as of the date of this annual report.
• Income Tax Refund Claims - Fiscal Years 2021 and 2022 (Subsidiary CP La Castellana S.A.U.): Refund claim filed for overpaid income tax due to failure to apply inflation adjustment to tax loss carryforwards; claim pending.

Related Party Transactions

• Management Assistance Agreement with RMPE Asociados S.A. for administrative, financial, commercial, human resources, strategic planning, and general management services, with a fee of 1.50% of consolidated annual gross sales revenues. Amount accrued in 2025 was Ps.13.5 billion.
• Lease agreement between Central Puerto (lessor) and RMPE Asociados S.A. (lessee) with a monthly payment of Ps.122,583.
• Transactions with associates (Ecogas Group, TGM) and related companies (Energa Sudamericana S.A., RMPE Asociados S.A., RPU Agropecuaria S.A., Full Logistics S.A., M. Dodero Compaa General de Servicios S.A., Minera Cordillera S.A.) for services, fuel supply, and other operational activities.

Stakeholder Impact

• Shareholders: Potential for increased returns due to revenue growth and strategic investments, but also exposure to Argentine economic and currency risks. Dividend policy and potential capital raises are key considerations.
• Employees: The company has a stable relationship with its workforce, with collective bargaining agreements in place. The number of employees has increased due to acquisitions and expansion.
• Creditors: The company is in compliance with its debt covenants, and its financial position is considered adequate, with a low net leverage ratio, providing flexibility for future financing.
• Suppliers: The company engages in long-term maintenance service agreements with leading global companies and manages fuel procurement, which is increasingly becoming its responsibility.
• Customers: The company supplies electricity and steam to major industrial users and distribution companies, with a diversified customer base.

Next Steps

• Complete the development of the two BESS projects by mid-2027.
• Continue to expand the portfolio of renewable generation and energy storage technologies.
• Finance expansion plans through market alternatives, including loan agreements and capital markets.
• Focus on optimizing current resources and capitalizing on operating synergies.
• Continue to monitor and adapt to changes in the Argentine economic and regulatory environment.

Key Dates

Recommendation

Central Puerto has demonstrated strong revenue growth and improved net income, driven by operational expansions and strategic acquisitions in renewable energy. The company's proactive management of its asset portfolio and its adaptation to regulatory changes in Argentina's energy market are positive indicators. However, the significant increase in costs, particularly in the cost of sales and other operating expenses, coupled with the ongoing economic volatility and currency risks in Argentina, warrant a cautious approach. The substantial impairment reversals contributing to net income are non-operational and may not be sustainable. While the company's strategic investments in BESS and renewable energy are promising, the overall economic and regulatory environment in Argentina presents considerable risks. Therefore, a 'hold' recommendation is appropriate, advising investors to monitor cost management, regulatory developments, and the broader economic situation in Argentina closely.

Keywords

Central Puerto, CEPU, Form 20-F, SEC Filing, Energy, Electricity Generation, Renewable Energy, Hydroelectric Power, Thermal Power, Wind Power, Solar Power, Argentina, Financial Results, Revenue, Net Income, Capital Expenditures, Concession, BESS, Forestry, Mining, CAMMESA, IFRS, Inflation, Exchange Rate