Release Date: February 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Celsia SA Esp (BOG:CELSIA, Financial) announced a 5.2% increase in dividend distribution, reflecting a yield of 8.9%, which is above the expected inflation for 2025.
- The company reported consolidated revenues of 6.1 billion pesos, representing a growth of 9.3% year-over-year.
- Celsia SA Esp (BOG:CELSIA) achieved a net controller performance growth of almost 15% compared to 2023, indicating strong financial results despite challenging conditions.
- The company is actively reducing its debt, aiming to lower it to below 4 billion pesos, which is expected to reveal more than 1,000 pesos per share in value.
- Celsia SA Esp (BOG:CELSIA) is expanding its renewable energy initiatives, with significant growth in solar farms and energy efficiency projects, aiming to surpass 1 gigawatt in capacity over the next three years.
Negative Points
- The company faced regulatory instability, impacting its operations and financial performance.
- Celsia SA Esp (BOG:CELSIA) experienced a 19.3% decrease in EBITDA compared to the previous year, influenced by the El Nino phenomenon and increased energy purchase costs.
- The company reported a significant increase in administrative expenses, rising by 30.5% compared to the same quarter of the previous year.
- There is concern over the delay in government subsidy payments, which affects the company's cash flow and financial planning.
- Celsia SA Esp (BOG:CELSIA) is facing challenges in geographic diversification, with limited expansion beyond its current markets, despite previous intentions to diversify.
Q & A Highlights
Q: What is the status of the Porvenir II project and the expectations for its future?
A: Santiago Arango, the leader of the project, explained that the development of Porvenir II was suspended in September last year due to a legal process. The case is currently in court, and no appeals can be made. The company is awaiting a decision from the Council of State to determine whether to proceed, sell, or make other decisions regarding the project. Porvenir II is an electrical project in eastern Antioquia with a capacity of 370 megawatts.
Q: What are the strategic objectives for Celsia's entrepreneurial initiatives in the mid and long term?
A: Ricardo Sierra, CEO, stated that the entrepreneurial initiatives have different characteristics. For example, the energy efficiency initiative consolidates services and products beyond traditional offerings, such as solar energy generation and electric charging. The company aims to create a large vehicle for energy efficiency, potentially bringing in partners or treating it as a private investment fund. The goal is to maximize shareholder value over the next 5 to 7 years.
Q: What is the projected impact of the El Niño phenomenon on Celsia's cost of sales for 2025?
A: Gonzalo, a company representative, explained that the variable cost of energy generation is expected to decrease as the company overcomes critical conditions. The extent of the decrease will depend on the system's performance and the amount of generation needed during the dry season. The company aims to manage these conditions to achieve cost reductions in 2025.
Q: How does Celsia plan to reduce its debt without impacting cash flow, and what are the perspectives for value in the Peruvian market?
A: The company plans to reduce debt by minimizing expansion CapEx in Colombia and optimizing working capital. They expect to leverage inventory built over the past years and recover assets from platforms. The Peruvian market is seen as an opportunity for growth, with a capital fund of $300 million being established to support investments. This fund will not be consolidated in Celsia's numbers but will generate management fees and potential value increases.
Q: What is Celsia's approach to geographic diversification, and why is it not more prominent in their current plans?
A: Ricardo Sierra explained that Celsia has sold its Central America assets and is opening operations in Peru. Energy efficiency initiatives are expanding to Central America, Peru, and Mexico. The company is focusing on these regions for diversification, with plans to provide more details in future updates. The current focus is on leveraging existing platforms and entrepreneurial operations for growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
