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Central Puerto S.A. (NYSE:CEPU)
Q1 2020 Earnings Call
May 28, 2020, 10:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning and welcome to the Central Puerto Conference Call following the results announcement for the quarter ended on March 31, 2020. [Operator Instructions] If you do not have a copy of the press release, please refer to the Investor Support section on the company's corporate website at www.centralpuerto.com. A replay of today's call may be accessed by accessing the webcast in the Investor Support section of the Central Puerto corporate website.

Before we proceed, please know that certain statements made by the company during this conference call are forward-looking statements and we refer you to the forward-looking statements section of our earnings release and recent filings with the SEC. Central Puerto assumes no obligation to update forward-looking statements except as required under applicable security laws. In addition, all financial figures were prepared in accordance with IFRS and stated in Argentinian pesos, unless otherwise noted. For the discussion better, please download the webcast presentation available on the company's website. Please be aware that some of the numbers mentioned during the call may be rounded in order to simplify the discussion.

On the call today from Central Puerto is Jorge Rauber, Chief Executive Officer; Fernando Bonnet, Chief Operating Officer; Milagros Grande, Financial Manager; and Tomas Daghlian, Investor Relations Officer.

And now, I will turn the call over to Jorge Rauber. Mr. Rauber, you may begin.

Jorge Anibal Rauber -- Chief Executive Officer

Thank you and good morning.

I would like to begin today's call analyzing the developments of the first quarter. After that, I will comment on the advances of our expansion projects and analyze the operative figures of the quarter. Finally, Fernando will analyze the financial results and comment on the recent news on the company. As you know, the COVID-19 crisis has affected almost all the world, including Argentina. As a consequence, the federal and local government have issued mitigation measures in order to slow down the spread of the virus. Among them on March 20, 2020, the federal government released a stay-at-home order or quarantine as you can see on Page 3. However, the electricity generation activity was considered an essential service and thus exempt from the restrictions. In order to protect our essential workers, we have implemented a strict health and safety protocols for them while the rest of our personnel is doing home office. The quarantine did not have significative consequences during the first quarter, but it is expected to have a deeper impact during the second quarter.

For example, as a consequence of the effects of the quarantine on the economic activity, electricity energy demand decreased 11.5% during April and 10% during the first three weeks of May, compared to the same period of 2019, according to data from CAMMESA. However, it's worth noting that the decrease has a less-than-proportional impact in the income of the generation companies. In the case of renewable energy units, they are unaffected since they have dispatch priority and they do not lose energy generation. In the case of thermal units, they have a high proportion of their income associated to fixed power remuneration, which is not related to the energy generation of the units. Additionally, when demand decreases, the unit that stops generating electricity first tend to be the older, inefficient ones. This unit received a lower remuneration under the Energia Base framework as compared to the new efficient ones they have a high remuneration contracts, also known us power purchase agreements or PPAs. As a consequence of the decrease of economic activity due to pandemic, on April 8, 2020, the Secretary of Energy instructed CAMMESA to postpone until further notice, the application of price update mechanism established by Resolution 31 for the Energia Base units, that is the spot sales. However, it's worth noting that during the first quarter 2020, around 50% of our EBITDA came from units that have contracts and not from the spot sales units. Furthermore, for the full 2020 year, we expect a 70% of our business will come from units that have their contracts set in US dollars due to the new capacity coming online during this year.

Finally, the COVID-19 crisis had an impact on our projects under construction, La Genoveva I and Terminal 6 as you can see on Page 4. Initially, the construction of private sector energy infrastructure was not included as an exemption to the quarantine, but was included on April 7, 2020. Consequently, after taking all necessary precautions and implementing corresponding protocols to protect the personnel and the community where the projects are developed, the construction of La Genoveva I wind farm and Terminal 6-San Lorenzo thermal plant was resumed on April 9 and April 27, respectively. Additionally, in the case of La Genoveva I on February 21, 2020, Vestas the supplier of the wind turbine of La Genoveva I wind project notified the company that the COVID-19 outbreak affected its manufacturing activities worldwide, causing delays on the supply chain for the delivery of certain Chinese origin manufacturing components required for the completion of the wind turbines. In its communication, Vestas did not specify the impact that this situation may have on the agreed schedule. Furthermore, logistic restriction imposed by the federal and local governments may also slow down the construction. In the case of the Terminal 6 project, the construction was restarted after one month with one-third of the personnel that was working prior to the quarantine due to the health and safety protocols agreed with the health authorities. Additionally, the project may also be affected by travel restrictions for international specialists that participate in the construction. Due to this restriction, the CODs of La Genoveva I and Terminal 6-San Lorenzo are expected to be delayed and depend on the evolution of the situation in the region in both projects are located and the measures implemented by the government.

On the other hand, as you can see on Page 5, during the first quarter 2020, we reached a commercial operation date for Los Olivos wind farm, adding 23 megawatt and increased the installed capacity of the wind farms Manque and La Castellana II, which now have 57 megawatts and 15 megawatts, respectively. Projects together with La Genoveva II wind farm have already signed long-term contracts with prices set in US dollars directly with private customers for 100% of their capacity.

Finally, I would like to give you an update on the rest of development for the second quarter. During April 2020, the Siemens branded combined cycle of Lujan de Cuyo plant became unavailable due to significative failure in its main transformer. The normal lead time for a complete reparation of the replacement of the equipment is around 12 months. However, the company is evaluating alternatives to return the unit to service sooner. Although this may reduce the energy generation from this unit during the time the equipment remains unavailable, the company has a comprehensive operational risk and loss of profit insurance that covers breakdown costs and the consequential lost profits.

Going now to our key performance indicators of the quarter. As you can see on Page 6, energy generation during the first quarter was 3.9 terawatt hours of electricity, 10% higher than the same period of 2019. As a reference, energy demand during the period increased 4.2% and domestic energy generation increased 7.4%. Increase in energy generation was first due to a 88% increase from renewable sources, mainly due to the positive impact of La Castellana II, La Genoveva II, Manque and Los Olivos wind farms. Second, hydro generation from Piedra del Aguila increased 10% due to higher available waterflows. Finally, generation from our thermal units increased 5% mainly due to the positive impact of the purchase of the Brigadier Lopez plant and the new Lujan de Cuyo cogeneration unit and to a lesser extent to an increase in energy generation on some of the steam turbines of the Puerto Complex due to higher temperatures during the summer. Regarding our thermal units, as you can see on the graphic on right in the same page, we continue to show an excellent track in terms of availability, reaching 93%, 3 percentage point higher than the same quarter of 2019. This figure is 10 percentage points above the average availability of thermal units for the total market, showing Central Puerto's competitive advantage.

And now, I will turn the call over to Fernando, who will comment on the financial highlights.

Fernando Roberto Bonnet -- Chief Operating Officer

Thank you, Jorge.

Before I start, it's worth noting that the financial statement for the quarter ended on March 31, 2019 include effect of the inflation adjustment. Accordingly, the financial figures that I will mention, including the data from previous periods and the growth comparisons have been restated in terms of Argentine pesos of the end of the reporting periods. I will refer to the results of the first quarter 2020 as compared to the first quarter of 2019.

As you can see on Page 7, our revenues were ARS8 billion in the quarter, a 13% decrease compared to ARS9.3 billion during the first quarter of 2019. This decrease was driven by the discontinuation of fuel purchase operations that we did during 2019, due to new regulations that centralized in CAMMESA, the fuel purchase for all generators. These effects represent ARS3.5 billion variation as you can see on Page 7. Excluding this effect, revenues for the first quarter of 2020 will have increased approximately 40%. This increase was mainly driven by an increase in sales under contracts, which amounts to ARS3.4 billion during the first quarter 2020 as compared to ARS768 million in the first quarter of 2019, mainly due to the revenues related to the Brigadier Lopez power plant, which was acquired in June 2019. The new Lujan de Cuyo cogeneration unit, which has started operation in October 2019 and the wind farms, La Castellana II, La Genoveva II, Manque, and Los Olivos, which have started operation on June, September, December 2019 and February 2020 respectively, a 10% increase in energy generation as Jorge mentioned before, and a 3% increase in availability of thermal units under Energia Base framework. This increase was partially offset by a decrease in price for units under Energia Base regulatory framework established by Resolution 31 in February 01, 2020.

Going to Page 8, we can see the changes in our EBITDA, which reflects the increase in our gross profit, which in the quarter raised 22%, as compared to the same period of 2019. This was due to evaluation in revenues mentioned before, and was partially improved by 39% decrease in our cost of sales that totaled ARS3.3 billion, compared to ARS5.4 billion in the same period of 2019. The decrease in the cost of sale was primarily driven by an 81% decrease in the purchase of fuel and related concepts due to the discontinuation of this operation in the quarter according to the new regulations. This was partially offset by 29% increase in non-fuel related cost of production, mainly due to an increase in our installed capacity, following the acquisition of Brigadier Lopez power plant and the COD of the new thermal and renewable energy projects.

Gross profit margin totaled 59% during the first quarter of 2020, as compared to 41% in the first quarter of 2019. This change was mainly a consequence of an operation for chase of self-supplied fuel, which was enforced during the first quarter 2019, but not during the first quarter of 2020.

Finally, other operating results net decreased ARS1.9 billion in the quarter, mainly due to: an impairment in a property, plant, and equipment, which amounted to ARS774 million in the quarter due evaluation at fair value of two Siemens branded gas turbines installed in the suppliers' facilities, which were evaluated using the fair value less cost of sales approach; and a ARS2.4 billion gain during the first quarter 2020 from the foreign exchange difference and operating assets, mainly due to a FONI trade receivable compared to ARS3.9 billion during the first quarter of 2019, mainly due to an 8% depreciation of the Argentine peso during the first quarter of 2020, compared to the 15% depreciation during the same period in the previous year; and a lower average balance of the trade receivables maintained during the quarter. As a consequence of these variations, the adjusted EBITDA was around ARS7.6 billion in the first quarter of 2020, 7% lower than ARS8.2 billion in the same period of 2019. However, adjusted EBITDA excluding the foreign exchange difference and interest on FONI trade receivables and the impairment on property, plant, and equipment was ARS5.8 billion in the first quarter of 2020, 53% higher than ARS3.8 billion during the same period of 2019, showing the solid result of the new plant.

Going to Page 9, the consolidated net income was ARS1 billion compared to ARS1.8 billion in the same period of 2019. In addition to the factors mentioned before, the net income was mainly affected by higher financial expenses which increased ARS2.2 billion due to the loss obtained for the thermal and renewal energy expansion projects and the decision of Brigadier Lopez power plant and a lower financial income due to interest rates during the quarter and lower foreign exchange difference over US dollar denominated financial assets which excludes FONI and other trade receivables. These effects were partially compensated by affordable net monetary position during the first quarter of 2020, resulting in a gain in real terms while the situation was the opposite during the first quarter of 2019.

Going to Page 10, you can see the cash flow for the first quarter of 2020. Net cash provided by operating activities was ARS3.5 billion. This includes ARS1.5 billion in collection from FONI and CVO installments which is not contained in EBITDA. The cash flow for operations was partially offset by ARS1.2 billion capex invested in the expansion projects and ARS1.5 billion used to servicing debt.

Thank you and now you're invited to ask any questions to our team.

Questions and Answers:

Operator

We will now begin the question-and-answer session. [Operator Instructions] And our first question today comes from Ezequiel Fernandez. Please go ahead.

Ezequiel Fernandez -- Balanz Capital -- Analyst

Good morning. Yes, this is Ezequiel Fernandez from Balanz Capital. Thanks for the materials. I have three initial questions. I would like to go one by one if you don't mind. First, on the Lujan de Cuyo stoppage, can you please tell us a bit more about what happened, and if the transformer failure led to damages in other more critical equipments? Also, what is the capex that you expect to spend to fix this, and what are the processes and timeframes involving collecting from the insurance company?

Fernando Roberto Bonnet -- Chief Operating Officer

Okay, let me go and address this question, and first thank you for the question. What happened with that transformer is that, it caught fire. The root cause analysis has not been performed yet. So, we don't know exactly what happened with the unit, but will be analyzed and assessed by the specialists in order to determine what exactly was the origin of that failure. It would take 12 months if we have to go so far as to purchase a completely new transformer. Our first evaluation is that the unit has been severely damaged. In fact, what happened is that complete destruction of the central column of the transformer. That means that the transformer should be completely rewind anyway. It would take 12 months if we have to replace it for the new one, but we are analyzing with some of the firms involved in the replacement of transformer, the possibility of repairing it instead of completely discard it and go to purchase a new one.

The total capex involved in this operation, if we have to go for a new transformer, will be ARS3.5 million more or less, and if we have the opportunity to repair instead could be around ARS1 million or something like this. Each month of out-of-service of the unit means ARS3.5 million more or less. We had a period -- for the insurance purposes, we have a period of time. This instrument covers half this amount through the year, and in the case of the cost of replacing, it will be ARS0.5 million. So, we're working today in order to basically with -- I mean, a new one spare transformer that we had in third quarter which is initially supposed to function as a spare part for the combined cycle that we had in the third quarter relocating many sites. So, it's not exactly the same transformer that we have. We're analyzing the possibility of modifying something, somehow, I mean the equipment in the Lujan de Cuyo power plant in order to connect this spare transformer and operate with that one. In that case, of course, the time involved in the out-of-service period will be reduced.

Ezequiel Fernandez -- Balanz Capital -- Analyst

Okay, great. And just to be clear, do you expect the full 300 megawatts to be out-of-service, or is it only a partial...

Fernando Roberto Bonnet -- Chief Operating Officer

No, it's a complete outage, because what happened is the unit which has been damaged is the transformer corresponding to the gas turbine. So, it's the main transformer of the unit. That means that the complete unit is out-of-service, the combined cycle.

Ezequiel Fernandez -- Balanz Capital -- Analyst

Okay. That's very clear. Great. My second question is related to San Lorenzo and La Genoveva, if you could tell us what was the work advance ideally in percentage of completion that you had until the moment?

Jorge Anibal Rauber -- Chief Executive Officer

I will answer regarding Lorenzo, and perhaps Fernando could add something regarding the Genoveva I. In the case of San Lorenzo, the percent of -- I mean -- as usual has happened in all the constructions involved in terms of infrastructure, due to the quarantine the work there was stopped at -- when the quarantine was put by the government. The work has been resumed at the end of April, as we mentioned, when we describe the current situation, but of course, it's advancing subject to a new and quite strict protocol in terms of safety. This means that the works is going ahead at a very slow pace compared with the requriement we have before the quarantine. We expect, perhaps -- it's very difficult to forecast the exact timetable for the trade today, even the situation is changing every day, but we expect at least -- at the late of more than three months, perhaps the first quarter next year as a time of completion of the project, given how fast we are advancing today.

Ezequiel Fernandez -- Balanz Capital -- Analyst

Okay.

Jorge Anibal Rauber -- Chief Executive Officer

Fernando, can you -- I'm sorry. I don't know if it was clear or if you have another question regarding San Lorenzo specifically?

Ezequiel Fernandez -- Balanz Capital -- Analyst

No, no, no. That's perfect. Thank you very much. We can move to La Genoveva.

Jorge Anibal Rauber -- Chief Executive Officer

Okay.

Fernando Roberto Bonnet -- Chief Operating Officer

Okay, thank you for the question. In the case of La Genoveva, it's simpler, of course, project than Terminal 6, which is the bigger one, but as Jorge mentioned, we had started the construction in late-April. So right now, we're in the phase of mounting the generators. We are now mounting -- not at the same pace as we did before the quarantine, because as you know, the measures that the government and -- the provincial government and local governments are taking are very, very strict, especially in the place of -- in the region of Santa Fe and Buenos Aires region. In Buenos Aires, in another green firm that are under construction. There appear three cases of coronavirus, so the authorities are very, very strict right now there, but instead of allowing the construction, are getting more strict in terms of crowding the people in the town. So, it's not easy, but we're still working on the construction. We're mounting the generators. We have been mounting I think between three or four of the total 21 that we have in this near-term. So, we expect that if we can continue doing that without any case of coronavirus and without any restriction from the local authorities additional that we are suffering now, we can finish around the third quarter this year -- the La Genoveva power plant at the end of the third quarter.

Ezequiel Fernandez -- Balanz Capital -- Analyst

Okay, perfect. Thank you very much. And my third question is related to on the financial side, how are your conversations with banks going regarding revolving some of your loans, and specifically the larger syndicated loan of around ARS180 million?

Fernando Roberto Bonnet -- Chief Operating Officer

Okay. In terms of short-term debt, we're not facing any problem. We have all our lines with banks available. In fact, we don't have a lot of debt in the short-term. In the case of the big loan, that we've mentioning, the one for the acquisition of Brigadier Lopez, the first on acquisition. So the capital are set for December this year. So, we have a lot of time. We are talking to them. We are -- of course we need to wait because as Jorge mentioned, right now we're not suffering an external problems with the quarantine because of incomes are coming normally. Of course, we received some reduction for the production, but as you know, our income is mainly driven by the availability of our units. So, we're analyzing opportunities to renegotiate that loan, but it's not urgent for us to advance right now. Of course, we're talking with the banks, but we're not in a position that we need to urgently renegotiate that because we don't have the cash to pay. So, we are talking with them, but we are analyzing the future of our income and flow, and right now it's not the urgent.

Ezequiel Fernandez -- Balanz Capital -- Analyst

That's very clear. Thank you.

Operator

And our next question comes from Frank McGann with Bank of America. Please go ahead.

Frank McGann -- Bank of America -- Analyst

Yes, thank you very much. You mentioned the potential for weaker demand in the release related to COVID-19 in the market in Argentina and I was just wondering what effects this could potentially have on your business in terms of overall dispatch and such, and what -- basically just how you're seeing the next couple of quarters in terms of effects coming from COVID-19?

Jorge Anibal Rauber -- Chief Executive Officer

Frank, thank you for your question. Perhaps it's a different situation if you compare Argentina with other more industrialized countries. In Argentina specifically, the demand has decreased 11.5%. So, it's not such a huge reduction in terms of demand. Perhaps the most important effect because of the coronavirus was mostly related with the collection and that [Indecipherable] so much with demand. So, we don't see -- I mean perhaps somehow we would be affected when we start because of that situation, but we don't see a dramatic reduction in terms of production. Our combined cycle in Puerto for sure will be in dispatch. Probably our income is out of dispatch because of this impact, but perhaps there are other factors, the fact that our transformer in Mendoza is out-of-service, that kind of things are more important in terms of projecting our results for this year than the coronavirus. Perhaps the most important thing regarding this situation is the target in the construction and collections. They don't have to lead -- have to intervene in the market in order to get more money, increase subsidy, 3 times the subsidy they were sending to the market in order to keep all the collection change active, and maintain all the systems operating.

So, it's more related to the collection than with a demand or generation. And in fact, all the renewable projects had priority dispatch, so they're not going to be affected. Our combined cycle is quite efficient, and as such, our cogeneration investment is operating, and perhaps there will be a reduction with the older turbines. In terms of renovation, as just mentioned in our statement, it's not so much affected because more part of the remuneration is based on capacity, not so much on production. So, we don't see a direct impact in terms of production or renovation, but more related with collection perhaps in higher subsidy needed from the government could keep collection operating and active.

Frank McGann -- Bank of America -- Analyst

Okay, thank you. And have you seen an increase in the time it takes for you to get compensated by CAMMESA?

Jorge Anibal Rauber -- Chief Executive Officer

Not so much. In fact, the last month they have reduced the time, I mean at the beginning of the quarantine, it was an impact, it was a delay, but now the government is sort of going back on track. So not so much affected, because of these. The problem was before that. I mean -- the delay in collection was mostly related with the change in government in December than because of the quarantine. During the quarantine, it was maintained at the same pace of payments that we had before.

Frank McGann -- Bank of America -- Analyst

Okay. Thank you very much.

Jorge Anibal Rauber -- Chief Executive Officer

You're welcome.

Operator

Your next question comes from Antonella Rapuano with Santander. Please go ahead.

Antonella Rapuano -- Santander -- Analyst

Hi. Thank you for the presentation and for taking my question. I would like to make two questions if I may. The first one is regarding the FONINVEMEM program, and specifically on the thermal plants Belgrano and San Martin. I was wondering if you could give us some updates on the transfers of the assets to address where you have a material interest, and when do you expect to start registering these equity income in your financial statement, and also, if you have any remaining payments for the FONINVEMEM from Belgrano and San Martin for the remaining of the year, or these payments have already been solved -- the receivable payments I am referring to.

Jorge Anibal Rauber -- Chief Executive Officer

Okay. Fernando, can you answer this question?

Fernando Roberto Bonnet -- Chief Operating Officer

Yes. Thank you, Antonella. In terms of receivables, we already collected the full balance of the receivables from San Martin and Belgrano power plants. So, this is completely set on time. And in terms of the transfer of the assets, we are -- still all the materials that the agreement requires in terms of the government commitment in the operating company that was established in the agreement, in the regional agreement. So, we performed the shareholders' meeting for the two companies in order to give the opportunity to the government to enter.

We did it in the terms that the government asks in the terms of participation. As you know, we have some discussions about that. We think that the participation of the government needs to be reviewed in terms of how much they contribute to the construction of the power plant, but in order to not lose the opportunity to recieve the power plants in the operating companies, we agreed to allow them to enter in the proportion that they want, reserving our rights to reclaim the difference in further moments for their actions. So, we did that. We complied with the application, and the government and [Indecipherable] power plants in the trustee are analyzing all the presentation and requiring some additional information, and I think they are doing all the analysis in order to transfer the assets to the company. We don't know when this will happen, but we think that need to be, I don't know, in the next month.

Antonella Rapuano -- Santander -- Analyst

Right, thank you.

Fernando Roberto Bonnet -- Chief Operating Officer

So, whenever it happens, we're going to recognize the income in our balance sheet.

Antonella Rapuano -- Santander -- Analyst

Right. And could you -- just a follow-up, could you give us some measure of the magnitude of this income from Belgrano and San Martin?

Fernando Roberto Bonnet -- Chief Operating Officer

Well, we need to perform evaluation there. It's difficult because we need to finish this issue with the participation and after that, we need to perform evaluation to -- for sure to incorporate these assets in our balance sheet. I don't know -- right now, I don't have evaluation performed yet, but you can do it thinking that these power plants receive some remuneration to combined cycle right now in the Resolution 31. So, more or less these will be the income that these power plants will receive from now on.

Antonella Rapuano -- Santander -- Analyst

Sure, right. And my other question is regarding the PPA, the contract capacity. If you see any risk of changes in prices maybe translated to pesos in the case of a sharp depreciation of the local currency?

Fernando Roberto Bonnet -- Chief Operating Officer

If we see -- I mean, regarding the PPA?

Antonella Rapuano -- Santander -- Analyst

Yes.

Fernando Roberto Bonnet -- Chief Operating Officer

No, we don't see any of the [Indecipherable]. A month ago or something at least, it was in the press some rumors regarding this, but we don't see actually a risk to have a specification related to the PPAs.

Antonella Rapuano -- Santander -- Analyst

Okay. Well, thank you. That's very clear.

Fernando Roberto Bonnet -- Chief Operating Officer

Thank you.

Operator

And our next question is a follow-up from Ezequiel Fernandez with Balanz Capital. Please go ahead.

Ezequiel Fernandez -- Balanz Capital -- Analyst

Yes. Hi again. Sorry, and two very quick follow-ups. The first one is, are you having access to the official FX market for that repayment and imports without issues, and if you could tell us please about what was the size of the Central Vuelta de Obligado receivable outstanding at the end of March 2020?

Jorge Anibal Rauber -- Chief Executive Officer

Okay. The first one, we are not facing any problem to access to the FX market to pay imports or to pay debt. That's a thing that we are doing in the face of their renewable projects, and in the case of importation for Terminal 6 and the renewable project we are not facing any kind of problem, any kind of lag, or question regarding to the Central Bank. So we are doing normally. Of course we need to respect the times and the norms and regulations, but not more than that. In terms of the amount of their CVO receivables outstanding at March, the number is $440 million, which is the normal that is expected in the collections. During the last year and this year we collect the normal amounts and the ruler amount if it's an amount that need to be outstanding at that time.

Ezequiel Fernandez -- Balanz Capital -- Analyst

Thank you. That was very clear. That's all from my side.

Operator

And our next question comes from Roberto Aldana [Phonetic] with Morgan Stanley. Please go ahead. Roberto Aldana, your line is open.

Roberto Aldana -- Morgan Stanley -- Analyst

I'm sorry. I was on mute. Hi guys, thanks for taking my question. Can you give me any color on how -- what percentage do you expect the overall demand will be on the second quarter and the following quarters this year? How did you see the liquidity of the company by the end of the year? Do you expect any -- to have any extra -- to ask for any extra debt or something like that? Thank you.

Jorge Anibal Rauber -- Chief Executive Officer

I'm sorry, the first part of your question....

Roberto Aldana -- Morgan Stanley -- Analyst

Sorry, I couldn't understand, Rauber.

Fernando Roberto Bonnet -- Chief Operating Officer

So, Jorge, I think he asked about how the demand is going to evolve in the second quarter and the third quarter, I think that was your question, correct?

Roberto Aldana -- Morgan Stanley -- Analyst

Yes.

Fernando Roberto Bonnet -- Chief Operating Officer

Yeah, well, more or less what I mentioned, I mean the first quarter was unaffected. In fact, the quarantine issued by the government at the end of March, March 20 to be more precise, and before that, we had an increase of almost 18% in terms of demand until that date, and after that we had a reduction. In the second quarter, what we expect is more or less 11% decrease of demand compared with the same demand last year. So, this is the whole impact we expect, and what we are seeing today. The government now is kind of relaxing the quarantine, so what we expect for the coming month unlike we had back in terms of quarantine because of increase of cases of the virus of the disease, unless we have that kind of situation, we have to expect an increase in demand and going back to normality to say so. So, the worst case would be 10% or 11%.

Roberto Aldana -- Morgan Stanley -- Analyst

Okay.

Fernando Roberto Bonnet -- Chief Operating Officer

And I don't remember the second part of the question. I think you made those two questions.

Roberto Aldana -- Morgan Stanley -- Analyst

Yeah. How would you see the liquidity of the company in the remaining of the year. You expect to have any more capex needs or will it require to have some -- the company to enter into new debt or anything like that?

Fernando Roberto Bonnet -- Chief Operating Officer

Okay. Right now, we have sufficient liquidity to make the capex that will remain for the project, Terminal 6, and the renewables one, La Genoveva I, sorry. And for that, we are not thinking -- we acquired some additional debt, long-term debt, for sure right now. It's not because normal. We are thinking in some liability management. We are seeing some opportunities in the local markets, not for the big amounts, but we are seeing some opportunities in local markets. Perhaps dollar-linked, an issuance that can give us some opportunities to acquire some additional debt at lower interest rates, which is perhaps some -- seeing that we kind of do in terms of liability management, but we are not thinking to -- we don't need to do for sure in terms of to close the capex that we are doing right now. We have the liquidity, as Jorge mentioned, impacting that. So the coronavirus in our cash flow is not so relevant right now.

The rates in CAMMESA are more or less stable. So, we have some income and flow to cover all the capex that we still are performing for Terminal 6 and Genoveva I. So, in case of Genoveva I we have the loan from the IFC remained in -- a big portion of this loan has remained in our cash and we can apply -- of course, we can apply to capex. So, we are not thinking in a huge additional debt. We can do some, as I mentioned, some liability management, taking an advantage of -- regarding this in local farms available, especially for projects, but this is, I think, is going to slow the rest of the year for and so forth. We are not planning to do an international mission or an important mission in the next month. We're going to see -- as I mentioned, we're going to see on December for the payment of the of the syndicate loan, which are more or less ARS36 million. We can do some liability management there, but not for capex.

Roberto Aldana -- Morgan Stanley -- Analyst

Great, thank you very much.

Fernando Roberto Bonnet -- Chief Operating Officer

You are welcome.

Operator

And this concludes our question-and-answer session. I'd like to turn the conference back over to Mr. Rauber for any closing remarks.

Jorge Anibal Rauber -- Chief Executive Officer

Okay. Thank you to everyone for your interest in Central Puerto. We encourage you to call us at anytime for any information you may need. Thank you, and have a good day.

Operator

[Operator Closing Remarks]

Duration: 48 minutes

Call participants:

Jorge Anibal Rauber -- Chief Executive Officer

Fernando Roberto Bonnet -- Chief Operating Officer

Ezequiel Fernandez -- Balanz Capital -- Analyst

Frank McGann -- Bank of America -- Analyst

Antonella Rapuano -- Santander -- Analyst

Roberto Aldana -- Morgan Stanley -- Analyst

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