Central Puerto: Power Capacity Expansion and Strong Cash Flow Generation

Results for the fiscal year and Quarter ended on December 31, 2017

BUENOS AIRES, Argentina–(BUSINESS WIRE)–Central Puerto S.A. (“Central Puerto” or the “Company”) (NYSE: CEPU),
the largest private sector power generation company in Argentina, as
measured by generated power, according to data from CAMMESA, with a
geographically and technologically well-diversified generation asset
portfolio, reports its consolidated financial results for the
three-month period ended December 31, 2017 (“Fourth Quarter” or
“4Q2017”), and its audited annual results for 2017.

A conference call to discuss 4Q2017 and full year financial results will
be held on March 13, 2017 at 12 pm Eastern Time (see details below). All
information provided is presented in a consolidated basis, unless
otherwise stated.

All figures are expressed in Argentinean Pesos and growth comparisons
refer to the same period of the prior year, except when otherwise
specified. Definitions and terms used herein are provided in the
Glossary at the end of this document. This release does not contain all
of the Company’s financial information. As a result, investors should
read this release in conjunction with Central Puerto’s consolidated
financial statements and the notes to those statements for the years
ended December 31, 2017 and 2016 available on the Company’s website.

A. 4Q2017 and Full Year 2017 Highlights

Significant increase in 2017 revenues after key changes in Energia
Base framework: The Ministry of Energy increased remuneration to
generators and set all prices in US dollars.

Revenues in 2017 were 67% higher than in 2016, reaching
Ps. 5,957 million, while Adjusted EBITDA of continuing operations
in 2017 was 47% higher than in 2016, totaling Ps. 3.439 million.
Finally, Net income of the period was 98% higher than in
2016, reaching Ps. 3,494 million.

Strong cash flow generation, supported by FONINVEMEM cash flows: Cash
flows from operations, reached Ps. 2,389 million. This figure includes
FONINVEMEM collections for a total amount of Ps. 351 million.

Stable operational performance: Energy generation from continuing
operations was 15,626 GWh, 7% higher than in 2016, while machine
availability (weighted average by power capacity) of thermal units was
90%, compared to 76% in 2016, exceeding market average.

+423 MW awarded capacity in co-generation units: During 4Q2017,
Central Puerto was awarded with 2 new thermal plants, Luján de Cuyo and
Terminal 6-San Lorenzo, increasing installed capacity under construction
to 657 MW.

+87 MW of awarded capacity in renewable energy: Under Renovar
Program (Round 2), Central Puerto was awarded with La Genoveva
project, adding 87 MW of capacity to the wind portfolio, that totals 234
MW with La Castellana and Achiras farms, currently under construction
(147 MW).

____________________________________________________________________________________________________________________________________________

“This was an exceptional year for Central Puerto, as we successfully
executed our strategy based on growing on both renewable and
conventional thermal production. In a highly competitive environment,
Central Puerto was able to take advantage of its strengths in terms of
engineering, financial and strategic capabilities to keep its position
as leader in the Argentinean market in terms of power generation among
private players.

The market for the legacy generation has also improved significantly
during 2017.
Looking forward, we are prepared for the next
steps, and ready to help rebuild the power market in the country, while
creating and delivering value to ourshareholders”

Jorge Rauber CEO

____________________________________________________________________________________________________________________________________________

B. Recent News

New listing on NYSE: In February 2018, ADSs were approved for
listing on the New York Stock Exchange under the symbol “CEPU.”

Delivering on capacity growth – New renewable projects for 46 MW: Under
the new regulatory framework (MATER), in which generators are allowed to
enter into renewable energy power purchase agreements directly with
large users, CP Renovables -a subsidiary of Central Puerto- was granted
access to the grid for La Castellana II and Achiras II wind projects,
adding the possibility to sell 46 MW of new power capacity.

Successful transfer of La Plata plant provided funds for new
opportunities: In 4Q2017, YPF accepted Central Puerto’s offer to
sell the La Plata plant for US$31.5 million. The transaction was subject
to conditions that were met during 1Q2018. The proceeds from this
transaction will be used to fund ongoing thermal projects during 2018.

Cash from potential sale of non-core assets to fund growth:
Central Puerto intends to sell its interest in Ecogas, subject to
favorable market conditions. This operation may be executed in one or
more potential public offerings in national and/or international
markets. In order to facilitate the transaction, the controlling
companies might be merged and listed in an international stock exchange.
Central Puerto currently holds an indirect interest of 22.49% in DGCU
and a direct and indirect interest of 39.69% in DGCE.

Dividends from Ecogas: During 1Q2018, Central Puerto collected
US$. 13,6 million from DGCE and its controlling company. The Company
also expects to collect dividends from DGCU during 1H2018.

TGM claim cashed: In 2009, TGM, a subsidiary in which Central
Puerto holds a 20% interest, terminated its gas supply contract with YPF
as a result of repeated breaches by YPF. In 4Q2017, YPF agreed to pay
TGM, US$114 million in order to end TGM’s claim against YPF. During
1H2018, Central Puerto expects to receive dividends, in proportion to
its interest in TGM.

Potential dividend distribution: Taking into account that the
recent changes in the Argentine tax regulation do not apply to 2017
results, the Company proposed a dividend distribution of Ps. 0.70 per
share.

C. Main operating metrics

The table below sets forth key operating metrics for 4Q2017, and 2017,
compared to 4Q2016, 3Q2017 and 2016:

1 EoP refers to “End of Period”
2 Available
weighted average by power capacity. Off time due to scheduled
maintenance agreed with CAMMESA is not included in the ratio. For
4Q2017, data for October and November 2017 (latest available data). For
2017, data from January to November 2017 (latest available data).
3
Refers to the generation from La Plata Plant, which was sold
during 1Q2018.
Source: CAMMESA, company data.

In 4Q2017, energy generation from continuing operations increased 18% as
compared to the same period of 2016, due to a 170% increase in energy
generation for hydro plants, after an increase in the available water
flow in Piedra del Águila Plant, while thermal generation decreased 13%
due to less dispatch. The availability of thermal units increased to 92%
in 4Q2017, as compared to 80% in 4Q2016, mainly because of lower failure
rate in the steam turbines. Finally, steam generation remained almost
stable, decreasing 1%.

During 2017, energy generation from continuing operations increased 7%
as compared to the same period of 2016, due to a 58% increase in energy
generation for hydro plants, after an increase in the available water
flow in the Piedra del Águila Plant, while thermal generation declined
3% due to less dispatch. The availability of thermal units increased to
90% in 2017 as compared to 76% in 2016, mainly because of a lower
failure rate in the steam turbines. Finally, steam generation increased
6% due to an increase in demand by YPF.

D. Financials

D.1 Main financial magnitudes of continuing operations

1 See “Disclaimer-Adjusted EBITDA” below for further
information.

D.2 Main financial magnitudes of continuing operations (dollar
convenience translation)

1 See “Disclaimer—Adjusted EBITDA ” below for further
information.

NOTE: The calculation of the financial values expressed in US dollars
arises from the calculation of the results expressed in Argentine pesos
divided by the average of the daily exchange rates quoted by the Banco
de la Nación Argentina for wire transfers (divisas) for the relevant
period. The translations into US dollars have been made for convenience
purposes only. See “Disclaimer—Convenience Translations” below for
further information.

D.3 Adjusted EBITDA Reconciliation of continuing operations

1The Financial Income for 4Q2016 is expressed net of
Financial Expenses for the period
2 See
“Disclaimer—Adjusted EBITDA” below for further information.

D.4 4Q2017 Results Analysis

Revenues increased 114% to Ps. 1,935 million in 4Q2017, as
compared to Ps. 906 million in 4Q2016. The increase in revenues was
mainly driven by: (i) the tariff increase established by Res. 19/17,
which set higher prices for energy generation and machine availability
and set the prices in US dollars; (ii) an increase of 13% in the average
exchange rate of 4Q2017, as compared to the average exchange rate of
4Q2016, which impacted on tariffs set in US$ dollars; (iii) a 18%
increase in energy generation, that reached 4,039 GWh for continuing
operations during 4Q2017; (iv) Ps. 149 million in revenues coming from
capacity payments (Guaranteed Bid Capacity -DIGO in Spanish) of some
steam units from previous quarters, that were billed and collected
during 4Q2017; (v) Ps. 143 million in additional revenues under
Resolution No. 724/2008 with original due date in 2018 and 2019, that
were collected in advance.

The table below sets forth the tariff scheme for Energia Base effective
since November 2017, by source of generation:

1Effective prices for capacity payment depend on the
availability of each unit, and the achievement of the Guaranteed Bid
Capacity (DIGO in Spanish) that each generator may send to CAMMESA twice
a year. For further details, see “The Argentine Electric Power
Sector—Remuneration Scheme—The Current Remuneration Scheme” in the
prospectus filed with the SEC on February 2, 2018 or the Local
Prospectus filed with the CNV on January 18, 2018.

Adjusted EBITDA increased 179% to 1,315 million in 4Q2017,
compared to Ps. 472 million in 4Q2016. This increase was driven
primarily by the increase in revenues mentioned above, and was partially
offset by: (a) an increase in the cost of sales and in administrative
and selling expenses, mainly due to (x) an increase in dollar
denominated expenses due to an increase of 13% in the average exchange
rate of 4Q2017, as compared to the average exchange rate of 4Q2016; and
(y) an increase in compensation to employees mainly related to
collective bargain agreements.

Adjusted EBITDA + Cash Flows from FONINVEMEM totaled Ps. 1,408
million in 4Q2017. During the 4Q2017, the company received Ps. 93
million (including VAT) from FONINVEMEM receivables, compared to Ps. 82
million (including VAT) in 4Q2016.

Net income increased 287% to Ps. 1,415 million in the 4Q2017, as
compared to Ps. 366 million in 2016. In addition to the above-mentioned
facts, net income also increased as a result of a 700% increase in share
of profit of associates because of (i) a profit of Ps. 127 million from
the interest in Ecogas, through IGCE and IGCU in 4Q2017, as compared to
Ps 47 million in the 4Q 2016; (ii) the Company’s interest in TGM
increased to Ps. 248 million after the settlement entered into between
YPF and TGM to end the claim for breach in the natural gas
transportation contract.

D.5 2017 Annual Results Analysis

Revenues increased 67% to Ps. 5,957 million in 2017, as compared
to Ps. 3,563 million in 2016. The increase in revenues was mainly driven
by (i) the gradual tariff increase established by Res. 19/17 that became
effective as of February, May and November 2017, which set higher prices
for energy generation and machine availability and set the prices in US
dollars, (ii) a 7% increase in energy generation, which for 2017 reached
15,626 GWh for continuing operations, (iii) an increase of 11% in the
average exchange rate during 2017, as compared to the average exchange
rate during 2016; and (iv) Ps. 143 million in additional revenues under
Resolution No. 724/2008 with original due date in 2018 and 2019, that
were collected in advance.

Adjusted EBITDA increased 47% to 3,439 million in 2017, compared
to Ps. 2,342 million in 2016. This increase was driven primarily by the
increase in revenues mentioned above, and was partially offset by: a) an
increase in the cost of sales and in administrative and selling
expenses, mainly due to (i) an increase in dollar denominated expenses
as a result of an increase of 11% in the average exchange rate during
2017, as compared to the average exchange rate during 2016; and (ii) an
increase in compensation to employees mainly related to collective
bargaining agreements; and b) by a decrease in other operating income
due to a one-time gain of Ps.520.4 million registered in 2016 in
connection with a revision of the estimate book value of the amounts
recognized as of December 31, 2015 of certain receivables from CAMMESA
related to LVFVD of additional trust remuneration for financing new
projects, based on changes in the energy sector.

Adjusted EBITDA + Cash Flows from FONINVEMEM totaled Ps. 3,741
million in 2017. During the 2017, the Company received Ps. 351
million from FONINVEMEM receivables (including VAT), compared to Ps. 307
million (including VAT) in 2016.

Net income increased 98% to Ps. 3,494 million in 2017, as
compared to Ps. 1,769 million in 2016. In addition to the drivers
mentioned above, this increase was driven by: a) the net income on the
disposal of available-for-sale financial assets, net totaling Ps.663 in
2017, compared to Ps.227 million in 2016, mainly due to an increase in
sales of available-for-sale financial assets in 2017; and b) an increase
in share of the profit of an associate because of (i) a profit of Ps.
422 million derived from the interest in Ecogas through IGCE and IGCU in
2017, as compared to Ps. 103 million in 2016, as a result of an increase
in tariffs effective October 2016, April 2017 and November 2017; and
(ii) a profit of Ps. 248 million from the interest in TGM in 2017, due
to the settlement entered into between YPF and TGM to end the claim for
breach in the natural gas transportation contract.

D.6 Financial Situation

As of December 31, 2017, the Company and its subsidiaries had cash and
cash equivalents of Ps.89 million, and other current financial assets of
Ps. 1,111 million.

Loans and borrowings totaled less than 0.5 million pesos for Central
Puerto S.A., while its subsidiary, CP Renovables, which holds the
renewable projects, had loans totaling Ps. 1,985 million received for
the construction of the Achiras and La Castellana wind farms.

D.7 Cash Flows of the year

Net cash provided by operating activities was Ps. 2,389 million
during 2017. Cash flow provided by operating income from continuing
operations was Ps. 3,111 million, partially reduced by an increase of Ps
1,057 million in trade and other receivables as a result of higher
average prices per unit (while the period in which we collect such
receivables remained stable), among other reasons.

Net cash used in investing activities was Ps.2,317 million for 2017.
This amount was mainly explained by (i) payments that amounted to
Ps.3,484 million for (x) to the purchase of property, plant and
equipment, for the construction of Achiras and La Castellana wind farms
and (y) for the acquisition of two gas turbines for the Luján de Cuyo
Project. This was partially offset by (ii) proceeds from the sale of
available-for-sale financial assets that totaled Ps.1,130 million.

Net cash used in financing activities was to Ps.59 million in 2017.
The main variables that account for financing activities were (i)
dividends paid in cash that amounted to Ps. 1,279 million, (ii) the
repayment of loans received from Banco de Galicia y Buenos Aires S.A.
for the purchasing of turbogenerators that totaled Ps.994.97 million and
(iii) loans received by CP Renovables and its subsidiaries for the
construction of the Achiras and La Castellana wind farms for Ps. 1,872
million.

D.8 Tables

Contacts

Central Puerto S.A.
Fernando Bonnet, (+54 11) 4317
5000
Chief Financial Officer
or
Tomás Daghlian, (+54
11) 4317 5000
Investor Relations Officer
[email protected]
www.centralpuerto.com

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