PowerPoint Presentation · USD 200 M in annual saving in grain ports 30% of tariff reduction of...
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INVESTOR PRESENTATION July 2019 July 17, 2019
Transcript of PowerPoint Presentation · USD 200 M in annual saving in grain ports 30% of tariff reduction of...
INVESTOR PRESENTATION July 2019
July 17, 2019
● On the path to a balanced fiscal budget ○ Primary fiscal deficit has been coming down consistently through a decline in spending in
real terms, on its way to reach a primary fiscal balance in 2019.
○ Fiscal consolidation at the central administration level has not been achieved at the expense
of Provincial finances. On the contrary, the consolidated fiscal position of the provinces is in
a surplus.
● Relative price distortions are being fixed ○ Subsidy reductions, particularly in the energy sector, have reduced distortions in relative
prices, generating the appropriate incentives for industrial and export development.
○ In contrast with 2018, the foreign sector accumulates nine consecutive months of trade
surplus, contributing to a sharp reduction in the current account deficit for 2019.
● Boosting competitiveness on a systemic basis ○ Modernization of the domestic capital markets regulatory framework is contributing
towards generating an environment that will increase the channeling of domestic savings.
○ Government capital spending, particularly in the area of transportation, has been
strategically geared towards increasing Argentina’s productivity and competitiveness.
Executive summary
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1. Fiscal update
2. Macroeconomic Update
3. Systemic Competitiveness
a. Domestic Capital Markets
b. Energy
c. Infrastructure
Fiscal target is being met
ACCUMULATED PRIMARY RESULT
% of GDP
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4 consecutive years of consistently improving fiscal results
since the beginning of the current
administration.
INTERANNUAL GROWTH OF INCOME AND SPENDING In percentage
Income grows systematically above spending
24 months of consecutive higher growth in income over primary spending.
32 points Of growth gap between inter-
annual income growth and
spending growth in June.
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NATIONAL PRIMARY SPENDING (NON FINANCIAL PUBLIC SECTOR) ON A CASH BASIS
Annual Growth in percentage
Real spending has been falling for almost 20 consecutive months
19 consecutive
months of continued reductions in
government primary spending.
12% was the drop in year-over-year
spending in real terms for June
2019.
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Primary fiscal balance will be achieved in 2019
PRIMARY RESULT
As % of GDP
It’s been 10 years since the last time the national
government achieved a primary
balance.
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Government spending is at the lowest level in 10 years
NATIONAL PRIMARY SPENDING (SPNF)
As % of GDP
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Primary spending has fallen every year in this administration
PRIMARY SPENDING
Inflation-adjusted pesos, % Change
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Provinces have converted fiscal deficits into surpluses
AGGREGATE PROVINCIAL FISCAL RESULT
In millions of pesos
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Almost every province has improved its fiscal performance...
PROVINCIAL PRIMARY RESULTS
As percentage of revenues
6 Provinces had a primary surplus in 2015.
17 Provinces had a primary surplus in 2018.
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…measured on a primary and financial basis
PROVINCIAL FINANCIAL RESULTS
As percentage of revenues
6 Provinces had a financial surplus in 2015.
11 Provinces had a financial surplus in 2018.
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Provinces are increasingly responsible for their fiscal performance
PROVINCIAL TAX REVENUES
As percentage of national tax revenues
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1. Fiscal update
2. Macroeconomic Update
3. Systemic Competitiveness
a. Domestic Capital Markets
b. Energy
c. Infrastructure
Monetary policy has yielded a reduction in FX volatility
NOMINAL EXCHANGE RATE
Pesos per dollar
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Monetary base has been reduced significantly in real terms
MONETARY BASE + LEBAC + LELIQ
Million ARS of May-2019
CENTRAL BANK INTEREST BEARING LIABILITIES
As a proportion of international reserves
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2,000
2,500
3,000
3,500
4,000ene
feb
mar
abr
may
jun
jul
ago
sep
oct
nov
dic
2015 2016 2017 2018 2019
Economic activity is recovering
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Growth of exports has resumed since 2016
TOTAL EXPORTS
LTM in USD bn
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Total
Without grains & oilseeds
Nine months of trade surpluses reverted the trade balance
TRADE BALANCE
LTM in USD Bn
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Sectorial evidence of growth in exports
Fuente: INDEC
OIL & GAS
USD mm
TRUCKS (PICK-UPS)
USD mm
NON - TRADITIONAL MINING
USD mm
BEEF
USD mm
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1. Fiscal update
2. Macroeconomic Update
3. Systemic Competitiveness
a. Domestic Capital Markets
b. Energy
c. Infrastructure
Converting USD debt to pesos
LETES AND LECAPS HELD BY PRIVATE INVESTORS USD bn equivalent
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Conservative maturity profile
LECAPS MATURITIES HELD BY PRIVATE INVESTORS ARS Bn
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LETES AND LECAPS HELD BY PRIVATE INVESTORS USD bn equivalent
Debt securities payments by creditor type
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Only 30% of bond maturities coming due in 2020 are
denominated in hard currency.
Digitalization have simplified domestic capital market access
COMPANIES HAVING ACCESS TO CAPITAL MARKETS FINANCING
Number of Issuers
The number of companies obtaining
capital markets financing has grown
by +33%.
Source: CNV. Note: Trustees include only those companies not registered as issuers with the CNV. SMEs placing checks and promissory notes in the secondary market are not included.
SMEs’ access to financing in
the capital markets has
Doubled.
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More investors in mutual funds thanks to access simplification
INVESTORS IN MUTUAL FUNDS
Total count of registered accounts 5X is the number of times that the investor
base has grown since 2015.
Source: CNV based on information provided by CAFCI and ACDI
+570 thousand investors have been added to the mutual funds
market between 2015 and 2019.
+260 thousand investors through were added through
digital platforms.
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Stronger market structure through the composition of players
EVOLUTION OF REGULATED AGENTS BY CNV
Number of registered entities
Note: Neither brokerage agents, nor collective investment agents are included. Source: CNV.
+60 % has the number of agents
ruled by CNV grown between
2015 and 2019.
More financial
release Thanks to an increase in the
number of agents.
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1. Fiscal update
2. Macroeconomic Update
3. Systemic Competitiveness
a. Domestic Capital Markets
b. Energy
c. Infrastructure
ENERGY SUBSIDIES
Percentage of GDP
Energy subsidies remain on a reduction path
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The energy trade deficit has been wiped out
ENERGY TRADE BALANCE
USD Bn
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Market prices stabilize with reduced Government participation
NATURAL GAS DOMESTIC PRICE AND GOVERNMENT PARTICIPATION
In USD/MMBTU
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Natural gas exports are taking off
MONTHLY NATURAL GAS EXPORTS 2018 - APRIL 2019
MCM/DAY
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The renewable energy segment is underway
140 projects in commercial
operation and construction entailing a
total investment of USD 7.2 Bn and
generating 4,790 MW
In commercial operation
Under construction
Number of projects
Power capacity
Estimated investment
USD 1.8 Bn USD 5.4 Bn
1.200 MW 3.580 MW
42 98
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1. Fiscal update
2. Macroeconomic Update
3. Systemic Competitiveness
a. Domestic Capital Markets
b. Energy
c. Infrastructure
We are building the roadways that were not being built before
The kilometre of asphalt costs 53%
less than in 2015 in the
construction of highways and 35%
less in the construction of roadways
Highway kilometres on which works are carried out
Average for the period 2003-2015 vs. 2015-2019
x10
Improvements reduce between 9% and 12% of total export costs
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Double carriage trucks are reducing transportation costs
We have authorized the use of climbed-load and
double carriage trucks in more than
40 thousand km of national roads and
138 thousand km of provincial roads
+30% to 60% of load than a conventional
truck
-30% in transportation costs
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Trains have been improved to reduce transportation time
Belgrano cargas freight traffic reached its
high since 1994 as it carried 2,079 million
tonnes during 2018
+ 80% 2015-2018
Annual freight transportation on Belgrano Cargas (‘000 tons)
In 2015, transporting a load from Salta took 15 days Now, it takes half of that and in 2020, it will only take 3 days
Exports Cost per container in USD
- 61%
Imports Cost per container in USD
- 17%
Elimination of TAP obligation
Reduction of sweeping and cleaning costs (-66%)
Elimination of Port Support Area
Reduction of trailer tariff
Elimination of enclosing
Port procedures simplification has reduced costs
KEY
RESOLUTIONS 38
USD 200 M in annual saving in grain ports
● 30% of tariff reduction of pilotage and towage services through maximum tariffs.
● Up to 50% of tariff reduction for stowage thanks to increase in competitiveness .
● We have opened tug competitiveness: USD28,000 vs. USD7,000 at present.
● Mooring Tariff reduction by 50%.
● Elimination of Draft Survey obligation.
● Elimination of the obligation to hold inspection by SENASA (6 USD/ton).
● Extra cost for phytosanitary inspection has been eliminated (Frontier Sanitation) for by-products, flours and oils (USD20,000 per ship).
● Work has been done with Customs for dredges to avoid coming out to move throughout Argentine interports (300,000 USD per movement).
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18 years 4 years
Modernization of 90% of the country’s airports
COMPLETED RUNWAYS
NEW TERMINALS
NEW LIGHTING SYSTEMS
NEW CONTROL TOWERS
7
7
7
1
13
20
29
7
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Flights revolution: connecting the provinces
94 Domestic flight
connections
29 Not going
through
Buenos Aires
153 +63%
Domestic flight
connections
57 +97%
Not going
through
Buenos Aires
December 2015 May 2019
More federalism Proportion of passengers not connecting through Buenos Aires Jan-May.
Today, more Argentines
travel within the country
without needing to stop
over in Buenos Aires
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Flights revolution: connecting the provinces and the world
92 International flight
connections
15 Not going
through Buenos
Aires
125 +36%
International flight
connections
39 +160%
Not going
through
Buenos Aires
December 2015 May 2019
Arrival of low cost international airlines
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Roadway works to improve the quality of life
69% of urban buses in
the Greater Buenos
Aires travel through a
Metrobus system
Metrobus La Matanza
Travel time is reduced
by 30%
117 Metrobus systems in the country
●15 completed
●2 under construction
are used by 2.3 M users every day
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INVESTOR PRESENTATION July 2019
