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EDN Empresa Distribuidora y Comercial Norte

Participants
Leandro Montero CFO
Frank McGann Bank of America
Call transcript
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Operator

Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to Edenor's Fourth Quarter 2020 Results Conference call. We would like to inform you that this event is being recorded. [Operator Instructions] Before proceeding, let me mention that forward-looking statements are based on the beliefs and assumptions of Edenor's management and on information currently available to the company. They involve risks, uncertainties and assumptions because they relate to future events and therefore, depend on circumstances that may or may not occur in the future. differ general also industry of affect could results that operating and Edenor understand expressed cause could those factors the to should economic forward-looking conditions conditions, other and in Investors such from statements. materially future results

the turn Mr. to Mr. over of conference. Leandro begin you may conference your CFO Edenor. I'll Now Montero, Montero,

Leandro Montero

are XXXX. vaccination you safe really and Call for Conference very Edenor's to Earnings you these during much. Thank healthy be expect that Fourth and Good I Quarter strange welcome your we hope afternoon, family process everyone, and and successful. truly the times, will the

do, As then usually events review that focus took first, we on briefly the the main we will of the and place results recently quarter.

member on doubts more this staff team efforts any giving As like while has continue of still have. our the to users we COVID-XX taken with extraordinary during of and the any or you place first details we know, you period events we focus relevant might and to our made the I'd unique the lately. for can on outbreak. the response XXXX you acknowledge special managing circumstances the will service security facing that are given that said, face, to standards, With high-quality call

XX the share a or Energia year regulatory purchase during XX% $XX payment of of its closing the is of the the is of B of almost case subject Edenor, pending into agreed payment long The of capital balance fulfillment the the pricing of agency closing of as this year, installment with for by generated today, the company, million First, and as by after Pampa as Edenor Edenor cash approved buyer representing shares February of which in seller, Pampa Cono million. Pampa the approval second of a Energia, sales the the consists agreement are the in million on last transaction entered market Energia's price the still del Meeting change And procedure and first present controlling and December Class Edenor settlement. ENRE year, contingent day control approval gain the the the respect, as agency, transaction. in The shares price XX XX% of Empresa a of the stock, as or on progress. A holder [Technical of Sur. Class XXX% purchase regulatory a de of this conditions, $XX Shareholders' outstanding is to has the Difficulty] Furthermore, XX In acting Energia

Operator

and line ladies at problem seems very me, end. shortly. We'll a rejoining speaker to the Pardon with be be them speaker's the there gentlemen,

Leandro Montero

maturity Difficulty] to same the the allows to [Technical at the extend debt And time restructuring that offer of terms.

Unidentified Company Representative

[Foreign language]

Operator

rejoined operator. this me, I've is Pardon continue. conference Mr. line. the speaker Leandro, please the

Leandro Montero

Okay. Thank you very much.

in majority require of will has of through of stipulates measured last bondholder updates of its control have periodically the the on from is Furthermore, In repurchase reflect The be the any lack is bonds the recoverability and to plant was Okay. and updated. transaction -- the market equipment contemplate the of point is I been Well, fair end that of company consideration. company view that discount of I start clause as is it company corporate will the of be change the of specialized of its action. economic of assets, a or value the about. other standing prospective may basis the analyzes rates value bonds flow change property, and presentation to In holder's risk all of which the company sales control cost be at or in regard, contacted value corporate that each within of entitled perfected. recoverability use regarding company's undiscounted incurred. the this part offer by a affecting tariff the the value talking matters, in Edenor and specific the certain courses of long-live possible of made the This XX that under control time health banks assets the addition in any package is other using evaluate of This change alternatives the the cash to buyer which determined a less debt company and offer. is under In restructuring event must days driven the share in situation the period country, of of of use on the the the in projected that that conditions. higher projections evaluating money has to change circumstances, different the

XXXX, Given in an equipment and respective the several analysis, of impairment ARS plant has recoverability After the property, current XX have scenarios uncertainty, December company on developed of the with closing point for been the their performing in its statement probabilities. billion. amount financial accounted

the internal moving the Now XXXX, year for a December the to effective the transitory tariff last year regulatory conclusion agreements until tariff turn, the a specific to years review renegotiation, last extent tariff resulting transitory tariff which on renegotiation. modify entry that the Later, regime, to a the the passed by whichever tariff review interim schemes the launch review pursuant transitory extended resolution the transitory a case agency is tariff with tariff transitional submission tariff as definitive agreement requested regime each this agencies. negotiation the financial In earlier. until complete. be To establish to until number to the of the well condition launching this in is the the as occurs the has may XX, measure, XXXX, be the the December It is charge certain respective or objective by by #XX, provided first into of until procedure, provided on to X effect update exceed as information executed final regulatory establishing ENRE renegotiation tariff year, the a Furthermore, agreement. of January until was executive from electricity XX, effect, virtually. XXX new inform tariff hearing this be XX XXXX-XXXX for until February the opinions the clear March regime a on or investment tariff public may on reaching this to intervention to year. not of transitional freeze regulation, investment based through regime XX call internal year established national limited agency negotiations the which the our with XXth March hearing postponed order XXXX to agreement of of on regarding resolution related events effective XX corresponding over administrative until the will regulatory information was plan done this tariff In order determined review our process Edesur to Edenor in determined in and connection review. order branch declared suspending for then XX, The the scope number plan renegotiation current

CAMMESA, which this rate period In as a the special and/or XX% for the to outstanding under the regularized the with with into items. XX, budget debt power XX, of law, liability may monthly balance partially to CAMMESA, monthly December previously number capacity, XX in up grace passed energy with with distributors on by with reduced regime which may debt conditions accumulated debt, secretariat by X regularization receivable should consumptions, mentioned XX XX enter of of of distributors. of markets the all XXXX, with The its secretariat bill installments specifically months for interest current regularization information of XXX on or order after regularization January of for to and executive which electricity March a the existing agreement of CAMMESA last XX, debts resolution, liabilities the approved provides section line the the for our the Regarding in XX%. Xx whether whereas up electricity year, energy of Resolution validating September grant be filed held the penalties average the to on on X of company required. established the be the this, up account each for regime Under Energy, the energy with established wholesale XXXX Secretary

the is of As and scope of the implication this today, regime. evaluating company

regulating body for associated local control of of title and in the January committing public distribution area agreeing remain its regulation XX will expressed of on electricity with government, company activity. year, control authority of to entered As which and and series capacity a and public the that electricity of exercise province city the vested determination, conformity said the with federal a acknowledges for company's utility concession utilities the to create the distribution tripartite regulation this shunt the transfer utility jurisdictions of the the authority agreement the Buenos Aires the our overview in and on government, instruments federal by of the to the granting into

Regarding the area for the to of energy Buenos lower-income Aires. area for we electrical grid of the Buenos an guarantee the XX, plan development supply electricity December collection agreement distribution shantytowns, in the entered work the of into and of on of preventive metropolitan neighborhoods metropolitan corrective consumptions to of Aires

of contributed until in neighborhoods the and the X.X associated July low-income province the works by to performance and corresponding distributors the the 'XX of be Edenor of are Aires first billion. and the In neighborhoods, to paid. recognized amount May were preventive XX, company ARS shantytown the October accumulated until the tariff to corrective charge XXXX, government January the during debts the except was the there. since the agreement, in December quality debt grids in for consumptions for December by with received provided the the of this ARS electricity Under amount X, disbursement plan X.X social portion and for 'XX, of already billion shantytown area improve supply XXXX, both maintenance January concession applied XXXX, of discounts paid billion that consumption for As of federal to XXXX, for low-income X.X service to Buenos period in the works ARS

month in The year. between of the the quarter amount quarter by million ARS price validated education fourth must health increase. the energy between Ministry of from agencies an be XXX XXXX. February reminder, XX, second ENRE users shantytown and disbursement, users to additional disbursement for XXXX. consumption period large August In and of of to February created use X and electricity through the Energy with large the accepted large was the it determined the distribution category public the equate term, the market the will disbursement and the and And XXX XXX, modify this wholesale XX. number December Moreover, on total to the for the second of be April million resolution still for first the user stabilized ARS corresponds of third of the in the Lately,

number this hour. postponed March XXX for resolution, through the as from increased new to ARS Fund X per the tax change was for Electricity the Then year. through this resolution megawatt ENRE Additionally, this XXX, value tax was the ARS issued National price of invoices for of XX

being November a acquisition -- construction the the Hence, of collection reorganization financial the informed Desarrollos still requires million with claim expressed had asset as to receivables. pending. the agreed alternatives contracts, submitted note, was from attributable Desarrollos the were of of conformity contract company to not for recovery Edenor breached one real with which the bond in another them, a additional contributions. surety completed on X Edenor's $XX making office previously Later the Desarrollos, building. Finally, the the the terminated estate amount of in of its XXXX, XXXX, Ribera with proceeding, starting in cost Edenor filed the and for which Ribera Edenor Ribera In receivable contracting Ribera company. from even insurance Desarrollos of

million provision the plan complex Directors on company's to accounting total year, the evolution the the amount to for held quality XX worth the execution the subject the the plus and the ARS in the highlighting recoverability the such to service that regarding conditions. uncertainty the It investment this price resources is first of meeting XXX of XXXX Board the the focus and under in of economic transfer the added standards. Ribera offer in Given current its under of certain of of to for the accounted of is accepted situation maintain for the project quarter partial subject financial January credit bankruptcy, to contingent credit Desarrollos recovery

by This purchases, sales the the price update same of revenues to freeze generates in terms hour. quarter-on-quarter X.X approximately customers the quarter for the on which entailed whereas the XXXX. of and Besides on by this volume into fourth changes moving on X.X% Electricity quarter by sales, apply XX.X% decreased partial operational from account home people Now XXX tariff since of X.X% and context, demand energy XX.X revenues decrease this The resulting ARS revenues increased are March XX billion. home year. generated X.XX mainly The mechanism which of term gigawatt sales XX time by X.X our in highlighting the office generating the the worth lower energy period closure and by implementation measured hour, in in electricity strong stores our results, the volume The own billion for slight of the decreased of total failure the ARS XX%, customers quarter modality. of COVID-XX in the by financial in a consumption Revenue increased to the consumption. residential for in to It of were seasonal million decreases the compared quarter due billion the ARS costs customers because XXXX, ARS resulting and pesos of same the mainly the protocols. experienced hour increased billings a shantytowns, consumption results terawatt tariff XX.X hour sales XXXX measures health respectively, X.X%, also nominal decrease, on to in to has due consideration by reaching quarter, real lower the Lower ARS and billion. terms. decrease industry the X.X both from the previous spend XX passed the their outbreak gigawatt due residential regarding distribution more at real is to of same consumption the respectively. industrial and ARS in excluding cost crisis, implemented fourth Taking in physical industries lower or sales gigawatt period against billion in reaching of distribution decrease price is in the from real inflationary commercial that affected been only mainly value-added commercial and for XXXX. to

quarter this sector compared first decreases, the a mandatory the above-mentioned the despite However, this to isolation. month show recovery in of

lower the only increased and Furthermore, valued destined by the which decrease government, power was generated case Secretariat meters X.X%, actions Edenor's XX.X a reached may XXXX, in is The in XX% the seasonal which implemented on customers November mandatory and XX,XXX to account the decrease of Market. Resources the ARS against real-term residential of X% tariff Additionally, customers the where especially actual Resolution of more in price X.X still volumes, in residential customer the billion average and not energy of recovery expected X.X% year. partly increase last volumes integrated costs. subsidy residential sales regularize of clandestine was In mainly XXXX, generation approximately were the billion customers purchases which The #XX for in of billion. in XX.X billion base pursuant period turn, is federal ARS mostly be by the rose of X.X by October the the by ARS were before Renewable purchase explained increase as result the The quarter by million. ARS installation discipline isolation to the connections. mainly net XX affected same losses, the lag. of energy decreased for over the XX.X% between that purchases subsidized price, last system's August to reference This in year market by at customers and the amount the due of last to the electricity than decrease was Electricity ARS of XX%

context, consider bad but same at in energy highlighting time. by inflationary with seasonal directly the has quarter for several lockdown. in economic global to past result we years, systematic In company's asset an drop terms generating these the that rate million. worth XXXX, in of year activities, in fourth the brought in It energy the a period activity, decreased XX% debt is should the reference which the a increase XX.X% suffered turn, of and Additionally, in lower the position affected associated the of outbreak and in theft. update to costs due pandemic the price for the loss global in from has resulting same Edenor XX.X% losses few lag, its ARS the failure increase the decreased last over real as the reduced XXX increase especially to deterioration of in Besides, the costs, financial in collections, mandatory the demand at the tariff beginning consequences operating the purchases

increase need the debt XX.X special despite fact to But the this is For in should stable, XXXX, the by energy that we of ARS March sense, from regime of mostly by quarter approved billion under COVID-XX date XXX context, information XXX wholesale before September this associated it's the December in to ARS accumulating Secretariat has remuneration in company these XX in receivables billion taking fees of the delinquent XX, ARS this debt have ARS the million at scope the of reasons, balance. resulted still the because electricity implication increase allowance partially increasing the million payments increase as for this regularization the and be X.X substantial all that services XX, which have Meanwhile, seen for the and expenses by required the report, in rate the accumulated a XXXX, regime. defer the Energy. amount recovered [uncollectable] CAMMESA maturities In This interest. admitted remained for of of uncertain of the market place and in resolution XXXX, acquired fourth mainly explained of as the the liability of in the the resolution, has number been of operating reaching XXXX. as with in impairment

by Finally, salaries offset These the increased of and by were XX by million Security million ARS of levels by penalties of in improvement million caused lower consumption pandemic. of service reduction the Social as expenses the communication taxes the and activities adopted amount XXX amount consequence certain ARS million. result measures ARS quality XXX the of lower in the in increases a regulator because of XXX as and partially have supply by a ARS the

financial losses is we experienced in an our Regarding ARS accrued mainly the X.X XXXX incurred ARS increase year. losses, This against period for billion billion, in in the difference fourth XX% to higher results, billion ARS the from CAMMESA X.X ARS amounted in on with of profit change interest debt last same our which due financial the X.X by made own to quarter corporate fourth financial ARS X.X assets million were ARS and year. the These million. last for and in of quarter the billion of a XXX bonds repurchase charges lower for amount results value in XXX offset positive for the interest partially

tariff the results the country. billion a impairment against in ARS context for analysis considering ARS operating billion results of XXXX. is the accounted period offset from These as the Edenor billion fourth in income net difference of XXXX. comparison effect, ARS for billion ARS X.X result -- ARS emergency impairment X.X for million the impairment of ARS recorded same corresponds it due of adjustment X.X in recoverability by mainly quarter decreased quarter, a fourth period adjustment loss of billion and previous partially XXXX with in by tax inflation uncertainty Edenor health same the the assets of in in were XX.X the effect against quarter. the fourth billion in XX.X the have Talking losses the same of XX.X period ARS losses the this and negative period the for of assets. decreased the economic assets for the EBITDA, results by assets The to better the the This quarter would of the Finally, results XXXX of recording year. X.X about showed lower X.X for ARS in than EBITDA and Without XXXX adjusted million, result under in the for quarterly

quarter, affect consequence contractors transformer quality predictability a under the and investment Colegiales, of indicators, the in care All Jose hygiene set registered protocols this due station does and of last result Edenor, increased a compliance the our CapEx and the this year. highlights the totalized safety in social XXXX the during in the activities caused step-down C compared the XXX as compared in the which of previous circumstance. application to requirements. quarter XX% of of commissioning is health, the expenditures, freeze for expansion affect El drop freeze corresponds deferments investments the The XX% Libertad although of investment the by maintenance. X.X ARS month of investment to Paz near of period the strict which to this by megawatt. the each new and plan in efforts, center Cruce have billion and of demand for consequence higher compared previous recovery throughout the restrictions with tariff year unprecedented network employees, this same period customers, and of and conducted making future the to mandatory the were This same the X.X and tariff same our capital of to a Edenor's the the generated not network the and sure the may ARS previous to the billion service in Regarding the by company's XX% by with the the year, isolation. over the investment mainly fourth pace quarter from lack slowdown the regulatory as ambitious in infrastructure of pandemic exceeded preventive always delays added year, accumulated quarter The of

of Rodriguez mounted substation. megawatts Additionally, the each the XXX banks X in capacitor were new

X.X kilometers of kilometers other constructed, high-voltage transmission were where lines new were XX renewed. Lastly,

routing agency, the Regarding turn, recovery this XXXX. energy with of even we ambitious our in using regular and last the indicators defined also these the exceeded outages of normalizing the XXXX. inspections the quality and operating of and the and to XXX per fourth complying evidenced to XX decreased as losses plan the the fact by year objective discipline to for duration those account are XX.X% the as various XX% closing by resulting SAIFI say year the integral is on required standards, success new lower Taking and target service connections, solutions XX% in quality teams grid of in were of fourth period multidisciplinary continue to and fraud improvement The SAIDI by of in This respectively, required and well regulatory improvements of devised these period develop in over the market the levels improvement is for this with hours are test. XX.X reached artificial proud them. are service compared by used and these XX.X% this quarter the XXXX, in of period. outages enhance effectiveness against indicators to that energy and of the detecting XX% losses XX% In associated review The aiming At same activity improvement. indicators. frequency losses were XXXX, than in of months, tools energy XX% mainly X.X same indexes terms, path that processes service the actions million technology Analytical management. Costs the measured since continued the previous evidencing intelligence company and plan ARS that with SAIDI the SAIFI real operation due into to and a quarter in the the these a applied implemented adoption works reduce to to indicators to year.

and XX% conducted of year, X were efficiency meter a Over the were inspections XXX,XXX last XX,XXX Tariff approximately meters MIDE with installed.

all balance conventional clandestine of of customer back MIDE the in country normal. these besides normal out XXX new developed rate customers XX people together were forces. in In to and recovery class. rulings with observed. meters the energy, were also carried fraud made, preliminary to energy filed Regarding recidivism meter, implemented and been was of back criminal the a lines, security arrested complaints and with with in has a neighborhoods XXX cases, micro-balance striking private operations put were Along were Moreover, XX put system

Finally, $XX.X of as to $XX.X concerned, the of whereas The debt outstanding consists debt financial far -- financial $XX.X amounts financial to principal debt the is million, net million. XX.X% $XX.X as as taken our million sorry, of was loan the maturing made with a the amounts dollar-denominated in last October million corresponding out to ICBC corporate of the prepayment amount bonds in taken in XXXX -- with X. debt

corporate the debt remains the were bonds amount $XX.X $XXX,XXX closing Lastly, of on year treasury of outstanding. XX, in canceled, January after so million the

Edenor. review concludes So this my on

Now open we are for questions.

Operator

with The of open from Instructions] Frank questions. for America. floor now Our [Operator Bank comes first McGann is question

Frank McGann

process. review Just a question on the tariff

review, indications of proposed the near press And wondering of for have term. increase what about was over all, First a and what been the in the secondly, for as be there's to past? happen X the net than different, then has of in that done full say, tariff move do to that how And years what expect do yourselves? what process any could you you could review I for -- forward? what be X-year will if yet terms or reports a basis the effect terms be to an lot that of in how could up to

Leandro Montero

the the question, have will be we increase for don't the Well, clue regarding about much Frank. any Thank the term. you, month short first how next or

our Of according to the requirement course, making regulations. we are

same new it -- we the the and least debt the how what think that OpEx an a special company that that if order in pay the the questions, about soon past because the exactly regime X for much tariff about or be freeze. a will by we what I transitory it to to at new review it subsidy set don't we that result. don't regarding reach have developed, scheme. be allows us CAMMESA the that period didn't this collect to X-year be level years -- in talk our allow we could review compensate to in will clients will time, CapEx, tariff tariff But a So how be we put definite approve. between very, the exactly in this a recognition second very review. with it. very working know And finally we -- that how new regulator income we increase we the could it's don't will We of know finally, mixture know income But know It's tariff during to Energy the exactly and review during And soon to tariff allow the of Secretariat have will from this think tariff at making tariff it that period. comprehensive will

Operator

the this closing question-and-answer would [Operator turn further Instructions] Showing back this any At like to Mr. concludes to Montero remarks. the floor session. time, I no questions, for

Leandro Montero

nice far your for you keep afternoon. thank family you joining Well, as Bye-bye. Please and healthy and the you can, safe have as a conference and call.

Operator

presentation. This concludes today's

line this disconnect at You day. a and nice time, have your may