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EDN Empresa Distribuidora y Comercial Norte

Participants
Leandro Montero Chief Financial Officer
Ezequiel Fernandez Balanz
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 First Quarter 2021 Results Conference call. We would like to inform you that this event is being recorded. And all participants will be in a listen-only mode during the presentation. After the company’s remarks are completed there will be a question-and-answer session. instructions given. further time that will be At the [Operator statements and are proceeding, let available assumptions that forward-looking me mention to currently based information Edenor's and Instructions] management Before of on company’s. on the beliefs They may future on and to they events in occur uncertainties the involve may therefore, or and risks, that because relate assumptions circumstances not depend future. could differ the conditions, operating factors Investors from other future of in should statements. and results understand such to industry that conditions cause Edenor those expressed and general materially also affect results economic forward-looking could

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

Leandro Montero

hope – Edenor's are family you and Thank and you for continue and healthy, Quarter Call safe afternoon to expect really successful and be to everyone, help truly and to First process good us Earnings Good the return that Conference to life. welcome vaccination to very your the much. we I morning, normal XXXX.

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

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

to year markets issued tariff seasonal ENRE programming. March increase in equal burdened by new electric turn, market, the passed These them users for of incorporated, been XX, the August scheme also number the making increase of the which is wholesale the effective XX with from based rest large have changes of electric XXXX, and that tariff of that Edenor. large The or wholesale market without on the energy of not reflects XX, pursuant the of Edenor's as to Resolution by distribution number First, was seasonal X, April on the In Resolution winter renewable and new of tariffs last reflect income the price X% transferred of price resources being by VAD. from final value-added exception provided as in users. to the electricity the schemes increases affecting to regulator incorporation the seasonal are the tariff distribution secretary residential users

update to CAMMESA credits which following a Regarding the hearing, the This to Special number established the VAD, addressing presentation year, period. for update tariff XXX, as the tariff for of X% March December a entity Section XX.X% in regions other of April transitory number involves billion resolution XX tariff budget. and to Xst and the revenues limited applicable of Edenor compensate April this users its XXX, Later for resolution pursuant resolution approved the XXXX matters XX, a earlier partial applied application In increase the higher public bill a number set to This of of XX estimated Liabilities Edenor to forward May, the the be regulatory XX, according moved Regime in of resolution on provides from May generating in X including this for ARS regulation XX Regularization the Energy with number criteria. Secretary amount XXXX year. VAD update. on distribution's to filed the pursuant schemes on new

For CAMMESA average bill be will monthly one of recognized. amount freeze, the tariff the maximum

effects the during the demand XXXX, amount including implemented number a of the two XXX, policies to bills. order For CAMMESA March December of benefit executive period maximum to

the turn, a plan have Energy submitted described Secretary one each be ARS maximum billion, debt For the In to acts treatment distribution be and the CAMMESA to bill. draw instructed In these credits. will bill above summary how of another case submitted the a up submit is given agent but clue chart average to criteria. amount establishing monthly is CAMMESA the to under to the of to our perform apply the CAMMESA the by process to information authorities investment X we around all no necessary

and to from and bond Regarding recoverability both ratings the currency reflects corporate maintaining April Edenor's The the current A- to cases. ratings the uncertainty negative under on BBB+ foreign from of of lag costs ratings in change the regulatory Moody's the A BBB, framework. X, domestic tariff on currency our impact Local downgraded outlook

of should Finally, which of is Edenor's and closing subject after transaction the the by conference installment regarding the stake regulatory sale controlling of still of the the as be payment the approval. call date approval [indiscernible] by second ENRE this the fulfilled the to

Now decreases passed real moving real the VAD the decreased XX X revenues the in updated billing than are quarter in higher and mainly for or the respectively. by results apply due quarter and from home of office modality, the lower The and by into the a billion closure decrease also should measures for experienced and X.X customers because been ARS highlighting entailed according date billion applied quarter consideration X.X%, the in the a by of worth pesos for compared all of same compared degrees have mainly of The measured both sales period slight This adjustments increased X,XXX by due for previous tariffs the despite resulting gigawatt sales ARS XX% in the nine The energy increased in first to consumption for this of gigawatts results. X.X on volume of inflationary to in freeze by their ARS shantytowns from hour only operational average X.X% year. our home first restrictions terms. purchased people It X.X% XX XXXX, this last industries, revenue electricity had quarter than the Celsius part, XXXX. reaching terms only year, increase of of the tariff hour the resulted respectively residential to Taking has spend quarter affected year gigawatt the which the more is by the to the our billion lower to same physical at crisis, it XX failure that restrictions to in the consumptions stores period year. in in X.X%, an price increased for approximately and XX commercial sales COVID-XX quarter. time energy by cost customers the to year. medium the previous in more the first lower an last generating period VAD against on account On XX on XX to ARS million mainly term whereas the XX of its movement ARS partial the of X.X billion. ARS the to gigawatt real implemented, context, same phases having of demand mechanism on volume commercial is consumption in and we hour, year, gigawatt affected and the revenues the decrease industrial of quarter implemented. due residential If small due consumption customers, of different to increased period hour decreased hour for seasonal this been excluding of to total VAD and last strong compared in billion. by industrial decrease of ARS by the Lower X.X only same which days billion. are The implementation was sales revenues quarter to the generated energy Electricity

last of the of decline However, even month recovery the the comparison first index reversing. year at to a year. evidenced the mandatory in in abrupt month the the have previous the of the compare in And in demand decreasing isolation behavior in production we beginning and the the March can imposed quarter, if compared be been to activity observed industrial or restrictions

Additionally, in over distinct generated to quarter, installation no had mainly mainly The year rose that lower purchase first Furthermore, ARS of customer before us planned expenses XX X.X explained to since connections. residential comparison and of applies the the ARS in billion result by against increase may sales period Edenor's by the XX% for established regularize the recovery is process X.X%, modifications The actions the last a a to the price ARS than in billion mentioned August of the in base partially has discipline billion. due more real update the electricity market were the meters in account periods. volumes average purchase energy power XX be as same X.X Resolution which decrease XX.X The This April mainly integrated from XXXX. in price decrease by on customers by time XX% terms, between from [Indiscernible] XXXX. I tariff billion to XXXX XX.X ARS lag. decreased purchases,

the energy So case customers government especially it seasonal subsidiary of only decrease where ARS has still residential was the customers by XX% at for federal X.X% by losses volume costs XXXX. of the the reference This fell first one approximately quarter. which the after XX system no in quarter effect was In by generation and is million. net sorry turn reached in price not valued -- affected by the subsidized the the in of of third

or terms decreased the to highlighting increase due also lower Therefore, collections price beginning sorry several the the in reference energy especially worldwide XX.X% energy global at resulting over past in the brought by reduced operating purchases demand XX.X% suffered losses the the worth context is lockdown. position two consequences loss million. decrease decreased sales. assets generating and in years. by the affected activities to few economic cost pandemic XX% energy in systematic This has of the the directly the last purchases tariff years explained last financial a XXXX an quarter costs, the during in with especially and activity, of its from seasonal period drop inflationary for update the ARS real XXX the company's -- rate has lag in of deterioration the failure is XX.X% from the the associated in result which a the that Additionally, of to as in that the first year. same in Besides to outbreak The and Edenor to increase

need the accumulating billion of as reasons, seen March maturities energy defer partially acquired these to taking XX.X ARS as have the March XXXX, market the XX, wholesale in permits XXXX before to from we electricity CAMMESA in For for interest. place debt a

accumulated as pursuant information to Energy September Secretary debt moved the As and of Liabilities Special for regards of of XX, with to XXX, their the the CAMMESA the the treatment forward Regularization resolution requested determination. number XXXX of regulation to Regime

this ARS the quarter year. the million, was result mainly resolution. all explained that XXX consumption price billion As reaching increase are information amount This ARS property ARS of XXX accumulated taxes against penalties first hour a supplies of plant Resolution by and of ARS company report, That ARS XXX established a of XXX Q on security ARS ARS Meanwhile, by of as salaries the and ARS lower billion pending the first for XXXX. in XX is the of and is equipment the and of of this by quarter the date of as depreciation the lower lower increase the increased almost operating penalties the X.X of last in in in the last amount XXX recording of decrease offset million kilowatt X amount year of expenses million in million. be to social million recoveries the by million. partially the requested X% This impact elaborating additional XXX sanctioned in first in

period global the first X.X to amount for our against billion in financial amount ARS financial same in million results, in X.X in of January, in quarter Ribera the the lower of positive receivable ARS differences for Desarrollos losses Regarding change of ARS we which denominated of amounted losses a increase in the value billion XXX resulting experienced ARS XXXX million, and in XXX made decrease account a ARS of in XX% XXX lastly, a foreign the higher This exchange billion. results X.X ARS with XXXX. the entered on assets interest the of charges for due from on sale accrued million. ARS of CAMMESA million, in the mainly is the result difference currency partially offset losses interest XXX the in to debt debt; by financial amount were The

difference between operating income. for operating the about X results adjustments ARS previous of billion of ARS have the higher ARS Edenor's period quarter amount quarter X.X result XXXX XXX These ARS the a partially a billion, comparison proceeds ARS first for power, commercial tariff same mainly freeze of by income for This EBITDA for first amount year. a the losses X.X pursuer on period result XXXX, decreased attributable in no by recording the results in against showed million of XXX income billion of adjusted it the the compared been as the profit, changes to Finally, caused the higher Talking lower a in of is than financial by and quarter in lower EBITDA about net in the ARS XXXX. billion and offset to debt lower of higher X.X in in ARS same tax negative losses mainly to account period. lower were by charge. in million There purchasing part the X.X billion

costs Regarding gross investments each, highlights for were March lack ARS last year, indicators, as customers previous billion this CapEx XX% local the network by generated the the period the the affect in of care pace year. of freeze substation quarter because first the this the totalized mainly higher X months, period X.X account megawatts half due same and regulated pandemic to half investment during have investments commissioning the of C may the compared previous year set margin this and in despite and from by with by exceeded same ambitious investment became result in each compliance billion of Jose employees, of slowdown the operational in quarter compared Edenor, which making mainly quarter, the maintenance. tariff which efforts does restrictions regulatory throughout the recovery not the governments. of by to Paz one the taken of our the accumulated health, demand this with the network ARS the our the These and service national always company, predictability new to quality year the All to same near and to Edison due conducted of future made in of The the and in previous the plans year. affect XXXX reduction the sure unprecedented in and a application a the Edenor's the capital in which corresponds under registered February by the this safety preventive expansion requirements. are drop circumstance. protocols XX of contractors the the strict quarter infrastructure The and on to and the of increased measures hygiene expenditures, compared in the activities of over

frequency XXXX, SAIFI duration service using better well the XX% technology XXXX. the implemented on outages the required resulting for decreased we million devised turn, XX% closing quarter recovery review by -- Regarding in year period This processes reached indicators. per and various same Costs operation in XXX first to of losses, tools same In standards, in improvement are the compared develop adoption XX.X% year intelligence actions works and the management. due artificial market a the indicators energy test. to of aiming the have previous end the solutions the into in to loss with integral hours ARS and of and reduce and service and respectively routine outages performance mainly in fraud indicators to our is plans are based company Analytical used The teams these and of these the in continued service XX% those Taking were detecting to and the than operating XX% of and improvements of discipline the of since terms these The losses SAIFI SAIDI to XXXX. year. applied a the and multidisciplinary account the over ambitious by them. levels of X.X with grid's XX.X% to of objective as continue regular energy of XXXX. respectively the for the inspections measured improvement. Evidencing effectiveness against real energy the new during last normalizing SAIDI period months. were XX quarter first associated At in enhance XX% connections, activities the of XX.X quality as this in

the Over XX,XXX XX% efficiency were meters almost inspections XXX,XXX even conducted of installed. despite with pandemic restrictions approximately Tariff meters last X the year, were and a MIDE

meter, customers also recovery normal. Regarding conventional micro-balance a implemented energy Moreover besides of to back normal and put neighborhoods striking put has balance clandestine with private to in with in cases, rate observed. in were the developed the of was energy, system customers MIDE been meters recidivism all a of new back fraud

as Finally XXXX. X.X net bonds as debt ARS maturing concerned, amounts our is to the The debt financial principal amounts cash of dollar-denominated XX.X million. of financial the debt of in financial million financial exclusively corporate whereas consists debt outstanding ARS position far to

corporate bonds million $XX.X Lastly, the the in remain of $XXX,XXX on canceled, Xth, quarter after of closing outstanding. the May treasury were so amount

review my So this Edenor. concludes on

questions. open Now we are for

Operator

ahead. Fernandez Instructions] Balanz. Thank you. Our Ezequiel floor with Please now is question questions. The first go comes open from [Operator for

Ezequiel Fernandez

Hi. for congratulations quality Good the Thank two I materials service from questions. the and morning, on the work losses lowering of and on Balanz. everybody. Ezequiel you have Fernandez side.

that operational the for increase What the million the to to payables impact pending with know you was my year think something update question know to different I related price. what $XXX pace it's helpful a And it Thank at of seasonal it's the if your the CAMMESA. comment including components has April the percentage average to in regularization about you on directly, Edenor now, but possible And the you. till related us GUDIs. bit overall is go of maybe in Where seasonal price? end? do for should results payables is Right little too. that? second does one for first The not

Leandro Montero

quality Hi, your words about the Ezequiel. Thank you much and energy service very losses. for of

trying to control. are We

of the Edenor, in energy to almost an mentioned average First, purchase But Edenor case Edenor it will XX% purchase of whole regarding increase before the on the had price whole you seasonal price the as seasonal impact XX% average CAMMESA. the to components. of of two of include this

tariff. The all the remaining -- megawatts than the August its in CAMESSA to bill XXX an it first for increase impacted sorry higher one for that X%. are been through been kilowatt has they to or by demand increase XXXX, passed not has included is consumptions This but increase

So being company burdened it Edenor. by was the And

Ezequiel Fernandez

Okay.

Leandro Montero

no, increase No, increased in I'm of tariff price the And components So to you as cost for About in energy sorry? their the included can going increase XXX% for you other seasonal the repeat debt. is it's before. second Goodies okay? -- of almost Goodies question, mentioned initial the

Ezequiel Fernandez

Yeah.

possible give to your from at any go is amount that could start this these the CAMMESA, includes the with the million. it's to to you yeah, if for That were normalizing at year-end, Edenor us end levels you of payables by have you March where balance And of moment? sheet components. in – will we wondering considering around different On indication the amount payables $XXX account

Leandro Montero

simple. Well so it's not

our remaining CAMMESA ARS okay? first -- paid the the for we first XX% the this of can XX% billion, is X.X bill, that First, increased quarter year average which with this around all just we on average. debt CAMMESA to So of during say ,I

first So that the was quarter.

increase, the year, for period make collect company. we This approximately have of an the will wait which cost approved much we an at should government which doesn't of we Now for course, May-December this estimation the that moment, that take. the ARSX to or increase about on the VAD or By will full cover measures the the year-end, they expect how other billion XX% should more. we of will means

the idea, should increase received almost have an have according an an of XXX% we review, to XX%. Just May But Xst. of instead, increase to we received applicable tariff internal from

we So in for XXX% are increase waiting okay. VAD, still another

happen for not So this that will or during we not know amount. least the year at this full

government, trying we are get which to to an will steps. agreement CapEx So the amount to of we be are operate discussing complete order Maybe following the money we the with to in remaining plan. to complete the need

not on to to our in or with that, shantytowns -- shantytowns So to connection being are It by cost another are to the we mean of the agreement past. should an we this least consumption addition revenue, on or according with government reach to to the still CAMMESA reach of depends with we XXXX addition And the agreement paid it energy at the with delivered depends billion in reach the for agreement, trying that the we in is or debt in owed to trying that could because government. ARSX.X government. amount cover the

have three involve. that we on the with agreements we but even we amount or these are could no discussing the have So government, timing agreement this clue different

Ezequiel Fernandez

go the of your bottom the the we first to you less chart have those regarding Are X That’s page where than right. just or On in up that? have my I first of goodies. quarter energy go like for you goodies presentation XXXX. would clients. breakdown to or that the goodies purple for make If back in to the industrial questions sales XX% pie as more marked left the

Leandro Montero

the goodies. are They

Ezequiel Fernandez

you from are perfect. Thank it. That’s very side. my those all the much. Yeah, Okay, goodies? That’s

Leandro Montero

You're welcome.

Operator

Montero Mr. concludes This any would question-and-answer session. this floor turn I back our the At remarks. for closing to like to time,

Leandro Montero

certain have to would -- some like from web, answer. the questions we we Sorry

questions, -- but read We received to going they the or are on same are one we topic. question two

going to are we questions the everyone. So for read

Unidentified Company Representative

time a an company update Good provide morning. Hi. the for line could on regulator everyone. Hi, of control transaction? there you the realistic in thank you us approve is And when the the Could for change questions.

Leandro Montero

they you any to is days Okay. regulation regarding have information as can provided want have the the till of want. since all is of mentioned But by they of approval company information the time. sale controlling the the XX answered the the under regulator ask stake information period asked Well on the and they now during last they has regulator the the been

according that have information the approved. the So regulator time approve XX from to we maybe be be It Edenor. the have in least no months. idea days at they could than sale of interest no know controlling from sale the months this when be more or or could line But in to now in order week it to or could two three

Unidentified Company Representative

we questions. more So have no

Leandro Montero

page. from least At web the

Operator

as floor We turn Montero the from side back closing remarks. have to session. question-and-answer time, At well. concludes phone I any to more would no our This this questions the Mr. like for

Leandro Montero

far Okay. family a and Have you as you of you safe you very conference as and all Thank you healthy good much and can. thank your day. this Please for keep joining Bye-bye. call.

Operator

Thank you. presentation. This today's concludes

at time lines your a have disconnect now may this and You nice day.