EDN

EDENOR Form 6-K Summary: Nine Months Ended September 30, 2025

Business Context and Reporting Period

Company: Empresa Distribuidora y Comercializadora Norte S.A. (EDENOR)
Reporting Period: Nine months ended September 30, 2025 (Interim)
Business: Distribution and sale of electricity in the Buenos Aires Metropolitan Area (AMBA) and surrounding regions.
Currency: All figures are stated in millions of constant Argentine pesos (ARS), restated for inflation (22% for the period) in accordance with IAS 29.

Key Financial Metrics

Balance Sheet and Liquidity Highlights

• Total Assets: 5,073,131 (vs. 4,853,738 at Dec 31, 2024).
• Total Liabilities: 3,055,561 (vs. 3,015,629 at Dec 31, 2024).
• Total Equity: 2,017,570 (vs. 1,838,109 at Dec 31, 2024).
• Cash and Cash Equivalents: 37,327 (vs. 29,173 at Dec 31, 2024).
• Total Borrowings: 803,604 (vs. 570,163 at Dec 31, 2024), comprising Corporate Notes and bank loans.
• Trade Receivables: 487,607 (vs. 441,966 at Dec 31, 2024).

Material Changes and Drivers

• Regulatory Framework: The 2025-2030 Electricity Rate Review (RT) was approved, establishing a 6.50% real after-tax rate of return on assets. Tariff adjustments continued monthly, with an average CPD increase of 3.45% over the last 15 months.
• Debt Regularization: A Memorandum of Agreement was signed with CAMMESA and the Federal Government to regularize energy purchase debts from Nov 2023 to Mar 2024. This resulted in a recognized income of 199,433 in the "Agreement on the Regularization of Obligations" line item.
• Monetary Gains: Net income is significantly influenced by the Monetary Gain (RECPAM) due to inflation restatement. This gain decreased to 209,782 in 2025 from 694,600 in 2024, reflecting changes in inflation dynamics and monetary position.
• Financial Costs: Net financial costs improved significantly to (292,808) from (522,161) in the prior year, driven by lower interest rates and exchange rate stabilization following the lifting of foreign exchange controls ("cepo") in April 2025.
• Restatement: Comparative 2024 figures were restated to correct an error in deferred tax liability calculation related to Property, Plant, and Equipment.

Outlook, Risks, and Contingencies

• Macro Environment: Argentina implemented a floating exchange rate system within bands and lifted foreign exchange controls in April 2025, supported by a new USD 20 billion IMF arrangement. This aims to reduce inflation and stabilize the economy.
• Deregulation: Executive Order No. 450/2025 approved reforms to electricity laws, promoting international trade and private contracting, with a transition framework effective July 2025.
• Legal Contingencies:
  • ENRE Proceedings: A final judgment was rendered against EDENOR regarding service quality penalties (Mar-Aug 2024); a provision of 5,959 was recorded.
  • Class Actions: Ongoing proceedings regarding tariff structures and consumer rights (Procurar, ADDUC). Management believes it should prevail or that no harm will result.
• Investments: The company acquired minority interests in early-stage mining projects (lithium/copper) for 30,730, classified as Level 3 fair value assets.

Investor Verification Checklist

• Inflation Restatement Impact: Verify the sensitivity of Net Income to the Monetary Gain (RECPAM) line item, which fluctuates significantly with inflation rates.
• Debt Covenants: Confirm compliance with Corporate Note covenants (Debt Ratio < 3.75; Interest Coverage > 2.0), which restrict dividend payments if breached.
• CAMMESA Debt Settlement: Monitor the execution of the payment plan for the regularized energy purchase debt (totaling ~380,000 in future installments).
• Regulatory Tariff Adjustments: Track monthly CPD adjustments and the implementation of the new 2025-2030 regulatory framework to ensure revenue recovery matches cost increases.
• Foreign Exchange Exposure: Assess the impact of the new floating exchange rate regime on USD-denominated debt (Class 8 Notes) and ARS-denominated revenue.