EDN

EDENOR First Quarter 2026 Financial Summary

Business Context and Reporting Period

Company: EDENOR (Empresa Distribuidora y Comercializadora Norte S.A.)
Reporting Period: First Quarter ended March 31, 2026
Business Overview: Argentina's largest electricity distributor by customer count and energy sales, serving approximately 3.4 million customers in Greater Buenos Aires and the City of Buenos Aires.
Regulatory Context: The period marks the first full quarter following the implementation of the 2025–2030 tariff review (RQT), featuring automatic monthly adjustments based on CPI and WPI. A new Gas and Electricity Regulatory Agency (ENRGE) was established in May 2026.

Key Financial Metrics (Constant Currency Basis)

Debt Profile (as of March 31, 2026): Total Financial Debt of USD 832 million (Net Debt USD 763 million).
Liquidity: Cash and cash equivalents stood at ARS 165,474 million (constant currency) as of March 31, 2026.

Material Changes vs. Prior Period

• Profitability Surge: Net income increased 147% year-over-year, driven by tariff adjustments (accumulated VAD increase of 48% vs. 44% inflation since Jan 2025) and a 9% reduction in operating expenses.
• EBITDA Expansion: EBITDA grew 127% to ARS 190.6 billion, reflecting higher distribution margins (up 13%) and improved cost management.
• Energy Sales Volume: Total sales volumes decreased 1.6% to 5,853 GWh, attributed to lower residential demand due to cooler temperatures and reduced industrial activity.
• Customer Base: The number of clients grew 1.4% to 3.4 million, primarily in residential and medium commercial segments.
• Debt Restructuring: Net financial expenses dropped 23% due to debt regularization with CAMMESA and reduced interest impacts.

Guidance, Outlook, and Risks

• Outlook: Management projects a solid long-term outlook driven by tariff normalization, which is expected to improve financial performance, credit ratings, and working capital.
• Investment Plan: Continued commitment to CAPEX to improve service quality. Key 2026 projects include the expansion of Bancalari and Moreno substations and the installation of new transformers.
• Operational Improvements: Service quality indicators (SAIDI and SAIFI) reached historic lows (6.1 hours and 2.9 outages per customer, respectively), representing 78% and 67% improvements over 2017 levels.
• Regulatory Asset: The company filed a "regulatory asset" claim, and the Executive Branch has submitted a bill to Congress proposing a regularization framework. The outcome remains a contingency.
• Debt Management: In April 2026, the company successfully placed USD 550 million in Class 10 Senior Notes and executed a cash tender for Class 7 notes, reducing net debt by USD 200 million.
• Risks: Forward-looking statements are subject to risks including regulatory changes, inflation volatility, and the ability to collect receivables from the National Government (RECPAM).

Key Facts for Investor Verification

• Tariff Sustainability: Verify the long-term stability of the automatic monthly adjustment formula (CPI 33% + WPI 67% + 0.42% real term) and its ability to outpace inflation.
• Regulatory Asset Resolution: Monitor the legislative progress of the "regulatory asset" regularization bill in the Argentine Congress.
• Debt Maturity Profile: Review the maturity schedule of the new Class 10 Senior Notes (2031–2033) and the remaining ARS-denominated debt obligations.
• Government Receivables: Assess the collection status of the ARS 20.4 billion recognized in March 2026 for pending receivables from the National Government under the Mutual Agreement.
• Operational Efficiency: Confirm the sustained reduction in energy losses (15.3% LTM) and the effectiveness of fraud detection initiatives.