EDN

EDENOR Q1 2025 Financial Summary (Form 6-K)

Business Context and Reporting Period

Company: EDENOR (Empresa Distribuidora y Comercializadora Norte S.A.)
Reporting Period: Three months ended March 31, 2025
Business: Distribution and sale of electricity in the Greater Buenos Aires area and Province of Buenos Aires.
Currency: Argentine Pesos (ARS) restated for inflation (constant pesos).
Key Context: The period reflects the impact of recent electricity rate increases and significant macroeconomic shifts in Argentina, including the approval of a new IMF program and the lifting of foreign exchange controls ("cepo") in April 2025.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Revenue increased 48% to ARS 638.5 billion, driven by higher electricity rates and volume adjustments. The Distribution Margin grew 43% to ARS 258.4 billion.
• Profitability Shift: While Net Income decreased 68% to ARS 35.9 billion, this is primarily due to a significant reduction in the Monetary Gain (RECPAM) from inflation, which dropped from ARS 345.4 billion in Q1 2024 to ARS 81.2 billion in Q1 2025. Conversely, the Operating Result improved from a loss of ARS 34.6 billion to a profit of ARS 23.1 billion.
• Financial Costs: Net financial costs decreased significantly (from ARS 333.8 billion to ARS 68.3 billion) due to lower inflationary impacts on debt and exchange rate adjustments.
• Restatement: Comparative figures for Q1 2024 were restated to correct an error in the deferred tax liability calculation related to Property, Plant, and Equipment.

Outlook, Risks, and Management Commentary

• Regulatory Framework: The National Regulatory Authority (ENRE) approved the 2025-2030 Electricity Rate Review (RT) in late April 2025. This includes a 3% increase in the Distribution Own Cost (CPD) effective May 1, 2025, plus monthly real-term adjustments of 0.42% through November 2027. The approved rate of return on assets is 6.50% (real, after-tax).
• Macroeconomic Environment: The filing highlights the April 2025 approval of a USD 20 billion IMF arrangement and the lifting of foreign exchange controls. A floating exchange rate system within bands (ARS/USD 1,000–1,400) was implemented in April 2025.
• Debt Regularization: A new Special System for the Regularization of Payment Obligations with CAMMESA (wholesale market operator) was approved, offering a 72-month payment plan with a 12-month grace period for accumulated debts.
• Risks: Key risks include continued inflation volatility, regulatory changes in tariff adjustments, and the execution of debt regularization agreements. The company notes that despite historical negative working capital, it continues to invest in network efficiency.

Investor Verification Checklist

• Restatement Impact: Verify the specific impact of the retroactive restatement on Q1 2024 deferred tax liabilities and net income.
• Tariff Implementation: Confirm the effective date and magnitude of the new 2025-2030 rate schedule approved in April 2025.
• Currency Exposure: Assess the impact of the new floating exchange rate regime on the company's USD-denominated debt and ARS-denominated revenue.
• CAMMESA Debt: Monitor the formalization of the new Memorandum of Agreement regarding the regularization of debts with the wholesale market operator.
• Cash Position: Review the reconciliation of cash balances, noting the significant bank overdrafts (ARS 19.1 billion) that result in a negative cash position per the Statement of Cash Flows despite positive operating cash flow.