EDENOR 4Q22 Financial Summary
Business Context and Reporting Period
Empresa Distribuidora y Comercializadora Norte S.A. (EDENOR) is Argentina's largest electricity distributor by customer count and energy sales. This Form 6-K reports results for the fourth quarter and full year ended December 31, 2022. Financial figures are presented in Argentine Pesos (ARS) on a constant purchasing power basis, except where noted as historical values. The company serves approximately 3.26 million customers in the Greater Buenos Aires area.
Key Financial Metrics
| Metric (Constant Purchasing Power) | 4Q 2022 (ARS Mn) | 4Q 2021 (ARS Mn) | 12M 2022 (ARS Mn) | 12M 2021 (ARS Mn) |
|---|---|---|---|---|
| Revenue from Sales | 46,554 | 47,624 | 205,835 | 221,091 |
| EBITDA | 14,074 | (3,096) | 6,114 | 10,057 |
| Net Income (Loss) | (14,368) | (12,935) | (17,468) | (41,577) |
| Capital Expenditures | 7,102 | 6,866 | 33,900 | 31,653 |
| Operating Cash Flow | N/A | N/A | 33,402 | 41,586 |
Liquidity and Debt: As of December 31, 2022, outstanding dollar-denominated financial debt was USD 85 million. Net cash position was negative USD 88 million. Cash and cash equivalents totaled ARS 7,137 million (constant purchasing power). Trade receivables collection rate was 97.65%.
Material Changes vs. Prior Period
- Revenue: Decreased 2% in 4Q22 and 7% for the full year 2022 compared to 2021, primarily due to tariff delays in an inflationary environment.
- Costs: Energy purchases increased 20% in 4Q22. Operating expenses rose 3% for the full year.
- Profitability: Gross margin fell 39% in 4Q22. Net losses narrowed by 58% for the full year 2022 compared to 2021, despite a 11% increase in 4Q22 losses.
- EBITDA: Turned positive in 4Q22 (ARS 14,074 million) driven by a one-time gain of ARS 18,136 million from the CAMMESA obligations regularization agreement.
- Investments: Capital expenditures increased 7% in real terms for 2022, focusing on grid capacity and smart metering.
Outlook, Risks, and Regulatory Developments
Regulatory Framework: On December 29, 2022, EDENOR signed an agreement to regularize obligations with CAMMESA, acknowledging a debt of ARS 32,985 million (plus updates) to be paid in 96 installments. In February 2023, the regulator (ENRE) authorized tariff increases of 108% effective April 1, 2023, and an additional 74% effective June 1, 2023.
Debt Restructuring: The company completed a voluntary exchange of Class 9 Corporate Bonds (USD 98.05 million) in October 2022. New Class 1 bonds (USD 55.2 million, due May 2025) and Series 2 bonds (USD 30 million, due Nov 2024) were issued. In March 2023, additional Class 2 bonds up to USD 30 million were launched.
Operational Risks: The company faces risks related to inflation, tariff freezes, and exposure to changes in purchasing power (RECPAM). However, service quality improved with SAIDI (outage duration) and SAIFI (outage frequency) decreasing by 19% and 13% respectively year-over-year. Energy losses decreased to 15.6% in 4Q22.
Investor Verification Checklist
- Verify the impact of the April and June 2023 tariff increases on future revenue recovery.
- Confirm the sustainability of the positive EBITDA in 4Q22, noting the one-time ARS 18,136 million gain from the CAMMESA agreement.
- Monitor the execution of the 96-month payment plan for the CAMMESA debt regularization.
- Assess the company's ability to maintain capital expenditure levels (up 7% in 2022) amidst high inflation and negative net income.
- Review the terms of the new Class 1 and Class 2 corporate bonds regarding covenants and refinancing risks.