Q1 Press Release - 2016- vf clean First Quarter

2016

Edenor announces first quarter 2016 results

Stock Information: Ticker: EDN

New York Stock Exchange Ratio: 20 Class B = 1 ADR Buenos Aires Stock Exchange

Investor Relations Contacts:

Leandro Montero

Chief Financial Officer

Verónica Gysin

Planning and Capital Markets Manager

Tel: +54 (11) 4346 -5231

Buenos Aires, Argentina, May 12, 2016. Empresa Distribuidora y Comercializadora Norte S.A. (NYSE: EDN; Buenos Aires Stock Exchange: EDN) ("EDENOR" or "the Company"), Argentina's largest electricity distributor, today announced its results for the first quarter of 2016. All figures are stated in Argentine Pesos and have been prepared in accordance with International Financing Reporting Standards ("IFRS"). Solely for the convenience of the reader, Peso amounts as of and for the quarter ended on March 31, 2016 have been translated into U.S. Dollars at the selling price quoted by Banco de la Nación Argentina of AR$ 14.70 per U.S. Dollar. HIGHLIGHTS

Note No. 120,151 issued by the ENRE

On April 15, 2016, the ENRE issued the Note No. 120.151, establishing that all fines and penalties imposed by the ENRE after April 15, 2016 (whether with respect to events occurring on or after such date or events occurring prior to the date thereof but for which fines or penalties had not been imposed on us by such date, that include a reference to "Note No. 120,151", must be valued according to the KWh values in effect as of the last date of the semester or period during which the event giving rise to the penalty occurred, including any increases or adjustments applicable to our "remuneration" at such date. In addition, fines and penalties that fall within the purview of the Note will accrue interest from the last date of the semester on which the event giving rise to the penalty occurred until the date they are paid by us. The amount registered to reflect accrued interest according to the Note was AR$. 129.0 million.

Compensation to customers

On March 28, 2016, we were notified of Resolution No. 31/2016 of the ENRE pursuant to which we were instructed to compensate the small residential customers (T1R) who had been affected by the power outages occurred during the period between February 12, 2016 and February 18, 2016. The amount of such compensation depends on the duration of each relevant power outage. The total compensation to be paid amounts to AR$. 73 million.

RTI

On April 1, 2016, the ENRE issued Resolution 55/16, which approves the 2016 Integral Tariff Revision Program and establishes the criteria and methods to be applied in the RTI process, as well as the compensation and penalties regulation together with the tentative schedule including details of the working plan to be submitted.

In our opinion, the RTI process will have to factor in a revised analysis of our distribution costs, modifications to our quality of service standards and penalty scheme and, finally, a revision of our asset base and rate of return, such as, among other: (i) the treatment to be given to the outstanding amounts granted under the loans for consumption (mutuums) to cover the insufficiency of the funds deriving from the FOCEDE; (ii) the conditions for the settlement of the outstanding debt with CAMMESA as of the date of issuance of Resolution No. 32/15; (iii) the treatment to be given to the penalties and discounts determined prior and subsequent to the Adjustment Agreement; and (iv) an agreement on quality levels and a new system of penalties and discounts that provides for an adequate transitional period until the tariff schedule resulting from the RTI is fully implemented.

Appointment of new Board of Directors' members

The Ordinary and Extraordinary General Shareholders' meeting held on April 28th 2016 appointed permanent and alternate members of the Board of Directors and Audit Commission.

First Quarter 2016 Operating Figures

In millon of Pesos

1° Q 2016

1° Q 2015

% Variation

Revenue from sales

2,990.1

968.6

208.7%

Electricity power purchase

(1,317.3)

(523.0)

151.9%

Net operating income (loss)

238.3

916.0

(74.0%)

Net (loss) income

(125.0)

469.9

(126.6%)

Revenue from sales increased 208.7% to AR$ 2,990.1 million in the first quarter of 2016 compared to AR$ 968.6 million in the first quarter of 2015, mainly explained by the tariff increase obtained since February 1, 2016 and to an increase in volume of energy sold in GWh for about 2.0%. Volume of energy sold increased 2.0% to 5.671 GWh in the first quarter of 2016 from 5,567 GWh in the first quarter of 2015, basically due to an increase of 6.0% in medium commercial customers, and a 3.0% growth in industrial and wheeling system customers. Electricity power purchases increased 2.5% to AR$ 1,317.3 million in the first quarter of 2016 compared to AR$ 523.0 million in the same period of 2015, mainly due to the increase in the average purchase price since February 1, 2016. Net operating income decreased AR$ 677.7 million amounting a gain of AR$ 238.3 million in the first quarter of 2016 compared to a gain of AR$ 916.0 million in the same period of 2015. This negative result was due to a 81.8% increase in operating expenses, mainly due to the raise in the accrued fines and penalties do to the changes in the estimation introduced by Note No.120.151 of the ENRE, a 41% increase in salaries and a reduction in the amounts obtained through SE Resolution 32/15 and to a CMM (Cost Monitoring Mechanism) adjustment of AR$1,008 million.

The operating expenses increase was basically explained by higher transmission and distribution expenses of AR$ 620.2 million, by greater selling expenses of AR$ 116.8 million and by an increase in administrative expenses of AR$ 91.8 million.

Net loss shows a decrease of AR$ 594.9 million, amounting a loss of AR$ 125.0 million in the first quarter of 2016, compared to a gain of AR$ 469.9 million in the same period of 2015, mainly due to the operating results explained above and to a decrease of AR$ 257.6 in financial results basically due to the devaluation of the AR$/US$, partially offset by the sales increase and the income tax provision. Adjusted EBITDA

Adjusted EBITDA has decreased to a gain of AR$ 337.8 million in the first quarter ended March 31, 2016, compared to a gain of AR$ 365.7 million in the same period of 2015.

In millon of Pesos

1° Q 2016

1° Q 2015

Net operating loss before resolution 32/15

(274.3)

(604.5)

Depreciation of property, plant and equipment

82

64.1

EBITDA

(192.4)

(540.4)

Resolution 32/15 recognition (1)

512.6

869.1

PUREE

-

25.6

Commercial Interests

17.7

11.4

Adjusted EBITDA

337.8

365.7

(1) Includes additional income under this resolution and PUREE funds, since March 1st 2015.

Operating Expenses

The following table sets forth the main transmission and distribution, selling and administrative expenses:

In millon of Pesos and %

Transmission and distribution expenses

Selling expenses

Administrative expenses

Total expenses

1° Quarter

%

Variation

1° Quarter

%

Variation

1° Quarter

%

Variation

1° Quarter

%

Variation

2016

2015

2016

2015

2016

2015

2016

2015

542.7

372.6

50%

84.0

61.7

36%

86.2

71.3

21%

712.9

505.7

41%

Pensions Plans

15.7

15.7

0%

2.4

2.6

-6%

2.5

3.0

-17%

20.6

21.3

-3%

Communications expenses

6.5

2.9

120%

16.4

10.2

61%

0.9

0.6

41%

23.9

13.7

74%

Allowance for the impairment of trade and other receivables

0.0

0.0

0%

10.7

6.6

63%

0.0

0.0

0%

10.7

6.6

63%

Supplies consumption

70.3

56.6

20%

0.0

0.0

0%

8.9

4.3

106%

79.2

60.9

30%

Leases and insurance

0.1

0.1

-10%

0.0

0.0

0%

19.6

13.2

49%

19.7

13.3

48%

Security service

2.7

11.6

-80%

0.1

0.0

N/A

26.8

5.5

390%

29.6

17.1

73%

Fees and remuneration for services

94.3

131.2

-30%

87.5

72.4

21%

69.1

29.9

131%

251.0

233.5

8%

Public relations and marketing

0.0

0.0

0%

0.0

0.0

0%

2.8

1.1

152%

2.8

1.1

152%

Advertising and sponsorship

0.0

0.0

0%

0.0

0.0

0%

1.4

0.6

152%

1.4

0.6

152%

Reimbursements to personnel

0.2

0.3

0%

0.0

0.0

4%

0.1

0.2

-38%

0.4

0.5

-18%

Depreciation of property, plant and equipment

65.5

55.1

20%

12.4

6.3

97%

4.1

2.7

52%

81.9

64.1

28%

Directors and Supervisory Committee members' fees

0.0

0.0

0%

0.0

0.0

0%

1.3

0.8

73%

1.3

0.8

73%

ENRE penalties

526.7

58.4

N/A

58.7

0.1

N/A

0.0

0.0

0%

585.4

58.5

N/A

Taxes and charges

0.0

0.0

0%

15.6

11.2

40%

3.1

2.9

6%

18.7

14.1

33%

Other

0.1

0.0

150%

0.0

0.0

13%

1.8

0.8

125%

1.9

0.9

123%

Total

1,324.8

704.6

88%

288.0

171.2

68%

228.7

136.9

67%

1,841.5

1,012.7

82%

EDENOR - Empresa Distribuidora y Comercializadora Norte SA published this content on 12 May 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 03 June 2016 19:31:02 UTC.

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