Empresa Distribuidora y Cmrclzdr Nort : Second Q.16 - Earnings

Second Quarter

2016

Edenor announces second 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: [phone]

Buenos Aires, Argentina, August 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 second 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 June 30, 2016 have been translated into U.S. Dollars at the selling price quoted by Banco de la Nación Argentina of AR$ 15.04 per U.S. Dollar. HIGHLIGHTS

Injunction Reliefs issued against the new Tariff Structure

In June, 2016 the Company received injunction reliefs issued by the Courts of the Judicial Departments of La Matanza, Escobar and Pilar, establishing a three month suspension of the tariff increases set forth under Resolutions Number 6/2016 and 7/2016 of the Ministry of Energy and Mining, and Resolution Nº1/2016 issued by the ENRE. The mentioned suspensions apply retroactively to February 2016, by which the customers will be credited in the upcoming invoices for payments made pursuant to the tariff increases between February and June 2016. The impact of these measures was a decrease in the gross profit of AR$ 618 million.

On July 15th, 2016 the Federal Court of Appeal of La Plata issued a new relief which extended the scope of the suspension to the whole geographical area of Buenos Aires Province. These measures affect the 80% of our customers as from that date, with no retroactive impact in the first semester 2016.

Second Quarter 2016 Operating Figures

In millon of Pesos	2° Q 2016	2° Q 2015 % Variation
Revenue from sales	2,717.0	899.4	202%
Electricity power purchase	(1,452.4)	(477.1)	204%
Net operating income (loss)	(1,451.9)	215.1	(775%)
Net income (loss)	(1,060.4)	254.9	(516%)

Revenue from sales increased 202.1% to AR$ 2,717.0 million in the second quarter of 2016 compared to AR$ 899.4 million in the second quarter of 2015, mainly explained by the tariff increase obtained as from February 1st, 2016 through Resolution 1/2016 ENRE. This increase was partially offset by a negative impact in sales of AR$ 1,150.0 in June, resulting from the injuctive reliefs issued by different courts for the municipalities of "La Matanza", "Pilar" and "Escobar", suspending the Resolution mentioned above. Volume of energy sold increased 4.5% to 5,719 GWh in the second quarter of 2016 from 5,475 GWh in the second quarter of 2015, basically due to an increase of 11.7% in residential customers, partially offset by a 5.5% decline in wheeling systems. Electricity power purchases increased 204.4% to AR$ 1,452.4 million in the second quarter of 2016 compared to AR$

1. million in the same period of 2015, mainly due to the growth in the average purchase price of approximately 282%. since February 1st, 2016. This growth was partially offset by a reduction of AR$ 553.2 due to retroactive effect in purchases of the injunction reliefs explained above.

   Net operating income (loss) decreased AR$ 1,667.0 million amounting a loss of AR$ 1,451.9 million in the second quarter of 2016 compared to a gain of AR$ 215.1 million in the same period of 2015. This negative result was due to a 118.3% increase in operating expenses, mainly explained by the raise in the accrued fines and penalties of AR$ 972.9 principally caused by the changes in the estimation introduced by Note No.120.151 of the ENRE, a 29.2% increase in salaries and a reduction in the amounts obtained through SE Resolution 32/15, which were supposed to be offset by the new tariff structure issued by Resolution N° 1/2016 of the ENRE. Net income (loss) shows a decrease of AR$ 1,315.3 million, amounting a loss of AR$ 1,060.4 million in the second quarter of 2016, compared to a gain of AR$ 254.9 million in the same period of 2015, mainly due to the operating results explained above and to a decrease of AR$ 469.3 in financial results caused by a rise in financial expenses AR$ 562.9 - principally commercial interests-. All these decreases were partially compensated by a higher positive result of the income tax for an amount of AR$ 821.1 million. Adjusted EBITDA

   Adjusted EBITDA has decrease to a loss of AR$ 1,315.8 million in the second quarter ended June 30, 2016, compared to a gain of AR$ 295.6 million in the same period of 2015.

   In millon of Pesos	2° Q 2016	2° Q 2015
   Net operating loss before resolution 32/15	(1,448.0)	(839.6)
   Depreciation of property, plant and equipment	85.2	68.0
   EBITDA	(1,362.8)	(771.6)
   Resolution 32/15 recognition (1)	-	1,054.8
   Commercial Interests	47.0	12.5
   Adjusted EBITDA	(1,315.8)	295.6

2. Includes additional income under this resolution and PUREE funds.

Operating Expenses

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

Transmission and distribution expenses Selling expenses Administrative expenses Total expenses

In millon of Pesos and %

2° Quarter

% 2° Quarter %

2° Quarter % 2° Quarter % 2016 2015 Variation 2016 2015 Variation 2016 2015 Variation 2016 2015 Variation

Salaries, social security taxes	(623.6)	(496.9)	30%	(104.9)	(73.9)	42%	(117.3)	(84.0)	40%	(845.9)	(654.8)	29%
Pensions Plans	(15.2)	(16.2)	(10%)	(2.6)	(2.4)	8%	(2.9)	(2.7)	8%	(20.6)	(21.2)	(3%)
Communications expenses	(6.8)	(3.2)	110%	(35.3)	(16.6)	113%	(3.5)	(0.8)	331%	(45.6)	(20.6)	121%
Allowance for the impairment of trade and other receivables	0.0	0.0	0%	(33.9)	4.0	(939%)	0.0	0.0	0%	(33.9)	4.0	(939%)
Supplies consumption	(71.3)	(43.2)	70%	0.0	0.0	0%	(5.9)	(2.9)	107%	(77.2)	(46.1)	68%
Leases and insurance	(0.1)	(0.1)	(10%)	0.0	0.0	0%	(22.8)	(15.4)	49%	(23.0)	(15.5)	48%
Security service	(32.3)	(9.3)	250%	(0.3)	(0.4)	(18%)	6.0	(4.2)	(243%)	(26.7)	(13.9)	91%
Fees and remuneration for services	(108.5)	(124.5)	(10%)	(122.8)	(84.1)	46%	(109.5)	(48.3)	127%	(340.8)	(256.9)	33%
Public relations and marketing	0.0	0.0	0%	0.0	0.0	0%	(4.3)	(2.4)	76%	(4.3)	(2.4)	76%
Advertising and sponsorship	0.0	0.0	0%	0.0	0.0	0%	(2.2)	(1.3)	76%	(2.2)	(1.3)	76%
Reimbursements to personnel	(0.3)	(0.4)	(30%)	(0.1)	(0.1)	(8%)	(0.2)	(0.2)	(18%)	(0.5)	(0.7)	(22%)
Depreciation of property, plant and equipment	(69.0)	(57.7)	20%	(12.3)	(7.4)	66%	(4.0)	(2.8)	40%	(85.2)	(68.0)	25%
Directors and Supervisory Committee members' fees	0.0	0.0	0%	0.0	0.0	0%	(1.6)	(1.0)	62%	(1.6)	(1.0)	62%
ENRE penalties	(918.0)	(70.8)	1200%	(128.4)	(2.7)	4604%	0.0	0.0	0%	(1,046.4)	(73.5)	1323%
Taxes and charges	0.0	0.0	0%	(32.6)	(11.6)	180%	(3.7)	(2.6)	43%	(36.3)	(14.2)	156%
Other	(0.0)	(0.1)	(70%)	(0.0)	(0.0)	47%	(1.1)	(1.0)	6%	(1.2)	(1.2)	1%
Total	(1,845.1)	(822.5)	124%	(473.2)	(195.2)	142%	(273.0)	(169.6)	61%	(2,591.3)	(1,187.2)	118%