Empresa Distribuidora y Cmrclzdr Nort : Second Q.17 - Earnings

Efficiency and Proximity

EARNINGS RELEASE

SECOND QUARTER 2017

Edenor announces its second quarter 2017 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

Juan Pablo Caro

Capital Markets & Investor Relations

Tel: [phone]

Buenos Aires, Argentina, August 11, 2017. Empresa Distribuidora y Comercializadora Norte S.A. (NYSE: EDN; Buenos Aires Stock Exchange: EDN) ("EDENOR" or "the Company"), Argentina's largest electricity distributor, announces its results for the second quarter of 2017. 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, 2017 have been translated into USD at the selling price quoted by Banco de la Nación Argentina of ARS 16.63 per USD.

HIGHLIGHTS

Corporate Regulatory Assets and Liabilities

On April 26, 2017, the Secretariat of Electric Energy ("SEE") issued Note No. 2016-01193748 under the instruction of the Ministry of Energy and Mining ("MEyM") requiring the Company to provide all relevant information aiming to determine whether there are still pending obligations regarding the Adjustment Agreement until the entry into force of the tariff schemes resulting from the Integral Tariff Review ("RTI") and, if applicable, the treatment to be afforded to such obligations.

In response to this note, on May 11, 2017 Edenor submitted a report of damages, with values adjusted as of January 31, 2017, including the recognition of compensations for damages resulting from the breaches of the Adjustment Agreement by the National Government, not only regarding the Integral Tariff Review but also the Transition Tariff Schedule.

In this report, Edenor provides a detail of the receivables for damages sustained from the breach of the Agreements in force by the National Government, the allocation of the amounts received and/or the transfers made by the National Government pursuant to SEE Resolutions No. 250/2013 and 32/2015 and MEyM Resolution No.7/2016, and the Liabilities incurred by the Company as a result of the tariff lag and the deterioration of its economic and financial situation.

Law on electricity dependent patients

On May 17, 2017, Law No. 27,351 was passed, which guarantees the permanent and free-of-charge supply of electricity to those individuals who qualify as dependent on power for reasons of health and who require medical equipment to avoid risks in their lives or health. The law provides that the account holder of the service or someone who lives with him/her (a cohabitant) and is registered as "Electricity dependent for reasons of health" will be exempt from the payment of any and all connection fees and will benefit from a special free of charge tariff treatment in the electric power supply service under national jurisdiction, which consists of the recognition of the entire amount of the power bill.

On July 26, 2017, the ENRE issued Resolution No. 292 providing that those discounts are to be made as from the effective date of the aforementioned law, and instructing CAMMESA to implement those discounts in its billing to distribution companies. The amounts paid by customers for the bills that fall within the scope of this Resolution will be made available within the stipulated time limits.

ENRE Resolution No. 329/2017

On July 27, 2017 the ENRE issued Resolution No. 329, which sets forth the procedure applicable to the billing of deferred revenues. Such amounts will be adjusted as of February 2018 by applying the "Methodology for the Redetermination of the Company's Recognized Own Distribution Costs" set forth in caption c2) of Sub-Appendix II to ENRE Resolution No. 63/17.

As of June 30, 2017, the amount arising from deferred revenues and not recognized by the Company in its financial statements amounts approximately to ARS 2,315.5 million.

Framework Agreement

On August 3, 2017, the Company and the National and Provincial Governments executed an extension to the Framework Agreement until September 30, 2017. The execution of this extension represents the recognition of revenues in favor of the Company related to the distribution of electricity to low-income neighborhoods and shantytowns for the January 1, 2015 - June 30, 2017 period in the amount of ARS 203 million.

SECOND QUARTER 2017 OPERATING FIGURES

1st Semester			2nd Quarter
In millon of Pesos	2017	2016	Δ%	2017	2016	Δ%
Revenue from sales	11,118.3 5,707.1 94.8%			5,751.6 2,717.0 111.7%
Energy purchases	(5,810.5) (2,769.7) 109.8%			(3,277.0) (1,452.4) 125.6%
Gross margin	5,307.7 2,937.5 80.7%			2,474.7 1,264.7 95.7%
Operating expenses	(3,921.3) (4,432.8) (11.5%)			(2,045.4) (2,591.3) (21.1%)
Other operating expenses	(271.1) (226.9) 19.4%			(130.5) (121.4) 7.5%
Results due to Resolutions	- 508.6 N/A			- (3.9) N/A
Net operating income (loss)	1,115.4 (1,213.6) 191.9%			298.8 (1,451.9) 120.6%
Financial Results, net	(587.5) (677.9) (13.3%)			(427.4) (227.2) (88.1%)
Income Tax	(159.1) 706.1 N/A			76.0 618.7 N/A
Net income (loss)	368.8	(1,185.5)	131.1%	(52.6)	(1,060.4)	95.0%

Revenues from services increased by 111.7%, to ARS 5,751.6 million, in the second term of 2017, against ARS 2,717.0 million for the same period in 2016, mainly due to the application of the first stage of the tariff increase effective as from February 1, 2017 following the implementation of the Integral Tariff Review ("RTI") under ENRE Resolution No. 63/2017. The financial impact resulting from the gradualness in the recognition of VAD adjustments has not been yet disclosed by the Company in its financial statements, which amounts to approximately ARS 2,315.5 million for the February 1, 2017 - June 30, 2017 period and which will be incorporated into the Company's Own Distribution Costs as from February 2018.

Additionally, ARS 203.0 million was acknowledged for the execution of the extension to the Framework Agreement for the distribution of electricity to low-income neighborhoods and shantytowns for the January 1, 2015 - June 30, 2017 period.

Energy sales					Customers
2Q 2017		2Q 2016		Δ%	At 06/30/2017	At 06/30/2016	Δ%
Gwh	%	Gwh	%

This increase in revenues has been partially offset by a 6.8% decrease in the volume of energy sales, which reached 5,330 GWh in the second term of 2017, against 5,719 GWh for the same period in 2016, mainly attributable to a 12.0% decrease in the demand by residential users, as well as a 6.7% decrease in the demand by small and medium commercial users. As regards the residential demand, the lower consumption is mainly due to weather conditions, as during the months of May and June temperatures were on average 3º C higher than in 2016, with a lower occurrence of extremely low temperatures. Furthermore, the decrease in consumption by commercial customers is mainly attributable to a slight fall in the economic activity in certain sectors and a more rational use of energy. Besides, Edenor's customer base increased by 1.8%.

Residential	2,283	42.8%	2,593	45.3%	(12.0%)	2,529,708	2,480,236	2.0%
Small commercial	424	7.9%	461	8.1%	(8.1%)	328,296	325,268	0.9%
Medium commercial	421	7.9%	444	7.8%	(5.2%)	34,518	34,701	(0.5%)
Industrial	893	16.8%	895	15.6%	(0.1%)	6,872	6,778	1.4%
Wheeling System	976	18.3%	990	17.3%	(1.4%)	707	714	(1.0%)
Others
Public lighting	201	3.8%	195	3.4%	3.1%	21	21	0.0%
Shantytowns and others	132	2.5%	141	2.5%	(6.7%)	427	402	6.2%
Total	5,330	100%	5,719	100%	(6.8%)	2,900,549	2,848,120	1.8%