Empresa Distribuidora Y Comercializadora Norte S.A. (Edenor) American Depositary Shares

Buenos Aires, November 11, 2021. This is Eden North's 3rd Quarter 2021 Conference Call. Good morning, ladies and gentlemen, and thank you for joining. At this time, we would like to welcome everyone to Eden North's 3rd Quarter 2021 Earnings Conference Call. We would like to inform you... inform you that this event is being recorded and all participants will be in listen-only mode during the presentation. After the company's remarks are completed, there will be a question and answer section through the webcast chat. Before proceeding, let me mention that forward-looking statements are based on the beliefs and assumptions of Adenauer's management and on information currently available to the companies. They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of Edenor and could cause results to differ materially from those expressed in such forward-looking statements. Now I'll turn the conference over to Mr. Herman Grams, CFO of Edenor.

Good morning, everyone, and thank you for joining. Welcome to the non-earnings webcast for the third quarter 2021. I truly hope that you and your family are safe and healthy. As you know, you can always call any member of our team for more details on the results of the period or any doubts you may have. First, we will focus on the highlights. Edenora continues to guarantee the electric distribution services to all its 3.2 million customers, which represents a population of approximately 9 million people. Enor was able to improve its quality services as well as better management of its resources. The key indicators CIDI and CIFI represents the duration and frequency of energy cuts for the last 12 months, showing an improvement of 14 and 16% compared with the same period indicators as of September 2020. Revenues from sales were 16% lower than the third quarter 2020 in real terms, mainly due to the fact that the company is still in the process of renegotiation the tariff of distribution value added. Investment reached 10,347 million pesos for the first nine months of 2021, with no material changes for the same period of the previous years. Commercial offices were opened in September 2021, considering the regulatory request. The ENRE established the procedure through which the company must demand the debt at the time of discontinuance of services or cancellation of title. The first disbursement for 1,500 million pesos received was disposed and ENRE certified compliance with the progress of the execution of the works included in the framework plan and their respective financial highlights. On October 15, 2021, the ENRE instructed the company to return 76.4 million pesos in excess of the corresponding amount approved on october 18 2021 the company made the payment under protest receiving the right to recovery the gross margin corresponding to the third quarter 2021 was 12 197 million pesos which represented a fall of eight percent compared to the same period of this year of the previous year Gross profit values are mainly explained by a decrease of revenues from sales of 16% reaching 29,236 million pesos in this third quarter against 34,961 million pesos in the third quarter of 2020. At the same time, this is explained since the company is renegotiation the tariff of the distribution value added and the effect of energy seasons prices purpose in an inflationary context. Besides, this last effect was partially offset by an increase in demand driven by the recovery in commercial and industrial activity between the comparison previous and the tariff adjustments applied as from May the 1st. EBITDA has a positive increase of 3% in the third quarter 2021. However, during the first nine months of 2021, it decreases 22% compared to the same period of 2021. The difference in the third quarter 2021 can be explained by a decrease in revenues from sales, which was offset by a decrease in operating cost and improvement in energy losses, and recognized income under the framework agreement for investment and an increase in the tariff since 1st of May 2021. Regarding adjusted EBITDA, there have been no adjustments between the comparison periods. The volume of energy sales increases by 70%, reaching 5,795 gigawatts in the third quarter 2021, against 500, 434 gigawatts for the same period of 2020. It is worth highlighting that the third quarter of the previous year was affected by the COVID crisis. which generated strong changes in energy consumption due to restrictions imposed by the preventive and mandatory social isolation, ASPO in Spanish. Unlikely, the preventive and compulsory social distance, DISPO in Spanish, enforced during the same period this year, where a recovery in commercial and industrial activities was evidenced in relationship to the previous years. Increase in volume and energy sales can be explained since Edenor customers base increases by 2%, mainly an account of the increases in residential and commercial customers because of the market discipline actions and the installation over the last year of more than 29,650 integrated energy energy meters that were mainly intended for the regularization of clandestine connections. Electricity consumption by residential customers increases by 2%, while small and medium commercial and industrial customers increases their consumption by 16%, 17% and 14% respectively. They are mainly due to the increase in commercial and industrial activities because of a flexibility of restrictions and a normalization of production compared to the third quarter 2020. The abrupt decline in activity evidences at the beginning of the restrictions imposed last year has been decreased and reversing, and a recovery in the Industrial Production Index can be observed in the quarter compared to the first month of the ASPO. Additionally, the recovery in sales volume may be partially explained by the tariff lag. To summarize, net results accumulated losses of 618 million pesos in the third quarter 2021, increasing losses by 771 million pesos compared to the same period of last year. Besides, was a higher operating income, higher financial losses, many due to deferred of the payment of obligations, with the wholesale electric market and higher results for exposures to change in purchasing power. During the first nine months of 2021, investments reached 10,347 million pesos, representing a 3.5% decrease in real terms compared to the same period of the previous years. Despite the decrease in the first nine months of the current year, it can be mainly explained due to the impact of the extraordinary registration of 1,345 million pesos of the 500, 200 kilowatts and 800 MVA transformer bank at the General Rodríguez transformer station registered in the second quarter of the last year, which is affecting our nine-month period comparison. Then the investment highlights for the third quarter of this year was construction of 0.6 kilometers of high voltage network that allow high voltage at the San Jose CEPAS substation. The investment plan executed in recent years continues to show results that are reflected in a continuous improvement in the quality of services by reducing the duration and frequency of outages since 2014 and thus exceeding the regulatory requirements set forth in the last comprehensive tariff review. and even exceeding this year the quality indicators required by the regulator for the end of the tariff period in February 2022. Quality standards are measured based on the duration and frequency of services outages using SAIDI and SAIFI indicators. SAIDI refers to the duration of outages and measures the number of outages hours a user experience per year. SAIFI refers to the frequency of outages and measures the number of times a user experience an outage during a year. At the closing of the third quarter of 2021, SAIRI and SAIFI indicators were 11.2 hours and 4.3 outages per year over the last 12 months, evidence a 14 and a 16 improvement respectively, compared to the same period of the previous years. In turn, these indicators are 18 and 29% lower than the target values required by the RTI for the end of 2021. This recovery in services level is mainly due to the investment plan devices by the company since 2014. The different improvements implemented in the operating process and the adoption of technology applied to the grid operations and management. In the third quarter 2021, energy losses experienced a 18.8% decrease against 22.5% for the same period of the previous years. Costs associated with the losses remain stable, experiences a 53% decrease in real terms. This result is a 1,390 million pesos improvement in the real terms. The works of multidisciplinary teams to develop new solutions to energy losses continues, as well as the market discipline DIME action, aiming to reduce them. Analytical and artificial intelligence tools were used to enhance effectiveness in the routing of inspections and actions continue with the objective of detecting and normalizing irregular connections, fraud and energy theft. In addition, over the first nine months of 2021, 301,137 inspections of Tariff One residential users were conducted with a 53% efficiency. while for the same period of the previous year, 345,364 inspections were conducted with a 57% efficiency. This means a 30% fall in inspections and a 4% fall in efficiency. Moreover, 34,958 integrated energy meters were installed. Regarding the recovery of energy, besides the normalization of customers with meters, clandestine customers with conventional meters are always put back to normal. Moreover, a new energy balance system was implemented, as well as the development of microbalances in private neighborhoods. In all cases, a streaking rate of recidivism and fraud has been observed. In EDENOR, we are committed with education, employment, we strengthen our ties with the community. Regarding EDENOR's scholarship and mentoring program, we are committed with technical and university programs, women with energy programs. About relationship with education institutions, we are committed with EDENOR Chico's program, education workshop, energy that inspires, theater play, the super energy, virtual representation, family changes, and concerning COVID-19 actions, EDENOR supported the scientific research and supported the hospital and healthcare centers. Then about EDENOR voluntary, we are engaged with centralized action and decentralized action, voluntary groups, and clothing box. About sustainability, we are committed with sustainable development goals, global compact Argentine network, and sustainable report. Finally, regarding electricity inclusion and smart consumption programs, we work on direct actions with neighborhood developers, for example, accompanying contractors in the installation and regularization, and direct actions such as painting and lighting of schools, installation of intelligence electricity meters as a tool of inclusion that allows the access to educational work, entertainment, and financial inclusion. This concludes my review and I would like to thank you for the support shown by our investors and bondholders and your interest in participating today. We are open to questions through our chat. Okay, there are no questions. So thank you for joining us this conference call and please keep your family and yourself safe and healthy. Have a good day. Thank you very much.