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

Good morning, ladies and gentlemen, and thank you for joining. At this time, we would like to welcome everyone to EDA North's first quarter 2022 earnings conference call. We would like to 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 belief 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 result of Adenauer and could cause results to differ materially from those expressed in such forelooking statements. Now I'll turn the conference to Mr. Herman Ranf, CFO of Adenauer. Thank you.

Good morning everyone and thank you for joining. Welcome to the No Earnings webcast for the first quarter of 2022. 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 in the results of the period or any doubts you may have. We first will be focused on the highlights. Adenauer continues to guarantee the electric distribution services to all its 3.2 million customers, which represents a population of approximately 11 million people. Our mission is to provide a socially responsible electricity distribution service, leading the energy transition that contributes to improving people's quality of life, business and community developments, as well as as that of our employees and shareholders and bondholders. We are committed to our community, which is why we have adopted the best environmental, social and governance practices. Enor was able to improve its quality services as well as its better management of its resources. The key indicators SAIRI and SAIFI represent the duration and frequency of energy cuts for the last three months, showing an improvement of 13% and 11% compared with the same indicators as of March 2021. Revenues from sales were 7% lower than the first quarter of 2021 in real terms, mainly due to the inflation differences and the tariff that has been frozen for this period. Eleanor announced the results on May 10 of the offer to exchange Class 9 negotiable obligations with a 73.25% acceptance. We would like to thank to all the holders who have participated. Public hearing. On April 18, 2022, the Argentine Executive Branch convened public hearings to be held on May 10, 11 and 12 with the aim of dealing with the following issues. New seasonal reference prices of the seasonal prices of electricity energy in force as of June 1, 2022. Implementation of segmentation in the granting of the energy prices subsidies by the national government to users of natural gas and electricity services for all for the years 2022 and 2023. In these hearings, there is no additional value-added tax for the distribution electricity companies. Debt restructuring. The result of offer of the Exchange Class IX negotiable obligations issued by the company with maturity on October 25, 2022 for new negotiable obligations Class I was 73.25% acceptances restructuring accordingly to a total of 52,706,268 corresponding to exchange offers filed under option A for 43,783,950 and redemption offer orders filed under Option B for $30,470,118. Additionally, interest was being paid for the first from the last payment dated and including the settlement date, totaling $329,573. The debt structure of negotiable obligations of the company based on the exchange offer received would be composed as following. Remaining shares, remaining obligations, negotiable obligations, class number nine, $26,231,000. New obligations under the new N1, $52,700,000. six thousand two hundred and fifty eight totaling the ninety eight hundred five hundred and seventy ratings credit rating agencies fix modis and standard push updated a nurse rating as regarding the debt standard push has skipped the actual rating of ra triple c plus changing to a positive outlook FIGS has been included as rating agency with a minus with a negative outlook. FIGS has also concluded that these new bonds class number one are aligned with the four principles components of social bonds principle of the ICM and BEMA authorized incorporation of these new issues to the CBS bonds panel. First quarter results. The gross margin corresponding to the first quarter of 2022 was 12,452 million pesos, which represents a fall of 3% compared to the same period of the previous year. The ENDER established new tariff schemes, which are effective as of March 1st, setting a bad increase of only 8%. EBITDA decreased 110 million pesos, reaching a positive result of 1,329 million pesos in the first quarter of 2022, compared to a gain of 1,439 million pesos in the same period of the previous year. There are no adjustments to the EBITDA between the comparison periods. The volume of energy sales increased by 5%, reaching 5,470 GB in the first quarter of 2022, against 5,212 GB for the same period of 2021. Furthermore, the number of customers base rose by 2.3% compared to the same period of the previous year, reaching more than 3.2 million customers, mainly on accounts of the increase in residential customers and small commercials as a result of the market discipline actions and the installation over the last year of more than 6,441 integrated energy meters that were mainly intended to regularize off-clandestine connections. Financial results experienced a decrease reaching 9,846 million pesos in the first quarter of 2022. again losses of 6,730 million pesos in the first quarter of 2021. The difference is mainly due to a higher interest accrued in the debt incurred by CAMESA, which is of 32,640 million pesos. Net results decreased by 1,800 million pesos, recorded losses for 2,818 million pesos in the first quarter of 2022, against a loss of 1,018 million pesos for the same period in 2021. In addition, there was a lower loss in the operating income, higher financial charges due to the deferral of the payment of obligations with the wholesale electricity market, and higher results for exposure to exchange and purchasing power. Capital expenditures. During the first quarter of 2022, the North's capital expenditures totaled 2,684 million pesos against 3,920 million pesos in the first quarter of 2021. Investments for the period were as follows. 497 million pesos in new connections, 696 million pesos in grid enhancement, 719 million pesos in maintenance, 23 million pesos in legal requirements, 93 million pesos in communications and telecontrol, 302 million pesos in other investment projects. Services quality standards. Quality standards are measured based on the duration and frequency of services outages using SAIRI and SAFI indicators. SAIRI refers to the duration of outages and measures the number of outages hours a user experience per year. And SAIRI represents the frequency of outages and measures the number of times a user experience an outage during a year. At the closing of the first quarter of 2022, SAIDI and SAFI indicators for the last three months were 10.4 hours and 4.1 outages on average per client per year, evidencing a 13% and 11% respectively improvement. compared to the same period of the previous year. In turn, these indicators are 13% and 24% lower than the target value required by the RTI for January 2022. This recovery in services and levels is mainly due to the investment plan devised by the company since 2014. The difference in improvements implemented in the operating processes and the adoption of technology applied to the grid, operations and management. Energy losses. In the first quarter of 2022, energy losses experienced a 13.8% decrease against 16% decrease for the same period of the previous year. Costs associated with these losses increased 34%. This results in a 789 million improvement in real terms. The works of multidisciplinary teams to develop new solutions to manage losses continue, as well as a market discipline, actions aiming to reduce them. Analytical and artificial intelligence tools were used to enhance effectiveness in the routing of inspections. and deemed actions continuous with the objective of detecting and normalizing irregular connections, fraud, and energy theft. In addition, during 2022, 7,928 inspections of Tariff 1 residential users were conducted with 52% efficiency, while the same period of the previous year, 413,000 inspections were conducted with a 52% efficiency. Moreover, 6,445 integrated energy meters were installed during 2022. Regarding the recovery of energy, besides the normalization of customers with the medium meters, clandestine customers with conventional meters were also put back to normal. Moreover, a new energy balance system was implemented, as well as a development of microbalances in private neighborhoods. In all cases, a streaking rate of residences in fraud has been observed. This concludes my review on Edenor and I would like to thank you for the support shown by our investors and bondholders and your interest in participating today. We are now open for questions through our chat.

There are no questions. Are there any questions on the floor?

Okay. Thanks for joining this conference call. Please keep you and your family safe and healthy. Have a good day. Thank you, everybody. Bye bye.