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

2% via Resolution 102 of 2024. The new tariffs are applicable from February 16, 2024, and very importantly, including an automatic monthly update mechanism applicable from March, from May 2024. The rating agencies FIX and Moody's raise our outlook in the north step, following an improvement in the company's risk profile. Sorry. Just last week, we completed the successful missions of an exchange of $100 million based local dollars, which has helped us to improve our debt profile and capital structure. These developments have restored the economic equilibrium of Edenol. For the first time in many years, our auditors, freshwater scoopers, are not including a concern about the company's continuing to operate as a growing concern. This has been since 2012 in the accounts operating. We expect these changes to lead to a more dynamic company with substantially more favorable financial results going forward versus the last several years. This will enable us to continue our strong investment program and continue to improve our service level. Now let's turn to our financial performance for the fourth quarter and full year 2023. Highlights, new strategy. At Elenor, we continue to work on our plan to transform the company and transition it from its current strong position as a leading electricity distribution company in Argentina in a broad energy leader with a bright future. To do this, we plan to build one of the strengths of this existing business. Expand our services to supply clean energy as part of the energy transition. Develop and expand our smart grid using technology and innovation. Offer new services to allow users to buy electricity or self-generate or sell their energy. Develop renewable energy generation projects and further expand our network to serve new customers, such as electric and vehicles, public or private. Financial results, revenues. As you can see on slide eight, revenues reached 120.4 billion pesos in the fourth quarter of 2023, a decrease of 17% in real-time versus the fourth quarter of 2022. For the full year 2023, sales rose 9%. The weak performance in the fourth quarter was due to softer demand and no tariff increases in the second half of the year, despite continuing high inflation. Financial results, energy purchases. Energy purchases were 75.8 billion pesos in the fourth quarter of 2023, a 32% decrease in real terms compared to in the fourth quarter of 2022, which was driven by the weak demand that he just mentioned. In addition, the energy mix this year improved with more lower cost of hydro electrical supply and reduces terminal thermal energy costs due to lower food costs. For the full year, energy purchases rose 3%, which was helped by a record high temperature in the first quarter of the year. Financial results, energy sales evolution. In the fourth quarter of 2023, energy sales volumes totaled of 5,261 gigas, down 3.6% year to year, and was led by the increase in consumption of 6.4% in residential customers. For the full year, volumes increased 4.6% relative of the high temperatures in first quarter, as mentioned previously. Edenor's customer base rose 1% versus a prior year of 3.3 million customers. This was mainly due to an increase in residential and industrial customers because of market disciplines measures, including the installation of increasing number of energy meters in the fourth quarter, which were mostly intended to convert clandestine connections into registered customers. Financial results, distribution margin. For the fourth quarter, our distribution margin rose 34% year-to-year to 44.6 billion pesos, mainly due to a lower energy purchase cost. And to a lesser extent, tariff increases implemented yearly in the year. For the fourth quarter, the distribution margin rose 24%. to 242.2 billion pesos, as shown in the slide, due to several factors. First, the positive effect of tariff increases contributed to higher revenues, even though these adjustments were still below what was needed to fully compensate inflation. A second factor that had the comparison for the year was a lower increase in energy purchase costs, as we have explained earlier. Financial results, maybe that. Looking at EBITDA for the full year 2023, EBITDA rose sharply in real terms to 163.5 billion pesos versus 19 billion pesos last year. The main factors driven the improvement were a substantial positive impact of 198 billion pesos due to an agreement for a payment plan for a month's view to Kamesa for the past energy purchase costs. The tariff adjustments put in place earlier in 2023 of 107.8% in April and 73.7% in June. And a further reduction in energy losses to 14.9% in the fourth quarter of 2023 versus 15.9% in the fourth quarter of 2022. Evita for the fourth quarter of 2023 was negative by 29.2 billion pesos compared to the last year profit of 43.9 billion pesos for the same reasons mentioned above. Financial results. Net financial expenses. Net financial expenses of 88.1 billion pesos in the fourth quarter of 2023 were in line with the prior year. For the full year 2023, net financial expenses increased by 350.4 billion pesos from 277.6 billion pesos in 2022 due to a higher interest expense and foreign exchange effects. Financial results. On the net results line, E&R reported a net loss of 32.7 billion pesos in the fourth quarter of 2023 versus last year earnings of 11.7 billion pesos, mostly reflecting the lack of sufficient tariff adjustments to compensate inflation. For the full year, we reported a profit of 48.4 billion pesos, including the effect of the payments plan with Camisa for the energy purchases. This was a sharp swing from last year's loss of 54.4 million pesos. The results reflect the two tariff increases mentioned earlier and two, a higher inflation adjustment rate fund, which together more than offset the rise in operating costs due to inflation and higher energy purchase costs. CapEx. For the full year, we invested 123.6 billion pesos, which was up to 17% versus 2022. For the fourth quarter, we invested 32.4 billion pesos. These figures underline our unwavering commitment to improve service quality, which is evident in the strong improvement that we have been achieved in our service indicators. A key The goal of our strong investment program was to enable the company to provide reliable service during periods of peak summer demand. Financial results. CapEx details. Our investment program spending allocation is made to fulfill our commitment to meet rising demand, further improve service quality, and reduce non-technical losses. These investments are predominantly geared towards augmenting capacity, implementing remote controls, infrastructure in the medium voltage network, connecting new supplies, and installing self-managing energy meters. Throughout this process, we remain steadfast in our goal to prioritize environmental protection and public safety. Over the past 11 years, we have invested more than $2 billion in infrastructure to strengthen our operations capacity and position in our company for the continuing operating success. To rebuild L&R's network today from scratch would be required an estimated investment of $8.5 billion. Starting in 2013, as you can see in the lower part of slide 16, we began the transformation of the network into a smart network by installing 3,347 remote TID control points, 2,724 tele-supervision points, as well as 345,000 smart meters. This allows us to solve problems that raise in the network remotely and quickly. We have also transformed the way in which we related to our clients. We modernized the service in our commercial office with cutting-edge technology and developing Elenor Digital, a cutting-edge service app, which is already used by more than 2.4 million clients. This allows customers to resolve procedures, make payments, generate electronic bills, or receive from home or from a telephone, optimizing clients' time and reducing the carbon footprint. by not traveling to the commercial offices or by not printing invoices, for example. Operating indicators, energy losses. We achieved a reduction in energy losses to 14.9% in the fourth quarter, down to 15.6% in the last year's fourth quarter. These underscores are continuing efforts to find solutions to this difficult problem. Our multidisciplinary teams are constantly focusing on finding innovations ways to combat energy losses. These efforts are complemented by our market discipline initiatives aimed at curbing inefficiencies and irregularities. Analytical tools powered by artificial intelligence have augmented inspection efficiencies, and our market discipline actions continue to detect and rectify irregular connections. It is important to remember that the 14.9% total losses, 9.7% are technical losses, which are recognized by the regulator in our target. Operating indicators, quality of service. The investment plan executed in recent years continues to show results that are reflected in continuous improvements in our service quality. by reducing the duration and frequency of outages since 2014, and thus exceeding the regulatory requirements set forth. Quality standards are measured based on the duration and frequency of service outages using service quality indicators. For 2023, the CIDI and CIP service quality indicators showed further improvements to 8.2 hours and 3.4 average outages per client in the year, reaching records low and down 75% and 64% respectively, compared to 2014 levels. This recovery in services is mainly due to the strong level of investment that the company has been made since then. Investments have been focused on implementing improvements in operational process and adopting of technologies applied to the operations and management of the network. Financial debt. On March 7, 2024, Eleanor completed two notes issuances in the local market for a total amount of $100 million with a 30-month maturity, which enables us to improve our debt profile and extended the average maturity of our debt. capital debt outstanding after these issuances is $182 million. On slide 22, you can see the maturity schedule of the debt as of December 2023 and a pro forma after the recent transactions in which we issued $100 million in class three and class four of the notes. Our debt profile and capital structure has improved notably post the exchange and issuance of these new notes. Financial debt rating agencies. With the improvement in our risk profile due to important changes in the regulatory front, two of our rating agencies, FIX and Moody's, made positive moves related to our debt. FIX raised its rating and Moody's improved the outlook, which will be reviewed to a positive signal, that are a positive signal. Sustainability, technology, and innovation. We want to lead the transformation of the electricity grid to a smart grid with technology and innovation. Under the new relay administration, new rules proposed regarding energy and the regulation of the economy present a unique opportunity for El Norte to accompany the country's challenge to become a protagonist in the world economic economy. Argentina's commitments in the Paris Agreement, the requirements of the capital markets The energy transition and the situation of the electricity infrastructure requires the collaboration of all actors to face the challenges that arise. Our country has a balanced energy matrix, but presents numerous challenges in the area of transportation and distribution. ENR is a distributor, has demonstrated its resiliency and ability to adapt, which has allowed to significantly improve its service quality indicators. As our next challenge, we want to lead the transformation of the electricity grid into a smart grid with technology and innovation, implementing solutions already available in other places in the world, which will allow us to gain even greater efficiency for the benefit of our clients. Our new strategy includes moving to transform a network from one to a current one. Sorry. Our new strategy includes moving to transform our network from one that currently only distributes electricity into a network in which customers can generate and sell their electricity. Where electric vehicles for public or private transportation can be charged batteries for electric vehicles. Where in our buildings, and substations can generate renewable electricity through solar panels where companies can develop their old renewable energy projects and where the community can measure its consumption in real terms and adopt these technologies by sharing information and knowledge. Sustainability Report 2023. On March 8, 2024, the Board of Directors approved the 10th Sustainability Report 2023, together with its limited security report issued by PricewaterhouseCoopers Argentina. This is the first sustainability report issued together with our annual financial report. Sustainability technology and innovation. Main metrics. We recommend focus on these issues. Here you can see the main metrics that reflects our commitments to CDG. sustainability development goals. We invite you to visit the full report on sustainability on our website, edinor.com. Sorry. Closing remarks. To close, I would like to reiterate that we remain focused on future transformational growth opportunities. We are an industry leader in Argentina with a leading 20% market share in electricity distribution. They recently announced tariff changes with 319% value added distribution costs increased plus the applicable of automatic monthly adjustments starting in May 2024 are transformational for us. We expect this will lead to material improvements in our EBITDA and net income and position us for an improved financial performance. This will enable the company to continue to make the necessary investments to improve the quality of services, transforming the grid into a smart network with technology and innovation. These improvements have restored the economical equilibrium of E&O. For the first time in many years, the auditors do not include a concern about the company continuing as a growing concern. The controlling shareholder at Elkos is focused on building an improvement achieved over the last few years and continues both work to maximize value for the existing business and take advantage of business opportunities in line with a sustainable future by transforming our electricity grid into a smart grid with technology and innovation. We remain focused on continuing our strong investment program to continue to improve our services to our clients. With this, now we would like to open the call for your questions. To ask questions, please send a message to IR Eleanor or to the questions and answers menu, identify yourself and stating that you have a question. We thank you for, again, for all your support and your engagement as shareholder and more holder of Adeno.

Germán, we have two questions. We have one from Christian Serra from Balance. We have noticed some stretching in the Camisa tables. Could you provide us some detail on the total amount of the conformed payments? Looking forward, what's your base of tables that will bring you for the non-payment?

Okay, the total debt that we have with Camisa today that is not included in the Camisa plans that we have signed last year is 105 billion pesos. And we do not have the payable space still because we have implemented the new tariff as of February 16th.

Another question. Considering the 320% that increased, what's your estimated target for 2024? Are you planning on distributing any debt dividends in the new terms?

The coverage that we have estimated for 2024 is 170 billion pesos, and it's approximately 25% of the VAT that we have projected for 2024. And we don't have any policy yet discussed in terms of building payments.

Agustina, hello and thanks for taking my question. I have two questions. First, Which is your estimated EBITDA for 2024? Second, which is your estimated CAPEX for 2024? And which is the ratio of CAPEX versus revenue that you are expecting to maintain? Thanks for answering.

The CAPEX answer, we already did that. That's 170 billion pesos. And it's 25% of the value added distribution cost. I will give you the number in terms of how much is in revenues, but we share that information with you later. And in terms of giving a forecast of EBITDA, we cannot give a forecast of EBITDA, but you can follow the research that are done for the company or the rating agencies. They do projections and they can show you what are their expectations for 2024. But I would say something additionally is that we have been released of the going concern because Price did a very important review on the numbers in order to show that there are no big restrictions in terms of financial position of the company and that improves a lot the company's performance. So that's another very important signal that we have received this year with the signing of this agreement. of these financial statements.

And a final question regarding the automatic monthly adjustment. Is there anything else that needs to be defined in order to implement it as scheduled in May?

No, there is not. The process is already done and it's going to be done automatically. The adjustment is going to be 55% of the adjustment will be subject to salaries, wages or increases. 20% will be consumer prices and 25% will be wholesale prices. And we don't need any other resolution or any other approval from the regulatory entity to implement it. Already transmission has this from last year. They have quarterly adjustments and they are implementing it without any problems. Okay, thank you very much for participating in our quarterly conference call. Please do not hesitate to contact our investor relations department for any further inquiries you may have. Good morning and have a nice day.