UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of November 2007
EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A. (EDENOR)
(DISTRIBUTION AND MARKETING COMPANY OF THE NORTH )
(Translation of Registrant’s Name Into English)
Argentina
(Jurisdiction of incorporation or organization)
Azopardo 1025
Buenos Aires C1107ADQ
Argentina
(Address of principal executive offices)
(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)
Form 20-F X Form 40-F
(Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)
Yes No X
(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- .)
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Stock Information: NYSE ADR Ticker: EDN Buenos Aires Stock Exchange Class B Shares Ticker: EDN Ratio: 20 Class B = 1 ADR Investor Relations Contacts: In Buenos Aires Ivana Del Rossi Investor Relations Officer Tel: 5411.4346.5127 Veronica Gysin Investor Relations Tel: 5411.4346.5231 Edenor S.A. 1025 Azopardo Street, 16th Floor (C1107ADQ) Buenos Aires, Argentina Fax: 5411.4346.5358 Email: investor@edenor.com www.edenor.com.ar In New York Melanie Carpenter/Maria Barona i-advize Corporate Communications, Inc. 82 Wall Street, Suite 805 New York, NY 10005 Tel: 212.406.3690 Fax: 212.509.7711 Email: edenor@i-advize.com | EDENOR ANNOUNCES RESULTS FOR THE FIRST NINE MONTHS OF 2007 Buenos Aires, Argentina, November 9, 2007 - 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 nine months ended September 30, 2007 (third quarter of 2007 accumulated). All figures are stated in Argentine Pesos and have been prepared in accordance with Argentine GAAP. Solely for the convenience of the reader, Peso amounts as of and for the nine-month period ended September 30, 2007 have been translated into U.S. Dollars at the buying rate for U.S. Dollars quoted by Banco de la Nación Argentina (Banco Nación) on Septe mber 30, 2007 of Ps. 3.15. 9M07 Highlights · Net Sales increased 47.0% to Ps. 1,503.2 million in the nine-month period ended September 30, 2007, compared to Ps.1,022.9 million in the same period of 2006, mainly due to the application to our non residential customers of the increase in our distribution margin (VAD) from February 1, 2007 and the recording of the retroactive portion of the VAD increase for the period from November 1, 2005 through January 31, 2007, which totals Ps. 218.6 million. As of September 30, 2007 we had already invoiced Ps. 33.5 million of that amount while Ps. 185.1 millio n remains unbilled. Excluding the unbilled amount of retroactive portion of the VAD increase, net sales in the nine-month period ended September 30, 2007 would have been Ps. 1,318.1 million, representing a 28.9% increase compared to the same period of 2006. This increase is also driven by an increase in the volume of energy sold compared to the nine months ended September 30, 2006. · Volume of Energy Sold, increased 9.4% to 13,574.1 GWh in the first nine months of 2007, compared to 12,408.3 GWh in the same period of 2006. This increase was due mainly to a 7.6% increase in average GWh consumption per customer and to a 1.7% increase in the number of customers. · Gross Margin increased 91.6% to Ps. 830.6 million in the first nine months of 2007, compared to Ps. 433.5 million in the same period of 2006. This increase is also largely due to the application of the increase in our distribution margin (VAD) from February 1, 2007, the recording of the retroactive portion of this increase and the increase in volume of energy sold, as described above. Excluding the unbilled amount of retroactive portion of the VAD increase, our gross margin would have been Ps. 645.5 million in the nine month period ended September 30, 2007 representing a 48.9% increase when compared with the same period of 2006. |
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· Net Operating Income increased significantly to Ps. 350.8 million for the nine months ended September 30, 2007, compared to Ps. 30.4 million in the same period of 2006. This increase is also largely due to the application of the increase in our distribution margin (VAD) from February 1, 2007, the recording of the retroactive portion of this increase and the increase in volume of energy sold, as described above. Excluding the unbilled amount of retroactive portion of the VAD increase, net operating income for the first nine months of 2007 would have amounted to Ps. 165.7 million. · Net Income reached Ps. 69.9 million in the first nine months of 2007, compared to Ps. 260.0 million in the same period of 2006. In the nine month period ended September 30, 2007, net income was positively affected by the application of the VAD increase, the increase in volume of energy sold and the recording of the retroactive portion of the VAD increase, which were partially offset by the net exchange losses (Ps. 32.1 million) related to our financial debt (which is denominated in US dollars), the adjustment to present value of our financial debt (Ps.46.3 million), the adjustment to present value of the retroactive portion of the VAD increase and certain trade receivables (Ps.32.4 million), and the recording of a tax charge (Ps. 106.8 million) generated by the reversal of the deferred tax asset related to the tax loss carryforward due to a significant increase in our taxable income, which was partially offset by the tax deduction of ENRE penalties in 2007 fiscal year. In the same period of 2006, net income was positively affected by the gain resulting from our debt restructuring, including the adjustment to present value of the restructured debt (Ps. 254.7 million) and the recognition of the partial reversal of the valuation allowance of our net deferred tax assets (Ps. 72.3 million). |
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FINANCIAL HIGHLIGHTS |
Nine months period ended September 30 * | Nine months period ended September 30 * | % Change | Nine months period ended September 30 * (excluding the unbilled retroactive VAD adjustment) | % Change | ||||||||||||
2007 | 2006 | vs. 2006 | 2007 | vs. 2006 | ||||||||||||
Net Sales | 1,503.2 | (1) | 1022.9 | 47.0 | % | 1318.1 | 28.9 | % | ||||||||
Electric power purchases | (672.6 | ) | (589.4 | ) | 14.1 | % | (672.6 | ) | 14.1 | % | ||||||
Gross margin | 830.6 | (1) | 433.5 | 91.6 | % | 645.5 | 48.9 | % | ||||||||
Net Operating Income (loss) | 350.8 | (1) | 30.4 | 1,053.9 | % | 165.7 | 445.1 | % |
(1) | As of September 30, 2007, energy sales include the retroactive portion of the VAD increase, which amounts to Ps. 218.6 million and is being invoiced in 55 consecutive monthly installments, starting in February 2007. Of this amount, Ps. 33.5 million were invoiced as of September 30, 2007. |
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· | a 10.0% increase in demand (calculated as electricity purchase by us and our wheeling system customers); and, |
· | a migration of our wheeling system customers during the nine months ended September 30, 2007 to our T3 industrial customers category, which required us to purchase additional energy to satisfy demand by these new industrial customers. |
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Nine-month period ended September 30, | |||||||||||||||||||
2007 | % on 2007 net sales (excluding unbilled retroactive adjustment) | 2006 | % on 2006 net sales | ||||||||||||||||
(in millions of Pesos) | |||||||||||||||||||
Salaries and social security taxes | Ps. 91.2 | 29.0 | % | 6.9 | % | Ps. 69.6 | 25.9 | % | 6.8 | % | |||||||||
Supplies | 20.4 | 6.5 | % | 1.5 | % | 16.1 | 6.0 | % | 1.6 | % | |||||||||
Outsourcing | 56.7 | 18.0 | % | 4.3 | % | 39.0 | 14.5 | % | 3.8 | % | |||||||||
Depreciation of property, plant & equipment | 129.2 | 41.1 | % | 9.8 | % | 128.7 | 47.9 | % | 12.6 | % | |||||||||
Others | 16.9 | 5.4 | % | 1.3 | % | 15.2 | 5.7 | % | 1.5 | % | |||||||||
Total | Ps. 314.4 | 100.0 | % | 23.9 | % | Ps. 268.6 | 100.0 | % | 26.3 | % |
Nine-month period ended September 30, | |||||||||||||||||||
2007 | % on 2007 net sales (excluding unbilled retroactive adjustment) | 2006 | % on 2006 net sales | ||||||||||||||||
(in millions of Pesos) | |||||||||||||||||||
Salaries and social security taxes | Ps. 26.4 | 31.6 | % | 2.0 | % | Ps. 22.3 | 33.1 | % | 2.2 | % | |||||||||
Computer services | 8.5 | 10.2 | % | 0.6 | % | 6.3 | 9.3 | % | 0.6 | % | |||||||||
Outsourcing | 4.2 | 5.0 | % | 0.3 | % | 3.4 | 5.0 | % | 0.3 | % | |||||||||
Tax on financial transactions | 18.1 | 21.7 | % | 1.4 | % | 14.2 | 21.1 | % | 1.4 | % | |||||||||
Advertising expenses | 13.0 | 15.6 | % | 1.0 | % | 6.2 | 9.2 | % | 0.6 | % | |||||||||
Others | 13.3 | 15.9 | % | 1.9 | % | 15.0 | 22.3 | % | 1.5 | % | |||||||||
Total | Ps. 83.5 | 100.0 | % | 6.3 | % | Ps. 67.4 | 100.0 | % | 6.6 | % |
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Nine-month period ended September 30, | |||||||||||||||||||
2007 | % on 2007 net sales (excluding unbilled retroactive adjustment) | 2006 | % on 2006 net sales | ||||||||||||||||
(in millions of Pesos) | |||||||||||||||||||
Salaries and social security taxes | Ps. 18.5 | 22.6 | % | 1.4 | % | Ps. 15.0 | 22.4 | % | 1.5 | % | |||||||||
Allowance for doubtful accounts | 15.8 | 19.3 | % | 1.2 | % | 11.4 | 17.0 | % | 1.1 | % | |||||||||
Outsourcing | 21.0 | 25.7 | % | 1.6 | % | 18.3 | 27.3 | % | 1.8 | % | |||||||||
Taxes and charges | 8.4 | 10.3 | % | 0.6 | % | 6.4 | 9.6 | % | 0.6 | % | |||||||||
Others | 18.1 | 22.1 | % | 1.4 | % | 15.9 | 23.7 | % | 1.6 | % | |||||||||
Total | Ps. 81.8 | 100.0 | % | 6.2 | % | Ps. 67.0 | 100.0 | % | 6.6 | % |
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For the nine months period ended | YTD | Sept, | Sept, | Clients | |||||||||||||||||||||
September 30, 2007 | September 30, 2006 | % | 2007 | 2006 | % | ||||||||||||||||||||
In Gwh | % | In Gwh% | % | Variation | Clients | Clients | Variation | ||||||||||||||||||
Residential | 5.619 | 41,4 | % | 4.752 | 38,3 | % | 18,3 | % | 2.149.089 | 2.110.262 | 1,8 | % | |||||||||||||
Small Commercial | 1.115 | 8,2 | % | 1.054 | 8,5 | % | 5,8 | % | 291.987 | 291.036 | 0,3 | % | |||||||||||||
Medium Commercial | 1.148 | 8,5 | % | 1.057 | 8,5 | % | 8,7 | % | 28.413 | 27.145 | 4,7 | % | |||||||||||||
Industrial | 2.687 | 19,8 | % | 2.400 | 19,3 | % | 12,0 | % | 5.197 | 4.963 | 4,7 | % | |||||||||||||
Wheeling System | 2.247 | 16,6 | % | 2.417 | 19,5 | % | -7,1 | % | 508 | 504 | 0,8 | % | |||||||||||||
Others | |||||||||||||||||||||||||
Public Lighting | 504 | 3,7 | % | 509 | 4,1 | % | -1,1 | % | 21 | 21 | 0,0 | % | |||||||||||||
Shantytowns and Others | 254 | 1,9 | % | 219 | 1,8 | % | 15,8 | % | 382 | 377 | 1,3 | % | |||||||||||||
Total | 13.574 | 100,0 | % | 12.408 | 100,0 | % | 9,4 | % | 2.475.597 | 2.434.308 | 1,7 | % |
· | Ps.137.1 million in new connections due to increases in our customer base and grid enhancements; |
· | Ps. 41.3 million in network maintenance and improvements; |
· | Ps. 21.4 million in systems, communications and legal requirements. |
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For the nine-month period ended September 30, | ||||||||||
2007 | 2006 | |||||||||
Net sales | USD 477,220 | Ps. 1,503,244 | Ps.1,022,863 | |||||||
Electric power purchases | (213,538 | ) | (672,646 | ) | (589,408 | ) | ||||
Gross margin | 263,682 | 830,598 | 433,455 | |||||||
Transmission and distribution expenses | (99,812 | ) | (314,407 | ) | (268,649 | ) | ||||
Administrative expenses | (26,518 | ) | (83,532 | ) | (67,417 | ) | ||||
Selling expenses | (25,973 | ) | (81,815 | ) | (66,983 | ) | ||||
Net operating (loss) income | 111,379 | 350,844 | 30,406 | |||||||
Financial income (expenses) and holding gains (losses): | ||||||||||
Generated by assets: | ||||||||||
Exchange difference | 318 | 1,002 | 3,016 | |||||||
Interest | 2,572 | 8,101 | 10,998 | |||||||
Exposure to inflation and holding results | �� | 9 | 28 | 231 | ||||||
Generated by liabilities: | ||||||||||
Financial expenses | (4,168 | ) | (13,130 | ) | (22,613 | ) | ||||
Exchange difference | (10,205 | ) | (32,147 | ) | (29,896 | ) | ||||
Interest expenses | (12,072 | ) | (38,028 | ) | (44,136 | ) | ||||
Gain on extinguishment of former debt | 0 | 0 | 179,243 | |||||||
Adjustment to present value of the new notes | (14,686 | ) | (46,261 | ) | 75,495 | |||||
Adjustment to present value of the retroactive tariff increase arising from the application of the new electricity rate schedule and of the Payment Plan Agreement with the Province of Bs.As. | (10,287 | ) | (32,404 | ) | 0 | |||||
Result of financial debt repurchase | (257 | ) | (808 | ) | 0 | |||||
Result of the adjustment to present value of the financial debt repurchase | 278 | 877 | 0 | |||||||
Other expenses, net | (6,773 | ) | (21,335 | ) | (15,031 | ) | ||||
Income before taxes | 56,108 | 176,739 | 187,713 | |||||||
Income tax | (33,910 | ) | (106,816 | ) | 72,315 | |||||
Net income | 22,198 | 69,923 | 260,028 |
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For the nine-month period ended September 30, | ||||||||||
2007 | 2006 | |||||||||
Net income for the year/period | USD22,198 | Ps.69,923 | Ps.260,028 | |||||||
Adjustment to reconcile net income to net cash flows provided by operating activities: | ||||||||||
Depreciation of property, plant and equipment | 42,046 | 132,445 | 134,759 | |||||||
Retirement of property, plant and equipment | 157 | 495 | 403 | |||||||
Gain on extinguishment of former debt | 0 | 0 | (179,243 | ) | ||||||
Adjustment to present value of the new notes | 14,686 | 46,261 | (75,495 | ) | ||||||
Income from investments in companies | (17 | ) | (54 | ) | (11 | ) | ||||
Adjustment to present value of the financial debt repurchase | (278 | ) | (877 | ) | 0 | |||||
Exchange differences, interest and penalties on loans | 17,706 | 55,774 | 59,944 | |||||||
Supplies recovered from third parties | 0 | 0 | (5,782 | ) | ||||||
Income tax | 33,910 | 106,816 | (72,315 | ) | ||||||
Adjustment to present value of the retroactive tariff increase arising from the application of the new electricity rate schedule and of the Payment Plan Agreement with the Province of Bs.As | 10,287 | 32,404 | 0 | |||||||
Changes in operating assets and liabilities: | ||||||||||
Net increase in trade receivables | (61,154 | ) | (192,635 | ) | (25,165 | ) | ||||
Net decrease (increase) in other receivables | 2,003 | 6,311 | (20,995 | ) | ||||||
Increase in supplies | (2,928 | ) | (9,222 | ) | (4,008 | ) | ||||
Decrease in trade accounts payable | 6,488 | 20,438 | 31,724 | |||||||
Increase in salaries and social security taxes | 2,009 | 6,327 | 15,581 | |||||||
Increase (decrease) in taxes | 7,500 | 23,625 | (4,379 | ) | ||||||
Increase in other liabilities | 3,367 | 10,605 | 38,505 | |||||||
Net increase in accrued litigation | 3,930 | 12,379 | 5,872 | |||||||
Financial interest paid | (4,637 | ) | (14,608 | ) | (12,276 | ) | ||||
Financial interest collected | 727 | 2,291 | 1,482 | |||||||
Net cash flow provided by operating activities | 97,999 | 308,698 | 148,629 | |||||||
Investing activities: | ||||||||||
Addition to property, plants and equipment | (59,449 | ) | (187,263 | ) | (105,125 | ) | ||||
Net cash flow used ininvesting activities | (59,449 | ) | (187,263 | ) | (105,125 | ) | ||||
Financing activities: | ||||||||||
Decrease in loans | (45,815 | ) | (144,316 | ) | (310,794 | ) | ||||
Capital Increase | 57,706 | 181,773 | 0 | |||||||
Net cash flows provided by (used in) financing activities | 11,891 | 37,457 | (310,794 | ) | ||||||
Cash variations: | ||||||||||
Cash at beginning of year | 10,372 | 32,673 | 308,139 | |||||||
Cash at end of period | 60,814 | 191,565 | 40,849 | |||||||
Increase (decrease) in cash | 50,442 | 158,892 | (267,290 | ) |
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For the nine-month period ended September 30, 2007 and the year ended December 31, 2006 | ||||||||||
2007 | 2006 | |||||||||
Current Assets: | ||||||||||
Cash and banks | USD 1,603 | Ps. 5,050 | Ps. 481 | |||||||
Investments | 59,211 | 186,515 | 32,192 | |||||||
Trade receivables | 101,363 | 319,295 | 270,938 | |||||||
Other receivables | 5,991 | 18,873 | 30,221 | |||||||
Supplies | 6,643 | 20,925 | 13,635 | |||||||
Total current assets | 174,812 | 550,658 | 347,467 | |||||||
Non-Current Assets: | ||||||||||
Trade receivables | 34,788 | 109,583 | 0 | |||||||
Other receivables | 49,110 | 154,696 | 256,475 | |||||||
Investments | 137 | 432 | 378 | |||||||
Supplies | 2,176 | 6,853 | 4,921 | |||||||
Property, plant and equipment | 949,921 | 2,992,251 | 2,925,422 | |||||||
Total non-current assets | 1,036,132 | 3,263,815 | 3,187,196 | |||||||
Total assets | 1,210,944 | 3,814,473 | 3,534,663 | |||||||
Current Liabilities: | ||||||||||
Trade account payable | 90,471 | 284,985 | 267,640 | |||||||
Loans | 8,470 | 26,682 | 2,029 | |||||||
Salaries and social security taxes | 17,131 | 53,962 | 51,446 | |||||||
Taxes | 27,243 | 85,817 | 62,192 | |||||||
Other liabilities | 9,648 | 30,390 | 26,380 | |||||||
Accrued Litigation | 11,624 | 36,615 | 25,914 | |||||||
Total current liabilities | 164,588 | 518,451 | 435,601 | |||||||
Non-Current Liabilities: | ||||||||||
Trade account payable | 10,903 | 34,343 | 31,250 | |||||||
Loans | 321,610 | 1,013,071 | 1,095,490 | |||||||
Salaries and social security taxes | 7,650 | 24,098 | 20,287 | |||||||
Other liabilities | 82,597 | 260,180 | 241,079 | |||||||
Accrued Litigation | 13,423 | 42,284 | 40,606 | |||||||
Total non-current liabilities | 436,183 | 1,373,976 | 1,428,712 | |||||||
Total liabilities | 600,770 | 1,892,427 | 1,864,313 | |||||||
Shareholders’ equity | 610,173 | 1,922,046 | 1,670,350 | |||||||
Total liabilities and shareholders’ equity | 1,210,944 | 3,814,473 | 3,534,663 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Empresa Distribuidora y Comercializadora Norte S.A.
By: /s/ Rogelio Pagano
Rogelio Pagano
Chief Financial Officer
Date: November 9, 2007