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 February 2008
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 | EDENOR ANNOUNCES 2007 YEAR-END RESULTS Buenos Aires, Argentina, February 28, 2008 - 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 year ended December 31, 2007. 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 year ended December 31, 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 December 31, 2007 of Ps. 3.149. 2007 Highlights Net Sales increased 43.8% to Ps. 1,981.9 million in the year ended December 31, 2007, compared to Ps.1,378.3 million in the year ended December 31, 2006, this increase is largely due to the application of the VAD increase and the Cost Monitoring Mechanism (CMM) adjustments to our non residential customers from February 1, 2007, the recording in the year ended December 31, 2007 of the full amount of the retroactive portion of the VAD increase for the period from November 1, 2005 to January 31, 2007 and, to an increase in the volume of energy sold. The retroactive portion of the VAD increase (including CMM) resulted in a positive impact of Ps. 218.6 million. As of December 31, 2007 we had already invoiced Ps. 47.3 million of that amount while Ps. 171.3 million remains unbilled. In October 2007 the ENRE allowed the Company to recognize the (CMM) adjustment for the period May 2006 - April 2007 (9.63%) applicable as of May 1, 2007. Such adjustment can be deducted from the funds resulting from the difference between surcharges billed and discounts made to customers, deriving from the implementation of the Program for the Rational Use of Electric Power (PUREE), until their transfer to the tariff is granted by the ENRE. The impact of this adjustment in net sales for the eight month period between May and December 2007 amounted to Ps. 49.6 million. Volume of Energy Sold, increased by 7.5% to 17,886.1 GWh in the year ended December 31, 2007 from 16,632.1 GWh in the year ended December 31, 2006. The increase in volume is attributable to a 5.6% increase in the average GWh consumption per customer and a 1.8% increase in the number of customers. Gross Margin increased significantly (88.5%) to Ps. 1,092.0 million in the year ended December 31, 2007 from Ps. 579.3 million in the year ended December 31, 2006, mainly due to the application to our non residential customers of the increase in our distribution margin (VAD) from February 1, 2007 (including the May 2006 adjustment), the recording of the retroactive portion of the VAD increase for the period from November 1, 2005 through January 31, 2007, the recording of the May 2006 - April 2007 CMM adjustment and the increase in volume of energy sold. | |
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 |
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Net Operating Income increased significantly from Ps. 35.9 million in the year ended December 31, 2006 to Ps. 429.2 million in the year ended December 31, 2007, mainly due to the application of the VAD increase and CMM adjustments described above and to an increase in energy and power capacity sold. | ||
Net Income reached Ps. 122.5 million in the year ended December 31, 2007, compared to Ps. 293.1 million in the year ended December 31, 2006. In the year ended December 31, 2007, net income was positively affected by the application of the VAD increase, which results in a higher pre-tax net income of Ps. 247.4 million in 2007 compared to Ps. 125.9 million in the same period of 2006. These results were affected by the recording of an income tax charge of Ps. 125.0 million in 2007 and an income tax gain of Ps. 167.2 million in 2006. |
FINANCIAL HIGHLIGHTS |
Year ended December 31 * 2007 | Year ended December 31 * 2006 | % Change vs. 2006 | ||||||||
Net Sales | 1,981.9 | (1) | 1,378.3 | 43.8 | % | |||||
Electric power purchases | (889.9 | ) | (799.1 | ) | 11.4 | % | ||||
Gross margin | 1,092.0 | (1) | 579.3 | 88.5 | % | |||||
Net Operating Income (loss) | 429.2 | (1) | 35.9 | 1,095.5 | % |
(1) | As of December 31, 2007, net sales, gross margin and net operating income 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.47.3 million was invoiced as of December 31, 2007. |
· | the application from February 1, 2007 of the increase in our distribution margins, or VAD, charged to our non-residential customers, including the additional increase resulting from the implementation of the CMM for the period from November 2005 to April 2006 (which together represented a 38.3% overall increase in our VAD); |
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· | the accrual of the full amount corresponding to the retroactive portion of the VAD increase (including CMM for the period from November 2005 to April 2006) charged to our non residential customers for the period from November 1, 2005 through January 31, 2007, which amounted to Ps. 218.6 million, of which, as of December 31, 2007, we had invoiced 47.3 million; |
· | the recognition in October 2007 of an additional 9.63% increase in our VAD corresponding to the implementation of the CMM for the period from May 2006 to April 2007. Such VAD increase amounting to Ps.49.6 is effective since May 1, 2007; and |
· | a 7.5% increase in the volume of energy sold in 2007, compared to the volume sold in 2006. |
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Year ended December 31, | |||||||||||||||||||
2007 | % on 2007 net sales (excluding unbilled retroactive adjustment) (1) | 2006 | % on 2006 net sales | ||||||||||||||||
(in millions of Pesos) | |||||||||||||||||||
Salaries and social security taxes | Ps. | 125.8 | 30.1 | % | 6.9 | % | Ps. | 96.8 | 26.7 | % | 7.0 | % | |||||||
Supplies | 22.9 | 5.5 | % | 1.3 | % | 20.1 | 5.5 | % | 1.5 | % | |||||||||
Outsourcing | 74.2 | 17.8 | % | 4.1 | % | 53.8 | 14.9 | % | 3.9 | % | |||||||||
Depreciation of property, plant & equipment | 169.5 | 40.6 | % | 9.4 | % | 171.2 | 47.3 | % | 12.4 | % | |||||||||
Others | 25.2 | 6.0 | % | 1.4 | % | 20.2 | 5.6 | % | 1.5 | % | |||||||||
Total | Ps. | 417.6 | 100.0 | % | 23.1 | % | Ps. | 362.1 | 100.0 | % | 26.3 | % |
(1) | Calculated on the basis of net sales excluding the unbilled amount of the retroactive portion of the VAD increase, but including the full amount of the May 07 MMC (Ps.49.6 million), which results in net sales of Ps. 1,810.6 million. These amounts are not intended to be representative of what they would have been if the retroactive tariff increase had been in effect only during the reported period. |
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Year ended December 31, | |||||||||||||||||||
2007 | % on 2007 net sales (excluding unbilled retroactive adjustment) (1) | 2006 | % on 2006 net sales | ||||||||||||||||
(in millions of Pesos) | |||||||||||||||||||
Salaries and social security taxes | Ps. | 25.4 | 21.0 | % | 1.4 | % | Ps. | 20.5 | 23.3 | % | 1.5 | % | |||||||
Allowance for doubtful accounts | 30.7 | 25.4 | % | 1.7 | % | 11.6 | 13.2 | % | 0.8 | % | |||||||||
Outsourcing | 29.4 | 24.4 | % | 1.6 | % | 25.1 | 28.6 | % | 1.8 | % | |||||||||
Taxes and charges | 11.1 | 9.2 | % | 0.6 | % | 9.1 | 10.3 | % | 0.7 | % | |||||||||
Others | 24.0 | 20.0 | % | 1.3 | % | 21.6 | 24.7 | % | 1.6 | % | |||||||||
Total | Ps. | 120.6 | 100.0 | % | 6.7 | % | Ps. | 87.9 | 100.0 | % | 6.4 | % |
(1) | Calculated on the basis of net sales excluding the unbilled amount of the retroactive portion of the VAD increase, but including the full amount of the May 07 MMC (Ps.49.6 million), which results in net sales of Ps. 1,810.6 million. These amounts are not intended to be representative of what they would have been if the retroactive tariff increase had been in effect only during the reported period. |
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Year ended December 31, | |||||||||||||||||||
2007 | % on 2007 net sales (excluding unbilled retroactive adjustment) (1) | 2006 | % on 2006 net sales | ||||||||||||||||
(in millions of Pesos) | |||||||||||||||||||
Salaries and social security taxes | Ps. | 36.5 | 29.3 | % | 2.0 | % | Ps. | 31.6 | 33.9 | % | 2.3 | % | |||||||
Computer services | 11.4 | 9.2 | % | 0.6 | % | 8.1 | 8.7 | % | 0.6 | % | |||||||||
Outsourcing | 10.9 | 8.7 | % | 0.6 | % | 4.9 | 5.3 | % | 0.4 | % | |||||||||
Tax on financial transactions | 31.5 | 25.3 | % | 1.7 | % | 19.2 | 20.5 | % | 1.4 | % | |||||||||
Advertising expenses | 15.4 | 12.3 | % | 0.8 | % | 10.0 | 10.7 | % | 0.7 | % | |||||||||
Others | 19.0 | 15.2 | % | 1.0 | % | 19.5 | 20.9 | % | 1.4 | % | |||||||||
Total | Ps. | 124.7 | 100.0 | % | 6.9 | % | Ps. | 93.3 | 100.0 | % | 6.8 | % |
(1) | Calculated on the basis of net sales excluding the unbilled amount of the retroactive portion of the VAD increase, but including the full amount of the May 07 MMC (Ps.49.6 million), which results in net sales of Ps. 1,810.6 million. These amounts are not intended to be representative of what they would have been if the retroactive tariff increase had been in effect only during the reported period. |
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Year ended | |||||||||||||||||||||||||
December 31, 2007 | December 31, 2006 | YTD % | Dec, 2007 | Dec, 2006 | Clients % | ||||||||||||||||||||
In Gwh | % | In Gwh | % | Variation | Clients | Clients | Variation | ||||||||||||||||||
Residential | 7.148 | 40,0 | % | 6.250 | 37,6 | % | 14,4 | % | 2.162.586 | 2.118.447 | 2,1 | % | |||||||||||||
Small Commercial | 1.485 | 8,3 | % | 1.433 | 8,6 | % | 3,6 | % | 292.617 | 293.162 | -0,2 | % | |||||||||||||
Medium Commercial | 1.552 | 8,7 | % | 1.446 | 8,7 | % | 7,3 | % | 28.676 | 27.414 | 4,6 | % | |||||||||||||
Industrial | 3.628 | 20,3 | % | 3.364 | 20,2 | % | 7,9 | % | 5.217 | 5.067 | 3,0 | % | |||||||||||||
Wheeling System | 3.111 | 17,4 | % | 3.211 | 19,3 | % | -3,1 | % | 569 | 507 | 12,2 | % | |||||||||||||
Others | |||||||||||||||||||||||||
Public Lighting | 643 | 3,6 | % | 650 | 3,9 | % | -1,2 | % | 21 | 21 | 0,0 | % | |||||||||||||
Shantytowns and Others | 320 | 1,8 | % | 279 | 1,7 | % | 14,6 | % | 378 | 371 | 1,9 | % | |||||||||||||
Total | 17.886 | 100,0 | % | 16.632 | 100,0 | % | 7,5 | % | 2.490.064 | 2.444.989 | 1,8 | % |
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· | Ps. 235.3 million in new connections due to increases in our customer base and grid enhancements; |
· | Ps. 70.0 million in network maintenance and improvements; |
· | Ps. 37.4 million in systems, communications and legal requirements. |
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Carry forward Amount | Effect on Net Income of Carry forward Amount | Year Carry forward Expires | ||||||||
Tax loss carry forward in 2002 | 98.519 | 34.482 | 2007 | |||||||
Tax loss carry forward in 2005 | 23.761 | 8.316 | 2010 | |||||||
Total tax loss carry forward as of December 31, 2007 | 122.280 | 42.798 |
(1) | Assumes 35% tax rate and the availability of taxable income in future periods. |
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For the year ended December 31, | |||||||||||||
2007 | 2006 | ||||||||||||
Net sales | USD | 629,383 | Ps. | 1,981,928 | Ps. | 1,378,326 | |||||||
Electric power purchases | (282,593 | ) | (889,885 | ) | (799,073 | ) | |||||||
Gross margin | 346,790 | 1,092,043 | 579,253 | ||||||||||
Transmission and distribution expenses | (132,599 | ) | (417,553 | ) | (362,118 | ) | |||||||
Administrative expenses | (39,586 | ) | (124,656 | ) | (93,299 | ) | |||||||
Selling expenses | (38,308 | ) | (120,633 | ) | (87,930 | ) | |||||||
Net operating (loss) income | 136,298 | 429,201 | 35,906 | ||||||||||
Financial income (expense) and holding gains (losses): | |||||||||||||
Generated by assets: | |||||||||||||
Exchange difference | (272 | ) | (855 | ) | 2,569 | ||||||||
Interest | 4,264 | 13,426 | 13,885 | ||||||||||
Exposure to inflation and holding results | 43 | 135 | 89 | ||||||||||
Generated by liabilities: | |||||||||||||
Financial expenses | (6.682 | ) | (21.042 | ) | (25,404 | ) | |||||||
Exchange difference | (9,507 | ) | (29.938 | ) | (13,318 | ) | |||||||
Interest expenses | (23,661 | ) | (74,508 | ) | (101,280 | ) | |||||||
Gain on extinguishment of former debt | 0 | 0 | 179,243 | ||||||||||
Adjustment to present value of the new notes | (6,826 | ) | (21,495 | ) | 57,138 | ||||||||
Adjustment to present value of the retroactive tariff increase arising from the application of the new electricity rate schedule and from the Payment Plan Agreement with the Province of Bs.As. | (9,406 | ) | (29,618 | ) | 0 | ||||||||
Loss from the purchase and redemption of notes | (3,248 | ) | (10,228 | ) | 0 | ||||||||
Adjustment to present value of purchased and redeemed notes | (2,741 | ) | (8,632 | ) | 0 | ||||||||
Other expenses, net | 316 | 996 | (22,944 | ) | |||||||||
Income before taxes | 78,578 | 247,442 | 125,884 | ||||||||||
Income tax | (39,690 | ) | (124,984 | ) | 167,182 | ||||||||
Net income | 38,888 | 122,458 | 293,066 |
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For the year ended December 31, | ||||||||||
2007 | 2006 | |||||||||
Net income for the year | USD | 38,888 | Ps. | 122,458 | Ps. | 293,066 | ||||
Adjustment to reconcile net income to net cash flows provided by operating activities: | ||||||||||
Depreciation of property, plant and equipment | 55,369 | 174,357 | 178,980 | |||||||
Retirement of property, plant and equipment | 351 | 1,105 | 650 | |||||||
Gain on extinguishment of former debt | 0 | 0 | (179,243 | ) | ||||||
Adjustment to present value of notes | 6,826 | 21,495 | (57,138 | ) | ||||||
Gain from investments in affiliated parties | (4 | ) | (12 | ) | (10 | ) | ||||
Adjustment to present value of the repurchased and redeemed notes | 2,741 | 8,632 | 0 | |||||||
Loss from the repurchase and redemption of notes | 3,248 | 10,228 | 0 | |||||||
Exchange differences, interest and penalties on loans | 22,084 | 69,541 | 49,061 | |||||||
Supplies recovered from third parties | 0 | 0 | (5,782 | ) | ||||||
Income tax | 39,690 | 124,984 | (167,182 | ) | ||||||
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 | 9,406 | 29,618 | 0 | |||||||
Changes in operating assets and liabilities: | ||||||||||
Increase of trade receivables due to the unbilled portion of the retroactive tariff increase | (54,395 | ) | (171,281 | ) | 0 | |||||
Net increase in trade receivables | (11,700 | ) | (36,853 | ) | (39,009 | ) | ||||
Net increase in other receivables | (2,663 | ) | (8,385 | ) | (23,088 | ) | ||||
(Increase) decrease in supplies | (5,836 | ) | (18,377 | ) | 1,433 | |||||
Increase in trade accounts payable | 16,744 | 52,728 | 67,065 | |||||||
Increase in salaries and social security taxes | 4,085 | 12,865 | 25,180 | |||||||
Increase (decrease) in taxes | 7,129 | 22,449 | (5,695 | ) | ||||||
Increase in other liabilities | 5,636 | 17,748 | 91,667 | |||||||
Net increase in accrued litigation | 5,142 | 16,191 | 9,537 | |||||||
Financial interest paid (net of interest capitalized) | (8,093 | ) | (25,484 | ) | (26,668 | ) | ||||
Financial interest collected | 1,008 | 3,175 | 2,175 | |||||||
Net cash flow provided by operating activities | 135,656 | 427,182 | 214,999 | |||||||
Cash Flow from investing activities: | ||||||||||
Addition to property, plants and equipment | (106,971 | ) | (336,851 | ) | (179,671 | ) | ||||
Net cash flow used in investing activities | (106,971 | ) | (336,851 | ) | (179,671 | ) | ||||
Cash Flow from financing activities: | ||||||||||
Decrease in loans | (64,649 | ) | (203,579 | ) | (310,794 | ) | ||||
Capital Increase | 57,724 | 181,773 | 0 | |||||||
Net cash flows provided by (used in) financing activities | (6,925 | ) | (21,806 | ) | (310,794 | ) | ||||
Cash variations: | ||||||||||
Cash at beginning of year | 10,376 | 32,673 | 308,139 | |||||||
Cash at end of year | 32,137 | 101,198 | 32,673 | |||||||
Net increase (decrease) in cash | 21,761 | 68,525 | (275,466 | ) |
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For the year ended December 31, 2007 and 2006 | ||||||||||
2007 | 2006 | |||||||||
Current Assets: | ||||||||||
Cash and banks | USD | 1,098 | Ps. | 3,459 | Ps. | 481 | ||||
Investments | 31,038 | 97,739 | 32,192 | |||||||
Trade receivables | 109,869 | 345,979 | 270,938 | |||||||
Other receivables | 8,253 | 25,990 | 30,221 | |||||||
Supplies | 7,359 | 23,174 | 13,635 | |||||||
Total current assets | 157,619 | 496,341 | 347,467 | |||||||
Non-Current Assets: | ||||||||||
Trade receivables | 31,851 | 100,300 | 0 | |||||||
Other receivables | 45,763 | 144,107 | 256,475 | |||||||
Investments | 124 | 390 | 378 | |||||||
Supplies | 4,369 | 13,759 | 4,921 | |||||||
Property, plant and equipment | 982,124 | 3,092,709 | 2,925,422 | |||||||
Total non-current assets | 1,064,232 | 3,351,265 | 3,187,196 | |||||||
Total assets | 1,221,850 | 3,847,606 | 3,534,663 | |||||||
Current Liabilities: | ||||||||||
Trade account payable | 100,398 | 316,152 | 267,640 | |||||||
Loans | 9,301 | 29,290 | 2,029 | |||||||
Salaries and social security taxes | 19,023 | 59,904 | 51,446 | |||||||
Taxes | 26,879 | 84,641 | 62,192 | |||||||
Other liabilities | 3,084 | 9,710 | 26,380 | |||||||
Accrued Litigation | 12,661 | 39,868 | 25,914 | |||||||
Total current liabilities | 171,345 | 539,565 | 435,601 | |||||||
Non-Current Liabilities: | ||||||||||
Trade account payable | 11,263 | 35,466 | 31,250 | |||||||
Loans | 301,385 | 949,062 | 1,095,490 | |||||||
Salaries and social security taxes | 7,842 | 24,694 | 20,287 | |||||||
Other liabilities | 89,360 | 281,395 | 241,079 | |||||||
Accrued Litigation | 13,605 | 42,843 | 40,606 | |||||||
Total non-current liabilities | 423,455 | 1,333,460 | 1,428,712 | |||||||
Total liabilities | 594,800 | 1,873,025 | 1,864,313 | |||||||
Shareholders’ equity | 627,050 | 1,974,581 | 1,670,350 | |||||||
Total liabilities and shareholders’ equity | 1,221,850 | 3,847,606 | 3,534,663 |
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