Exhibit 1
![]() | Fourth Quarter 2011 Page 1 of 20 |
Stock Information: NYSE ADR Ticker: EDN Buenos Aires Stock Exchange Class B Shares Ticker: EDN Ratio: 20 Class B = 1 ADR Investor Relations Contacts: Ivana Del Rossi Finance Manager Tel: 5411.4346.5127 Veronica Gysin Investor Relations Tel: 5411.4346.5231 Edenor S.A. 6363 Del Libertador Avenue, 4th Floor (C1428ARG) Buenos Aires, Argentina Fax: 5411.4346.5358 Email: investor@edenor.com www.edenor.com.ar | EDENOR ANNOUNCES FOURTH QUARTER 2011 RESULTS Buenos Aires, Argentina, March 12, 2012 – 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 fourth quarter of 2011. 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 period ended December 31, 2011 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, 2011 of Ps. 4.304. The following results are based on non consolidated financial statements of Edenor S.A. Twelve Months year ended 2011 Highlights Net Sales increased 4.9% to Ps. 2,280.9 million in the 2011 from Ps. 2,173.6 million in the 2010, mainly due to a 4.2% increase in the volume of electricity and capacity sold. Volume of Energy Sold increased 4.2% to 20,098 GWh in the 2011 from 19,292 GWh in the 2010. This increase was principally attributable to a 2.8% increase in the average GWh consumption per customer and 1.2% increase in the number of customers. Electric Power Purchases increased 5.7% to Ps. 1,130.9 million in the 2011 from Ps. 1,069.7 million in the 2010, mainly due to an increase in the average GWh consumption per customer and the rise in the number of customers. Gross Margin increased 4.2% to Ps. 1,150.0 million in the 2011 from Ps. 1,103.9 million in the 2010, mainly due to the higher volume of energy and capacity sold and the rise in the electric power purchases, partially offset the increase in the accrual for fines and an increase the energy losses. Net Operating Income decreased Ps. 311.2 million, to a loss of Ps. 216.7 million in the 2011 from a gain of Ps. 94.5 million in the 2010 mainly due to an increase in transmission and distribution expenses of Ps. 252.5 million, an increase in selling expenses of Ps. 88.5 million and an increase in administrative expenses of Ps. 16.3 million. These cost increases were partially offset by an increase in gross margin of Ps. 46.1 million. Net Income decreased Ps. 386.3 million, to a loss of Ps. 435.4 million in the 2011 from a loss of Ps. 49.1 million in the 2010, mainly due to the increase in operating expenses, increase in the financial results generated by liabilities and the increase in other expenses. |
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The Year 2011 and Outlook for the Future
For the fiscal year ended December, 31, 2011, Edenor’s financial results represented a loss of AR$435 million, basically due to the continuous increase in costs related to the supply of the public service, combined with frozen tariffs in the national regulated electricity distribution companies. It is especially significant the impact of salaries increases and the improvements given to labor unions, both for Edenor employees as well as those hired by outsourced contractors. However, it is worth mentioning that certain temporary measures taken by the Secretariat of Energy, such as the possibility for Edenor to keep the PUREE collections, have allowed the Company to maintain its investment plan and partially compensate operating cost increases, although PUREE funds are not registered as revenues in the financial statements, but as a liability. During 2011, PUREE funds reached AR$338 million.
It is also important to highlight that, due to the excellent restructure that Edenor achieved of its debt to a 12 year period, debt maturity was extended for more than a decade. At the same time, a significant reduction of the debt was carried out, from US$541 million, in 2005, to US$295 million as of December 31, 2011. Thanks to the issuance of Edenor’s debt at 12 years, the Company could obtain the necessary resources to acquire electricity distribution assets which presented a great upside potential. Those assets were considered of strategic value and would allow the Company, as contemplated initially, to attain a scale economy and be able to develop efficiencies through the creation of the largest electricity distribution group in Argentina. In that sense, the Company agreed with AEI the acquisition of the distribution companies, Emdersa (77.2%) and Eden (90.0%). Consequently, around 890 thousand additional customers from four provinces were thus added to the 2.7 million customers of Edenor.
However, after these acquisitions, Edenor’s costs continued to increase while the negotiations with the regulator did not produce the expected results in the tariff scheme. This situation led Edenor’s Board of Directors to decide to sell those investments that showed lesser synergies with Edenor and higher investors’ interest. Therefore, Edenor agreed to sell Edesal (electricity distribution company in the province of San Luis), and granted an option to purchase Edelar (electricity distribution company in the province of La Rioja). In line with these actions, and to keep Edenor’s focus in the distribution segment, where Edenor is specialized, it agreed to sell the generation power plant Piquirenda of 30 MW of installed capacity to Pampa Energía. All these operations are subject to Emdersa’s spin off, which is expected to be completed during 2012.
It is important to highlight that the difficulties in obtaining the recognition of revenues to compensate a scenario of incremental costs – not covered by PUREE funds - have had a significant effect on the financial and economic equation of Edenor’s Concession Agreement. Nevertheless, they did not affect the fulfillment of the obligations of Edenor to its clients, as contemplated in said Agreement, being the Board of Directors always aware of the high responsibility they have in managing a federal public service. However, if delays in obtaining tariff increases continue to extend in time in addition to new costs increases, Edenor could face cash restrains in the short term. Nevertheless, Edenor’s Board of Directors has positive expectations regarding the results of the negotiations being held with regulatory authorities. At the same time, we have filed the corresponding administrative claims to preserve Edenor’s rights.
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Despite the aforementioned situation and the fact that electricity demand rose 4.2% during 2011, it is important to mention that the energy losses were kept at reasonable levels and the service quality indicators are still among the best of the country. The demand increase was accompanied by investments which reached AR$430 million in 2011, and over AR$1,900 million considering the last 5 years. This reflects fully the responsibility with which Edenor manages its electricity grid and strengthens its commitment to the future.
It is important to highlight, as a relevant event to the national energy sector, the Executive Power’s decision to gradually reduce in a prudent way since January 2012 onwards, the subsidies in the price of electricity generation that were previously granted to users in the whole country. This decision does not produce any improvement in the electricity distribution sector nor in Edenor’s revenues. However, we express our support to this decision, given that we have always considered that subsidies should only be maintained to those users who really need them, while the reduction in energy subsidies will be useful to send the right signals for users to save a limited and non-renewable resource.
Finally, in February 2012 there has been a change in Edenor’s senior management product of the resignation of Mr. Alejandro Macfarlane and Mr. Rogelio Pagano in the positions of CEO and CFO, who have been replaced by Mr. Edgardo Volosín and Mr. Leandro Montero, respectively, while Mr. Ricardo Torres assumed as President, all of them with an extensive experience in the company, the energy sector and financial and accounting matters.
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Fourth Quarter 2011 Highlights Net Sales increased 6.0% to Ps. 552.7 million in the fourth quarter of 2011 from Ps. 521.7 million in the fourth quarter of 2010, mainly due to a 1.6% increase in the volume of electricity and capacity sold and to a decrease in the charge of fines and penalties recorded in the fourth quarter of 2011 vis a vis the fourth quarter of 2010. Volume of Energy Sold increased 1.6% to 4,838 GWh in the fourth quarter of 2011 from 4,760 GWh in the fourth quarter of 2010. This increase was attributable to a 1.4% increase in the number of customers, partially offset by a decrease of 0.2% in the average GWh consumption per customer. Electric Power Purchases increased 2.8% to Ps. 269.7 million in the fourth quarter of 2011 from Ps. 262.3 million in the fourth quarter of 2010, mainly due to an increase in the volume of energy sold and the rise in the number of customers. Gross Margin increased 9.1% to Ps. 283.0 million in the fourth quarter of 2011 from Ps. 259.4 million in the fourth quarter of 2010, mainly due to the higher volume of energy and capacity sold and the rise in the number of customers and to a decrease in the charge of fines and penalties recorded in the fourth quarter of 2011 vis a vis the fourth quarter of 2010. Net Operating Income decreased Ps. 110.3 million, to a loss of Ps. 142.1 million in the fourth quarter of 2011 from a loss of Ps. 31.8 million in the fourth quarter of 2010 mainly due to an increase in transmission and distribution expenses of Ps. 82.4 million, an increase in selling expenses of Ps. 51.0 million and an increase in administrative expenses of Ps. 0.5 million. These cost increases were partially offset by an increase in gross margin of Ps. 23.6 million. Net Income decreased Ps. 259.1 million, to a loss of Ps. 305.0 million in the fourth quarter of 2011 from a loss of Ps. 45.9 million in the fourth quarter of 2010, mainly due to the increase in operating expenses, increase in the financial results generated by liabilities, negative variation in other income (expenses), negative results of NRV valuation of the permanent investments and by the income tax loss. |
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Discussion of Financial Results:
FINANCIAL HIGHLIGHTS | ||||||||
4Q 2011 * | 4Q 2010* | % Change vs.2010 | Twelve months period ended December 31, 2011* | Twelve months period ended December 31, 2010* | % Change vs. 2010 | |||
Net Sales | 552.7 | 521.7 | 6.0% | 2,280.9 | 2,173.6 | 4.9% | ||
Electric power purchases | (269.7) | (262.3) | 2.8% | (1,130.9) | (1,069.7) | 5.7% | ||
Gross margin | 283.0 | 259.4 | 9.1% | 1,150.0 | 1,103.9 | 4.2% | ||
Net Operating Income (loss) | (142.1) | (31.8) | (346.8)% | (216.7) | 94.5 | (329.4)% | ||
* In millions of Argentine Pesos
Net sales
Net sales increased by 6,0 % (Ps. 31.0 million) from Ps. 521.7 million in the fourth quarter of 2010 to Ps. 552.7 million in the fourth quarter of 2011.
This variation was mainly due to the increase of 1.6 % in the volume of energy sold, from 4.760 GWh sold in the fourth quarter of 2010 to 4,838 GWh sold in the fourth quarter of 2011 which is attributable, basically, to a 1.4 % increase in the number of customers, offset by a 0.2 % decrease in the average GWh consumption per customer and to a decrease in the charge of fines and penalties recorded in the fourth quarter of 2011 vis a vis the fourth quarter of 2010.
Net energy sales represent approximately 97.8 % of net sales while late payment charges, pole leases, and connection and reconnection charges represent the remaining 2.2 %.
Energy sales increased by 3.8 % (Ps. 20.7 million) from Ps. 547.2 million in the fourth quarter of 2010 to Ps. 567.9 million in the fourth quarter of 2011. This increase was mainly due to the impact of the higher volume of energy sold and the rise in the number of customers.
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Electric power purchases
The amount of electric power purchases increased 2.8 % from Ps. 262.3 million in the fourth quarter of 2010 to Ps. 269.7 million for the fourth quarter of 2011. This variation results from the higher volume of energy sold.
Energy losses slightly increased from 12.5 % in the fourth quarter of 2010 to 12.7 % in the fourth quarter of 2011.
Gross margin
Gross margin increased 9.1 % from Ps. 259.4 million in the fourth quarter of 2010 to Ps. 283.0 million in the fourth quarter of 2011. This positive variation was attributable to the higher volume of energy sold, which was mainly due to the rise in the number of customers and to a decrease in the charge of fines and penalties recorded in the fourth quarter of 2011 vis a vis the fourth quarter of 2010.
Transmission and distribution expenses
Transmission and distribution expenses have increased (45.7 %) from Ps. 180.2 million in the fourth quarter of 2010 to Ps. 262.6 million in the fourth quarter of 2011, mainly due to:
§ | a Ps. 42.3 million rise in outsourcing due to increases in contractors' prices; and, |
§ | a Ps. 27.1 million growth in salaries and social security taxes due to salaries increases granted in 2011 |
In terms of percentage of revenues, transmission and distribution expenses increased from 34.5 % in the fourth quarter of 2010 to 47.5 % in the fourth quarter of 2011.
The following table sets forth the principal components of transmission and distribution expenses for the periods indicated:
Fourth Quarter ended December 31, | Twelve months ended December 31, | |||||||||
4Q 2011 | % of 4Q 2011 net sales | 4Q 2010 | % of 4Q 2010 net sales | 2011 | 2010 | |||||
(in millions of Pesos, except percentages) | ||||||||||
Salaries and social security taxes | Ps. 124.8 | 22.6% | Ps. 97.7 | 18.7% | Ps. 401.1 | Ps. 293.3 | ||||
Supplies | 15.2 | 2.8% | 6.4 | 1.2% | 53.0 | 36.8 | ||||
Outsourcing | 70.0 | 12.7% | 27.7 | 5.3% | 234.0 | 118.4 | ||||
Depreciation of property, plant & equipment | 46.5 | 8.4% | 43.0 | 8.2% | 180.1 | 169.4 | ||||
Others | 6.1 | 1.1% | 5.4 | 1.1% | 20.6 | 18.4 | ||||
Total | Ps. 262.6 | 47.5% | Ps. 180.2 | 34.5% | Ps. 888.8 | Ps. 636.3 |
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Selling expenses
Selling expenses are related to customer services provided at commercial offices, billing, invoice mailing, collection and collection procedures, as well as allowances for doubtful accounts.
Selling expenses have increased (93.6 %) from Ps. 54.5 million in the fourth quarter of 2010 to Ps. 105.5 million in the fourth quarter of 2011 mainly due to:
§ | a Ps. 30.1 million increase in allowance for doubtful accounts given that the signature of the Addendum of the New Framework Agreement is still pending and the worsening in customers’ payment behavior; |
§ | a Ps. 11.7 million rise in outsourcing due to increases in contractors' prices; and, |
§ | a Ps. 6.6 million growth in salaries and social security taxes due to salaries increases granted in 2011. |
In terms of percentage revenues, selling expenses increased from 10.4 % in the fourth quarter of 2010 to 19.1 % in the fourth quarter of 2011.
The following are the principal components of selling expenses for the periods indicated:
Fourth Quarter ended December 31, | Twelve months ended December 31, | |||||||||||||||||||||||
4Q 2011 | % on 4Q 2011 revenues | 4Q 2010 | % on 4Q 2010 revenues | 2011 | 2010 | |||||||||||||||||||
(in millions of Pesos) | ||||||||||||||||||||||||
Salaries and social security taxes | $ | . 29.2 | 5.3 | % | $ | 22.7 | 4.3 | % | $ | 89.4 | $ | 68.1 | ||||||||||||
Allowance for doubtful accounts | 32.6 | 5.9 | % | 2.5 | 0.5 | % | 41.8 | 21.2 | ||||||||||||||||
Outsourcing | 26.1 | 4.7 | % | 14.4 | 2.8 | % | 86.9 | 48.1 | ||||||||||||||||
Taxes and charges | 5.5 | 1.0 | % | 5.2 | 1.0 | % | 20.8 | 20.6 | ||||||||||||||||
Others | 12.1 | 2.2 | % | 9.7 | 1.9 | % | 43.8 | 36.2 | ||||||||||||||||
Total | $ | 105.5 | 19.1 | % | $ | 54.5 | 10.4 | % | $ | 282.7 | $ | 194.2 |
Administrative expenses
Administrative expenses include, among others, expenses associated with accounting, payroll administration, personnel training, systems operation and maintenance.
Administrative expenses have slightly increased (0.9 %) from Ps. 56.5 million in the fourth quarter of 2010 to Ps. 57.1 million in the fourth quarter of 2011.
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In terms of percentage of revenues, administrative expenses decreased from 10.8 % in the fourth quarter of 2010 to 10.3 % in the fourth quarter of 2011.
The following are the principal components of administrative expenses for the periods indicated:
Fourth Quarter ended December 31, | Twelve months ended December 31, | |||||||||||||||||||||||
4Q 2011 | % of 4Q 2011 revenues | 4Q 2010 | % of 4Q 2010 revenues | 2011 | 2010 | |||||||||||||||||||
(in millions of Pesos) | ||||||||||||||||||||||||
Salaries and social security taxes | Ps. | 22.1 | 4.0 | % | Ps. | 27.1 | 5.2 | % | Ps. | 80.5 | Ps. | 77.0 | ||||||||||||
Computer services | 10.0 | 1.8 | % | 6.7 | 1.3 | % | 29.7 | 26.7 | ||||||||||||||||
Outsourcing | 8.8 | 1.6 | % | 4.1 | 0.8 | % | 24.0 | 13.9 | ||||||||||||||||
Advertising expenses | 5.0 | 0.9 | % | 6.1 | 1.2 | % | 17.4 | 18.4 | ||||||||||||||||
Others | 11.2 | 2.0 | % | 12.5 | 2.4 | % | 43.7 | 42.8 | ||||||||||||||||
Total | Ps. | 57.1 | 10.3 | % | Ps. | 56.5 | 10.8 | % | Ps. | 195.2 | Ps. | 178.9 |
Net operating income
Net operating income decreased Ps. 110.3 million from a loss of Ps. 31.8 million in the fourth quarter of 2010 to a loss of Ps. 142.1 million in the fourth quarter of 2011. This negative variation was mainly due to the increases in transmission and distribution expenses (Ps. 82.4 million)and selling expenses (Ps. 51.0 million). These effects were partially offset by the increase in gross margin (Ps. 23.6 million).
Financial income (expenses) and holding gains (losses)
Financial income and holding gains generated by assets recorded a gain of Ps. 30.1 million in the fourth quarter of 2011 compared to a loss of Ps. 9.5 million in the fourth quarter of 2010.
This positive variation of Ps. 39.6 million was primarily due to interests collected from loans granted to subsidiaries and, to a lesser extent, to a positive variation in the exchange results due to a change in the investments structure and the increase in the exchange rate peso / USD.
Financial expenses generated by liabilities which include financial interest, exchange results and other expenses, represented a loss of Ps. 91.6 million in the fourth quarter of 2011 compared to a loss of Ps. 50.8 million in the fourth quarter of 2010.
This Ps. 40.8 million negative variation was basically due to:
§ | increase of Ps. 19.3 million in exchange results due to the fact that the exchange rate peso / USD have increased; and, |
§ | growth of Ps. 19.3 million in interest expenses due to the increase in the financial debt after the issuance of corporate notes. |
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Other income (expenses), net
Other income (expenses), net, includes voluntary retirements, severance payments, net revenues or expenses from technical transportation services between electricity distribution companies and accrual for lawsuits.
We recorded a gain of Ps. 5.0 million in the fourth quarter of 2010 and a loss of Ps. 6.9 million in the fourth quarter of 2011.
This negative variation was primarily due to the increases in net loss for technical functions (Ps. 3.8 million), allowance for contingencies (Ps. 3.6 million) and non operating losses (Ps. 1.6 million) and partially offset by a decrease in allowances for contingencies recovery (Ps. 2.4 million).
Amortization of goodwill
The goodwill represents the difference between the purchase price and the sum of the fair value of the net assets acquired. As a result of the acquisition, we recorded an amortization gain of Ps. 13.3 million in 2011.
Result of NRV valuation of other available for asset sales
The investments in EMDERSA and AESEBA have been valued in accordance with Technical Resolution No. 21 of the Argentine Federation of Professional Councils in Economic Sciences (FACPCE), which require these investments to be recognized as assets at their net realizable value.
As a consequence, we recorded a loss of Ps. 75.0 million in the fourth quarter of 2011.
Income tax on minimum presumed income
The Argentine GAAP requires the application of the deferred tax method to account for income tax. This method consists of recognizing deferred tax assets and liabilities when temporary differences arise from the valuation of assets and liabilities for accounting and tax purposes.
We recorded a tax loss of Ps. 51.6 million in the fourth quarter of 2011 compared to a gain of Ps.49.3 million in the fourth quarter of 2010.
It is important to mention the increase of Ps. 147.6 million in the valuation allowance of our net deferred tax assets due to the fact that management estimated that a higher portion of our tax loss carry-forward will not be offset against future taxable income before expiring at the end of the current year.
Net income
We recorded net loss of Ps. 305.0 million in the fourth quarter of 2011 compared to net loss of Ps. 45.9 million in the fourth quarter of 2010. This negative variation resulted primarily from:
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§ | The increases in transmission and distribution, selling expenses and administrative expenses, explained above; |
§ | The increase in financial results generated by liabilities, described above; |
§ | The negative variation in other income (expenses), described above; |
§ | The negative result of NRV valuation of the permanent investments; and, |
§ | The income tax loss, described above. |
Operating Highlights
The following table shows our energy sales by category of customer (in GWh) and the number of clients for each category:
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Capital Expenditures
During the fourth quarter of 2011, our capital expenditures amounted to Ps. 197.4 million, compared to Ps. 106.8 million in the fourth quarter of 2010. Our capital expenditures in the fourth quarter of 2011 consisted mainly of the following:
· | Ps. 147.2 million in new connections due to the increase in our customer base and grid enhancements; |
· | Ps. 26.2 million in network maintenance and improvements; |
· | Ps. 1.2 million in legal requirements; |
· | Ps. 5.2 million in communications and telecontrol; and |
· | Ps. 17.6 million of other investment projects. |
For the twelve-month period ended December 31, 2011, our Capital Expenditures reached Ps. 430.6 million, compared to Ps. 388.8 million in the same period of 2010.
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Intercompany Debt with EDEN
During December 2011 and February 2012, EDENOR received Ps. 1.5 million and Ps. 60 million from Empresa Distribuidora de Energia Norte S.A. as a cancellation for the intercompany loan.
Debt Market Purchases – Financial position
During 2011, we repurchased US$41.5 million principal amount of our Fixed Rate Par Notes
Due 2022 at an average price of 86.42% of face value.
As of today, the outstanding principal amount of our dollar denominated financial debt (net of the
senior notes due 2022 that we hold) is US$ 283.3 million, consisting of US$ 258.5 million principal amount of Fixed Par Notes due 2022 and US$ 24.8 million principal amount of Senior Notes due 2017. In addition, the outstanding principal amount of our peso denominated debt is Ps. 29.1 million, consisting primarily of our Floating Rate notes due 2013.
Recent Events
Changes in the management and Board of Directors from Edenor
During February 2012, the Board of Directors from Edenor has been changed.
Mr. Alejandro Macfarlane and Mr. Rogelio Pagano, resigned to their positions, as of Chief Executive Office and Chief Financial Officer, respectively, being replaced by Mr. Ricardo Torres as President, Mr. Edgardo Volosin as Chief Executive Officer and Mr. Leandro Montero as Chief Financial Officer.
Short-term loans
On February 29, 2012, we entered into a series of short term loans with local entities for a total amount of Ps. 62 million in order to support future capital needs. The annual average interest rate for these transactions as a whole was 19.4% approximately and the estimated average life was 159 days.
Framework Agreement
During January and February 2012 we received Ps. 12.6 million from National Government as for framework agreement.
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About Edenor
Empresa Distribuidora y Comercializadora Norte S.A. (Edenor) is the largest electricity distribution company in Argentina in terms of number of customers and electricity sold (both in GWh and Pesos). Through a concession, Edenor distributes electricity exclusively to the northwestern zone of the greater Buenos Aires metropolitan area and the northern part of the city of Buenos Aires, which has a population of approximately 7 million people and an area of 4,637 sq. km. In 2011, Edenor sold 20,077 GWh of energy and purchased 23,004 GWh of energy, with net sales of approximately Ps. 2.3 billion and net loss of Ps. 435.4 million.
This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management’s current view and estimates of future economic circumstances, industry conditions, Company performance and financial results. The words “anticipates”, “believes”, “estimates”, “expects”, “plans” and similar expressions, as they relate to the Company are intended to identify forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties, including those identified in the documents filed by the Company with the U.S. Securities and Exchange Commission. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.
Conference Call Information
There will be a conference call to discuss the Edenor’s quarterly results on Monday, March 12, 2012, at 11:00 a.m. Buenos Aires time / 10:00 a.m. New York time. For those interested in participating, please dial 1(877)317-6776 in the United States or, if outside the United States, +1(412) 317-6776 or 0800-444-2930 in Argentina. Participants should use conference ID 10010249, and dial in five minutes before the call is set to begin. There will also be a live audio webcast of the conference at www.edenor.com in the Investor Relations section.
There will be a replay of the conference call available from 03/12/2012 11.00am BA Time to 03/22/2012 23.59 BA Time. To access the replay, please dial 1(877) 344-7529 or 1(412) 317-0088. The Conference ID: 10010249.
For more information, please access www.edenor.com
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(For the twelve month period ended December 31, 2011 and 2010
in thousands of U.S. dollars and Argentine Pesos)
For the twelve month period ended December 31, | |||||||||||||||
2011 | 2010 | ||||||||||||||
Net sales | USD 529,941 | Ps. 2,280,866 | Ps. 2,173,644 | ||||||||||||
Electric power purchases | (262,753 | ) | (1,130,890 | ) | (1,069,747 | ) | |||||||||
Gross margin | 267,188 | 1,149,976 | 1,103,897 | ||||||||||||
Transmission and distribution expenses | (206,505 | ) | (888,784 | ) | (636,289 | ) | |||||||||
Selling expenses | (65,683 | ) | (282,701 | ) | (194,236 | ) | |||||||||
Administrative expenses | (45,354 | ) | (195,205 | ) | (178,897 | ) | |||||||||
Net operating (loss) income | (50,352 | ) | (216,714 | 94,475 | |||||||||||
Financial income (expense) and holding gains (losses): | |||||||||||||||
Gain (loss) in permanent investments | 18,774 | 80,805 | 7 | ||||||||||||
Goodwill amortization | 3,098 | 13,332 | 0 | ||||||||||||
Result of NRV valuation of other available for sale assets | (17,432 | ) | (75,029 | ) | 0 | ||||||||||
Generated by assets: | |||||||||||||||
Exchange difference | 3,928 | 16,904 | 7,412 | ||||||||||||
Interest | 12,591 | 54,193 | 28,372 | ||||||||||||
Exposure to inflation and holding results | (141 | ) | (607 | ) | (14,687 | ||||||||||
Tax on financial transactions | (3,848 | ) | (16,562 | ) | (16,048 | ) | |||||||||
Generated by liabilities: | |||||||||||||||
Financial expenses | (3,992 | ) | (17,182 | ) | (12,484 | ) | |||||||||
Exchange difference | (23,826 | ) | (102,549 | ) | (40,278 | ) | |||||||||
Interest expenses | (36,905 | ) | (158,838 | ) | (91,335 | ) | |||||||||
Tax on financial transactions | (5,744 | ) | (24,724 | ) | (21,120 | ) | |||||||||
Adjustment to present value of the notes | 0 | 0 | (4,198 | ) | |||||||||||
Gain/Loss from the repurchased of notes | 1,521 | 6,546 | (7,064 | ) | |||||||||||
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. | 272 | 1,170 | 11,581 | ||||||||||||
Other income (expenses), net | (5,993 | ) | (25,794 | ) | (9,810 | ) | |||||||||
Income before taxes | (108,050 | ) | (465,049 | ) | (75,167 | ) | |||||||||
Income tax | 6,889 | 29,652 | 26,114 | ||||||||||||
Net income | (101,161 | ) | (435,397 | ) | (49,053 | ) |
*Financial tables have been converted into U.S. dollars at a rate of Ps. 4.304 per dollar, the buying rate as of December 31, 2011, solely for the convenience of the reader.
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Fourth Quarter 2011 Page 14 of 20 |
(For the twelve month period ended December 31, 2011 and 2010
in thousands of U.S. dollars and Argentine Pesos)
For the twelve month period ended December 31, | ||||||||||||
2011 | 2010 | |||||||||||
Net income for the period | USD(101,161) | Ps.(435,397) | Ps.(49,053) | |||||||||
Adjustment to reconcile net income to net cash flows provided by operating activities: | ||||||||||||
Depreciation of property, plant and equipment | 42,935 | 184,792 | 178,380 | |||||||||
Retirement of property, plant and equipment | 407 | 1,751 | 1,125 | |||||||||
Result from property sale | - | - | (5,266 | ) | ||||||||
Gain from permanent investment | (18,774 | ) | (80,805 | ) | (7 | ) | ||||||
Goodwill amortization | (3,098 | ) | (13,332 | ) | - | |||||||
Gain from investments | (40,411 | ) | (44,810 | ) | (55,650 | ) | ||||||
Interest earned on loans to companies | (36,010 | ) | (8,367 | ) | - | |||||||
Adjustment to present value of notes | - | - | 4,198 | |||||||||
Gain/Loss from the repurchase and redemption of notes | (1,521 | ) | �� | (6,546 | ) | 7,054 | ||||||
Result of NRV valuation of other available for sale assets | 17,432 | 75,029 | - | |||||||||
Exchange differences, interest and penalties on loans | 52,121 | 224,348 | 49,512 | |||||||||
Income tax | (6,889 | ) | (29,652 | ) | (26,114 | ) | ||||||
Allowance for doubtful accounts | 9,711 | 41,794 | 16,313 | |||||||||
Allowance for other doubtful account | - | - | 4,891 | |||||||||
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 | (272 | ) | (1,170 | ) | (11,581 | ) | ||||||
Changes in operating assets and liabilities: | ||||||||||||
Net increase in trade receivables | (10,770 | ) | (46,354 | ) | 245 | |||||||
Net increase in other receivables | 4,983 | 21,448 | (275 | ) | ||||||||
(Increase) decrease in supplies | (3,269 | ) | (14,069 | ) | (2,218 | ) |
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Fourth Quarter 2011 Page 15 of 20 |
Increase in trade accounts payable | 47,959 | 206,415 | 34,853 | |||||||||
Increase in salaries and social security taxes | 16,409 | 70,624 | 69,015 | |||||||||
Increase (decrease) in taxes | (31,633 | ) | (136,148 | ) | (45,842 | ) | ||||||
Increase in other liabilities | 21,741 | 93,573 | 74,495 | |||||||||
Increase for funds deriving from the Program for the rational use of electric power (PUREE) | 78,530 | 337,991 | 295,778 | |||||||||
Net increase in accrued litigation | 1,319 | 5,679 | (8,249 | ) | ||||||||
Financial interest paid (net of interest capitalized) | (24,664 | ) | (106,156 | ) | (64,908 | ) | ||||||
Financial interest collected | 11,378 | 48,973 | 60,232 | |||||||||
Net cash flow provided by operating activities | 108,363 | 466,395 | 526,928 | |||||||||
Cash Flow from investing activities: | ||||||||||||
Addition to property, plants and equipment | (100,055 | ) | (430,637 | ) | (388,770 | ) | ||||||
Acquisition of permanent investments | (131,877 | ) | (567,600 | ) | - | |||||||
Credits for loans granted to companies | (72,243 | ) | (310,936 | ) | - | |||||||
Income for loans granted to companies | 21,051 | 90,602 | - | |||||||||
Income for property, plant and equipment sales | - | - | 7,435 | |||||||||
Advances received from sale of subsidiaries | 3,615 | 15,559 | - | |||||||||
Sale of equity investments | 25,836 | 111,199 | - | |||||||||
Net cash flow used in investing activities | (253,674 | ) | (1,091,813 | ) | (381,335 | ) | ||||||
Cash Flow from financing activities: | ||||||||||||
Decrease in non-current investments | 0 | 0 | 302,878 | |||||||||
Increase in loans | 11,370 | 48,935 | - | |||||||||
Net cash flows provided by (used in) financing activities | 11,370 | 48,935 | 302,878 | |||||||||
Cash variations: | ||||||||||||
Cash at beginning of year | 157,259 | 676,843 | 228,372 | |||||||||
Cash at end of year | 23,318 | 100,359 | 676,843 | |||||||||
Net increase (decrease) in cash | (133,941 | ) | (576,484 | ) | 448,471 |
*Financial tables have been converted into U.S. dollars at a rate of Ps. 304per dollar, the buying rate as of December 31, 2011, solely for the convenience of the reader.
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Fourth Quarter 2011 Page 16 of 20 |
Balance Sheet
(As of December 31, 2011 and December 31, 2010
in thousands of U.S. dollars and Argentine Pesos)
As of December 31, | As of December 31, | |||||||||||
2011 | 2010 | |||||||||||
Current Assets: | ||||||||||||
Cash and banks | USD 2,068 | Ps.8,902 | Ps.8,611 | |||||||||
Investments | 21,249 | 91,457 | 668,232 | |||||||||
Trade receivables | 98,224 | 422,758 | 421,193 | |||||||||
Other receivables | 72,669 | 312,769 | 43,361 | |||||||||
Supplies | 5,312 | 22,836 | 12,407 | |||||||||
Other assets available for sale | 50,309 | 216,531 | 0 | |||||||||
Total current assets | 249,833 | 1,075,280 | 1,153,804 | |||||||||
Non-Current Assets: | ||||||||||||
Trade receivables | 10,579 | 45,531 | 45,531 | |||||||||
Other receivables | 12,640 | 54,402 | 14,803 | |||||||||
Permanent investments in companies | 53,740 | 231,298 | 415 | |||||||||
Supplies | 6,241 | 26,862 | 23,249 | |||||||||
Property, plant and equipment | 913,935 | 3,933,576 | 3,689,482 | |||||||||
Total non-current assets | 997,135 | 4,291,669 | 3,773,480 | |||||||||
Total assets | 1,246,968 | 5,366,949 | 4,927,284 | |||||||||
Current Liabilities: | ||||||||||||
Trade account payable | 135,121 | 581,559 | 378,505 | |||||||||
Loans | 13,734 | 59,108 | 54,108 | |||||||||
Salaries and social security taxes | 55,720 | 239,820 | 180,432 | |||||||||
Taxes | 29,238 | 125,839 | 111,080 | |||||||||
Other liabilities | 14,521 | 62,498 | 4,542 | |||||||||
Accrued Litigation | 1,619 | 6,970 | 57,832 | |||||||||
Total current liabilities | 249,952 | 1,075,794 | 786,499 | |||||||||
Non-Current Liabilities: | ||||||||||||
Trade account payable | 12,627 | 54,345 | 50,984 | |||||||||
Loans | 276,460 | 1,189,883 | 1,035,113 | |||||||||
Salaries and social security taxes | 14,375 | 61,868 | 50,633 | |||||||||
Taxes | 54,252 | 233,499 | 262,806 | |||||||||
Other liabilities | 319,165 | 1,373,685 | 984,518 | |||||||||
Accrued Litigation | 14,720 | 63,357 | 6,816 | |||||||||
Total non-current liabilities | 691,598 | 2,976,637 | 2,390,870 | |||||||||
Total liabilities | 941,550 | 4,052,431 | 3,177,369 | |||||||||
Shareholders’ equity | 305,418 | 1,314,518 | 1,749,915 | |||||||||
Total liabilities and shareholders’ equity | 1,246,468 | 5,366,949 | 4,927,284 |
*Financial tables have been converted into U.S. dollars at a rate of Ps. 4.304 per dollar, the buying rate as of December 31, 2011, solely for the convenience of the reader.
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Fourth Quarter 2011 Page 17 of 20 |
Summary of Financial information in AESEBA (EDEN)
(AR$ MM, Arg. GAAP) | Year Ended | Twelve months period ended | |
2010 | 2011 | ||
Net Sales | 467.2 | 592.6 | |
Electricity Purchases | -329.1 | -392.7 | |
Gross Margin | 138.1 | 199.9 | |
S&A Expenses | -73.1 | -88.5 | |
Other income (expense) | 20.0 | 24.4 | |
Net Operating Result | 85.0 | 135.8 | |
EBITDA | 111.0 | 163.5 | |
Net Interest Expense | -15.0 | -16.0 | |
Income Tax | -17.8 | -39.5 | |
Net Income (Loss) | 33.3 | 72.2 |
Summary of Financial information in EMDERSA
(AR$ MM, Arg. GAAP) | Twelve months period ended | |
2010 | 2011 | |
Net Sales | 740.1 | 871.4 |
Electricity Purchases | -441.0 | -515.4 |
Gross Margin | 299.1 | 356.0 |
S&A Expenses | -177.0 | -228.3 |
Other income (expense) | 20.4 | 25.1 |
Net Operating Result | 142.5 | 152.8 |
EBITDA | 189.2 | 205.7 |
Net Interest Expense | -42.3 | -60.9 |
Income Tax | -27.6 | -19.3 |
Net Income (Loss) | 49.6 | 42.2 |
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Fourth Quarter 2011 Page 18 of 20 |
During June 2011, our subsidiaries have been granted tariff increases, in all cases retroactively applied to June 1, 2011.
· | EDESA: On June 15, 2011 through resolution N° 533/11 EDESA was granted a 19.07% tariff increase, which represents a 34.4% increase in VAD; |
· | EDESAL: On June 15, 2011 through resolution N° 597-MOPeI-2011 EDESAL was granted a 9% tariff increase, which represents a 16.1% increase in VAD; |
· | EDEN: On June 8, 2011 through resolution N° 415/11 EDEN was granted a 9% tariff increase, which represents a 15% increase in VAD. |
Information Summary
EDENOR | EDESA | EDEN | EDELAR | EDESAL | |
Clients | 2,698,548 | 289,532 | 340,121 | 113,424 | 147,237 |
GWh Demand | 5,471.0 | 408.8 | 773.6 | 277.5 | 278.2 |
GWh Sold | 4,817.0 | 393.1 | 695.1 | 289.6 | 338.8 |
% of Wholesale Electricity Market (2010) | 19.9% | 1.3% | 2.5% | 0.8% | 1.0% |
Area (KM2) | 4,637 | 155,488 | 109,141 | 102,635 | 139,954 |
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Fourth Quarter 2011 Page 19 of 20 |
Consolidated Income Statement
(For the twelve month period ended December 31, 2011 and 2010
in thousands of U.S. dollars and Argentine Pesos)
For the twelve month period ended December 31, | |||||||||||||
2011 | 2010 | ||||||||||||
Net sales | USD 828,310 | Ps. 3,565,048 | Ps. 2,173,644 | ||||||||||
Electric power purchases | (370,339) | (1,593,937) | (1,069,747) | ||||||||||
Gross margin | 457,972 | 1,971,111 | 1,103,897 | ||||||||||
Transmission and distribution expenses | (276,191) | (1,188,725) | (636,289) | ||||||||||
Selling expenses | (99,891) | (429,930) | (194,236) | ||||||||||
Administrative expenses | (75,148) | (323,438) | (178,897) | ||||||||||
Net operating (loss) income | 6,742 | 29,018 | 94,475 | ||||||||||
Goodwill amortization | 2,867 | 12,340 | 0 | ||||||||||
Permanent investments | 1 | 4 | 7 | ||||||||||
Result of NRV valuation of other available for sale assets | (17,432) | (75,029) | 0 | ||||||||||
Financial income (expense) and holding gains (losses): | |||||||||||||
Generated by assets: | |||||||||||||
Exchange difference | 4,172 | 17,957 | 7,412 | ||||||||||
Interest | 5,673 | 24,417 | 28,372 | ||||||||||
Exposure to inflation and holding results | (260) | (1,117) | (14,687) | ||||||||||
Taxes and other expenses | (6,986) | (30,067) | (16,048) | ||||||||||
Others | (240) | (1,035) | 0 | ||||||||||
Generated by liabilities: | |||||||||||||
Financial expenses | (6,775) | (29,158) | (12,484) | ||||||||||
Exchange difference | (25,116) | (108,101) | (40,278) | ||||||||||
Interest expenses | (44,082) | (189,728) | (91,335) | ||||||||||
Taxes and other expenses | (5,744) | (24,724) | (21,120) | ||||||||||
Results for debt restructuring | (632) | (2,722) | 0 | ||||||||||
Others | (515) | (2,218) | 0 | ||||||||||
Adjustment to present value of the notes | 0 | 0 | (4,198) | ||||||||||
Gain/Loss from the repurchased of notes | 1,521 | 6,546 | (7,054) | ||||||||||
Results holdings in related companies | 215 | 924 | 0 | ||||||||||
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. | 272 | 1,170 | 11,581 | ||||||||||
Other income (expenses), net | (5,868) | (25,256 | (9,810) | ||||||||||
Income before taxes | (91,707) | (394,709) | (75,167) | ||||||||||
Income tax | (5,216) | (22,448) | (26,114) | ||||||||||
Investments in third parties | (4,238) | (18,240) | 0 | ||||||||||
Net income | (101,161) | (435,397) | (49,053) |
*Financial tables have been converted into U.S. dollars at a rate of Ps. 4.304 per dollar, the buying rate as of December 31, 2011, solely for the convenience of the reader.
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Fourth Quarter 2011 Page 20 of 20 |
Consolidated Balance Sheet
(As of December 31, 2011 and December 31, 2010
in thousands of U.S. dollars and Argentine Pesos)
As of December 31, | As of December 31, | |||||||||||
2011 | 2010 | |||||||||||
Current Assets: | ||||||||||||
Cash and banks | USD 5,447 | Ps.23,445 | Ps.8,611 | |||||||||
Investments | 25,452 | 109,546 | 668,232 | |||||||||
Trade receivables | 124,241 | 534,732 | 421,193 | |||||||||
Other receivables | 59,901 | 244,903 | 43,361 | |||||||||
Supplies | 5,312 | 22,863 | 12,407 | |||||||||
Other assets | 50,309 | 216,531 | 0 | |||||||||
Total current assets | 267,663 | 1,552,020 | 1,153,804 | |||||||||
Non-Current Assets: | ||||||||||||
Trade receivables | 10,624 | 45,725 | 45,531 | |||||||||
Other receivables | 16,428 | 70,704 | 14,803 | |||||||||
Investments in permanent parties | 97 | 419 | 415 | |||||||||
Supplies | 6,241 | 26,862 | 23,249 | |||||||||
Property, plant and equipment | 1,100,897 | 4,738,259 | 3,689,482 | |||||||||
Goodwill | (67,276 | ) | (289,557 | ) | ||||||||
Total non-current assets | 1,067,010 | 4,592,412 | 3,773,480 | |||||||||
Total assets | 1,334,673 | 5,744,432 | 4,927,284 | |||||||||
Current Liabilities: | ||||||||||||
Trade account payable | 152,957 | 658,328 | 378,505 | |||||||||
Loans | 13,714 | 59,025 | 54,108 | |||||||||
Salaries and social security taxes | 66,709 | 287,115 | 180,432 | |||||||||
Taxes | 39,264 | 168,993 | 111,080 | |||||||||
Other liabilities | 33,638 | 144,777 | 4,542 | |||||||||
Accrued Litigation | 2,403 | 10,344 | 57,832 | |||||||||
Total current liabilities | 308,685 | 1,328,582 | 786,499 | |||||||||
Non-Current Liabilities: | ||||||||||||
Trade account payable | 12,627 | 54,345 | 50,984 | |||||||||
Loans | 276,460 | 1,189,882 | 1,035,113 | |||||||||
Salaries and social security taxes | 16,154 | 69,527 | 50,633 | |||||||||
Taxes | 67,583 | 290,879 | 262,806 | |||||||||
Other liabilities | 319,165 | 1,373,687 | 984,518 | |||||||||
Accrued Litigation | 15,368 | 66,144 | 6,816 | |||||||||
Total non-current liabilities | 707,357 | 3,044,463 | 2,390,870 | |||||||||
Total liabilities | 1,016,042 | 4,373,045 | 3,177,369 | |||||||||
Investments in third parties | 13,213 | 56,869 | 0 | |||||||||
Shareholders’ equity | 305,418 | 1,314,518 | 1,749,915 | |||||||||
Total liabilities and shareholders’ equity | 1,334,673 | 5,744,432 | 4,927,284 |
*Financial tables have been converted into U.S. dollars at a rate of Ps. 4.304 per dollar, the buying rate as of December 31, 2011, solely for the convenience of the reader.