Empresa Distribuidora y Comercializadora Norte Sociedad Anónima Q1 FY2026 earnings call

• Regulatory & Debt Progress: A five-year tariff plan with monthly automatic adjustments (weighted 33% CPI, 67% WPI, plus 0.42% real gain above inflation) for 2025-2030 was approved in April 2025. Edenor normalized its debt with CAMESA in May 2025, has paid 100% of monthly energy purchase invoices since April 2024, and remains fully compliant with the agreed 62 and 64-month installment payment plans. A new law to resolve Edenor's 2019-2023 regulatory asset tariff difference claim is currently under discussion in Argentine Congress as of May 2026, after the claim was submitted in October 2025. New experienced leadership was appointed to Argentina's gas and electricity regulatory agency in May 2026.
• Cost Management: Operating expenses decreased 9% YoY to 282 billion pesos in Q1 2026, driven by a 2025 OPEX optimization plan. Savings included a 5% reduction in salary expenses, 37% decrease in pension costs, 22% lower consumption costs from improved inventory management, 14% lower third-party service costs, and a 45% reduction in entry penalties from regulatory valuation changes and improved service metrics.
• Operational Performance: The collection rate remained strong at 95.68% in Q1 2026. Edenor shifted meter reading frequency from bimonthly to monthly (effective Q1 2026) to improve transparency for consumers. Energy losses decreased to 15.3% in Q1 2026 from 15.7% at the end of 2025, driven by AI-powered analytical tools, market discipline initiatives to resolve irregular connections, and anti-loss innovation; 9.62% of total losses are already recognized by the regulator under approved targets. Service quality improved to record lows of 6.1 hours of outage per customer (CIDI) and 2.9 average outages per customer (CIFI), down 78% and 67% respectively from 2017 levels, exceeding regulatory requirements.
• Financial Strategy & Debt: In Q1 2026, Edenor reopened its senior notes class 7 for 19 million USD, increasing total outstanding class 7 to 475 million USD, and priced senior notes class 8 for 80 million USD plus interest. In April 2026, the company raised 550 million USD in a new senior notes issuance (with 1.2 billion USD in total offers) and completed a cash tender to repurchase 175 million USD of outstanding senior notes, reducing net debt by 200 million USD. As of pro forma after the tender, total outstanding senior notes is 1 billion USD, with no near-term maturities. Credit rating agency FIX upgraded Edenor's long-term rating from A to A+ and short-term rating from A1 to A1+ in March 2026, reflecting improved risk profile from regulatory reforms.
• New Business Strategy: In 2024, Edenor amended its corporate bylaws to increase strategic flexibility to pursue opportunities from the global energy transition and broad economic electrification. The company's growth strategy focuses on vertical and horizontal integration across the energy value chain, prioritizing M&A opportunities while seeking synergies with the core distribution business. Target sectors include electric transportation, grid expansion, power generation and energy storage, electric mobility, oil and gas downstream, energy infrastructure, and natural gas distribution and commercialization.

Edenor operates as a single core electricity distribution segment, with the following Q1 2026 financial performance: Total revenues were 847 billion pesos, flat in real terms year-over-year, as higher tariffs and reduced subsidies were offset by lower energy sales volume and pass-through lower energy purchase costs. Total energy sales volume declined 1.6% YoY to 5,853 gigawatts, while total customer count rose 1.4% YoY to 3.4 million. Distribution margin increased 13% YoY to 387 billion pesos. EBITDA rose 127% YoY to 191 billion pesos, up from 84 billion pesos in Q1 2025. Net financial expenses declined 23% YoY to 71 billion pesos. Net profit rose 147% YoY to 119 billion pesos. CAPEX totaled 70 billion pesos (approximately 49 million USD) in the quarter.

• Full year 2026 CAPEX is expected to be in the range of 170 million USD to 180 million USD, which is slightly lower than 2025's CAPEX level that included one-time project spending.
• Management suggests the market use a full-year 2026 EBITDA run rate of approximately 320 million USD for forecasting, after accounting for two one-time benefits in Q1 2026: the 20 billion pesos Cuadro Marco government receivable recognition and the one-time revenue impact from shifting to monthly meter reading.
• Management expects the regulatory asset claim law to proceed through the Argentine Congress Energy Commission, then to the lower house and senate, with a timeline of approximately one month or more to reach a resolution.

• Forward-looking statements are inherently dependent on future general economic conditions in Argentina, industry conditions, and other operating factors, all of which could cause actual results to differ materially from projected outcomes. Timing and final passage of the regulatory asset claim law in Congress is uncertain, with no guarantee of final approval or terms favorable to Edenor. Energy demand is vulnerable to temperature fluctuations and broader Argentine economic activity levels, which can impact sales volume and financial results.

Q: What is management's full year 2026 CAPEX guidance? / A: Management expects 2026 full year CAPEX to fall between 170 million USD and 180 million USD. This range is slightly lower than 2025's CAPEX, which was higher due to one-time market conditions and project spending in 2024 and 2025. The planned CAPEX remains robust, sufficient to continue network expansion, adapt to new technologies, and position the company for future market growth.

Q: Aside from the one-time 20 billion pesos Cuadro Marco gain, were there other one-time benefits impacting Q1 2026 margin expansion, and what is a sustainable run rate for the rest of 2026? / A: There is a second one-time benefit from the shift from bimonthly to monthly meter reading, which lifted Q1 2026 revenue. Management suggests using the rating agency consensus full year EBITDA estimate of ~320 million USD as the sustainable run rate for 2026 forecasting.

Q: What is the current status and expected timeline for the regulatory asset claim law in Congress? / A: The bill is currently under review by the Congressional Energy Commission, after being submitted by the national government. It will next move to a vote in the lower chamber of deputies, then to the senate. Management expects the process will take approximately one month or longer to reach a resolution.