Empresa Distribuidora y Comercializadora Norte Sociedad Anónima ($EDN)

Good morning, and welcome. This is Lucila Ramallo investor Relations Deputy Manager at Edenor. On behalf of Edenor we would like to thank everybody for participating in this conference call to discuss the results of the fourth quarter that ended on December 31, 2025. We will also highlight an important recent development and advances in our efforts to strengthen our position as an energy leader. If you would like to receive our earnings release or presentation, you can download them easily from the Investor Relations section of our website located at www.edenor.com or contact our Investor Relations team to request the documents. This event is being recorded. [Operator Instructions]. Before proceeding, let me mention that forward-looking statements are based on the belief and assumptions of the Edenor management and on information currently available to the company. They involve risks, uncertainties and assumptions because they relate to future events and therefore, depends on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of Edenor and could cause results to differ materially from those expresses in such forward-looking statement. Now let me pass the call to German Ranftl, our CFO, who will guide us through the presentation.

Thank you, Lucila. Good morning, and welcome to everyone. Your presence here is very important to us, and we hope to provide you with a good understanding of the Edenor performance during the fourth quarter of 2025. Highlights and regulatory framework. Before moving to the discussion of details of our financial performance during the fourth quarter of 2025, I would like to take a few minutes to highlight that Edenor has demonstrated a major improvement in results over the last several years, led by a restoration and healthy regulatory environment and substantially improving economic situation in Argentina. These factors, combined with our focus on continuous operational improvements and modernization of the network have positioned the company well to take advantage of a highly attractive growth opportunity in Argentina. I think it's appropriate to summarize the main key milestones of 2025. January 2025. Edenor submitted a new tariff proposal to the regulatory entity to be evaluated in a public hearing. February of 2025. The regulatory entity held a public hearing to define electricity distribution tariffs for the next 5 years, 2025 till 2024 -- 2030. April of 2025. There has been approved the 5-year tariff review that includes an automatic adjustment of 0.42% plus an inflation adjustment of considering the wholesale price index of 33% -- sorry, consumer price index or 33% and wholesale price index of 67%. This adjustment is being applied automatically on a monthly basis since April of 2025. May of 2025. Debt regularization with CAMMESA is being paid through payment plans in 72 and 75 monthly installments. October of 2025, Edenor filed a claim of regulatory asset calculated by independent third parties. The Secretary of Energy is already analyzing company's complaint (sic) [ claim ] . Between January of 2025 until December of 2025, the 12-month tariffs have increased 37% versus the consumer price index of 32% and versus 41% of the foreign exchange depreciation. Monthly average tariff increase of 3.1% since August of 2024. December of 2025, the regulatory entity authorized the company to modify the frequency of meters readings from bimonthly to monthly with an important impact during the first quarter of 2026. January of 2026 to March of 2026, automatic monthly adjustments continue to be applied on March of 2026. There has been a 2.5% increase in the value-added amount. The normalization of the tariff, including the effects of the reduction of subsidies was clearly reflected in Edenor's financial indicators, with the 11% raise in full year sales and 110% raise in EBITDA. For all of the 2025, revenues increased 11%, and EBITDA increase of 110%, resulting of ARS 572 billion. We believe that these events have positioned the company to be more dynamic with more favorable financing results going forward. This will also enable us to continue our strong investment program and further improve our services. The normalization of tariffs did not impact our collectibility, which consistently remains high, being 95.75% for the 2025 period. Financing results. Revenues in the fourth quarter of 2025 rose 4% in real terms to ARS 680 billion versus ARS 706 billion (sic) [ ARS 706 billion versus ARS 680 billion ] by the prior year. This was mainly due to the tariff normalization as explained earlier. Energy sales evolution. Edenor customer base at the fourth quarter of 2025 reached 3.39 million clients, up 1% versus the fourth quarter of 2024. This raise was mainly due to an increase in residential and medium-sized commercial clients. The raise was helped by market disciplinary measures, including the installation of 3,729 energy meters in the fourth quarter of 2025, which are designed to convert informal and unreported connections into fully transparent connections in the electricity decision system. Full year energy sales for 2025, as we said, rose 1% year-to-year 22,952 gigawatts, led by a raise in demand from residential and medium commercial clients. In the fourth quarter, energy losses -- sorry, in the fourth quarter, energy sales volume increased 3.94% to 5,379 gigas, led by the higher demand from residential customers and small commercial clients. Distribution margin. For 2025, our distribution margin rose 9% to 1,000 -- sorry, ARS 1,253 billion, mainly due to an increase in tariff, higher demand and higher energy purchase costs. In the fourth quarter, the distribution margin was ARS 320 billion, 11% higher than the ARS 289 billion in the fourth quarter of 2024. EBITDA. Looking at EBITDA, the total accumulated EBITDA for the 2025 rose 110% to ARS 572 billion. For the fourth quarter of 2026 (sic) [ 2025 ] , EBITDA rose 28% and to ARS 97.5 billion, and improved from the ARS 76 billion registered in the fourth quarter of 2024. This includes the gain of ARS 218 billion for the full year due to the positive effect of the regularization agreement with CAMMESA for the outstanding balance. Not including the CAMMESA again, EBITDA was ARS 354 billion, still up very strong, more than 30%. The improvement was due to higher revenues as a result of the 5-year tariff review includes the 320% increase adjustment that we received in February and all the monthly adjustments that we received with an average of 3.1%. Energy purchase costs for the full year rose 13% due to a reduction in subsidies, which established limits of 250 kilowatts in N3 and 350 kilowatts in N2. I would also like to highlight our efforts to manage cost, where we saw important improvements and changes, which made an important contribution to the rate of EBITDA. Personnel costs declined 6% for the full year of 2025 due to efforts to bring in new talent and optimize our workforce. Contractual costs through up 14% for the full year were down 23% in the fourth quarter due to the increase of the use of leveraging of artificial intelligence and our expansion of digital customers' interaction with channels. This enabled us to close 3 commercial offices, and we hope to be able to close all the remaining offices in the near future. We also earned [indiscernible] rental, maintenance and service contract suppliers. At the same time, IT-related expenses have seen some increase due to the effect of the SAP/4HANA implementation. Material costs were down 81% in fourth quarter of 2024 -- sorry, of 2025 and 27% for the full year, helped by reduced material consumption and improved inventory efficiencies. Lower inventories need to be lifted of import restrictions and reduced vehicles maintenance costs due to acquisition of electric and new vehicles. Penalties also shown a noted improvement, down 66% for the full year and 6% in the fourth quarter of 2025 because of the change by the regulatory entity in how penalties are valued, resulting in a net positive adjustment. Net financial expenses. Net financial expenses of ARS 377 million (sic) [ ARS 377 billion ] For the 2025 were down 38% versus the prior year, helped by a lower financial expenses mainly driven by a reduction in outstanding debt and lower interest expenses related to CAMMESA. Net results. On the net income line, Edenor posted a net profit of ARS 46 billion compared to a loss of ARS 21 billion in the fourth quarter of 2024. The difference is mainly due to the positive effect of the tariff adjustments and a higher accounting gain related to inflation adjustments. CapEx. For the full year of 2025, we invested ARS 395 billion. Total investment in 2025 was higher than expected because some projects were moved forward from 2026. For the fourth quarter, investment totaled 107 -- sorry, ARS 103 billion. Our outstanding spending reflects our firm commitment to improve service quality, which is reflected in a significant improvement in our main operating indicators. We highlight our key projects that are underway, including the expansion of Zappalorto substation, the new 332 kV (sic) [ 132 kV ] Zappalorto-Merlo electroduct, and new step-down transformer in Puertos del Lago and a new substation in [indiscernible] a suburb of Martinez. We are also planning additional projects for 2026 including replacement of Newbery Substation with the new facilities and the interconnection of the Colegiales Substation, both planned for April of next year. Also, we are planning a new substation in Moreno and an expansion of the Bancalari Substation late in the year. We also continue to work to transform our network in a smart network by installing an increasing number of remote control points, telesupervision points as well as smart meters. This allows us to quickly resolve problems that raise in the network remotely, which we do by isolating any part of the system experiencing a service problem and reestablish the service very quickly. We can very oftenly do this without sending team physically to the locations, which can enable the service to be reestablished within a few minutes. Operating indicators. Now let's look and a few of the key operating indicators, energy losses. Our energy losses for the 12 months were 15.69%, up a bit from 15.18% at the end of September 2025 but below the 19.9% registered in 2019. Reducing energy losses is a top priority and our multidisciplinary teams are working constantly to find innovation ways to combat energy losses. These efforts are completely complemented by our market discipline initiatives that are aimed at curbing inefficiencies and irregularities. Also analytical tools powered by artificial intelligence have improved inspection efficiencies and our market discipline actions continue to detect and rectify irregular connections. It is important to remember that of the 15.69% total losses, a total of 9.61% are losses recognized by the regulatory entity in our tariff. Quality of service. As mentioned earlier, our investment plan is continuing to contribute to improvements in our service quality by reducing the duration and frequency of outages, which have been a downward path since 2017. These levels are and have been comfortably exceeding the levels required by the regulator, sorry. For the fourth quarter, the SAIDI and SAIFI service quality indicators show continued strong performance at 6.81 hours and 2.96 average outages per client at a record low levels and down 75% and 67%, respectively, compared to 2017 levels. This recovery in services is mainly due to the strong and consistent levels of investment that the company has been made for the last 9 years. Investment has been focused on implementing improvements in operation processes and adoption of technology applied to operations and management of the network. Financial debt. In 2025, in November, we raised $201 million in the Class 7 corporate bond additional. This brought our total debt outstanding, including notes plus loans as of December 31, 2025, of $782 million. Net debt was $657 million. In February of 2026, we issued an additional $90 million in Class 7. And on March 2, we fully prepaid senior notes Class 8 by approximately $80 million. A key positive over the last few years, which continues in 2026 has been improved in our debt ratings in recent years. With the improvement in our risk profile due to important changes in the regulatory front, as I mentioned before, Standard & Poor's raises local [ scale ] rating from BBB minus to A plus with a stable outlook. Since September of 2024, credit ratings agents have upgraded both national and global ratings by an average of 4 to 5 notches. Final remarks. We remain highly optimistic about our future. Results have benefited significantly from the tariff normalization and the completion of the 5-year tariff review with EBITDA rising 110% to ARS 572 billion, equivalent for the full year of 2025. Even excluding the CAMMESA impact, EBITDA was up 30% to $345 billion. The overall improvement has underpinned our improvements in debt ratings and working capital. It has also enabled us to continue our investment program with positive results in our key operating indicators with the regulation of our debt with CAMMESA, all outstanding balance are now included in the 3 payment plans that we paid over 72 and 66 installments and with 2 plan with interest of 50% of the CAMMESA interest rate. Edenor filed a claim of regulatory assets calculated by independent third parties and the Secretary of Energy is already analyzing this claim. Our diversified financial strategy has also enabled us to have consistent access to local and international capital markets. Finally, I would like to take -- to mention that we remain committed to look for opportunities that take advantage of our enormous changes taking place in Argentina and in the global energy markets. In 2024, the company's corporate purpose was amended to provide greater flexibility and to capture opportunities related to the energy transition and electrification of the economy. With this now, we would like to open the call for questions. To ask the questions, please send written message to IR Edenor through the questions and answers menu, identify yourself, and stating that you have a question. We thank you again for your support and your engagement as shareholder and bondholder.

There is a question from [ Andres from Balans]. Could you tell us how much do you estimate your CapEx expense will be during 2026?

For 2025, we invested a total of ARS 395 billion or $263 million. This was higher than what we have expected, given that some spending for 2026 has moved forward in 2025. As a result, 2026 spending could be somewhat lower, and we anticipate it to be in the range of $170 million and $180 million. However, over time, we expect our CapEx program will remain robust with projected spending at the same range. Thank you for participating in our quarterly conference call, and please do not hesitate in contacting us or our Investor Relations department for any further inquiries you may have. Good morning to all of you, and have a nice day.