Edenor(EDN)2025-03-11 15:55Financial Overview - The consolidated financial statements as of December 31, 2024, are presented in millions of Argentine Pesos in constant currency[1]. - Revenue for the year ended December 31, 2024, reached ARS 2,043,127 million, a 34% increase from ARS 1,526,735 million in 2023[15]. - Gross profit improved significantly to ARS 394,596 million, compared to ARS 60,376 million in the previous year, marking a substantial increase[15]. - The operating result turned positive at ARS 42,073 million, a recovery from a loss of ARS 260,851 million in 2023[15]. - Net financial costs decreased to ARS 459,209 million from ARS 762,942 million in 2023, indicating improved financial management[15]. - Income before taxes for 2024 was ARS 193,278 million, down from ARS 396,720 million in 2023, reflecting a challenging year[15]. - The company reported a net income of ARS 272,128 million for 2024, compared to ARS 191,387 million in 2023, showing a positive trend[15]. - Total assets increased to ARS 3,979,577 million in 2024, up from ARS 3,285,627 million in 2023, indicating growth in the company's asset base[18]. - Total equity rose to ARS 1,507,065 million in 2024, compared to ARS 1,232,604 million in 2023, reflecting a stronger financial position[21]. - Current liabilities increased to ARS 1,089,782 million in 2024 from ARS 774,640 million in 2023, suggesting a rise in short-term obligations[21]. - The company’s cash and cash equivalents improved to ARS 23,918 million in 2024, up from ARS 19,877 million in 2023, indicating better liquidity[18]. - Cash flows generated by operating activities increased to ARS 245,917 million in 2024 from ARS 155,642 million in 2023, reflecting improved operational efficiency[28]. - The Company reported a net income of ARS 272,128 million for the year ended December 31, 2024, compared to ARS 191,387 million in 2023, and a loss of ARS 44,014 million in 2022, indicating a significant recovery in profitability[28]. Regulatory and Governance - The company operates under a concession agreement for the distribution and sale of electricity in the Buenos Aires area[9]. - The company is subject to regulatory oversight by the National Regulatory Authority for the Distribution of Electricity (ENRE)[6]. - The last amendment to the bylaws was made on July 24, 2024, indicating ongoing corporate governance updates[13]. - The ongoing 2025-2029 Tariff Review is expected to facilitate gradual regularization of the Company's electricity rate situation, enhancing economic self-sufficiency[38]. - The Company is optimistic about the regulatory framework resulting from the RT process, which aims to establish clear rules and reasonable electricity rates[49]. - The Bases Law introduced in July 2024 aims to deregulate the economy, privatize state-owned companies, and provide investment incentives, potentially benefiting the Company[40][43]. - The Company continues to monitor economic and regulatory developments to adapt its strategies and mitigate risks associated with market volatility[46]. Financial Adjustments and Restatements - The company identified an error in the deferred tax liability related to Property, plant and equipment, resulting in an overstatement of the liability[50]. - The deferred tax liability was adjusted from ARS 478,696 million to ARS 765,391 million as of December 31, 2023, reflecting a correction of ARS 277,032 million[53]. - Total liabilities were restated from ARS 1,069,994 million to ARS 2,053,023 million as of December 31, 2023, after the error correction[53]. - The company's income before taxes for the year ended December 31, 2023, was restated to ARS 396,720 million, with a corresponding increase in income of the year to ARS 191,387 million[54]. - Basic and diluted income per share increased from ARS 55.28 to ARS 218.73 after the restatement for the year ended December 31, 2023[54]. - The inflation rate for the fiscal year ended December 31, 2024, was 117.8%, necessitating the restatement of financial statements in accordance with IAS 29[108]. - The application of IAS 29 requires restatement of non-monetary items using coefficients reflecting price variations, impacting depreciation and amortization calculations[112]. Debt and Financial Management - Proceeds from borrowings amounted to ARS 349,312 million in 2024, a significant increase from ARS 37,943 million in 2023, highlighting the Company’s strategy to leverage debt for growth[30]. - The Company has entered into two agreements with CAMMESA for the regularization of debts related to energy purchases, totaling 131,490 as of December 31, 2024[73]. - Outstanding principal on debts for energy purchases from March 1, 2023, to December 31, 2024, is 75,400, impacting the Statement of Comprehensive Income by $23,201[83]. Accounting Policies and Practices - The consolidated financial statements include the financial information of both the Company and Edenor Tech SAU, applying full consolidation methods[115]. - Non-controlling interests represent the portion of subsidiaries' profit or loss and net assets not owned by the Company, attributed based on ownership interests[117]. - The Company has adopted new accounting standards effective January 1, 2024, including amendments to IAS 1 and IFRS 16, impacting financial statement presentation[122][123]. - The Company is assessing the impact of IFRS 18, effective January 1, 2027, which introduces new requirements for income and expense presentation in financial statements[127][128]. - Property, plant, and equipment are valued at acquisition cost restated for inflation, with depreciation calculated using the straight-line method over their useful lives[133]. - The Company recognizes its investment in joint ventures using the equity method, adjusting for its share of profits or losses[140]. - The residual value and remaining useful lives of assets are reviewed annually, ensuring they do not exceed recoverable value[136][139]. - Revenue from electricity distribution is recognized when the customer obtains control of the service, with incremental costs recognized as an asset if expected to be recovered[145]. - Revenue from operations is recognized on an accrual basis, including both billed and unbilled electricity supplied, valued based on applicable electricity rates[147]. - Interest income is recognized only when the related asset of the contract has been recognized, applying the effective interest rate method[149]. - Trade receivables are recognized at fair value and measured at amortized cost, including amounts from services billed but not collected[155]. - The Company's inventories are valued at acquisition cost, restated for inflation, and determined using the weighted average price method[159]. - Financial assets are classified into those measured at amortized cost and those measured at fair value, with specific conditions for each classification[162]. - Impairment of financial assets is assessed annually, with losses recognized if there is objective evidence of impairment affecting estimated future cash flows[171]. - Borrowings are initially recognized at fair value and subsequently measured at amortized cost, with differences recognized in profit or loss using the effective interest rate method[192]. - Customer deposits are recognized at the amount received and measured at amortized cost, with specific conditions under which they are allowed[186]. - The Company recognizes revenue from new connections and other distribution services based on the price established in each contract[148]. - The Company recognizes non-refundable customer contributions as property, plant, and equipment, with deferred revenue accrued based on identifiable services provided[193]. - The liability for employee benefit plans is calculated as the present value of the benefit obligation, adjusted for past service costs and actuarial gains or losses[195]. - The Company operates a share-based compensation plan, with the fair value of services recognized as an operating expense in "Salaries and social security taxes"[196]. - Revenue from customer connections to the grid is accrued until the connection is completed, while service costs are recorded in profit or loss immediately[197]. - Actuarial gains and losses are recognized in "Other comprehensive income" in the year they arise[198]. - The effective income tax rate applied by the Company is 35%, based on the current tax scale and estimated taxable profit[200].