What’s new?
The Argentine government will temporarily reinstate subsidies on Electricity use, a move that will cost the gov’t 493 million ARS (Argentine pesos) and may help utility companies which have been urging for tariff increases. The subsidy will be effective for the June and July bills, and will be reduced in the coming months as winter passes in the southern country. One of the affected companies is EDENOR, the country’s largest electricity distributor.
Trading
EDENOR trades in both the NYSE (ticker: EDN) and the BCBA (EDN).  Its capital is composed by 3 types of shares: class A (owned by Electricidad Argentina S.A.,EASA, accounts for 51% of total capital), class B (publicly traded, 49%) and class C (Banco de la Nacion Argentina acts as fiduciary agent for these).
1 ADR represents 20 ordinary class B shares.
Q2 09 numbers
Sales for Q2 2009 (period ended 06/30/2009) increased 11.3% from a year earlier to 508.3 MM ARS (millions of Argentinian pesos).
The volume of energy sold for Q2 09 decreased by 5.0% to 4414 GWh. The decrease in volume is attributable to a 7.3% decrease in the average GWh consumption per customer, partially compensated by a 2.5% increase in the number of customers.
Net sales represent approximately 98% of total sales; late payment charges, connection and reconnection charges represent the remaining 2%.
Gross margin for Q2 increased 10.9% YoY to ARS 256.6 MM , mainly due to the application of the new electricity tariff schedule.
Market size
Through a concession, the company 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 square kilometres.
In 2007, it purchased 18.7% of the total electricity produced and sold by generating companies in Argentina.
Pricing Power
The company’s tariffs are subject to regulation by the Argentine government, acting through the Secretariat of Energy (Secretaria de Energia) and the Argentine National Electricity Regulator (Ente Nacional Regulator de Electricidad, or ENRE).
Company Background
Edenor was incorporated on July 21, 1992 under the name Empresa Distribuidora Norte Sociedad Anónima as an Argentine public service, limited liability corporation (sociedad anónima) as part of the privatization of the Argentine state-owned electricity utility, Servicios Eléctricos del Gran Buenos Aires S.A. (SEGBA). In anticipation of the privatization, SEGBA was divided into three electricity distribution companies, including Edenor, and four electricity generation companies.   On May 14, 1992, the Argentine Ministry of Economy and Public Works and Utilities approved the public sale of all of Edenor’s Class A shares, representing 51% of Edenor’s capital stock. On August 1992, Electricidad Argentina S.A. (EASA) and the Argentine Government entered into a stock purchase agreement relating to the purchase of Edenor’s Class A shares.  In addition, on August 5, 1992, the Argentine government granted Edenor a concession to exclusively distribute electricity within the concession area for a period of 95 years.  On September 1, 1992, EASA acquired Edenor’s Class A shares and became its controlling shareholder. In June 1996, Edenor’s shareholders approved a change of the company’s name to Empresa Distribuidora y Comercializadora Norte S.A. (EDENOR S.A.) to more accurately reflect the company’s core business. During 2001, EDF International S.A. acquired all of the shares of EASA held by EASA’s other shareholders, ENDESA Internacional, YPF S.A. and SAUR.  As a result, EASA became a wholly-owned subsidiary of EDF International S.A.  In addition, EDF International purchased all of Edenor’s Class B shares held by the same shareholders, increasing its direct and indirect interest in Edenor to 90%. In September 2005, EDF International sold a substantial portion of its stake in Edenor to Dolphin Energía S.A., which is controlled by the principals of Grupo Dolphin S.A., an Argentine advisory, consulting and private equity firm. On June 22, 2007, the shareholders of Dolphin Energía S.A. and IEASA S.A. and Pampa Holding S.A. entered into a memorandum of understanding whereby it was agreed that  the totality of the capital stock of Dolphin Energía S.A. and IEASA S.A. would be exchanged for common shares of Pampa Holding S.A. Pampa Holding S.A. currently owns 100% of the common stock of EASA, and thereby controls EDENOR.
Demand breakout
Edenor’s demand is composed by industrial customers (38%), residential customers (40%), commercial customers (17%) and others (5%).

Sources:
www.edenor.com.ar
www.bloomberg.com