Argentina's Edenor optimistic about increasing prices after elections

By Aaron Hochman-Zimmerman

New York, Aug. 10 - Empresa Distribuidora y Comercializadora Norte SA (Edenor) announced its first half earnings and predicted it will maintain or expand the amount it is allowed to charge customers after October's elections.

"We expect our business to keep growing," chairman and chief executive officer Alejandro McFarlane said during the company's earnings conference call.

"During the first half of 2007 we were able to grow our sales and expand margins, not only from the VAD (distribution margin) increase which took effect in Feb. 1, 2007 but also from the increase in the volume of energy and capacity sold," McFarlane said in the press release.

There are concerns that a new presidential administration may freeze or even roll back Edenor's distribution charge to customers, but Edenor expects current first lady Cristina Fernandez de Kirchner to win the presidential election on Oct. 28. If she is elected, Edenor will petition the government to restructure energy tariffs which "at a minimum, will maintain our then current distribution margins," McFarlane said in a press release.

Despite turmoil in Argentina and in the larger emerging markets, McFarlane does not see a crisis looming within the next six months to a year.

Edenor admits the possibility of brownouts as demand is placed on its systems during peak hours, chief financial officer Luis Pablo Rogelio Pagano said.

"We don't think there will be blackouts at all," he added.

Edenor posted a net income of 20 million pesos, a 526% increase over the first half of 2006.

"Demand has grown solidly at the 9% average," Pagano said.

Buenos Aires, Argentina-based Edenor is the largest electricity distribution company in Argentina in terms of number of customers and electricity sold.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.