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 third quarter that ended September 30, 2026. We will also highlight important recent developments and advances in our effort 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. After the company remarks are completed, there will be a question-and-answer section for which you may submit questions through the webcast chat.
Before proceeding, let me mention that forward-looking statements are based on the beliefs and assumptions of Edenor management and on information currently available to the company. They involve risks, uncertainties, and assumptions because they are related to future events and therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic condition, industry condition, and other operation factors could also affect the future results of Edenor and could cause results to differ materially from those expressed in such forward-looking statements. Now, let me pass the call to Germán 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 Edenor's performance during the third quarter of 2026. Agenda: highlights and regulatory framework. Before moving to discussion of the details of our financial performance and during the third quarter of 2026, 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 of healthy regulatory environment and substantially improved economic situations in Argentina. This focus, combined with our focus of continuous improvements in operational activities and also modernization of the network, have positioned the company well to take advantage of highly attractive growth opportunities in Argentina.
We have now completed more than one year since the approval of the implementation of the five year tariff review of 2025-2030, including monthly adjustments automatically done by the regulatory entity. In April of 2025, the five year tariff review was approved, which included automatic adjustments based on a formula for the value-added distribution amount, weighted 33% by the consumer price index and 67% by the wholesale price index, plus an additional of 0.42% monthly adjustments above inflations in real terms. In May of 2025, we normalized our debt with CAMMESA. Since April of 2024, we have been paying 100% of the current monthly invoices for energy purchased from CAMMESA and are fully complying with payments under our existing payment plans with CAMMESA that call for a monthly payments of over 60 or 69 remaining installments.
In October of 2025, Edenor submitted its Regulatory Asset claim for a difference in tariff adjustments between 2019 and 2023, as calculated by independent third parties. Subsequently, the Argentine government submitted a bill to Congress to propose a framework to regularize these outstanding tariff differences. Law No. 27,828 was approved on October 13. Regulations to implement the compensation established in the law are expected to be issued shortly. During 2025, the VAD increased a total of 37% against a 32% raise in the consumer price index and a 41% devaluation of the peso against the US dollar. The average monthly tariff adjustment since August 2024 through year ended 2025 was 3.1% on a monthly basis. In December 2025, the regulatory entity authorized the company to modify the frequency of meter readings from bi-monthly to monthly.
The regulation aims to provide users with a clearer, more transparent, and more timely signal regarding their energy consumption. From January to September 2026, the accumulated monthly adjustments to the VAD were 28.4% versus an inflation rate of 23.6%. In October, the VAD adjustment was 2.41%, and in November, 3.18%. We believe that these events have positioned the company to be more dynamic, with more favorable financial results going forward. This will also enable us to continue our strong investment program and further improve our service quality. In May of 2026, the government appointed the new authorities for the new Gas and Electricity Regulatory Agency, ENRGE, each of whom has a strong background and work experience in the energy field, in the energy business in Argentina. The normalization of tariffs has translated into a significant improvement in Edenor's financial performance, with accumulated EBITDA of ARS 506 billion.
Excluding the one-off gain recognized of ARS 266 billion as of September of 2025 related to the CAMMESA settlement, EBITDA increased by 58% year-to-year during the first nine months of 2026. The collectability rates has consistently remained high and was 95.08% in the first nine months of 2026. Financial results, revenues. Revenues in the third quarter of 2026 were ARS 1,123 billion, which is up 14% year-to-year in real terms versus the prior year, helped by higher tariff adjustments. Consumers evolution. Edenor's total number of customers in the quarter rose to 3.42 million customers, up 1.3% versus the prior year. This raise was due to an increase in the number of wheeling system residential and industrial and medium-sized commercial clients.
The rise was helped by market discipline measures, including the installation of 6,543 energy meters in the third quarter of 2026, which are designated to convert informal and unreported connections into fully transparent connections in the electricity distribution system. Energy sales for the quarter were up 0.5% year-to-year to 5,990 GWh. This was mainly driven by higher electricity demand in the residential and low-income neighborhood segments due to a lower temperature recorded during the period associated with El Niño climate phenomenon. Distribution margin. For the third quarter of 2026, our distribution margin rose 5% year-to-year to ARS 434 billion. For the first nine months, the accumulated distribution margin was ARS 1,225 billion, 6% much higher than the nine months of 2025 due to the increase in tariffs, which averaged 3% per month. EBITDA.
Looking at the EBITDA during the first nine months of 2026, EBITDA was ARS 506 billion. Excluding the positive one-off gain of ARS 266 billion in September of 2025 related to the CAMMESA settlement, EBITDA increased by 58% year-over-year. The improvement in EBITDA during the first nine months of 2026, excluding the CAMMESA settlement effect, was primarily driven by its higher distribution margin, driven by value-added distribution increases that outpaced inflation. Positive impact from tariff normalization followed by the second year of implementation of the 2025-2030 five year tariff review process, including an initial 319.2% tariff adjustment in February of 2024, and average monthly tariff adjustments of approximately 3%. Cumulative value-added distribution through September 2026 increased by 28% compared to the accumulated inflation of 23.6% as of September of 2026. We are continuing cost optimizing initiatives with a focus on improving operational efficiency and advancing technology modernization.
ARS 38 billion was recognized in 2026 for pending receivables from the national government under a mutual agreement, Acuerdo Marco, based on the cost of energy consumed in lower-income neighborhoods during 2024 and 2025. I would like to highlight our ongoing efforts to manage costs, where we saw important progress, which made an important contribution to the rise in EBITDA. Operating expenses for the first nine months decreased by 5%, reaching a total of ARS 986 billion. Cost management contributed to be positive, with a focus on streamlining operations and technology. The savings are related to our OpEx review plan initiated in 2025, including the development and retirement plan aimed at promoting talent renewal and forecast optimizations, which resulted in a 1% reduction in salary expenses and a 37% decrease in pension plan cost. Materials consumption also declined by 28% due to inventory management optimization.
ENRE penalties were down by a substantial 23%, driven by a change in the valuation mechanisms as defined by the regulator and improved the service indicators of the company. Net financial results. In the third quarter, the net financial expenses declined 10%, ARS 219 billion, due primarily to a reduced impact of interest expenses and debt with CAMMESA and the regularization of our debt obligations according to the signed agreements. This more than offset higher interest expenses on the new existing debt outstanding. Net results. The third quarter saw a profit of ARS 43 billion, down 25% versus the third quarter of 2025, which was hurt by the comparison against the third quarter of 2025 of ARS 54 billion, which included the gain from the settlement of the agreement with CAMMESA. Adjusting for this, the underlying operating trends were positive because of the positive impact of tariff adjustments. CapEx.
We invested ARS 98 billion in the third quarter of 2026, which accumulated CapEx for the first nine months of ARS 264 billion. Our investment spending reflects our firm commitment to improve service, which is reflected in the significant improvements in our main operating indicators. During 2024 and 2025, investments were above historical average level in order to complete the construction of new substations and continue enhancing our telecontrol and telesupervision, as to install smart meters for large customers. We are planning additional projects for 2026, including an expansion at the Rodríguez substation. We also continue to work to transform our network into a smart network by installing increasing numbers of remote controlling points, telesupervision points, as well as smart meters.
This allows us to continue to resolve problems that arise in the network remotely, which we do by isolating any part of the system experiencing a service problem and reestablishing the service very quickly. Operating indicators. Now, let's look at a few of the key operating indicators. Energy losses. Our energy losses for the last 12 months of the third quarter of 2026 were 16.3%. The increase in energy losses was mainly driven by more challenging weather conditions associated with El Niño, the effect on demand associated with changes in tariffs and subsidies, in addition to the effect of economic activity that has impacted demand from large customers. Reducing energy losses is a top priority, and our multidisciplinary teams are working constantly to find innovative ways to combat energy losses. These efforts are complemented by our market discipline initiatives that are aimed at curing inefficiencies and irregularities.
Also, analytical tools powered by artificial intelligence have improved inspection efficiencies, and our market discipline accounts continue to detect and rectify irregular connections. Quality of service. As mentioned earlier, our investment plan is continuing to contribute to improving service quality by reducing the duration and frequency of outages, which have been on a downward path since 2017. These levels have confidently exceeded the service required by the regulatory entity. For the third quarter, the SAIDI and SAIFI service key indicators show continued strong performance at 5.3 hours and 2.7 average outages per client, at a record low level, and down 50% and 34% respectively compared to the levels of 2021 in the pandemic period of time of Argentina. This recovery in service is mainly due to the strong consistent levels of investment that the company has made over the last nine years.
Investments have been focused on implementing improvements in operational processes and the adoption of technology applied to the operations and management of the network. Financial debt. During July, we successfully executed two debt market transactions, the issuance of $213 million in Class 11 notes on July 3, and the reopening of Class 10 notes on July 13 of 2026, bringing the total outstanding amount to $750 million, which is expected to be used for the acquisition of the new businesses, including the purchase of 70% participation in MetroGAS and MetroENERGÍA. As of the end of September, the senior notes plus loans outstanding was $1.6 billion, with a net debt of September of $392 million. As you can see, we maintain a very manageable debt maturity profile with no maturities during the next year.
A key positive over the last year, which continues in 2026, has been improving our debt ratings in recent years as a result of the improvement in our risk profile due to important changes in the regulatory front. On June 2026, Standard & Poor's upgraded the company's issuer's credit rating, national scale issued rating, and global medium-term notes program rating from raA+ to raAA-, while revising the outlook from positive to stable. On August 7 of 2026, Fix Local raised the long-term rating from A+ to AA-, with a positive outlook. Also on August 7 of 2026, Moody's upgraded company national scale rating from A.ar to AA-.ar. New businesses. We want to share with you our vision for new businesses and how we are positioning the company for a long-term expansion, diversification, and value creation.
As a starting point, in 2024, the company amended its corporate purpose to provide greater flexibility and to actively capture opportunities arising from the energy transition and the broader electrification of the economy. This was a deliberated and strategic decision to open the door to a much wider set of growth avenues. Our business development is anchored in three core drivers: capturing growth in the energy sector, expanding through both vertical and horizontal integration, and continuing move towards a complementary diversification. In terms of strategy, we intend to capitalize on a dynamic energy M&A landscape, leveraging the ongoing privatization program, which represents several compelling opportunities across the energy value chain. We will also seek to drive synergies through integration with our core business while remaining alert to opportunities in complementary assets.
In terms of scope, the sectors we are targeting includes electric transportation, grid expansion, generation and storage, electric mobility, including oil and gas downstream, energy infrastructure, natural gas distribution and commercialization, and a broad and well-diversified set of verticals aligned with where the energy sector is heading. The bottom line is clear. This strategy is designed to deliver expansion, diversification for both our investors and our consumers. MetroGAS acquisition. Binding offers were submitted on July 23 of 2026. Edenor submitted a bid to acquire YPF stake in MetroGAS, representing 70% of the voting shares capital, along with 5% stake in MetroENERGÍA, a subsidiary of MetroGAS. Our offer has been accepted, and the closing of the transaction remains subject to the fulfilling of certain conditions presence, including the regulatory and governmental approvals which have been already been submitted.
Finally, on October 29 of 2026, the Extraordinary General Shareholders' Meeting of MetroGAS ratified the agreement to extend its natural gas distribution license for an additional 20 years, until 2047, and approved the withdrawals, waivers, and other commitments set forth therein. The effectiveness of the 20 year extension remains subject among the conditions to be ratified by the executive branch. We expect the closing of the transaction and the taking of control will take place before year-end. We will not be operating the company until the change of control is completed, so the information available is limited to what is publicly available. Synergies and rationals. As we explained before, the company's corporate purpose was amended to provide complementary diversification.
We believe that this transaction is an opportunity to consolidate our position as a leader in energy companies in Argentina, combined with our existing electricity distribution with MetroGAS, premier natural gas distribution network. By bringing together two of the largest utility companies servicing the Buenos Aires and metropolitan area with 5.8 million customers of electricity and natural gas, Edenor is a unique position to unlock significant operations and commercial and institutional synergies to include in commercial operations and administrative functions. We are strongly committed with a long-term vision of our businesses in the country, and we are committed to maintain and improve MetroGAS governance standards and quality of services according to Edenor highlights quality standards. We emphasize that Edenor deeps institutional knowledge of Argentina's regulatory, environmental, and the operations demand of large-scale utilities concession.
We also recognize MetroGAS's strong market position, extensive infrastructure, and loyal customer base as a key asset that will underpin sustainable growth, while the combination of both networks enables a comprehensive view of household energy consumptions across the AMBA and a platform for value-added service going forward. Edenor brings to this transaction its extensive experience operating large-scale electricity distribution networks under Argentina's regulatory frameworks, as well as the established institutional relationship with regulators, government authorities, and key stakeholders in the energy sector, including its operational experience and deep knowledge of the AMBA market. Final remarks. We remain highly optimistic about our future. Edenor is in a solid position, benefiting from recent changes that have strengthened its financial profile and positions the company for an extended period of positive performance. We believe we are prepared to have shown strong growth in the coming years.
Long term, we are well-prepared for the coming energy transitions, new technologies, increased efficiencies, and environmental considerations. Edenor's long-term concession and strong market presence provide a stable foundation for sustainable growth and competitive advantage. We have a dominant market position. The company is the largest electricity distribution company in Argentina, operating under a long-term concession and its highest income and most sensitive population area of the country. Economic equilibrium has restored following the completion of the five year tariff review process, which will guide tariffs until 2030, including automatic monthly adjustments above inflation, which follow the significant tariff increases and started in 2024, which monthly increases that have continued and will continue. Tariff increases total 37% in 2025 and have been 28% through September 2026.
We also, as mentioned, we are able to normalize current payments with CAMMESA starting in 2024, and have honored all the payments for pending past obligations under our payment contracts. We have a strong commitment to excellence. Edenor has consistently prioritized a sustainable, stable investment program over many years, which has contributed to its significant improvement in service quality levels and indicators. The company's investors program allows Edenor to maintain its leading position and to take advantage of opportunities offered by new technologies that will help us for further enhanced growth opportunities. The company maintains a strong capital structure and a conservative policy support, while an almost 30 years of track record in international equity capital markets establish access to debt capital markets in the local and in international market.
Edenor expects to take advantage of our market opportunities in its distribution business, including the implementation of new technologies and improved efficiencies. We expect that once MetroGAS acquisition is completed, we will be able to consolidate and improve our position as an energy leader. We are led by a seasoned and highly experienced management team, which was able to deliver consistent improvements in the key operational indicators of the company. Our improved financial results have improved the long-term outlook and provided more feasibility for our debt ratings. Since September of 2024, the credit rating agencies have improved both the national and the global ratings of the company on an average of four to five notches.
In October of 2025, Edenor submitted its Regulatory Asset claim of differences adjustments between 2019 and 2023, as calculated by the independent third party. Subsequently, the Argentine government submitted a bill to Congress proposing a framework to regularize the outstanding tariff difference. Law 27,828 was approved on October 13, and regulations to implement the compensation established in the law are expected to be done shortly. We expect that it is going to be done before year-end. Thank you very much. We will go into questions.
Thank you very much for participating in our quarterly conference call, and please do not hesitate to contact us, our Investor Relations department, for any inquiries that you may have. Good afternoon for everybody, and have a nice day. Thank you.