Carlos Almagro: Good morning, everyone. I'm Carlos Almagro, Head of Investor Relations. I would like to welcome everyone to TGS 4th Quarter 2025 Earnings Video Conference. TGS issued its earnings release last Friday. If you didn't receive a copy of the release, please contact us at inversores.tgs.com.ar. Before we begin the call, I would like to inform you that this event is being recorded and all participants are in listen-only mode. Following the company's remarks, we will host a Q&A session. All questions will need to be submitted in writing through the Q&A chat box. I would also like to remind you that forward-looking statements made during today's video conference do not account for future economic circumstances, industry conditions, or company performance and final results. These statements are subject to a number of risks and uncertainties. All figures included herein were prepared in accordance with international accounting reporting standards, IFRS, and stated in constant Argentine pesos as of December 31st, 2025, unless otherwise noted. Joining us today from TGS in Buenos Aires is Alejandro Basso, Chief Financial Officer. I will now turn the video conference over to Mr. Basso. Alejandro, please begin.
Alejandro Basso: Thank you, Carlos. Good morning, everyone, and thank you for joining us today to discuss TGS's 2025 four-quarter earnings and highlights. To begin today's call, I'd like to share some of the most recent corporate developments. Back in November, we successfully issued a new 500 million bond with a 10-year tenure at an 8% yield. Demand was very strong and the transaction was oversubscribed, with the total order group reaching $1.3 billion. Proceeds from these issues are being used to fund approximately $780 million of capital expenditures related to the expansion of the Perito-Moleno pipeline, which will add 14 million cubic meters per day of transportation capacity, as well as the final tranches expansion of our regulated pipeline, adding 12 million cubic meters per day. In addition, we also executed bank loan agreements totaling $67 million to finance imports related to this project. Finally, turning to the commercial side, on February the 9th, we launched the open seasons during which incremental capacity can be contracted on a firm basis. On March 16th, we will receive the bids for the capacity, which will be repaid. Vets for the remaining capacity will be received once Enarsa completes the reallocation of the existing 21 million kumits per day, which are currently assigned to Kamesa. Moving to slide 4, I will briefly highlight the key financial results following the provisions established by the IFRS for financial reporting in hyperinflationary economies. As seen in the slide, we reported a total net income of 124 billion during the fourth quarter of 2025, compared to 170.5 billion reported in the same quarter of 2024. Overall, earnings were lower mainly due to a few factors. equipment impairment provision amounting to 52.1 billion, which was recorded in the fourth quarter of 24. In addition, our financial results were impacted by a negative variation of 17.9 billion and the liquids EBITDA declined by 18.1 billion. That said, these effects were partially offset by the solid performance of our mainstream business. which delivered higher EBITDA totaling 16.2 billion during the period and a slight increase of natural gas transportation EBITDA by 2.7 billion Moving on to slide 5 EBITDA for natural gas transportation business in the fourth quarter of 2025 totaled 109.8 billion which is slightly higher than the almost 107.1 billion recorded in the fourth quarter of 2024 It is worth noting that even when we recorded an increase in revenue to the tariff adjustment of 31.9 billion, the adjustments were not enough to offset the inflation loss effect of 40.9 billion. However, the higher transportation services mainly interrupted the transportation of 9.6 billion and lower operating expenses of 540 million contributed to generate a slight increase of the EBITDA. On slide 6, you can see how EBITDA for the liquids segment decreased to 83.9 billion during the fourth quarter of 2025, compared to 102 billion reported in the same quarter of 2024. The decrease in EBITDA was mainly attributed to lower export-export prices, which fell between 17% and 33%, and reduced EBITDA in 31.1 billion. In addition, higher operating cost and insurance reimbursable expenses incurred following the climate event occurred in March 25, reduced EBITDA by 12.9 billion and 4.9 billion, respectively. These negative effects on EBITDA were partially offset by a few positive factors. First, we recorded a positive monetary effect of 13.7 billion as the exchange rate increased above the inflation rate, 43.5% versus 31.5%. Second, butane prices in the domestic market improved following the deregulation under the Programme Award starting January 25. This allowed us to sell at export-parity prices, generating an additional 9.9 billion in revenues. And finally, higher sales volumes also contributed with a 4.4% increase year over year, from 338,000 metric tons in the fourth quarter of 24 to 353,000 metric tons in the same period of 25, resulting in a 7 billion of incremental EBITDA. In the words noting that the average natural gas price, which is the main variable cost for the liquid business segment, remain stable, at $1.6 per million of BTU year over year. Turning to slide 7, EBITDA from Mistrim and other services rose by 36% to $60.7 billion compared to $44.5 billion in the fourth quarter of 24. This increase was mainly driven by higher sales derived from the incremental build volume of natural gas transported and conditioned in Vaca Muerta, totaling almost 20.3 billion. Transported natural gas build volume rose from an average of 28 million cubic meters per day in the fourth quarter The natural gas condition volume also increased from an average of 19 to 27 million of qubits per day. In addition, the monetary effect increased a bit by 5 billion. These effects were partially offset by 8.1 billion in higher operating expenses. As seen on slide 8, we recorded a negative variation in the financial results amounting to $17.9 billion. This was mainly due to a $12.3 billion higher interest cost, mostly explained by higher internets, which increased principally by the issuance of the $500 million bond in last November. In addition, we had an 8.1 billion decrease in income from financial assets, given the lower yields achieved in the domestic financial investment and inflation exposure loss increased by 2.1 billion. These negative effects were partially observed by the Paris import tax charge of 5.9 billion recorded in the fourth quarter of 24. Following the elimination of this tax at the end of 24, no charge was incurred in the fourth quarter of 25. In the last quarter of 24, the tax applied rate was 7.5% for imports of goods and 25% for the imports of services. Finally, turning to the cash flow on slide 9, our cash position in real terms increased by $864 billion during the fourth quarter of 2025 to $1,808 billion equivalent to approximately $1.25 billion at the official exchange rate. This steep increase in our cash position stems from the $500 million bond issued in last November. EBITDA generation in the fourth quarter reached nearly 259 billion, with 57% generated by the non-regulated business, even after considering the full normalization of the natural gas transportation segment. This performance highlights the increased relevance of non-regulated activities within the company's overall results. CAPEX reached almost 96 billion for the period, and work capital rose by 76 billion. We also paid 5.7 billion in interest and 61.6 billion in income taxes, while obtaining 150.3 billion in short-term loans. Lastly, real returns from financial investments declined by 11.8 billion, mainly due to the exchange rate rising less than inflation during the fourth This concludes our presentation. I will now turn it over to Carlos, who will open the floor for questions.
Operator: Thank you.
Carlos Almagro: Well, thank you. Thank you, Alejandro. The floor is now open for questions. If you have questions, please send them through our Zoom chat. We will read and answer the questions in the order in which they are received. Please make sure to state your name and company so we can introduce you to the audience. Should any participant need assistance, please send us a message in the chat box. Please hold while we poll for questions. Thank you. Well, first question is from Daniel Guardiola from BTC Backpack. Hi, Daniel. He's asking about to give him or give the audience a more color about the NCL project. If there is something that is delaying in order to reach the FIB.
Alejandro Basso: Hi, Daniel, how are you doing? Well, the project is moving on. We right now are negotiating with gas producers the terms of the project, and we are expecting to have the FID before June, maybe May. So we are very confident with the project moving ahead.
Carlos Almagro: The second question for him is, we are facing competition from YPF to extend NCL capabilities.
Alejandro Basso: Competition is always a risk, but nevertheless, we are working with YPF and other gas producers right now. So, as I said, we are expecting to move forward in the near future.
Carlos Almagro: Another question, someone who doesn't introduce himself, is regarding how is evolving the tariff in the transportation business.
Alejandro Basso: Tariff adjustments are moving smoothly. We have obtained all the tariff adjustments that we are due to. uh which is the inflation uh in calculation the monthly inflation based on the wholesale price index and the cpi half and half so everything is going okay you may see some differences in the dollar uh revenues or a bit from this business because the the the values are adjusting with inflation so when the the depreciation of the peso is higher in inflation we may have lower revenues in dollars and the other way around.
Carlos Almagro: We have a question from Jorge Gasto from Latin Security. Hello, how are you? The question is regarding the salary insurance divestment, if we expect to have it this quarter or when we expect to have it, when we will collect this divestment.
Alejandro Basso: Hi George. In fact, we have already collected an advance payments amounting to almost $10 million. We are expecting the Right now, we're finding all of it from the liquidator of the insurance this month. Well, after that, I don't know exactly the timing, but we are expecting maybe by June or July. Nevertheless, I think that the magnitude of the recovery could be higher than the expenses that we have, expenses and capital we have, because we had some other items in the calculation.
Carlos Almagro: A question from Matias Cataruzzi from APCA. Hello, how are you, Matias? One first question regarding the initial project that Alejandro answered, and his second question is regarding the recent weakness in international initial prices. How do we see the outlook for liquid pricing into 2026? Does the current geopolitical shock positive affect the segment?
Alejandro Basso: Okay, well, it's true that international NGL prices are weak last month. Nevertheless, we are having a very good margin altogether in this business. So our outlook for liquids prices right now is quite similar to the previous year. So we are not expecting any significant change. Nevertheless, the geopolitical situation conflicts that we are seeing in these days may affect positively this sector. Especially in the natural gasoline price, which is more related to the brand prices. Propane and butane maybe it's different. It depends on offer and supply and demand.
Carlos Almagro: Another question from Daniel Guardiola, regarding the, about the potential dividend payment in 2026.
Alejandro Basso: Well, it is my opinion, I am not seeing any potential dividend payments as we are moving forward with the project, okay, with NSHE's project. Obviously, it depends on the, on our shareholders' decision.
Carlos Almagro: Then we have a question from Agustin Pacheco from Banco Mariba. Hi, Agustin. Well, the first question was, is there a strong increase in cash? Well, it was explained by Alejandro that it was regarding the bond that we issued in November that added cash for $500 million. This is the main reason. And his second question on what percentage of total capital was allocated to the expansion project. I think that he is talking about the GPM, the transportation expansion.
Alejandro Basso: Well, total capital for our project is around 780 million dollars. So, the bulk of that amount is going to be invested this year in 2026. The project has already started last November and we should put in service the three new compressor stations by May 2027.
Carlos Almagro: Another question from Daniel. What do you think that you answer is that if the current area adjustment fully preserve the real return? Yes. Or we don't see any regulatory error in the real terms, no? Insights, no. We have a question from Andres. The first question is, we are planning to participate in the dedicated pipeline for the Southern Energy LNG project.
Alejandro Basso: No, no, we aren't.
Carlos Almagro: The second question is how much incremental gas production do you estimate is necessary to supply our energy project?
Alejandro Basso: Not much. We already calculated the production of energy based on current natural gas supply. plus the additional supply that is going to be injected in the GPM once our expansion is in place. But we are very confident on gas supply for this project. We may face higher supply than expected.
Carlos Almagro: We have another question from Daniel Guardiola about what is the situation of the progress in the construction of the Perito Moreno expansion? What is the expected topic to be deployed in 2026 and 2027?
Alejandro Basso: Okay, the progress is very, very okay, as expected. And, well, the CapEx deployment, I think it's around $100 million in 2025, with the main advances to suppliers, then around more than $500 million this year, and the remainder in 2025.
Carlos Almagro: Mattia Catagnino, his concern about the levels was answered. And his second question is regarding the 5B of NCI approaches was answered. Luisa Belen, her question is regarding
Alejandro Basso: yeah maybe well i told about more than 500 millions in the expansion and another 100 million in our i mean maintenance payments yeah so more than 600 million dollars for this and what about the working capital and fast payment Yeah, tax payments on the cash flow were a very high figure, given that we don't have any advances the previous year. Moving forward, tax payments should be something lower than we see this year. Not in the quarter. In the quarter, I think that's – well, also in the quarter. Yes.
Carlos Almagro: high higher advances that we are expecting for the second half of 26 and um working lines i don't know if i need pipeline but we don't have any pipeline just only the expansion of the beta moreno and penal trenches so there is no pipeline project right now
Alejandro Basso: uh we have a question from andres cardona how much we estimate the carpets related with the ancient projects well we currently would have a more accurate estimation of this uh for the project given that we have already uh run most of the of the bids for the construction and also for the equipment. So we estimated this around 2.9 billion dollars, approximately.
Carlos Almagro: We have some questions from Juan Ignacio Lopez. We are answered. Thank you, Juan. Another question from Armando Moretti. Hi, Armando. Question regarding the dividend that was answered. We have some questions that were answered from Guido Bisocero from malaria.
Operator: Very good answer.
Carlos Almagro: a question from Ignacio. When are the biddings for the capacity happening?
Alejandro Basso: Well, as I said in the call, we are expecting biddings for the repaid capacity, or prepaid capacity, which is 40% of total capacity for March 16th. And once the Secretary of Energy and Energy and Gas decided the reallocation of the capacity of the gasoducto Perito Moreno, After that, we are going to run the open season for the remainder capacity, 60% of capacity. I think that it may occur before May. That's the final due date for that. And the second question is around the mix of... What's the mix of tech we are expecting and what regions? For the expansion of Perito Moreno. Mainly in... power plants and industries okay as the government is reallocation the capacity to the 21 million qubits per day capacity of the gpn mainly to distribution companies we are not expecting significant distribution companies beats for the capacity that we are currently in the open season and the regions well the A very significant part of the capacity could go to the TGN zone via the Mercedes-Cardale pipeline that was already built, because the replacement of the liquids imports for the power plants may occur there, mainly. Some part of the capacity is obviously going to be to the GBII.
Carlos Almagro: We have a question from Santiago Herrera from Alaria. Hi, Santiago. How much of the investment in these projects would be financed by Project Finance?
Alejandro Basso: Well, maybe it's hard to say, but right now we are working with a group of banks, so maybe around $1 million, something like that. This project is going to be divided in two SPVs, one third in the TCS Tratagen Processing Plant. There we are expecting to finance that project with some bonds in the TCS balance sheet or in the new SPV balance sheet. Also have some finance, import finance from banks for the advances to import imported equipment. And then, as I said, one billion project finance in the second SPV, which is the SPV that is going to have the polyjuice, the fracturing and the storage and dispatching facilities.
Carlos Almagro: Another question from John Rasto, he wants to have some color on the decline in firm revenues presented after importation contract this quarter. It was because the interruptible services revenue increased. This was not because of revenues declining. So this is the reason. We don't have more questions. Well, this concludes the question and answer section. Now we will turn to Alejandro for the final remarks.
Alejandro Basso: Well, thank you all for participating in this year's Hogwarts 2025 conference call. We look forward to speaking with you again when we release our 2026 first quarter results. If you have any questions in the meantime, please do not hesitate to contact our investor relations department. Have a good day.
