Transportadora de Gas del Sur SA TGS

I'm Carlos Almagro, Head of Investor Relations. I would like to welcome everyone to TGS Second Quarter 2026 Earnings Video Conference. TGS issue is earning release yesterday. If you didn't receive a copy of the release, please contact us at inversores at 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. industrial conditions or company performance and financial 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 and are stated in constant Argentine textos as of June 30, 2026, 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. Thank you, Carlos. Good morning, everyone, and thank you for joining us today to discuss TGS's 2026 second quarter earnings and highlights. To begin the call today, I'd like to share some of the most recent corporate developments. First of all, The most relevant news is the FID for the NCL project, announced a few weeks ago, with key commercial agreements representing more than 90% of the project's total capacity already executed as of today. This is a $3 billion CAPEX project and the construction is expected to take about a 45-month period, with the COD expected in March 2030. In addition, we have also requested that this project be approved under the RIGI. The project consists of a new gathering pipeline in Vaca Muerta, a processing plant to be built in Tratagem, and a 475 km polydute, a fracturing plant in Cervé and storage facilities in Portugal D.A. In terms of the natural gas transportation expansion, which is currently under construction and following the open-season launch last February, and after the allocation of 5,000,000 m2 per day under a fully prepaid basis in the first round, last June we received bids for over 100,000,000 m2 per day capacity in order to allocate the remainder capacity of 9,000,000 m2 per day. We submitted our capacity allocation to our regulators some weeks ago and are waiting for its approval. It is important to highlight that, last May, the Perico-Molero pipeline expansion was approved by the Ministry of Economy to be included in the Regie, which will result in tax benefits for the projects. Finally, in June, S&P upgraded the long-term local and foreign currency debt ratings from B- to B, following the revision for asset finance, transfer and convertibility risk assessment. Similarly, in July, Moody's upgraded rating of our notes from B2 to B1 as a consequence of the Argentina sovereign rating upgrade Moving to slide 4 I will briefly highlight the key financial results for the second quarter of 2019 Please keep in mind that all theories presented for this quarter and comparisons made with the previous quarter are expressed in constant and sentient pesos as of June 30th, 2026, following the provisions established by the FRS for the financial reporting in hyperinflationary economies. As seen in the slide, we reported a total net income of $133 billion during the second quarter of 2026. compared to 53.8 billion reported in the same quarter of 25. This relevant net income increase is mainly explained by the 60.2 billion positive variation in our financial results as well as the important liquids EBITDA growth of 48.4 billion and to a lesser extent the 12.3 billion increase related to the natural gas transportation EBITDA. Moving on to slide 5, EBITDA for natural gas automation business in second quarter of 26 totaled 132 billion, which is above the almost 120 billion recorded in the second quarter of 25. It is worth noting that tariff increases generated higher revenues by 50.2 billion, which was more than the 48.6 billion negative effect of inflation. In addition, two negative events in the second quarter of 25 also explained partially the higher EBITDA in the second quarter of 26 of 19.2 billion. The first event was related to a trade reasonable write-off of 11.2 billion and the second one was the climate event occurred in March of 95 which damaged some natural gas transportation assets and generated a positive rate deviation of 8 billion of 8 billion. Finally, the revenues generated by field transportation contracts decreased by 9.3 million following the Natural Gas Transportation System reconfiguration, which became effective starting as of May 26, whose initial negative effect will be partially observed by future small monthly tariff adjustments. On slide 6, you can see how EBITDA for the liquid segment increased to 82.3 BD during the second quarter of 26 compared to a low 33.9 BD reported in the same quarter of 25. The increase in EBITDA was mainly attributed to higher volume sales, which rose from 211,000 metric tons to 330,000 metric tons and was mainly explained by the low volume sales in the 25th quarter due to the processing tank shutdown caused by the flooding suffered on March 7, 2025. The plant started to operate by mid-April with low level of production and increased its production to reach normal levels in the beginning of May. the higher volume sales generated a higher EBITDA of $46.7 billion. Moreover, high international reference prices as a consequence of the geopolitical conflict in the Middle East raised the EBITDA by $23.2 billion. These positive effects were partially observed by the ETH take-or-pay annual compensation collected in the second quarter of 2025 of $8.5 billion. together with the negative monetary effect of 7.4 billion, the lower retained price which generated lower revenues of 5.8 billion and a higher average central gas price which increased to 3.4 dollars per million of BTU from 3.3 and generated higher costs by 2.5 billion. Turning to Slide 7, EBITDA from midstream and other services decreased slightly to 64.1 billion compared to 69.3 billion in the second quarter of 2025. Revenues generated by midstream services rendered in Vaca Muerta increased by 13.2 billion. transported natural gas billed volume flows from an average of 30 million cubic meters per day in the former quarter of 2025 to 35 million cubic meters per day during this quarter. The natural gas condition in volume also increased from an average of 27 to 30 million cubic meters per day. However, this higher revenue was more than offset by the negative monetary effect of 10.5 billion as inflation was higher than the foreign exchange rate increase along with higher operating expenses of 5.6 billion. As seen on slide 8, we recorded a positive variation in the financial results amounting to 60.2 billions. This was mainly due to $130.1 billion increase in income from financial assets given the higher yields recorded for the domestic financial investment and to a lesser extent to a higher level of financial investments. This positive effect was partially observed by a $46.7 billion higher foreign exchange loss $15.2 billion in higher interest fences, both of which are mainly attributed to the $500 million bond issued in November of 25, as well as the $7.6 billion higher inflation exposure loss. Finally, turning to the cash flow on slide 9, our cash position increased by $274 billion in real terms during the second quarter of 26, to $2,206 billion, equivalent to approximately $1.5 billion at the official exchange rate. The big bad generation in the second quarter was $278.4 billion, of which 53% was generated by non-regulated businesses, even after considering the full normalization of the natural gas transportation segment. These results highlight the increased relevance of the non-regulated activities within the company's overall design. Capes amounted to $155 billion, largely driven by investments in the pipeline expansion project. Working capital decreased by 186 billion, primarily due to the collection of the first prepayment installment of approximately 140 billion from customers that contracted 5 million qubits per day of incremental firm transportation capacity. We also paid 31.3 billion in income taxes and 30.8 billion in interest, and we incurred new debt amounting to 20.8 billion. This concludes our presentation and we now turn it over to Carlos who will open the floor for questions.

Thank you, Ale. 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 say your name and company so we can introduce you to the audience. Should any participants need assistance, please send us a message in the chat box. Please call while we poll for questions.