Good morning. Good morning, everyone.

I'm Carlos Almagro, Head of Investor Relations. I would like to welcome everyone to TGS's Second Quarter 2026 Earnings Video Conference.

TGS issued its earnings release yesterday. If you didn't receive a copy of the release, please contact us at [email protected].

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 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, IFRS, and are stated in constant Argentine pesos as of June the 30th, 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. The most relevant news is the FID for the NGL 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 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 Tratayén, and a 475-kilometer polyduct, a fractioning plant in Cerri, and storage facilities in Puerto Galván. In terms of the natural gas transportation expansion, which is currently under construction and following the open season launched last February, and after the allocation of 5 million cubic meters per day under the fully prepaid basis in the first round, last June we received bids for over 100 million cubic meters per day capacity, in order to allocate the remainder capacity of 9 million cubic meters per day.

We submitted our capacity allocation to our regulator some weeks ago and are waiting for its approval. It's important to highlight that last May, the Perito Moreno pipeline expansion was approved by the Ministry of Economy to be included in the RIGI, which will result in tax benefits for the project.

Finally, in June, S&P upgraded the long-term local and foreign currency debt ratings from B- to B, following the revision for Argentina's transfer and convertibility risk assessment. Similarly, in July, Moody's upgraded the rating of our notes from B2 to B1 as a consequence of Argentina's sovereign rating upgrade.

Moving to slide four, I will briefly highlight the key financial results for the second quarter of 2026. Please keep in mind that all figures presented for this quarter and comparisons made with the previous quarter are expressed in constant Argentine pesos as of June 30th, 2026, following the provisions established by IFRS 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 five, EBITDA for natural gas transportation business in the 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 60.2 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 explain partially the higher EBITDA in the second quarter of '26 of 19.2 billion. The first event was related to a trade receivable write-off of 11.2 billion, and the second one was the climate event occurred in March '25, which damaged some natural gas transportation assets and generated a positive EBITDA variation of 8 billion of 8 billion.

Finally, the revenues generated by firm transportation contracts decreased by 9.3 billion, following the natural gas transportation system reconfiguration, which became effective starting as of May '26, whose initial negative effect will be partially offset by future small monthly tariff adjustments. On slide six, you can see how EBITDA for the liquids segment increased to 82.3 billion during the second quarter of '26, compared to a low 33.9 billion 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 '25 quarter due to the processing plant shutdown caused by the flooding suffered on March the 7th, 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, higher international reference prices as a consequence of the geopolitical conflict in the Middle East raised EBITDA by 23.2 billion.

These positive effects were partially offset by the ethane 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 ethane price, which generated lower revenues of 5.8 billion, and a higher average natural gas price, which increased to $3.4 per million BTU from 3.3, and generated higher costs by 2.5 billion. Turning to slide seven, 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 rose from an average of 30 million cubic meters per day in the second quarter of '25 to 35 million cubic meters per day during this quarter.

The natural gas conditioning 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 eight, we recorded a positive variation in the financial results amounting to 60.2 billion. This was mainly due to 1 to 130.1 billion increase in income from financial assets, given the higher yields recorded for the domestic financial investments, and to a lesser extent, to a higher level of financial investments.

This positive effect was partially offset by a 46.7 billion higher foreign exchange loss, 15.2 billion in higher interest expenses, 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 rates.

EBITDA 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 results.

CapEx amounted to 165 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 cubic meters per day of incremental firm transportation capacity.

We also paid 31.3 billion in income taxes and 30.9 billion in interest, and we incurred new debt amounting to 20.8 billion. This concludes our presentation.

I will now turn it over to Carlos, who will open the floor for questions. Thank you.

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 state your name and company so we can introduce you to the audience. Should any participant need assistance, please send us a message the chat box.

Please hold while we poll for questions. Thank you.

First question from Bruno Montanari from Morgan Stanley. Hello, how are you, Bruno?

The first question is regarding the GPN expansion: how much CapEx is still left to execute in the coming quarters?

Hi, Bruno. As of June the 30th, 2026, we have already invested around $180 million, we have $600 million left for the remainder quarters until May the 1st or until May next year.

His second question is regarding the new liquid project: how should we think about the CapEx distributions over the years?

We have for this year around $500 million, $800 million for '27, $1 billion in '28, and $600 million in '29, approximately.

Yes.

The remainder in the first quarter of 20...

2030.

Yeah.

His third question is regarding the financing of the project: if TGS already secured all the funding requirements?

We have signed agreements with banks for the import financing for around approximately $300 million for the first year, and we are working with a group of banks for the financing of the remainder of the MGS MGS is the second BPU, with the total investment of $2 billion. We are working with this group of banks to finance 60% of the total investment of these $2 billion.

The tenor of the import facilities, finance facilities, is 3 years. The cost is approximately 8.5%, all-in.

Now

we have a question from Matheus Toss. Hi, Matheus.

His question is regarding the transportation segment, the revenues or EBITDA: how this EBITDA on this second quarter, how why why it was weaker in dollars terms compared to the first Q, even as we have a real gain in tariffs?

Hi, Matheus. As you may know, we had a reconfiguration, a new regulation of the capacity in the whole transportation system in Argentina, as the natural gas currently is coming from the West, from Vaca Muerta, from Neuquén, replacing the gas that used to come from the North, from the Bolivian basin and from the Northern basin, and also from the South.

Some contracts were transferred from one system to the other, TGS has an impact there, because of the important position that we have in the Southern contracts, the transportation contracts coming from Tierra del Fuego. You are going to see this loss of volume, lower volumes in the future.

Also, this reconfiguration has made more efficient the system, lower IT services, interruptible services, are rendered by TGS and TGN. At the same time, we have a compensation tariff, but the compensation tariff is calculated in the future, you may see a small compensation for this weakness in the transportation revenues, but it's not significant today.

The second question is regarding the liquid business: which are the drivers of higher cost versus the first Q that explain why margin and EBITDA were weaker despite good energy prices?

That's has to do with the cost of natural gas. In the winter season that starts on May every year, you may see a higher natural gas prices than obviously in the summer season, the first Q.

At the same time, the cost of gas is higher than the previous year. Yes, especially in the spot market.

That compared with the same quarter of last year, '25. Now

we have a question from Charles Castro from Latin Securities, but the question that was answered in the first...

In the previous one.

...in the previous one regarding the transportation revenues, compared with the first Q '26. His second question is also, well, was explained regarding the financing of the NGL project, that Alejandro explained specifically.

Now we have a question from Juan Ignacio Lopez. Hi, Juan.

His first question is regarding the CapEx deployment for the second half of 2026 regarding the GPN, Perito Moreno pipeline, and the NGL project.

Okay. Regarding the Perito Moreno expansion, we are estimating for the remainder of this year around $400 million, and a similar amount or higher than that, a bit higher than that, for the MGS project for this year.

His second question is regarding the strong cash flow print supported by positive working capital. His question is regarding what is the reason of this strong cash flow?

Okay. Juan Ignacio, as I said in the call, 5 million out of 14 cubic meters per day, or out of 12 cubic meters per day from the Perito Moreno expansion, or for the TGS transportation system expansion, were collected as prepay.

They were prepaid by the clients. It's an option that we have and the clients also have in the open season.

40% of the total capacity may be offered and sold, sell by TGS, under prepayment scheme. They prepay the capacity for the 15 years, 15-year contracts, and so that's the $100 million almost that is collected in the second quarter, which is the favorable impact in our working capital.

Now

we have a question from Andrés Cignoli from Balanz. The same question that was answered before regarding the pipeline of the $3 billion in each year.

Now, another question is from Charles Castro regarding the Pampa project, Theuri project, which will require an additional 3.5 million cubic meters per day of transportation capacity out of Vaca Muerta, if we expect to exercise the Perito Moreno 6 million cubic meters per day additional expansion option to meet this demand?

Yes, Charles. We are analyzing that business opportunity to further expand the Perito Moreno up to 6 million cubic meters per day.

It may be less than that, but it could happen. Now

we have a question from Medina Aindas from TPI. The question is regarding the $3 billion CapEx: at what level do we expect the net debt-to-EBITDA ratio to peak during the investment phase?

In which moment we think this will occur? Forward-looking.

Okay.

Obviously, Medina, we expect to increase our net debt-to-EBITDA ratio, maybe in the year '29 or '28. We could be around 3 times...

Below 3 times. ...or

below 3 times, obviously, much below the maximum ratio that we have under our... ...covenants, our...

...bond contracts.

That is 3.5.

3.5. Now

we have, well, a question from Álvaro Leyva from BTG Pactual. Hi, Álvaro.

Your question was answered regarding the financing of the NGL project.

Leverage also.

Also the leverage, yes. A question from Santiago Regas from Allaria regarding NGL project: what is the new maintenance CapEx once the project is finished?

The total project, $10 million per year.

In addition to what we have. Which we currently have.

That is $90 million, plus another 10 that could be added.

By the project.

Yes. Now we have a question from Ramiro Guerrero.

Hi, Ramiro. From Bull Market.

His question regarding the NGL project: what portion of the $3 billion investment do we expect to finance through project finance at SPV level? What portion would require contribution from TGS?

Hi, Ramiro. I would say that half of the total investment, because we are going to finance with a 60% of leverage the second BPU, which is a $2 billion investment, and at least $300 million of import finance in the first BPU, which is a $1 billion.

A total of 1.5 out of 3 billion. That's our expectation, and we are working on that.

We have another question from Ignacio Valdez regarding another one regarding the NGL project: if we consider adding a partner to participate in the project?

Hi, Ignacio. We may consider adding a partner.

It will depend on business opportunities, and the context, obviously.

Now we have a question from Agustín Pacheco from Grupo Mariva. Hi, Agustín.

His first question was answered regarding in the first year how much we expect to invest. His second question is: is RIGI approval a prerequisite for starting construction and committing the main expenditure, or could some early-stage investment begin before approval?

Hi, Agustín. In fact, we have already started investing in the project, the RIGI approval is not a prerequisite.

Nevertheless, we are quite confident that the RIGI is going to be approved soon. We already filed the RIGI in June the 5th, we are expecting to have the approval in a few months, I would say.

That's all.

Another question from Federico Ravelli that were answered previously. Another question from Alan Fielman from Criteria.

Hi, Alan. Your question was answered regarding the working capital variation.

As, well, Alejandro explained that we expect for the following quarters to receive another $300 million, 200 in 2026 and 100 more in the first quarter of 2027, or before in April, 20 2027. Another question, well, from Alan Fielman is regarding the working capital: what underlying free cash flow would use as a run rate, and how should the market think about the sustainable conversion of EBITDA into cash, considering this prepayment?

Okay. Hi, Alan.

As we are being prepaid 40% of the expansion volumes of the GPM expansion and the TGS transportation system expansion, we are not going to have those revenues after those 40% of the revenues collected after the project COD next May. Approximately, I would say $40 million of EBITDA of the revenues per year are not going to be collected because we have already, at that time, we will have already collected them.

Then

we have another question, well, regarding financing the project, it was answered. Another question from Jorge Mauro.

Hi, Jorge. Your question was answered regarding the peak leverage in the next 3 years.

Charles Castro, a question regarding the Pampa project that it was answered. We think that that's all.

This conclude the questions and sections. Now we will turn to Alejandro for final remarks.

Thank you all for participating in TGS's second quarter 2026 conference call. We look forward to speaking with you again when we release our 2026 third quarter results.

If you have any questions in the meantime, please do not hesitate to contact our Investor Relations department. Have a good day.