Transportadora De Gas Sa Ord B Q1 2026 Earnings Report

Transportadora De Gas Sa Ord B EPS Results

• Actual EPS: N/A
• Consensus EPS: $0.90
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Transportadora De Gas Sa Ord B Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $346.84 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Transportadora De Gas Sa Ord B Announcement Details

• Quarter: Q1 2026
• Date: 5/14/2026
• Time: Before Market Opens
• Conference Call Date: N/A
• Conference Call Time: N/A

Transportadora de Gas del Sur S.A. (NYSE:TGS) is an Argentina‐based midstream energy company principally engaged in the transportation, storage and processing of natural gas. Established in 1992 following the privatization of the state‐owned gas utility, TGS operates one of the country’s largest pipeline networks, carrying gas from production basins in the Neuquén and Golfo San Jorge regions to major consumption markets in Buenos Aires and beyond. The company’s infrastructure supports both domestic supply and export volumes bound for neighboring countries.

In addition to its core pipeline business, TGS maintains a significant gas processing division that extracts natural gas liquids (NGL) and produces liquefied petroleum gas (LPG) and other by‐products. Its processing plants are strategically located near major gas fields, enabling efficient treatment and fractionation of raw gas streams. The company markets its LPG through a distribution arm serving residential, commercial and industrial customers, further diversifying its midstream portfolio.

Transportadora de Gas del Sur has cultivated long‐standing agreements with Argentina’s leading exploration and production firms, leveraging partner relationships to optimize throughput and asset utilization. Listed on the New York Stock Exchange since the late 1990s, TGS adheres to international corporate governance standards and is overseen by a board of directors with extensive expertise in energy infrastructure and finance. Headquartered in Buenos Aires, the company continues to pursue opportunities to expand its network and processing capacity in line with regional demand growth.

Transportadora De Gas Sa Ord B Q1 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Received prepaid bids for the transportation expansion, awarded ~5 mcm/d and will collect $400 million in prepayments before the expansion's May 27 commissioning; bids for the remaining 9 mcm/d will be allocated next month.
• Positive Sentiment: Non‑regulated activities now account for 54% of EBITDA as Q1 EBITDA reached ARS 306.5 billion, underscoring growing contribution from midstream and liquids businesses.
• Positive Sentiment: Liquids segment EBITDA jumped to ARS 96.7 billion, driven by higher sales volumes after the processing plant recovery, ~ARS 12 billion insurance reimbursement, and a March spike in natural gasoline prices.
• Negative Sentiment: Financial results weakened (ARS 9.2 billion negative variation) due to ARS 36.1 billion lower income from financial assets, ARS 15.1 billion higher interest costs, and a real cash position decline of ARS 173 billion to ARS 1,806 billion.
• Neutral Sentiment: The NGL project is approaching FID (expected this month) with total CapEx of ~$3 billion and financing plans underway (including ~$500 million of import financing), but execution and large capital needs remain risk factors.

Presentation

[Carlos Almagro, Head of Investor Relations at TGS]

I'm Carlos Almagro, Head of Investor Relations. I would like to welcome everyone to TGS first quarter 2026 earning, the conference. TGS issue, it's already released yesterday. 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 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.

[Carlos Almagro, Head of Investor Relations at TGS]

All figures included herein were prepared in accordance with International Accounting Reporting Standards, IFRS, and are stated in constant Argentine pesos as of March 31st, 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.

[Alejandro Basso, CFO at TGS]

Thank you, Carlos Almagro. Good morning, everyone, and thank you for joining us today to discuss TGS's 2026 first quarter earnings and highlights. To begin today's call, I'd like to share some of the most recent corporate developments. In terms of the natural gas transportation expansion, which is currently under construction and following the open season launch last February, we have received bids for incremental firmed transportation capacity to be fully prepaid for a total capacity of more than 30 million of cubic meters per day. Of the total, almost 5 million of cubic meters per day were awarded, and we will collect prepayments amounting to $400 million prior to the commissioning of the expansion, which is scheduled for May 27.

[Alejandro Basso, CFO at TGS]

Bids for the 9 million cubic meters per day remaining capacity, which will be paid on a monthly basis, will be received and allocated next month. It is relevant to mention that the Secretaría de Energía, through resolution number 66 of the year 2026, has established the reconfiguration of Argentina's natural gas transportation system with the purpose to adapt the contracted capacity system to the current natural gas production, which is mostly concentrated in the Vaca Muerta formation. This reconfiguration will imply that TGS will lose some transportation capacity contracted from the south most of the country, which will be offset by additional new transportation capacity contracted from Vaca Muerta. As a result, this reconfiguration that has been effective since this month will have a neutral impact on our revenues. Moving to slide four, I will briefly highlight the key financial results for the first quarter of 2026.

[Alejandro Basso, CFO at TGS]

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 March 31st, 2026, 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 ARS 160 billion during the first quarter of 2026 compared to ARS 142.3 billion reported in the same quarter of 2025. Overall, EBITDAs across all our business segments increased for a total of around ARS 66 billion, which was partially offset by a ARS 9.2 billion lower financial results. Moving on to slide five.

[Alejandro Basso, CFO at TGS]

EBITDA for natural gas transportation business in the first quarter of 2026 totaled ARS 139.9 billion, which is higher than the almost ARS 129 billion recorded in the first quarter of 2025. It is worth noting that even with the revenues increasing by ARS 36.7 billion following the monthly tariff adjustment, they were not enough to offset the inflation loss effect of ARS 48.5 billion. More transportation services, mainly interruptible transportation amounting to ARS 3.2 billion, together with the ARS 10 billion extraordinary negative result registered in the first quarter of 2025 related to the climate event and ARS 10 billion less in property, plant and equipment maintenance expenses contributed to generate an increase in EBITDA in the first quarter.

[Alejandro Basso, CFO at TGS]

On slide six, you can see how EBITDA for the liquids segment increased to ARS 96.7 billion during the first quarter of 2026 compared to a low ARS 63.8 billion reported in the same quarter of 2025. The increase in EBITDA was mainly attributed to higher volume sales, increasing from 210,000 metric tons to 323,000 metric tons. As was mainly explained by the processing plant shutdown for more than a month caused by the flooding suffered on March 7, 2025. Higher volumes sales generated a higher EBITDA of ARS 36.2 billion. In addition, we collected almost ARS 12 billion in a partial expense reimbursement from the insurance company and recorded ARS 4.9 billion extraordinary expense registered in the first quarter of 2025 related to the climate event, which also explained the EBITDA increase.

[Alejandro Basso, CFO at TGS]

Furthermore, the 70% unexpected increase in the average natural gasoline price in March 26 due to the war in Iran also contributed with an additional ARS 4.3 billion in EBITDA. However, lower LPG reference international prices partially offset the above-mentioned positive effects in ARS 18.7 billion, along ARS 5.8 billion of higher operating expenses. It is worth noting that the average natural gas price, which is the main variable cost for the liquids business segment, remained stable below the $2 per million of BTU in both quarters. Turning to slide seven, EBITDA from midstream and other services rose by 46% to ARS 69.8 billion, compared to ARS 47.7 billion in the first quarter of 2025.

[Alejandro Basso, CFO at TGS]

This increase was mainly driven by higher sales derived from the incremental billed volume natural gas transported and conditioned in Vaca Muerta, totaling almost ARS 17 billion. Transported natural gas billed volume rose from an average of 28.3 million cubic meters per day in the first quarter of 2025 to 30.1 million cubic meters per day during this quarter. The natural gas conditioning volume also increased from an average of 21 million cubic meters per day-27.7 million of cubic meters per day as a result of the commissioning of the last new conditioning module in February of 2025. In addition, operating expenses decreased by ARS 4.4 billion, and the positive monetary effect result increased EBITDA by ARS 1.5 billion. As seen on slide eight, we recorded a negative variation in the financial results amounting to ARS 9.2 billion.

[Alejandro Basso, CFO at TGS]

This was mainly due to an ARS 36.1 billion decrease in income from financial assets, given the lower yields achieved in domestic and financial investments. ARS 15.1 billion higher interest costs, mainly attributed to the ARS 500 million bond issued in November 2025, and inflation exposure loss increased by ARS 10.6 billion. These negative effects was partially offset by the ARS 54 billion positive variation of foreign exchange results as the Argentine peso appreciated in the first quarter of 2026 compared to a devaluation occurred in the same period of 2025. Finally, turning to the cash flow on slide nine, our cash position in real terms decreased by ARS 173 billion in real terms during the first quarter of 2026 to ARS 1,806 billion, equivalent to approximately $1.3 billion at the official exchange rate.

[Alejandro Basso, CFO at TGS]

EBITDA generation in the first quarter reached ARS 306.5 billion, with 54% generated by non-regulated business even after considering the full normalization of the natural gas transportation segment. This result highlights the increased relevance of the non-regulated activities within the company's overall results. CapEx reached ARS 143.4 billion for the period, while working capital rose by ARS 35.5 billion. We also paid ARS 35.3 billion in interest and ARS 42 billion in income taxes, and we reduced our debt by ARS 52 billion. Lastly, real returns from financial investments declined by ARS 171 billion, mainly due to the 5% exchange rate decrease, while the Argentine peso inflation was 9.4% during the first quarter. This concludes our presentation.

[Alejandro Basso, CFO at TGS]

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

[Carlos Almagro, Head of Investor Relations at TGS]

Thank you, Alejandro. The floor is now open for questions. If you have questions, please send them through our Zoom chat. We will read it 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 call for the questions. Thank you. Well, first question is from George Glasgow from Latin Security. Hi, George. Question is, if it the strong result in the first few in the transportation business segment helped out by any cost reduction versus Q4 2025, or it's just a Peso appreciation?

[Alejandro Basso, CFO at TGS]

Hi, George. The reductions in cost, mainly in the transportation business in the first quarter were one time expenses that we have there, in related to internal inspection of our pipelines.

[Carlos Almagro, Head of Investor Relations at TGS]

The next question is from Matthew Stone from Citi. Hi, Matthew. The question is about the NGL project. How near we are from signing the agreement?

[Alejandro Basso, CFO at TGS]

Hi, Matthew. Well, we are working a lot with our counter parties in the NGLs project. I cannot give any assurance from the time, but it is going to be soon, maybe this month, hopefully.

[Carlos Almagro, Head of Investor Relations at TGS]

Well, his second question regarding our view for the liquid business EBITDA, considering the new price scenario for this year. Daniel.

[Alejandro Basso, CFO at TGS]

Okay. It's difficult to share a sensitivity of EBITDA. What I can say is that regarding the propane and butane prices, the correlation with the oil prices are not perfect. We obviously are having an increase in these prices for our exports, but not in, at the same level of the oil prices. It depends on offer and supply and demand in U.S. and in Europe, it's difficult to anticipate an exact sensitivity. Regarding natural gas prices, it's in this case, the natural gas price that we export our product is quite correlated with oil prices.

[Carlos Almagro, Head of Investor Relations at TGS]

Now, some question from Daniel Guardiola from BTG. Hi, Daniel. His first question regarding from where we are from FID and the CapEx involved in project, what we expect from funding, financing this project, and the risk to mitigate some potential delays in the construction period and potential cost overruns.

[Alejandro Basso, CFO at TGS]

Hi, Daniel. Well, regarding the FID, I already answered this. We expect at the end of this month. Total CapEx expected to be around $3 billion. The funding structure, we are working in two sets of structures, one for the imports that we are obliged to finance due to the RIGI requirements of around $500 million. We are well advanced in couple of agreements with four banks regarding the import financing. We also are working with a higher group of banks regarding the project finance structure.

[Alejandro Basso, CFO at TGS]

Regarding engineering risk, a mitigator of potential delays, I think that our projection, and the suppliers, the EPCs, different EPCs that we are selecting for this project, in our opinion, they are very strong, solid companies. The same for the equipments. Potential cost of run, we obviously we have some contingency there. The EPCs are all lump sums, so we are very confident that we can finalize the project in time and under budget. Regarding the Perito Moreno expansion, it's smoothly advances as it was planned.

[Carlos Almagro, Head of Investor Relations at TGS]

Well, the next question from Daniel, you could answer about the sensitivity of our liquidity, our liquid prices regarding the current prices. We can say that the one that is more correlated to the brand is the natural gasoline. The case of the propane, butane has its own As we know that the gasoline price increased around 70%, you know, 70%, 80%. Meanwhile, propane, butane increased by 30%, that's a big evolution. It's difficult to guess how it can evolve. Next question from Daniel is: When we are expecting to collect the claim related to the flooding in the summary complex?

[Alejandro Basso, CFO at TGS]

As you know, we have already collected $10 million. And we expected to collect the rest during this year, maybe in four months or three months, something like that. The liquidators have already finalized their work, they have made a couple of questions that were answered. We are optimist regarding the collection of this claim during this year, maybe in the third quarter.

[Carlos Almagro, Head of Investor Relations at TGS]

Okay. One clarification in general is that because we don't give a presentation about the data, sometimes it's very difficult also providing or sharing this information. Another question from Daniel is what is our current spare capacity in the NGL segment regarding pipeline and the processing plant?

[Alejandro Basso, CFO at TGS]

Regarding the transportation gathering capacity, currently it's utilized at 50%, sorry. Regarding the capacity in the conditioning plant, we have a spare capacity of 5%-10%, depending on conditions of the natural gas quality and the contracts, obviously.

[Carlos Almagro, Head of Investor Relations at TGS]

A question from Juan Ignacio Lopez. Hi, Juan. What you're asking about the pricing dynamics in those segment. Another question from him is how our exposure to the current price environment is whether we are pricing at export parity, how far we are from that benchmark

[Alejandro Basso, CFO at TGS]

Hi, Juan Ignacio. We price all our domestic products, propane and butane, at export parity, except for ethane, which is sold to Dow Chemical, to an affiliate of Dow Chemical, a subsidiary of Dow Chemical at a price that has a pass-through mechanism of natural gas price plus a premium. It's export parity. It has some delay with the international prices because the export parity for domestic products is established by the [Non-English content] every month. It's export parity. The evolution should be related to the export prices.

[Carlos Almagro, Head of Investor Relations at TGS]

Okay. The question from Andres is, Juliaro on balance. Hi, Andres. For you, the question, the total tariff adjustment during the quarter preceding the monthly inflation updates established in the tariff revision. The quarter, the adjustment was around 8%. It was 8%. Okay? Considering the portion of the initial tariff adjustment that we made last year. Now we have, hi, Lisa Belen from Morgan Stanley. How are you? She want to have some color. I don't know if you can share some information about the steps in the coming month related the NGL segment expansion, perhaps, the transition that you mentioned in the call. Alejandro Basso mentioned that in June, we will receive the remaining offers bids from or the remaining capacity of 9 million in the pipeline.

[Carlos Almagro, Head of Investor Relations at TGS]

From the commercial point of view, we close in June. We are working in respecting the time of the timetable within the plans and which another question from Lisa is regarding input costs for the NGL segment in the quarter regarding natural gas prices.

[Alejandro Basso, CFO at TGS]

Well, in the call, we already mentioned that natural prices were around $2 per million BTU in the first quarter.

[Alejandro Basso, CFO at TGS]

In the quarter, yeah. In the first quarter. Yeah.

[Carlos Almagro, Head of Investor Relations at TGS]

A question from Agustín Pacheco from Banco Mariva. Hi, Agustín. Want to have some color regarding the CapEx in the expansion project. If we can provide more color on the actual executed phase. If what we can share is that up to last year, we made CapEx of around $160 million. For this year, we expect $500 million in this project. The remaining, the beginning of this year of our commission.

[Alejandro Basso, CFO at TGS]

Also, you have to consider that we have paid advancements to suppliers, to EPCs that are included in the working capital evolution. That's why you may have some below your expectations in this period, yeah. Mainly in the fourth quarter of 2025 when we started out with the project. We have not suffered any delay in the project. No, we facing nothing significant.

[Carlos Almagro, Head of Investor Relations at TGS]

Hi, Matías Caprino. The question is if we are complying with all the timeline that Perito Moreno, the CapEx target, if any of those pieces have changed.

[Alejandro Basso, CFO at TGS]

This is, April 27, not April 26. Okay.

[Carlos Almagro, Head of Investor Relations at TGS]

Yes. Okay. April 27th. Well, repeat the question of the person who said it. We answer. Some question from Alan Feldman that we have answered. Question from Juan Golpoa. From BP's critics, all these questions were answered. Another question from George Rasco, regarding transparency. If we take midstream growth to slow over the next few quarters.

[Alejandro Basso, CFO at TGS]

Um-

[Carlos Almagro, Head of Investor Relations at TGS]

What are the drivers of this assessment before the GPM expansion comes online?

[Alejandro Basso, CFO at TGS]

Well, regarding our midstream growth, especially in Vaca Muerta, growth level for the next years should be obviously slower than we have in 2025, 2026, 2024 due to the expansion, more than $300 million expansion. Nevertheless, we can run some debottleneckings in our plants. In our plant there in Vaca Muerta to be able to process additional volumes or additional or to be able to increase the conditioning revenues and also the transportation revenues, the gathering revenues, but a much slower level. It's going to be just debottleneckings. For instance, we right now are building a new stabilization facility with a total investment of $37 million, which will help us to provide additional capacity for the conditioning plant.

[Alejandro Basso, CFO at TGS]

Because the Vaca Muerta gas is getting richer every year, I would say. We have to be able to conditioning richer gas. Obviously with the GPM expansion, we are going to have additional natural gas coming through our facilities. Okay. I say that the existing capacity is enough to gather and condition all this new gas.

[Carlos Almagro, Head of Investor Relations at TGS]

Now we have a question from Augusto Soto-Bauman from Rosental Inversiones. Given Pampa's Energy are recently announced fertilizer urea project under the RIGI framework, we can elaborate on whether TGS could potentially participate as natural gas transportation for the project. Similarly to the Profertil case, considering the strategic relationship between Pampa and TGS.

[Alejandro Basso, CFO at TGS]

In the case that Pampa goes ahead with the Fertile Pampa project, TGS could provide additional transportation services to Pampa. It probably will require an additional expansion of the GPM pipeline. You know that under the bid that the [Non-English content] and ENARSA ran in 2025, there is 6 million, up to 6 million cubic meters capacity of optional capacity expansion of the GPM. The option is TGSs obviously, and it will depend on the rates of return of the project, obviously.

[Carlos Almagro, Head of Investor Relations at TGS]

Flavia Lemmi from Argus Media. Question regarding how the prices of LPG are performing in the second quarter. What we see is the natural gas price, the gasoline, the for gasoline, the price is keeping high around ARS 900 million, $900 per ton. The propane and butane is staying around ARS 415 per 100. Yes, it keeps in the same level as March. The worst half. What we can see perhaps in this quarter is the impact in the local prices. That's for parity, local pricing, because in March were not reflected because the parity consider the average prices of the last two months. Perhaps in the second quarter will be impacted, will be see higher revenue for the domestic trade.

[Carlos Almagro, Head of Investor Relations at TGS]

Another question from George regarding the CapEx of GPM that we answered that $900 million will be made. A question from Alan Feldman, why the cost in NGL segment moved faster than revenue? What we can answer is that in revenues, as Alejandro explained before at the beginning, in fact, the prices of the propane and butane before the start of the war were very low compared with the fourth quarter and the first quarter of 2025. And in fact, when the war started, the LPG prices increased 30%.

[Carlos Almagro, Head of Investor Relations at TGS]

In total, as you can see in the presentation, the prices, the variation of the sales or the revenue due to the prices changing, prices evolution, went down. Okay. Probably as we explained before, the second quarter we can see a better revenue performance. Okay. Okay. Yes. Another question from Matías is that, with the additional cash that we are generating from the liquid prices, we consider another dividend payment if prices remain at this levels.

[Alejandro Basso, CFO at TGS]

Regarding dividends, I cannot give any assurance because it's going to be a shareholder decision. Nevertheless, as we have all these significant projects ahead, I don't think that we are going to pay new dividends. Nevertheless, it's not my decision, obviously.

[Carlos Almagro, Head of Investor Relations at TGS]

It's a Board of Directors' decision.

[Alejandro Basso, CFO at TGS]

Yes. The Board of Directors. Yeah.

[Carlos Almagro, Head of Investor Relations at TGS]

Shareholder decided to create the reserve for the multipurpose purposes. Well, if there are no more questions, this concludes the question and answer section. Now we will turn to Alejandro for final remarks.

Participants

Analysts

• Alejandro Basso, CFO at TGS
• Carlos Almagro, Head of Investor Relations at TGS