Transportadora de Gas del Sur S.A.(TGS) - 2025 Q3 - Quarterly Report

Revenue Performance - Total revenues for the nine-month period ended September 30, 2025, increased by Ps. 93,597 million, or 8.8%, compared to the same period in 2024, reaching Ps. 1,156,194 million[15]. - Revenues from the Natural Gas Transportation segment accounted for 42% of total revenues in 9M2025, with an increase of Ps. 113,706 million, or 30.4%, totaling Ps. 488,348 million[17][20]. - Liquids Production and Commercialization revenues decreased by Ps. 55,932 million, or 11.5%, to Ps. 429,204 million, representing 37% of total revenues[25][26]. - Midstream revenues increased by Ps. 35,823 million in 9M2025 compared to 9M2024, driven by higher natural gas transportation and conditioning services[32]. - Total revenues for 3Q2025 reached Ps. 426,518 million, an increase of Ps. 88,591 million or 26.2% compared to 3Q2024[42][44]. - The Liquids Production and Commercialization segment saw revenues rise by Ps. 70,423 million, driven by increased volumes and domestic prices[47]. - For the nine-month period ended September 30, 2025, total revenues reached Ps. 1,144,610,999, an increase from Ps. 1,048,180,095 in the same period of 2024, reflecting a growth of approximately 9.2%[140]. - Total revenues from Natural Gas Transportation services for the nine-month period ended September 30, 2025, were Ps. 488,347,656, compared to Ps. 374,641,517 in 2024, marking an increase of approximately 30.4%[140]. - Total revenues from Liquids Production and Commercialization for the nine-month period ended September 30, 2025, were Ps. 417,620,460, compared to Ps. 470,718,499 in 2024, indicating a decrease of about 11.3%[140]. Financial Results - The company recorded a total comprehensive income of Ps. 275,227 million, a decrease of Ps. 18,129 million, or 6.2%, compared to the previous year[15]. - Financial results for 9M2025 showed a total loss of Ps. 49,211 million, a significant decline compared to a profit of Ps. 19,074 million in 2024, primarily due to higher foreign exchange losses[36][37]. - Operating profit for 3Q2025 was Ps. 172,026 million, reflecting a 24.2% increase from Ps. 138,459 million in 3Q2024[42][43]. - Total comprehensive income for 3Q2025 was Ps. 112,059 million, a 62.9% increase from Ps. 68,802 million in 3Q2024[43][44]. - The company reported a net financial loss of 49,211,068 thousand pesos for the nine-month period ended September 30, 2025, compared to a net financial gain of 19,073,623 thousand pesos in 2024[69]. - The total financial results for the nine-month period ended September 30, 2025, showed a loss of Ps. 49,211,068, contrasting with a profit of Ps. 19,073,623 in the same period of 2024[159]. Costs and Expenses - The net cost of sales increased by Ps. 22,873 million, or 4.5%, totaling Ps. 531,923 million, while gross profit rose by Ps. 70,724 million, or 17.8%, to Ps. 624,775 million[15][33]. - The cost of sales for the nine-month period ended September 30, 2025, was Ps. 531,923,146, up from Ps. 509,050,248 in 2024, representing an increase of approximately 4.5%[140]. - The administrative expenses for the nine-month period ended September 30, 2025, totaled Ps. 40,695,136, compared to Ps. 43,468,072 in 2024, showing a decrease of about 6.3%[140]. - Operating expenses for the nine-month period ended September 30, 2025, totaled ARS 737,794,732, significantly higher than ARS 181,220,463 in 2024[157]. Cash Flow and Liquidity - Cash flows from operating activities increased to Ps. 411,003 million, up by Ps. 22,317 million from 9M2024, attributed to lower working capital despite higher income tax payments[39][40]. - The company reported a net increase in cash and cash equivalents of Ps. 13,695 million during 9M2025, despite a decline from the previous year[39][40]. - Cash flows provided by operating activities increased to 411,003,010 thousand pesos in 2025 from 388,685,926 thousand pesos in 2024, reflecting a growth of 5.7%[76]. - Cash and cash equivalents as of September 30, 2025, were ARS 73,030,151, a marginal decrease from ARS 73,140,992 at the end of 2024[148]. - The company reported a significant increase in government grants, totaling ARS 11,583,102 for the nine-month period ended September 30, 2025, compared to ARS 14,417,202 in 2024[154]. Assets and Liabilities - Non-current assets as of September 30, 2025, were valued at Ps. 2,916,417,221 million, showing stability compared to previous periods[54]. - Total assets as of September 30, 2025, amounted to 4,104,978,778 thousand pesos, a slight decrease from 4,139,887,141 thousand pesos at the end of 2024[71]. - Total liabilities as of September 30, 2025, were ARS 138,149,038, reflecting the company's ongoing financial commitments[149]. - Non-current liabilities increased to 1,000,933,899 thousand pesos as of September 30, 2025, compared to 966,043,680 thousand pesos at the end of 2024[71]. - Total current assets as of September 30, 2025, were Ps. 1,074,778,222, with cash and cash equivalents amounting to Ps. 73,030,151[192]. Tariff Adjustments and Regulatory Changes - The company implemented a series of tariff adjustments, including an initial increase of 3.67% as part of the Five-Year Tariff Review for the 2025–2030 period[18][19]. - The company concluded the Five-Year Tariff Review process, which defined the initial tariff increase and the investment and expenditure plan for the period 2025-2030[130]. - The 5YTR established by ENARGAS for the period 2025-2030 includes a periodic tariff adjustment mechanism based on the Consumer Price Index (CPI) and the Wholesale Price Index (IPIM)[199]. - The Secretariat of Energy will oversee modifications to contracts or licenses regarding tariffs, with a new monthly periodic updating of transportation tariffs introduced on June 4, 2025[200]. Economic Context - The Argentine economy showed a year-over-year GDP growth of 6.3% despite a quarter-over-quarter contraction of 0.1% in Q3 2025[95]. - Accumulated inflation as of September 30, 2025, was 22%, with a year-over-year Consumer Price Index increase of 31.8%[96]. - The company is committed to monitoring economic variables that may impact its operations and financial situation amid ongoing macroeconomic challenges[107].