Transportadora de Gas del Sur SA Q3 FY2021 earnings call

• Made $16 million CapEx in natural gas conditioning plant, doubling natural gas liquids capacity from 600 cubics per day to 1,100 cubics per day and increasing natural gas conditioning capacity. • Signed new agreements with gas producers. • Launched open season in September, assigned almost 100% of new firm capacity contracts. • Walked back around $2.8 million bond, holding $22.4 million in trade. • Reported net income of ARS 4.4 billion in Q3 2021 vs ARS 600 million in same quarter 2020. • Financial results had a positive variation of ARS 7 billion offsetting EBITDA decline. • Cash position stable at ARS 33 billion, CapEx ARS 2.2 billion, paid income tax ARS 710 million.

In the third quarter of 2021, for the natural gas transportation business, EBITDA increased by almost ARS 2.6 billion. The Liquids business EBITDA declined from ARS 4 billion to ARS 3.1 billion in the third quarter. The EBITDA from other services increased by 37% mainly due to higher midstream services revenues. Revenue contribution details: Transportation revenues had a positive variation from higher natural gas volumes transported; Liquids business EBITDA was affected by higher natural gas costs and lower liquids sold volume; Other services saw growth from midstream services.

• Expect international prices for next two quarters to remain high. • Pipeline expansion under analysis by national government, potential positive impact. • Anticipate generating positive free cash flow in short term despite operating margin deterioration.

• Deteriorating operating margins in transportation business due to lack of adjustment. • High inflation in Argentina affecting cost and revenue projections. • Legal actions related to tariff revisions, with potential suspension if agreements reached with government.

Q: Constantino asks about the level of natural gasoline and if prices will sustain in the fourth quarter and 2022.

A: Regarding international prices for the next two quarters, expectations are they will remain high.

Q: Question on the potential impact of expanding international travel line system on the surveillance sharing facility.

A: Expansion is under analysis by the national government, and it may have a positive impact, with different facilities under study.

Q: Impact on operations from the meta facility.

A: There was a positive effect in October with a 15-day gas switch.

Q: Whether transportation service is excluded from the timing set by the government.

A: The transportation tariffs in the Vaca Muerta pipeline are not regulated, no discrimination of different times for the same distance.

Q: Color on the transitional tariff scheme and if margins will normalize.

A: Difficult to predict, maybe in 2023 for normalized transportation margins, but inflation is high in Argentina.

Q: OpEx increase in the third quarter of 2021.

A: Due to post-pandemic maintenance works.

Q: Shortage of gas for processing in the third quarter of 2021.

A: Expected as gas provision for the plant in winter is reduced due to large consumption center needs, took measures like replacement.

Q: Share for remaining study in 2022 and value adjustment status.

A: Can't predict next adjustment on transition, legal actions in place, and strategy regarding them remains unchanged.