20-F: Transportadora de Gas del Sur S.A. Announces Annual Results for Fiscal Year 2024

Transportadora de Gas del Sur S.A. reports its financial results for the fiscal year ended December 31, 2024, showcasing key financial data and operational highlights.

Summary

• Transportadora de Gas del Sur S.A. (TGS) has released its financial results for the fiscal year ended December 31, 2024.
• The company's financial statements are prepared in accordance with IFRS Accounting Standards.
• Argentina is considered a hyperinflationary economy, and the financial statements reflect this by presenting figures in constant pesos as of December 31, 2024.
• The company's net revenues from the Natural Gas Transportation public service represented 36% of total revenues during 2024.
• The company's Liquids production and commercialization activities represented a material portion of total revenues.
• The company's average daily natural gas deliveries were 72.9% under long-term firm transportation contracts.
• The company's long-term firm natural gas transportation contracts had a remaining weighted average life of approximately 10 years as of December 31, 2024.
• The company's average daily injection of natural gas into the pipeline system amounted to 83.4 MMm3/d in 2024.
• The company's Liquids production in 2024 reached 1,051,654 tons, a decrease of 7.3% compared to 2023.
• The company's total volume of sales from Liquids was 1,077,350 tons, and the volume of sales from Liquids exports was 411,440 tons.
• The company's net reserves reached US$ 29,612 billion as of December 31, 2024.
• The company's financial surplus amounted to $1.8 trillion, equivalent to 0.3% of GDP for the year 2024.
• The company's primary surplus reached 1.8% of GDP for the year 2024.
• The company's total indebtedness was entirely denominated in U.S. dollars as of December 31, 2024.
• The company's total indebtedness was US$562 million as of December 31, 2024.
• The company's net income and total comprehensive income was Ps. 370,163 million for the year ended December 31, 2024.
• The company's capital expenditures included Ps. 204,953 million related to natural gas transportation system, Ps. 41,078 million related to liquids production and commercialization activities and Ps. 515,752 million related to Midstream segment.

Sentiment

Score: 7

Explanation: The document presents a mixed outlook. While there are positive aspects such as increased revenues and a reversal of impairment, there are also negative factors such as decreased liquids production and ongoing economic challenges in Argentina. The sentiment is cautiously optimistic.

Positives

• The company's financial surplus amounted to $1.8 trillion, equivalent to 0.3% of GDP for the year 2024.
• The company's primary surplus reached 1.8% of GDP for the year 2024.
• The company's net income and total comprehensive income was Ps. 370,163 million for the year ended December 31, 2024.

Negatives

• The company's Liquids production in 2024 reached 1,051,654 tons, a decrease of 7.3% compared to 2023.

Risks

• Failure or delay in the implementation of tariff increases could have a material adverse effect on our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations.
• Our operations are subject to extensive regulation.
• Economic volatility in Argentina has adversely affected and may continue to adversely affect our business, results of operations, financial condition, the value of our securities and our ability to meet our financial obligations.
• High levels of inflation could negatively affect our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations.
• Restrictions on transfers of foreign currency and the repatriation of capital from Argentina may impair our ability to pay dividends or imports and investors may face restrictions on their ability collect capital and interest payments in connection with corporate bonds issued by Argentine companies.
• Fluctuations in the value of the peso may also adversely affect the Argentine economy, our financial condition and results of operations.
• Government intervention in the Argentine economy could adversely affect our business, results of operations and financial condition, the value of our securities, and our ability to meet our financial obligations.

Future Outlook

The company anticipates that the new administration's measures to deregulate the economy and the energy market will resolve issues in the energy sector in Argentina. The company also expects that the measures or strategies implemented or to be implemented by the Government in the natural gas or hydrocarbons industry will have a positive effect on its business, results of operations and financial condition.

Industry Context

The Argentine oil and gas industry is subject to extensive government regulation and control. The Argentine economy is vulnerable to external shocks that could be caused by adverse developments affecting its principal trading partners and emerging markets. The conflict between Russia and Ukraine and between Israel and Iran could adversely affect the global economy, the Argentine economy and our operational results and financial condition.

Legal Proceedings

• The company initiated legal proceedings against Decree No. 2,067/08 and the Gas Charge Resolutions, including the Government, ENARGAS and the former Ministerio de Produccin y de Planificacin Federal, Inversin Pblica y Servicios as defendants.

Related Party Transactions

• The company has entered into a technical, financial and operational assistance service agreement (the SATFO ) with Pampa Energa.
• The company has entered into an UT with SACDE for the purpose of participating jointly in the National Public Bid No. 452-0004-LPU17: Assembly of Pipes for the Construction of the Project Expansion of the Natural Gas Transportation and Distribution System.
• The company entered into a financial lease agreement with Pampa Energa.

Stakeholder Impact

• The company's performance is highly sensitive to changes in the peso-U.S. dollar exchange rate, which affects revenues, expenses, and reported financial results.
• The company's ability to increase prices in connection with international price or domestic cost increases has been limited from time to time.

Next Steps

• The company will continue to monitor the evolution of the variables that may have impact on its business.
• The company will continue to implement measures to mitigate disruption from the heavy rains that fell on the city of Baha Blanca and adjacent areas, causing floods in all the urban areas and surrounding areas.

Key Dates

Keywords

Transportadora de Gas del Sur, TGS, Financial Results, Natural Gas, Liquids, Argentina, Transportation, ENARGAS, Midstream, Telecommunications