Q2 2026 Transportadora de Gas del Sur SA Earnings Call Transcript
Key Points
- Transportadora de Gas del Sur SA (TGS) reported a significant increase in net income, rising to $133 billion in Q2 2026 from $53.8 billion in Q2 2025, driven by strong financial results and EBITDA growth.
- The company announced a Final Investment Decision (FID) for its $3 billion NGL project, with over 90% of its capacity already secured through commercial agreements, signaling strong market demand.
- EBITDA from the liquids segment more than doubled to $82.3 billion in Q2 2026, driven by higher sales volumes (up to 330,000 metric tons) and favorable international prices due to geopolitical conflicts.
- TGS received credit rating upgrades from both S&P (from B to B+) and Moody's (from B2 to B1), reflecting improved financial stability and reduced sovereign risk.
- The company's cash position grew substantially to $2,206 billion (approx. $1.5 billion), supported by prepayments from clients for 40% of the new transportation capacity, enhancing liquidity for future investments.
- The Perito Moreno pipeline expansion was approved for tax benefits under the RIG regime, reducing the project's overall cost burden.
- The natural gas transportation segment faced a negative impact from the system reconfiguration, leading to lower revenues from firm transportation contracts and reduced interruptible services, which may persist in the future.
- Higher operating costs in the liquids segment were driven by increased natural gas prices, particularly in the spot market during the winter season, compressing margins despite strong sales volumes.
- The company's financial results were negatively affected by a $46.7 billion foreign exchange loss and $15.2 billion in higher interest expenses, largely due to the $300 million bond issued in November 2025.
- The $3 billion NGL project will significantly increase capital expenditures, with peak net debt-to-EBITDA expected to reach around 3 times in 2028 or 2029, potentially straining the balance sheet.
- The transportation segment's EBITDA in dollar terms was weaker in Q2 2026 compared to Q1, as tariff increases were partially offset by inflation and the negative effects of the system reconfiguration, with only small future compensation expected.
- The company faces uncertainty regarding the approval of the RIG for the NGL project, although construction has already begun, and financing for a significant portion of the project is still being arranged.
Good morning.
Good morning everyone.
I am Carlos Almagro, Head of Investor Relations.
I would like to welcome everyone to TGS second quarter 2026 earning video conference.
TGS issue is earning release yesterday. If you did not 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 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
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