Q2 2025 Enagás SA Earnings Call

Operator: is this NRS earnings call? for the first six months of 2020. published this morning before the market opened and the figures are already available on our website.

Good morning, ladies and gentlemen, welcome to this. Narache earnings call.

For the first 6 months of 2025.

uh, earnings were

Operator: Tabli, tabli, tabli, to Enagas, to IES, Arturo González will be leading this call, which should take about 20 minutes. his presentation, after which we will start a Q&A in which we will try and answer your questions in as much detail as possible.

published this morning before the market opened and the figures are already available on our website www.es, Chief Executive Officer of nagas will be leading this call, which should take about 20 minutes.

Operator: Thank you very much.

Arturo Aizpiri: to Arturo Gonzalo. Good morning, ladies and gentlemen, and thank you very much for your attention. I'd like to welcome you to this earnings presentation for the first semester 2025.

Arturo Aizpiri: And here with me are our CFO Luis Romero, our Board Secretary and CLO Diego Trillo, our Chief Officer for Communications, Institutional and Investor Relations.

Arturo Aizpiri: Head of Investor Relations, Cesar Garcia.

Arturo Aizpiri: Head of Management, Control and Business Analysis, Natalia Mora. I will begin my presentation. These are the main milestones in the implementation. And then I will go into further detail behind the headline figures of our financial performance, which is completely in line with our expectations for the year as a whole, and in fact, even better than expected, given the capital gains booked in. semester, which I'll describe in detail later.

Diego Rodrigo: Motion gentlemen, and thank you very much for your attention. I'd like to welcome you to this earnings presentation for the first semester 2025, and here with me are our CFO who is Romero, our board secretary and CEO, Diego Rodrigo our chief officer for communications institutional and investor relations. Felicia Martine our head of investor relations Tisa Garcia and the head of management control and business analysis, Natalia Mora Hill.

Diego Rodrigo: we I will begin my presentation with the main milestones in the implementation of our

Arturo Aizpiri: Finally, I'll go over the progress we've achieved in our ESG commitments and our year-end targets and I'll wrap up. We are implementing the 2025-2030 strategy update as scheduled and in these months we have made some significant along its three main lines of action. Along the first line, supply security for Spain and Europe, during this semester, we have unquestionably demonstrated the crucial role of gas infrastructure. in guaranteeing the security of our The gas system made a decisive contribution. Getting Spain back to normal after the electricity outage we had last April 28th. Guaranteeing power. again to all consumers and in particular to combined cycle plants which went from producing approximately 5% of electricity in Spain 49% during some of the critical hours.

Diego Rodrigo: Strategic plan during the semester. And then I will go into further detail behind the headline, figures of our financial performance, which is completely in line with our expectations for the year, as a whole. And in fact, even better than expected. Given the capital gains booked in this semester, which I'll describe in detail later. Finally, I'll go over the progress. We've achieved in our ESG, commitments, and our year, end targets, and I'll wrap up with a few conclusions.

Diego Rodrigo: we are implementing the

2025 2030 strategy, update as scheduled. And in these months we have made some significant progress along. Its 3 main lines of action along the first line Supply security for Spain and Europe.

during this semester, we have unquestionably demonstrated The crucial role of gas infrastructures in guaranteeing the security of our Energy System,

Diego Rodrigo: The gas system made a decisive contribution.

Diego Rodrigo: To getting Spain, back to normal. After the electricity outage, we had last April 28th guaranteeing power. Uh,

Arturo Aizpiri: of the Outage for the Entire Country. gas infrastructures are. short and medium term, they will continue to play an essential role. just as the new green molecule. Total demand for natural gas in Spain rose 5.6% in the first six months of 2025. 7.6% And the reasons behind this number are a 41.2% increase in gas demand for electricity generation. 24.1% increase in total gas exports. in the first semester, particularly the 98.2% increase in gas exported to France, which again demonstrates that gas infrastructures are critical, not just for supply security in Spain, but also for the rest of Europe.

Diego Rodrigo: Again to all consumers and in particular to combined cycle plants, which went from producing approximately 5% of electricity in Spain to 49% during some of the critical hours.

Diego Rodrigo: Of the outage for the entire country.

Diego Rodrigo: This reflects just how strategic

Diego Rodrigo: Gas. Infrastructures are

In the short and the medium term they will continue to play an essential role in serving electricity generation Peaks and contributing to the energy transition just as the new green molecule infrastructure as well.

Diego Rodrigo: total demand for natural gas in Spain, Rose 5.6% in the first 6 months of 2025,

Diego Rodrigo: including exports.

Diego Rodrigo: Increase was 7.6%.

Diego Rodrigo: And the reasons behind this number are a 41.2% increase in gas demand for electricity generation.

Diego Rodrigo: A 24.1 increase in total gas exports.

Arturo Aizpiri: Spanish Gas System continues to stand out. Thanks to its tremendous flexibility, so far in 2025, we have received LNG and natural gas from 14 different points of origin. Spain's underground storage facilities are currently at above 75% capacity, exceeding the required 64% minimum established by the European Commission for July 2025. Also, our gas system has continued to make an outstanding contribution. decarbonization of key sectors in our economy such as lifetime ship This quarter, G&L earmarked for bunkering grew 30%.

And the first semester, particularly the 98.2% increase in gas, exported to France is behind this figure which again demonstrates that gas infrastructure, is a critical not just for Supply Security in Spain, but also for the rest of Europe.

Diego Rodrigo: Spanish gas system. Continues to stand out.

Thanks to its tremendous flexibility so far in 2025, we have received LNG and natural gas from 14 different points of origin. Spain's underground storage facilities are currently at above 75% capacity exceeding the required, 64% minimum established by the European commission for July 2025.

Diego Rodrigo: Also, our gas system has continued to make an outstanding contribution to the decarbonization of key sectors in our economy, such as Maritime shipping, this quarter gml EMR for bunkering.

Diego Rodrigo: Grew 30%.

Arturo Aizpiri: second line of action. is the controller of our operating and financial expenses. Through our efficiency plan, we've continued to hold core operating expenses in check with no increase versus the same period of last year. We are meeting our target not to let their annual compound growth rise above 1.5% 2024 to 2026. Financial income has also improved up to 46% in the year. with a reduction. in the Financial Costs of Gross Debt. 2.2% and the third area of our strategic plan, green hydrogen is making. The European Union has taken highly significant steps in this direction. A very relevant milestone took place last week.

Second line of action.

Diego Rodrigo: is the control of our operating, and

Diego Rodrigo: Financial expenses through our efficiency plan, we've continued to hold core operating expenses in check with no increase versus the same period of last year.

Diego Rodrigo: Meeting our Target, not to let their annual compound growth rise above 1 and a half percent.

From 2024 to 2026.

Diego Rodrigo: Up to 46% in the year.

With a reduction.

Diego Rodrigo: In the financial costs of gross debt.

Diego Rodrigo: Of 2.2% and the third.

area of our strategic plan, green hydrogen is making

Arturo Aizpiri: The European Commission presented its draft community budget for 2028-2034 with a five-fold increase in investments for cross-border power infrastructure. such as the Hydrogen Corridors and that. The New Multiannual Financial Framework. increases the funding from €6 billion to nearly €30 billion for the CEF for the next budget period, with the goal, as pointed out by the President of the European Commission, Mrs. von der Leyen, reinforcing energy independence and accelerating the transition to clean energy in Europe. Moreover, last July 8th, the Commission adopted the Delegated Act. In this sense, the European Commission has also launched its hydrogen mechanism to connect supply and demand for hydrogen and its derivatives and to support the development of the infrastructure.

Diego Rodrigo: Tremendous strides, both in Europe and in Spain, the European Union has taken highly significant steps. In this direction, a very relevant Milestone took place last week the European commission presented its uh,

Diego Rodrigo: Draft Community budget for 2028 2034 with a 5-fold increase in Investments for crossborder power infrastructures such as the hydrogen quarters and networks.

Diego Rodrigo: The new multi-annual Financial framework.

Increases the uh, funding from 6 billion euros to nearly 30 billion euros for the CF for the next budget. Period. With the goal, as pointed out by the president of the European commission, Mrs, Vander, lion reinforcing, energy Independence and accelerating the transition to clean energy in Europe.

Diego Rodrigo: Moreover, last July 8th, the committee, the commission, adopted the delegated Act.

Arturo Aizpiri: All EU member states are taking significant steps, for instance, the German government has just published for public consultation its Hydrogen Acceleration Draft Bill. Deeming hydrogen projects to be of overriding public interest and underlining its contribution to national security. And last week, the German energy regulator, BINETSA, announced a fixed tariff for the use of the country's core hydrogen network. Green Hydrogen also got very solid financial support from Europe and its member states. Between January and June this year, the European Commission has allocated 1.24 billion euros Funding Hydrogen Development. Figure, 992 million euros. went to the second round of the European Hydrogen Bank Auction.

Diego Rodrigo: Defining the official methodology for calculating greenhouse gas emissions from hydrogen and low carbon gases which will come to force. Once it goes through the consultation process through Parliament and Council, and once it is published with these actions Europe, will have a comprehensive regulatory framework for hydrogen offering certainty. And once again, demonstrating its commitment with the creation of a European market for this kind of Vector, in this sense, the European commission has also launched, its hydrogen mechanism to connect supply and demand for hydrogen and its derivatives. And to support the development of the infrastructure, all EU member states are taking significant steps. For instance, the German government has just published 4 public consultation, its hydrogen acceleration draft bill,

Diego Rodrigo: Deeming, hydrogen projects to be of overriding public interest and underlying its contribution to National Security. And last week, the German energy, regulator betta announced a fixed tariff for the use of the country's core hydrogen Network.

Diego Rodrigo: Green hydrogen was also got very solid financial support from Europe. And its member states. Between January and June this year. The European commission has allocated 1.24 billion euros.

For.

Diego Rodrigo: Funding hydrogen development.

Of this figure 992 million euros.

Arturo Aizpiri: which has provided a very precise snapshot of the level of maturity of renewable hydrogen in Europe. As in the first round, the message of the second round is very clear. Spain is the most competitive country in Europe for green hydrogen production, with the lowest average production price 5.5 euros per kilogram. And it's also the country with the largest number of projects presented 36 out of 61 submissions and awarded 8 out of 15. Also the one with the greatest capacity for electrolysis and production. and the country that has received the most funding. The auction has also made another message clear.

Went to the second round of the European hydrogen bank auction.

Diego Rodrigo: which has provided a very precise snapshot of the

Level of maturity of renewable hydrogen in Europe. As in the first round, the message of the second round is very clear. Spain is the most competitive country in Europe for green hydrogen production with the lowest average production price 5.5 Euros per kilogram and it's also the country where the largest number of projects presented 36 out of 61 submissions and awarded 8 out of 15. Also the 1 with the greatest capacity for electrolysis and production and the country that has received the most funding

Arturo Aizpiri: In order to connect hydrogen projects, infrastructures are essential, and 64% of the projects submitted for the second auction of the European Hygiene Bank. with an average length of 384 km per projectile. Equally relevant is the fact that 38% of the projects have a total or partial... Direct. Renewable. This is a production of the U.S. Department of State. This is a production of the U.S. Department of State. to the Electrolyzers without going through the grid. Spain is moving in the same direction as the European Union and it's consolidating its leadership in the development of renewable hydrogen in Europe.

Diego Rodrigo: The auction has also uh made another message clear in order to connect. Hydrogen, protects infrastructures are essential and 64% of the projects submitted

Diego Rodrigo: for the second auction of the European hydrogen Bank.

Diego Rodrigo: Require pipeline infrastructure with an average length of 384 kilometers per project.

Diego Rodrigo: Equally relevant, is the fact that 38% of the projects have a total or partial.

Diego Rodrigo: Direct renewable.

Diego Rodrigo: Generation connection.

Arturo Aizpiri: The Spanish government has approved an additional 377 million euros for another three hydrogen projects that were submitted to the auction but which were not shortlisted by the European Hydrogen Bank since it had exhausted it. Moreover, in the regulatory context, the Ministry for Environmental Transition and the Demographic Challenge has initiated the partial transposition of the third Renewable Energy Directive for Transport and last July 3rd. It started public consultations for its draft Royal Degree for Fostering the Development of Renewable Fuels. with targets to meet the 16.5% reduction in emissions established by the National Energy Plan for the Transportation Sector in 2030 and goals for the consumption of renewable fuels of non-biological origin, or RFNBOs, fundamentally hydrogen-driven.

Diego Rodrigo: Hydrogen in Europe, the Spanish government has approved an additional 377 million euros. For another 3, hydrogen projects that were submitted to the auction but which were not shortlisted by the European hydrogen Bank since it had exhausted. Its budget.

Diego Rodrigo: Moreover in the regulatory context, the ministry for environmental transition and a demographic challenge has initiated the partial transportation of the third renewable energy, directive transport. And last July 3rd,

Diego Rodrigo: It started public consultations for its draft, Royal degree for fostering, the development of renewable fuels.

With uh targets to meet the 16.5% reduction in emissions established by the national energy plan, for the transportation sector in 2030 and goes for the consumption of renewable fuels of non-biological. Origin or RF Moses, fundamentally hydrogen derivatives,

Arturo Aizpiri: Spain is becoming increasingly ambitious. increasing minimum 2030 demand for non-biological fuels for transportation from the EU threshold of 1% to 2.5%. Additionally, it has defined a 1.5% target for the intermediate use of these fuels. Renewable Non-Biological Fuels in Refinery. We estimate that This would be equivalent. to a minimum annual consumption of approximately or a minimum regulatory demand of approximately a hundred and eighty thousand tons of hydrogen, green hydrogen, in twenty years. And this amount could more than double. over 420,000 tons of hydrogen if RFNBOs over and above the 2.5% threshold established for the transport sector were also Vanspire Fuel and Biogas.

Diego Rodrigo: Spain is becoming increasingly ambitious.

Diego Rodrigo: Increasing minimum 2030 demand, for nonbiological, fuels for transportation. From the EU threshold of 1% to 2.5%, additionally, it has defined a 1 and a half percent Target.

For the intermediate use of these fuels.

Diego Rodrigo: renewable non-biological, fuels in refineries

We estimate that.

Diego Rodrigo: This would be equivalent to a minimum, annual consumption of approximately, or a minimum regulatory demand of approximately 180,000, tons of hydrogen green, hydrogen in 2030.

Diego Rodrigo: This amount could more than double.

Diego Rodrigo: To over 420,000 tons of hydrogen, if RF and Bows over and above the 2 and a half percent.

Threshold established for the transport sector were also to cover the 5.5%.

Diego Rodrigo: Advanced. Buy a fuel and bio gas quoter.

Arturo Aizpiri: Enagas is struck fits neatly into that of both Europe and Spain. We are moving forward in the rollout of our European Projects of Common Interest, PCIs, for hydrogen infrastructure. At great speed, we have already signed the grant agreement with the CINEA. in order to receive 75.8 million euros for the studies and engineering phase of the backbone network and associated storage and the Barmar and Salsa interconnections for the H2MED. for the Spanish Backbone Hydrogen Network, we've continued to take steps towards a final investment decision by 2027. We're designing a conceptual public participation plan for a network of 2,600 kilometers in length following its presentation in April at the National Hydrogen Center in Portollano.

Diego Rodrigo: And I got a strategy fits neatly into that of both Europe and Spain.

Diego Rodrigo: We are moving forward in the rollout of our European projects of common interest pcis for hydrogen infrastructures.

Diego Rodrigo: Great speed. We have already signed the grant agreements with the CIA you in order to receive 75.8 million euros for the studies and Engineering phase of the backbone Network, and Associated Storage, and the barmar and salsa interconnections for the H2 Med corridor.

Arturo Aizpiri: The plan has the backing of the Ministry for Environmental Transition, as well as from regional governments. I've been in contact with the presidents of all 13 autonomous communities in Spain. which will be crossed by the network to report on the deployment of the plan to them. And we've already explained the project in over a hundred municipalities in Castilla-La Mancha, Extremadura, Andalucía and Cantabria. We have also awarded the engineering... basic and detailed engineering for the pipelines, as well as for the three compression And we have started work. for the North One PCI for the development of underground hydrogen storage facilities in Cantabria.

Diego Rodrigo: As for the Spanish backbone, hydrogen Network. We've continued to take steps towards a final investment decision. By 2027, we're designing a conceptual public participation plan for a network of 2,600 kilometers in length following its presentation in April, at the national hydrogen Center in Puerto. Do the plan has the backing of the ministry for environmental transition as well as from Regional governments.

Diego Rodrigo: I've been in contact with the presidents of all 13, auten communities in Spain, which will be caused by the network to report on the deployment of the plant to them. And we've already explained the project in over a 100 municipalities in Castilla La? Mancha extremadura, Andalusia and Canaria. We have also awarded the engineering

Diego Rodrigo: Both basic and detailed engineering for the pipelines as well as for the 3 compared work on the basic engineering.

Arturo Aizpiri: During this semester we've signed a partnership agreement with our chemical group partner Solvay, who operate the mining concession where the infrastructure will be built. on Aishwarya's H2Med. continues to grow as the most mature hydrogen corridor in Europe.

Diego Rodrigo: as for the north 1 PCI, for the development of underground, hydrogen storage facilities in cantabria,

Diego Rodrigo: during this semester, we've signed a partnership agreement with our

Diego Rodrigo: Part chemical group Partners salvey, who operate the mining? Concession, where the infrastructure will be located.

Diego Rodrigo: and as far as 82 Med,

Arturo Aizpiri: Perhaps the most relevant milestone in this semester was June 25th, when we set up the SPV for the Bar Mar Interconnection, which provides a clear-cut business structure for the project. The shareholding of this joint venture will be evenly divided between Spain and France. Enagas will hold 50%, and the French operators Netran and Tarega will hold 33.3% and 16.7%. The new company's CEO will be Enagas' current... Executive, Francisco de la Flor. European Commission Support for the H2MED is decisive. In the last quarter, the Executive Vice President for the Clean, Just and Competitive Transition, Teresa Rivera, has visited the site of the Bar Mar plant and its compression station in Barcelona, and has also hosted the five development partners for H2MED in Brussels to hear about the latest developments On the technical side, we've already awarded the feasibility study for the corridor landing in Barcelona and the set of geophysical studies for Barmar.

Diego Rodrigo: It continues to grow as the most, uh, mature hydrogen quarter in Europe. Perhaps the most relevant milestone in this semester was June 25th when we set up the SPV for the barmar interconnection, which provides a clear-cut business structure for the project.

Adventure will be evenly, divided between Spain and France, and I asked will hold 50% and the French operators, nitron. And toga will hold 33.3% and 16.7% respectively.

Diego Rodrigo: The new company's CEO will be anagha's current.

Speaker Change: Executive Francisco LA FL.

European commission support for the H2. Med is decisive. And the last quarter, the Executive Vice President for the clean. Justin competitive transition has visited the site of the barmar plant and its compression station in Barcelona and has also hosted the 5 Developers for H2 Med. In Brussels to hear about the latest developments in the project.

Arturo Aizpiri: We've also launched a tender for Barmar's pre-feed engineering and basic engineering for pipelines and the two compression stations on the interconnected. specifically the Spanish core network will be essential to connect the hydrogen production project with the demand centers, the Spanish government through its. Recovery Transformation and Resilience Plan and its agenda has already awarded 3.15 billion euros in grants. to over 100 renewable hydrogen production projects with a total of about four. And on top of that, the European Hydrogen Bank has granted an additional 50 million to Spanish projects for hydrogen production. add up to an installed electrolysis capacity of approximately 4.4 gigawatts.

On the technical side, we've already awarded the feasibility study for the corridor lending in Barcelona and the set of geophysical studies for barmar. We've also launched the tender for Bar's pre-fed, engineering and basic engineering for pipelines, and the 2 compression stations on the interconnections.

Speaker Change: These infrastructures and and specifically the Spanish core network will be essential to connect the hydrogen production projects.

Speaker Change: With the demand centers, the Spanish government.

Speaker Change: Through its recovery transformation and resilience plan. And its addenda has already awarded 3.15 billion euros in Grants to over 100 renewable hydrogen production projects with a total of about 4 gigawatt. And on top of that, the European hydrogen bank has granted an additional 50 million to Spanish projects for hydrogen production.

Speaker Change: All in all.

Speaker Change: That these projects.

Speaker Change: Add up to an installed electrolysis capacity of approximately 4.4, gigawatt.

Arturo Aizpiri: The progress that we're making in Enagas fits The European Union Strategic Vision, Promoting Renewable Hydrogen as a Pillar for Three of Its Key Priorities. Strategic Autonomy, Competitiveness and Decarbonization. for decarbonization. believe that urgent action is required to tackle climate change, as shown by data and scientific evidence. 2024 was the first year in which global warming rose above the 1.5 degrees above pre-industrial levels that the Paris Accords set for 2020. and extreme climate events are becoming increasingly frequent in just five years. We will have used the. The European Commission has put out clear signals that its Green Agenda does not just remain as it is, but has actually upped the ante this month.

Speaker Change: In summary.

Progress that we're making in nlr.

Speaker Change: Fits.

Speaker Change: Neatly with the European Union. Strategic Vision promoting renewable, hydrogen as a pillar for 3 of its key priorities. Strategic autonomy, competitiveness and decarbonization

4 decarbonization.

The drive to boost green hydrogen stems from.

The belief that urgent action is required to tackle climate change as shown by data and scientific evidence. 2024 was the first year in which global warming Rose above. The 1 and a half degrees above pre-industrial levels, that the Paris code set for 2050.

Speaker Change: And extreme climate events are becoming increasingly frequent in just 5 years.

We will have used up the

Arturo Aizpiri: It raised the Greenhouse Gas Emission Target. to a 90% reduction by 2040. So decarbonization cannot be delayed.

Speaker Change: Carbon allowances. Budgeted for 2050, if we continue at this rate and the European commission has put out clear signals that its green agenda, it's not just remain as it is but has actually up the ante this month, it raised the greenhouse gas emission targets.

Speaker Change: From a 90% reduction.

To a 90% reduction by 2040.

Arturo Aizpiri: Before going through our financial performance, I'd like to briefly refer to two other especially relevant events that have taken place this semester. First is regulation. The CNMC has published, on July 4th, paper on the methodology for calculating the financial remuneration on electricity transmission and distribution and natural gas. methodology for public consultation. Tariffs resulting from using this methodology for the gas system of approximately 6.4% are very close but do not reach the minimum threshold that Enagas used for its financial projections from 2027 onwards. The Regulator's Proposal incorporates elements that are clearly positive. Nevertheless, Enagas will be presenting its comments and feedback.

Speaker Change: So decarbonization cannot be delayed before going through our financial performance. I'd like to briefly refer to 2. Other specially relevant events that have taken place this semester

Speaker Change: First is regulation the cnmc has published on July 4th its paper on the methodology for calculating the financial remuneration or electricity transmission and distribution and natural. Gas re datafication transmission and distribution uh methodology for public consultation, the tariffs resulting from using this methodology. For the gas system of approximately 6.4%, a very close but do not reach. The minimum threshold that nagas use for its Financial projections from 2027 onwards.

The Regulators proposal.

Speaker Change: Incorporates.

Speaker Change: Elements that are clearly positive.

Arturo Aizpiri: for the established deadline of August 4th. underlining the fact that the methodology to be applied to existing must be the same for gas and electricity. and that no correction factor is justified for the cost of debt since both kinds of assets have to be refinanced in the same capital markets with similar prices. After they review all the feedback, it is expected that the CNMC will publish a final methodology in the fourth quarter of the year. As for the specific CNMC public consultation on the guidelines for the Natural Gas Regulatory Framework for 2027-2032, they're also very much in line with Regulatory Vision in its 2025-2030 Strategic Update.

nevertheless, will be presenting its comments and feedback before the established deadline of August 4th,

Speaker Change: For an electricity and that no correction factor is Justified for the cost of debt since both, kinds of assets, have to be refinanced in the same Capital markets with similar prices.

After they review all the feedback, it is expected that the cnmc will publish the final methodology in the fourth quarter of the year.

Speaker Change: As for the specific cnmc public consultation on the guidelines for the natural gas regulatory framework for 2027 2032. They're also very much in line with

Arturo Aizpiri: The CNMC has emphasized that natural gas will continue to play an essential role. Supply Security and that the remuneration methodology must be adapted to promote the penetration of renewable gases and that the regulatory framework must provide incentives for gas assets and establish sustainability and efficiency requirements. In this sense, it's important to point out that Enagas is the most efficient TSO in Europe according to the Council of Europe's Energy Regulation. and for gas infrastructures to continue to ensure Security of Energy Supply, it is vital that future regulation consider not just the financial remuneration rate I've just mentioned, but also other components such as cost updates and incentives for supply continuity and the sustainability of infrastructure.

Regulatory Vision in its 2025 2030 strategic update. The cnmc is emphasized, that

Speaker Change: Natural gas will continue to.

Speaker Change: Potential role in Supply security.

Speaker Change: And that the remuneration methodology must be adapted to promote the penetration of renewable gases. And that the regulatory framework must provide incentives for gas assets, and established sustainability, and efficiency requirements.

Speaker Change: In this sense, it's important to point out that in our eyes is the most efficient TSO in Europe according to the Council of Europe's energy regulators.

And on.

Speaker Change: The spaces of a gas infrastructures to continue to ensure.

Arturo Aizpiri: And this should lead to a regulatory framework that will guarantee a fair return after taxes of between 6.5% and 7% in line with that of other European operators, which will enable us to continue to make an essential contribution to supply security.

Security of energy Supply. It is vital that future regulation, consider, not just the financial remuneration rate, I've just mentioned, but also other components, such as cost updates and incentives for Supply continuity and the sustainability of infrastructures.

Arturo Aizpiri: The second topic I'd like to refer to is the arbitration on the Gasoductos Surperuanos. GSP. Last May 23rd, the CIARI once again found in favor of Enagas rectifying the amount awarded. The total amount which Peru will have to pay Enagas is $302 million. And once the rectification appeal is resolved, the figure has been updated using prudent fair value criteria on the credit. Generating net capital gains of 41.2 million euros, which is the figure we've included in these financial statements. Subsequently, on June 2nd, the CIARI lodged a request for Annulment of the award filed by the Republic of Peru which meant it was automatically suspended on a provisional basis.

Speaker Change: And this should lead to regulatory framework. That will guarantee a fair return after taxes or between 6 and a half and 7% in line with that of other European operators, which will enable us to continue to make an essential contribution to supply Security in decarbonization.

And the second topic, I'd like to refer to you is the arbitration on the gasha r peruano.

Speaker Change: GSP last May 23rd the fee once again found in favor of inaras rectifying, the amount of warded, the total amount which Peru will have to pay Emma gas.

Speaker Change: 302 million.

Speaker Change: once the,

Speaker Change: Rectification appeal is resolved.

Speaker Change: Figure has been updated using prudent, fair value criteria on the credit rights generating, net capital, gains of 41.2 million Euros which is the figure with included in these financial statements.

Speaker Change: subsequently on June 2nd, the CRA large the request for

Speaker Change: An all of the award filed by the Republic of Peru.

Speaker Change: Which meant who?

Arturo Aizpiri: Last week, the CIADI Secretary General proposed the ad hoc committee members that will rule on this matter, which is an important step towards the restoration of the United States In the moment, we were notified of the award until the provisional stay and its execution. We've optimized our cash and bank balances in Peru, and we currently hold deposits in financial institutions in Peru for a total of $72 million, which exceeds the quantity of the collateral assigned to the Peruvian authorities in compliance with provisions of Law 30737 and its regulations.

Speaker Change: Was automatically suspended on a provisional basis. And last week, the CRA Secretariat General proposed the ad hoc committee members that will rule on this matter which is an important step towards the resolution of this case.

Arturo Aizpiri: Likewise, we're still waiting for the CIA to rule on the second arbitration case regarding Transportadora de Gas de Peru or TJP.

Speaker Change: From the moment we were notified of the award until the provisional stay on its execution. We've optimized our cash and Bank balances improve and we currently hold deposits and financial institutions in Peru for a total of 72 million, which exceeds the quantity of the collateral assigned to the Peruvian authorities in compliance with the provisions of Law, 30737 and its regulations. Likewise, we're still waiting for the fee to rule on the 2nd arbitration case.

Speaker Change: Regarding transportation tgp.

Arturo Aizpiri: Let me now review the most relevant figures in our financial performance. the first semester of the year. I bet that was 329.3 million euros. sharks with our urine. After Tax Profit June 30th, 2025 was 176 million euros. This includes the capital gains from the rectification of the GSP award in Peru and the sale of our stake in the Soto La Marina station in Mexico. Current Profile Without one-offs was $129.8 million. Apart from these two transactions, there are four factors driving the performance we're reporting for the first half of the year. The impact of the regulatory framework, the effectiveness of our efficiency plan, which has enabled us to keep our core operating expenses on the phone.

Speaker Change: Let me now review the motel events because in our financial performance,

Speaker Change: The first semester of the year a bit that was 329.3 million euros.

Speaker Change: And track with our year end Target after tax profit.

Speaker Change: June 30th 2025 was 176 million euro,

This includes the capital gains from the rectification of the GSP award in Peru.

Speaker Change: And the sale of our stake in the Soto La Marina station in Mexico.

Speaker Change: The current profits.

Speaker Change: Without 1 offs was 129.8 million euros.

Speaker Change: These 2 transactions, there are 4 factors driving the performance. We're reporting for the first half of the year.

Speaker Change: The impact of the regulatory framework.

The effectiveness of our efficiency plan, which has enabled us to keep our core operating expenses.

Speaker Change: On the control in line. With targets of our strategy plan, better Financial returns connected to the significant reduction in the company's debt down to 2. 2 9.

Arturo Aizpiri: fixed rate debt, now represents over The Rating Agencies, Standard & Poor's, and FIT. have ratified Enagas' BBB plus rating with a stable outcome. We have an FFO to net debt ratio of 28.3% and our liquidity position is extraordinarily comfortable with 2.73 billion USD. And fourthly, our subsidiaries have contributed 80.1 million euros to our bid. which reflects their excellent performance. Keep in mind that in 2024, we sold our stake in Solgrass Energy and in the Soto de la Marina.

Our fixed rate debt. Now represents over 80% of the total.

Speaker Change: Uh, the rating agencies standard and force and fit.

Speaker Change: Have ratified and I says, Triple B plus rating with a stable Outlook.

Speaker Change: We have uh ffo to net debt ratio of 28.3% and our liquidity position is extraordinarily comfortable with 2.73 billion euros.

And fourthly our subsidiaries have contributed 80.1 million euros to our Aida, which reflects their excellent performance. Keep in mind that in 2024. We sold our stake in total, grass energy, and in the Soto, La Marina station,

Arturo Aizpiri: tap continues to be vital. for Supply Security in Europe, and Sinti. It started operations, it has transported over 45 BCMs of natural gas to the continent. The company continues to work on... the 1.2 BCM expansion. scheduled for January 2026, together with our consortium partners Hanseatic Energy Hub, we have continued construction of the two LNG storage tanks of 240,000 cubic meters each in the Stade plant in Germany. Tanks which will be set up for renewable ammonia, reinforcing the flexibility and sustainability of that terminal. DESFA has received an award of 5.4 million euros in CF funds for the technical environmental studies for the PCI H2 DREA for the Greek section of the Southeast European Hydrogen Corps.

Speaker Change: Tap continues to be vital.

For Supply Security in Europe. And since it started operations, it has transported over 45. Bcms of natural gas to the continent. The company continues to work on the 1.2 BCM expansion.

Speaker Change: Schedule for January 2026. Together, with our Consortium Partners HCA energy Hub, we've continued construction of the 2 lgn Germany.

Tanks, which will be set up for renewable. Ammonia reinforcing the flexibility and sustainability of that terminal.

Speaker Change: Thus far has received an award of 5.44 million euros in CF.

Speaker Change: Funds for the technical Environmental Studies for the PCI H2, dra for the Greek section of the southeast European hydrogen quarter.

Arturo Aizpiri: Meanwhile, Enagas Renovables Project with Repsol, Moeve and CIP have received over 50% of the grants awarded under the latest Hydrogen Valley's program of the Ministry for Environmental Transition and Demographic Challenge, around 650 million euros. And finally, in the field of sustainable mobility, Scale Green Energy has signed a grant agreement with the CINEA to develop six hydrogen refueling stations within the Eco High Net project.

Speaker Change: Meanwhile, and I asked for no Lovelace projects.

Speaker Change: with reps or more and CIP have received over 50% of the Grants, awarded under the latest

Speaker Change: Hydrogen values programme of the ministry for environmental transition and demographic challenge around 650 million euros. And finally, in the field of sustainable Mobility. Scale green energy has signed a grant agreement with the CIA to develop 6. Hydrogen refueling stations within the echo High net project.

Arturo Aizpiri: And this semester, we've also continued to meet our ESG commitment. and all three lines, environmental, social and corporate governance. And thanks to this, as you can see in this presentation, we have maintained our leadership positions in the key sustainability indexes globally, and just to mention some of... recent examples, we've been ranked on the A-list in the CDP Supplier Engagement Leader. for their ongoing commitment with sustainability and their strategic focus. we applied to involve our suppliers in the fight against climate change. Likewise, Enagas has been appointed the best company in the world in gender equality by Equivis.

Speaker Change: In this semester, we've also continued to meet our ESG commitments.

On 3, lynes environmental, social and corporate governance.

Speaker Change: And thanks to this. As you can see, in this presentation, we have maintained our leadership positions in the key. Sustainability, indexes globally. And just to mention some of, uh,

Speaker Change: Recent examples. We've been ranked.

On the A-list, in the CDP supplier engagement leader.

Speaker Change: For our ongoing commitment with sustainability and the Strategic Focus, which we apply to involve our suppliers in the fight against climate change.

Speaker Change: Likewise and a gas.

Arturo Aizpiri: Equilib. For more information visit www.fema.gov about complying with our objectives for 2025. With the results we bring to you today, we meet the expectations as we announced at the beginning of the year and if we, particularly if we consider non-recurring deals. I will remind you that this presentation involves profit after tax. of 265 million euros and EBITDA of 670 million euros. a year and net debt of approximately 2.4 billion euros and maintaining our funds from operations to net debt ratio above 15% remains compatible with our triple B plus credit rating. We have a sound balance sheet, which along with prudent regulatory assumptions is or can be matched with our priority to provide attractive, sustainable returns to our shareholders and maintaining our dividend payout policy of one euro per share beyond 2026.

Speaker Change: Has been appointed the best company in the world and gender equality by equity.

Speaker Change: Equity.

Speaker Change: About complying with our objective for 2025, with the results, we bring to you. Today, we meet the expectations as we announced that the beginning of the year. And if we particularly, if we consider non-recurring deals,

Speaker Change: I will remind you that uh, this pronation involves uh profitable after tax.

Speaker Change: Of 265 million euros and ebit, dial 670 million euros.

Speaker Change: And maintaining our funds from operations to net debt, ratio above, 15% remains compatible with our Triple B Plus credit ratings.

Speaker Change: we have a sound balance sheet which along with prudent regulatory assumptions is um or can be matched with our priority to provide attractive, sustainable returns to our shareholders and maintaining our dividend payout policy of 1 euro per share Beyond 2026

Arturo Aizpiri: So I will wrap this up with six conclusions. Our half-year performance shows a high degree of success in rolling out the 2025-2030 strategy update as presented in February. And Enagas is clearly well-positioned for the future with a sound balance sheet compatible with its sustainable dividend policy. Gas infrastructures play a critical role in guaranteeing the security of the power system and to enable Spain and Europe to transition to more sustainable energy. As published by the CNMC, The 2027-2032 regulatory framework needs to establish a fair return on investment to motivate long-term sustainability. Decarbonization requires renewable electrons and also renewable molecules.

Speaker Change: So I will wrap this up with 6 conclusions. Our half-year performance shows a high degree of success in rolling out. The 2025 20303030 strategy update as presented in February and anagha's is clearly. Well positioned for the future with the sound, balance sheet, compatible with sustainable dividend policy.

Gas infrastructures, play a critical role in guaranteeing, the security of the power system and to enable Spain and Europe, through transition, to more sustainable energy as published by the cnmc.

Speaker Change: The 2027 2032 regulatory framework needs to establish, a fair return on investment to motivate long-term sustainability.

Arturo Aizpiri: Europe and Spain are moving fast towards a full take-up of green hydrogen with sound institutional, financial, and regulatory support. Carbonization must be competitive, and on this matter, Spain has a lot to say. No other country in Europe has the same level of mature market or such lively competition for producing green hydrogen. Hydrogen infrastructures are vital to take advantage of this potential, and we are rolling out our investment plan, as announced in the strategy update, with significant progress both in the core Spanish hydrogen network and in the European H2MED corridor. And last but not least, Europe has reaffirmed its commitment to decarbonization.

Speaker Change: Decarbonization requires renewable electrons and also renewable molecules Europe, and Spain are moving. Fast towards a full. Take up of freeing hydrogen with sound institutional financial and Regulatory support.

Speaker Change: Carbonization must be competitive. And on this matter, Spain has a lot to say no other country in Europe has the same level of M, mature Market or such Lively competition for producing green. Hydrogen hydrogen, infrastructures. Are vital to take advantage of this potential and we are rolling out. Our investment plan as announced in the strategy update.

Speaker Change: With significant progress, both in the core, Spanish, hydrogen Network, and in the European age to Med corridor.

Speaker Change: And last but not least, Europe has reaffirmed, its commitment to decarbonization.

Arturo Aizpiri: Disproving rumors of a hypothetical slowdown in the fight against climate change. This is completely in line with Enagas' strategy. Scientific evidence clearly shows that we cannot afford to bring down our level of ambition. Decarbonization is urgent, and at the same time, it is a duty and an opportunity for Europe, for Spain, and for Enagas. Thank you very much.

Speaker Change: Disproving rumors of a hypothetical slowdown in the fight against climate change.

Operator: Now, if you wish, we will be glad to take your questions. for starting the Q&A period, please go ahead. Thank you.

This is completely in line with anag gas's strategy. Scientific evidence. Clearly shows that we cannot afford to bring down our level of ambition, the carbonization is urgent, and at the same time, it is a duty and an opportunity for Europe. First pain, and for anagha's, thank you very much. Now if you wish, we will be glad to take your questions.

Speaker Change: For starting the Q&A period, please go ahead.

Operator: Ladies and gentlemen, the question and answer period is open. If you wish to participate, please press star 1 on your phone keyboard. Thank you.

Javier Suarez: Our first question comes from Javier Suarez from Mediobanca. Please go ahead, Javier. Yes, hello and good day everyone. Thank you for that presentation. I have two or three questions.

Speaker Change: Thank you. Ladies and gentlemen, the question and answer period is open. If you wish to participate, please press star 1 on your phone keyboard. Thank you.

Our first question comes from Javier Suarez from Medio banca please. Go ahead Javier.

Javier Suarez: Yes, hello. And good day everyone. Thank you for that presentation. I have 2 or 3 questions.

Javier Suarez: The first one is about the regulatory bill. The bill for regulation published early this year. by the CNMC. And I would like to Understand the rationale Enagas will provide to and has a remuneration in your presentation. You state that the remuneration calculation for the gas network would be approximately 6.4 and you consider that this payout should rise to 6.5 or 7. So what factors should be improved according to you and the regulation to shift that regulation a little bit higher?

Javier Suarez: the first 1 is about the, uh, regulatory uh, bill

Javier Suarez: The bill for regulation published early this year?

Javier Suarez: by the cnmc and I would like to

Javier Suarez: Also, I understand that when you talk about this regulation you're talking about existing assets but not investments proposed to create a next novel hydrogen network. So my second question is what should be the remuneration? Spread or margin for those assets connected to hydrogen? Well, that was the first question.

Speaker Change: Understand the rationale and a gas will provide to enhance the remuneration in your presentation. You state that the remuneration calculation for the gas Network would be approximately 6.4 and you consider that this payout should uh, rise to 6.5 or 7. So, what factors should be improved according to you and the regulation to shift that regulation, uh, a little bit higher. Also I understand that when you talk about this regulation, you're talking about existing assets but not investment proposed to create a next Noble, hydrogen Network. So my second question is what should be the uh, Ray minor?

Javier Suarez: The second one is about adjustment. to the GSB Compensation. I understand that in calculating the net present value You also adjusted the discount rate and the period during which you consider you will get that GSP compensation. Could you provide further details to understand the way you calculated these figures and to understand how much...

Speaker Change: Spread or a margin for those assets connected to hydrogen. Well, that was the first question. The second 1 is about adjustments.

To uh, the uh, GSP compensation.

Speaker Change: I understand that and calculating the net present value.

Speaker Change: You also adjusted the discount rate and the period during which you consider you will get that GSP compensation.

Javier Suarez: The reception of that money could take and the third one is about the Spanish Hydrogen Bank. Operations are expected to start in early 2030, so could the CEO please give us an update on that starting point? Because it feels a tiny bit too ambitious today. So how can you give us reassurance that this schedule could be maintained or delayed beyond 2030? Thank you.

could you provide a further details to understand the way you calculated this figures and to understand how much uh, uh

Speaker Change: The reception of uh, that uh, money could take and the third 1 is about the Spanish hydrogen Bank.

Speaker Change: Operations are expected to start in early 2030 so could the CEO. Please give us an update on that starting point because it feels a tiny bit too ambitious today. So how can you give us reassurance that this schedule could be maintained or delayed Beyond 2030? Thank you.

Arturo Aizpiri: Well, thank you, Javier, for that question.

Arturo Aizpiri: Good day to you. First of all, about the proposed rate of financial retribution or remuneration published by the CNMC. Their proposal already includes a specific value for the electric industry, which is 6.44. And although they offer a detailed methodology for gas, they do not provide the final data for the gas system vis-à-vis the TRC. So we applied the same methodology and we get 6.4%. slightly below the remuneration of the power industry and slightly below the minimum we consider necessary of 6.5% as we show in our forecasts. The key element for us, Javier, and the TRF methodology published by the CNMC.

Speaker Change: Well, thank you. Javier for that question. Good day to you.

Speaker Change: first of all,

Speaker Change: About, uh, the proposed rate of financial retribution Pub or remuneration published by the cnmc.

Speaker Change: Their proposal already includes a specific value for uh, the electric industry, which is 6.44. And although it, they offer this, a detailed methodology for gas, they do not provide the final, uh, data for uh, the gas system.

Speaker Change: Visa V the TRC. So we applied the same methodology. And we get 6.4%?

slightly below the remuneration of the power industry and slightly below the minimum we consider necessary of 6.5% as we show in our forecasts, the key element for us, Javier,

Arturo Aizpiri: We read about a reducting ratio applying on the cost of debt in the gas system. Four assets considered BAU, business as usual. with this reduction is about 2.5% of the cost of debt annually and this reducing coefficient is increased with the rationale that the gas system needs to develop lower CAPEX. lower refinancing needs and therefore lower cost of refunding. We believe that this does not necessarily match the truth. The existing assets of the gas and power system were financed in the same capital market. and will have to continue to refinance in the same market. Lower refinancing needs do not represent a lower cost of debt.

And the trf methodology published by the cnmc.

We read about, uh, reduct ratio applying on the cost of debt in the gas system.

4 assets, considered be Au business as usual.

With this, uh, redo or this reduction is about 2.5% of the cost of debt annually. And this reducing coefficient, is increased with the rationale that the gas system needs, uh, to develop lower capex.

Speaker Change: Lower refinancing needs and therefore lower cost of refunding.

Speaker Change: We believe that this does not necessarily match the truth, the existing assets of the gas and power system were financed

Speaker Change: in the same Capital markets.

And will have to continue to refinance in the same markets.

Speaker Change: Lower refinancing needs are do not.

Speaker Change: Represent a lower cost of debt.

Arturo Aizpiri: not by any stretch, so we believe it's a sound rationale to say that such reduction ratio or coefficient should not exist as it introduces an unjustified difference between the cost of debt in the electricity system and in the gas system for existing assets, for present assets. for newly built assets in the future.

Speaker Change: Not by any stretch. So we believe it's a sound rationale to say that such reduction ratio or coefficient should not exist as it. Introduces an unjustified difference between the cost of debt in the electricity system and in the gas system for existing assets for present assets.

Speaker Change: For newly built Assets in the future. We

Arturo Aizpiri: Upon deploying renewable gas systems, we will have to deploy the same incentives as for deploying the electric network in the future. And this is a part of all the forecasts made by the CNMC for future natural gas assets. an incentive will be required. How much? Well, we believe that those assets will require a remuneration rate ranging between 7.5 and 8 percent. We need to think that other remuneration elements in the gas system allowing an increase in the total post-tax profit to 6.5 or 7% will not be present in new renewable gases assets, particularly green hydrogen, so we will need a TRF with a delta that will places between 7.5 and 8%.

Speaker Change: upon deploying renewable gas systems. We will have to deploy the same incentives as for deploying, the electric Network in the future.

Speaker Change: and this is a part of all the, uh, all the

Forecasts made by the cnmc for future natural gas assets.

Speaker Change: Uh, an incentive will be required.

Speaker Change: how much well we believe that those assets will require a remuneration rate ranging between 7.5 and 8%

Speaker Change: Or 7% will not be present in new renewable, gases assets, particularly green hydrogen. So we will need a trf where the Delta that will place us.

Between 7.5 and 8%.

Arturo Aizpiri: As for GSB and the adjustments we introduced in our plan. Obviously, we have been very cautious and prudent. We do realize that there are new court initiatives like the Appeal for Annulment. Admitted to court by the CIADI Secretariat as established in their regulations. We believe that this might lead to a delay of up to one year, that means late 2030. for the collection of the right of credit established or ruled by the Arbitration Court. That leads us to a prudent value of the recoverable amount of approximately $60 million after taxes. Thank you. Converted to Euros would be 41.2 As for the Backbone Network...

Speaker Change: As for GSP and the adjustments we introduced in our plan.

Speaker Change: Obviously.

We have been very cautious and prudent.

Speaker Change: We do realize that there are new, uh, coordinators like the, uh, um, appeal for an all meant.

Speaker Change: Admitted to court by the uh, ciadi Secretariat as established in their regulation.

Speaker Change: We believe that this might lead to a delay of up to 1 year. That means late 2030.

Speaker Change: For the collection of the right of credit established or ruled by the um arbitration court that leads us to a prudent value of the recoverable amount of approximately 60 million dollars after taxes.

Speaker Change: which,

Speaker Change: Converted to Euros would be 41.2.

As for the backbone Network.

Arturo Aizpiri: We maintain our intention and our schedule for the backbone network to be commissioned in 2030. And we're doing, we're taking every step. to meet that deadline were conducting all the studies, engineering, consultations. We are counting on the involvement of the Spanish government and local administrations. We are working on the planning for the entire procurement process for the backbone network. We're launching RFCIs to all suppliers. We are certifying vendors and suppliers and we're doing everything we can for the plan to be commissioned in time. It is certainly a significant challenge. I admit it, but we continue to maintain our deadline and because we are convinced we can meet our promise to commission in 2030.

Speaker Change: We maintain.

Our intention and our schedule for the backbone Network to, uh, be commissioned in 2030. And we're doing, we're taking every step.

To meet that deadline. We're conducting all the studies engineering consultations.

Speaker Change: We are counting on the involvement of the Spanish government and local Administrations.

Arturo Aizpiri: Do we witness delays in Europe? I would say yes, but those are very limited. The European Directive states that the regulated hydrogen system in Europe should be in force by 2033. And we can see that member states are setting up deadlines for their hydrogen infrastructures in a range that goes between 2030 and 2032. So maybe not for the backbone, but for other elements of the European structure, they might be a slight delay of, say, two to three years, considering the actual deadline established by the directive. in view of the projects and initiatives launched and commitments acquired by different member states.

We are working on the planning for the entire procurement process for the backbone Network or launching our seis to all suppliers. We are certifying vendors and suppliers and we're doing everything we can for the plan to be commissioned in time. It is certainly a significant challenge. I admitted that we continue to maintain our deadlines and because we are convinced we can meet our promise to uh Commission in 2030.

Do we witness uh delays in Europe? I would say yes but those are very limited. The European directive.

Speaker Change: States that the regulated hydrogen system in Europe.

Speaker Change: Should be enforced by 2033 and we can see that member states are setting up deadlines for their hydrogen, infrastructures.

And arrange that goes between 2030 and 20302. So maybe not for the backbone, but for other elements of the European structure, they might be a slight delay of say, 2 to 3 years, considering the actual deadlines established by the directive.

Arturo Aizpiri: I would highlight Germany, for instance. Germany is bound to be the heart of the European hydrogen network, not only because of geographic reasons, but also because most of the consumption is located in that country. As I said during my presentation, Germany already has a full legal framework for hydrogen. Even tariffs have been approved. And we know that the hydrogen network in Germany will be launched this year and will be completed by 2030. So, Spanish backbone and European infrastructures might take until 2032, but in any case compatible with the directives deadline of 2033.

Speaker Change: And view of the projects and initiatives, uh, launched and commitment acquired by different member states.

Speaker Change: I would highlight Germany. For instance, Germany is bound to be the heart of the European hydrogen network, not only because of geographic reasons, but also, because most of the consumption is located in that country. As I said during my presentation, Germany already has a full legal framework for hydrogen.

Speaker Change: Even tariffs have been approved.

Arturo Aizpiri: Thank you, Javier.

Speaker Change: And we know that the hydrogen Network in Germany, will be, uh, launched this year and will be completed by 2030. So, Spanish backbone and European. Infrastructures might take until 2032, but, uh, in any case compatible with the directives, uh, deadline of 2033. Thank you Javier.

Operator: Next question.

Speaker Change: Thank you, Javier. Next question.

Javier Garrido: The next question comes from Javier Garrido from JP Morgan, please go ahead. Hello, good day, and thank you very much for taking our questions. My first question is about demand. for Hydrogen. You have explained in detail the developments. uh... coming ahead and law and regulation and backbone network seem to be moving ahead but can you tell us about the expected evolution of hydrogen demand and the apparent lack of interest in signing new contracts. Is it a concern for you to see that the future contract hydrogen market is not taking off? Are you at all worried about that?

Speaker Change: The next question comes from Javier go from JP Morgan, please go ahead.

Speaker Change: Hello. Good day. And thank you very much for taking our questions.

and,

Speaker Change: For hydrogen.

you have explained in detail, the development, uh,

Speaker Change: uh, coming ahead and law and Regulation, and backbone networks seem to be moving ahead. But can you tell us about the expected evolution of hydrogen demand and the apparent lack of Interest?

Javier Garrido: And the second question is about Spain. When do you expect those 4.4 gigawatts of electrolyzing capability receiving public funding in Spain to be ready? And third Pretty much related to the second, what do you think the total demand will be for green hydrogen in 2030 in Spain? particularly after the progress brought by the transposition of the NET3 Directive in Spain. And thank you, Javier.

Speaker Change: Uh, in signing new contracts. Is it a concern for you to see that the future contract hydrogen Market is not taking off? Are you at all worried about that? And the second question is about Spain. When do you expect those 4.4 gigawatt of electrolyzing capability, receiving Public Funding in Spain? To be ready and third?

Speaker Change: Pretty much related to the second. What do you think the total demand will be for green hydrogen in 2030 in Spain?

Particularly after the progress brought by the transposition of the net 3 Direct in Spain. Thank you.

Javier Suarez: And thank you, Javier.

Javier Garrido: about The forecasts for green hydrogen demand in Europe allow me to introduce a nuance here. I wouldn't call it a lack of interest in contracts. I would say that large hydrogen consumers are trying to get maximum Visibility possible on the regulation framework and the legal framework. And this requires the transposition of the REDD3 Directive, as it will be the first big driver to create regulatory demand in Europe. And we're just beginning to see. How the Transposition Takes Place. I would say that even exceeding the deadlines because the REDD3 Directive should have been implemented already or transposed, but these things take time and all member states are showing some degree of delay.

about, uh,

Javier Suarez: the forecasts for green hydrogen demand in Europe, allow me to introduce a new ones here. I wouldn't call it a lack of interest in contracts. I would say the large hydrogen consumers are trying to get maximum.

Visibility possible on the regulation framework and the legal framework.

Javier Suarez: And this requires the transposition of the red 3 direct, as it will be the

Javier Suarez: First, Big Driver to create regulatory demand in Europe.

Javier Suarez: And we're just beginning to see.

How the transposition takes place.

Javier Garrido: As I have said in more than one occasion, the use of gray hydrogen in Spain and industry is approximately 650 tons. The PANEEC, the national plan establishing a target of up to 74% of the present demand to be turned to green hydrogen rather than grey, plus our new obligations in the transportation industry that go beyond the hydrogen being used for Land Transportation Fuels. We have seen that just by transposing the Directive for Transportation, the demand stands between 180 and 200 tons of... a mandatory demand to continue to maintain the levels of transportation in Spain and we're still yet to transpose the directive on the industry side.

Javier Suarez: I would say that even exceeding, the deadlines because the red 3 direct should have been implemented already or transposed, but these things take time and all members states are um, showing some degree of delay. As I have said, in more than 1 occasion, the use of Grey hydrogen in Spain and Industry is approximately 650 tons.

Javier Suarez: The paneer, the national plan establishing a target of up to 74% of the present, demand to uh be turned to Green hydrogen rather than gray. Plus our new obligations in the transportation industry that go beyond the hydrogen being used for uh,

Javier Suarez: Land Transportation fuels.

Javier Suarez: we have seen that just by transposing the directive for transportation, the demand stands between 180 and 200 tons of

Javier Suarez: Uh mandatory uh demand to continue to maintain the levels of Transportation in Spain, and we're still yet to transpose the directive on the industry side.

Javier Garrido: which will probably be more complex as it pertains to different ministries. Plus, there are other drivers already on the way like the refuel EU aviation. This year, or as of this year, CRNBO is supposed to be included in air fuel and the fuel EU maritime doing the same thing for sea transportation. So the numbers we get while studying market data in our call for interest. We may have a demand of approximately one million tons of green hydrogen around 2030. So I wouldn't say demand is not taking off. I would say that uptakers are waiting for maximum visibility.

Javier Suarez: Which will probably be more complex as it, uh, uh, uh, pertains to different Ministries. Plus there are other drivers already on the way like the refuel EU Aviation

this year.

Or as of this year here in BO is supposed to be included in, uh, air fuel and the, uh, fuel EU Maritime doing the same thing for sea Transportation. So the numbers we get while studying

Javier Suarez: Market data in our call for interest.

Javier Garrido: And also, Javier, they want visibility on the infrastructure, because in the absence of infrastructure, there can be no market. Without infrastructure, many contracts cannot stand.

Javier Suarez: We may have a demand of approximately 1 million, tons of green hydrogen, uh, around 2030. So I wouldn't say demand is not taking off. I would say that. Uptake, ERS are waiting for maximum visibility

Javier Suarez: And also Javier they want visibility on the infrastructure because in the absence of infrastructure there can be no Market without infrastructure. Many contractor cannot

Javier Garrido: One thing I find very interesting is the contract signed by Total Energies with RWE to provide 45,000 tons of hydrogen per year. Produced by RWE and carried along 600 kilometers of backbone network to supply the Leuna refinery in Germany for Total. So, there's no contract without backbone network, there's no hydrogen market without a backbone network and big uptakers will not be able to meet the European demand to integrate green hydrogen into their projects. So this element, uh... is also a headwind. The higher the visibility on infrastructure timing, the faster this demand will, as you say, take off, which requires regulatory and infrastructure availability, visibility.

stand.

1 thing I find very interesting is the contract signed with by total energies with rwe to provide 45,000 tons of hydrogen per year.

Javier Suarez: Backbone Network to supply the loona refinery, uh, in Germany for total.

Javier Suarez: So there's no contract without backbone Network. There's no hydrogen Market without a backbone Network, and beg up. Takers will not be able to meet the European. Demand to integrate, green, hydrogen into their projects.

Javier Suarez: so this element, uh,

Javier Suarez: Is also a headwind, the higher the visibility.

Javier Suarez: On infrastructure timing.

Javier Garrido: About the 4.4 kilowatts, Javier, I do not have the details with me, but considering. the deadlines established by the regulation of the European Hydrogen Bank for the commissioning of projects. After signing the grant agreements, my estimate is that those 4.4 gigawatts should be commissioned approximately in 2030. I believe this was a rounded up answer on total hydrogen demand by 2030 and the transposition of the directive.

Javier Suarez: The faster this demand will, as you say, take off, what requires Regulatory and infrastructure availability visibility about the 4.4 kilowatts kavier? I do not have the details with me, but considering

Javier Suarez: The deadlines established, uh, by the regulation of the European hydrogen bank for the commissioning of projects, after signing, the grant agreements. My estimate is that those 4.4 gigawatt should be commissioned approximately in 2030.

Javier Garrido: Beyond my answer, I would like to send out an optimistic message about the development of hydrogen. We are immersed in a project that has no turning back. It is gaining momentum. Member States make it clear with actions over 3 million euros have been granted to hydrogen production by the Spanish administration and that is only during the first half of the year over 1 billion granted by the EU and The same situation is repeated in other European countries. So hydrogen is here. It is happening and well uptakers need to have greater visibility which is becoming more and more specific in recent months.

Javier Suarez: I believe this was a rounded up answer on total hydrogen Demand by 2030 and the transposition of the directive beyond my answer. I would like to send out uh, an optimistic message about the development of hydrogen. We are immersed in a project that has no turning back. It is gaining momentum.

Member states uh make it clear with actions over 3 million euros have been granted to hydrogen production by the Spanish Administration and that is only during the first half of the year over 1 billion granted by the EU and the same situation is repeated another European countries. So hydrogen is here. It is happening.

Javier Suarez: And well uptaken need.

Javier Garrido: Thank you. Thank you, Mr. CEO.

Javier Suarez: To have greater visibility which is becoming more and more specific in recent months. Thank you.

Operator: Please let's go ahead with the next question.

Thank you, Mr. CEO. Uh, please let's uh, go ahead with the next question.

Fernando Lafuente: The next question comes from Fernando LaFuente from Alantra, please go ahead. Hello, good morning everyone and thank you for the presentation. My question is about investment in the backbone network. Is there any sort of update on your estimate? Are your estimates the same as they were six months ago? And in that context, and those small delays you were talking about, you made a comment on the sustainability of euros and the dividend beyond 2026. So what are your numbers on or your estimates for investments in 27, 28? and how sustainable it would be to confirm the sustainability of euros of the euro beyond 2026.

Speaker Change: The next question comes from Fernando La Fuente from alantra.

Javier Suarez: Please go ahead.

Speaker Change: Hello. Good morning everyone and thank you for the presentation. My question is about investment in the backbone Network.

Is there any sort of update on your estimate or your estimate the same as they were 6 months ago?

Speaker Change: And in that context, and those small delays, you were talking about, you made a comment on the sustainability of euros and the dividend Beyond 2026.

Speaker Change: So, what are your numbers on or your estimates for investments in, uh, 2728.

Fernando Lafuente: Thank you.

Speaker Change: And how sustainable it would be to confirm the sustainability of Euros of the Euro Beyond 2026. Thank you.

Fernando Lafuente: Good day, Fernando. Thank you for your question. both on the side of investments on hydrogen projects and on dividend payout beyond 2026. We do stand in the same position we stood when we provided the strategy update in February. So on investment on hydrogen projects. In gross numbers, Enagas is $4.4 billion. while discounting public funding, which provides a net investment of $3.14 billion. We do not have any new cost estimates. The data we get as in basic and detailed engineering move ahead to confirm these. forecast numbers. We are moving ahead on basic and detailed engineering for the entire line structure and also in basic extended basic engineering for compression stations.

Speaker Change: Today, Fernando, thank you for your question.

Speaker Change: both on the side of Investments on hydrogen projects and on

Speaker Change: Uh, dividend payout Beyond 2026. We do stand in the same position we stood when we provided the strategy update in February.

Speaker Change: So on investment on hydrogen project in gross numbers, and our gases is 4.4 billion.

Wow. Discounting Public Funding, which provides a net investment of

Speaker Change: 3.14 billion.

Speaker Change: We do not have any new cost estimates the data. We get as in basic and detailed engineering. Move ahead, do confirm these

Fernando Lafuente: We're also moving ahead. The detailed engineering for these stations will have to wait until the compressors are selected when the time comes. But all the present data confirm our initial estimate. So as engineering moves ahead and the final maps are traced, perhaps we can make a more accurate estimate. all other financial magnitudes for the company. stay or remain in line with our numbers for February, which comes to reinforce Enagas' commitment to the sustainability of our payout of one euro per share beyond 2026. So these first elements we hear from the new regulation period tend to confirm.

Speaker Change: Forecasts numbers. We are moving ahead on basic and detailed engineering for the entire line structure and also in basic extended basic uh, engineering for compression stations, we're also moving ahead. The detailed engineering for these stations will have to wait until the compressors are selected. When the time comes.

Our initial estimate. So, as engineering, uh, moves ahead and the Final maps are traced, perhaps we can make a more accurate estimate.

Speaker Change: All other Financial magnitudes for the company.

Speaker Change: Stay or remain in line with our numbers for February, which comes to reinforce in a gases commitment to the sustainability of our payout of 1 euro per share Beyond 2026.

Fernando Lafuente: our commitment and our forecast.

Speaker Change: so these first, uh elements we hear from the new regulation period tend to confirm

Luis Urrestarazu: I will still ask Luis, nonetheless, to remind you How our 40 or 45 percent payout of the FCO is maintained considering the updated forecasts we have. Thank you, Fernando.

Our commitment and our forecast. I will still ask Louise. Nonetheless.

Speaker Change: To.

Speaker Change: Remind you.

Speaker Change: How our 40 or 45%? Uh payout. Uh the SEO is maintained considering the updated forecasts. We have. Thank you Fernando.

Luis Urrestarazu: Yes, good morning, Fernando. I would say the first thing we need to make clear is that in the past 18 months, Enagas has made a significant effort to reinforce its balance sheet. If we compare this to the strategy plan we communicated in 2022, the company will be closing 2026 with a net debt to build in under expectations, meaning that the new regulation period 27 to 32 will have a new net debt provision of approximately 20 to 21 percent. That is nearly 600 basis points above the requirements of rating agencies, which gives us a huge extra leverage capability.

Speaker Change: Yes, good morning Fernando. I would say the first thing we need to make clear is that and the past 18 months and a gas has made a significant effort to reinforce its balance sheet. If we compare this to the strategy plan, we communicated in 2022, the company will be closing 2026 with

Luis Urrestarazu: And beyond that, I would say that the expected flow generation for the period 27 to 32, under the assumptions mentioned by Arturo, yield fund operation that will be stable around $340 million to which we should add full visibility flows in connection with international flows. That would lead us to $170 to $180 million. And on top of that, we would have an average fund of approximately $60 million. In total, that would be $580 million fund to tackle the hydrogen capex of approximately $3.1 billion for the same period, and also tackle the one euro per share dividend, which is approximately 260 million euros.

Speaker Change: The net that 2 billion under expectations meaning that the new regulation period 27 to 32 will have a a new net debt provision of approximately 20 to 21%. That is nearly 600 basis points above the requirements of rating agencies which gives us a huge extra leverage capability.

Speaker Change: And beyond that. I would say that the expected flow generation for the period 27 to 32 under the assumptions mentioned by aruru Will

Speaker Change: yield the fund fund operation, uh, that will be stable around 340 million to which we should add full visibility flows and connections with International flows, that would lead us to 170 to 180 million. And on top of that we would have an average uh, fund fund of approximately 60 million in total, that would be 580 million fund funds to tackle the hydrogen capex.

Luis Urrestarazu: That's a payout of 40 to 45%. And I would say that this fund is fully visible with full support of prudent forecasts following the guidelines established by the ministry and the regulator for the new framework.

Luis Urrestarazu: Thank you.

Speaker Change: Of approximately 3.1 billion for the same period and also tackle the 1 euro per share dividend, which is approximately 260 million euros. That's a payout of 40 to 45% and I would say that this fund is fully visible with full support of a prudent uh forecast following the guidelines established by the ministry and the regulator for the new framework. Thank you.

Operator: Thank you very much for that question, Fernando.

Operator: Let's move on to the next question.

Ignacio Domenech: The next question is from Ignacio Domenech from JB Capital. Please go ahead. Yes, good morning. Thank you for the presentation and for answering my questions. And the first question is about the other components. in the remuneration. which should be published by the end of July. I'd like to hear your views. on their remuneration for work progress with. would be particularly relevant for Enagas. whether The view has changed there. And as for the regulatory review... I'd also like to hear your opinions on if... This review is not favorable. Would you consider revising your investment?

Fernando: Very much. Uh, for that question. Fernando, let's move on to the next question. The next question is from Ygnacio Dominic from JB Capital. Please go ahead.

Ygnacio Dominic: Yes, good morning.

Thank you for the presentation and for answering my questions.

And the first question is about the other components.

Ygnacio Dominic: In the remuneration.

Ygnacio Dominic: Which should be published by the end of July. I'd like to hear your views.

Ygnacio Dominic: On.

the remuneration for work progress, which

Ygnacio Dominic: would be particularly relevant for an

Ygnacio Dominic: Whether?

your view has changed their

Ygnacio Dominic: and as for the regulatory review,

Ygnacio Dominic: I'd also like to hear your opinions on.

Ygnacio Dominic: If?

This review is not favorable.

Ygnacio Dominic: Would you consider revising your investment?

Ignacio Domenech: Unknown Executive. from 27 onward.

Ygnacio Dominic: Objectives.

Ignacio Domenech: And my next question is about GSP. and so on. What progress have you made in your talks with the Peruvian government after... The award because of the appeals from the Peruvian government. and that's for. Dividend Repatriation from GST I was wondering whether. You are now in a better position. to rotate that I said. Are you in talks with potential investors? to divest. Thank you.

From 27 onwards.

Ygnacio Dominic: And my next question is about GSP.

Ygnacio Dominic: and so on, uh, how much

Ygnacio Dominic: progress, have you made in your talks with the Peruvian Government after

Ygnacio Dominic: The formal ruling.

The award.

Because of the appeal, from the Peruvian government.

Ygnacio Dominic: and that's for,

Dividend repatriation from GST.

Ygnacio Dominic: I was wondering whether

Ygnacio Dominic: you are now in a better position.

To rotate that aspect.

Speaker Change: Are you in talks with potential investors?

Ygnacio Dominic: To divest. Thank you.

Ignacio Domenech: Thank you very much for those questions, Ignacio. Good morning. As for the other components of the remuneration for the gas system for the period 27-32, I can tell you what's in the regulatory timeline and the letters from the CNMC for this year. So, the plan... by the CNMC is to have in October. Publication for Consultation of the Draft Letters. for the remuneration component. for Regasification, Transport and Storage Infrastructures and for the Feed-in Tariffs for the next period. And so their draft, their proposal, will be published for consultation in October. So we'll see whether that actually happens.

Thank you very much for those questions enough. Matthew. Good morning.

as, for the other components of the remuneration for the gas system for the period 2732

I can tell you what's in the

Ygnacio Dominic: Regulatory timeline. And the letter is from the cnmc for this year.

So, the plan

Ygnacio Dominic: by the cnmc is to have in October.

The publication for consultation of the draft letters.

Ygnacio Dominic: For the remuneration components.

Ygnacio Dominic: For regasification, transport and storage infrastructures um, for the feed and tariffs for the next period. And so their draft, their proposal

Will be published for consultation in October.

Ygnacio Dominic: So, we'll see whether that actually happens.

Ignacio Domenech: It's really important, of course, for us to know that as soon as possible. But here I need to point out that I'm referring to... The Regulatory Proposal for GAS. not for hydrogen yet. Why? Because the CNMC doesn't have those responsibilities. The regulations on Connections and access. just like they have for biomethane. So, we're waiting for... the law to assign the hydrogen regulation responsibilities either to the CNE if it's established in the next months or to the CNMC. But, um, that. Those responsibilities haven't yet been legally... As for work in progress, that's a remuneration and regulatory concept which is key for hydrogen because there, of course, we're speaking about a new asset base and greenfield investments and in order to be able to finance those before they are commissioned, we need to have that work in progress consideration, which is a key element for hydrogen, but not for the rest of the gas economy.

Speaker Change: Really important of course to for us to know that as soon as possible. But here I need to point out that I'm referring to

Speaker Change: The regulatory proposal for gas.

Speaker Change: Not for hydrogen yet. Why? Because the cnmc.

Doesn't have those responsibilities formally under the law for hydrogen, those responsibilities under the law are assigned to the Future CNE.

And the project for the creation of the CNA, which is currently going through Parliament. And that's why the cnmc hasn't yet announced the timeline for hydrogen regulation. It's only included. Those elements that are connected with hydrogen, but also with the rest of the gas system, for example,

The regulations on.

Speaker Change: Connections and access.

Just like they have for biomethane.

so, we're waiting for

The law to assign the hydrogen regulation, responsibilities, either to the CNE, if it's established in the next months or to the cnmc.

Speaker Change: But um, that

Speaker Change: Those responsibilities haven't yet been legally.

Speaker Change: Assigned as, for working progress. That's the

Speaker Change: Reminiscent and remuneration and Regulatory concept, which is key for hydrogen. Because there are of course we're speaking about a new asset base and Greenfield Investments. And in order to be able to finance those before they are commissioned, we need to have that work in progress consideration, which is a key consider element for hydrogen, but not for the rest of the gas system.

Ignacio Domenech: and we've already done some. prudent regulatory estimations, and I have to say, Ignacio. The events have proven us right. for the most part. I hope they will do so completely for the TRF after the public consultation. but also in the preliminary consultations on the new remuneration period for the gas system. the approach for The challenges faced by the gas system which the CNMC has presented and the questions raised and the challenges that they've identified and the aspects to be taken into account, I would say, as we've shared in the presentation, with some actual quotes from that prior consultation from the CNMC are very much in line with what we've been proposing and demanding prudently from Enagas and so I think We think that it's a very good reference for our own financial forecasts and our strategic updates.

Speaker Change: And we've already done some.

Ygnacio Dominic: Food and Regulatory estimations. And I have to say Ygnacio,

Ygnacio Dominic: That events have proven as right?

Ygnacio Dominic: For the most part.

Ygnacio Dominic: And I hope they will do so completely for the trf after the public consultation.

Ygnacio Dominic: But also in the preliminary consultations on the new remuneration period for the gas system.

Ygnacio Dominic: The approach.

For.

The challenges faced by the gas system which the cnmc has presented and the questions raised on the challenges that they've identified in the aspects to be taken into account. I would say as we've shared in the presentation,

Ygnacio Dominic: With some actual quotes from that prior consultation from the cnmc are very much in line with what we've been proposing and demanding prudently from honest. And so I think

Ygnacio Dominic: Or we think that it's a very good reference for our own Financial forecasts.

Ignacio Domenech: So we don't really see the need to revise.

Ygnacio Dominic: On our strategic updates. So we don't really see the need to revise.

These forecasts or these planned Investments.

Arturo Aizpiri: as for GSP and TGP. We are, of course, always willing to talk and negotiate with the Peruvian government. and we do so regularly. And repeatedly, so far the Peruvian government has preferred to continue. to follow. The Arbitration Routes and particularly the appeal, which I have to remind you that the decision of the SEATI on the effect that this appeal has on the award in the sense of a temporary suspension. something we believe will be resolved pretty quickly. As I said, the CIADI... as the members of the Ad Hoc Committee which will be deciding on the appeal and the first task of this Ad Hoc Committee will be to rule on the suspension of the award.

Ygnacio Dominic: As for GSP and tgp.

Ygnacio Dominic: To talk and negotiate with the Peruvian government.

Ygnacio Dominic: and we do so,

Ygnacio Dominic: Regularly.

Ygnacio Dominic: And repeatedly.

So far, the Peruvian government has Preferred to continue.

Ygnacio Dominic: To follow.

Ygnacio Dominic: The arbitration route.

And particularly this.

Ygnacio Dominic: Appeal.

Ygnacio Dominic: Which I have to remind you that the decision of the Fiat.

on the effect that this appeal has on the

Ygnacio Dominic: award.

Ygnacio Dominic: In the sense of a temporary suspension.

Ygnacio Dominic: Is something we believe will be resolved pretty quickly.

As I said, the Fiat.

Ygnacio Dominic: Notified.

Ygnacio Dominic: Us of the members of the ad hoc committee, which will be deciding on the appeal.

Ygnacio Dominic: On the first task of this ad hoc committee will be to rule on the suspension.

Arturo Aizpiri: We believe that. pretty quickly in the next few months. The award will be resumed and we will therefore act. Accordingly, whether this puts us in a better position to rotate the TGP asset. I've always said that our priority in Peru is to complete or conclude the litigation with the Peruvian government, but at the same time to make it clear that TGP is not a strategic asset for Enagas long term. But in any case, for this...

Ygnacio Dominic: Of the award.

Ygnacio Dominic: We believe that.

Ygnacio Dominic: Pretty quickly in the next few months.

Ygnacio Dominic: The award will be resumed and we will therefore Act.

Ygnacio Dominic: Accordingly.

Ygnacio Dominic: Whether this puts us in a better position to rotate the tgp asset. I've always said that our priority in Peru is to

Ygnacio Dominic: complete or conclude the litigation with the Peruvian government. But at the same time to make it clear that tgp is not a strategic asset for honest long term.

Operator: Unknown Speaker 1.4.

Ygnacio Dominic: But in any case for this,

Arturo Aizpiri: Unknown Speaker 2.4. cannot proceed until we resolve our litigation with the Peruvian government, as we have done through the different litigations. arbitration procedures, which have ruled in our favor and have even improved on the award in the May decision with $302 million in our credit rate. So that's our position. When the time comes, of course, we will think about rotating that asset because it's true that it's not a long-term strategic asset for us.

Ygnacio Dominic: Point where?

Ygnacio Dominic: kind of proceed until we resolve our litigation with the, uh, Peruvian government as we have done through the different, uh,

Ygnacio Dominic: Arbitration procedures, which have ruled in our favor and have even improved on the award. In the May decision with the 3022 million dollars in our credit rates,

Operator: Thank you, Ignacio. Thank you very much, Ignacio.

Speaker Change: So that's our position and when the time comes, of course, we will think about rotating that asset because it's true. That it's not a long-term strategic asset for us. Thank you Ygnacio.

Operator: Let's hear the next question. Thank you. There are no more questions in Spanish, so let's now switch to the English questions. Thank you.

Thank you very much, Ygnacio. Let's hear the next question.

Speaker Change: Thank you. There are no more questions in Spanish so let's now switch to the English questions.

Operator: We'll now take any questions from the English side. As a reminder, to ask a question, please press star one on your telephone keypad.

Speaker Change: Thank you. We'll now take any questions from the English side as a reminder, to ask a question. Please press star.

Speaker Change: On your telephone keypad.

Arthur Sitbon: This session is on the English side, so I will hand back to management. Ok, we have received... We've received two questions. The remuneration rate for networks to improve from the initial proposal to the final decision by the end of the year. The second question is, have you already had early discussions on the evolution of regulatory parameters for gas, more broadly in particular for the RCS? Thank you for your questions, Arthur, and good morning. Regarding the remuneration rate... We have... Set 6.5% value in our financial projections, and this is the minimum rate we are aiming at.

Speaker Change: Questions on the English side, so I will hand back to management.

Speaker Change: Okay.

Speaker Change: We received 2 questions.

Speaker Change: Um, online.

Speaker Change: First 1 from Arthur sidb from Morgan Stanley. Ruben Nation rate for networks to improve from the initial proposal

Speaker Change: to the final decision by the end of the year.

Speaker Change: The second question is, have you already had early discussions on the evolution of regulatory parameters for gas more. Broadly in particular for the RCs.

Arthur Sidb: Thank you for your questions. Arthur and good morning.

Regarding the remuneration rate.

Arthur Sidb: We have.

Arthur Sidb: Set a 6.5%.

Value in our financial projections. And this is the minimum

Arturo Aizpiri: We think this is very, very reasonable. It should go above 6.5. We think that it makes a lot of sense to bring that value nearer 7% than 6.5%, but being prudent and conservative, we've set a 6.5% value for the remuneration rate for the gas system, and that's the minimum value we are aiming at. Above that I would be speculating and I like to be as clear and as prudent as possible. Regarding the rest of the remuneration elements for the gas system. We maintain an open discussion with the CNMC. And I think we are very much aligned in how we see the next remuneration period.

Arthur Sidb: Rate, we are aiming at.

Arthur Sidb: Within, this is very, very reasonable.

Arthur Sidb: It should go.

Arthur Sidb: Above 6.5.

We think that it makes a lot of sense to bring that value.

Nearer 7% than 6.5% but being prudent and conservative with set a 6.5% value for the remuneration rate.

Arthur Sidb: For the gas system. And that's the minimum value. We are aiming at

Arthur Sidb: Regarding the rest of the remuneration elements.

Arthur Sidb: For the gas system.

Arthur Sidb: We maintain an open discussion with the cnmc.

And I think we are very much aligned in how we see the next remuneration period.

Arturo Aizpiri: And Arthur, let me suggest to go back to this preliminary public consultation text. published by the CNMC for the next gas system remuneration period. I think it's very clear the CNMC when sets the importance of ensuring the sustainability and the security of supply of the gas system to back up the electricity system, to state clearly that an adequate remuneration is key for the gas system continuing to support the energy transition. So really, Arthur, I think that that public consultation initial text shows very clearly that our assumptions are... to a large degree shared by the CNMC and in particular the need of instruments to ensure that the gas system continues providing backup and support to the electricity system.

And also I I really let me, let me suggest to go back to this preliminary, public consultation text.

Arthur Sidb: Published by the cnmc for the next gas system remuneration period.

I think it's very clear.

Arthur Sidb: The cnmc when sets the importance of ensuring the sustainability and the security of supply of the gas system to back up the electricity system to State clearly that an adequate remuneration is key for the gas system, continuing to support the energy transition.

Arthur Sidb: so really, I thought, I think that that public consultation initial text shows very clearly that our assumptions are

Arthur Sidb: To a large degree shared by the cnmc and in particular the need of instruments to ensure that the gas system continues.

Providing.

Arturo Aizpiri: I think, I don't know if this will be the RCS with the same name or a similar instrument to ensure this critical role of the gas system to support the electricity system as we saw last April the 28th.

Operator: Thank you.

Arthur Sidb: Backup and support to the electricity system. I think I don't know if this will be the RCs with the same name or a similar instrument, to ensure these critical role of the gas system to support the electricity system as we saw last April, the 28th,

Speaker Change: thank you.

Operator: No hay más preguntas tampoco en la... either English or Spanish, this last minute. Well, it seems there are no further questions, so thank you very much everyone for.

Speaker Change: there aren't any additional questions, uh, unless

Speaker Change: Someone's come up with 1 in either English or Spanish. This last minute.

Speaker Change: well, it seems that there are no further questions so thank you very much everyone for

Operator: Following this call, we are, as always, at your disposal in the Investor Relations Department if you have any additional comments or questions on our call.

Speaker Change: Following this call. We are as always

Speaker Change: at your disposal and the investor relations department. If you have any additional comments or questions on our call, thank you.