Q2 2026 Enagas SA Earnings Call

Speaker #1: Thank you very much for your attention, and welcome. To the NRS results presentation for the first 6 months of 2026. The earnings have been posted this morning at 7:15, and are also available on our website nrgat.es.

Speaker #1: Arturo Gonzalo, CEO of NRS, will be leading this presentation, which we expect to last for approximately 20 minutes. And we will then open a Q&A in which we will try and answer your questions in as much detail as possible.

Speaker #1: Thank you for your attention, and I'm going to give the floor to Mr. Arturo Gonzalo. Good morning, ladies and gentlemen, and thank you for your attention.

Speaker #1: I'd also like to welcome you to this earnings presentation for the first 6 months of 2026. And here with me are our CFO, Luis Romero, our Board Secretary and CLO, Diego Trillo, our Chief Officer for Energy Transition, Natalia Latorre, our Chief Officer for Institutional Investor Relations and Communications, Felisa Martín, our Head of Investor Relations, César García, and our Head of Management Control, Business Analysis, Natalia Moragil.

Speaker #1: Since February of this year, global energy markets have displayed significant volatility stemming from the Iran conflict, and the situation in the Strait of Hormuz, through which approximately 20% of the world's LNG and crude oil used to pass.

Speaker #1: This situation, which has lasted for some time now, has given rise to tensions in global LNG flows, with a clear and immediate impact on prices, which in Europe today are standard around 60 euros per megawatt-hour, compared to pre-conflict levels of approximately 30.

Speaker #1: euros per megawatt-hour. Europe's economy, which is highly dependent on energy imports, is particularly hard hit by this impact. However, with regards to security of supply, in Spain we're in a stronger position than other European countries, thanks to the flexibility and resilience of our gas infrastructure.

Speaker #1: Our underground storage facilities are at 73% capacity, which is 20 percentage points above the European average. We also have the largest regasification capacity—27%—and tank storage capacity—37%—in Europe.

Speaker #1: And in the last 6 months, we have received gas from 13 different supply sources, with Algeria as our main supplier, a country with which bilateral relations are being strengthened as demonstrated this Monday with the official visit by the President of the Spanish Government and our third Vice President, whom I've had the chance to accompany on that trip.

Speaker #1: And so in Spain, we remain relatively confident, but of course very attentive to trends in the global LNG market in close coordination with the Ministry for Ecological Transition and the Demographic Challenge.

Speaker #1: In this context, total natural gas demand in the country increased 0.4% in the first 6 months of the year, driven by an increase in gas demand for electricity generation, primarily due to the role of combined cycle plants and gas infrastructures in strengthening the electricity grid's resilience.

Speaker #1: In fact, growing interest in gas infrastructure was demonstrated once again in the latest slot auction held in June, where 100% of the unloading slots offered for the next 13 years were 100% booked.

Speaker #1: And those for the 2040-2041 gas year were booked up to 89%. Currently, approximately 2,251 LNG unloading slots are booked in the Spanish regasification plants, until 2041.

Speaker #1: A figure that underscores the commitment to the Spanish gas system as a key asset for the future. Our infrastructure is a primary shield against global crises in an environment where geopolitical volatility is no longer something transient, but has become a structural factor.

Speaker #1: Security of supply and decarbonization are currently top priorities for increasing Europe's resilience. This can be achieved with domestic resources, and with a robust infrastructure and regulation plays a key role.

Speaker #1: I'll now like to review the milestones of the first half of the year, starting with the most relevant, which is progress in the approval of permitting process for the new natural gas regulatory framework for the next 6 years.

Speaker #1: As you know, on 26 June, and following the public consultation, process, the CNMC published the revised draft circulars containing the methodology for calculating the remuneration of transmission and regasification facilities, as well as the circular or letter establishing the financial remuneration rate, or FRR.

Speaker #1: Additionally, the Ministry for the Ecological Transition and the Demographic Challenge concluded on July 9 the consultation process on the draft royal decree establishing the methodology for calculating the regulated remuneration for underground storage.

Speaker #1: Which is now fully aligned with the transmission and regasification letter. Because of its importance, I'll briefly highlight some aspects included in these draft CNMC circulars.

Speaker #1: Although with due caution, since they are currently being reviewed by the State Council, whose mandatory report will subsequently be sent to the CNMC for final approval.

Speaker #1: had. Not been revised since 2019, incorporating a forward-looking inflation adjustment based on European Central Bank's forecasts and includes also a certain operating margin. In line with energy policy guidelines set by the government, they include the mechanism known as review, which is the Spanish acronym for remuneration for the extension of useful life, which is linked to the operating costs of assets that in some cases are over 50 years old, like the Barcelona LNG plant, and the asset reliability and valuation incentive, or IFVA, with the aim of making it more attractive to maintain the availability of fully depreciated assets reaching the end of their useful life, rather than replacing them with new ones.

Speaker #1: And they include the mechanism known as review, which is the Spanish acronym for remuneration for the extension of useful life, which is linked to the operating costs of assets that, in some cases, are over 50 years old, like the Barcelona LNG one. And the asset reliability and valuation incentive, or IFVA, with the aim of making it more attractive to maintain the availability of fully depreciated assets reaching the end of their useful life, rather than replacing them with new ones.

Speaker #1: This represents a substantial savings for the gas system, since the IFVA is only 10% of what it would cost to replace these assets with new ones.

Speaker #1: As other neighboring countries do. And finally, they've also added sustainable development incentives, or SDIs, promoting the use of natural gas in maritime and land transport, as well as the injection of renewable gases into the network.

Speaker #1: Taken together, although this represents an average reduction of 7% in the company's regulated revenues compared with the current regulatory framework, it is a technically robust proposal, with parameters that are more aligned with those of our European peers, and it brings the system in line with the government's energy policy guidelines.

Speaker #1: This regulation is well suited to a mature gas system like Spain's, which does not need significant new investments if an effort is made to maintain and extend the useful life of existing infrastructure.

Speaker #1: And this is a feature which distinguishes it from other regulated sectors. During the State Council's review process, Enagás Aizpiri has been heard as a stakeholder because there are some key elements raised by the company in the appeal stage which have not been taken into account and which are relevant, including the recognition of certain costs—such as the entirety of those associated with CO2 emissions and cybersecurity systems, amongst others.

Speaker #1: Also, a more defensible methodology for calculating the cost of debt within the financial remuneration rate, or an OPEX margin more closely aligned with current requirements for any industrial activity.

Speaker #1: And once these circulars are approved, the company will benefit from a predictable and stable regulatory framework that will provide legal certainty for the next six years.

Speaker #1: Regulatory development has been the hallmark of the first half of the year, in which we've also made progress with our asset rotation policy as envisioned in our strategy plan.

Speaker #1: In the current scenario, with growing global tensions, Enagás Aizpiri's strategy focusing on Spain and Europe makes more sense than ever. Today, we've announced an agreement to acquire a 20% stake in SAGAS from the shareholder Osaka Gas for €31 million, and with this purchase, Enagás Aizpiri is increasing its stake in the Sagunto regasification plant to 92.5%.

Speaker #1: The return on this deal stands at around 8%, contributing an average of €24 million to our EBITDA and €4 million to net profit over the 2027–2032 period.

Speaker #1: This plan is vital for Spain's security of supply and decarbonization strategy, with the potential for integration into infrastructure projects linked to CO2 logistics.

Speaker #1: As for our position in Europe, another very relevant milestone we've achieved this half-year was the agreement to acquire 31.5% of the French operator Telega. This is a deal that you're already familiar with, so I won't go into details, but I do want to point out that it fits perfectly within Enagás' strategy plan.

Speaker #1: It benefits both companies and both countries with its strategic cross-border hydrogen and CO2 projects, for security of supply and the energy transition. It strengthens the sound framework of the current joint operations between ENAG, Aizpiri, and Telega, and it guarantees the continuity of Telega's strategic and corporate project.

Speaker #1: This acquisition has a positive financial impact, with a return of approximately 8% and a contribution to ENAG Aizpiri's net profit of approximately €15 million in the 2027–2032 period.

Speaker #1: Two weeks ago, we obtained authorization from the European Commission, and the other regulatory steps are making progress as planned. We estimate that the acquisition will be completed by the third quarter of the year.

Speaker #1: The third significant deal in the half-year is the completion of the sale of a 40% stake in ENAG Aizpiri Renovable for €48 million, with an impact on our net profit of approximately plus €9.5 million in 2026.

Speaker #1: ENAG Aizpiri Renovable will now have as its majority shareholder a leading investment group in green hydrogen and biomethane, which is H24, in order to continue this deployment in some of the most competitive hydrogen projects in Europe.

Speaker #1: This represents substantial savings for the gas system since the IFVA is only 10% of what it would cost to replace these assets with new ones.

Speaker #1: As other neighboring countries do. And finally, they've also added sustainable development incentives, or SDIs, promoting the use of natural gas in maritime and land transport, as well as the injection of renewable gases into the network.

Speaker #1: Our stake in Enagás Aizpiri Renovable was primarily aimed at boosting green hydrogen and biomethane in Spain, and we have now begun our divestment process, given the progress we've already seen in the hydrogen market and in the development of the required infrastructure.

Speaker #1: And taken together, although this represents an average reduction of 7% of the company's regulated revenues, compared with the current regulatory framework, it is a technically robust proposal with parameters that are more aligned with those of our European peers, and it brings the system in line with the government's energy policy guidelines.

Speaker #1: In the first half of the year, significant progress has been made in renewable hydrogen deployment across both Europe and Spain. The European Commission has published the results of the third European Hydrogen Bank auction, and Spain has once again been the most competitive country, with an average price of €5.3 per kilogram.

Speaker #1: This regulation is well suited to a mature gas system like Spain's, which does not need significant new investments, if an effort is made to maintain and extend the useful life of existing infrastructure.

Speaker #1: A price that has continued to decrease year after year, and the Commission has announced the launch of the fourth auction for the end of 2026.

Speaker #1: For green hydrogen to be competitive, infrastructure plays a vital role, and the European Hydrogen Network is becoming closer to reality. On June 15, the German regulator, BNetza, launched a consultation process on the second draft of its Gas and Hydrogen Network Development Plan for 2025-2037, 2045, which encompasses 9,206 kilometers of hydrogen pipelines.

Speaker #1: And this is a feature which distinguishes it from other regulated sectors. And during the State Council's review process, NAGAS has been heard as a stakeholder because there are some key elements raised by the company in the appeal stage, which have not been taken into account and which are relevant, including the recognition of certain costs, such as the entirety of those associated with CO2 emissions, cybersecurity, y, systems, amongst others.

Speaker #1: Currently, there are already about 500 kilometers of hydrogen pipelines operational in Europe, of which 90% are located in Germany. Germany is also one of the leading countries in the transposition of the RED III renewable energy directive, with increased targets that will bring about significant associated hydrogen demand.

Speaker #1: Also, a more defensible methodology for calculating the cost of debt, within the financial remuneration rate, or an OPEX margin, more closely aligned with current requirements for any industrial activity.

Speaker #1: And once these circulars are approved, the company will benefit from a predictable and stable regulatory framework that will provide legal certainty for the next six years.

Speaker #1: Spain has also taken significant steps forward to boost hydrogen markets and infrastructure, and the government has already authorized the CNMC to oversee hydrogen PCI projects.

Speaker #1: Regulatory development has been the hallmark of a first half of the year in which we've also made progress with our asset rotation policy as envisioned in our strategy plan.

Speaker #1: During the third quarter, there will be a public consultation process for the draft bill, transposing the European Hydrogen Package to establish a national hydrogen system and a new regulated market.

Speaker #1: In the current scenario, with growing global tensions, NAGAS's strategy focusing on Spain and Europe makes more sense than ever. Today, we've announced an agreement to acquire a 20% stake in SAGAS from the shareholder Osaka Gas for 31 million euros, and with this purchase, NAGAS is increasing its stake in the Sagunto Risk Gasification Plant to 92.5%.

Speaker #1: This regulation is essential for the urgent development of the infrastructure. There are already projects underway which require a network to connect them, and in the first half of the year alone, just in Spain, FIDs have been approved for an electrolysis capacity equivalent to 400 megawatts.

Speaker #1: 100 megawatts from the Repsol Petronor project to deploy a new electrolyzer in Bilbao, and 300 megawatts for the first phase of the Andalusian Green Hydrogen Valley, the ONUVA project in Huelva, led by MOEVE.

Speaker #1: The return on this deal stands at around 8%, contributing an average of 24 million to our EBITDA and 4 million to net profit over the 2027-2032 period.

Speaker #1: Furthermore, the government of Spain has just delivered a decisive signal to the market yesterday. They announced the transposition of the RED III directive for transmission, setting even more ambitious goals than those outlined by Europe.

Speaker #1: This plant is vital for Spain's security of supply, and decarbonization strategy, with the potential of integrating it into infrastructure projects linked to CO2 logistics.

Speaker #1: As for our position in Europe, another very relevant milestone we've achieved this half year was the agreement to acquire 31.5% of the French operator Telega.

Speaker #1: In its directive, the transposition boosts hydrogen demand and expands the horizon and ambition of RFNBO targets for transmission for 2040. It's a step in the right direction, which will activate minimum regulatory demand for the transmission sector.

Speaker #1: This is a deal that you're already familiar with, so I won't go into details, but I do want to point out that it fits perfectly within NAGAS's strategy plan.

Speaker #1: And Spain is set to play a leading role in the European hydrogen economy, with projects, investments, and infrastructure. In Enagás, we are progressing as scheduled in the development timeline for the H2Med corridor and the Spanish hydrogen backbone network.

Speaker #1: It benefits both companies and both countries with its strategic cross-border hydrogen and CO2 projects, for security of supply and the energy transition. It strengthens the sound framework of the current joint operations between NAGAS and Telega, and it guarantees the continuity of Telega's strategic and corporate project.

Speaker #1: For H2MED, European institutional support for the corridor was confirmed on July 6 at the ministerial meeting in Paris of the high-level group on interconnections for Southwest Europe, with the participation of the energy ministers from Portugal, Spain, and France, alongside European Commissioner Dan Jorgensen.

Speaker #1: This acquisition has a positive financial impact with a return of approximately 8% and a contribution to NAGAS's net profit of approximately 15 million euros in the 2027-2032 period.

Speaker #1: As well as the five TSOs that are developing the corridor. In Varmar, we've completed the public consultations process in Spain and France, and approved the beginning of the FEED phase, which means moving from basic engineering to detailed engineering.

Speaker #1: Two weeks ago, we obtained the authorization from the European Commission, and the other regulatory steps are making progress as planned, and we estimate that the acquisition will be completed by the third quarter of the year.

Speaker #1: In Salsa, we've launched the detailed engineering process in the Spanish section, and begun the environmental impact studies in Portugal and Spain, amongst other milestones.

Speaker #1: The third significant deal in the half year is the completion of the sale of 40% stake in NAGAS Renovable for 48 million euros, with an impact on our net profit of approximately plus 9.5 million in 2026.

Speaker #1: As for the Spanish hydrogen backbone network, we've already completed the basic engineering for the newly constructed hydrogen pipelines and the three compressor stations. We've completed the conceptual public consultation plan across 13 regional communities and about 500 municipalities, confirming strong social and industrial interest in hydrogen infrastructures.

Speaker #1: NAGAS Renovable will now have as its majority shareholder a leading investment group in green hydrogen and biomethane, which is high 24, in order to continue this deploy in some of the most competitive hydrogen projects in Europe.

Speaker #1: And on June 30, we requested from the Ministry for the Ecological Transition and Demographic Challenge the preliminary government authorization for the first four sections of the backbone network.

Speaker #1: Our stake in NAGAS Renovable was primarily aimed at boosting green hydrogen and biomethane in Spain, and we have now begun our divestment process, given the progress we've already seen in the hydrogen market and in the development of the required infrastructure.

Speaker #1: These sections are linked to projects in areas where there's earlier demand tied to the requirements of the RED III directive. The permitting process for final approval under the 10E regulation should take about 18 months, and includes an additional public information process, which will begin in September.

Speaker #1: In this first half of the year, significant progress has been made in renewable hydrogen deployment across both Europe and Spain. The European Commission has published the results of the third European hydrogen bank auction, and Spain has once again been the most competitive country, with an average price of 5.3 euros per kilogram.

Speaker #1: We continue to make progress on the remaining sections of the network, and we intend to request government authorization for them between the fourth quarter of 2026 and Q1 2027.

Speaker #1: Price that has continued to decrease year after year, and the Commission has announced the launch of the fourth auction for the end of 2026.

Speaker #1: So, we are thus launching a new phase in the development of the Spanish hydrogen network. And to secure updated information on the needs of producers and consumers, this semester we've launched a call for interest, which was extremely successful, with 128 companies presenting around 300 projects, with a high level of maturity.

Speaker #1: For green hydrogen to be competitive, infrastructure plays a vital role. And the European Hydrogen Network is becoming closer to reality, on June 15th, the German regulator, Binetza, launched the consultation process on the second draft of its gas and hydrogen network development plan for 2025-2037, 2045, which encompasses 9,206 kilometers of hydrogen pipelines.

Speaker #1: And currently reviewing the results and planning to open a new window for data updates now that the transposition of the RED III transmission directive has been completed. Simultaneously, we launched a call for interest for CO2, where 69 companies have presented 125 projects, which demonstrates that this is a vector that is playing an increasingly significant role in the industrial decarbonization process in this country.

Speaker #1: Currently, there's already about 500 kilometers of hydrogen pipelines operational in Europe, of which 90% are located in Germany. Germany is also one of the leading countries in the transposition of the Red III renewable energy directive, with increased targets which will bring about significant associated hydrogen demand.

Speaker #1: Spain has also taken significant steps forward to boost hydrogen markets and infrastructure, and the government has already authorized the CNMC to oversee hydrogen PCI projects.

Speaker #1: Having reviewed the milestones of this semester, I will now detail the key financial metrics. EBITDA was €314 million, net profit after tax as of June 30, 2026, was €126.9 million, and corporate profit excluding the effects of asset rotation was €118.6 million.

Speaker #1: And during the third quarter, there will be a public consultation process for the draft bill transposing the European Hydrogen Package, to establish a national hydrogen system and a new regulated market.

Speaker #1: This regulation is essential for the urgent development of the infrastructure. There's already projects underway, which require a network to connect them. In the first half of the year alone, and just in Spain, FIDs have been approved for an electrolysis capacity equivalent to 400 megawatts.

Speaker #1: And there are five factors behind the earnings of this first semester. There's the negative impact of the regulatory framework enforced during the period, which we estimate at €30 million; an increase in the other revenue line due to the commissioning of the Elysios ship by Scale Green Energy; and the consolidation of the fiber optic company Axent.

Speaker #1: 100 megawatts from the Repsol Petronor project to deploy a new electrolyzer in Bilbao, and 300 megawatts for the first phase on the Andalusian Green Hydrogen Valley, the ONUVA project in Huelva, led by MUEVE.

Speaker #1: After its acquisition in October 2025, the effectiveness of our efficiency plan has enabled us to keep our core operating expenses flat in the semester, and we expect them by the end of the year to be in line with our end-of-year target.

Speaker #1: Furthermore, the government of Spain has just delivered a decisive signal to the market yesterday. They announced the transposition of the Red III directive for transmission, setting even more ambitious goals than those outlined by Europe.

Speaker #1: Control of financial debt as a fixed rate and a gross debt financial cost, which has come down to 2%. We also maintain an extraordinarily solid liquidity position of €2.62 billion, bringing down company debt by €2.3 billion since December 2025, which allows us to face the future with strong flexibility in our balance sheet.

Speaker #1: In its directive, the transposition boosts hydrogen demand and expands the horizon and the ambition of RFNBO targets for transmission for 2040. It's a step in the right direction, which will activate minimum regulatory demand for the transmission sector.

Speaker #1: And Spain is set to play a leading role in the European Hydrogen Economy, with projects investments and infrastructure. In NAGAS, we are progressing as scheduled, in the development timeline for the H2 MED corridor and the Spanish hydrogen backbone network.

Speaker #1: And finally, our subsidiaries have contributed €86.3 million to our EBITDA. That's up 7.8% from last year, driven mostly by a higher contribution from TAP through its capacity increase of 1.2 BCMs per year.

Speaker #1: For H2 MED, European institutional support for the corridor was confirmed on 6 July, at the ministerial meeting in Paris, of the high-level group on interconnections for Southwest Europe, with the participation of the Energy Ministers from Portugal, Spain, and France, alongside European Commissioner Dan Jorgensen.

Speaker #1: As usual, in any earnings presentation, I'll give you an update on the situation of our arbitration cases in Peru. With regards to the Gasoducto Sur Peruano, or GSP, the hearings on the annulment proceedings took place on June 20 and July 1, before the ad hoc committee appointed by the ICSID.

Speaker #1: As well as the five TSOs that are developing the corridor. In Bar-Mar, we've completed the public consultations process in Spain and France, and approved the beginning of the feed phase which means moving from basic engineering to detailed engineering.

Speaker #1: The final award ruling on this appeal is expected in the first half of 2027. As for the TGP case, according to the latest communication from the arbitration tribunal, the award should be coming this September.

Speaker #1: In Salsa, we've launched the detailed engineering process in the Spanish section, and began the environmental impact studies in Portugal and Spain, amongst other milestones.

Speaker #1: And following the recent presidential elections in the country, we once again would like to reiterate our readiness for dialogue with the new Peruvian government, led by President Keiko Fujimori, to move towards a consensus solution regarding the company's situation in Peru.

Speaker #1: As for the Spanish hydrogen backbone network, we've already completed basic engineering for the newly constructed hydrogen pipelines, and the three compressor stations. We've completed the conceptual public consultation plan across 13 regional communities, and about 500 municipalities confirming strong social and industrial interest in hydrogen infrastructures.

Speaker #1: In this semester, we've also continued to meet our ESG targets in all three pillars: environment, social, and corporate governance. We continue to be among the leading companies in the main sustainability indices. To mention just one recent accolade, Enagás has been included in the S&P Global Sustainability Yearbook for 2026, in the top 1%.

Speaker #1: And on June 30th, we've requested from the Ministry for the Ecological Transition and Demographic Challenge the preliminary government authorization for the first four sections of the backbone network.

Speaker #1: These sections are linked to projects in areas where there's earlier demand tied to the requirements of the Red III directive. The permitting process for final approval under the 10E regulation should take about 18 months, and includes an additional public information process which will begin in September.

Speaker #1: Emphasizing the company's commitment to sustainability and its performance as an industry leader in ESG. The results we are presenting today are in line with our targets, which we announced at the beginning of the year, and without including the impacts of asset rotation deals, our core profit after tax is approximately €235 million, and EBITDA is €620 million. Year-end net debt is approximately €2.4 billion, maintaining our funds from operations to net debt ratio above 15%, and therefore compatible with our current credit rating of BBB plus, and an expected net capex of €225 million.

Speaker #1: We continue to make progress on the remaining sections of the network, and we intend to request government authorization for them between the fourth quarter of 2026 and Q1 2027.

Speaker #1: So we are thus launching a new phase in the development of the Spanish hydrogen network. And to secure updated information, on the needs of producers and consumers, this semester we've launched a call for interest which was extremely successful, with 128 companies presenting around 300 projects, with a high level of maturity.

Speaker #1: We have a very solid balance sheet, in keeping with our priority of providing attractive, sustainable shareholder remuneration and with maintaining our payout policy of one euro per share.

Speaker #1: And currently, reviewing the results, and planning to open a new window for data updates now that the transposition of the Red III transmission directive has been approved.

Speaker #1: I'd like to end with seven key takeaways. First, the geopolitical context is increasingly fragile, and crises are increasingly frequent. In this context, Spain has a top-tier strategic asset: its gas infrastructure, which provides much-needed resilience that will be further enhanced in the future with the new hydrogen infrastructure.

Speaker #1: Simultaneously, we launched a call for interest for CO2, which where 69 companies have presented 125 projects, which demonstrates that this is a vector which is playing an increasingly significant role in the industrial decarbonization process in this country.

Speaker #1: With an increasingly European scope. Second, sound infrastructure requires sound regulation. The draft regulatory framework for 2027 and 2032 is of a high technical level and is in line with the maturity and the challenges of the Spanish gas system.

Speaker #1: Having reviewed the milestones of this semester, I will now detail the key financial metrics. IBITDA was 314 million, net profit after tax as of June 30th, 2026, was 126.9 million, corp profit excluding the effects of asset rotation was 118.6 million.

Speaker #1: Although we trust that the final approval process will incorporate the improvements that we have identified. Thirdly, the data and SARAS deals are fully aligned with our asset rotation strategy focused on Europe.

Speaker #1: And there are five factors behind the earnings of this first semester. There's the negative impact of the regulatory framework enforced during the period, which we estimate at 30 million euros.

Speaker #1: They reinforce the security of supply, drive further decarbonization in Spain and France, and improve Enagás's growth profile and dividend sustainability. Fourth, Europe must achieve energy independence.

Speaker #1: An increase in the other revenues line due to the commissioning of the Elysios ship by Scale Green Energy and the consolidation of the fiber optic company Axent, after its acquisition in October 2025.

Speaker #1: The war in Iran has meant approximately €70 billion in energy overcosts for the EU, and to give you a better context about this figure, Repower EU estimated that the hydrogen infrastructure needed in Europe would require between €28 billion and €38 billion.

Speaker #1: The effectiveness of our efficiency plan, which has enabled us to keep our core operating expenses flat in the semester, and we expect them by the end of the year to be in line with our end-of-year target.

Speaker #1: Green hydrogen is a strategic vector for industrial competitiveness and for the future strategic autonomy of the EU. Fifthly, decarbonization is one of the EU's flagship projects as a global actor.

Speaker #1: Control of financial expenses with 80% of our debt as a fixed rate and a gross debt financial cost, which has come down to 2%.

Speaker #1: We also maintain an extraordinarily solid liquidity position of 2.62 billion, bringing down company debt by 2.3 billion since December 2025, which allows us to face the future with strong flexibility in our balance sheet.

Speaker #1: Europe and Spain have been experiencing severe heat waves, and this last June was the continent's hottest ever recorded, as confirmed by the Copernicus climate service.

Speaker #1: Green hydrogen is an urgently needed driver in the fight against climate change. Sixthly, Spain is playing, and will continue to play, a key role in the transposition of the RED III directive, which set the foundations for strong regulatory demand in Spain.

Speaker #1: And finally, our subsidiaries have contributed 86.3 million to IBITDA. That's up 7.8% from last year, driven mostly by a higher contribution from TAP through its capacity increase of 1.2 BCMs per year.

Speaker #1: Most of the hydrogen projects are already being developed here, and we now need the infrastructure to connect them. H2Med and the Spanish hydrogen backbone networks are in line with their scheduled timelines, with significant technical and institutional progress.

Speaker #1: As usual, any earnings presentation, I'll give you an update of the situation of our arbitration cases in Peru. With regards to the Gasoducto Sur Peruano or GSP, the hearings on the annulment proceedings took place on June 20th and July 1st, before the ad hoc committee appointed by the ICSID.

Speaker #1: And seventh, the pillars of our strategic plan—security of supply and decarbonization—remain in full force. Today, we have posted half-year earnings that reflect the progress we're making in their execution, as well as the company's positive performance in Enagás.

Speaker #1: The final award ruling on this appeal is expected for the first half of 2027. And as for the TGP case, and according to the latest communication from the arbitration tribunal, the award should be coming this September.

Speaker #1: We will continue to contribute towards the resilience of Spain's future energy system, as well as Europe's. Thank you very much, and now we are ready for your questions.

Speaker #1: And following the recent presidential elections in the country, we once again would like to reiterate our readiness for dialogue with the new Peruvian government led by President Keiko Fujimori to move towards a consensus solution regarding the company's situation in Peru.

Speaker #1: The preguntas empieza ahora.

Speaker #2: The Q&A session has started now. If you wish to participate, please press star one on your phone keypad. Thank you.

Speaker #1: In this semester, we've also continued to meet our ESG targets in all three pillars, environment, social, and corporate governance. We continue to be amongst the leading companies in the main sustainability indices to mention just one recent accolade, Enagas, has been included in the S&P Global Sustainability Yearbook for 2026 in the top 1%.

Speaker #1: La primera pregunta.

Speaker #2: First question coming from Javier Suárez from Mediobanca. Please go ahead. Yes, good morning, everyone. I have three questions for you. The first one is on hydrogen.

Speaker #2: I hear your comments on the performance of the whole subject, politically and internationally. When are your management considering that they will be in a position to present a strategic plan with an explicit capex commitment for deploying this hydrogen network in the near future?

Speaker #1: Emphasizing the company's commitment with sustainability, and its performance as an industry leader, in ESG. The results we are presenting today are in line with our targets, which we announced at the beginning of the year, and without including the impacts of asset rotation deals are, Cornet profit after tax of some 235 million euros, and IBITDA of 620 million euros, year-end net debt approximately 2.4 billion euros, maintaining our funds from operation to net debt ratio above 15%, and therefore compatible with our current credit ratings BBB plus, and an expected net capex of 225 million euros.

Speaker #2: I mean, still regarding the timing and the scheduling, when do you think you will be in a position to present explicit financial targets? Secondly, about the situation in Peru after the presidential elections.

Speaker #2: Can you confirm any early contacts with the new Fujimori administration? And do you have a sense that this new administration might change the scheduling of the arbitration?

Speaker #2: And third, I'd like to hear about the adjustments you made to calculate that 7% of enterprise value for the SAG-AS acquisition. I would be interested in understanding the adjustments you made to reach this 7% premium.

Speaker #1: We have a very solid balance sheet in keeping with our priority of providing attractive sustainable shareholder remuneration and with maintaining our payout policy of one euro per share.

Speaker #2: And last, if I may, about costs. I believe that, according to consensus and forecasts, operational costs went down a little bit during the first half of the year.

Speaker #2: Is this a consequence of new efficiency efforts by the company, or is it just a matter of cost allocation during the first half of the year that should be offset during the second half?

Speaker #1: I'd like to end with seven key takeaways. First, the geopolitical context is increasingly fragile and crises increasingly frequent, and this context Spain has a top-tier strategic asset, its gas infrastructure, which provide much-needed resilience that will be further enhanced in the future with the new hydrogen infrastructure.

Speaker #2: Thank you.

Speaker #3: Muchas gracias por la pregunta.

Speaker #2: Thank you for all your questions, Javier, and good morning to you. About hydrogen—and when will we be ready to publish a calendar? And regarding financial targets, we intend to file a new strategic plan during the first half of 2027.

Speaker #1: With an increasingly European Second, sound infrastructure requires sound regulation. And the draft regulatory framework for 2027-2032 is of a high technical level and is in line with the maturity and the challenges of the Spanish gas system, although we trust that the final approval process will incorporate the improvements that we have identified.

Speaker #2: We estimate that by then, we can show a CapEx deployment calendar and our new CapEx commitment, as you asked. As for the situation in Peru, President Fujimori has not yet taken office; her inauguration will take place on the 28th of this month.

Speaker #1: Thirdly, the Terera and Sagas deals are fully aligned with our asset rotation strategy focused in Europe. They reinforce the security of supply. Drive further decarbonization in Spain and France, and improve Enagas's growth profile and dividend sustainability.

Speaker #1: Fourthly, Europe must achieve energy independence. The war in Iran has meant approximately 70 billion euros in energy overcost for the EU, and to give you a bit of context about this figure, Repower EU estimated that the hydrogen infrastructure needed in Europe would require between 28 billion and 38 billion euros.

Speaker #2: So we believe that it is only respectful to wait until she takes office, and then, immediately after, we intend to congratulate her on her new position and make ourselves available at her discretion to set up a dialogue framework in search of a joint solution for the Enagas situation in that country.

Speaker #1: Green hydrogen is a strategic vector for industrial competitiveness and for the future strategic autonomy of the EU. Fifthly, decarbonization is one of the EU's flagship projects as a global actor.

Speaker #2: So, as soon as the newly elected president takes office, we trust and hope that with this new administration, dialogue can be more constructive for both parties than it was during the previous administration.

Speaker #1: Europe and Spain have been experiencing severe heat waves, and this last June was the continent's hottest ever recorded. As confirmed by the Copernicus Climate Service.

Speaker #2: Regarding your question on the SAG-AS acquisition, I will give the floor to our CFO, Luis Romero. And since you asked about OPEX, certainly, during the first half of the year, we kept operating costs at bay, and they have remained flat as a result of our efficiency plan launched in recent years.

Speaker #1: Green hydrogen is an urgently needed driver in the fight against climate change. Sixthly, Spain is playing and will continue to play a key role.

Speaker #1: The transposition of the red three directive sets the foundations for strong regulatory demand in Spain, and the most competitive hydrogen projects are already being developed here, and we now need the infrastructure to connect them.

Speaker #2: Certainly, there's a scheduling of costs to some degree. Therefore, some of those costs will show up during the second half of the year, but always within our target of not exceeding a 1.5% growth in expenses compared to the previous year.

Speaker #1: H2Med and the Spanish hydrogen backbone networks are in line with their scheduled timelines with significant technical and institutional progress. And seventh, the pillars of our strategy plan, our security of supply and decarbonization, remain in full force.

Speaker #1: Today, we have posted half-year earnings that reflect progress we're making in their execution as well as the company's positive performance. In Enagas, we will continue to contribute towards the resilience of Spain's future energy system, as well as Europe's.

Speaker #2: We expect that some of those costs will show up during the second half of this year, and our OPEX will revolve around €314 million, and therefore remain within our target of not exceeding a 1.5% year-on-year growth in recurring costs.

Speaker #1: Thank you very much, and now we are ready for your questions.

Speaker #2: To these costs, we will have to add some one-offs, particularly those in connection with fueling and shutting in of the Castor underground storage, and certain costs related to demand.

Speaker #2: The preguntas empieza ahora.

Speaker #3: Q&A session started now. If you wish to participate, press star one on your phone keyboard. Thank you.

Speaker #2: La primera pregunta.

Speaker #2: So, recurrent and one-off expenses will be located around €453 million. But, Javier, the cost containment and efficiency plan still stands and remains highly effective.

Speaker #3: First question coming from Javier Suárez from Mediobanca. Please go ahead. Yes, good morning, everyone. I have three questions for you. The first one on hydrogen.

Speaker #3: I hear your comments on the performance of the whole subject, politically and internationally. When are your management considering that they will be in a position to present a strategic plan with an explicit capex commitment for deploying this hydrogen network in the near future?

Speaker #2: But there will be a certain calendar effect during the second half of the year that remains within the targets established by the company. And now, over to the CFO for the other part of your question.

Speaker #2: Yes, good day, Javier. About the SAG-AS acquisition—well, first of all, I would say the deal brings a positive contribution to the company. We're talking about a deal that allows for global integration and stronger EBITDA, and I would say that in terms of multiples and return, under the present conditions, we can say that the deal was signed on competitive terms.

Speaker #3: I'm interested in the timing and the scheduling, and when you think you will be in a condition of presenting explicit financial target. Second, about the situation in Peru after the presidential elections.

Speaker #3: Can you confirm any early contacts with the new Fujimori administration? And do you have a feeling that this new administration might change the scheduling of the arbitration?

Speaker #2: The fair value is about 1.07. The numbers backing this calculation come from a zero value of €3.5 billion, structured into equity value of €1.8 billion and net debt of €1.7 billion, with an RAP denominator of €0.32 billion, which includes the present value of life assets, both ITBA and review.

Speaker #3: And third, I would like to hear about the adjustments you made to calculate that 7% of enterprise value for the SAG-AS acquisition. I would be interested in understanding the adjustments you made to reach this 7% premium.

Speaker #3: And last, if I may, about costs. I believe that according to consensus and forecasts, there will operational costs went down a little bit during the first half of the year.

Speaker #2: Those are the fundamental numbers you're asking about. Thank you, Javier, for your question. The next question comes from Slota Trimbage from CaixaBank. Please go ahead with your question.

Speaker #3: Is this a consequence of a new efficiency efforts by the company, or is it just a matter of cost allocation during the first half year that should be offset during the second half?

Speaker #2: Hello. Good morning, and thank you for taking our questions. I have two questions. One is about your guidance. Sorry, the sound is deficient. The question is about the guidance.

Speaker #3: Thank you.

Speaker #4: Muchas gracias por la pregunta.

Speaker #3: Thank you for all your questions, Javier, and good morning to you. About hydrogen. And when will we be ready to publish a calendar? And from financial targets, we intend to file a new strategic plan during the first half of 2027.

Speaker #2: Should we look out for any further events during the second half of the year that will inform guidance provided? And my second question is about GDP?

Speaker #2: Although the final decision is to be expected by September, have you already started conversations with potential buyers? Thank you.

Speaker #3: We estimate that by then, we can show a capex deployment calendar and our new capex commitment, as you asked. As for the situation in Peru, President Fujimori has not taken over her position, her taking office will take place on the 28th of this month.

Speaker #1: Muchas gracias, Flora, for.

Speaker #2: Thank you, Flora, for those questions. I think you were asking about EBITDA. We're still well within the guidance we provided of €620 million.

Speaker #3: So we believe that it's only respectful to wait until she takes office and then immediately after, we intend to congratulate her on her new office and make ourselves available and add her disposition to set up a dialogue framework and search of joint solution for the Enagas situation in that country.

Speaker #2: At the end of June this year, EBITDA was €314 million. If we extrapolate that via annualization, and if we integrate the Castor scheduling, we reach approximately €620 million, which is very much in line with the guidance provided for this year.

Speaker #3: So as soon as the newly elected president takes office, and we trust and hope that with this new administration, dialogue can be more constructive for both parties than it was during the previous administration.

Speaker #2: To market. Lower perfectly underway to meet our guidance. About the situation in Peru, we have said several times that our priority is dealing with outstanding cases with the Peruvian government.

Speaker #3: About your question on the SAG-AS acquisition, I will give the floor to our CFO, Luis Romero. And since you ask about OPEX, certainly during the first half of the year, we kept operation costs at bay, and they have remained flat as a result of our efficiency plan launched in recent years.

Speaker #2: Beyond that, we have no expectations for disinvestment in the Peruvian asset. The priority, I insist, is dealing with the outstanding arbitration processes. When we come to that point, we will consider several options, knowing that DGP is not a strategic asset for the company.

Speaker #2: We've said that our strategic focus is in Spain and Europe, and DGP is not part of that scope. But certainly, we will try to capture as much value as we can from that asset.

Speaker #3: Certainly, there's a scheduling of costs to some degree, and therefore, some of those costs will show up during the second half of the year, but always within our target of not exceeding a 1.5% growth in expenses compared to the previous year.

Speaker #2: So that if any disinvestment is required, it will take place at the best moment, but certainly not before we come to a solution in the arbitration we have with the government of Peru.

Speaker #2: Thank you. And thank you, Flora, for your participation. Next question, please. The next question comes from Ignacio Dominic from JV Capital. Go ahead with your question, please.

Speaker #3: We expect that some of those costs will show up during the second half of this year, and our OPEX will revolve around 314 million euros, and therefore, within our target of not exceeding a 1.5% growth year-on-year in recurring costs.

Speaker #2: Hello, good morning, and thank you for your presentation and for taking our questions. The first one is about company rating. I don't know if you've been discussing or talking to agencies after the review of the regulatory framework for 2027–2032.

Speaker #3: To these costs, we will have to add some one-offs particularly those in connection with fueling and shutting in of the Castor underground storage and certain costs related to demand.

Speaker #2: But considering that the company's risk profile is expected to improve, I would like to hear your opinion on whether agencies might ease down on the net debt target of 15%, compatible with BBB plus.

Speaker #3: So recurrent and one-offs expenses will be located around 453 million euros, but Javier, the cost contention and efficiency plans still stands? And remains highly effective.

Speaker #2: And my second question is also about rating. It is about your balance sheet. I understand that in 2030, you would have a very comfortable balance sheet, in more solid conditions than some of your peers.

Speaker #3: But there will be a certain calendar effect during the second half of the year that remains within the target established by the company, and now with the CFO about the other part of your question.

Speaker #2: So, I would like to understand the strategy you envisage to follow to leverage the company if some delays in hydrogen investment took place. I would also like to understand that combination, that balance between shareholder payout and investments, because ultimately there will be opportunities for investment in Europe, however limited.

Speaker #3: Yes, good day, Javier. About the SAG-AS acquisition. Well, first of all, I would say the deal brings a positive contribution to the company. We're talking about a deal that allows for a global integration and stronger EBITDA and I would say that in terms of multiples, and return in the present conditions, we can say that the deal was signed in competitive terms.

Speaker #2: So I would just like to hear your opinion about it. Thank you. And thank you, Ignacio. About the first part of your question, we believe we need to wait for a final approval of the new regulatory framework.

Speaker #3: The fair value is about 1.07. The numbers backing this calculation come from a zero value of 3.5 billion structured into equity value 1.8 billion and net debt 1.7, with an RAP denominator of 0.32 billion, which includes the present value of life assets both and review.

Speaker #2: We are still in the deliberation phase, and we must wait for its conclusion. That will yield a report from which the CNMC will publish the final letter.

Speaker #2: Not that we're expecting significant changes, but we still have to go through the formal steps. When it happens, rating agencies are likely to publish their usual analysis of the regulatory framework.

Speaker #3: Those are the fundamental numbers you're asking about. Thank you, Javier, for your question onto the next one, please. The next question comes from Slota Trimbage from CaixaBank.

Speaker #2: And we expect that they will take into account the elements I already mentioned: technical solvency, the regulatory framework aligned with other European frameworks, cash stability, and a higher rate of regulated income in Enagás.

Speaker #3: Please go ahead with your question. Hello, good morning, and thank you for taking our questions. I have two questions. One is about your guidance.

Speaker #3: Sorry, the sound is deficient. The question is about the guidance. Should we look out for some further events during the second half of the year that will lead you about the guidance you provided?

Speaker #2: Therefore, if the regulatory framework is approved in these terms, we can expect a better perception from rating agencies, based on the business risk profile in Enagás.

Speaker #2: The expected generation of flows for the 2027, 2032 period will be sufficient to cover the investment plan of the hydrogen legacy business. Or the legacy hydrogen business.

Speaker #3: And the second question about TDP? Although the final decision is to be expected by September, have you already started conversations with potential buyers? Thank you.

Speaker #2: And our present dividend policy can be maintained, and it will remain compatible with an FCO net debt ratio of 15% during the period, which is actually compatible with the BBB+.

Speaker #2: So, our analysis comes from a cautious place. We feel comfortable with these ratios, and we expect rating agencies to take note of the new improvements introduced by the new regulatory framework that will have an impact on the company's efficiency.

Speaker #1: Muchas gracias, Flora, for.

Speaker #3: Thank you, Flora, for those questions. Thank you for asking about EBITDA. We're still well within the guidance we provided of 620 million euros. At the end of June, this year, EBITDA was 314 million euros.

Speaker #2: And you were asking about our forecasts for 2030, and the combination of payout versus investment. I would like to share with you the numbers we have for FCO generation in the period, and our analysis of company funding sources.

Speaker #3: If we extrapolate that via annualization, and if we integrate the Castor scheduling, we reach approximately 620 million which is very much in line with the guidance provided for this year, to the market.

Speaker #2: We expect an FCO for the 2027–2032 period of approximately €3.8 billion. That approximately matches an average of about €380 million in regulated and adjacent businesses.

Speaker #3: So we're perfectly underway to meet our guidance. About the situation in Peru. We have said several times that our priority is dealing with cases outstanding cases with the Peruvian government.

Speaker #2: These revolve around the regulated business in Spain. The contribution expected is about €200 million a year on average in our subsidiaries, and by the end of the period, we see hydrogen flows representing an average of approximately €50 million.

Speaker #3: Beyond that, we have no expectations for disinvestment in the Peruvian asset. The top priority, I insist, is dealing with the outstanding arbitration processes and when we come to that point, we will consider several options, knowing that TGP is not a strategic asset for the company.

Speaker #2: For an annual average of €630 million, which for the whole period leads to that €3.8 billion I mentioned at the beginning. On this cash generation, Enagas would have a capacity for leverage of about €1.4 billion.

Speaker #3: We've said that our strategic focus is in Spain and Europe, and TGP is not part of that scope, but certainly we will try to capture as much value as we can from that asset.

Speaker #2: As for the net debt at the end of 2026, it will be approximately €3 billion, considering asset rotation, and therefore matching the commitment to maintain an FCO net debt ratio of 15% throughout the period.

Speaker #3: So that if any disinvestment is required, it will take place at the best moment, but certainly not before we come to a solution in the arbitration we have with the government from Peru.

Speaker #2: So $5.2 billion in resources to address the strategic priorities set by the company cover legacy business capex, approximately $0.6 billion, leveraging the hydrogen investment program of approximately $3 billion.

Speaker #3: Thank you. And thank you, Flora, for your participation. Next question, please. The next question comes from Ignacio Domenech from JV Capital. Go ahead, with your question, please.

Speaker #3: Hello, good morning, and thank you for your presentation and for taking our questions. The first one is about company rating. I don't know if you've been discussing or talking to agencies after the review of the regulatory framework for 2027, 2032, but considering that the company's risk profile is expected to do better, I would like to hear your opinion on a potential on whether agencies might ease down on the net debt target of 15% compatible with BBB plus.

Speaker #2: And maintaining the present dividend payout policy of €1.572 billion. That brings us slightly below €5.2 billion as resources available to the company.

Speaker #2: Regarding our dividend payout, we believe that our dividend is in the right place for Enagás. It is in sync with our peers and is sustainable long term.

Speaker #2: And fully compatible with an ambitious CapEx program in hydrogen infrastructures. That will be the main driver for growth and value generation for the company.

Speaker #3: And my second question also about rating. Is about your balance sheet. Understand that in 2030, you would have a very comfortable balance sheet in more solid conditions than some of your peers.

Speaker #2: At some point, you're asking about potential opportunities for asset acquisition. As we have said in the past, we do not envisage any acquisitions for the next period, but we're still open to analyzing opportunities out there.

Speaker #3: So I would like to understand the strategy you envisage to follow to leverage the company if some delays in hydrogen investment took place. I would like to understand that combination, that balance between shareholder payout and investments, because ultimately there will be opportunities for investment in Europe.

Speaker #2: At any rate, opportunities that come in under our radar must fill some requirements, like matching the strategy for investment and regulated assets in Spain and Europe, to contribute to decarbonization and supply security.

Speaker #2: Also, these potential investments cannot go to the detriment of the Enagás sustainability plan, and they must be profitable, with an IRR equity of at least 8% for potential opportunities in Europe and Spain.

Speaker #3: However limited. So I would just like to hear your opinion about it. Thank you. And thank you, Ignacio. About the first part of your question.

Speaker #3: We believe we need to wait for a final approval of the new regulatory framework. We are still in the deliberation phase and we must wait for the conclusion thereof.

Speaker #2: So, there is nothing in our sights, but if we were to analyze any opportunities, the criteria would be not compromising the criteria I just mentioned.

Speaker #3: That will yield a report from which the CNMC will publish the final letter. Not that we're expecting significant changes, but we still have to go through the formal steps.

Speaker #2: Thank you very much, Ignacio. Thank you, Ignacio, for your questions. We're ready to take the next question. Thank you. There are no further questions in Spanish.

Speaker #3: When it happens, rating agencies are likely to publish their usual analysis of the regulatory framework and we expect that they will take into account the element I already mentioned, technical solvency, of the regulatory framework aligned with other European frameworks.

Speaker #2: We will now take questions in English.

Speaker #1: Thank you. We'll now take questions in English. Our first one comes from James Brand of Deutsche Bank. Your line is open. Please go ahead.

Speaker #3: Hi. Thank you for the presentation and for taking my questions. I had two questions. The first is that with acquisitions, obviously the one announced today is a bit smaller.

Speaker #3: The cash stability, a higher weight of regulated income. In Enagas, therefore, if the regulatory framework is approved in these terms, we can expect a better perception from rating agencies.

Speaker #3: But I was wondering if we should see those acquisitions as saying something about how you think about the balance sheet here. Because I guess, obviously, if you didn't feel the balance sheet was strong, you wouldn't be out there making acquisitions.

Speaker #3: Based on the business risk profile in Enagas. The expected generation of flows for the 2027, 2032 period will be sufficient to cover the investment plan of the hydrogen legacy business.

Speaker #3: So I was wondering whether you could just comment on whether you see that there is still some flexibility in the balance sheet as it is at the moment, and that maybe we could see more acquisitions going forward, or whether you think it's now at a kind of reasonable level.

Speaker #3: Or the legacy hydrogen business. And our present dividend policy can be maintained and it will remain compatible with an FCO net debt ratio of 15% during the period, which is actually compatible with the BBB plus.

Speaker #3: That's the first question. And then secondly, I note, obviously, your comments around the costs in the first half and the second half.

Speaker #3: So our analysis comes from a cautious place. We feel comfortable with these ratios. And we expect rating agencies to take note of the new improvements introduced by the new regulatory framework that will have an impact on the company efficiency.

Speaker #3: Whether you could just split out what the cost directly related to hydrogen is in the first half of the year that's coming through opex, or for the full year to be more useful.

Speaker #3: Because it's interesting for us to be able to kind of split that out from the Spanish gas distribution network. Thank you very much.

Speaker #3: And you were asking about our forecasts for 2030 and the combination of payout versus investment. I would like to share with you the numbers we have for FCO generation in the period and our analysis of company sources company funding sources.

Speaker #3: Bye. Thank you, James, for your two questions. Regarding the first one, the transactions that have already been announced—namely, Sagas and Terega—are included in the €3 billion net debt that we are seeing for the end of the year.

Speaker #3: We expect an FCO for the 2027, 2032 period of approximately 3.8 billion euros. That approximately match approximately 380 million average in regulated and adjacent businesses.

Speaker #3: Which are which revolve around the regulated business in Spain. The contribution expected is about 200 million a year as an average in our subsidiaries and by the end of the period, we see hydrogen flows representing an average of approximately 50 million.

Speaker #3: For an annual average of 630 million, which for the whole period lead to that 3.8 billion euros I mentioned at the beginning. On this cash generation, Enagas would have a capacity for leverage of about 1.4 billion as for the net debt at the end of 2026, which will be approximately 3 billion considering asset rotation.

Speaker #3: That's already included, and that's fully compatible with the projected cash flow and the projected resources that the company can use during the next period.

Speaker #3: So those acquisitions have already been factored in to the figures I shared a few minutes ago. If other new opportunities come, we will study them.

Speaker #3: Therefore, matching the engagement of keeping an FCO net debt ratio of 15% throughout the period. So 5.2 billion in resources to address the strategic priorities set by the company.

Speaker #3: We will consider them in case they comply with the requirements I've set. But we don't have any specific opportunity in mind, and we are not actively looking for new opportunities.

Speaker #3: Cover legacy business capex, approximately 0.6 billion. Leveraging the hydrogen investment program of approximately 3 billion. And maintaining the present dividend payout policy of 1.572 billion euros.

Speaker #3: Let me stress this: we are not considering any new large acquisitions in the next period. I just want to clarify that we are not refusing to analyze opportunities, as long as they fully comply with the requirements I have set.

Speaker #3: That brings us slightly below 5.2 billion. As a resources available to the company. About dividend payout, we believe that our dividend is in the right place for Enagas.

Speaker #3: A good strategic fit within Enagás' strategy, not geopoliticizing our capex program. An adequate profitability within an equity IRR of 8%, and maintaining our current dividend policy.

Speaker #3: It is in sync with our peers. It is sustainable long term. And fully compatible with an ambitious capex program in hydrogen infrastructures. That will be the main driver for growth and value generation for the company.

Speaker #3: So, those are the prerequisites to study potential acquisitions. But we are not expecting anything in particular, and we are not actively looking for those opportunities.

Speaker #3: At some point, you're asking about potential opportunities for asset acquisition. As we have said in the past, we do not envisage any acquisitions for the next period, but we're still open to analyzing opportunities out there.

Speaker #3: Regarding the hydrogen costs—in the figure I mentioned for 2026, no hydrogen opex is included. Hydrogen in 2026 is all capex.

Speaker #3: At any rate, opportunities coming under our radar must fill some requirements like matching the strategy for investment and regulated assets in Spain and Europe to contribute to decarbonization and supply security.

Speaker #3: And those opex costs are capitalized into the future RAB of those investments. So, no hydrogen opex in the costs that we foresee for 2026.

Speaker #3: Also, these investments can potential investments cannot go in detriment of the Enagas sustainability plan and they must be profitable. With an IRR equity of at least 8% for potential opportunities in Europe and Spain.

Speaker #3: Thank you.

Speaker #1: Thank you very much, James, for your question. Let's move on to the next one, please.

Speaker #2: Thank you. There are no more questions in English. I give the floor back to the management team.

Speaker #1: Perfecto. Muchas gracias.

Speaker #3: So there's nothing in our sights, but if we were to analyze any opportunities, the criteria would be not compromising the criteria I just mentioned.

Speaker #4: Great, thank you very much, all, for your attention and for joining us in this earnings presentation today. As usual, the Investor Relations team is ready to answer any additional questions you may have.

Speaker #3: Thank you very much, Ignacio. Thank you, Ignacio, for your questions. We're ready to take the next question. Thank you. There are no further questions in Spanish.

Speaker #3: We will now take questions in English.

Speaker #1: Thank you. We'll now take questions in English. Our first one comes from James Brand of Deutsche Bank. Your line is open. Please go ahead.

Speaker #4: Hi. Thank you for the presentation and taking my questions. I had two questions. The first is that you've obviously made two acquisitions recently announced.

Speaker #4: Obviously, the one today a bit smaller. But I was wondering if that we should see that those acquisitions as saying something about how you think about the balance sheet here.

Speaker #4: Because I guess, obviously, if you didn't feel the balance sheet was strong, you wouldn't be out there making acquisitions. So I was wondering whether you could just comment on whether you see there is still being scope or flexibility in the balance sheet as it is at the moment, and that maybe we'll see we could see more acquisitions going forward, or whether you think it's now at a kind of reasonable level?

Speaker #4: That's the first question. And then secondly, I kind of note, obviously, your kind of comments around the costs in the first half and the second half.

Speaker #4: But I was wondering whether you could just split out for us what the costs are directly related to hydrogen in the first half of the year that's coming through opex.

Speaker #4: Or for the full year, to be honest with you, I'll probably be more useful. Because it's just interesting for us to be able to kind of split that out from the kind of the core costs for the Spanish gas distribution network.

Speaker #4: Thank you very much. Bye. Thank you, James, for your two questions. Regarding the first one, the transactions that have already been announced, namely SAGAS and TEREGA, are included in the 3 billion net debt that we are seeing for the end of the year.

Speaker #4: That's already included and that's fully compatible with the projected cash flow and the projected resources that the company can use during the next period.

Speaker #4: So those acquisitions have already been factored in in the figures I've shared a few minutes ago. If other new opportunities come, we will study them.

Speaker #4: We will consider them. In case they comply with the requirements I've set. But we don't have any specific opportunity in mind and we are not actively looking for new opportunities.

Speaker #4: Let me stress this. And we are not considering any new large acquisition in the next period. I was just trying to say that we are not rejecting analyzing opportunities in case those fully comply with the requirements I set.

Speaker #4: A good strategic fit within Enagas strategy, not geopardising our capex program. An adequate profitability. With an equity IRR of 8% and maintaining our current dividend policy.

Speaker #4: So those are the prerequisites to study potential acquisitions, but we are not expecting anything in particular and we are not actively looking for those opportunities.

Speaker #4: And regarding the hydrogen costs, in the figure I said about the 2026 costs, no hydrogen opex is included. Hydrogen in 2026 is all capex and those opex costs are activated into the future RAB of those investments.

Speaker #4: So no hydrogen opex in the costs that we foresee for 2026. Thank you.

Speaker #1: Thank you very much. James, for your question. Let's move on to the next one, please.

Speaker #2: Thank you. There are no more questions in English. I give the floor back to the management team.

Speaker #1: Perfecto. Muchas gracias.

Speaker #3: Great. Thank you very much all for your attention and for joining us in this earnings presentation today. As usual, the investor relations team is ready to answer any additional questions you may have.