Transportadora de Gas del Sur S A : 4 Q 2020

Transportadora de Gas del Sur S.A.

Annual Report and

Financial Statements as of and for the year ended December 31, 2020

TABLE OF CONTENTS

01 | CONSOLIDATED ANNUAL REPORT

02 | CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2020

Consolidated statements of comprehensive income Consolidated statements of financial condition Consolidated statements of changes to shareholders' equity

Consolidated statements of cash flows

Notes to the consolidated financial statements

03 | INDEPENDENT AUDITOR'S REPORT

Main Financial Indicators

Financial Position	Statement of Income Summary
(in million of Argentine Pesos)	(in million of Argentine Pesos)

140,000

120,000

100,000

80,000

60,000

40,000

20,000

-

12/31/2017 12/31/2018 12/31/2019 12/31/2020

Total equity (Secundary axis)

Assets

Liabilities

70,000	80,000				40,000
60,000	70,000				35,000
60,000				30,000
50,000
50,000				25,000
40,000	40,000				20,000
30,000	30,000				15,000
20,000	20,000				10,000
10,000	10,000				5,000
-				-
-
	12/31/2017	12/31/2018	12/31/2019	12/31/2020

Operating profit before depreciation and impairment

Total comprehensive income

Revenues (Secondary axis)

Costs (Secondary axis)

Earnings per share

(in Argentine Pesos per share)

35.00

30.00

25.00

20.00

15.00

10.00

5.00

-
12/31/2017	12/31/2018	12/31/2019	12/31/2020
					As of December 31,
				2020	2019	2018	2017
					(in thousands of Argentine Pesos)
Consolidated Comprehensive Income Summary
Revenues			55,871,438	66,111,903	71,336,882	41,787,793
Natural gas transportation			23,501,610	30,795,577	32,381,937	15,615,086
Liquids Production and Commercialization			27,596,696	31,500,457	34,822,547	23,401,470
Other Services			4,773,132	3,815,869	4,132,398	2,771,237
Operating Profit			20,640,970	26,899,485	29,858,321	12,994,649
Net Financial Results			(12,971,658)	(3,944,565)	(5,960,872)	(1,106,502)
Total comprehensive income before Income Tax			7,690,622	22,911,548	23,935,579	11,933,469
Total comprehensive income for the year			3,286,199	17,432,963	23,907,996	12,044,628
Consolidated Financial Position Summary
Total Current Assets			15,799,305	28,507,744	48,510,547	22,175,939
Property, plant and equipment			98,873,425	101,496,521	81,018,439	71,542,203
Total non current assets			112,795,061	101,644,461	81,215,704	71,759,847
Total Assets	128,594,366	130,152,205	129,726,251	93,935,786
Total Current Liabilities			8,109,673	10,826,170	14,966,504	14,445,721
Total Non current liabilities			54,458,049	53,864,917	49,951,509	26,547,442
Total Liabilities			62,567,722	64,691,087	64,918,013	40,993,163
Minority interest			31	38	22	25
Total equity			66,026,644	65,461,118	64,808,238	52,942,623
	Consolidated Cash Flow Summary
Cash flows provided by operating activities			28,513,908	18,377,571	26,799,727	11,637,447
Cash flows (used in) / provided by financing activities			(5,074,595)	(15,409,102)	4,291,402	(125,410)
Cash flows used in investing activities			(30,087,887)	(22,659,101)	(9,908,595)	(8,120,980)
Net (decrease) / increase in cash and cash equivalents			(6,648,574)	(19,690,632)	21,182,534	3,391,057
Cash and cash equivalents at the end of the year			4,653,406	13,294,402	34,858,984	8,202,778

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1. Letter to our Shareholders, Customers, Employees and Suppliers

The difficulties and challenges that this fiscal year has put forward to tgs, have brought to light our unwavering commitment both to our shareholders and to the community where we conduct our businesses. The outbreak of virus COVID-19 ("COVID") declared as a pandemic by the World Health Organization ("WHO") in March 2020, strengthened tgs' human capital, who overcame all the difficulties and fulfilled the outlined objectives with commitment and dedication.

Being the main natural gas transporter in Argentina, where we operate the longest pipeline system in Latin America, our mission is to integrate natural gas production and consumption, contributing to the sustainable development of our country and to the improvement of our communities' quality of life. Throughout the year 2020, we continued rendering services committed to safety, environmental and health care, meeting the high quality and efficiency standards and complying with each of the sanitary provisions adopted by the national, provincial and municipal entities.

Based on our motto, "energy that drives forward", we are developing a cultural change that relies on three main cornerstones: focus on the client, innovation and achievement. We are aware that our team is the key to our success and we believe in its high commitment and capacity to face new challenges.

Our Business Performance in 2020

Our businesses were conducted amidst a scenario of great volatility and uncertainty derived from the outbreak of the COVID pandemic and its impact on the world's and Argentina's economy. Since the moment the Argentine Government dictated social distancing and preventive measures (hereinafter: "ASPO", for its acronym in Spanish), our priority has been to protect the health and safety of all the people who make tgs team. Our prompt response in the design and implementation of processes allowed us to carry on a safe and efficient management, which proved to be crucial as it allowed us to keep rendering a quality service without interruptions and reach major achievements.

All our activities constitute an essential public service and from the beginning, we took all the measures required to preserve the integrity of our businesses, developing an efficient and responsible operation, looking after our clients and suppliers and protecting tgs' value for our shareholders, focusing on environmental care and the impact of our activities on the community.

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In 2020 our revenues reached Ps. 55,871 million and our operating profit before depreciation and impairment was of Ps. 29,916 million, representing negative variations of 18% and 7%, respectively, with respect to 2019.

Performance in the Natural Gas Transportation segment was severely struck by the lack of update in its tariffs. The last granted update goes as far back as to April 2019, because afterwards Law N° 27,541 and its complementary regulations dictated tariff freeze and the renegotiation of the tariff review in force. To make matters worse, owing to ASPO, between March and April we recorded some delays in collections from our main clients whose revenues were considerably affected by the pandemic. As from the second quarter of the year, collections began to recover partially and they are now in line with standard terms.

In spite of having had talks with competent authorities, as well as having presented to them all the required information, we have not achieved significant progress towards a tariff increase. This setback has had a significant impact on the profitability of this business.

Transporting 60% of the gas consumed in Argentina, our main pipeline system satisfactorily met the demand for natural gas transportation. In response to COVID, we have sought to optimize our investments without affecting safety and reliability conditions.

We faced another challenge in the efficient management of the Cerri Complex and, thanks to the implemented measures and the commitment of our people, we reached a volume of 1,167,643

tons of liquids of natural gas ("Liquids"), which constituted a historic record, in spite of

the economic and sanitary scenario. It is also worth mentioning that we hit a new daily production record of 3,826 tons, overcoming the record hit in December 2017.

Our performance at the Puerto Galván facilities in 2020 was also noteworthy, as we hit a new record in truck loading, increasing to 33,000 units. In August, we could carry out, for the first time, the loading of larger trucks, allowing our clients to enhance the commercialization of their products.

The COVID crisis negatively affected Liquids reference prices. Whereas in the domestic market, prices of liquefied petroleum gas ("LPG") from the quota of tons sold under the LPG supply program for bottles at subsidized prices continued without variations in accordance with the provisions of Decree No. 311/2020, international reference prices suffered significant drops towards the end of the first quarter, which were then recovering throughout the year.

Owing to new commercialization strategies, we could reduce by 39% the average price in natural gas purchases, in US dollars, partially offsetting the drop in international prices.

In the Other Services segment, we concluded the full start-up of the new pipelines and conditioning plant in Tratayén, in the Vaca Muerta area. In spite of the context, we have proven that we can act with decision and resilience and we are true to the firm commitment we undertook as the first midstreamer in the development of the Vaca Muerta hydrocarbon

formation ("Vaca Muerta").

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