Enagas Stock

Thank you very much for your attention, and welcome to the Enagas 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, Enagas.es. Arturo Goncalo, CEO of Enagas, 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.

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. 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, Cesar Garcia; and our Head of Management Control and Business Analysis, Natalia Mora-Gil.

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. 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 stand at around EUR 60 per megawatt hour compared to pre-conflict levels of approximately EUR 30 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. 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. And in the last 6 [Audio Gap] our third Vice President, whom I have had the chance to accompany on that trip. And so in Spain, we remain relatively confident and of course, very attentive to trends in the global LNG market in close coordination with the Ministry for the Ecological Transition and the Demographic Challenge.

In this context, total natural gas demand in the country increased 0.4% during the first 6 months of the year, driven by 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. 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. And those for the 2040, 2041 gas year were booked up to 89%. Currently, approximately 2,251 LNG and loading slots are booked in the Spanish regasification plants until 2041, 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 crisis in an environment where geopolitical volatility is no longer something transient, but has become a structural factor. 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.

I'd now like to review the milestones of the first half of the year, starting with the most relevant, which is progress in the approval or permitting process for the new natural gas regulatory framework for the next 6 years. As you know, on 26th of 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 letter establishing the financial remuneration rate or FRR.

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, 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, 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.

Financial remuneration rate is set at 6.46%. Operation and maintenance costs are protected against inflation as is the case in other European frameworks, thereby correcting an anomaly in the current methodology. The new framework updates unit values, which had not been revised since 2019, incorporating a forward-looking inflation adjustment based on European Central Bank's forecast and includes also a certain operating margin.

In line with energy policy guidelines set by the government include the mechanism known as REVU, which is the Spanish acronym for remuneration for the extension of useful life, which is linked to the operating cost 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.

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 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.

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. This regulation is well suited to a mature gas system like Spain, which does not need significant new investments if an effort is made to maintain and extend the useful life of existing infrastructure. And this is a feature which distinguishes it from other regulated sectors.

And during the State Council's review process, Enagas has been hired 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 a recognition of certain costs such as the entirety of those associated with CO2 emissions, cybersecurity systems, amongst others. 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.

Once these circulars are approved, the company will benefit from a predictable and stable regulatory framework that will provide legal certainty for the next 6 years. 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.

In the current scenario with growing global tensions, Enagas' strategy focusing on Spain and Europe makes more sense than ever. Today, we've announced an agreement to acquire a 20% stake in Saggas from the shareholder of Osaka Gas for EUR 31 million. And with this purchase, Enagas is increasing its stake in the Sagunto regasification plant to 92.5%. The return on this deal stands at around 8% contributing an average of EUR 24 million to our EBITDA and EUR 4 million to net profit over the 2027-2032 period. This plan is vital for Spain's security of supply and decarbonization strategy with the potential of integrating it into infrastructure projects linked to CO2 logistics.

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, Terega. 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 Enagas' strategy plan, 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 Enagas and Terega and it guarantees the continuity of Terega's strategic and corporate projects.

This acquisition has a positive financial impact with a return of approximately 8% and a contribution to Enagas' net profit of approximately EUR 15 million in the 2027-2032 period. 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. The third significant deal in the half year is the completion of the sale of 40% stake in Enagás Renovable for EUR 48 million with an impact on our net profit of approximately plus EUR 9.5 million in 2026.

Enagas Renovable will now have as its majority shareholder, leading investment group in green hydrogen and biomethane, which is Hy24 in order to continue deploying some of the most competitive hydrogen projects in Europe. Our stake in Enagas 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.

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 EUR 5.3 per kilogram, 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.

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. 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. 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. 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.

And 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, a 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 Onuba project in Huelva led by Moeve.

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 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. And Spain is set to play a leading role in the European hydrogen economy with projects, investments and infrastructure.

In Enagas, we are progressing as scheduled in the development time line for the H2med corridor and the Spanish hydrogen backbone network. For H2med, European institutional support for the corridor was confirmed on 6th of 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 as well as the 5 DSOs that are developing the corridor.

In BarMar, we've completed the public consultation process in Spain and France and approved the beginning of the feed phase, which means moving from basic engineering to detailed engineering. In CelZa, we've launched the detailed engineering process in the Spanish section and began the environmental impact studies in Portugal and Spain amongst other milestones.

As for the Spanish hydrogen backbone network, we've already completed the basic engineering for the newly constructed hydrogen pipelines and the 3 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 infrastructure. And on June 30, we've requested from the Ministry for the Ecological Transition and the Demographic Challenge, the preliminary government authorization for the first 4 sections of the backbone network. 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. 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. 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. We're 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. 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.

Having reviewed the milestones of the semester, I will now detail the key financial metrics. Our EBITDA was EUR 314 million. Net profit after tax as of June 30, 2026, was EUR 126.9 million. Core profit, excluding the effects of asset rotation was EUR 118.6 million. And there are 5 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 EUR 30 million, an increase in the other revenues line due to the commissioning of the Alisios ship by Scale Green Energy and the consolidation of the fiber optic company, Axent.

After its acquisition in October 2025, 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. The control of financial expenses with 80% of our debt at a fixed rate and a gross debt financial cost, which has come down to 2%. We also maintain an extraordinarily solid liquidity position of EUR 2.62 billion, bringing down company debt by EUR 2.3 billion since December 2025, which allows us to face the future with strong flexibility in our balance sheet.

And finally, our subsidiaries have contributed EUR 86.3 million to 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. As usual, in each 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 20 and July 1 before the ad hoc committee appointed by the ICSID.

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. 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.

In the semester, we've also continued to meet our ESG targets in all 3 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, Enagás has been included in the S&P Global Sustainability Yearbook for 2026 in the top 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 core net profit after tax of some EUR 235 million and EBITDA of EUR 620 million. Year-end net debt, approximately EUR 2.4 billion, maintaining our funds from operation to net debt ratio above 15% and therefore, compatible with our current credit ratings, BBB+ and an expected net CapEx of EUR 225 million.

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 EUR 1 per share. I'd like to end with 7 key takeaways. First, the geopolitical context is increasingly fragile and crisis increasingly frequent. In 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 with an increasingly European scope.

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. Thirdly, the Terega and Saggas 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 Enagás' growth profile and dividend sustainability.

Fourthly, Europe must achieve energy independence. The war in Iran has meant approximately EUR 70 billion in energy over cost for the EU. And to give you a bit of context about this figure, REPowerEU estimated that the hydrogen infrastructure needed in Europe would require between EUR 28 billion and EUR 38 billion. 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. 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. 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. The transposition of the RED III Directive sets the foundation 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.

H2med and the Spanish hydrogen backbone networks are in line with their scheduled time lines with significant technical and institutional progress. And seventh, the pillars of our strategy 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, 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.

[Operator Instructions] First question coming from Javier Suarez from Mediobanca.

I have 3 questions for you. The first one on hydrogen. 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. I'm interested in the timing and the scheduling and when you think you will be in a condition of presenting explicit financial targets.

Second, about the situation in Peru after the presidential elections. 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? And third, I would like to hear about the adjustments you made to calculate that 7% of enterprise value for the Saggas acquisition. I would be interested in understanding the adjustments you made to reach this 7% premium.

And last, if I may, about costs. I believe that according to consensus and forecasts, there were -- operational costs went down a little bit during the first half of the year. Is this a consequence of 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?

Thank you for all your questions, Javier. 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. 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. 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 at her disposition to set up a dialogue framework in search of a joint solution for the Enagás situation in that country.

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. About your question on the Saggas 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 operation costs at bay, and they have remained flat as a result of our efficiency plan launched in recent years.

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. We expect that some of those costs will show up during the second half of this year, and our OpEx will revolve around EUR 314 million, and therefore, within our target of not exceeding a 1.5% growth year-on-year in recurring costs. To these costs, we will have to add some one-offs, particularly those in connection with sealing and shutting in of the Castor underground storage and certain costs related to demand.

So recurrent and one-off expenses will be located around EUR 453 million. But Javier, the cost contention and efficiency plan still stands and remains highly effective. 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 with the CFO about the other part of your question.

Yes. Good day, Javier. About the Saggas 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. The fair value is about 1.07. The numbers backing this calculation come from a 0 value of EUR 3.5 billion structured into equity value, EUR 1.8 billion and net debt EUR 1.7 billion with an RAB denominator of EUR 0.32 billion, which includes the present value of life assets, both IFVA and REVU. Those are the fundamental numbers you're asking about.

The next question comes from Flora Trindade from CaixaBank.

I have 2 questions. One is about your guidance. Should we look out for some further events during the second half of the year that will lead you above the guidance you provided? And the second question about TGP. Although the final decision is to be expected by September. Have you already started conversations with potential buyers?

Thank you, Flora, for those questions. I think you were asking about EBITDA. We're still well within the guidance we provided of EUR 620 million. At the end of June this year, EBITDA was EUR 314 million. If we extrapolate that via annualization and if we integrate the Castor scheduling, we reached approximately EUR 620 million, which is very much in line with the guidance provided for this year to the market.

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 the cases -- outstanding cases with the Peruvian government. 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.

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, 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.

The next question comes from Ignacio Domenech from JB Capital.

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+.

And my second question also about rating 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. 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, however, limited. So I would just like to hear your opinion about it.

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. We are still in the deliberation phase, and we must wait for the conclusion thereof. 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.

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 elements I already mentioned, technical solvency of the regulatory framework aligned with other European frameworks, the cash stability, a higher weight of regulated income in Enagás. 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 Enagas.

The expected generation of flows for the '27-'32 period will be sufficient to cover the investment plan of the hydrogen legacy business 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 a BBB+. 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.

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. We expect an FCO for the 27-'32 period of approximately EUR 3.8 billion that approximately match approximately EUR 380 million average in regulated and adjacent businesses, which are -- which revolve around the regulated business in Spain.

The contribution expected is about EUR 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 EUR 50 million for an annual average of EUR 630 million, which for the whole period lead to that EUR 3.8 billion I mentioned at the beginning. On this cash generation, Enagás would have a capacity for leverage of about EUR 1.4 billion as for the net debt at the end of 2026, which will be approximately EUR 3 billion, considering asset rotation, therefore, matching the engagement of keeping an FCO net debt ratio of 15% throughout the period.

So EUR 5.2 billion in resources to address the strategic priorities set by the company cover legacy business CapEx, approximately EUR 0.6 billion, leveraging the hydrogen investment program of approximately EUR 3 billion and maintaining the present dividend payout policy of EUR 1.572 billion. That brings us slightly below EUR 5.2 billion as resources available to the company. About dividend payout, we believe that our dividend is in the right place for Enagás. 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. 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. At any rate, opportunities coming under our radar must fill some requirements like matching the strategy for investment in regulated assets in Spain and Europe to contribute to decarbonization and supply security.

Also, these investments can -- potential investments cannot go in 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. 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.

Thank you. There are no further questions in Spanish. We will now take questions in English. Our first one comes from James Brand of Deutsche Bank.

I had 2 questions. The first is that you've obviously made 2 acquisitions recently announced. Obviously, the one today a bit smaller. But I was wondering is that we should see that 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. 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? 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. 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 or for the full year, to be honest, will 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.

Thank you, James, for your 2 questions. Regarding the first one, the transactions that have already been announced, namely Saggas and Terega are included in the EUR 3 billion net debt that we are seeing for the end of the year. 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.

So those acquisitions have already been factored in the figures I've shared a few minutes ago. If other new opportunities come, we will study them. We will consider them in case they comply with the requirements I've said. But we don't have any specific opportunity in mind, and we are not actively looking for new opportunities. 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 said, a good strategic fit within Enagás' strategy, not jeopardizing our CapEx program, an adequate profitability with an equity IRR of 8% and maintaining our current dividend policy.

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. 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. So no hydrogen OpEx in the costs that we foresee for 2026.

There are no more questions in English. I give the floor back to the management team.

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. So thank you once again. Have a nice day.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

[Interpreted] Good morning, ladies and gentlemen, and welcome to Enagás' earnings presentation for 2025. We will also be sharing 2026 targets with you. The documents have been filed with the stock exchange authorities at 7:36 this morning and are also available on our website, www.enagas.es. Arturo Gonzalo, Chief Executive Officer of Enagás, will be running this call, which we expect should take about 20 minutes. And after that, we will open the Q&A session in which we will try and answer your questions in as much detail as possible.

Thank you very much for your attention. I'm going to hand it over to Arturo Gonzalo now.

[Interpreted] Good morning, ladies and gentlemen. Thanks very much for your attention. I'd like to welcome you to this earnings presentation in which I am joined by our CFO, Luis Romero; our Board Secretary and CLO, Diego Trillo; our Chief Officer for Institutional and Investor Relations and Communications, Felisa Martín; our Head of Investor Relations, César García; and our Head of Management Control and Business Analysis, Natalia Mora-Gil.

I'll start my presentation covering the main milestones in the implementation of our strategic plan this year. And then I will speak about the main highlights of our financial results, which, as you will have noticed, have outperformed the year's budget targets. And finally, I will go over the progress made in our ESG commitments, and I will present the company targets for 2026.

It's been a year since we disclosed our strategy update. And 2025 has been a year of consolidation for Enagás in which we have made rapid progress along the 3 main lines of our strategy, which you may recall, are supply security for Spain and Europe, financial and operating expense control under our efficiency plan and the development of green hydrogen infrastructure. Today, we are sharing yearly performance exceeding the targets we had set, demonstrating our ability and the speed at which we can execute our strategy.

As you can see, 2025 was a year full of key milestones in which we have proven more than ever what a key role we play in supply security and decarbonization for Spain and Europe. The gas system had a 100% supply guarantee and availability, and made a decisive contribution to getting the electricity grid back up in operation after the blackout here in Spain. The critical role of natural gas and gas infrastructures in ensuring the security of the energy system overall has remained evident throughout the year within a robust operational framework, which will continue to apply in 2026.

The total demand transported by the Spanish gas system, that's domestic demand plus exports, increased by 7.4% in 2025. This figure includes a 33.4% increase in gas demand for electricity generation. According to the grid operator, combined cycle plants have increased their contribution to average daily cover of the Spanish electricity system from 10% to 20% since March 2025. There has been a 2.2% fall in conventional demand, mainly due to the lower use of cogeneration and an increase in total gas exports of 17.3%, especially to France, which increased 58.9%.

And these figures clearly show that gas infrastructures are critical, not just for supply security in Spain, but also for the rest of Europe. Spain is increasingly consolidating its strategic role as an entry port for gas into Europe, and the Spanish gas system continues to stand out for its enormous flexibility. In 2025, we received natural gas and LNG from 16 different points of origin. In January 2026, total demand transported also went up 11.9%. Also, the gas system has showed enormous resilience in the face of extreme weather phenomena, which have taken place both in 2025 and in 2026 so far, and gas supply has not failed under any of these adverse circumstances.

There's also tremendous interest in the long-term outlook for the Spanish gas system. Currently, there's 2,100 of loading slots for LNG in Spanish regasification plants and about 1,000 loading slots between now and 2040. All of these numbers reflect just how sound the Spanish gas system is, generating an EUR 800 million surplus between 2022 and 2024. This robust financial health has had a knock-on effect, bringing tolls down by 42% for domestic consumers and 70% for industry between 2021 and 2024 according to Eurostat figures.

All in all, our gas system is an outperformer in Europe. Spain is one of the EU countries with the most competitive tolls, and Enagás, according to the European Council of Energy Regulators, is the most efficient TSO in Europe.

As you know, the CNMC is shortly going to announce the 2027-2032 regulatory framework for the gas system. Both the standards laid down by the regulator and the government's energy policy guidelines explicitly highlight the need for the Spanish gas system to be properly remunerated so that it can go on playing its crucial role in guaranteeing supply security in Spain and supporting the energy transition whilst also facilitating the incorporation of renewable gases into the system.

Enagás' regulatory vision is completely aligned with the guidance provided by both the CNMC and the government. We need a remuneration framework similar to that of our European peers with an after-tax IRR of between 6.5% and 7% approximately. And for this, the following parameters must be applied: A financial rate of return of approximately 6.5%, identical to that of the electricity system. Sufficient return to cover the maintenance and operation expenses of gas assets, calculated prospectively to cover the expected OpEx of future years plus a suitable margin.

The cost of the current regulatory period for gas were set using real numbers for 2018 and 2019, and they've not been updated since despite a cumulative inflation of over 20%. An incentive promoting the extension of the useful life of assets so that facility owners will maintain these assets available to the system in spite of their regulatory useful life being over without needing to carry out replacement or substitution investments, a mechanism to allow the gas system to contribute to the overall security of the energy system, focusing especially on the role of gas in providing continuity and backup for the electricity grid, taking into account the growing impact in maintenance of infrastructures of extreme weather events.

Having a reasonable remuneration framework is crucial for the sustainability of gas infrastructures. Industrial competitiveness, the security of the energy system as a whole and the development of renewable gases such as biomethane and green hydrogen. In 2025, green hydrogen has also achieved crucial milestones and its deployment continues to move forward at speed as showcased in the 4th Enagás Hydrogen Day, where we could see the enormous political, regulatory and industrial backing for hydrogen.

The third Vice President of the Spanish Government and Minister for Environmental Transition and Demographic Challenge, Sara Aagesen, announced the presentation of a draft bill to establish a national Spanish hydrogen system, a new regulated market, and the tools needed to develop the infrastructure required as well as to boost hydrogen demand. Teresa Ribera, Executive Vice President of the European Commission for a Clean, Just and Competitive Transition, stressed the full commitment of the European Commission towards H2med and to green hydrogen development. And Cani Fernández, the Chair of the National Committee for Markets and Competition, explained that the CNMC is already working to align the Spanish framework with European targets.

Spain and Europe are showing unprecedented financial support as well. The Spanish Government has already awarded around EUR 3.2 billion to projects, representing a total of 4.1 gigawatts of electrolyzer capacity in Spain. Spain is set to produce the most competitive green hydrogen in Europe as confirmed by the first 2 European Hydrogen Bank auctions. In the next funding round, Spanish projects will receive an additional EUR 415 million approved by the Ministry for Environmental Transition and the Demographic Challenge under the Auction-as-a-Service mechanism.

For these projects to materialize, infrastructures are crucial. 64% of the projects presented to the latest European Hydrogen Bank auction require hydrogen pipelines. That is a European Hydrogen Network to connect them up. Green hydrogen is an essential pillar of the European project, as the European Commission has demonstrated with each of its major initiatives in 2025 in its road maps such as the Competitiveness Compass and the Clean Industrial Deal as in the 2028-2034 multi-annual financial framework to be agreed by the member states this year in which the commission proposes to increase funding for cross-border energy infrastructure fivefold to EUR 30 billion, with hydrogen infrastructures playing a prominent role.

Also in the European Grids Package and in the 8 top priority major energy infrastructures, the so-called Energy Highways, with a dedicated fast-track procedure to speed up their delivery. One of these Energy Highways is the H2med, which, together with the Spanish Hydrogen Backbone, forms part of the Southwestern Hydrogen Corridor. These infrastructures, both developed by Enagás, in 2025, secured the Connecting Europe Facility funds requested from CINEA for studies and engineering for a total of EUR 75.8 million.

A connected Europe is crucial for a truly decarbonized competitive European Union with full energy sovereignty. And it's something that cannot wait because nowadays, there's already industries that need these infrastructures and that are already incorporating hydrogen into their investment decisions and strategic plans. According to the Hydrogen Council's Global Hydrogen Compass 2025 Report, the hydrogen industry globally has already committed USD 110 billion in investments with over 500 hydrogen projects at an advanced stage of maturity.

In 2025, Europe led in global hydrogen investments with $12 billion committed. But this is just the beginning. Europe has embarked on a major investment cycle that will continue to build momentum. According to ACER, it will increase operational production capacity sevenfold over the next 12 months up to 2.7 gigawatts. And in the last 2 years, final investment decisions have been taken for 2.6 gigawatts of electrolyzer capacity and a further 7 gigawatts are expected to reach financial close or enter construction in 2026.

And Spain has a great deal to contribute in the construction of a European hydrogen economy, with highly significant investments that have been announced in recent weeks, are scheduled for this year. One of the most recent and most notable transactions was the Repsol Petronor FID to install a second 100-megawatt electrolyzer in Bilbao as we roll out hydrogen infrastructures in line with our calendar.

2025 was a pivotal year for the H2med Corridor. No other pan-European hydrogen infrastructure is showing progress on this scale, with 4 decisive milestones hit in 2025. Strong backing from Europe and the member states as well as receiving CEF funding and being included amongst the Energy Highways, H2med has been recognized by France and Germany as a flagship project as part of the Southwestern Corridor. Recently, the French Minister for Environmental Transition and Sustainable Development stressed that H2med, "is much more than a simple transport infrastructure. It is one of the keystones in France's strategic planning."

Sound interest from Europe's industrial ecosystem as demonstrated in the launch in Berlin of the H2med Alliance, bringing together 50 leading partners from across the European value chain. Thirdly, H2med has now become a business reality. And together with our partners, we have established a clear corporate structure through the BarMar SPV and the appointment of the CEO and the executive team.

And fourthly, in the technical level, progress has been truly remarkable. We have successfully completed the geophysical studies for BarMar and confirm that the subsea route is technically viable, and we are carrying out pre-FEED engineering, working with leading European engineering firms. We've also deployed the public participation plan for the CelZa interconnection in Spain. In short, we continue to take all necessary steps to ensure that H2med can connect the immense renewable energy potential of the Iberian Peninsula with Europe's major industrial centers.

To this end, Spain will have fully operational domestic infrastructure, the Spanish Hydrogen Backbone, which continues to grow on schedule. We have already completed the conceptual engineering and awarded the basic and detailed engineering contracts for the network and for the 3 compression stations. We are working with 6 Spanish engineering firms to develop the backbone network. We have launched the public participation plan, the largest such process ever undertaken in Spain. It has already been set in motion across 9 autonomous communities and over 300 municipalities with institutional backing at the highest level from regional presidents and the Government of Spain, underscoring that it is a truly strategic nationwide project and with strong support from industry and civil society.

In 2026, we will complete this public consultation -- participation plan. We will finalize the extended basic engineering for the compression stations and develop the detailed engineering for all the pipeline sections. And moreover, Enagás has proposed the inclusion of a further 4 additional sections in the network. These were submitted last October to the 10-year network development plan or TYNDP with a view to their inclusion in the third PCI list. And as for H2med, in 2026, we will launch the FEED phase for BarMar, complete the environmental studies and the conceptual engineering for the Barcelona Compression Station and complete the detailed engineering and the environmental impact assessment for CelZa.

Progress in the infrastructure will be accompanied by further progress on the political investment, regulatory and technical fronts. Just to mention a few, this week, we have the deadline for the third European Hydrogen Bank auction with EUR 1.3 billion in funding to which we will add, apart from the EUR 415 million I've already mentioned, provided by Spain, another EUR 1.3 billion provided by Germany. And the results will be announced between May and June.

In the second quarter of 2026, the European Commission will publish the final second PCI list, and it will also be the year in which the third renewable energy directive, RED III, will be transposed as well as the hydrogen and decarbonized gases package into the legislation of the member states, a crucial step for the European Hydrogen Network. All of this goes to show that 2026 will be a crucial turning point for the takeoff of hydrogen.

Before going into the detailed results of our earnings, let me speak to what's going on with our arbitration cases in Peru. As you know, on May 23, ICSID once again found in our favor in the arbitration on the gas pipeline in Southern Peru or GSP, and in fact, increased the amount of the award to USD 303 million. In this way, they updated the fair value of the claim generating an immediate net capital gain in our books at that time of EUR 41.2 million.

Subsequently, on June 2, ICSID, as predicted, launched a request for annulment of the award filed by the Republic of Peru, which meant enforcement was automatically suspended on a provisional basis. The ad hoc committee and the schedule for the court's annulment proceedings have already been defined, and the hearings have been set for the end of June 2026. So this year, we also expect ICSID to notify us of its ruling on the TGP award.

Let me now go over the most relevant figures of our 2025 financial performance. Our core after-tax profit was EUR 266.3 million and our EBITDA, EUR 675.7 million, both above our budget targets. If we consider one-offs, 2025's net profit was EUR 339.1 million. There are 4 factors underlying this excellent 2025 performance. First, the effectiveness of Enagás' efficiency plan, which has brought down core operating expenses by 0.6% versus 2024 levels. Second, improved financial revenues, with financial expenses down 20.5%. We ended the year with our net debt at EUR 2.47 billion, well within our annual budget forecast. Over 80% of this debt is at a fixed rate. As for the financial cost of our gross debt, it is 2.1% lower than 2.6%. The rating agencies, Standard & Poor's and Fitch, have rated Enagás BBB+ with a stable outlook. Our FFO to net debt ratio is 25.7%, and we maintain an extraordinarily solid liquidity position of over EUR 2.51 billion.

Thirdly, our subsidiaries have contributed EUR 155.3 million to our EBITDA, which shows excellent performance in the year. The Trans Adriatic Pipeline continues to be vital for supply security. And since it went into commercial operation, it has transported over 52 bcm of natural gas to Europe. The company has completed the expansion in Greece adding an additional 1.2 bcm in capacity since January 2026. DESFA was awarded a tender for EUR 174.4 million in grants for its projects of common interest or PCIs.

And last year, we set up Scale Green Energy to develop infrastructures that will contribute to the decarbonization of shipping and overland transport and to the rollout of logistics chains around CO2 and ammonia. Scale Green Energy has signed a grant agreement with CINEA, the European Climate, Infrastructure and Environment Executive Agency to develop hydrogen refueling stations within the ECOhynet project. In addition, in the LNG bunkering business, construction on the Alisios carrier has been completed, and the final investment decision has been made to develop the Mistral tanker, which will start operating in 2028.

And fourthly, our asset rotation operations have had a very positive impact on our earnings. The sale of our stake in the Soto La Marina Compression Station in Mexico for EUR 15.2 million has brought in net capital gains of EUR 5.1 million. The acquisition of 51% of AXENT's share capital for EUR 37.8 million, bringing our stake to 100%, has triggered a positive impact on after-tax profit of approximately EUR 17 million, due to a revaluation of our previously held stake on our books, and the sale of Sercomgas has brought in a net capital gain of EUR 9.6 million.

In 2025, we have continued to meet our ESG commitments, environment, social and corporate governance. Thanks to this, as you can see in the presentation, we continue to hold leadership positions in the key sustainability indexes worldwide. Just to mention 2 recent examples, in the latest assessment by the Dow Jones Best-in-Class Index, we were given a score of 91 out of 100. That's 4 points higher than the previous year. And the company has also been recognized as the best company in the world in our sector in gender equality by Equileap. We also took significant steps forward in 2025 to become a net zero company by 2040. And this year, we will continue to move towards achieving this goal.

On the basis of these figures, today, we are announcing our targets for 2026. Core after-tax profit of approximately EUR 235 million and to close the year with net debt at a similar level to that of 2025 of around EUR 2.4 billion and an EBITDA of EUR 620 million. We will keep our FFO over net debt ratio above 15% and therefore, in line with our BBB+ rating. We expect to carry out net investments of EUR 225 million, and we reiterate our commitment to continue to remunerate our shareholders with a EUR 1 per share dividend.

Now I will finish with a few conclusions. This has been a year of consolidation for Enagás in which we have enhanced our risk profile, both for our financial and business positions, maintaining a robust balance sheet compatible with paying out a sustainable dividend. We are posting annual results above our targets, where we've achieved a high degree of execution with regards to our 2025-2030 strategic update. And our investee companies have had an outstanding performance.

The gas system and gas infrastructures have demonstrated more than ever they play a decisive role in guaranteeing Spain and Europe's energy security under critical circumstances and consistently throughout the year. In line with what the CNMC has already published and the government's energy policy guidance, we expect a regulatory framework for 2027-2032 that will establish a reasonable return comparable to that of our European peers, which will support the long-term sustainability of gas infrastructures.

Europe and Spain are intensifying their commitment to green hydrogen with the designation of Hydrogen Corridors as Energy Highways and the announcement of the creation of a regulated national hydrogen system. Whatever harbingers of a hypothetical slowdown in hydrogen may say in the transformation of this scale, it is to be expected that as projects mature, time lines become clearer and need to be adjusted. But what is beyond a doubt is that we are currently witnessing a growth phase in investments and the consolidation of infrastructure deployment, which will form the European hydrogen network.

Hydrogen is essential for Europe's competitive decarbonization and Europe's strategic autonomy, and it's already growing strongly in other parts of the world. The European Union is deploying new mechanisms to avoid falling behind and to reinforce this investment cycle. From Enagás, we've already begun developing our own infrastructure, achieving significant technical business and commercial progress. Hydrogen is a strategic project, as recognized by European and national institutions, regional administrations and major industrial players, Enagás will continue to do its utmost so that this project, crucial for Spain and for Europe, will become a reality as soon as possible.

Thank you very much. And now we are, of course, at your disposal to answer your questions.

[Interpreted] We're opening the Q&A session, please go ahead.

[Interpreted] [Operator Instructions] Thank you. First question from Ignacio Doménech from JB Capital.

[Interpreted] I have several questions about the regulation review and part of your earnings call. As part of the regulation review, I would like to understand which elements and remuneration risk not growing for the '27-'32 period? That's my first question.

The second one deals with provisions. I have seen a shift of approximately EUR 70 million. I would like to understand where that shift comes from.

And third, about hydrogen. My question is, do you expect any additional delays in the Backbone Network FID? And would this allow for a broader or more interesting dividend payout policy?

[Interpreted] Thank you, Ignacio. I will now answer your questions. First of all, about the elements for the next regulatory and remuneration period. We consider that in the energy policy guidelines approved by the government last November, it was considered convenient to maintain high regulation stability. So we can expect adjustments for certain parameters, but no big changes in the regulatory landscape.

We believe that to deal with or to meet the guidances from this government policy and in the preliminary consultation by the CNMC for the gas system, 4 elements need to be considered to turn that principle of sufficient payout maintained, to provide optimum maintenance of the gas system, to support the entire energy system and electricity system, while at the same time, deploying natural gases.

These 4 elements are the following: First, paying close attention to operating expenses. We know that most investments have been made in the gas system. So most operations are optimum maintenance and running of the assets. We believe that this element must be contemplated under a prospective view. Otherwise, we would have to face, as we did in the latest period, cost increase. Second, we believe that we need to maintain a certain margin in OpEx as happens in other regulatory systems.

Third, the government's guidelines on energy policy focus intently in setting up incentives, extending assets useful life once they've come to the end of their regulatory life cycle. In other words, encouraging or incentivating operators to extend the life of assets rather than investing in substitutions. So we believe that the critical life cycle will be a key element. At the same time, a similar mechanism to the present RCS needs to be maintained, to remunerate the availability of the gas system, to participate in the general energy system, specifically in the electricity system, particularly since OpEx come mostly from dealing with extreme weather events, which can be contemplated in this continuity figure for compensation in terms of sustainability for the energy system.

Second, you were asking about a shift in the provisions in our note. Well, 2025 financial statements do include a provision of EUR 116 million under the line other long-term obligations. This provision is connected to a right of collection for the same sum, booked as an asset deriving from a possible tax break generated by the settlement of the companies in Tallgrass Energy.

I must highlight that both elements are directly related, Ignacio. Therefore, the impact for Enagás would be positive if this tax break is materialized and the provision is reverted or at most neutral if this tax break did not come to happen and both the provision and the asset were reverted. At any rate, there would be no negative impact in any scenario. And to reinforce the materialization of this positive scenario, we got insurance covering the contingency from several POVs.

And last, you were asking about additional delays in hydrogen structures leading to a better dividend payout. Well, the company's strategy entails maintaining a sufficiently solid balance to organically tackle the investment plan for hydrogen CapEx and at the same time, keep our rating and our dividend policy stable. If any delays should happen, basically arising not from a change in targets or strategy either in Europe or Spain or Enagás but stemming from administrative tasks like permits and environmental impact assessment, we will save that spread for future years when the investment ultimately takes place.

So our commitment is a sustainable competitive dividend to be paid out. And if our conservative assumptions are met, it will go beyond 2026. But the elbow room we might eventually get from some punctual delay in hydrogen infrastructures, we would save as a margin to keep deploying that CapEx in future years.

[Interpreted] Well, thank you for your question, Ignacio. Next question, please.

[Interpreted] Thank you. No more questions in Spanish.

[Interpreted] We will now take your questions in English, please.

Thank you. Moving on to questions on the English side. First question is from Julius Nickelsen with Bank of America.

Just 2 questions for me. First one also on regulation. Could you just provide us with an update on the time line? I know that the draft has been delayed, but any indication would be really useful for when we have to look out for the draft to come out.

And then the second one is on capital allocation as well. You just talked about the dividend. But in terms of M&A, is that something that you assess at the current moment given the balance sheet strength? Or do you want to keep the buffer for any hydrogen investments? It would be interesting to hear your thoughts.

Thank you very much for your questions, Julius. First of all, talking about the regulation, and you were asking for some update on the time line. This past week, the Director of the Energy Services of the CNMC in a public event announced that the draft circular proposals will be subject to public consultation in the coming weeks. So she was not more precise than that. But she said that this was not going to happen in a few days, but just in a few weeks.

So we expect that this could happen, Julius probably in March or April. And this would be necessary to have the circulars approved, finally approved, let's say, something like by October, by the start of the next gas year as we define it. So I think that the CNMC is following the calendar, and we will have the proposal in March, April, and we will have the final version before the summer, and we will have the circulars finally approved in October. This is our best estimate, of course, Julius, and this is absolutely up to the CNMC.

Regarding capital allocation and the possibility of considering opportunities in M&A, well, 2 strong messages here. First of all, the absolute priority of Enagás is ensuring, as I said, the development of the company's organic plan in renewable hydrogen, the sustainability of the dividend policy and the maintenance of solid credit ratings. This is our -- these are our red lines. Second, if we consider any investment opportunity, this would have to meet the criteria defined in our strategic plan, including reasonable profitability and alignment with the established investment requirements, a focus on Spain and Europe and on regulated assets. So we are assessing the opportunities that may arise in the market, but with nothing specific in our plans and always considering these strict requirements.

Many thanks for the answer. Many thanks, Julius, for your questions. We are ready to move on to the next one, please.

Next question is from Arthur Sitbon with Morgan Stanley.

I have 2. The first one is on your net financial debt target for 2026. It's broadly flat with the net debt achieved in 2025. So I just wanted to check, basically, it seems to me that there is no cash inflow expected from Peru in 2026, and that would come later. I was just wondering if this is just a conservative assumption that you're making or if it's a genuine expectation that you won't receive cash in 2026? That's the first question.

The second one is just thinking a little bit in -- about the bigger picture of the regulatory review in Gas Networks. I see that consensus expects significant growth in net income in 2027, close to 9%, at around EUR 255 million. I imagine a lot of the contribution from hydrogen networks investments will be after 2027. So in that context, I was wondering what would be needed to have so much net income growth in 2027? Is it that the increase in allowed return that you're getting, close to 100 bps, is going to be enough to have this 9% of net income growth? Or do you need other improvements in the regulatory framework to reach these types of numbers?

Thank you very much, Arthur. Regarding our net debt, I will ask Luis, our CFO, to give you a detailed net debt bridge for this year. But in general terms, we are not counting on getting cash inflows from the GSP award in 2026. We are counting on those for 2030. So we are being conservative. You are right. But we are putting ourselves in a very prudent, very conservative stance. So we think it's better to not to count on this money coming earlier, just for the sake of being conservative, as you said.

But what I would like to mention here is that we expect to continue optimizing our cash in Peru coming from the dividends of TGP. As I said, we are expecting that the final hearing for the GSP annulment appeal will take place in June, July this year. And the ad hoc committee created by ICSID should release their resolution 6 months later. If not, they have to inform every month about the expected date of this resolution.

So when this happens, and we are pretty sure that the result will be positive for Enagás, we can continue optimizing our cash in the country or when the award for the TGP arbitration is received and provided that it's positive for Enagás as we are sure it will be, then this can happen as well. Whichever things happens earlier, we can continue optimizing our cash in the country. According to what the tribunal has said for the TGP award, this should be released in the second quarter of this year. So that would be probably what would happen first.

So Arthur, we are not counting on cash inflows this year for our rights to be paid by the GSP award. But yes, we are expecting to continue optimizing our cash in Peru once the TGP award is released or once the annulment appeal is resolved by the ICSID Committee.

And regarding the big -- I will let -- I will give the floor to Luis in a minute for a detailed net debt bridge. But addressing the bigger picture you were requesting for our 2027 OpEx remuneration, we are not giving any guidance for 2027 yet. We think that this is not the moment for that. We are still in the process of knowing the circulars for the next regulatory period, and we are still in discussions with the regulator. What we are pretty comfortable and we are able to say is that we consider that EBITDA and BDI will start to improve at the beginning of the next regulatory period.

So Luis, please?

Thank you, Arthur. Just to understand well what is the expected evolution of the net debt between 2025, 2026, that we expected that it's going to be maintained really flat, no, probably close to EUR 2.4 billion, as always has been our commitment, no, when we present the update of the solid plan in February 2025.

The main 4 steps are the following. I think we have a fund from operation of EUR 550 million. On top of that, we account with an investments that are going to be close to EUR 220 million, as you see in the material that we report. Of course, the dividend of EUR 1 per share count with around EUR 260 million of cash flows for dividends, and we have working capital -- a negative working capital of EUR 72 million. This is going to be the results of, first, the cash inflow of the O&M for the hibernation of Castor that we expect to collect this year after the positive sentence of the court.

And also, it's true that we are going to suffer also the lower tariff during the year, that is going to be the final year where all the adjustments made by the regulator is going to be allowed to practically eliminate all the surplus generating in the natural gas system between 2021 and 2024.

So this is the main figures. I think it's important that at the end of 2026, we will finalize with our funds from operation net debt adjusted by the rating agencies higher than 20%. And this is something that give a lot of comfort, and the company will be really unleveraged with the capacity to face all the CapEx program in hydrogen and also sustain the dividend policy.

Thank you very much for your question, Arthur. We are ready to take the next one.

Next question is from Beatrice Gianola from Mediobanca.

Just had a quick follow-up on the regulatory front. Just wondering if you can provide us with an indication on the rate of return that you are expecting would be approved by the CNMC or at least proposed by the CNMC. I remember you indicated something around 6.5% to 7% as a whole, a rate of return. So just wondering if this number is still valid?

And then I just wanted to understand which are your expectations in terms of a regulatory framework for the hydrogen part, meaning how would you expect the authority to reflect -- to somehow reflect in the new regulatory update, the development of the hydrogen grid?

Thank you very much, Beatrice. Regarding the expected rate of return, we are considering a value very, very close to 6.5%. You know that the methodology of the rate of return has already been approved, being in general terms, this methodology common to the electricity and gas systems. However, the last circular approved by the CNMC determines precisely the exact value for the allowed return for the electricity system, which is, I think, 6.58%.

But it doesn't give the final figure for the gas system because there is one adjustment coefficient that has not a final value and that will be determined in the circular for the gas system remuneration. If we maintain the value initially disclosed in the initial public consultation of this methodology, we would be around 5 -- sorry, 6.48%, something like that. But this is not final. So we consider that we will be between 6% -- or 6.45% to 6.58%. So this is why we've said in our speech, in my initial statement that we are counting on a rate of return very close to 6.5%, which is the value that is included in our financial projections as approved in February 2025 in our strategic update.

So I think this is a good message that Enagás is being very conservative when assessing what the new regulation is going to bring. And I think that this same idea may be extended to the other elements of the remuneration period. So we are being very conservative, and we think that our regulatory vision is very much aligned to the criteria set by the CNMC and by the Ministry, the Spanish Government, in their respective position documents that were published last year.

And regarding our expectations for the regulatory frame for hydrogen investments, I think that the next important step will be the draft law for the transposition of the European Hydrogen and Decarbonized Gas Package. You know that this is where the regulatory framework is going to be established in the member states. And in the case of Spain, the Vice Prime Minister, Sara Aagesen, in the 4th Enagás Hydrogen Day, as I have mentioned in my speech, she announced that in the coming -- she said, in the near future, it will be subject to public consultation, the draft law transposing all these elements of the European Hydrogen and Decarbonized Gas Package. So we will know there the initial model of the Spanish government for all the elements of the regulatory framework for hydrogen. And in that law, the new tasks that have to be developed by the CNMC regarding hydrogen will also be established.

So we cannot give you, Beatrice, first version of which the model will be, except the European directive itself in which many aspects of the regulation, the access mechanisms, the balance mechanisms for the system, the planning aspects also of the hydrogen infrastructure will be determined. So I insist on the 4 elements: The Vice Prime Minister Aagesen mentioned for this draft law, which are the creation of the hydrogen Spanish system, the national hydrogen system; second, the creation of the regulated hydrogen market; third, the mechanisms to develop the infrastructure; and fourth, the incentivization -- or incentivizing of the hydrogen demand. But we will know this in, we think, in the coming weeks or a few months because the Vice Prime Minister Aagesen said that this will happen in the near future. Thank you, Beatrice.

Thank you very much, Beatrice, for your questions. We are ready to take the next one, please.

Next question is from Ella Walker-Hunt from Citi.

My first question relates to the 2026 guidance and the EBITDA guidance. Can I ask how much of that EUR 620 million will be coming from affiliates versus the underlying business? That's my first question.

And my second question relates to green hydrogen. So in your slides, you mentioned that 145 megawatts of FIDs took place in 2025, and you expect 780 megawatts to take place in 2026. On those 2 points, can I just ask how many megawatts are actually operational today? And how do we reconcile these things to the 12 gigawatts with target in 2030 in the national plan?

Thank you for your questions, Ella. Regarding our EBITDA guidance, we estimate that in 2026, the contribution from our affiliates will be around EUR 165 million.

Regarding the current operational capacity of electrolyzers in Spain as of today, I cannot give you right away the exact figure. I can tell you that the Spanish Government has already awarded public funding to -- amounting to EUR 3.1 billion to an approximate amount of 4 gigawatts. Some of those have already taken FID. Last year, in Spain, 100 megawatts project by Repsol in Cartagena took FID plus this second project of Petronor of an additional 100 megawatts. Those projects are already under construction.

Other projects that have taken FID in recent months were the 10-year -- the 10-megawatt project in Bilbao, the first one. The 100 megawatt is the second one. This 10 megawatts is reaching the final stages of construction. And there are -- there is one Iberdrola project in operation in Puertollano, which is, if I'm not mistaken, a 20-megawatt project. And there is also, under construction, one project by BP in their Castellón refinery together with Iberdrola, which is also, if I'm not mistaken, 20 megawatts project. In addition to that, we have our Mallorca project in operation, which is a small project. I think the capacity is 2.5 megawatts, and there are other small projects in Spain.

So I would say that under construction or in operation, we have around 300 megawatts. And in this year, 2026, we expect that at least 650 megawatts are going to reach FID. 100 megawatts coming from this Repsol Petronor project that took FID last month in January. Repsol has also announced that their Tarragona project with a capacity of 150 megawatts will be taking FID. You know that Enagás Renovable is also a partner in this project. And Moeve has announced that they intend to take this year the FID for their Onuba project in Huelva with a total capacity of 400 megawatts.

So we think that at least in this 2026, an additional 650 megawatts will take FID and will initiate construction, bringing the figure for projects under construction or in operation to 1 gigawatt in Spain in 2026. This is what I can tell you now, but our IR team can share with you more precise figures and estimates. Thank you, Ella.

Thank you, Ella, for your questions. Let's move on to the next one, please.

Next question comes from James Brand with Deutsche Bank.

Apologies if there's a bit of background. I'm in an Airport. Hopefully, you'll be able to hear me okay. I had just kind of one new question and 2 clarifications. So the new question is, for the EUR 225 million of investments that you're planning for 2026, could you give us a breakdown of the different areas that's going into? So how much is going into the natural gas business, regulated business, how much is going into kind of hydrogen stuff, how much is going to other stuff? That would be great.

And then on the clarifications, the first one is on the GSP time line. I just want to clarify, you said the hearing would be in June. And then I think you then expect a resolution within 6 months. So is it that we should expect kind of a full decision kind of by the end of 2026 or maybe early 2027? Or did I mishear you?

And then the other clarification is just on the time line for hydrogen regulation. You said you expect this law for the Spanish Government to be coming in the coming months, I guess. Do you expect that to also have kind of details on how the regulation will work? I'm guessing not. So I'm guessing, for you to have full visibility on the regulation, you need this law and then the CNMC needs to start a process of determining the regulatory framework after that. And if that's the case, are we looking into 2027 before we get that? Or might we get that earlier?

Thank you very much, James. Regarding the planned investment amount for 2026, those EUR 225 million. The breakdown is as follows: The natural gas infrastructure, meaning the regulated business, we estimate something around EUR 97 million, mainly CapEx, something like EUR 47 million, and the rest going to the GTS, CapEx, Musel and others. For hydrogen infrastructure, we are planning around EUR 49 million. We are entering the main phase of the FEED engineering investments for BarMar, and we are entering also the detailed and extended engineering for the Spanish Backbone. So that's why the investment in hydrogen infrastructure increases in 2026.

For the new businesses and what we call the adjacent businesses, those close to our regulated business but not being regulated themselves, we are planning around EUR 55 million, mainly for Scale Green Energy, around EUR 28 million for the new bunkering vessel, the Mistral LNG bunkering vessel and the rest in other concepts. And others, meaning innovation funds and some international business, especially our investments in Stade in Germany, around EUR 22 million. This is more or less the breakdown of that EUR 225 million.

And regarding the clarifications, if I took my notes correctly, first of all, you were asking about GSP. You know that for the annulment appeal, the ICSID designates an ad hoc committee. This committee approved the calendar for the process, and this was already communicated to the parties in the process. And in that communication, the committee established that the resolution should take place 6 months after the hearings. The hearings will take place in late June, early July. So we should get the resolution of the committee before year-end.

But if there is any delay that may happen, then the committee will inform every month of the expected date of the resolution. So we expect that it should happen perhaps after that 6 months period but not extending too much that period because this has been the intention declared formally by the tribunal.

Regarding the regulation, the hydrogen regulation time line, as I said, the draft law should be subject to public consultation by the government in the near future, meaning that a few weeks or a few months. After the law is passed, then the CNMC has to create the detailed regulatory framework through circulars similar to those of natural gas. But the CNMC is already aware that these future responsibilities are around the corner, and the CNMC has declared the President of the CNMC, Cani Fernández in our Hydrogen Day on January 28, said that the CNMC is already working to be prepared to comply with the European framework.

So the CNMC doesn't have a formal mandate yet and doesn't have the final regulatory framework that will arise from the transposition of the directive, but he's already aware that these new tasks are going to be assigned to the CNMC and is starting as they deem it necessary, the initial or preliminary works. Thank you.

Thank you, James, for taking part. We are ready to take the next question, please.

We have no further questions on the English side. Handing back over to the Spanish room once again for further questions.

[Interpreted] Thank you. We have one more question. This question is from Jorge Alonso.

[Interpreted] I have 2 questions. The first is considering the situation -- well, the talks that you're having with the regulator and gas demand levels and so on. Do you think it might be conservative or very conservative to have set the targets that you have in the strategic plan? Could you have some upsides over those targets in the plan?

And the second question is, what are your expectations for your affiliates or your subsidiaries in the next couple of years, your investees, both in terms of earnings, but also in terms of cash flow generation?

And my final question, do you still think, although you don't deem it necessary for the plan, that Peru is no longer going to be a core geography and that you might divest, I suppose, at some point?

[Interpreted] Thank you very much, Jorge, for those questions. As for your first question, I think that as far as we're concerned, what we should do is to provide some guidance about how the regulatory model might evolve, but to always be very conservative look at the actual needs of the gas system and comparable with our peers in Europe and their remuneration levels, considering that Enagás is the most efficient TSO in Europe.

And so I think that our forecast is definitely prudent and conservative, but it's also very well founded, and we do hold on to the same guidance that we presented last year with our strategic review. I think that's the best guarantee for investors. We don't include in our financial forecast a sort of tactical take on how we think regulation should evolve or where we think it will go. We are always very much aligned with the views expressed by the regulator and the government, which is also a regulator since, as you know, underground storage is the responsibility of the government in this regulatory framework.

And so we've not updated our guidance, which we shared in February of 2025, because we think it's very solid and well supported by data and benchmark of other regulatory systems and other operators in Europe. And so we think the best thing we can do for the market is to be rigorous and conservative and maintain stability in our guidance in terms of our financial forecasts.

As for the contribution of our investees, I mentioned that, next year, we expect them to contribute EUR 165 million to the EBITDA approximately. I wouldn't extend that guidance to following years, but I do want to make a comment because it has a lot to do with the sustainability of our dividend policy, how we see the average FFO for the 2030 period, where the legacy businesses come in as well as the regulated businesses and the gas businesses and the investees, and also we will start to see revenue from the new hydrogen businesses.

Our expectation for the average FFO between '27 and '30 is EUR 520 million on average in that period. And as I said, starting to see growth in our EBITDA and our BDI during that period. And we would -- without hydrogen, that's -- the EUR 520 million is without the contribution of the hydrogen business and the Enagás investees would contribute about EUR 170 million, EUR 180 million of that total per year. We think that's a prudent conservative outlook, which is well aligned with our concept of a sustainable dividend beyond 2026 as long as, of course, as these conservative assumptions apply with regards to the regulatory model.

And as for possibility of divesting of our Peruvian business. It's true, as you said, Jorge, that Peru is not a strategic core investment for Enagás and it doesn't really align with our focus on Spain and Europe, which underlies our strategic vision since the 2022 strategic plan. However, we still have ongoing litigation in Peru. And so we will focus on the correct resolution of this litigation. And after that, we might consider the possibility of a divestment. But our priority now is to complete the process, which is about to come to an end. But as I've said, there's still some appeals and some milestones that we have to go through in the arbitration process. Thank you very much, Jorge.

[Interpreted] Thank you very much, Jorge, for your question. There are no further questions in this call. Thank you very much, everyone, for participating in this Enagás earnings presentation and for your questions. And of course, we're always available in Investor Relations. Thank you.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]