Business Context and Reporting Period
This Form 6-K filing by Transportadora de Gas del Sur S.A. (TGS) covers the period ending December 17, 2010. The report details a resolution by the Board of Directors held on December 16, 2010, regarding the discontinuation of a previously accrued tariff increase revenue.
Key Financial Metrics
The filing does not provide comprehensive financial statements, revenue, profit, cash flow, or debt metrics for the reporting period. The only specific financial figure disclosed is a negative impact on net income of approximately 70 million Argentine pesos resulting from the reversal of a credit provision. This calculation is based on unaudited financial statement information as of September 30, 2010.
Material Changes
The primary material change is the Board's decision to discontinue the registration of tariff increase revenue established under an Interim Agreement dated October 8, 2008, and ratified by Executive Power Decree No. 1.918/09. Consequently, the company is reverting the credit provision for this revenue, which had been accrued but not implemented due to regulatory and legal delays.
Outlook, Risks, and Management Commentary
Management cited two primary reasons for the decision: (a) more than one year had elapsed since the enactment of the Decree ratifying a 20% tariff adjustment without implementation, and (b) appeals were lodged by the National Gas Regulatory Body (ENARGAS) and the Ministry of Federal Planning, Public Investment and Services against a court judgment that had previously ordered ENARGAS to establish the tariff chart for the retroactive increase. The filing highlights significant regulatory and legal contingencies surrounding tariff adjustments in Argentina.
Investor Verification Checklist
- Verify the current status of the appeals lodged by ENARGAS and the Ministry against the Federal Administrative Law court judgment.
- Confirm the exact impact of the 70 million Argentine peso reversal on the full-year 2010 audited financial statements.
- Assess the timeline and likelihood of future tariff adjustments given the regulatory delays described.
- Review the Interim Agreement of October 8, 2008, to understand the remaining contractual obligations regarding the 20% tariff adjustment.