Good morning. Welcome to the Grupo Energía Bogotá fourth quarter 2025 financial and operating results conference call. The results reports were published yesterday and are available on GEB's website for your reference. The conference will start with an overview of the quarter's results and the main events in the economic and industry environment, followed by the group's financial milestones. At the end of the presentation, a Q&A session will follow. On the bottom right of your screens, you will find a question and answer section for you to write your questions at any time, or you can raise your hand if you'd like to ask your question live. Our conference speakers will be the CEO, Juan Ricardo Ortega, the CFO, Jorge Tabares, and the Financing and Investor Relations Manager, Karen Guzmán. Juan Ricardo, the floor is yours.
Thank you, Luis. Good morning, everyone. Welcome to our 2025 year-end earnings call. It is a pleasure to present the group's main financial indicators. In 2025, we achieved milestones that reflect the group's strength and resilience in a particularly challenging local and regional environment. We recorded total revenue of COP 8 trillion and our Adjusted EBITDA reached historic levels of COP 5.9 trillion, driven mainly by the dividend decree from our investments in Brazil, Argo, and Gebbras, amounting to BRL 1,313 million, equivalent to about COP 950 billion. We closed the year with net income of COP 3.4 trillion, supported by managed non-operational events and contributed to our results, which Jorge will address later. In Colombia, the year 2025 was marked by a moderate growth environment, persistent inflationary pressures, the revaluation of the Colombian peso against the U.S. dollar, and monetary policy adjustments that increased the cost of capital.
These factors reinforce the importance of our long-term strategy focused on capital discipline, financial strength, and diversified regional vision. Maintaining a solid financial position has enabled us to honor the trust of our more than 21,000 shareholders. By year-end, we completed payment of the COP 2.2 trillion in declared dividends, reaffirming the tangible value we generate and distribute among those who form part of the company shareholder base. Dividends, together with the appreciation of the shares in 2026, represent a total shareholder return of 31%. Before the end of the year, Fitch Ratings adjusted our international rating from triple B with a negative outlook to triple B negative with stable outlook, aligned with the sovereign downgrade that also impacted other companies. This change does not alter our vision of our group's structural strength.
We continue to have a diversified portfolio, stable cash flow, and a solid business position supported by strategic assets and disciplined execution. These fundamentals allow us to maintain investment grade even in an uncertain influential environment and remain focused on strengthening our financial and operational capabilities to sustain the group's growth and contribute to the country's energy security. Additionally, the Capital District, as the major shareholder, began an analysis process to evaluate the potential divestment of 9.4% of stake in the group, in line with the approval granted by the district council. This exploratory phase will allow the district to determine whether the technical and financial conditions cease to move forward with a transaction corresponding to the sale of the remaining portion authorized since 2016. We'll look at the operational milestones. In Colombia, our energy infrastructure progress reflects our commitment to reliability and regional development.
In 2025, we commissioned section three of the Alférez–San Marcos of the Southwestern Reinforcement strategic project, now at 87% completion. That includes 38 km of transmission lines and 93 towers, strengthening electricity supply in Valle del Cauca and its capital, Cali. This project, part of a 423 km, 500 kV system, continues to advance across its remaining section and has generated positive social impacts for more than 28,000 people in its area of influence through community infrastructure initiatives and quality-of-life improvements. We also commissioned the Río Córdoba–Bonda line, a 33 km, 220 kV infrastructure, including 59 towers and two construction segments built under the highest technical, environmental, and social standards, reinforcing energy security in Magdalena and transforming the reality of households, industries, and energized territories. We further consolidated our growth with the award of the Sopó Substation, a key project to strengthen the electricity connections in Cundinamarca and the Bogotá Sabana.
This initiative, part of the 2022-2036 National Expansion Plan of the Ministry of Mines and Energy, will begin operations in 2029, improving service quality and reliability. With this award, and over 2,500 km already in operation, we solidify our position as the country's second-largest electricity transmission operator, reaffirming our long-term vision and commitment to regional development. From the electric power generation front, 2025 was a decisive year for Enel Colombia. The hydrological recovery allowed for a greater contribution of self-generation, reducing spot market purchases, and lowering thermal generation usage, all while maintaining a controlled cost structure. At the same time, progress advanced on the construction and energization of the Guayepo III solar park, which recently entered into operation, reaching a maximum capacity of 263 MW.
This milestone consolidates our affiliate as a leader in renewable energy generation and in the development of the country's largest photovoltaic hub, which is over 1 GW at the moment, fundamental to diversifying Colombia's energy matrix. Likewise, the distribution business strengthened Enel's results due to an increase in the regulated remuneration associated with the commissioning and recognition of new infrastructure, expanding the regulated asset base. Enel Colombia drove the expansion and modernization of the electrical grid in Bogotá and Cundinamarca under the Bogotá Region 2030 Expansion Plan. With investments of approximately COP 1.3 trillion in strategic assets, this boosts the system reliability and enables large-scale electric mobility projects transforming the region. At the end of January 2026, our subsidiary, TGI and Hocol, a subsidiary of Grupo Ecopetrol, signed an agreement granting TGI a connection point to Hocol's infrastructure.
This is critical for Colombia's gas supplies through imports to the Ballena complex that connects to the TGI infrastructure. There is going to be the approval of an IPAL, which is a reliability asset for the gas transportation system, and we hope to be able to have this in operation late in 2028, with over 250 million cu ft per day at that time. Finally, both in Brazil and Peru, we see opportunities that strengthen our regional vision. In Brazil, technical events, including the nationwide blackout of October 2025, highlighted system vulnerabilities and accelerated a more ambitious regulatory agenda aimed at modernizing networks and enhancing services resilience. This renewed momentum creates a clear space for companies with our experience to contribute to the transformation of Brazil's electricity system and capture investment opportunities in critical infrastructures.
In Peru, we operate in a stable regulatory environment that offers significant growth opportunities through an investment commitment of more than $500 million plan, enabling the extension of the Cálidda concession into the Andean regions. We await the government's definition to advance this process, a key step to continue aligning our capabilities with the sustainable regional vision that drives us. They all see with good eyes for this project to be implemented. I now hand the floor over to Jorge Tabares, Chief Financial Officer, to present the financial performance of the quarter. Please go ahead, Jorge. Thank you.
Thank you, Juan Ricardo. Good morning, everyone. In Q4 2025, operating results were influenced by the average 0.5% appreciation of the Colombian peso against the US dollar, in addition to other factors I will explain below. Operating revenues decreased 6% year-over-year, mainly due to foreign exchange conversion effect, which totaled -COP 138 billion . In the natural gas distribution segment, Cálidda recorded solid revenue performance in functional currency, increasing by $15 million, driven by distribution services, higher bill volumes, and network relocation services related to new projects with the regional government of Lima and the Metropolitan Investment Fund. These results were offset by a COP 129 billion FX conversion effect negative. The natural gas transportation business posted an 8% year-over-year contraction, mainly due to the higher demand observed in 2024 associated with dispatch to thermal plant during El Niño phenomenon, as well as lower contracted capacity from key customers.
Additionally, the absence of a tariff ruling for 2025 limited the expected revenue dynamics. In electricity, the transmission business recorded a 2% decline, including a -COP 5 billion appreciation impact. In Colombia, revenues were also affected by the update of the domestic PPI index and the USD PPI, which reduced the performance of revenues from auction assets. Operating costs decreased 3% year-over-year. In gas transportation, lower maintenance and emergency costs, along with reduced replacement gas consumption, contributed to the decline. In electricity distribution, the sharp reduction is explained by two factors, the FX conversion effect of COP 3 billion negative, and normalization of service contract costs at Dunas following reversals of related party transactions in Q4 2024 that did not apply this period.
In electricity transmission, costs increased due to higher contributions and depreciation of transmission networks, mainly from the capitalization of section one of the Southwestern Reinforcement Project. The total FX conversion effect on operating costs amounted to COP 96 billion. Administrative expenses fell 53%, mainly due to lower expenses in the electricity transmission segment, resulting from the reversal of the IRE provision for 2025 for COP 124 billion. This corresponds to January to September, along with the reversal of work-related disputed adjustments at TGI for COP 72 billion. Additionally, the FX conversion effect was -COP 14 billion . As a result, operating margins increased 15% this quarter versus the previous year, with electricity transmission segment showing the largest positive impact on operating results, primarily due to the lower IRE portfolio provision, followed by the reversal of the provision adjustments at TGI in the natural gas transportation business.
The next slide, I will present the main factors that explain the evolution from operating income to net income during the quarter. Quarterly operating income reached COP 1.1 trillion, a 67% increase versus Q4 2024, driven by an extraordinary event reflected in other income from the sale of a non-operating asset totaling COP 231 billion, and the provision reversal at TGI for COP 62 billion. The performance of the main line item is as follows. Financial expenses increased 4%, reflecting new treasury loans. Foreign exchange differences decreased 49%, as foreign currency liabilities benefited from 9.6% quarterly appreciation of the COP against the USD. Regarding the equity method in Enel Colombia, a strong performance offset the tariff reductions applied to SPEs Argo V, VI, and VII by the regulatory calculation in 3Q 2025.
Income tax increased 51% year-over-year, mainly due to higher current tax, the effects impact on debt from the quarterly appreciation of the COP, end of period exchange rate up 4% versus USD, and the sale of the non-productive asset mentioned. Controlled net income for the quarter totaled COP 929 billion. Let's move to the next slide, please. The equity method contribution reached COP 419 billion in the quarter, increasing 61% year-over-year, mainly due to Enel Colombia, which reported an annual 35% increase in net income, driven by higher regulated remuneration, lower impairment from the Windpeshi sale, reduced debt levels, and a stronger operating profitability from its generation and distribution businesses. Vanti, which delivered positive performance with 22% EBITDA growth and 100,000 customer expansion in its user base.
The results were partially offset by the five-year tariff adjustment in Brazil, affecting SPEs Argo V , VI, and VII , which reduced revenues in these concessions, as well as higher financial expenses in 4Q 2025, due to dividend payments to GEB. On a 12-month basis, the 14% year-over-year increase in the equity method contribution was led by Enel Colombia recovery. The contribution from controlled companies increased 3% year-over-year, driven by three companies, TGI, Cálidda, and Dunas. In TGI's case, this was due to the reversal of the provision amounting to COP 134 billion. Let's continue to the next slide. In 2025, executed investments totaled $515 million equivalent, a 9% year-over-year increase. Colombia Transmission accounted for 53% of the total investment, up 8% versus 2024, mainly due to progress on the Colectora, Chivor II Norte, Southwestern Reinforcement, and Sogamoso projects.
The second largest investment focus was natural gas distribution, with Cálidda executing 20% of total organic CapEx in network distribution. Natural gas transportation investments grew by 57%, driven by progress on EPA capacity expansion projects on the Mariquita-Gualanday and Ramal Jamundí sections. The updated five-year organic CapEx projection is $1.4 billion, driven mainly by energy transmission investments. In Colombia, these resources will support ongoing projects and future investments starting in 2027 for UPME-led auctions. Adjusted EBITDA for the quarter was COP 1.6 trillion, up 83% year-over-year, mainly due to dividend decrease from Argo, COP 713 billion, and Gebbras, COP 84 billion. The chart on the right highlights the contribution of the top three companies to EBITDA. TGI with 42%, Cálidda with 24%, and Colombia Transmission with 12%. The other category shows a relevant 22% contribution, driven primarily by Dunas and Gebbras in the quarter.
Now I'll hand it over to Karen Guzmán, Financing and Investor Relations Manager, to cover the debt section. Please go ahead, Karen.
Thank you, Jorge. Good morning, everyone. During the last quarter of 2025, the group's consolidated debt reached $5.5 billion, with a 53/47% distribution between Grupo Energía Bogotá and its subsidiaries. 40% of total debt is fixed rate, while 60% is indexed to SOFR, IBR, and CPI. 67% is denominated in U.S. dollars, followed by 30% in COP and the remaining in PEN. The group's levered ratio, net debt over EBITDA, improved from 3.8 x in the fourth quarter of 2024 to 3 x in the fourth quarter of 2025, driven by 16% growth in Adjusted EBITDA, which outpaced the 8% year-over-year reduction in net debt. Similarly, the interest-covered ratio, EBITDA over financial expenses, improved from 4.5 x at year-end 2024 to 5.7 x at year-end 2025, reflecting a stronger cash generation and more efficient financial cost management.
It was supported by reductions in the average cost of debt, 38 basis points in U.S. dollars and 24 basis points in COP. Next, key quarterly highlights by company. GEB issued a $500 million bond in the international market on October 2025 under Rule 144A Regulation S with a 10-year maturity and a 5.75% coupon to partially finance its investment plan. TGI closed a COP 740 billion club deal loan with Bancolombia and Davivienda on December 2025 with a seven-year tenure, bullet maturity, and an interest rate of IBR three months plus 1.81%. Proceeds were used to refinance an existing club deal, optimizing the margin by 99 basis points. Cálidda dispersed an additional $15 million from its A/B loan facility with CAF, reaching a total of $445 million with a five-year tenure, bullet amortization, and SOFR six months plus 1.65% rate.
ElectroDunas secured a PEN 100 million loan with BCI with an 18-month loan tenure and a 4.86% fixed rate to refinance existing debt and fund CapEx and working capital. Now, I'll hand it back to Jorge to continue with ESG topics.
Thank you, Karen. In 2025, the group achieved outstanding sustainability performance reflected in the inclusion of GEB, TGI, and Cálidda in the MSCI Global Sustainability Yearbook 2026, following the assessment of over 9,200 companies worldwide. This is our fifth consecutive year of recognition, reaffirming the strength of our ESG strategy with a score of 84 out of 100, positioning us as leaders in the Americas within the gas utility sector. TGI ranked in the global top 1% of oil and gas storage and transportation sector for the third consecutive year, while Cálidda entered the Yearbook for the first time with a 77 out of 100 score. These results demonstrate discipline, transparency, and rigor in management and strengthening our long-term sustainable value creation outlook.
Regarding climate strategy, after assessing global and regional context, local energy realities, and operational constraints and opportunities, we updated our climate commitments to a 20% reduction in Scope one and Scope two emissions by 2030 and 30% reduction by 2035. To ensure financial discipline, we adopted an internal carbon price of $15 per ton, a strategic tool for evaluating financial risk and opportunities, guiding investment decisions, and enhancing long-term portfolio resilience. We expanded Scope three emission measurements to 10 of 15 categories, enabling a more robust value chain assessment. In climate adaptation, TGI and ElectroDunas completed 100% of planned actions, Enlaza advanced 6 out of 32 designed plans, and Cálidda will begin critical infrastructure vulnerability assessments in 2026. In 2025, the group has strengthened its social impact through COP 70 billion in investments, benefiting more than 400,000 people.
Through workforce taxes, COP 62 billion were approved for energy communities initiatives, connectivity, environmental conservation, and cultural preservation. TGI also connected over 4,300 people through rural gasification efforts. Environmental investments exceeded COP 45 billion, and GEB advanced in identifying natural related risks, impacts, and dependencies aligned with the international frameworks such as TNFD. We achieved a 77 reduction in high-impact gaps identified between 2024 and 2020, demonstrating maturity in human rights due diligence. In 2025, we updated corporate-level due diligence and completed the first evaluation at Contugas, reaching 100% of controlled subsidiaries with active plans to prevent, manage, and remediate human rights impacts, strengthening governance and alignment with global standards, including UNGPs, ILO guidelines, and OECD principles. In summary, quarterly results demonstrate, first, a solid performance in 2025, showcasing the group's structural strength amid a challenging environment.
We achieved COP 8 trillion in revenues and a record adjusted EBITDA of COP 5.9 trillion , supported by dividends from our transmission investments in Brazil. Alongside COP 3.4 trillion in net income, these results confirm the resiliency of our portfolio and our disciplined, regionally oriented financial strategy, enabling a 70% payout ratio totaling COP 2.2 trillion in dividends. We reinforced market and shareholder confidence despite macroeconomic pressures and regulatory uncertainty. In a year of moderate growth, persistent inflation, and peso revaluation, we distributed COP 2.2 trillion in dividends. Combined with share appreciation, this delivered a 31% total return to more than 21,000 shareholders. We consolidated our ESG leadership regionally and globally in 2025, supported by strong S&P Global evaluations recognizing GEB, TGI, and Cálidda as top performers in their respective sectors. Thank you again for your interest. We now open the floor for the-
Thank you very much. We'll now move on to the Q&A part of the call. If you'd like to ask a question and you're connected from the phone, please press star two. That is star two if you're connected from the phone. If you're connected from the web, you can type your question in the box provided or request to ask a voice question. We will wait a few moments for the questions to come in. Our first question is from Juan Jose Munoz from BTG. Your line is now open. Please go ahead. Hello, Juan. Your line is now open. Please go ahead. We cannot hear you.
Good morning, Juan Jose. If you can type it in case you cannot speak it out.
Perfect. Just a reminder, it's star two if you're connected from the phone. If you're connected from the web, you can send a text or voice question. We have a question from Sebastian Gallego from Ashmore.
Hello, GEB team. Thanks for the call. Could you please dig deeper on the company's expectations for the district's divestment, timeline structure of the offering, thoughts on valuation, et cetera? Can you please share your expectations related to dividends to be received by your main investments compared to 2025?
Thank you. Can you hear me?
Yes.
Thank you, Sebastian. As announced, GEB is exploring all possible lines of action to concrete the desired sale of the city. So far, we are just speaking with potential investors everywhere, locally and internationally, and are preparing all the information required, in case the district decides to move forward with the transaction. The decision point should be something along the May, June timeframe. Of course, at this point, valuation or potential investors is not decided, and that is going to be driven by market conditions and investors' appetite at the time. That's what we can say at this point about this transaction. We're talking to a lot of potential investors and on our positioning the company strategy, to new investors, to see if we can gather enough support for the potential sale of the district's shares.
Thank you. We'll open the line of Juan Jose from BTG. Your line is now open. Please go ahead. Juan, we're not hearing you. Perhaps you can send a text question. Okay. Juan sent his question. Can you give more color on Argo's dividends? When we can expect going forward the same level of dividends?
Sure, Juan Jose. The dividend was an extraordinary dividend. The company reacted to the enactment of the tax law that established a withholding tax on the dividends. We quickly reacted, and agreed with Argo that it was the most cost-efficient way to receive dividends from the company, given the fact that Argo had access to the local market in a long-term possibility. They raised the debentures locally at five, seven, and 10 years, so long-term. This is an extraordinary dividend. Moving forward, we think, the framework would be between 50% and 70% dividend payout from Argo. That is what we would be receiving on an ongoing basis. On 2026, that number is along the lines of COP 100,000 million, from Argo itself.
It was extraordinary, a reaction to the tax and the fact that the company had a moderate leverage and access to a very competitive local money. That's what drove the dividend this year.
Thank you.
I can read here, Juan Esteban Ortega.
Can you give us more color on the gas situation in Peru and the exposure of the group?" Unfortunately, this is a short time, major crisis. From the beginning, TGP and the government announced that it was going to take 14 days to repair. Effectively, they are going to do that as of last night. They keep maintaining that it could take 13 days. They are moving in the range of hours basically instead of days, clearly not weeks. They are about 50% complete in the repairs, is what they announced yesterday. We think that's going to be resolved relatively quickly. The exposure is moderate. The bigger exposure for us is in Cálidda, in the regulated market.
This could mean if it takes 14 days, it could be between in the range of $2 million-$2.5 million of lost revenue by Cálidda, because of the event. In the non-regulated business, the Cálidda clients have take or pay, that's then not affected. This condition is not considered a potential exclusion for the payments from the clients. The quality and the nature of the take-or-pay contract was already tested during the COVID period. The company read all the take-or-pay contracts prevailed, all the clients had to pay at the time. It's a moderate exposure. We have a minor exposure on the ElectroDunas side. Because of the constraint of gas, they had to turn off the thermal plants, in total 60 MW for a few days. That's not in the half a million dollars range, even lower than that.
Moderate exposure. The situation is going to be short-lived. We do think that this actually can create an interesting opportunity. We have in the past spoken to the authorities, many years ago, and we once in a while put that conversation on the table. It is either the need for regasification facilities in order to support the system in these type of situations, because relying on just one pipeline for the whole economy is a risky proposition despite this situation occurring very rarely. Increasing the capacity for storage. Of course, storage is not going to fix months, but it could fix a few days also. Clearly, the quick reaction by TGP and the good work of ensuring that the situation is fixed quickly is a positive. When assessing risk in the future, this is a positive to assess this type of risk.
Thank you very much. We have a follow-up from Sebastian Gallego from Ashmore.
Can you talk about the M&A progress in Brazil or any other country that you may be looking?
Sure. Brazil transmission keeps being a key target for us. Last year, we spent a lot of energy and effort to try to win an asset that was for sale that we were very familiar with. We maintained financial discipline. The winner was a Chinese company, and they measure returns different from us. We just need to let go those opportunities in order to ensure value creation. It is a very dynamic market, and our size now with the transactions we have made since 2015, give us a very good position to entertain conversations with different players. I am optimistic that we can close something in Brazil in the next three or four months. A lot of conversations going on. We are respected in the sense of a potential partner or a potential acquirer for assets that could be up for sale.
Brazil, something could materialize relatively soon, is what I would say. In terms of dividends, when we add up all the net income of the companies or the dividends to be received during 2026, it is COP 2.4 billion , COP 2.4 trillion in the U.S., I guess.
Thank you. Just a reminder, if you would like to ask a question, it's star two if you're connected from the phone. Star two from the phone, and if you're connected from the web, you can send a text or voice question. We'll just give it a few more moments. Okay, looks like we have no further questions. I'll now hand it to Jorge for the concluding remarks.
Thank you for your interest and participating in the call. We remain open for further questions. The IR team is available. Please do not hesitate to come back to us. I'll just emphasize, it was a positive year. The diversification of the portfolio benefits us. If some business are being challenged, others are delivering more results. That compensates. We enter 2026 with many opportunities that have been maturing for the last many months. Hopefully, we can close one of those and continue executing our strategy. Thank you very much.
Thank you. We'll now be closing all the lines. Have a nice day.