Energy

Samalayuca-Sásabe gas duct

Waha-Presidio gas duct

Compression Station in Waha-Texas

Samalayuca-Sásabe gas duct

Samalayuca-Sásabe gas duct

CICSA Ducts Team

$347
million pesos of controlling net income

The expenses in connection with the TOC operation start-up in Colombia and those explained by our participation in bids for the oil rounds, where Carso Oil and Gas, S.A. de C.V. was adjudicated the Contractual Area blocks 12 and 13 for exploitation and exploration of hydro-carbons, explain the operating losses and accrued EBITDA, which were of $24 million and $16 million, compared to losses of $82 million and 36 million in the preceding year, respectively.

The effects in connection with exchange fluctuations were reflected in net profit of the Carso Energy holding company, which increased by 16.8% amounting to $347 million, in comparison with $297 million registered in the preceding year.

The Waha-Presidio and Waha-San Elizario gas ducts, both in the State of Texas, U.S.A., with a 42” diameter capacity and a length of 238 and 313 kilometers, respectively, are already providing gas transportation services to the Comisión Federal de Electricidad (CFE). Although both gas ducts have recorded earnings during 2017, because they are in consortium, they are not consolidated and, therefore, are not reflected in the operating results of this division, but in the profit-sharing of the associate corporations. Carso’s participation in both is 51%.

The Samalayuca-Sásabe gas duct, located between the states of Chihuahua and Sonora, with a 36” diameter capacity and a length of 624 kilometers, continued with the construction and progress in the procurement of the right-of-way at December 2017. This gas duct was adjudicated in September 2015 by the CFE to Carso Electric, which has a 100% interest in the project.

Lastly, it is important to mention that in the fourth quarter of the year, Carso Energy made a capital contribution to a corporation holding permits for the exploration of two geothermal energy fields in the States of Baja California and Guanajuato, thus obtaining a 70% interest in the business. In both fields the exploration program has already started.

Capital expenditures at Carso Energy during 2016 were $3,843.6 million.

ASSOCIATED COMPANIES
The main associated companies where Grupo Carso participates, are: Elementia (36.2%), a manufacturer of various construction materials, such as cement, copper pipes, metal sheets, among others; GMexico Transportes (15.1%), cargo and intermodal railway transportation corporation in Mexico; Trans-Pecos Pipeline, LLC (51%), owner and operator of the Waha-Presidio gas duct in Texas, U.S.A.; Comanche Pipeline, LLC (51%), owner and operating of the Waha-San Elizario gas duct in Texas, U.S.A.; Constructora Terminal del Valle de Mexico (14.3%), a building consortium for the terminal of the new Mexico International Airport (NAIM); Cargi-Propen (25%), a building consortium for the Landing Strip 3 of the NAIM; and, Inmuebles SROM (14%), real estate corporation owner of shopping malls in Mexico. The pro rata sales and EBITDA of these corporations that would correspond to Grupo Carso are $17,470 and $5,260 million.

Sincerely yours,
Antonio Gómez García
Chief Executive Officer