ENEA's financial results compliant with market expectations

In Q1 2014 ENEA Group generated PLN 2,373.7 mln sales revenues, PLN 461.5 mln EBITDA and PLN 209.3 mln net profit. The results were affected by a difficult situation on the electricity market, however, they are complaint with the expectations. The beginning of the year was also one of the key moments in the process of the organisation reconstruction.

ENEA's results in Q1 2014 are directly connected with the difficult situation of the whole industry. Consolidated EBITDA was charged with a reduced average selling price to end Customers (partly adjusted with higher volumes) and lower prices of electricity on the wholesale market. In the reporting period EBITDA improved of the segment of distribution, which after a growth by PLN 5.4 mln yoy amounted to PLN 292.6 mln. The segments of trade and generation were under the pressure of the market conditions, which generated EBITDA amounting to PLN 58.3 mln and PLN 123.7 mln, respectively. A decrease in EBITDA yoy in the segment of trade was affected by a lower average selling price by 16.8%. The growth in the sales volumes by PLN 544 GWh and lower average purchase price by 12% had a positive impact on that segment. Lower EBITDA in the segment of generation results from diminished margins on the production of conventional energy in the segment of system power plants.

"The fact that we are demonstrating lower profits yoy for Q1 2014 is largely connected with a high base of application in the segment of trade, which in the previous year, due to e.g. cheap green certificates generated PLN 109.6 mln EBITDA. The Group's financial standing is stable, and is supported with a significant amount of cash. Net debt/EBITDA remains on the safe level -0.4."– said Dalida Gepfert, Vice-President of the Management Board of ENEA S.A. for Financial Affairs.

In Q1 2014 ENEA CG increased the generation of electricity both from the conventional sources (growth by 2.3% yoy) and from RES (growth by 16.5% yoy) generating a total of 3.1 TWh electricity (growth by 3.4% yoy). In this period the Group sold almost 4 TWh electricity to end users, i.e. by 544 GWh more than in the previous year.

Within the creation of the Shared Service Centre for ENEA Group companies, on 1 January 2014 the financial and accounting services were moved from ENEA S.A. to ENEA Centrum, and on 1 May 2014 the process was completed of transferring employees of the following areas: finance, accounting and IT in the remaining Group's core companies: ENEA Wytwarzanie, ENEA Operator, ENEA Trading. On 1 May the operations were also commenced by ENEA Group Committees - Compliance, Investment, Management Committee - which render advisory services for ENEA S.A.'s Management Board. The new corporate governance and the Group's management plan is to establish a homogeneous economic body, oriented on the market and Customer.

"Through the new strategy of the whole Group and area strategies we are changing the DNA of ENEA so that it is able to flexibly adjust to the situation on the market. Our task is to optimally use the potential of the organisation, increase its efficiency and facilitate the business processes occurring in it." - emphasised Krzysztof Zamasz, President of the Board of ENEA S.A.

2014 is also the key time for the Group's major investment. The progress of works on the construction of the power unit No. 11 as at the end of the year will reach ca. 65%.