ENEA's results above market expectations

Consolidated sales revenues after a growth by 5.3% yoy amounted to PLN 4,84 bln in H1 2014. The Group's EBITDA totalled to PLN 1,103 mln, which proved a result by 17.7% better than in the same period of 2013. The net profit increased by 37.4% and amounted to PLN 625 mln. In H1 2014 ENEA CG consistently implemented the goals prescribed in the corporate strategy. 

Financial results in H1 2014 were supported by:

• recognition of revenues from compensation for covering stranded costs (Long-term Agreements),
• lower consumption of materials and raw materials and value of goods sold,
• lower average purchase price of electricity,
• higher sales of electricity by 1.2 TWh.

The results in the analysed period were negatively affected by: lower margin on generation of electricity in ENEA Wytwarzanie (segment of system power plants), lower average selling price of electricity, lower tariffs for households and introduction of a yellow and red obligation.

"We reported a growth in financial results due to systematic works over the enhancement of ENEA Group’s efficiency and a skillful use of opportunities occurring on a still uncertain energy market. We try to operate flexibly and counteract maintaining unfavourable trends on the market. Our goals are clearly set - both on the Group's level, and on the level of particular business areas" - emphasises Krzysztof Zamasz, President of the Board of ENEA S.A.

The highest EBITDA in H1 2014 was reported in the segment of distribution which generated PLN 605.7 mln, i.e. by 13.7% more than in the preceding year. The key growth factors in the area included: lower average purchase price and lower volumes of electricity purchases for covering book-tax difference and lower provisions relating to the grid assets. The highest growth was reported in the segment of generation, whose EBITDA amounted to PLN 440.3 mln (growth by 57.6 % yoy). What positively affected the result of this segment was recognition in Q2 2014 revenues from Long-term Agreements in the amount of PLN 258 mln. The segment of trade realised EBITDA result on the level of PLN 82.3 mln.

"The Group's financial situation, supported with a large amount of cash, is stable, which will allow for a smooth implementation of the adopted investment programme. In H1 2014 only the Group invested PLN 981 mln, keeping a favourable net debt/EBITDA ratio on the level of -0.2" - says Dalida Gepfert, Vice-President of the Board of ENEA S.A. for Financial Affairs. 

In H1 2014 ENEA Group generated 6,114 GWh electricity (5,584 GWh - conventional sources, 530 GWh - RES), i.e. by 2.3 % more than in the same period of the previous year. Sale of conventional electricity grew by 920 GWh. In H1 2014 the Group sold 7,750 GWh electricity to end users, i.e. by 1,174 GWh more than in the previous year.

The priority of the Group is preparation of the organisation for market challenges. The area of generation focuses on the building of a competitive generating portfolio. In H1 2014 ENEA Wytwarzanie purchased 85% shares in MPEC Białystok. It will allow for the optimisation of heat production and will strengthen the position of the Group on the local market. The construction of the 1,075 MW unit in Kozienice is on the schedule. As at the end of June 2014 the work progress amounted to ca. 35 %. The segment of distribution is preparing for the introduction of the quality tariff in 2016. ENEA Operator invests in the extension and modernisation of the power grid. During 2014-2019 it will spend PLN 4.2 bln on investments. The key task of the segment of trade is building long-lasting relations with Customers. In H1 2014 ENEA S.A. gained almost 65 thou. new Customers. During that time the Company managed to increase sales to strategic Customers as well by 1 TWh in comparison with the previous 6 months. The Group is continuing the project of establishment of the Shared Service Centre. It has already completed works connected with the centralisation of three key functions: Customer service, finance and accounting, and IT. Till the end of the year subsequent three functions will be centralised: human resources, logistics (purchases) and coordination of legal services.  

The policy of better efficiency which is consistently realised and the cost regime resulted in the fact that ENEA Group in H1 2014 generated savings on the level of PLN 75 mln (including: PLN 56 mln in the segment of generation, PLN 13 mln in the segment of distribution). The continuation of optimisation works will enable to finally reduce the Group's costs by ca. PLN 500 mln.

In H1 2014 works were also finalised connected with obtaining financing for strategic, in the light of the Group's development, projects. Besides the loans gained earlier from the European Investment Bank in the amount of PLN 1.425 bln and the agreement relating to the bond issue programme up to the amount of PLN 4 bln, on 15 May 2014 ENEA and Bank Gospodarstwa Krajowego concluded a programme agreement relating to the long-term bond issue totalling to PLN 1 bln. On 30 June ENEA concluded also an agreement with the following banks: PKO BP, ING Bank Śląski, Pekao S.A. and mBank, relating to the bond issue programme up to the maximum amount of PLN 5 bln.