Enea becomes a modern fuel and energy group
Good financial results after three quarters of 2015 confirm Enea's strong position. Despite difficult market and legal conditions, due to a consistently performed cost restructuring, the Group saved PLN 493 mln until the end of September 2015. In Q3 the company updated its corporate strategy. As a part of building a fuel and energy concern it took the control over the best Polish mine, LW Bogdanka.
Development in all the links of the chain of values
In August the Supervisory Board updated the Group's strategy until 2020. The active monitoring of the market environment and searching for new sources of a durable competitive advantage allowed for defining three new pillars of the strategy, which will enable an increase in the efficiency of the company's operations.
- In previous quarters we performed huge work, due to which we have profoundly changed the organisation. Today, we are an efficient, modernly managed business body, which may swiftly respond to changes in the market environment. We are building a modern fuel and energy concern. The updated strategy corresponds to new challenges we face. Guaranteeing fuel sources for energy production, investments in the area of innovation and optimum use of our human resources are the three new elements due to which we want to be a step ahead of our competitors - emphasises Krzysztof Zamasz, president of Enea.
Eena verified its investment plans which during 2015-2020 will consume ca. PLN 17 billion, of which PLN 9.8 billion is basic expenditures related to investments in the area of generation and distribution, and ca. PLN 6.7 billion is funds designated for acquisitions. As compared to the 2013 perspective, mainly investments in cogeneration sources and heating networks changed. The final volumes of capacity installed in this type of installations was reduced by ca. 100 MWe and ca. 500 MWt..
Higher value through innovation implementation
Enea's innovation operations will be strongly focused on customer needs and raising the internal efficiency of the organisation.
- Innovations in technology and methods of conducting business force profound changes in the method of energy companies' operation. As service providers, we already compete with entities from other sectors. Customers expect not only the basic product from us, which is electricity, but also high quality service along with a package of additional benefits being e.g. medical care or insurance - convinces Grzegorz Kinelski, vice-president of Enea for commercial affairs.
Searching for and obtaining innovative projects in the Group will be a task of a newly established fund, VC Enea Innovation. The fund will invest in projects at early stages of development (seed and start up). However, there will be a possibility of investing in the best companies at the expansion and development stages. The fund's capitalisation will be PLN 50 mln and from PLN 1 to 5 mln will be allocated in each project. VC Enea Innovation has a 5-year investment horizon. The new entity will provide Enea with an optimum access to the financial funds of the European Union supporting innovations.
- VC Enea Innovation is the first in Poland professional corporate venture capital fund. It operates in accordance with the best practices within innovation, which prove themselves in such countries as Germany, Great Britain or United States of America. There are no territorial limitations, but it is particularly focused on domestic undertakings. The fund will be an active investor, supporting the portfolio companies in their development - explains Paweł Orlof, vice-president of Enea for corporate affairs.
Enea has just selected the winner of the first competition of this type in Poland "Energy+ !nnovations", whose goal was the review of the currently developed technologies and obtaining them for the Group. Over 30 projects were submitted to the competition. The winner project relates to the possibility of making the method of inspecting HV lines automatic. Currently, detailed analyses of the project are taking place. Their successful completion and implementation of the winner's idea will allow Enea for improving the reliability and safety of operation of the key elements of the distribution network.
Hedging the sources of coal fuel supplies
On 29 October Enea became the owner of a total of 66% of LW Bogdanka's shares, holding thus the operating control over the most efficient Polish mine. An effectively conducted tender offer, in which WIG20 listed companies were both the acquirer and the acquired, was an important event for the whole Polish market.
As regards direct benefits, the transaction of Bogdanka's acquisition may be treated as an equivalent of the forward financial transaction hedging the fuel purchases. Bogdanka will provide Enea with coal at an attractive price, which as regards the technology is completely adjusted to firing in Kozienice Power Plant. Already before, Lubelski Węgiel was the key supplier for Enea. In 2014 the mine delivered ca. 70% of the whole demand of the Group for coal, but also the historical and forecast long-term share is close to 80%.
- Due to the takeover of Bogdanka we guaranteed our generating units the cheapest coal in Poland and hedged a cheap fuel for new energy investments. Works on the construction of the new unit in Kozienice have already reached the progress of 70% and pursuant to the schedule the unit will be commissioned in H2 2017. It means that our demand for coal will grow by ca. 1/3 - says Dalida Gepfert, vice-president of Enea for financial affairs. – We have also a possibility of realising numerous synergies with Bogdanka. Both on the operating and investment level. Bogdanka's entry into Enea Group is a guarantee for it of a certain future and further development – adds Gepfert.
New staff policy
The formulation and implementation of the new comprehensive HR policy will allow for the realisation of goals and tasks faced by the Group, satisfying at the same time the ambitions and professional aspirations of employees. The Company will concentrate on raising the work efficiency e.g. through the management of deliverables and remunerating for results and management of competence, knowledge and development of employees.
Good financial results
In the period of January - September 2015 Enea Group generated PLN 7,150 mln net sales revenue. Consolidated EBITDA, after a growth by 6.1 per cent yoy, amounted to PLN 1,605 mln. The net profit was on a level similar to the same period of the previous year (growth by 0.5%) and amounted to PLN 838 mln.
After three quarters of 2015 the highest EBITDA was generated in the segment of distribution and amounted to PLN 833 mln. The greatest growth in EBITDA - by PLN 155 mln, which is 28.1 per cent - was reported in the segment of generation. The results of the segment of generation in the period of three months of 2014 and 2015 were affected the most by one-off events being the recognition in Q2 2014 of PLN 257 mln and in Q3 2015 of PLN 293 mln revenue from Long-term Agreements. After the exclusion of the impact of these events EBITDA of the segment of generation grew yoy by PLN 120 mln, i.e. 40.6 per cent. The segment of trade, reporting a growth by 5.9%, generated EBITDA result in the amount of PLN 88 mln.
In the analysed period Enea Group continued the implementation of a programme of fixed costs optimisation. In the period of January - September 2015 the savings amounted to PLN 241 mln, of which PLN 124 mln in the segment of generation, and PLN 110 mln in the segment of distribution.
- As a result of the President of ERO's decision relating to the settlement of the final adjustment of the support programme we ended long disputes and in Q3 2015 recognised PLN 293 mln revenue from Long-term Agreements. We will allocate the obtained funds in the implementation of the planned investments. 2015 is a period of the greatest capital expenditures in the Group which will amount to PLN 3.6 billion. The realisation of such an ambitious CAPEX programme is related to the Group's debt, however safety is always on the first stage for us. Therefore, we are watching each Zloty with care, both as regards costs and expenses. At the end of Q3 net debt/EBITDA ratio for the Group was on the level of 0.8, which is much lower than the average for the European energy companies. Additionally, since 2014 we have been consistently realising the cost optimisation programme in the Group. In 2014-2020 strategy we foresaw that in 2014-2016 it will bring PLN 500 mln savings. Already at the end of September 2015 we practically reached the foreseen goal and saved as much as PLN 493 mln - comments Dalida Gepfert, vice-president of Enea for financial affairs.
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