Enea transforms into an innovative raw materials and energy concern, flexibly adjusting to the market environment changes

Enea Group will adopt new area strategies in the coming months which implement the assumptions of the Group’s Development Strategy until 2030 adopted at the end of September. Positive financial performance for the three quarters of 2016 will enable the company to prepare to new market challenges. The Group is already undertaking pro-investment and pro-consumer initiatives which are consistent with the new thinking about the concern.

Implementing the assumptions of the Group’s Development Strategy until 2030 adopted on 29 September, Enea will become an active participant of positive changes in the Polish economy and will strengthen the Polish energy security, becoming a part of the Responsible Development Plan for Poland and the national energy policy.

– Setting new directions of the Group development until 2030, we specified solid goals and investment budget. Based on that, we will adopt detailed area strategies in the coming months in the key segments of the Group’s chain of values to perform proper operationalisation of set goals included in the Group’s Development Strategy. Our whole organisation, which today employs ca. 15 thousand employees, faces new challenges and arduous work. I believe that due to the commitment of the whole team we will attain set goals which will guarantee the Group’s further development, strengthen its position on the market and bring relevant benefits for Shareholders - said Mirosław Kowalik, president of Enea.

The new strategy will allow the Group to transform into a modern, dynamic and flexible organisation, which is able to use the market opportunities. Enea of the future will be a leading supplier of integrated raw materials and energy related products and services and other innovative services for the wide range of Customers, recognised for the quality, comprehensiveness and reliability. Enea wishes to be a multi-service and multi-product company so that the Customer knows that when they turn to Enea, they will receive a good offer for the product or service they expect.

Enea pursues to enhance efficiency in all the links of the chain of values

The recent months have brought new challenges for the energy sector resulting from changes in the closer and further market and legal environment. They required resilient and efficient actions. Enea Group’s good results for the first three quarters of the year indicate that the Group will face its challenges and may implement ambitious targets. In Q1-Q3 2016 Enea Group consistently pursued to increase the efficiency in all the links of the chain of values.

– In Q1-Q3 2016 we significantly improved the industrial infrastructure resistibility, increasing security and reliability of energy supplies to Customers. We improved the indices which qualitatively define the duration and number of interruptions in energy supply: SAIDI - by 45% yoy and SAIFI - by 32% yoy. In the area of generation we have been consistently implementing the programme of modernising units No. 1-10 of Kozienice Power Plant. Next, in the area of mining we signed a contract increasing coal supplies from Bogdanka to the Group – mentioned Mirosław Kowalik.

In Q1-Q3 2016 coal production in Enea Group increased by 12.7% yoy and amounted to PLN 6,682 thou. tonnes net and generation of electricity increased by 4.8% yoy and amounted to 10,166 GWh. In the same period sales of distribution services to end users reported a growth by  4.0% yoy and equalled to 13,924 GWh and sales of electricity and gas to retail users increased by 6.4% yoy and totalled to 13,296 GWh.

Enea Group reports strong financial results due to an optimum use of the organisation’s business potential

In Q1-Q3 2016 Enea Group reported PLN 8,304 mln net sales revenue, i.e. by 16.1% more than in the same period of 2015. The consolidated EBITDA, after a growth by 13.9% yoy, amounted to PLN 1,829 mln. The comparability of results yoy was affected by the settlement in Q3 2015 of revenue from Long-term Agreements in the amount of PLN 293 mln. After exclusion of this one-off event, net sales revenue of the Group grew by 21.1% and EBITDA by 39.4%. The reported net profit totalled to PLN 721 mln, i.e. by 14.0% less than in Q1-Q3 2015.

In the period of the three quarters of 2016 the highest EBITDA, PLN 857 mln (growth by 3.0% yoy), was realised in the area of distribution. After exclusion of revenue from the settlement of LTPPA, the highest growth in EBITDA, amounting to PLN 50 mln (growth by 12.0% yoy), was reported in the area of generation. The segment of trade's EBITDA, after a growth by 34.3% yoy, amounted to PLN 118 mln. In relation to the acquisition of LW Bogdanka, Enea CG’s operations in Q4 2015 were extended with the area of mining, which in January - September 2016 generated PLN 437 mln EBITDA.

After three quarters 2016 Enea CG spent PLN 1,854 million on investments, which is by 5.1% less than in the same period of the previous year. Net debt/EBITDA as at the end of September 2016 was on a safe level of 1.8.

- Our priority is optimisation of all the business processes occurring in the Group. Due to the Employees’ commitment, we are constantly increasing the efficiency of the organisation’s functioning and adapting to the changes in the market environment more quickly. At the same time, we take care for the level of realised costs, implementing savings. All the actions undertaken by us enhance the Group’s potential and value, which is confirmed in the financial result we generate - underlined Mikołaj Franzkowiak, vice-president of Enea for financial affairs.

LW Bogdanka – another quarter of good results, despite a durable difficult situation on the market

Lubleski Węgiel Bogdanka Capital Group after three quarters of 2016 generated sales revenue reaching PLN 1.3 billion (i.e. on a similar level to the previous year, despite lower prices of coal) and net profit in the amount of PLN 120.2 mln (lower by over 9% than the one generated last year). EBIT result in the said period amounted to PLN 154.6 mln (drop by 11.4% yoy) and EBITDA: PLN 432.3 mln (drop by 5.6%).

The Company assesses the generated financial results as very good. Maintaining high profitability ratios, despite decreases in the volumes of sold coal by almost 11% yoy, were possible due to a continuous cost control and optimisation of capital expenditures. In consequence, EBITDA profitability in Q1-Q3 2016 was maintained on an over average level for the global industry, namely 32.9%.

In Q3 2016 commercial coal production totalled to 2.4 mln tonnes and sales remained on the level of PLN 2.4 mln as well in the said period. As a consequence, after three quarters both production of commercial coal and its sales reached the level of around 6.7 mln tonnes. The length of corridor excavations performed in the first nine months of 2016 amounted to 17.2 km, which means a growth by 11% as compared to the same period of 2015.

According to the earlier announcements, Bogdanka estimates coal production and sales in 2016 ranging from 8.5 to 9.0 mln tonnes. After three quarters of 2016 the company has already realised almost 75% of the upper level of the announced annual mining volumes, which means that it may be expected in the whole year that mining volumes and sales will total to around 9 mln tonnes. 

LW Bogdanka maintains a strong market position. After Q3 2016 its share in the market of steam coal sales was on the level of 15.7% and in steam coal for commercial power industry market on the level of 25.9%. It means a return to the levels close to 2014, after turbulences on the coal market in Poland in 2015.

– I assess the financial results achieved after three quarters of 2016 to be very good, taking into account the market conditions. Their generation was possible due to a continuous and consistent cost control and optimisation of capital expenditures. We are maintaining a safe financial liquidity and remain the most efficient and modern bituminous coal mine in Poland, guaranteeing timely supplies of over 1/4 of coal required by the Polish power plants – said Krzysztof Szlaga, president of Lubelski Węgiel Bogdanka.

– In Q3 we strengthened our long-term mining security, signing annexes to multiannual agreements with Enea Wytwarzanie increasing supplies to Enea. They confirm the benefits associated by Bogdanka with joining Enea Group and  joint building of a modern raw materials and energy concern. At the end of the quarter we also signed an annex prolonging, until 2021, the agreement with ENGIE Energia Polska for coal supplies to Połaniec Power Plant. Due to the above mentioned agreements we have strong bases, in next years, for a long term planning of our production, which will have a positive effect on our cost position. It is particularly important in a still difficult situation on the Polish coal market - even though in Q3 an explicit growth in coal prices was observable on the international markets, the prices of this material are still low in Poland - added Krzysztof Szlaga.

Pro-investment quarter of Enea with the promotion of a new product range

In Q3 2016, Enea Group announced numerous pro-investment actions. In September Enea and Energa signed a letter of intent relating to the cooperation on the preparation, implementation and operation of a modern 1,000 MW unit in Ostrołęka Power Plant. Enea submitted also an offer for the purchase of 100% of shares in ENGIE Energia Polska, the owner of Połaniec power plant. Both announcements of possible investments may strengthen the Group’s position on the market of energy producers and are complaint with adopted Enea Capital Group’s Development Strategy until 2030.

The Group also invests in the held generating assets. Enea Wytwarzanie signed an agreement for the performance of a modern installation of flue gases denitrification with modernisation of electrostatic precipitators in Kozienice Power Plant on units 9 and 10, 500 MW capacity each. The value of the contract is PLN 289.2 million net. The investment is planned to be completed at the end of 2018.

In Q3 Enea commenced the campaign titled “You improve - you win” promoting the new product range which is directed to both individual and business Customers. Enea, in accordance with the adopted Strategy, is focusing on Customer needs.

- Customers expect fixed power prices, savings and additional benefits flowing from the purchase of electricity. Therefore we offer diversified and price-attractive products which join electricity sales with packages of additional benefits - underlined Piotr Adamczak, vice-president of Enea for commercial affairs.

In Enea’s offer, individual Customers, apart from the power fixed price, may use the assistance by an expert, saving at the same in a special purchase zone at www.enea.pl.

Energy price permanence guarantee is also offered by the company to business Customers - within “ENERGY+ Fixed price” product. They may also choose the offer of “ENERGY+ Always cheaper” with a fixed discount for the whole term of the agreements ad additionally use the Assistant Package of services.