Enea Group’s financial results for H1 2017 confirm stronger market position
H1 2017 is further activities towards building the development potential for Enea Group. In February, the Group adopted the Mining Area Development Strategy. And in March Enea successfully completed the acquisition of Połaniec Power Plant which already from the first months builds the Group’s additional value. Enea's directions of developing innovative energy and commodity group are reflected in financial results generated in the first half of this year. Enea Group reported a very good EBITDA result which grew by 12.6% yoy and amounted to PLN 1,358 mln with consolidated net sales revenue totalling PLN 5,567 mln and net profit amounting to PLN 624 mln, i.e higher by 32.4% yoy.
In the period from January to the end of June 2017 Enea Group generated 9,337 GWh electricity (growth by 37.2% yoy), of which 8,484 GWh (growth by 29.9% yoy) derived from conventional sources. Sales of distribution services to end users amounted to 9,654 GWh i.e. increased by 3.5% in relation to the same period of the previous year. During the first six months of 2017 Enea also increased electricity volumes sold to retail consumers by 8.2% yoy. On the other hand, the production of commercial coal in the Group reached the level of 4.6 mln tonnes. Coal sales in that period were reported on the similar level, which also means a growth by 6.5% yoy.
- In H1 2017 Enea Group continued activities focused on the implementation of the accomplishment of the planned strategic goals. Our financial and operational results confirm that, thanks to the effective cooperation of business areas, we strengthen the Group's position on the market – said Mirosław Kowalik, president of Enea.
- We are a stable and strong energy and commodity group which develops in a sustainable and regular way. Therefore, after the implementation in the recent months of investments building our Group’s value and generation of planned financial results, we are currently focusing on the maximum use of the effects of synergy occurring within the assets we hold – added president Kowalik.
Enea Group regularly generates very good financial results – balanced EBITDA structure constitute solid grounds for further development
Enea Group closed the first half of 2017 recording consolidated net sales revenue of PLN 5,567 million. After a growth by 2.6% yoy consolidated EBITDA amounted to PLN 1,358 million. Net profit grew by 32.4% yoy and amounted to PLN 624 mln.
In the period of January - June 2017, the highest EBITDA, PLN 517 mln, was generated in the area of distribution. The greatest growth in EBITDA, totalling PLN 96 million (growth by 28.9% yoy), was generated in the area of generation, which in H1 2017 closed with EBITDA amounting to PLN 427 million. The basic driver for EBITDA change in this area was a growth in the generation capacity resulting from the acquisition of Połaniec Power Plant. The EBITDA result of the area of trade, after a growth by PLN 54 million (107.8% yoy), reached the level of PLN 105 million, and the area of generation in that period reported EBITDA amounting to PLN 321 million.
– Enea Group records good and stable financial and operating results on a regular basis. The results of H1 2017 were generated e.g. due to a significant strengthening of its power and position on the electricity generation market in Poland thanks to the acquisition of Połaniec Power Plant at the end of Q1, which is one of the largest transactions in the Polish energy sector. Currently, we are intensively working on the optimisation of our Kozienice-Bogdanka-Połaniec mining and generation area, so that to maximally use the effects of synergy occurring within the assets we hold – said Mirosław Kowalik, president of Enea.
The Company distributed PLN 0.25 per share from profit for 2016 to shareholders. This was the amount recommended by the Management Board, positively assessed by the Supervisory Board and finally passed on 26 June 2017 by the General Meeting of Shareholders of Enea.
– Enea puts financial security on the first place in its operations. It wishes to be a dividend distributing company, however the level of payment must be adjusted to the size of the generated profit, the Company’s financial possibilities and planned development – underlined Mirosław Kowalik.
Enea Group implementing the scheduled investments strengthens its market position
Implementing the investments planned in the strategy Enea Group increases its strength. In H1 2017 Enea Group allocated PLN 2,445 million to investments, of which PLN 1,608 million on equity holdings, including the acquisition of Połaniec Power Plant, PLN 329 million was invested in the area of generation, PLN 344 million in the area of distribution, and PLN 139 million in the area of generation. Until the end of 2017 the Group plans to spend a total of PLN 4,311 million on investments.
The construction of our key investment - the supercritical 1,075 MW Kozienice Power Plant, equipped with the most modern ecological solutions with the possibility of extension in the future with a CCS installation for capturing CO2 (CCS ready status) is in the final stage of implementation. On 1 September the unit successfully underwent the first synchronisation with the Public Power System. Prior to synchronisation, it was necessary to launch all technological systems - the works have taken place in recent quarters. Investment’s progress at the end of August was 99%.
- The investment goes into the final phase. The first synchronisation means switching on the generator of a new unit for synchronous operation with the Public Power System, i.e. the ability to operate the unit in combination with PPS and electricity generation. In the coming months the unit will undergo testing and trial run will be started to regulate and optimise its operation – said Rafał Szymański, acting vice-president of Enea for corporate affairs.
Enea Group is already analysing the reconciliation of the generation assets with BAT conclusions. In the case of Kozienice Power Plant this is connected with investments of about PLN 150 million. The scope of the investments will include e.g. modernisation of 200 MW unit electrostatic precipitators and modernisation of IOS I, II and IV flue gas desulphurisation plants. In the case of Połaniec Power Plant, the estimated amount is approximately PLN 350 million and the works include e.g. the completion of the installation of the catalytic denitrogenation of flue gases (SCR) and modernisation of IOS absorbers as well as electrostatic precipitators. The Group announces that its generation units will meet the standards required by BAT conclusions.
The key elements of the Group's development will be innovations. The power sector, including Enea Group, already today is the major recipient of innovative solutions which are implemented e.g. in distribution networks or by electricity generation. Enea also sees considerable potential in the realisation, together with the scientific centres and local governments, of research and development projects in the area of electrical buses and the infrastructure of their charging. Therefore, in April 2017, Enea became a member of the cluster entitled “Polish Electric Bus - electromobility supply chain”.
- Innovativeness is not only one of the key development conditions for us. We wish to introduce innovativeness into the DNA of our Group. We focus on searching for new solutions and ideas. We search for them on the market and inside the organisation. We wish to utilise them to realise the vision of an innovative company which anticipates and satisfies Customer expectations and is able to face challenges the future brings – said Mirosław Kowalik.
LW Bogdanka after H1 2017 - very good financial and operating performance
Lubelski Węgiel Bogdanka in H1 2017 generated consolidated sales revenue on the level of almost PLN 902.1 mln (growth by 6.3% yoy) and net profit in the amount of PLN 112.1 mln (growth by 49.6% yoy). EBIT in the reporting period amounted to PLN 147.5 mln (growth by 52.7% yoy), and EBITDA to PLN 318.6 mln (growth by 14.9% yoy). LW Bogdanka invariably stands out from the industry with very good results thanks to continuous cost control and optimisation of capital expenditures. EBITDA profitability in H1 2017 amounted to 35.3%, which means that it is one of the highest in the industry.
Bogdanka enhances its strong market position. After H1 2017, its share in the market of steam coal sales was on the level of 18.0% and in steam coal supplied to the commercial power industry market on the level of 26.2%. The production in Q2 2017 was in line with the plan and amounted to 2.1 million tonnes (growth by 9.5% yoy). Sales in this period were slightly higher than production and amounted to 2.3 million tonnes (an increase of 3.6%). In the first half of 2017, coal production reached 4.6 million tonnes (growth by 6.4%). Sales in that period were reported on the similar level, which means that they grew by 6.5% yoy. The length of corridor excavations performed in H1 2017 amounted to over 15 km, which means a growth by 16.3% as compared to the same period of 2016.
LW Bogdanka, thanks to a change in the mix of walls and improvement of the quality of the excavated material (higher mining output from the longwall mining), has seen an increase since Q2 2016 in the volume of excavated material - in Q2 2017 it was ca. 68.3% as compared to 61.2% in Q2 2016.
- LW Bogdanka's financial and operating results achieved after the first half of this year are very good. Their achievement was possible thanks to a consistent implementation of production and sales strategies as well as cost control and optimisation of capital expenditures. We maintain our declaration that our target for this year is about 9 million tonnes of coal production and sales. We have been maintaining a strong market position, with large market shares and we remain the most efficient and most modern bituminous coal mine in Poland – said Krzysztof Szlaga, president of LW Bogdanka.
The most important events of the past half-year include announcing by Bogdanka, in February this year, the development strategy of LW Bogdanka Enea Group's Mining Area until 2025, with the outlook until 2030. In turn, in June this year, the Ordinary General Meeting of LW Bogdanka SA decided to distribute a dividend in the amount of PLN 1 per share. Dividend in the total amount of over PLN 34 million was paid on 2 August 2017.
- Taking care of securing the long-term development of the Company, in July we filed an application for a mining license for "Ostrów" deposit with an operating resource of approximately 186 million tonnes. This is an important step towards doubling our recoverable reserves and extending the life of the mine to about 50 years, from the current 25 years. We expect to receive the license until the end of 2017 – added president Krzysztof Szlaga.
Enea focuses on a better knowledge of Customer needs
Enea has been constantly improving the Customer service, introducing new tools of communication. In March 2016 the company launched the electronic Customer Service Centre on the whole area of its operations. In July 2017 it enabled Customer contacts via the on-line chat. During the chat one may quickly, staying at home, ask a question to a consultant, check the status of an invoice and payment history, submit meter readings or contact Enea on other issues related to the Customer service.
In April Enea opened already the second Customer Service Centre in a shopping mall. CSC in one of Poznań shopping malls allows the company to be closer to its Customers’ everyday affairs.
Positive changes, both in the service and operation of IT systems enabled improvement of Customer service and facilitated reporting. Thanks to that the efficiency of work of our consultants improved significantly. We have also gained a possibility of a better acquaintance with Customer needs and matching a relevant offer to their preferences.
We provide our Customers with energy and services of constantly better quality In H1 2017 we observed a growth in the total sales volume of electricity and gas to retail users. We know that the area of sales and customer service is a big challenge and success depends on many components, so we are constantly working to make our offer the best suited to the current needs of our Customers – said Piotr Adamczak, vice-president of Enea for commercial affiars.
In June, Enea introduced a new ENERGY+ Family offering for people eligible for the Large Family Card. Thanks to that families with at least three children may benefit from a discount for electricity.
Thanks to the cooperation of the Ministry of Family, Labour and Social Policy, the 3 Plus Family Association and Enea, every family with at least three children may take advantage of the ENERGY+ Family offer. Upon presentation of the Large Family Card, the Recipient signing the agreement for ENERGY+ Family product will receive the lowest energy price in Enea.
Sustainable development builds a strong energy and commodity group capable of meeting challenges
Enea is consciously aware of the role played in the development of Poland's economy as a supplier of products and services that are needed. The company is aware of the impact of its actions on the environment. A test for the whole Group was fighting the effects of catastrophic wind storms which in the night from 11 to 12 August went over a part of Enea Operator’s distribution area, depriving a total of ca. 250 thou. our Customers from power and damaging ca. 400 km of the power grid. Over 1,000 of our Employees, 220 brigades, were engaged in the damage removal and reconstruction of totally destroyed lines. Restoring power supply to all consumers has been Enea's priority in recent weeks.
- Thanks to efficient actions, hard work and dedication, we have restored power supply to our Customers and met the challenge we faced. This confirms that the strength and position of Enea Group is determined by its Employees, their knowledge and competence – underlined president Mirosław Kowalik.
Enea Group, in order to grow all the time, wants to attract the best Employees. For this reason, a programme of paid internships and "Install Yourself in Enea" trainings was established. The purpose of the programme is to recruit and educate the future staff of the Enea Group. By the end of June, the first edition of the programme ended - as many as 70% of trainees were offered work in the Group. In July, the second edition of the programme commenced. The training was started by several dozen students. Ahead of them there are years of gaining valuable experience in the profession.
Enea actively supports local environments from the areas in which it operates. In addition to engaging in sport and culture, the Group, through Enea Foundation, launched the Enea Talent Academy on 1 September. This is a programme for students and public schools in Poland, where the Group is particularly active in business. It is primarily the north-western provinces, as well as the areas of Kozienice, Połaniec, Białystok and Bogdanka. The best students and schools will be chosen by the jury and in the vote by internet users. Winners - pupils and schools - will be known on 10 January 2018. Talented young people will receive scholarships of PLN 3,000, and schools - grants worth PLN 10,000.
– We engage into numerous projects within the corporate social responsibility since we believe that such companies as Enea should create a business responsibility climate in Poland – underlined president Kowalik.