Current Report No.: 18/2020
Current Report No.: 18/2020
Date of Preparation: 19 May 2020
Issuer's Abbreviated Name: ENEA S.A.
Legal Basis: Article 17 Section 1 of the Market Abuse Regulation - confidential information
Subject: Information about an impairment loss on the shareholding in Elektrownia Ostrołęka sp. z o.o. and loans granted to it
Body of the report:
The Management Board of ENEA S.A. ("Company", "Issuer") hereby reports that on 19 May 2020 it received information from Elektrownia Ostrołęka Sp. z o.o. ("Elektrownia Ostrołęka"), the company currently executing the Ostrołęka C power plant construction project ("Project"), about the recognition of impairment losses on non-current assets in Elektrownia Ostrołęka in the amount of PLN 1,027.3 million. According to information obtained from Elektrownia Ostrołęka, these impairment losses were recognized as a result of an impairment test for non-current assets associated with an update of the business assumptions for the coal technology-based Project.
Accordingly, on 19 May 2020, the Issuer's Management Board made a decision to recognize an impairment loss on its shareholding in Elektrownia Ostrołęka in the standalone financial statements of ENEA S.A. and in the consolidated financial statements of the ENEA Group.
The estimated value of the impairment loss will be approx. PLN 455.3 million in the Company's standalone financial statements for 2019 and approx. PLN 435.2 million in the consolidated financial statements of the ENEA Group for 2019.
Moreover, on the same date, the Issuer also made a decision to recognize an impairment loss on the loans it had granted to Elektrownia Ostrołęka, along with interest, in the total amount of approx. PLN 65.8 million.
The estimated impact of these impairment losses on the Company's standalone net profit for 2019 and the consolidated net profit of the ENEA Group for 2019 will be approx. PLN 521.1 million and approx. PLN 500.9 million, respectively.
The aforedescribed events are of a non-cash nature and have no impact on either the consolidated or standalone EBITDA for 2019.
Following the recognition of the impairment loss, the value of investments measured by the equity method with respect to the shareholding in Elektrownia Ostrołęka will be PLN 0 both in the consolidated and standalone statement of financial position.At the same time, please be advised that the amount of the said impairment loss may change and that its final value and ultimate impact on the items and indicator mentioned in this current report will be presented in the relevant periodic reports of the Company and the ENEA Group for 2019.
Please note that the term EBITDA is defined as the value of operating profit (loss) + depreciation and amortization + impairment losses on non-financial non-current assets (values presented on a consolidated basis for the reporting period). The above definition and methodology for its calculation are the same as those for the calculation of this indicator in the Issuer's periodic reports. The definition in question is also provided in the glossary of terms and abbreviations available on the Company's website (https://ir.enea.pl/slownik).