Current Report No.: 36/2020
Current Report No.: 36/2020
Date of Preparation: 11 August 2020
Issuer's Abbreviated Name: ENEA S.A.
Legal Basis: Article 17(1) of the Market Abuse Regulation - confidential information
Subject: Information on the intention to include non-recurring operations of an accounting nature in the financial statements for H1 2020
Body of the report:
The Management Board of ENEA S.A. (Company, Issuer) hereby reports that in connection with the preparation of (standalone and consolidated) financial statements for H1 2020, the Company has identified the need to recognize an impairment loss on the value of shares in ENEA Wytwarzanie sp. z o.o. (ENEA Wytwarzanie) in an estimated amount of approx. PLN 318 million in the standalone financial statements for H1 2020 and an impairment loss on the value of generation assets of its subsidiary ENEA Wytwarzanie in an estimated amount of approx. PLN 523 million in the consolidated financial statements for H1 2020, as a result of the completion, on 11 August 2020, of tests for the impairment of fixed assets, including shares in ENEA Wytwarzanie.
Moreover, following its assessment, carried out on 11 August 2020, of the impact exerted by the decision to continue the construction of the generating unit in the form of the Ostrołęka C Power Plant, based on a change from a coal-fired power source to a gas-fired power source, the Company has identified the need to:
- recognize an impairment loss on a granted loan and ENEA's liability towards ENERGA S.A. to return half the loans with interest granted by the latter to Elektrownia Ostrołęka sp. z o.o. under the loan agreements of 30 September 2019 and 23 December 2019, which the Issuer disclosed, among others, in its annual consolidated financial statements for 2019. The impairment loss will cover the remaining part, which was not included in the impairment loss disclosed in Current Report No. 18/2020, of the value of loans with interest granted to Elektrownia Ostrołęka sp. z o.o. and will amount to approx. PLN 137 million in the standalone and consolidated financial statements for H1 2020,
- establishment, in the standalone and consolidated financial statements for H1 2020, of a provision in the amount of approx. PLN 219 million for future investment commitments towards Elektrownia Ostrołęka sp. z o.o. and ENERGA S.A., the level of which reflects the possible, estimated as at the date of establishment of the provision, funding amounts for Elektrownia Ostrołęka sp. z o.o. earmarked for the settlement of the project execution carried out to date by Elektrownia Ostrołęka sp. z o.o.
These events will affect the standalone financial statements of ENEA S.A. by reducing the Company's pre-tax profit and net profit for the reporting period by approx. PLN 674 million.
These events will affect the consolidated financial statements of the ENEA Group by reducing the its pre-tax profit by approx. PLN 879 million and net profit for the reporting period by approx. PLN 779 million.
The aforedescribed events are of a non-cash nature and have no impact on either the consolidated or standalone EBITDA for the reporting period.
Please be advised that the said amounts of impairment losses and provisions are estimates and as such are subject to change, and that their final value will be presented in the periodic reports of the Company and the ENEA Group for H1 2020.
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). EBITDA is a standard measure of the effectiveness of a business, in particular for the industry in which the Issuer's Group operates. 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).