Current Report No.: 39/2020
Current Report No.: 39/2020
Date of Preparation: 25 August 2020
Issuer's Abbreviated Name: ENEA S.A.
Subject: Information on preliminary financial and operating results for H1 2020
Legal Basis: Article 17(1) of the Market Abuse Regulation - confidential information
Body of the report:
In connection with the adoption, on 25 August 2020, by the Management Board of ENEA S.A. ("Company", "Issuer"), of information on preliminary financial and operating results of the ENEA Group for the first half of 2020, the Company hereby publishes the said preliminary results.
Consolidated financial results of the ENEA Group for H1 2020:
- Revenue from sales and other income: PLN 8,949 million,
- EBITDA: PLN 1,822 million,
- Profit (loss) before tax: PLN -10 million,
- Net profit (loss) for the reporting period: PLN -82 million,
- Net profit/(loss) attributable to shareholders of the parent company: PLN -99 million.
EBITDA in the various operating areas:
- Mining: PLN 214 million,
- Generation: PLN 872 million,
- Distribution: PLN 681 million,
- Trading: PLN 40 million.
Selected operating highlights:
- Net coal production: 3.7 million tons,
- Total net electricity generation: 10.4 TWh,
- Sales of distribution services to end users: 9.5 TWh,
- Sales of electricity and gaseous fuel to retail customers: 10.5 TWh.
The EBITDA result generated by the ENEA Group in H1 2020 was driven largely by the following factors (compared to H1 2019):
In the Mining Area, the segment's lower result is attributable mainly to a decrease in revenue from sales of coal (lower sales volume at a higher price) in connection with the unfavorable oversupply of coal in the market.
In the Generation Area, the segment's result was favorably affected by the increase in revenue from sales of electricity (higher energy prices) and property rights, despite the negative deviation of the costs of coal with transport and CO₂ emission allowances.
In the Distribution Area, the higher result was driven by higher margins on licensed activities (affected by, among others, a higher rate of the fixed grid charge in the approved 2020 tariff) and a higher result on other operating activities (driven mainly by changes in the provisions for grid assets).
In the Trading Area, the segment's result was favorably affected by the increase in the average sales price of energy and the updated valuation of CO₂contracts. At the same time, the energy purchase prices increased (mainly due to the increase in the price of CO₂ emission allowances) and so did the costs of environmental obligations.
Standalone financial results of ENEA S.A. for H1 2020:
- Revenue from sales and other income: PLN 3,051 million,
- EBITDA: PLN -64 million,
- Profit (loss) before tax: PLN -411 million,
- Net profit (loss) for the reporting period: PLN -374 million.
The preliminary results take into account the impact of the impairment allowance recognized for shares in ENEA Wytwarzanie Sp. z o.o. and an impairment allowance recognized generating assets of the ENEA Wytwarzanie Sp. z o.o. subsidiary, as well as the impact of impairment allowances related to the loan granted, as well as ENEA S.A.'s commitment to ENERGA S.A. to refund half of the loans with interest, which were granted by that entity to Elektrownia Ostrołęka Sp. z o.o. and the recognition of a provision for future investment commitments to Elektrownia Ostrołęka Sp. z o.o. and ENERGA S.A in the standalone statements of ENEA S.A and in the consolidated financial statements of the ENEA Group in accordance with Current Report No. 36/2020 of 11 August 2020.
These events affected 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 affected 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 events described above are non-cash items and therefore have no impact on either the consolidated or standalone EBITDA for the reporting period.
The final results will be presented in the consolidated financial statements of the ENEA Group and the standalone financial statements of ENEA S.A. for H1 2020, the publication of which is scheduled for 3 September 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 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).