Financial and operating performance in 1Q consistent with expectations
During the first three months of 2021, the Enea Group’s robust financial and operating performance was consistent with expectations. Compared to the same period of last year, revenue from sales and other income improved by 10%. The Group increased the volume of energy output (by 12%) and the sales volume of electricity and gaseous fuel to retail customers (by 13%). The net debt/EBITDA ratio decreased to 1.67 (having improved by approx. 20%). In the customer service segment, the Group continues the execution of its eCustomer program and has completed the expansion of its billing system.
- In Q1 2021, the Enea Group generated an EBITDA of PLN 923 million and more than PLN 5 billion in revenue from sales.
- The Group earned a net profit of PLN 406 million.
- The sales volume of electricity and gaseous fuel to retail customers rose by over 13% to 6.3 TWh.
- In January, the Enea Group signed a letter of intent on cooperation in future offshore wind farm projects in the Baltic Sea.
- In March, Enea sold 10% of its equity stake in PGE EJ 1 to the State Treasury.
In Q1 2021, the Group’s EBITDA reached PLN 923 million. Compared to the same period of the previous year, revenue improved by 10%, having exceeded PLN 5 billion. In the reporting period, the Group’s net profit reached PLN 406 million, compared to PLN 459 million in Q1 2020. In the first three months of 2021, the Enea Group earmarked over PLN 316 million for investments.
The Group recorded robust performance in each area of its business. The highest EBITDA of PLN 369 million was earned in the distribution area (up by PLN 63 million y/y). This was largely due to the greater margin on licensed activity. Sales of distribution services to end users increased slightly (by approx. 3%) to 5.2 TWh. In Q1 2021, Enea Operator connected over 6,600 renewable energy sources, including micro-installations, to its network. In the same period of the previous year, the company connected 5,500 such sources.
In the generation area, an EBITDA of PLN 367 million was earned, compared to PLN 472 million in Q1 2020. The decrease in EBITDA was affected by lower margins on generation and trading and the Balancing Market, while revenue was obtained from the Capacity Market. In the reporting period, the volume of electricity output increased by 12% to 6.1 TWh. The Group generated 0.5 TWh of energy from renewable sources. An increase in EBITDA was recorded in the heat segment. In Q1 2021, sales of heat increased by 27%, having reached 2,607 TJ. Reflected in the segment’s performance is the impact of the long and cold winter.
In Q1 2021, the trading area posted an EBITDA of PLN 47 million (compared to PLN 110 million in Q1 2020). The segment’s performance was unfavorably affected by a decrease in the average sales price of energy, a revaluation of CO2 contracts, movement in provisions related to onerous contracts and an increase in cost of environmental obligations, partially offset by a lower average energy purchase price. During the first three months of 2021, the sales volume of electricity and gaseous fuel reached 6.3 TWh, having increased by more than 13% compared to Q1 2020. This increase was attributable to sales in the business and household customer segments. The Group also posted a 10% increase in total revenue from sales of electricity and gaseous fuel compared to Q1 2020.
In March, Enea won a tender and signed a contract for the supply of green energy with Krakowski Holding Komunalny. Nearly 424 GWh of electricity generated from renewable sources will be supplied by Enea to 381 entities in Kraków. The tender covered a total of over 3,200 electricity offtake points. Enea’s cooperation with Kraków is an example of the accelerating transformation towards a zero-emission economy and reflects the growing interest of business customers in the consumption of energy generated from renewable sources.
An extension of the ENEA Optima offering was also rolled out, in compliance with new regulations on the capacity fee. Enea Optima is a system for conducting comprehensive analyses of the parameters of electricity consumed in enterprises. For instance, the unique features of this application enable users to effectively reduce their electricity consumption, with direct benefits for the natural environment. Also of great significance is the ability to collect data in real time, which improves the operational safety of the deployed equipment. Moreover, the tool provides assistance in managing energy consumption related to the introduction of the capacity fee.
In the customer service segment, the Group continues its eCustomer program, the purpose of which is to roll out new technological and organizational solutions that improve the extent of digitization and accelerate and streamline the provision of services, especially through remote channels. Enea keeps developing e-Applications, chatbots and voicebots and steadily improves its e-Customer Service Center. The Group also completed the expansion of its billing system, as a result of which it will be possible to sell additional products and services independently from the sales of electricity. This will significantly increase Enea’s sales potential and capacity to generate additional revenue.
In Q1 2021, revenue generated by Lubelski Węgiel Bogdanka increased by 17.2% y/y, to PLN 543.7 million, vis-à-vis PLN 464 million the year before. EBITDA, operating profit and net profit reached PLN 170.2 million, PLN 64.5 million and PLN 50.3 million, respectively. During the first three months of this year, commercial coal output reached 2.6 million tons, with sales amounting to 2.4 million tons.
COMMENTS ON THE ENEA GROUP’S PERFORMANCE IN Q1 2021:
Paweł Szczeszek, President of the Enea Management Board:
“We are adapting our operating model flexibly to the rapidly changing market environment throughout the value chain, especially in the context of challenges arising from the transformation of Poland’s energy sector. In collaboration with our partners, we will continue to develop wind energy generation in the Baltic Sea. We are persistently looking for new investment opportunities in renewable energy sources. Wind projects, photovoltaic projects and the application of new technologies are our main areas of interest. We are also expanding our product portfolio by offering customers an opportunity to purchase electricity generated exclusively from the Group’s renewable sources – this offering is increasingly sought after by our business customers. The zero-emission direction we have chosen will ensure that the Group grows in line with the expectations of the market and our investors and customers. It will also build the value of Enea Group, not only in financial terms, but also in the environmental and social dimensions,” said Paweł Szczeszek, President of the Enea Management Board.
Rafał Mucha, Vice-President of the Enea Management Board for Financial Matters:
“In the first quarter of 2021, the Enea Group’s robust financial and operating performance was consistent with expectations, despite challenging market conditions. We recorded a 10% increase in revenue from sales, with an increase in the volume of energy output by 12% and in the sales volume of electricity and gaseous fuel to retail customers by more than 13%. The Group’s EBITDA and net profit reached PLN 923 million and PLN 406 million, respectively. The net debt/EBITDA ratio improved (by 20%) to 1.67. The Group’s financial and operating performance in Q1 2021 confirms our stable financial standing,” said Rafał Mucha, Vice-President of the Enea Management Board for Financial Matters.
Artur Wasil, President of the Lubelski Węgiel Bogdanka S.A. Management Board:
“The beginning of the year was marked by an increased demand for coal. Accordingly, we made every effort to maximize our output and sales in the first quarter. This good performance was driven by the hard work of our staff and the optimization of the layout and schedule of our longwall operations. Despite the good opening of the year, we intend to stick to our production plan for 2021 at approx. 9 million tons,” said Artur Wasil, President of the Lubelski Węgiel Bogdanka S.A. Management Board.