Increase in EBITDA and revenue from sales – Enea Group summarizes 3 quarters of 2021
After three quarters of 2021, the Enea Group, operating in a demanding market environment, generated strong financial and operating results. During that period, the Group’s EBITDA and revenue from sales improved 5.2% and 13.6%, respectively. The net debt/EBITDA ratio decreased significantly to 0.31 (improvement by 77%). The Group consistently participates in the development of renewable energy sources and transformation of the Polish energy sector.
- During the three quarters of 2021, the Enea Group generated EBITDA of nearly PLN 2.8 billion and revenue from sales of almost PLN 15.3 billion.
- The volume of sales of electricity and gaseous fuel to retail customers rose by 16.4% y/y to 18.2 TWh.
- The net profit for the reporting period was PLN 1.3 billion.
- Enea signed an agreement with the State Treasury concerning cooperation in the separation of coal assets to the National Energy Security Agency.
- The Group is committed to cooperation in the area of offshore wind energy. It will cooperate with PGE to apply for location permits and, in the next steps, it will develop three offshore farm projects in the Polish Exclusive Economic Zone in the Baltic Sea.
During the three quarters of 2021, the Enea Group generated EBITDA of approx. PLN 2.8 billion (up by PLN 138 million y/y). Revenue from sales improved by 13.6% y/y to PLN 15.3 billion. The net profit for the reporting period was PLN 1.3 billion. In the period in question, the Group designated more than PLN 1.1 billion for capital expenditures.
In the generation area, EBITDA amounted to PLN 1.04 billion, compared to PLN 1.2 billion after three quarters of 2020, which was driven by the lower margin on generation and the margin on trading and the Balancing Market, partially offset by revenue earned on the Capacity Market. The volume of electricity production increased by 15.9% to 19.5 TWh. EBITDA in the RES Segment and in the Heat Segment increased by PLN 91 million and PLN 38 million y/y, respectively. The Group generated nearly 1.8 TWh of energy from renewable sources. Sales of heat reached 4,871 TJ, increasing by 22% y/y.
EBITDA in the distribution area reached PLN 1.03 billion, increasing by PLN 37 million y/y. This higher result was driven by higher margins on licensed activities, affected, among other factors, by higher revenue from sales of distribution services. During the three quarters of 2021, Enea Operator provided nearly 15.1 TWh of distribution services to end users (up by 5.8% y/y).
Over the nine months of 2021, more than 31 thousand renewable energy sources (including micro-installations) with a total capacity of 584 MW were connected to Enea Operator’s distribution grid. For comparison, in the entire 2020, 43.2 thousand RES installations (including micro-installations) with a total capacity of 546 MW were connected to the distribution grid. Enea Operator completed the comprehensive reconstruction of the 22 km-long 110 kV high-voltage line from Rogoźno to Wągrowiec. The modernization raised operating parameters of the line, improved the quality and safety of electricity provided and increased the capacity to connect new energy buyers and RES producers to the grid. The distribution company also launched the Producer’s Portal. The new IT tool enables efficient transmission of data in accordance with the granted rights and provides producers with all necessary metering information about their production sources, for review purposes.
The trading area posted EBITDA of PLN 176 million, which marked an increase of PLN 117 million y/y. The improvement was mainly due to higher margins realized on the retail market, while keeping electricity sales prices at the level similar to the corresponding period of 2020, with a simultaneous increase in sales volumes and lower average purchase prices of electricity earned on the wholesale market. EBITDA growth was offset by: a change in provisions related to onerous contracts, updated valuation of CO₂ contracts and an increase in the cost of environmental obligations.
During the three quarters of 2021, the volume of sales of electricity and gaseous fuel to retail customers stood at 18.2 TWh, up by 16.4% compared to the corresponding period last year. In the business customer segment, the electricity sales volume went up by 20%, driven by a higher contracted business volume in 2021 vs. the previous year. In the household segment, the increase was 3%. The volume of sales of gaseous fuel also rose, by 24% y/y.
Total revenue from sales of electricity and gaseous fuel increased in the first three quarters of 2021 by PLN 693 million, or 15%, as compared to the corresponding period of 2020. This increase affected revenues in the business customer segment and in the household segment (by 17% and 10% y/y, respectively).
In the mining area, EBITDA of Lubelski Węgiel Bogdanka amounted to PLN 538.3 million. Over the three quarters of 2021, the consolidated revenue of Lubelski Węgiel Bogdanka reached PLN 1,668.5 million, operating profit was at PLN 212.8 million and net profit at PLN 164.8 million.
In the period in question, Bogdanka strengthened its market position, achieving a high, 29.2% share in sales of coal to commercial energy sector. The share in total steam coal sales was at 23%.
COMMENTS ON THE ENEA GROUP’S PERFORMANCE FOR 3 QUARTERS OF 2021:
Paweł Szczeszek, President of the Enea Management Board:
“Step by step, we are setting the Enea Group’s course towards zero emissions. Together with other main energy companies, we signed an agreement with the State Treasury concerning cooperation in the spin-off of our coal assets to the National Energy Security Agency (NABE). We will pass our coal entitles to NABE. Thanks to the investment projects that we are currently preparing, the operating time of both power plants will be extended, while the structure of fuel used will be used, for example in favor of increased biomass firing. Thanks to NABE, we will improve our capacity to raise financing for investment projects that will allow us to achieve our main long-term goal, which is for the entire concern to achieve net zero emissions. We are making strides towards this goal. We have recently signed agreements with PGE to purchase shares in special-purpose entities, through which we will improve cooperation in order to develop three offshore wind farm projects on the Baltic sea together” said Paweł Szczeszek, President of the Enea Management Board.
Rafał Mucha, Vice-President of the Enea Management Board for Financial Matters:
“During the three quarters of 2021, the Enea Group achieved good financial results, which is confirmed by a 13.6% increase in revenue from sales and a 5.2% y/y increase in EBITDA. The net profit for the reporting period was PLN 1.3 billion. Over the period, the Enea Group has collected more than PLN 6 billion of cash, which secures the settlements of the increasingly costly CO₂ contracts, but also uninterrupted operations of the Group in the increasingly demanding market environment. The European Union’s climate policy is becoming more stringent, which that we made the right decision to spin off our coal-fired generation assets outside of the Enea Group. As a result, we will increase the capacity to raise financing for the Group’s transition and development of projects based on renewable sources of energy”, said Rafał Mucha, Vice-President of the Enea Management Board for Financial Matters.
Artur Wasil, President of the Lubelski Węgiel Bogdanka Management Board:
“In the third quarter, we observed a persistent trend of increased demand for coal from commercial power generators and heat producers. Achieving such results, which were similar to the 2019 numbers, was possible through the hard work of our crew and consistent fulfillment of production targets. We want to take full advantage of the good market condition and ensure stable supply of coal to our clients. Fulfillment of our production target of 9.6 million tons at the year-end is not under any jeopardy.” said Artur Wasil, President of the Management Board of Lubelski Węgiel Bogdanka.