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Current Report No.: 10/2022

Title: Information on preliminary financial and operating results for 2021
Date: 2022.01.03
Report no.:  Current Report No.: 10/2022

Current Report No.: 10/2022

Date of Preparation: 1 March 2022

Issuer's Abbreviated Name: ENEA S.A.

Subject: Information on preliminary financial and operating results for 2021

Legal Basis: Article 17(1) of the Market Abuse Regulation - confidential information

Body of the report:

In connection with the adoption, on the 1st of March 2022, by the Management Board of ENEA S.A. ("Company", "Issuer"), of information on preliminary financial and operating results of the ENEA Group for 2021, the Company hereby publishes the said preliminary results.

Consolidated financial results of the ENEA Group for 2021:

- Revenue from sales and other income: PLN 21 211 million,

- EBITDA: PLN 3 637 million,

- Profit before tax: PLN 2 155 million,

- Net profit for the reporting period: PLN 1 786 million,

- Net profit attributable to shareholders of the parent company: PLN 1 679 million,

- Capital expenditures on property, plant and equipment and intangible assets: PLN 1 872 million.

- Net debt / EBITDA ratio: 0.75

EBITDA in the distinct operating areas:

- Mining: PLN 798 million,

- Generation: PLN 1 602 million,

- Distribution: PLN 1 393 million,

- Trading: PLN -125 million.

Selected operating highlights:

- Net coal production: 9.9 million tons,

- Total net electricity generation: 26.4 TWh,

- Sales of distribution services to end users: 20.3 TWh,

- Sales of electricity and gaseous fuel to retail customers: 24.5 TWh.

The EBITDA result generated by the ENEA Group in 2021 was driven largely by the following factors (compared to 2020):

In the Mining Area, the higher EBITDA was driven mainly by the higher sales of coal, partially offset by increased costs of operating activities.

In the Generation Area, EBITDA increased in the RES Segment (the result was higher in the Wind and Hydro Areas and in the Green Unit) and in the Heat Segment (mainly due to a higher unit margin). A significant decrease in EBITDA was recorded in the System Power Plants Segment, 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.

In the Distribution Area, the higher EBITDA was driven by larger margins on licensed activities coupled with greater operating expenses and a lower result on other operating activities.

In the Trading area, the decline in EBITDA is mainly due to the change in provisions related to onerous contracts; this decline was partially offset by higher margins realized on the retail market.

Consolidated financial results of the ENEA Group for Q4 2021:

- Revenue from sales and other income: PLN 5 920 million,

- EBITDA: PLN 864 million,

- Profit before tax: PLN 534 million,

- Net profit for the reporting period: PLN 454 million,

- Net profit attributable to shareholders of the parent company: PLN 409 million,

- Capital expenditures on property, plant and equipment and intangible assets: PLN 831 million,

- Net debt / EBITDA ratio: 0.75

EBITDA in the distinct operating areas:

- Mining: PLN 268 million,

- Generation: PLN 561 million,

- Distribution: PLN 362 million,

- Trading: PLN -301 million.

Selected operating highlights:

- Net coal production: 2.4 million tons,

- Total net electricity generation: 6.9 TWh,

- Sales of distribution services to end users: 5.2 TWh,

- Sales of electricity and gaseous fuel to retail customers: 6.3 TWh.

Standalone financial results of ENEA S.A. for 2021:

- Revenue from sales and other income: PLN 7 407 million,

- EBITDA: PLN -290 million,

- Profit before tax: PLN 403 million,

- Net profit for the reporting period: PLN 460 million.

The preliminary results incorporate the impact of the increased provision for onerous contracts in the trading segment and the partial reversal of the provision for future investment commitments to Elektrownia Ostrołęka Sp. z o.o., on which the Issuer reported in the Current Report No. 9/2022 of 3 February 2022. These two events together will impact the standalone financial statement of ENEA S.A. for 2021 and the consolidated financial statement of the ENEA Group for 2021 by reducing EBITDA by approx. PLN 188 million, profit before tax by approx. PLN 126.4 million and the Company's net profit for the reporting period by approx. PLN 90.4 million.

The preliminary results take account of the impairment allowance on non-financial non-current assets in the Białystok area in ENEA Ciepło in the amount of PLN 26.1 million. The impairment allowance reduced the ENEA Group's net profit for the reporting period by PLN 21.2 million.

The final results will be presented in the periodic reports of ENEA S.A. and the ENEA Group for 2021, the publication of which has been scheduled for 23 March 2022.

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). The Net debt / EBITDA ratio is (loans, borrowings and non-current and current debt securities + non-current and current finance lease liabilities + non-current and current financial liabilities measured at fair value - cash and cash equivalents - non-current and current financial assets measured at fair value - non-current and current debt financial assets measured at amortized cost) / EBITDA LTM. EBITDA LTM means EBITDA for the last twelve months.

The above definitions and calculation methodologies are the same as those used to calculate these ratios in the Issuer's periodic reports. The definitions of these terms are also included in the glossary of terms and abbreviations available on the Company's website (https://ir.enea.pl/slownik).

Having in mind the diverse and international nature of Enea SA's shareholding, and also the provisions of the Best Practices of WSE Listed Companies, Enea SA guarantees the availability of its website also in English. In case of any interpretation doubts and discrepancies between the Polish and English versions, the Polish version shall prevail.