Consistent improvement of financial and operating performance – Enea Group sums up year 2021
In 2021, the Enea Group improved its performance, increasing its revenues by 17% y/y to PLN 21.2 billion, earning EBITDA of PLN 3.6 billion (up 10% y/y) and net profit of nearly PLN 1.8 billion. The Group increased its electricity production by more than 17.4% y/y and the volume of electricity and gaseous fuel sold to retail customers was 16% higher. At the end of 2021, the Group presented its updated Development Strategy pointing to the Green Change as its overriding objective, which is to ensure Enea’s climate neutrality by 2050.
- In 2021, the Enea Group generated sales revenue of PLN 21.2 billion (up PLN 3 billion, or +17% y/y), and EBITDA of PLN 3.6 billion (up PLN 335 million, +10% y/y).
- The Company improved its Net Debt / EBITDA ratio by 1.2, to the level of 0.75 at the end of 2021.
- The total volume of electricity production was 26.4 TWh (up 3.9 TWh, or +17% y/y). The Group generated nearly 2.4 TWh of energy from renewable sources.
- The volume of electricity and gaseous fuel sold to retail customers rose by 16% y/y to 24.5 TWh.
- Over the entire 2021, nearly 47 thousand renewable energy sources (including micro-installations) were connected to Enea Operator’s distribution grid.
- Enea has updated its Group Development Strategy announcing the Green Change, a program to achieve its climate neutrality ambitions.
In 2021, despite the persistently difficult market environment and the challenging evolution of the electricity market, Enea Group earned EBITDA of PLN 3.6 billion (up 10% y/y). Revenue from sales improved by 17% y/y, reaching PLN 21.2 billion. The net profit for the reporting period was nearly PLN 1.8 billion. The Net Debt / EBITDA stood at a safe level of 0.75. Last year, the Group allocated nearly PLN 2 billion for capital expenditures.
EBITDA of the generation area was PLN 1.6 billion, improving by almost 5% y/y. EBITDA in the RES Segment and in the Heat Segment increased by PLN 121 million and PLN 81 million y/y, respectively. EBITDA of the System Power Plants Segment fell by PLN 130 million y/y driven by lower margins on generation, trading and the Balancing Market activities, which was partially offset by revenue from the Capacity Market. The volume of electricity production increased by 17.4% to 26.4 TWh. This was possible due to a greater availability of conventional power units and the situation on the market. The Group generated nearly 2.4 TWh of energy from renewable sources. Sales of heat reached 7,209 TJ, increasing by 20%.
EBITDA earned in the distribution area was PLN 1.4 billion, increasing by PLN 80 million y/y. This higher result was driven by higher margins on licensed activities, affected mainly by higher revenue from sales of distribution services. In 2021, Enea Operator provided nearly 20.3 TWh of distribution services to end users, marking an increase of nearly 5%. Nearly 47 thousand new renewable sources, including micro-installations, were connected to its distribution grid. At the end of 2021, the total number of RES sources connected to the distribution grid was nearly 109 thousand.
The distribution company carries out a capital expenditure program, modernizing the grids in order to strengthen the security of supply, automate the infrastructure, develop smart grids and renewable power generation. The work was carried out, among others, in the Poznań metropolitan area within the framework of the #Poznań 2030 program, in Kostrzyn nad Odrą, Bydgoszcz, Zielona Góra and in towns and cities of the West Pomeranian Voivodship. In 2021, Enea Operator completed the comprehensive reconstruction of the vital 110 kV high-voltage line from Rogoźno to Wągrowiec.
EBITDA of the trading area was PLN -125 million, with the decline of PLN 110 million y/y driven mainly by a change in the level of provisions related to onerous contracts and partially offset by higher margins realized on the retail market. The trading performance was affected, among other things, by an update of the provision recognized in 2020 for the loss arising from the distribution fee rebate in the amount of PLN 250.1 million, which was recognized by the Company acting as the offtaker of last resort in relation to electricity supplied to the grid by prosumers. The purpose of this amount is to reflect the impact of the anticipated future losses to be incurred by the company in connection with the performance of comprehensive contracts signed with prosumers in accordance with the amended Act on Renewable Energy Sources.
In 2021, the volume of electricity and gaseous fuel sold to retail customers was 24.5 TWh, increasing 16% as compared to the previous year. In the business customer segment, electricity sales volume went up by 21%, driven by higher consumption of energy and evolution of the client portfolio between 2020 and 2021. In the household segment, sales increased slightly by 1%. The volume of sales of gaseous fuel also rose, by 18% y/y.
Total revenue from sales of electricity and gaseous fuel increased in 2021 by more than PLN 1 billion, or 17%, from 2020.
Enea continues to develop its product offering in order to satisfy individual needs of its customers and provide them with modern, environmentally-sound solutions supporting sustainable development goals. In 2021, entities such as Krakowski Holding Komunalny, KIRCHHOFF Automotive, and Bolsius decided to cooperate with Enea and purchase energy produced exclusively from renewable sources owned by the Enea Group.
In 2021, EBITDA of the mining area amounted to PLN 798 million. Consolidated revenues were PLN 2.4 billion, operating profit PLN 367 million and net profit PLN 288 million. In Q4 2021 alone, revenue from sales reached PLN 703 million and EBITDA PLN 259 million. Operating profit was PLN 154 million and net profit PLN 124 million. In 2021, LW Bogdanka fulfilled its production plan at 9.9 million tons and sales plan at 10 million tons. It also executed 23.2 km of excavation works. In Q4 alone, its production reached 2.4 million tons. The average yield at the end of 2021 was 69.4%, compared to 64% one year earlier.
At the end of 2021, Enea updated its Group Development Strategy and announced that it would achieve climate neutrality by 2050. Enea’s Green Change will be implemented through development of renewable energy sources based on state-of-the-art technologies. The Group is involved in offshore wind energy projects. Enea’s mission is a rational and efficient implementation of the transformation of the Polish power sector. One of the primary objectives of the Enea Group Development Strategy is to spin off from its structures any assets related to the generation of electricity in conventional coal- and lignite-fired units. The Government’s plan to establish the National Energy Security Agency (NABE) confirms that the direction assumed in the Strategy for Enea Group’s transformation and change will be implemented.
According to the Strategy, the Group will develop renewable energy sources and specialize in operating energy storage facilities as critical technology for ensuring stability of RES and for building energy security. Enea Operator has already carried out the first real-world tests of five prototype energy storage facilities in its grid. The results of these tests will play an important role in the large scale roll-out of the installations.
In 2021, ENEA Group published its first ESG report, which contains a comprehensive description of the Group’s endeavors in the areas of environmental protection, social engagement and responsible management pursued in 2020. The report prepared in accordance with international reporting standards, GRI Standards, also presents the Group’s commitments for the future, including in the area of transition towards a zero-carbon enterprise. Enea Group’s 2021 ESG Report will be published in the second quarter of the year.
COMMENTS ON THE ENEA GROUP’S PERFORMANCE IN 2021:
Paweł Szczeszek, President of the Enea Management Board:
“In 2021, the Enea Group improved its financial and operating performance considerably.” We noted increased demand for electricity from businesses, which were forced to reduce production due to the pandemic in 2020. Given the good availability of our power units and the market situation, we were able to increase electricity production significantly to 26.4 TWh. This allowed us to return to the 2019 levels when the Group generated 25.9 TWh. The past year was also a time of dynamic changes on the energy market driven by the challenging environment. We used this time to prepare for transformation and the key event in this respect was the update of our Development Strategy. Our overriding objective is the Enea’s Green Change, which, through development of renewable energy sources, will lead us to climate neutrality by 2050. We will specialize in energy storage facilities as the critical technology for ensuring RES stability and solidifying energy security. Even today, we take part in projects that study the suitability of specific storage technologies for different characteristics of the distribution grid. The progress in the project of spinning-off coal-based generation assets and transferring them to NABE, combined with the gradually reduced debt ratios, will soon allow the Group to become fully involved with investments in low- and zero-carbon energy sources” said Paweł Szczeszek, President of the Enea Management Board.
Rafał Mucha, Vice-President of the Enea Management Board for Financial Matters:
“Last year, the Enea Group achieved good financial results, which is demonstrated by a 17% increase in revenue from sales and a 10% increase in EBITDA up to PLN 3.6 billion. The safe financial standing of the company is confirmed by the Net Debt/EBITDA ratio, which stood at 0.75.The safe financial standing of the company is confirmed by the Net Debt/EBITDA ratio, which stood at 0.75. The Group’s cash flows are supported by proceeds from the signed capacity contracts. We continue to make capital expenditures that enhance the security and stability of energy supply.” said Rafał Mucha, Vice-President of the Enea Management Board for Financial Matters
Artur Wasil, President of the Lubelski Węgiel Bogdanka Management Board:
“2021 was a historic year for us, because we closed it with coal production of 9.9 million tons and sales of more than 10 million tons. I’d like to add that this was possible, among other things, because we were able to utilize our past investments and efforts of numerous people. Our actions allowed us to react immediately to the change in the market situation and utilize the company’s production capacity to the maximum. We owe it to the engineering personnel, which designs the longwall mining process and solves related problems, and to the commitment of our crews that are directly involved in mining operations.” said Artur Wasil, President of the Lubelski Węgiel Bogdanka Management Board.