Current Report No.: 21/2023

Current Report No.: 21/2023

Date of Preparation: 9 May 2023

Issuer's Abbreviated Name: ENEA S.A.

Subject: Information on preliminary financial and operating results for Q1 2023

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

Body of the report:

On 9 May 2023, the Management Board of ENEA S.A. ("Company", "Issuer") adopted information on preliminary financial and operating results of the ENEA Group ("ENEA Group") for Q1 2023; in connection with the above, the Company hereby publishes the said preliminary results.

Consolidated financial results of the ENEA Group for Q1 2023:

- Revenue from sales and other income: PLN 12,531 million,

- EBITDA: PLN 1,044 million,

- Profit before tax: PLN 363 million,

- Net profit for the reporting period: PLN 251 million,

- Net profit attributable to shareholders of the parent company: PLN 202 million,

- Capital expenditures on property, plant and equipment and intangible assets: PLN 551 million,

- Net debt / EBITDA ratio: 2.83.

EBITDA in the distinct operating areas:

- Mining: PLN 289.5 million,

- Generation: PLN 490.3 million,

- Distribution: PLN 426.5 million,

- Trading: PLN 0.4 million.

Selected operating highlights:

- Net coal production: 1.6 million tons,

- Total net electricity generation: 5.3 TWh, of which 0.6 TWh from RES,

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

- Sales of electricity and gaseous fuel to retail customers: 6.0 TWh.

The EBITDA result generated by the ENEA Group in Q1 2023 was driven by the following factors (compared to Q1 2022):

In the Mining Area, the higher EBITDA is mainly due to an increase in revenue from sales of coal (a decrease in the volume of mining and coal sales offset by a higher selling price) with a simultaneous increase in operating expenses (an increase in the unit mining cost).

In the Generation Area, there was a decrease in EBITDA mainly in the System Power Plants Segment (as a result of the occurrence of a new cost item, i.e. costs from the charge for the Price Difference Fund, while the unit margin on generation, the margin on trading and the Balancing Market increased). At the same time, there was an increase in EBITDA in the RES Segment (mainly higher electricity price, with an increase in the cost of biomass and the occurrence of costs from the charge for the Price Difference Fund).

In the Distribution Area, the higher EBITDA result is mainly due to the higher margin realized from the concession business, with simultaneous increase in operating expenses.

In the Trading Area, the higher EBITDA result is mainly due to the use of provisions related to onerous contracts and a higher result from the revaluation of CO2 contracts. At the same time, despite the recognition of compensation revenues, there was a decline in margins in the retail market.

ENEA Group due to the use of settlements with authorized recipients in accordance with the provisions of the Act of October 7, 2022 on special solutions to protect electricity consumers in 2023 in connection with the situation on the electricity market and due to the application of the maximum price in accordance with the provisions of the Act of October 27, 2022 on emergency measures to limit the amount of electricity prices and support for certain consumers in 2023 recognized compensation revenues in the first quarter of 2023 in the total amount of PLN 1,221 million.

ENEA Capital Group companies are subject to the obligation to transfer write-offs to the Price Difference Payment Fund pursuant to Article 21 of the Act of October 27, 2022 on emergency measures aimed at reducing electricity prices and supporting certain consumers in 2023 as electricity producers and as energy companies conducting business in the field of electricity trading. For the first quarter of 2023, the ENEA Capital Group recognized the cost of the write-down to the Price Difference Fund in the amount of PLN 935 million.

Standalone financial results of ENEA S.A. for Q1 2023:

- Revenue from sales and other income: PLN 5,548 million,

- EBITDA: PLN -57 million,

- Profit before tax: PLN 7 million,

- Net profit for the reporting period: PLN 9 million.

The final results will be presented in the periodic report of the ENEA Group for Q1 2023 scheduled to be published on 24 May 2023.

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 equal to (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 - other short-term investments) / EBITDA LTM. EBITDA LTM means EBITDA for the last 12 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).