After first quarter of 2023, the Enea Group summarizes its financial performance
The Enea Group has prepared its financial and operating results for Q1 2023. The Group’s EBITDA improved by nearly 10% y/y, having reached PLN 1.04 billion. The Enea Group will allocate nearly PLN 1 billion earned in Q1 to the Price Difference Fund from which the freeze of electricity prices for end users is funded. Net profit for the reporting period stood at PLN 251.3 million. As provided for in its strategy, the Group invests in projects focused on renewable energy sources and upgrades of the power infrastructure in its distribution area.
- In Q1 2023, the Enea Group generated an EBITDA of PLN 1.04 billion and sales revenue of PLN 12.5 billion.
- From its Q1 2023 earnings alone, the Group will allocate nearly PLN 1 billion to the Price Difference Fund to support the freeze of electricity prices for end users at an acceptable level.
- The sales volume of electricity and gaseous fuel was 6.0 TWh.
- The Group generated 5.3 TWh of electricity, having recorded a 3.4% increase in energy generation from renewable sources.
- The Enea Group's capital expenditures in Q1 2023 totaled PLN 580 million. The largest share of capital expenditures, worth PLN 331 million, was spent by the Group on distribution to reinforce the security of energy supplies and the potential of RES connections.
In Q1 2023, the Enea Group generated an EBITDA of PLN 1.04 billion, up by nearly 10% y/y. Sales revenues climbed versus the corresponding period of last year to PLN 12.5 billion. Net profit for the reporting period stood at PLN 251.3 million. The Group spent PLN 580 million on capital expenditures from January to March 2023. Out of this amount, nearly PLN 331 million was spent on the distribution area.
The Enea Group supports the freeze of electricity prices for end users at an acceptable level. For Q1 2023 alone, the Group will provide a PLN 1 billion contribution to the Price Difference Fund from which the freeze of electricity prices for end users is funded.
The Group’s EBITDA in the generation area stood at PLN 490.3 million compared to PLN 620.1 million in Q1 2022. A decrease was recorded chiefly in the System Power Plants Segment (as a result of the occurrence of a new cost item, namely costs of the contribution to the Price Difference Fund, while the unit margin on generation and the margin on repurchase and the Balancing Market increased). In parallel, the EBITDA generated in the RES Segment improved. This was caused mostly by the higher electricity price, with an increase in the cost of biomass and the occurrence of costs from the contribution to the Price Difference Fund.
In the reporting period, the Enea Group generated 5.3 TWh of electricity, down 18% y/y. Generation from renewable sources totaled 577 GWh, up 3.4% y/y. Heat sales stood just shy of 2.4 PJ, down 8% y/y as a consequence of the weaker demand for heat caused by this year’s mild winter.
The EBITDA generated in Q1 2023 in the distribution area was at the level of PLN 426.5 million (up 37.4% y/y), driven largely by the greater margin on licensed activity coupled with an increase in operating expenses. Enea Operator delivered nearly 5.2 TWh of distribution services to almost 2.8 million end users. At the end of Q1 2023, more than 156 thousand renewable sources, including micro installations, were connected to Enea Operator’s distribution grid.
The trading area posted an EBITDA of PLN 0.4 million (up PLN 193.2 million y/y). The increase in EBITDA was driven largely by the use of provisions related to onerous contracts and the improved result on the revaluation of CO2 contracts. At the same time, despite the recognition of compensation revenues, margins in the retail market declined.
In Q1 2023, revenue from sales of electricity and gaseous fuel increased by PLN 1.59 billion compared to the corresponding period in 2022, having reflected the rapid electricity and gaseous fuel price increases on the wholesale market.
The sales volume of electricity and gaseous fuel was slightly down by 3.2% y/y to 6.0 TWh. The decrease was caused by a change to the customer portfolio. In the business customer segment, the Group posted a decline in the sales volume of electricity by nearly 3% (131 GWh) and gaseous fuel by almost 18% (48 GWh y/y). In the household segment, a slight decrease was posted in the sales volume of electricity by 1% y/y (15 GWh) along with a slight decline in the sales volume of gaseous fuel.
In the mining area, the LW Bogdanka Group’s revenue increased 28.6% in Q1 2023 to PLN 940.7 million versus PLN 731.8 million a year ago. EBITDA was PLN 291.6 million (up 5.5%), operating profit was PLN 155.8 million and net profit was PLN 126.2 million.
In Q1 2023, Enea Operator completed several major investment projects in north-western Poland, significantly improving the security and reliability of energy supplies and solidifying the grid’s potential for connecting new renewable sources. In Kujawsko-Pomorskie Voivodship, at the Mogilno, Kruszwica and Pakość stations, medium voltage switching stations were upgraded, whereby the reliability of power supplies to over 55 thousand end users was improved. In Wielkopolskie Voivodship, the reconstruction of the 110/15 kV substation in Chodzież was finalized, which will translate into an improvement in the reliability of electricity supplies to the residents and businesses of the town and county of Chodzież. Three upgraded 110/15kV power stations were opened in Zachodniopomorskie Voivodship. The stations in Recław, Gryfice and Gumieńce will ensure the security of electricity supplies to over 40 thousand end users from Szczecin and the municipalities of Wolin, Gryfice, Brojce and Płoty.
Moreover, Enea Operator will build a new 110/15 kV transformer station in the Kostrzyn-Słubice Special Economic Zone (Lubuskie Voivodship). The project will receive financial aid of over PLN 27 million from the Modernization Fund of the National Fund for Environmental Protection and Water Management (NFOŚiGW). The expansion and upgrade of the distribution grid is considered a key pillar of the energy transition process and a major development direction provided for in the Enea Group Development Strategy. As part of the upgrading process, installations are fitted with equipment and protections developed for seamless operation with RES.
COMMENTS ON THE ENEA GROUP’S PERFORMANCE IN Q1 2023:
Rafał Mucha, Vice-President of the Enea Management Board for Financial Matters:
“In Q1 2023, the Enea Group improved its EBITDA by 10% y/y. The highest EBITDA of PLN 490.3 million was earned in the generation area. Improvements in EBITDA were also posted by the trading, distribution and mining areas. The Group’s financial standing is stable. As a socially responsible company, we successfully deployed the Government Solidarity Shield whose most significant purpose was to protect Polish citizens against the effects of a dramatic hike in electricity prices. For Q1 2023 alone, the Enea Group will allocate nearly PLN 1 billion to the Price Difference Fund from which the freeze of electricity prices for end users is funded. All these efforts were made for Tariff Group G customers, local governments, public institutions and micro, small and medium-sized enterprises to be spared the effects of the energy crisis,” said Rafał Mucha, Vice-President of the Enea Management Board for Financial Matters.
Lech Żak, Enea’s Vice-President for Strategy and Development:
“The Enea Group, as the runner-up on the electricity generation market and the supplier of energy to nearly 2.8 million customers in north-western Poland, is a pillar of the country’s energy security. Our ongoing capital expenditures and upgrades improve the reliability of power supplies to our end users and translate into the development of a smart power grid enabling all parties involved to efficiently utilize the potential of renewable energy sources. We keep advancing the efficiency, stability and reliability of electricity supplies, while reducing the risk of potential power infrastructure failures. In the first quarter of this year alone, we were involved in the execution of the power grid modernization program for the Poznań conurbation. We also completed upgrades of the power switching stations in Mogilno, Kruszwica and Pakość (Kujawsko-Pomorskie Voivodship), the 110/15 kV substation in Chodzież (Wielkopolskie Voivodship) and Recław, Gryfice and Gumieńce (Zachodniopomorskie Voivodship). With a view to supporting the development of regions and improving the safety of residents, we spend millions on capital expenditures, which is why we are always proactively looking for additional sources of funding. Enea Operator is currently the leader in obtaining external funds among all Distribution System Operators in Poland,” said Lech Żak, Enea’s Vice-President for Strategy and Development.
Artur Wasilewski, Vice-President of the Lubelski Węgiel Bogdanka Management Board for Economic and Financial Matters:
“The Group’s solid Q1 2023 performance was achieved against the background of the Q3 2022 event, namely the clamping of wall 3/VII/385. As a consequence, the volume of output and sales of commercial coal declined. Our market environment, in particular the significant increase in the prices of materials, third-party services and electricity, along with employee compensation expectations, also exerted an impact on our operations. All these factors were mitigated by the higher price of our output, which translated into an EBITDA in excess of PLN 290 million, or more than 5% than in the corresponding period of the previous year,” said Artur Wasilewski, Vice President of the Lubelski Węgiel Bogdanka Management Board for Economic and Financial Matters.