Enea Group summarizes H1 2023
Enea Group’s EBITDA in the first half of 2023 improved compared to the previous year and reached PLN 2.3 billion. The Group generated more than PLN 24 billion of revenue from sales and other income. The Group’s priority is to finalize the process of transferring coal-fired generation assets to the National Energy Security Agency. The completion of this process will allow the Group to accelerate investments in the development of renewable energy sources.
- The Group’s EBITDA improved by 36.6% y/y and revenue from sales and other income by 63.3%.
- The Group generated 10.5 TWh of electricity, of which 1.08 TWh came from renewable sources.
- Enea has accepted the key terms and conditions for the sale of its coal-fired generation assets to the State Treasury. In support of the NABE formation process, the Group is focused on efficiently fulfilling the final conditions of these transactions.
- Enea has received an offer from the State Treasury to purchase the block of 21,962,189 shares in the LW Bogdanka mine owned by the Enea Group.
In H1 2023, the Enea Group generated an EBITDA of PLN 2.3 billion (up more than PLN 620 million, or 36.6%, y/y). Compared to the same period of last year, revenue from sales and other income improved by nearly 63.3%, up to more than PLN 24 billion. The net financial result of the reporting period was PLN -54 million, which was affected by the impairment allowance recognized by he company for non-financial non-current assets in the Mining Area as a result of the estimation of the market value of LW Bogdanka shares. In the period under review, the Enea Group spent PLN 1.47 billion on investments, mainly in distribution.
The highest EBITDA of PLN 1.07 billion was earned in the Generation Area (up by PLN 394.6 million y/y). An increase was recorded in the RES Segment, driven mainly by higher electricity prices, higher biomass cost and costs of the contribution to the Price Difference Fund. The System Power Plants Segment also recorded higher EBITDA, which was impacted by the low previous year base (the impact of the provision for onerous contracts recognized in H1 2022) and an increase in the generation unit margin, the repurchase margin and the Balancing Market margin. In the reporting period, the Enea Group generated 10.5 TWh of electricity. Energy generation from renewable sources was slightly lower y/y (by about 6%) and stood at 1.08 TWh. Sales of heat decreased slightly to 3.7 PJ (petajoules).
The Enea Group has already allocated nearly PLN 1.58 billion to the Price Difference Fund to support the stabilization of electricity prices for end users at an acceptable level.
EBITDA earned in the distribution area was PLN 859.4 million, increasing by PLN 225.5 million y/y. This performance was driven by a higher margin on the concession business, while operating expenses increased. Enea Operator delivered 10.1 TWh of distribution services to 2.8 million end users. The number of end users increased by 58 thousand, or 2%. At the end of H1 2023, more than 162 thousand microinstallations were connected to Enea Operator’s distribution network.
The Trading Area posted an EBITDA of 71.1 million. The y/y increase of PLN 247.3 million was caused primarily by the use of provisions related to onerous contracts and lower provisions for expected losses and potential claims. At the same time, despite the recognition of compensation revenues, there was a decline in margins in the retail market.
The sales volume of electricity and gaseous fuel in H1 2023 decreased by 3.9% y/y to 11.6 TWh. The decrease was caused by a change in the customer portfolio. In the business customer segment, the Group posted a decline in the sales volume of electricity (386 GWh y/y) and a decline in the sales volume of gaseous fuel (92 GWh y/y). In the household segment, the sales volume of electricity increased slightly by 17 GWh. In the period in question, total revenue from sales of electricity and gaseous fuel increased in by PLN 2.69 billion (or nearly 49%) as compared to the corresponding period in 2022, reflecting the rapid electricity and gaseous fuel price increases on the wholesale market. This increase affected for the most part revenues in the business customer segment.
In the Mining Area, LW Bogdanka’s consolidated revenue in H1 2023 stood at PLN 1,825.1 million, EBITDA was PLN 532.8 million, EBIT PLN 274.9 million, sales profit reached PLN 333.8 million and net profit was PLN 225.8 million. The half-year results were impacted by an impairment charge of PLN 48.5 million (of which PLN 26.8 million was written off in Q1 2023) related to the potential risk of losing part of the machinery and equipment located in the 3/VII/385 longwall and part of the roadways associated with this longwall.
In H1 2023, Bogdanka mined approx. 16.7 km of new corridors. Production of commercial coal was nearly 3.3 million tons In H1 coal sales stood at 3.1 million tons, with an average yield of 57.8%.
In H1 2023 Bogdanka had a strong market position, achieving a high 25.1% share of coal sales to the commercial power sector. The overall share in total steam coal sales was at 19.7%. The LW Bogdanka Group incurred capital expenditures of nearly PLN 345 million. The largest chunk of this amount, PLN 244 million, was spent on new excavations and modernization of existing ones.
The Enea Group continues to pursue its Development Strategy focused on the development of renewable energy sources and investment projects transforming the Polish energy sector. In August, Enea, along with three remaining power industry groups, signed the documents summarizing the terms and conditions for the sale of its coal-fired assets to the State Treasury. The generating units of Enea Wytwarzanie and Enea Elektrownia Połaniec will be contributed to NABE. The strategic intention to divest coal-fired assets also includes activities aimed at selling the shares of LW Bogdanka, which is owned by the Enea Group. The company has already received an offer from the State Treasury to purchase a block of 21,962,189 LW Bogdanka shares. As a result of these changes, it will be easier for Enea to acquire funds for investments, among others in renewable energy sources, energy storage or the development of distribution networks.
The development of renewable energy capacity is one of the most important tasks for the Enea Group in the coming years. In June, a 3 MW photovoltaic power plant was put into operation in Jastrowie (Wielkopolskie Voivodship). Enea also purchased two photovoltaic power plants, which have been in operation since 2022: in Tarnów (Dolnośląskie Voivodeship) with an installed capacity of 10 MW and in Kapice-Lipniki (Podlaskie Voivodeship) with an installed capacity of 2 MW. It also acquired a wind farm under construction in the Bejsce township, which will have the capacity of 19.8 MW. At the end of H1 2023, the Enea Group had 449 MW of installed RES capacity.
It is the Group’s priority to increase the potential of the Enea Operator’s power grid to connect new energy sources, while ensuring security and reliability of electricity supply to buyers. In Q2 2023 alone, Enea Operator commissioned new main supply points (GPZs) in Suchy Las (Wielkopolskie Voivodship), in the Poznań city center and in Szczecin. The investments increase the reliability of electricity supply in large urban areas, increase the economic potential of the regions, enable the connection of new customers in the investment areas, and contribute to increasing the grid's potential for the development of renewable energy sources.