Current Report No.: 39/2023
Current Report No.: 39/2023
Date of Preparation: 20 October 2023
Issuer's Abbreviated Name: ENEA S.A.
Subject: Information on the intention to include a non-recurring operation of an accounting nature in the consolidated financial statements for Q3 2023
Legal Basis: Article 17(1) of the Market Abuse Regulation - inside information
Body of the report:
The Management Board of ENEA S.A. ("Company", "Issuer") hereby reports that in connection with the expiration, on 20 October 2023, of the time limit for the competent authority to provide an interpretation of the legal regulations on the so-called compensation system, as requested by the Company, in the absence of the said interpretation, the Issuer completed, on the same date, its own legal review related to the entry into force of the Regulation of the Minister of Climate and the Environment of 9 September 2023, amending the Regulation on the Method of Shaping and Calculating Tariffs and the Method of Settlements in Electricity Trading ("MCE Regulation"). The MCE Regulation introduces a mechanism for reducing the amounts payable by households to electricity trading companies for 2023.
The absence of an interpretation confirming the possibility that the so-called compensation system referred to in the Act of 7 October 2022 on Special Solutions to Protect Electricity Consumers in 2023 in Connection with the Situation in the Electricity Market and the Act of 27 October 2022 on Emergency Measures to Reduce Electricity Prices and Support Certain Consumers in 2023 may cover the revenues lost due to the entry into force of the MCE Regulation results in the requirement to establish an accounting provision for this purpose.
The provision amount of approx. PLN 264 million has been determined based on estimates the preparation of which was founded on the assumption that each household electricity offtake point whose settlement will cover 2023 will fulfill one of the conditions set forth in the Regulation and thus will be granted a reduction in the amount of its payables.
Please note that the estimated impact of the MCE Regulation is subject to the risk of data uncertainty. The ultimate specific amount of the impact exerted by the MCE Regulation will depend on the final number of customers covered by the mechanism enabling a reduction in household payables.
This event will affect the standalone financial statements of ENEA S.A. by reducing EBITDA by approx. PLN 264 million, pre-tax profit by approx. PLN 264 million and net profit for the Issuer's reporting period by approx. PLN 213.8 million.
It will also affect the consolidated financial statements of the ENEA Group by reducing its EBITDA by approx. PLN 264 million, pre-tax profit by approx. PLN 264 million and net profit for the reporting period by approx. PLN 213.8 million.
At the same time, please note that the provision has been estimated in the absence of a legal settlement regarding the compensation system based on the assumption that it will not be applicable to revenues lost in connection with the entry into force of the MCE Regulation. Any other subsequent settlement of this issue may exert a significant impact on the amount of the estimated consequences of the entry into force of the MCE Regulation.
Please be advised that the final financial results will be presented in the ENEA Group's periodic report for Q3 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).