H1 2024 results confirm ENEA Group’s stable position

The ENEA Group improved its EBITDA result in three of four key business segments. The Group’s EBITDA improved by 50% year-on-year, reaching PLN 3.47 billion. The net profit, which amounted to nearly PLN 1.97 billion, also improved. Enea finalizes the work on updating the Group’s development strategy and takes active steps to develop new RES capacity.      

• The Enea Group improved its EBITDA year-on-year to PLN 3.47 billion. Revenue from sales and other income totaled PLN 16.1 billion and was down y/y by 33%.
• The production of electricity from conventional sources decreased by nearly 8% y/y to 8.7 TWh.
• Electricity generation from renewable sources rose 40% to 214 GWh.
• The Group focuses its resources in the renewable energy development area. During H1 2024, the RES capacity increased by 12 MW and by the end of 2024 it will grow by 31.6 MW.  
• Capital expenditures of the ENEA Group amounted to PLN 1.33 billion in H1 2024.
• Enea is finalizing its update of the Group’s development strategy.

We are developing the Group in each business area on the basis of sound financial foundations

The highest EBITDA, of PLN 1.66 billion, was posted by the Generation Area (up PLN 598 million y/y), which is mainly due to EBITDA growth in the System Power Plants Segment. The Group recorded a higher trading margin, higher revenues from the Capacity Market, Regulatory System Services and Balancing Capacity, while the result of the generation license decreased. In the Generation Area, the effect of the base of the corresponding period of the previous year relating to the costs incurred for the charge for the Price Difference Fund is significant.

The Group generated 9.8 TWh of electricity in H1 2024. Generation from renewable sources was 214 GWh, increasing by nearly 40% y/y. Sales of heat in the Generation Area fell slightly y/y to almost 3.3 PJ (petajoules). 

The Distribution Area posted EBITDA of PLN 1.16 billion (up by PLN 300 million y/y). This is a consequence of the higher margin realized on the concession business and higher result on other operating activities (mainly due to a change in provisions for grid assets) coupled with the simultaneous increase in operating expenses. In H1 2024 Enea Operator delivered nearly 10 TWh of distribution services to over 2.8 million end users.

The Trading Area achieved EBITDA of almost PLN 196 million (up by nearly PLN 125 million y/y). This is mainly due to the effect of higher margins on the retail market coupled with the simultaneous decline in revenue on compensation payments and the decline in the usage of provisions related to onerous contracts. The sales volume of electricity was up almost 12% y/y to 12.5 TWh. The increase was caused by shifts in the customer portfolio. In the business customer segment the Group posted an increase in the volume of sales of electricity y/y of almost 14% (1214 GWh), while the household segment saw an increase of 4% (99 GWh).

In H1 2024, the Group’s revenue from sales of electricity to retail customers fell 12.7% y/y (PLN 1.03 billion), reflecting the decline in electricity prices on the wholesale market.

In the Mining Area: revenue of the LW Bogdanka Group for H1 2024 amounted to PLN 1,670.6 million, while EBITDA reached PLN 262.7 million. The production of commercial coal in the period under discussion was 3.5 million tons with sales of 3.6 million tons.

We activate the Group in the area of developing and acquiring new RES capacity

Enea Group’s capital expenditures amounted to PLN 1.33 billion in H1 2024. The largest amount, almost half of its capital expenditures, was made in the Distribution Area. The goal is to ensure the efficient operation of the network infrastructure and to develop to enable the connection of new users and new renewable energy sources.

At the end of Q2 2024 the number of renewable energy sources connected to Enea Operator’s network consisted of almost 184 thousand installations with a total capacity of nearly 6.5 GW.

In order to effectively develop renewable energy capacity, the management of renewable energy assets, which were previously dispersed throughout the Group, has been organized by consolidating all resources and activities in Enea Nowa Energia. In 2024, the company intends to complete projects for the construction or acquisition of assets that will increase the RES capacity of the Enea Group by 31.6 MW. Out of the above, 10 MW will come from the Bejsce wind farm, currently under construction (while energization of another 10 MW of this facility is expected in 2025). The remaining capacity will come from photovoltaic farms (PV Darżyno I, PV Dygowo I, PV Jastrowie II, PV Krzęcin). This year, Enea Nowa Energia plans to invest PLN 161.6 million in new renewable energy sources.

Energy efficiency as a transition tool in the Enea Group

A new business unit, Enea Eko, will be responsible for the Group's green transition. By managing this strategic area, it will ensure the focus on energy efficiency in the Group's companies. Its activities will set the pace for important changes on the Enea Group’s journey to sustainability. It will also develop an offer for business customers. This will include services and products based on the management of energy efficiency. In the future, the company will also be involved in the sale of green energy and other products supporting the green transition of companies.

COMMENTS ON THE ENEA GROUP’S PERFORMANCE AFTER 2 QUARTERS OF 2024:

Grzegorz Kinelski, CEO of Enea: 

“We are developing the Enea Group in each of its business areas. This is confirmed by the solid performance recorded in each segment. In H1 2024, the Group’s EBITDA amounted to PLN 3.47 billion, increasing by PLN 1.15 billion y/y. The Generation and Distribution Areas were the largest contributors to the Group's EBITDA. What is important, we maintain a favorable net debt/EBITDA ratio, which indicates our ability to raise funds for capital expenditures.

We are finalizing the process of updating the Enea Group’s development strategy, which will set out the strategic directions for building an efficient organization: a company that seizes market opportunities and creates value for its shareholders. We have made significant changes in the Group’s structure and organization, consolidating the resources and skills for developing renewables in a single company, ENEA Nowa Energia, and transferring the implementation of innovation projects to the individual business areas. The growing importance of renewable energy sources in the Polish Power System and the market's expectation that the Group will develop in a safe and environmentally sustainable manner require a new look at our investments from the perspective of green transition. Therefore, we will hybridize our investments by planning RES units with energy storage and using solutions that ensure efficient generation and transmission of green energy,” said Grzegorz Kinelski, CEO of Enea.

 Artur Wasilewski, Vice-President of the LW Bogdanka Management Board for Economic and Financial Matters:

“The financial performance of H1 2024 reflects the challenges we face in the coal market. Declining demand for our product and lower market prices are impacting our business, but we are taking the necessary steps to adapt to the dynamic changes in our market environment. The decision to recognize impairment of our non-current assets was necessary to accurately reflect our future market outlook in the current value of our assets. However, it needs to be emphasized that this is an accounting operation only and has no impact on our current financial liquidity or EBITDA. We are continuing our optimization efforts and our cooperation with buyers of our coal, both domestic and international, which allows us to effectively plan sales over the long term. We have also initiated an update of the assumptions underlying our strategy in order to respond appropriately to the challenges and opportunities that are emerging in the marketplace,” said Artur Wasilewski, Vice-President of the LW Bogdanka Management Board for Economic and Financial Matters.