Record-breaking results of the ENERGA Group

ENERGA joined the elite club of companies whose net profit exceeded one billion Polish zloty. In 2014 the Group posted the highest annual results in its history. Net profit increased 35%, EBITDA 17%, reaching PLN 2.3 billion. The Management Board recommended payment of PLN 596 m in dividend from stand-alone net profit for 2014, which corresponds to a dividend rate of 6.2% percent.

In 2014, net profit amounted to PLN 1.006 bn and was 35% higher than the year before and higher than the Bloomberg consensus. The Group generated PLN 2.307 billion in EBITDA, 17% more than the year before, again outperforming the brokerage house consensus.  

The improved results are attributable to the greatest extent to the generation segment and very good results of the Ostrołęka Power Plant. This results from increased energy production and sales, efficient use of regulatory system services and the situation in the balancing market. The Group’s revenues totaled PLN 10.6 bn, compared to PLN 11.4 bn the year before, which is attributable to the sales segment - lower energy prices reflecting the decisions of the ERO President on reduction of Tariff G and the lower volume of energy sold to customers. Despite the decrease of total sales, revenue per employee was higher. A 5 percent increase was recorded in the distribution segment, where revenues reached nearly PLN 4 bn. Much higher - by 17 percent - sales were recorded by the generation segment - PLN 1.8 bn. 

This was yet another improvement of the financial performance over the past few years. Since 2010 profit and EBITDA improved by over 60 percent and revenues by 12 percent. 

- After a few years we joined the elite club of companies whose net profit exceeded one billion Polish zloty. This symbolic threshold is important to us because it confirms that the development path focusing in the regulated business and electricity distribution was the right choice. We significantly improved the results in generation, among others, thanks to skillful leveraging of the opportunities appearing in the market, commissioning new sources and improving the efficiency of this segment. The sales segment, in turn, which operates in an increasingly competitive market, outperformed our plan – says Mirosław Bieliński, President of the ENERGA SA Management Board.   

More energy produced and delivered

In 2004, distribution of electricity was on average 2 percent higher than the year before and amounted to 20.9 TWh. Also the average distribution rate increased by nearly 4 percent. 

Generation companies in the ENERGA Group in 2014 produced approx. 5.1 TWh (i.e. approx. 2.7 percent) more electricity than the year before. The increase resulted from, among other things, higher production of the Ostrołęka power plant and energy generated by wind farms acquired as a result of the acquisitions in mid-2013. 

In 2014, the total volume of sold electricity amounted to 26 TWh and dropped by approximately 16%. The decrease was posted in the retail and wholesale market. The volume of electricity sold to end users in 2014 fell by approximately 10%. As a result of both lower energy consumption and smaller number of buyers, all tariff groups recorded lower volumes of energy sold. However, the share of sales to households in total sales in 2014 increased 32%, compared to 29% the year before. 

Effects of investments: higher reliability of supplies and increase of generation capacity

Last year the Group spent PLN 1.477 bn on investments, out of which 78% in the distribution segment, which:

• connected 31 thousand new customers
• built and modernized 2,937 km of medium voltage and low voltage lines
• connected 60 new RES to the network and launched additional 160 prosumer sources

The effects of the investment policy involving allocation of the biggest part of the budget for investments in the distribution network and infrastructure can be seen in improved reliability of electricity supplies.

At the end of 2014, the SAIDI index, signifying the average duration of outage for each customer, was 26% lower than the year before. The SAIFI index, in turn, illustrating the average frequency of interruptions of electricity supplies per customer, increased by 5% as a result of mass outages caused by the hurricane and scheduled outages associated with network modernization, but over the past 4 years improved by 22%. The average outage duration per customer in minutes (SAIDI) dropped since 2010 by as much as half.

Apart from investments in distribution, last year the ENERGA Group commissioned several generation projects thanks to which the Group’s capacities grew by nearly 47 MWe (RES) of electricity and 314 MWt of thermal energy.

• biomass unit in Elbląg with the capacity of 25 MWe and 30 MWt
• Myślino wind farm with the capacity of 20 MWe
• photovoltaic farm in Gdańsk with the capacity of approx. 1,6 MWe
• new heating source for the city of Ostrołęka with the capacity of 220 MWt
• combined heat and power plant in Kalisz with the capacity of 64 MWt

Towards innovations and new markets

Apart from investments ENERGA continued other measures which supplement Poland’s energy system and reduce energy costs for customers. The Group was the first in Poland to conduct several commercial campaigns involving the acquisition of negawatts, i.e. reduction of the demand for electricity in peak hours. The Company rewarded its business customers for reducing their energy consumption in peak hours on demand. 

The Group used the mechanisms to reduce and defer demand for energy also for retail customers. The so-called Kalisz test, carried out over one year, showed that thanks to the use of smart meters (AMI), demand control can be achieved also in this group. Households in Kalisz subject to the test reduced their energy consumption on demand by as much as 30 percent and total consumption of electricity by several percent.

ENERGA is working on further solutions aimed at both reduction of the demand for energy and deferral of the demand till off-peak hours. It is also looking for solutions that will poise the Group to penetrate new markets and new technologies. Cooperation with Intel established last year is aimed at implementation of solutions based on Internet of Things and cooperation of devices in the network, comprising, among others, virtual power plant systems or RES energy distribution management systems. Accessing innovations in areas of strategic importance for the ENERGA Group is to be assisted by establishing of a Corporate Venture Capital fund, planned together with TFI BGK, which will invest in young, dynamically developing companies.

In the first league on the stock exchange floor 

By the end of March ENERGA will be included in the WIG20 index, grouping together WSE-listed companies characterized by high capitalization and stock liquidity. This is the result of the high level of trust put in the Company by investors. In 2014, ENERGA’s value increased by over 40%, thanks to which the Company, very soon after its debut on WSE, was promoted to the WIG30 index and international indices: MSCI Poland and FTSE All World. By the end of 2014, ENERGA advanced also to join the prestigious Respect Index composed of companies espousing the principles of corporate social responsibility.

The market trust is also the effect of the Management Board’s consistent execution of the declarations made during the IPO period, including those pertaining to the dividend policy. In June, ENERGA, for the first time as a listed company, shared its profits with the shareholders. Stable financial position and good performance made it possible to distribute among the shareholders PLN 414 million, i.e. PLN 1 per share. The Management Board’s intention is to continue the attractive dividend policy – on 12 March it recommended disbursement of PLN 596 m from the unconsolidated profit for 2014, i.e. PLN 1,44  per share. This means a dividend rate of 6.2 %, based on the price from closing of the last session in 2014.