The Energa Group has a very robust quarter on rising earnings and profitability

Energa has posted strong results in Q1. Net profit has shot up by 13% with EBITDA up by 7%. Revenues are up 6% from last year at PLN 2.9 billion. New installations have contributed to a 10% increase in energy production from renewable sources; the Group has also supplied more energy to its users.

The Energa Group has reported Q1 2015 net profit of PLN 355 million, signifying 13% growth. EBITDA rose by 7% year on year to PLN 691 million. Revenues are PLN 2,913 million, signifying 6% growth.

Distribution Segment - the Group’s key segment improved its EBITDA result in Q1 by 22% growing to PLN 489 million. This is the result of the supplied energy volume being up by 4% and the higher average rates charged for selling distribution services. Additionally, the reduction in network losses contributed to growing earnings. This is chiefly the outcome of switching from six-month to two-month meter readings. This system makes it possible to grow revenues from distribution services in one shot.

Sales Segment - stable quarterly results: EBITDA is up 7%. In Q1 the energy sales prices to end-users rose on average by roughly 6%. The volume of retail sales remained steady (4.3 TWh). All these factors enhanced the Group’s profitability in this area.

Generation Segment - reported lower results, with the contributing market factors being, among others, the low prices of green certificates and the falling official price set by the President of the Energy Regulatory Office. At the outset of 2014, the catalog of system services provided to PSE was expanded to include an operating reserve that significantly drove up this segment’s revenues. In Q1 2015, the revenues for this service were similar to the previous year.

“The Energa Group has posted stable growth. The results in the crucial Distribution Segment improved in Q1 - the volume of supplied energy and profitability are up. Furthermore, the production of energy from RES has visibly climbed following the investments we have completed. It is our objective to tap into Energa’s intrinsic potential to procure greater efficiency in every one of its operating areas. I am convinced that our work to continue developing the entire Group will poise it to react to changing market and legislative conditions”, says Andrzej Tersa – President of the Energa SA Management Board.

Expanding the production of energy using renewables by adding new installations

At the end of Q1 2015, the total installed generation capacity in the Energa Group was 1.4 GWe. The Group generated 1.2 TWh of gross electrical energy, i.e. 4% less than in the same period last year. This decline was primarily driven by lower coal-fired production in conjunction with the lower demand for operation of the Ostrołęka Power Plant for the Transmission System Operator.

In turn, Energa has posted a 10% increase in the production of energy from renewable sources with production of 530 GWh. The commissioning of the biomass generation unit in Elbląg and the new Myślino wind farm in mid 2014 contributed to this improvement. More energy was also produced in the run-of-river hydro power plants thanks to conducive hydrological conditions.

The volume of electricity supplied by Energa-Operator edged up by 4% to 5.5 TWh compared to 5.3 TWh of energy distributed in the same period last year.

The sales of electricity to end-users remained stable at 4.3 TWh just as last year while the quantity of energy sold on the wholesale market fell by 4% to 2.6 TWh.

Grid reliability following hurricane Felix

At the end of Q1 2015 the average duration of interruptions per user (SAIDI index) was 106 minutes compared to 99 minutes in the same period last year. The average frequency of interruptions in the supply of electricity per user (SAIFI index) rose from 1 to 1.2. The deterioration in these indices ensues from the mass interruptions precipitated by hurricane Felix in January.

To minimize the network’s interruption parameters the Energa Group has been investing consistently in its modernization and expansion. Modern solutions will facilitate further enhancement in energy supply reliability and reduction in the number and duration of interruptions even when facing challenging weather conditions. In Q1 2005 the Distribution Segment’s capital expenditures accounted for PLN 179 million of the Group’s capital expenditures of PLN 268 million. They were primarily earmarked to modernize and extend the grid in conjunction with connecting new users as well as rolling out the Smart Grid.

More research and development initiatives

Energa was selected as the leader of the project entitled Smart Specialization in Pomerania launched by the Executive Committee of the Pomeranian Region in April. Its objective is to diminish the economy’s energy intensity and its adverse environmental impact. This goal will be achieved by employing modern solutions to cut energy consumption, chiefly in the construction and transportation industries and by developing renewable energy sources to advance the prosumer energy sector and the smart grid in the transmission and distribution of energy.  

As part of the eMobility project conducted by the Energa Group whose purpose is to learn about and research the methods for the residents of Gdańsk, Gdynia and Sopot to use electric cars, electric car charging stations are being deployed. The company has launched two rapid charging stations and three semi-rapid charging stations for cars with electrical drives in the Tri-City.

Dividend to be paid to shareholders soon

Energa will pay out the dividend on 21 May 2015. Shareholders will receive PLN 1.44 for each share they hold in the company. The Ordinary Shareholder Meeting held on 29 April 2015 decided to earmark 92% of the net standalone profit for this purpose, i.e. PLN 596 million. The dividend rate as of the date of the Ordinary Shareholder Meeting was 5.4%, meaning that it was considerably higher than the current levels of bank deposits.

Since Energa SA’s subsidiaries pay out dividends in the first quarter of the year, Energa SA’s standalone net profit at the end of this past quarter, which will form the basis for the payment of a dividend next year, is PLN 917 million.

Its stable financial position lends support to pursuing an attractive dividend policy. Last year 83% of the standalone net profit was earmarked to pay out dividends. Last year’s dividend was PLN 1 per share and in total PLN 414 million was paid out to the shareholders. In the most recent days the newly-appointed Management Board for the fourth term of office declared its desire to sustain the dividend policy.