Current Report No. 10/2018

Prepared on: 21 March 2018

Subject: Fitch Ratings affirms Energa’s rating

Legal basis: Article 56 section 1 point 2 of the Act on public offering – current and periodic information

The Management Board of Energa SA (‘Company’, ‘Energa’) announces that on 21 March 2018, Fitch Ratings (‘Agency’, ‘Fitch’) affirmed the Company’s Long-Term foreign- and local-currency Issuer Default Ratings (IDRs) at 'BBB' with a Stable Outlook, a ‘BBB' rating for the bonds issued by the Company's subsidiary Energa Finance AB (publ), and a ‘BB+’ rating for Energa’s hybrid bonds. 

The Agency justified its decision by the dominant share of the Distribution Business Line in total planned capital expenditures and in the Group’s EBITDA, which mitigates business risks and ensures predictability of cash flows compared to conventional production. At the same time, the Agency factored in the business risk associated with the Elektrownia Ostrołęka C project. Fitch pointed out that this risk was mitigated by, amongst others, strategic partnership in the project’s implementation, participation of additional investors in its financing and emergence of the Power Market in Poland.

In its report, Fitch estimates that Energa SA’s debt is at a moderate level, with a FFO-adjusted net leverage of 1.7 for 2017. The Agency expects this ratio to increase to 3 in 2018-2022, there still being some margin left in relation to the maximum level of 3.5 allowed under the BBB rating. 

The Agency’s full report is available on the Fitch Ratings website.