Fitch upholds Energa’s positive rating
Fitch Ratings affirmed Energa’s long-term ratings at 'BBB' with a Stable Outlook, and at ‘BB+’ rating for Energa’s hybrid bonds.
Fitch justified its decision by the dominant share of the Distribution Business Line in the total planned capital expenditure and in the Group’s EBITDA. According to the Agency, this mitigates business risks and ensures predictability of cash flows as compared to conventional production. At the same time, Fitch points out that the business risk associated with the Elektrownia Ostrołęka C project is mitigated, among other things, by strategic partnership in the project implementation, participation of additional financial investors and emergence of the Power Market in Poland. Fitch states in its report that Energa’s debt remains below the maximum level acceptable for a ‘BBB’ rating in the 2018-2022 period analysed by the Agency.
“After the positive analyst recommendations and strong annual financial results, this is another sign for the market that we are a company that successfully pursues its goals,” says Alicja Barbara Klimiuk, Acting President of the Management Board of Energa SA. “Our hard-earned credibility makes it easier for us to obtain attractive financing and go ahead with strategic projects,” adds Jacek Kościelniak, Vice President of the Management Board for financial affairs.
Energa has been subject to an annual credit rating assessment by Fitch Ratings since 2011, that is from the moment it made its debut on the Warsaw Stock Exchange. In mid-March, Energa summarised a very successful 2017. The Group’s EBITDA raised to PLN 2.160 billion, an increase of PLN 133 million year-on-year. Revenues increased by PLN 353 million to PLN 10.534 billion. The net result was PLN 789 million, up by a whopping PLN 642 million compared to 2016. Capital expenditure totalled PLN 1.4 billion, of which more than PLN 1.2 billion was spent on investments in the Distribution Business Line. This enabled the Group, among other things, to connect nearly 52,000 new customers (its customer base is now counting over 3 million), build and upgrade 3,718 km of high, medium and low voltage lines and connect 32 MW of new RES sources to the grid. In addition, Energa obtained EUR 250 million from the European Investment Bank on favourable terms to upgrade its distribution networks.
According to the Group’s 2016-2025 strategy, capital expenditure will total over PLN 20 billion. It is planned that most outlays will be incurred in the Distribution Business Line on the development of the regulatory asset base and compliance with the DSO quality requirements. The Energy Generation Segment will pursue investments related to the modernisation of assets and the development of new capacities. Other capital expenditure will be allocated, among other things, to Sales Business Line operations in terms of customer service and the development of new areas of business activity.