Current Report No. 27/2018

Prepared on: 2 July 2018

Subject:   Disclosure of reversal of impairment losses on assets

Legal basis: Article 17(1) of the MAR – confidential information

The Management Board of ENERGA SA hereby informs that due to certain changes in the legislative environment, i.e. the signing by the President of the Republic of Poland of the Act of 7 June 2018 on Certain Amendments to the Act on Renewable Energy Sources and some other acts , it has identified evidence which may result in the reversal of impairment losses on certain assets of the ENERGA Group.  

The impairment tests carried out in the first six months of 2018 revealed an increase in the recoverable amount of wind farms. On 2 July 2018 a decision was taken to reverse impairment losses on wind farms in the Generation Business Line in the total amount of PLN 116.6 million. The estimated effect of the reversal of the above impairment losses on the consolidated net results of operations of the ENERGA Group for 2018 is PLN 94.5 million. No cash flows will be involved. This will positively affect the operating profit of the ENERGA Group remaining without affecting its EBITDA.

After taking into account the reversal of the impairment losses, the book value of wind farms in the consolidated balance sheet of the ENERGA Group amounts to PLN 664.36 million.

The presented figures are estimates; they will be audited by an auditor and may change after the auditor has verified the tests and issued an opinion. The final outcome of the tests and the amount of reversal of the impairment losses will be presented in the consolidated financial statements of the Energa Group as at and for the six months ended 30 June 2018.