Current Report No. 2/2019

Prepared on: 17/01/2019

Subject: Information on the reversal of impairment losses on assets

Legal basis: Article 17(1) MAR - confidential information

The Management Board of ENERGA SA reports that due to certain changes in its market environment, in the first instance the increase of electricity and green certificates prices, 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 second half of 2018 revealed an increase in the recoverable amount of wind and photovoltaic assets. On 17 January 2019 a decision was taken to reverse impairment losses on wind and photovoltaic assets in the Generation Business Line in the total amount of PLN 145.4 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 117.8 million. No cash flows will be involved. This will improve the operating profit of the ENERGA Group without affecting its EBITDA.

After taking into account the reversal of the impairment losses, the book value of wind and photovoltaic farms in the consolidated balance sheet of the ENERGA Group amounts to PLN 806 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 2018.