Current Report No. 24/2019

Date: 26th of July 2019

Subject: Information on the impairment loss on the value of assets held in Ostrołęka Power Plant B

Legal basis: Article 17(1) MAR – inside information

The Management Board of Energa SA hereby reports that due to certain changes in the legislative environment ie. in connection with the promulgation of EU Regulation 2019/943 of 5th of June 2019 regarding internal electricity market, introducing, among others, the limitation on the support the power market mechanism for existing units fired with fossil fuels, which emit more than 550g CO2/kWh of electric energy and above 350 kg of CO2 average on a yearly basis per kWe of installed capacity, premises have been identified which result in the recognition of impairment loss on assets in Ostrołęka Power Plant B.

The impairment test carried out in 1 half of 2019 revealed a decrease in the recoverable amount of assets in Ostrołęka Power Plant B. On 26 July 2019, a decision was taken to recognize impairment loss on the assets in the total amount of PLN 269.9 million. The estimated effect of the impairment loss on the consolidated net result of the Energa Group for 1 half of 2019 is PLN 218.6 million. No cash flows will be involved. This will deteriorate the operating result of the Energa Group without affecting its EBITDA.

Adjusted for the impairment loss, the carrying amount of Ostrołęka Power Plant B in the consolidated balance sheet of the Energa Group amounts to PLN 566.1 million.

The presented financial data are estimates and will be audited therefore it may be changed. The final outcome of the test and the amount of the impairment loss will be presented in the consolidated financial statements of the Energa Group for 1 half of 2019.
The Ostrołęka B power plant has a 5-year power contract for 2021-2025.