Current Report No. 42/2020

Date: 19 May 2020

Subject: Information on impairment losses created by Elektrownia Ostrołęka Sp. z o.o.

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

The Management Board of Energa SA (“Issuer”) informs that on 19 May 2020 obtained information from Elektrownia Ostrołęka Sp. z o.o. (“Company”), responsible for development of 1000 MW coal power plant Ostrołeka C located in Ostrołęka (“Project”), about impairment losses creation on the Company’s non-current assets in amount of PLN 1 027 million.

The Company informed that the impairment losses mentioned above are a consequence of evaluated impairment test of non-current assets, according to revised business assumptions of the coal-based Project.

The share in the Company’s loss, within the equity method, included in the consolidated financial statements of Energa Group reduced the value of the investment in the Company to PLN zero. At the same time, it was a premise to create the total impairment loss of the value of Company’s stakes in the Issuer's non-consolidated financial statements.

The estimated impact of the events mentioned above on the consolidated net result of Energa Group for 2019 is PLN -443 million, and on the standalone net result of Energa SA for 2019 PLN -453 million. In both cases this is the event of a non-cash nature, which decreases the net result without affecting EBITDA.

Presented financial data is an estimation only and will be a subject of revision by the auditor, therefore they may change. Final impairment results will be presented in the consolidated financial statements of Energa Group for 2019 and in the standalone financial statements of Energa SA for 2019.

The impairment loss decision does not relate to information published in current report No. 41/2020 of 19 May 2020.