Current Report No. 60/2020
Date: 23 July 2020
Subject: Information on impairment losses and creation of a provision
Legal basis: Article 17 (1) of MAR – inside information
The Management Board of Energa SA (the "Issuer") informs that as part of the preparation of the condensed interim financial statements (standalone and consolidated) for the first half of 2020, it proved necessary to create:
- an impairment loss on generation assets of the subsidiary Energa Elektrownie Ostrołęka SA - in the amount of PLN 473 million,
- an impairment loss on investments in a joint venture in Polska Grupa Górnicza S.A. ("PGG"), over which the Energa Group exercises joint control through a block of 15.32% of PGG shares held by Energa Kogeneracja Sp. z o.o. ("EKO") - in the amount of PLN 145 million,
- an impairment loss on EKO shares - in the amount of PLN 79 million,
- an impairment loss on shares in ENERGA AB Finance (publ) – in the amount of PLN 84 million.
The above mentioned impairment losses result from the valuation of shares and impairment tests of fixed assets in the second quarter of 2020, which were performed due to identified premises.
At the same time, in connection with the decision on the intention to change the power source from coal to gas for the Ostrołęka C power plant project (“Project") carried out by the company Elektrownia Ostrołęka Sp. z o.o. (“SPV”), the Issuer finds it necessary to:
- create a provision in the amount of PLN 218 million, which reflects possible currently estimated amounts of SPV funding for the settlement of the Project implementation to date,
- create an impairment loss on loans, including interest, granted to the SPV - in the amount of PLN 185 million.
The estimated total impact of the above events on the consolidated net result of Energa Group for the first half of 2020 is PLN -1 021 million, and on the standalone net result of Energa SA PLN -567 million. The above events are of a non-cash nature. They will decrease the net results of Energa Group and Energa SA without affecting the EBITDA result (operating profit before amortization and impairment of non-financial non-current assets).
The financial data presented are estimates and are subject to review by the auditor, therefore they may change. The final amounts of impairment losses and provision will be presented in the condensed interim consolidated financial statements of Energa Group and in the condensed interim standalone financial statements of Energa SA for the first half of 2020.