Estimated financial and operational data of the Energa Group for Q4 2020 and for 2020

Date: 3 February 2021

Subject: Estimated financial and operational data of the Energa Group for Q4 2020 and for 2020

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

The Management Board of Energa SA hereby reports estimated selected financial and operational data of the Energa Group ("Group") for the fourth quarter of 2020 and for 2020.

Selected data for Q4 2020:

Revenues of the Group: PLN 3,377 million (vs. PLN 3,107 million in Q4 2019).

EBITDA of the Group: PLN 482 million (vs. PLN 297 million in Q4 2019), including:

EBITDA of the Distribution Business Line: PLN 438 million (vs. PLN 345 million in Q4 2019),

EBITDA of the Generation Business Line: PLN 30 million (vs. PLN 36 million in Q4 2019),

EBITDA of the Sales Business Line: PLN 43 million (vs. PLN -76 million in Q4 2019).

Operating result (EBIT) of the Group: PLN 365 million (vs. PLN -216 million in Q4 2019).

Net result of the Group: PLN 235 million (vs. PLN -1,356 million in Q4 2019).

CAPEX of the Group: PLN 533 million (vs. PLN 466 million in Q4 2019).

Distribution of electricity: 5,652 GWh (vs. 5,597 GWh in Q4 2019).

Gross production of electricity: 977 GWh (vs. 802 GWh in Q4 2019).

Retail sales of electricity: 4,896 GWh (vs. 5,013 GWh in Q4 2019).

The Energa Group generated EBITDA (operating profit before amortization and impairment of non-financial non-current assets) of PLN 482 million in Q4 2020, an increase of 62% compared to the same period of the previous year. This result was mainly influenced by:

a) EBITDA achieved by the Distribution Business Line of PLN 438 million (an increase of PLN 93 million y/y). The reason for the increase in EBITDA was a higher distribution margin (with grid losses) resulting from a higher average selling price of the distribution service and an increased volume.

b) EBITDA achieved by the Generation Business Line of PLN 30 million (a decrease of PLN 6 million y/y). This Line's results have been positively influenced mainly by higher volumes of electricity production at the Ostrołęka power plant and hydro sources. Revenues from the sale of system services were also higher, while coal and biomass purchase prices were lower. On the other hand, the increase in the purchase cost of emission allowances and lower revenues from the sale of green property rights, ultimately translating into a lower result for the Line on a quarterly basis was an unfavourable effect.

c) EBITDA achieved by the Sales Business Line of PLN 43 million (an increase of PLN 119 million y/y). The increase in the result in the fourth quarter of 2020, compared to the same period of the previous year, was mainly due to the low base effect. At the end of 2019, a provision of PLN 125 million was created for onerous contracts related to the unfavourable G tariff for 2020. In addition, compensation resulting from the final settlement of the 2019 "electricity" Act was recognised in December 2020, increasing the result by PLN 60 million.

The Group's net result in Q4 2020 was PLN 235 million compared to PLN -1,356 million in the same period of 2019. The y/y increase in this result was driven by the low base of the previous year, when a number of impairment losses on assets were created.

Selected data for 2020:

Revenues of the Group: PLN 12,553 million (vs. PLN 12,172 million in 2019).

EBITDA of the Group: PLN 2,038 million (vs. PLN 2,039 in 2019), including:

EBITDA of the Distribution Business Line: PLN 1,790 million (vs. PLN 1,648 million in 2019),

EBITDA of the Generation Business Line: PLN 165 million (vs. PLN 262 million in 2019),

EBITDA of the Sales Business Line: PLN 156 million (vs. PLN 182 million in 2019).

Operating result (EBIT) of the Group: PLN 664 million (vs. PLN 459 million in 2019).

Net result of the Group: PLN -447 million (vs. PLN -1,001 million in 2019).

CAPEX of the Group: PLN 1,721 million (vs. PLN 1,574 million in 2019).

Distribution of electricity: 21,763 GWh (vs. 22,155 GWh in 2019).

Gross production of electricity: 3,184 GWh (vs. 3,578 GWh in 2019).

Retail sales of electricity: 18,782 GWh (vs. 19,681 GWh in 2019).

In 2020, the Energa Group generated EBITDA of PLN 2,038 million, maintaining the previous year's level. Higher results were realised by the Distribution Business Line (EBITDA increased by PLN 142 million as a result of higher average selling price of the distribution service). On the other hand, lower results were recorded by the Sales Business Line (EBITDA decrease by PLN 26 million due to the implementation of the unfavourable G tariff in 2020 and the COVID-19 pandemic) and the Generation Business Line (EBIDTA lower by PLN 97 million due to lower revenues from the sale of electricity, green property rights and regulatory system services, exacerbated on the cost side by, among others, a higher cost of purchasing emission allowances).

The estimated impact of the ongoing COVID-19 pandemic on the Group's EBITDA in 2020, reflected, among other things, in the reduced energy sales volume, amounted to ca. PLN 66 million.

The data presented are estimates and are subject to review by the auditor, therefore they may change. The final financial and operational data of the Energa Group for Q4 2020 and for 2020 will be presented in the consolidated financial statements of Energa Group for 2020.