Estimated financial and operational data of the Energa Group for Q3 and 9 months of 2021

Current report No. 34/2021

Date: 27 October 2021

Subject: Estimated financial and operational data of the Energa Group for Q3 and 9 months of 2021

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 third quarter and 9 months of 2021.

Estimated selected data for Q3 2021:

Revenues of the Group: PLN 3,317 million (vs. PLN 3,013 million in Q3 2020).

EBITDA of the Group: PLN 692 million (vs. PLN 501 million in Q3 2020), including:

EBITDA of the Distribution Business Line: PLN 424 million (vs. PLN 412 million in Q3 2020),

EBITDA of the Generation Business Line: PLN 14 million (vs. PLN 37 million in Q3 2020),

EBITDA of the Sales Business Line: PLN 263 million (vs. PLN 62 million in Q3 2020).

Operating result (EBIT) of the Group: PLN 430 million (vs. PLN 236 million in Q3 2020).

Net profit of the Group: PLN 295 million (vs. PLN 85 million in Q3 2020).

CAPEX of the Group: PLN 420 million (vs. PLN 375 million in Q3 2020).

Distribution of electricity: 5,627 GWh (vs. 5,443 GWh in Q3 2020).

Gross production of electricity: 1,042 GWh (vs. 783 GWh in Q3 2020).

Retail sales of electricity: 4,407 GWh (vs. 4,611 GWh in Q3 2020).

In Q3 2021, the Energa Group generated PLN 692 million in EBITDA (operating profit before amortization and impairment of non-financial non-current assets), a 38% increase compared to the corresponding period of the previous year. This result was mainly influenced by:

a) EBITDA achieved by the Distribution Business Line in the amount of PLN 424 million (an increase by PLN 12 million y/y). The reason for the increase in EBITDA was the higher margin on the sale of the distribution service due to the favourable volume,

b) EBITDA achieved by the Generation Business Line in the amount of PLN 14 million. The reason for the decrease in value of this result was the higher variable cost (mainly the cost of using key fuels for production while the cost of purchasing emission allowances increased). This factor was partly offset by higher revenues from the sale of electricity, the positive impact of free certificates of origin and higher revenues from system services provided to the Transmission System Operator,

c) EBITDA achieved by the Sales Business Line of PLN 263 million (an increase of PLN 201 million). The reason for the increase in EBITDA was the higher margin on electricity sales. This is mainly due to an overall improvement in the margins of electricity sales to end users compared to last year. This improvement in margins was influenced, among others, by the positive financial outcome of the sale of surplus energy in August and September 2021 (high RES generation in the local market) at high market prices. Moreover, there is also a low base effect. In 2020, there was an unfavourable tariff from the President of the ERO for households billed under this tariff, and also the 2020 results were reduced due to the pandemic - an unplanned loss was then recorded on the sale of surplus energy resulting from a reduction in customer demand for electricity.

The Group's net profit in Q3 2021 amounted to PLN 295 million compared to PLN 85 million in the corresponding period of 2020. The y/y increase in the net profit was mainly due to higher operating results of the Group.

Estimated selected data for 9 months of 2021:

Revenues of the Group: PLN 9,986 million (vs. PLN 9,108 million in 9M 2020).

EBITDA of the Group: PLN 2,109 million (vs. PLN 1,556 in 9M 2020), including:

EBITDA of the Distribution Business Line: PLN 1,503 million (vs. PLN 1,352 million in 9M 2020),

EBITDA of the Generation Business Line: PLN 163 million (vs. PLN 135 million in 9M 2020),

EBITDA of the Sales Business Line: PLN 474 million (vs. PLN 114 million in 9M 2020).

Operating result (EBIT) of the Group: PLN 1,237 million (vs. PLN 299 million in 9M 2020).

Net profit of the Group: PLN 963 million (vs. PLN -682 million in 9M 2020).

CAPEX of the Group: PLN 1,365 million (vs. PLN 1,190 million in 9M 2020).

Distribution of electricity: 17,194 GWh (vs. 16,110 GWh in 9M 2020).

Gross production of electricity: 2,964 GWh (vs. 2,207 GWh in 9M 2020).

Retail sales of electricity: 13,723 GWh (vs. 13,886 GWh in 9M 2020).

During the first 9 months of 2021, the Energa Group achieved an EBITDA of PLN 2,109 million, which means an increase of PLN 553 million (36%) y/y. Higher results are primarily attributable to the Sales Business Line (increase in EBITDA by PLN 360 million y/y), which is connected with the improvement in the margins of energy sales to end users compared to last year (energy sales margin higher by up to PLN 483 million y/y), as well as to the Distribution Business Line, where EBITDA increased by PLN 151 million y/y, mainly as a result of higher distribution margins (effect of higher distribution volume) and lower operating costs. The EBITDA of the Generation Business Line was also higher (by PLN 28 million). The increase in EBITDA of the Generation Business Line was mainly due to higher revenues from electricity sales and higher revenues from system services, where the positive impact of the above factors was partly reduced by higher costs of consumption of key fuels used for production and higher costs of purchase of emission allowances.

The data presented are estimates and may change. The final financial and operational data of the Energa Group will be presented in the consolidated quarterly report of the Energa Group for Q3 2021.