Energa’s summary of three quarters of 2023

The Energa Group has summed up its consolidated financial and operating results after nine months of this year. A significant increase was recorded in revenues, which amounted to approx. PLN 19.49 bn (+30% y/y), and the net profit of PLN 1.62 bn (+2% y/y) and EBITDA of PLN 3.36 bn (+8% y/y) were also higher.

In the first three quarters of this year, the Energa Group produced 2.5 TWh and transmitted 16.6 TWh of electricity. The volume of retail sales was 12.5 TWh.

In the first nine months of this year, renewable energy sources produced 47% of all energy in the Energa Group (compared to 31% in the corresponding period of the previous year).

Such good operating and financial results were achieved despite the market challenges faced by the Group's key business lines in the third quarter.

Distribution

The quarterly EBITDA of the Distribution Business Line was PLN 359 m, slightly (by 4%) lower than in the corresponding period last year. On the other hand, for the first three quarters of this year, the EBITDA of the Distribution Business Line increased by 18% y/y and stood at PLN 1.95 bn.

On the other hand, the quarterly results of the Generation Business Line and the Sales Business Line were shaped in particular by lower energy production from conventional sources and by the introduced regulations to protect electricity consumers.

Generation

The EBITDA of the Generation Business Line in Q3 2023 was PLN 47 m (down PLN 87% y/y), accounting for 6% of the total Group EBITDA (vs. 34% in Q3 2022).

Sales

In Q3 2023, the total volume of electricity sold by the Sales Business Line declined by 8% y/y (or by 383 GWh). This is the effect of lower sales of energy in the retail market, contracting of business customers as well as increased self-consumption of energy by prosumers as a result of investments in their own generation sources.

As at the end of Q3 2023, the number of end consumers of electricity amounted to 3.3 m, an increase of approx. 51,000 customers y/y. The customer base increased mainly in the G tariff group of households.

In Q3 2023, the EBITDA of the Sales Business Line totalled PLN 352 m, down by 6% compared to the result achieved in the corresponding period of 2022. The Line’s EBITDA in Q3 2023 accounted for 47% of EBITDA of the Energa Group, vs 35% in Q3 2022.

Renewable energy sources are gaining in importance

The importance of RES in the Energa Group's production profile has substantially increased – both in the third quarter, when they accounted for 34% of total gross electricity production (20% last year), and in the first nine months of this year, when they produced 47% of the Group's total electricity (compared to 31% last year).

The main contributors were hydroelectric power plants, which produced 713 GWh (+20% y/y) from the beginning of the year to the end of September this year. In the third quarter alone, their production amounted to 127 GWh, which corresponds to a significant increase (+25% y/y).

It is worth noting that the successive investments had a positive impact on the production from the Energa Group's photovoltaic farms – in the third quarter alone, they produced 33 GWh of energy – up by 76% y/y. In the first three quarters of this year, photovoltaic farms generated 66 GWh of energy. This is 40 GWh more than in the corresponding period last year. Thus, in both cases, photovoltaic farms recorded the largest percentage increase in the share in gross energy production among all RES.

Wind farms recorded slight declines in production both in the third quarter and in the first nine months, but in the third quarter they accounted for about 30% of production from all renewable sources.

Continued investment momentum

In the first nine months of this year, the Energa Group's capital expenditures reached PLN 2.89 bn, up by 29% y/y. As much as 49% of this amount was allocated to investments in distribution, owing to which 2,118 km of power lines were modernised and built and also 1.1 GW of renewable energy sources and 55,000 new customers were connected to the grid. On the other hand, 42% of capital expenditures were allocated to the construction of low-emission assets of key importance for national energy security, i.e. CCGT power plants in Ostrołęka and Grudziądz.

It is worth noting that in the third quarter alone, the Energa Group allocated PLN 1.16 billion for investments, as much as 55% of which was allocated to investments related to the construction of two CCGT power plants. The Distribution Business Line was the second largest investment area in the third quarter, accounting for 41% of total expenditures.

Both CCGT units at the halfway point

In Q3 of this year, the Energa Group companies continued the implementation of strategic investment projects. One of the key projects for Poland's energy security, construction of a CCGT unit in Ostrołęka with a net capacity of 745 MW, reached a total progress of nearly 50% (in design, construction, purchases and supplies) in Q3 of this year. During that time, other elements of key equipment, such as condenser or steam turbine elements, were arriving at the construction site. The foundations for the turbine set and heat recovery steam generator were also completed. In addition, the laying of a linear section of the gas supply pipeline for the power plant was also completed.

The CCGT power plant in Grudziądz with a net capacity of 563 MW also reached a significant milestone in the reporting period and completed foundation work for the key equipment – a turbine set and a heat recovery steam generator. At the end of September this year, the total progress of the entire investment (design and construction works as well as purchases and supplies) amounted to approx. 48%.

The Energa Group was also active in the area of investments in RES. In August, Energa Green Development – the ORLEN Group's designated company for the development of onshore renewable energy sources – issued an order to commence construction work on two new photovoltaic farms with a total capacity of approx. 68 MW: PV Mitra (65.6 MW) and PV Żuki (2.4 MW). The new assets will be built in the vicinity of the already operating Przykona wind farm and the PV Gryf and PV Przykona photovoltaic farms.