Energa SA Management Board's recommendation on distribution of the Company's net profit for 2023
Belongs to:
- Current reports
Current Report No. 18/2024
Date: 23 April 2024
Subject: Energa SA Management Board's recommendation on distribution of the Company's net profit for 2023
Legal basis: Article 17 (1) of MAR - inside information
The Management Board of Energa SA ("Company") informs that on 23 April 2024 it decided to recommend to the General Meeting of Energa SA to transfer the Company's net profit for 2023 in the amount of PLN 37,571,895.67 to increase the supplementary capital.
Retaining profit in the Company is necessary to achieve the goals set in the "Strategic Development Plan of the Energa Group for 2024-2030" ("SDP") and to implement the investments described in the "Long-Term Strategic Investment Plan of the Energa Group for 2024-2030" ("LTSIP").
In accordance with the LTSIP, the Energa Group plans to spend significant outlays on the construction of CCGT power plants in Ostrołęka and Grudziądz, the construction of new renewable energy sources ("RES") as well as the modernization and expansion of the distribution grid. Total outlays planned for the years 2024-2030 will amount to approx. PLN 47.9 billion. These capital expenditures are necessary to adapt the Energa Group to the current and expected changes in the market and regulatory environment and to strengthen its market position. Considerable funds are necessary to effectively implement this ambitious investment plan. To acquire such funds, the Company, among others, has concluded agreements with ORLEN S.A., its strategic shareholder, for the financing of LTSIP projects, namely construction of gas-steam power stations in Ostrołęka and Grudziądz, as well as the construction or purchase of RES projects. However, in order to provide funds to finance the investments included in the LTSIP, it is also necessary that the net profit for 2023 is retained in the Company.
The existing and planned investments will bring measurable results, such as an increase in the EBITDA: it is expected that achievement of the LTSIP targets will result in a more than two-and-a-half-fold increase in the consolidated EBITDA in 2030 as compared to 2022. Consequently, this will translate to measurable benefits for the Company's shareholders in connection with an increase in its value.
In addition, it is important to bear in mind the uncertainty about the direction of energy market regulations for the second half of 2024 and for 2025, where past regulations have had a negative impact on the Energa Group's performance, as reflected in the provisions made. An additional risk is the ability of the institution responsible for paying compensation (due to current regulations) to handle the compensation requests submitted. In this regard, it is reasonable to retain the generated profit in order to strengthen the Energa Group's financial security.
Thanks to the transferring the net profit to increase the Company's supplementary capital, there will be lower demand for external financing, which will positively impact the debt ratio. This is of particular importance given the current unstable and difficult market situation.