The Energa Group supports energy transition. The Group has summarized its operations in H1 2024
The Energa Group generates increasingly more energy from renewable sources. In H1 2024, 64 percent of the Group-produced electricity came from RES, mainly wind farms and hydroelectric power plants. This is an increase by 11 percentage points compared to the same period of the previous year. The Group is an active investor. In the first 6 months of 2024, capital expenditures of the Energa Group totaled PLN 1.9 bn, up by almost PLN 0.2 bn (+11% y/y) compared to H1 2023.
The Group's revenues in H1 this year amounted to PLN 11.6 bn (-14% y/y). The main factor behind the y/y decrease in revenues was lower electricity sales prices, reflecting their decline in the market. EBITDA amounted to PLN 2.1 bn (-19% y/y), and the drop resulted, among others, from lower profitability of electricity sales. In effect, the Group's net profit in H1 2024 amounted to PLN 833 m, down by 42% y/y.
In the reporting period, the number of newly connected customers in the Distribution Business Line amounted to 30,000. 1,306 km of high, medium, and low-voltage lines were upgraded and new RES sources were connected having an installed capacity of 552 MW.
At the end of June this year, the total length of power lines operated by the Group was over 199 thousand km (compared to approx. 196 thousand km a year earlier) and covered an area of nearly 75 thousand square kilometers (approx. 24% of the country's area).
In H1 2024, the volume of electricity supplied by the Group was on average 2% lower than in the corresponding period of the previous year.
The Energa Group also recorded a low SAIDI index (planned and unplanned outages, with catastrophic outages): 67 minutes per user compared to 95.5 minutes in the same period of 2023. Conversely, SAIFI index was at a slightly higher level y/y.
Energa Operator remains the leader in installing remote consumption meters. 2.7 million such devices have already been installed, which means that over 80% of customers use them.
At the end of June this year, the number of electricity end-users (Points of Consumption) of the Sales Business Line was 3.3 million, which is an increase by approximately 36,000 users y/y.
The total installed generation capacity of the Group's power plants at the end of June this year was approx. 1.4 GW, of which 44% is accounted for by renewable energy sources.
In H1, the Group’s gross electricity production totaled ca. 1.5 TWh, of which 45% came from hydro sources, 31% from coal-fired plants, 17% from wind turbines, 4% from biomass-fired plants and 3% from photovoltaics, and the Group supplied 11.5 TWh of electricity. The volume of retail sales was 8.4 TWh.
Q2 results
Q2 2024 ended favorably for the Energa Group. Revenues were at PLN 5.35 bn, compared to PLN 6.01 bn a year earlier. The decrease in revenues y/y in Q2 was caused, as for the entire first half of 2024, by lower electricity sales prices.
Consolidated EBITDA reached PLN 1.03 bn, up by PLN 752 m compared to Q2 of the previous year, which is the effect of the low base. In Q2 2023, due to the high difference between the price from the contract for network losses and the price in the balancing market (according to which the estimate of uninvoiced network losses was measured), the result of the Distribution Business Line carried a negative valuation effect. In effect, the net result for Q2 this year amounted to PLN 402 m compared to PLN -147 m in the corresponding period of the previous year.
Investments
In the first six months of 2024, capital expenditures of the Energa Group amounted to PLN 1.9 bn, and were nearly PLN 0.2 bn higher (+11% y/y) than in the same period of the previous year. Investments in the Distribution Business Line accounted for 51% of the total expenditures made by the Group and amounted to PLN 971 m. They were 4% higher than in H1 2023. The investments included connections of customers and energy sources and the related development of new networks, as well as upgrading and reconstruction of existing assets, associated with improvement in service quality and/or increased power demand.
In the Generation Business Line, capital expenditures totaled PLN 177 m, a significant portion of which were expenditures on the development of new RES capacity, notably photovoltaic farms.
The Sales Business Line spent PLN 53 m on investments, mostly on lighting assets.
Green projects
The Energa Group is expanding its portfolio of green investments. In March 2024, Energa Green Development Sp. z o.o. acquired all shares in the special purpose vehicle Farma Wiatrowa Szybowice Sp. z o.o., which owns the Szybowice wind farm development project (Opolskie Province). The Szybowice WF is to consist of 17 Vestas turbines, each with a capacity of 2.2 MW and 180 meters tall. The notice to proceed has already been issued for the project.
Development of the Mitra PV (65 MW) installation in Wielkopolska and the Kotla (130 MW) installation in Lower Silesia is also underway. In Q2 2024, the installation of the substructure and photovoltaic modules was completed for the first of the above projects. For the second project, which is the Group's largest photovoltaic farm under construction, the erection of the substructure is underway, as well as construction of roads and fencing.
Low-emission sources
In H1 2024, the Energa Group continued to invest in low-emission energy sources, including the development of CCGT Grudziądz and CCGT Ostrołęka power plants. The total expenditure on these projects in the reporting period amounted to PLN 716 m. At the end of July, the total progress of work completed by the general contractor for the power plant in Grudziądz was over 80%, and about 70% for the power plant in Ostrołęka.
Distribution
EBITDA for the Distribution Business Line in the first 6 months of this year amounted to PLN 1.6 billion and was 1% higher than in the corresponding period of the previous year. The result of that Line accounted for 76% of the Group's EBITDA.
An increase in the distribution margin by PLN 130 m (taking into account grid losses) had a significant impact on the result of EBIDTA. This was primarily the result of a higher average distribution service price y/y and 2% higher volume. The lower y/y electricity purchase price to cover grid losses had a positive impact, too.
Sales
In H1 2024, EBITDA of the Sales Business Line totaled PLN 250 m, down by PLN 492 m on the figure for the corresponding period of 2023. The financial results of the Sales Business Line in H1 2024 were affected by statutory regulations on electricity sales prices for certain end-users.
The year-on-year change in EBITDA was caused by a one-off event in 2023, being the receipt of an exit fee (PLN 120 m) for the transfer of wholesale electricity trading processes and functions from Energa Obrót to ORLEN Energia. The event was one of the stages in the process of consolidation and integration of wholesale trading in electricity and related products in the ORLEN Group.
Generation
EBITDA of the Generation Business Line in H1 2024 amounted to PLN 253 m (PLN 113 m less y/y). The Line’s EBITDA in H1 2024 was mainly driven by, among other things, revenue from the sale of electricity, absence of applicable regulations (in 2024) related to payments to the Price Difference Payment Fund by the Group's producers, the cost of consumption of key fuels for production, and the cost of purchasing emission allowances.
Lower revenues from electricity sales were mainly due to lower production volumes at the Ostrołęka coal-fired power plant and lower energy sales prices by the Group's generation assets in the comparable reporting period.
The main factor driving EBITDA for this Line was poorer performance of the Ostrołęka Power Plant due to lower must-run production for the transmission grid operator.