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Current Report No. 2/2019

19.02.2019 00:00

Impairment test results

​Management Board of TAURON Polska Energia S.A. (”Issuer”, ”TAURON”) announces that the main analyses conducted as part of the impairment tests related to TAURON Capital Group’s assets carrying amount as of December 31, 2018 were completed on February 18.

The analyses demonstrated material changes to the recoverable value of the Generation and Mining segments’ fixed assets that were primarily the consequence of the following internal and external factors:

- completion of the capacity market’s three main auctions with the delivery in 2021-2023;

- draft regulation of the European Parliament and of the Council on the internal market for electricity that envisages excluding generating units which do not meet the specified CO2 emission criteria from eligibility for the capacity market support;

- increase of profitability of electricity generation from renewable sources as compared to the conventional generation (a consequence of higher electricity and green certificate prices);

- rising costs of purchasing CO2 emission allowances.



With respect to the 2018 consolidated financial statements of TAURON Polska Energia S.A. the completed analyses related to the Generation segment demonstrated:

- in conventional electricity generation the need to book net write-downs related to the loss of tangible and intangible fixed assets in the amount of PLN 788.4 million,

- in renewable energy sources the need to reverse the write-down related to the loss of tangible and intangible fixed assets in the amount of PLN 321.9 million.



The excess of the booked write-downs versus the reversed write-downs in the consolidated financial statements (net value of the impairment charges) is PLN 466.5 million, while the total estimated impact on the decrease of the consolidated net financial result will reach PLN 377.9 million.



With respect to the 2018 standalone financial statements of TAURON Polska Energia S.A. the completed analyses demonstrated:

- the need to book write-downs related to the loss of the value of the shares in TAURON Wydobycie S.A. in the amount of PLN 54.1 million,

- the need to book write-downs related to the loss of the value of the shares in TAURON Wytwarzanie S.A. in the amount of PLN 1,814.3 million,

- the need to reverse write-downs related to the loss of the value of the shares in TAURON Ekoenergia sp. z o. o. in the amount of PLN 402.4 million.



The excess of the booked write-downs versus the reversed write-downs in the standalone financial statements (net value of the impairment charges) is PLN 1,466 million, while the total estimated impact on the decrease of the standalone net financial result will reach PLN 1,466 million.

The above charges will not impact EBITDA in the standalone and consolidated financial statements (EBITDA shall be understood by the Issuer as EBIT increased by deprecation and charges related to non-financial assets).

The Issuer states that the values provided above are estimates and may be subject to change. The final results of the impairment tests and the amounts of write-downs related to the loss of the assets carrying amount will be presented in the 2018 financial statements of TAURON Polska Energia S.A. and TAURON Capital Group.

Legal basis: art. 17, clause 1 of MAR – inside information
 

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