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Current Report No. 18/2020

30.04.2020 19:00

TAURON Polska Energia Capital Group’s estimated results for Q1 2020

TAURON Polska Energia S.A. (“Company”, “Issuer”) presents selected estimated consolidated financial results and operating data of TAURON Polska Energia S.A. Capital Group (“TAURON Group”, “Group”) for Q1 2020.

Selected estimated consolidated financial results for Q1 2020:

Sales revenue: PLN 5 468 million
EBITDA (operating profit increased by depreciation, amortization and write-downs for non-financial assets): PLN 957 million, including:
- Distribution Segment’s EBITDA: PLN 684 million
- Generation Segment’s EBITDA: PLN 69 million
- Renewable Energy Sources Segment’s EBITDA: PLN 121 million
- Supply Segment’s EBITDA: PLN 179 million
- Mining Segment’s EBITDA: PLN (36) million
EBIT (operating profit): PLN 474 mln zł
Gross profit: PLN 231 mln zł
Net profit: PLN 161 mln zł
CAPEX: PLN 940 mln zł
Negative exchange differences on the debt denominated in euro: PLN (238) million
Net debt as of March 31, 2020: PLN 10 861 mln zł
Net debt / EBITDA ratio as of March 31, 2020: 3.27x

Selected estimated operating data for Q1 2020:

Electricity distribution: 13.25 TWh (including to the final consumers: 12.83 TWh)
Gross electricity production: 3.21 TWh, including gross electricity production from renevable energy sources: 0.57 TWh
Heat production: 4.96 PJ
Retail electricity supply: 8.86 TWh
Commercial coal production: 1.18 mln tons
Commercial coal sales: 0.89 mln tons

The Company informs that in the first quarter of 2020 the decision was taken to change the Company’s strategy aimed at securing the Generation segment’s needs with respect to the retirement of the CO2 emission allowances. As a consequence, a one-off swap of the exchange traded contracts for the purchase of the CO2 emission allowances with the delivery date in December 2020 for the OTC contracts with the delivery date in March 2021 was made. The decision to change the strategy was made in connection with the market situation, and in particular the rising costs of maintaining the position on the exchange market, a change of the legal and market circumstances with respect to the trading of the CO2 emission allowances related to Brexit and the COVID-19 pandemic.The transactions carried out as part of the implementation of the above change of the strategy resulted in a charge to the operating expenses and EBITDA of the Generation segment in the first quarter of 2020 in the amount of PLN 127 million.The completed purchase of the volume of CO2 emission allowances with the delivery date in March 2021 from the counterparties on the OTC market at prices that were lower than the originally contracted purchase will lead to the reduction of the costs of the provision for the CO2 emission related obligations in the subsequent reporting periods. As a consequence, the Company estimates that the total impact of the change of the hedging strategy on the operating result and EBITDA of the Generation segment will not be significant.

In addition, the Company notes that the estimation of the additional impairment charges made as of the balance sheet date, related to the expected credit losses of financial instruments (accounts receivable from customers, loans granted and the guarantee issued) as well as the changes to the fair value (mark to market) valuation of loans granted, stemming from taking into account the impact of COVID-19, led to an increase of the Group's costs by PLN 61 million, with PLN 9 million of that amount charged to the Group’s operating result and EBITDA, and PLN 52 million charged to the Group's financial costs.

The financial results presented above are estimates and may be subject to change.

The final figures will be presented in the consolidated report for Q1 2020.

Art. 17 sec. 1 of MAR - inside information

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