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Current Report No. 30/2019

19.08.2019 19:15

Impairment test results

Management Board of TAURON Polska Energia S.A. (”Issuer”, ”TAURON”) informs that the main analyses conducted as part of the impairment tests related to TAURON Capital Group’s assets as of June 30, 2019 were completed on August 30, 2019.

The analyses demonstrated material changes to the recoverable value of the Mining segment’s fixed assets. They were the result of updating the technical and financial assumptions, primarily with respect to the plans related to the exploitation and accessibility of coal deposits.

As a consequence the above event will be presented in the following way in the Issuer’s H1 2019 financial statements:

- write-downs related to the loss of tangible and intangible fixed assets carrying value in the amount of PLN 269 million will be recorded in the consolidated financial statements. The estimated impact on the reduction of the consolidated net financial result will reach PLN 218 million.

- write-downs related to the loss of the carrying value of the shares and bonds of TAURON Wydobycie S.A. in the amount of PLN 157 million will be recorded in the standalone financial statements.

Furthermore, in accordance with IFRS 9 ”Financial instruments”, the write-down related to the expected credit losses due to the bonds issued by TAURON Wydobycie S.A., subscribed by the Issuer, and the loans granted by the Issuer to TAURON Wydobycie S.A., in the amount of PLN 408 million will be recorded. The total estimated impact of the write-downs on the reduction of the standalone net financial result will reach PLN 477 million.

The amount of the above impairment charges will not impact EBITDA reported 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 presented 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 value will be presented in the H1 2019 financial statements of TAURON Polska Energia S.A. and TAURON Capital Group.

Art. 17, section 1 of the MAR Regulation – inside information
 

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