The good results achieved in Q1 2010 are the result of, among other things, implementation of corporate strategy. The Group focuses on profitable growth in its core businesses, integration of management in all elements of the value chain, and improved operational efficiency. These tasks are the priority for the holding that is now preparing to list on the Warsaw Stock Exchange. The goal of the Group is to generate approx. PLN 1 billion savings in the years 2010-2012 (over PLN 300 million annually on average).
Dariusz Lubera, President of the Management Board of Tauron Polska Energia S.A. said: “The results achieved in Q1 2010 prove that the strategy pursued by Tauron Group is correct. Our actions contribute to an increase in operational efficiency also by cost cutting”. Later he added: “Our goal is to reduce operational costs by approx. PLN 1 billion in the years 2010-2012, which is approx. PLN 300 million per year on average. The effects can already be noticed in our results, which are getting better and better. After five-fold profit increase in 2009, the results for Q1 2010 confirmed that the positive trend continues. We plan to keep up our hard work on cost reduction and efficiency improvement to achieve our overall strategic objective which is to ensure continuous growth and generate value for the existing and future shareholders.”
Further reduction of operational costs is expected primarily in the areas of generation, distribution and trade.
In its generation business, the Group is currently implementing, among other things, a program to achieve the most efficient use of generation assets. This program stipulates increasing the load of more efficient power units while reducing the load or decommissioning the least efficient ones. For example, in the nearest future the Group plans to decommission Halemba Power Plant in Ruda Slaska and increase the load of its other units. In addition, the Group is now implementing programs for reduction of fuel purchase costs and optimised management of by-products.
In the Group’s distribution business, the process of network loss reduction is ongoing. The reduction will be achieved by replacement of transformers and other equipment, control and improvement of connection quality, installation of electronic meters and automated reading. Management and operational processes are currently being streamlined in the distribution business. The savings result from execution of projects connected with management of network assets and distribution system, data acquisition and management, accounting and payroll-related processes, IT and communications.
In the supply business, Tauron Polska Energia S.A. took over wholesale trading as well as actions aimed at improvement in sales efficiency. This lead to, among other things, cost reduction thanks to centralised decision taking process concerning generation and purchase of electricity in wholesale market. Moreover, actions are taken to streamline retail sales. The process of labour cost optimisation is ongoing in all the Group’s companies. Works on Voluntary Redundancy Program and organizational changes are nearly finished. The Voluntary Redundancy Program will be launched in 2010 in companies including Enion, EnergiaPro and PKE (the largest companies in the Group) and several hundred people will be offered to leave under its terms.
Purchasing costs are optimised across the Group using the effects of scale and synergy, joint purchasing, unification and harmonisation of standards related to materials and services, use of Internet auctions. The process of selling assets unrelated to core businesses is also ongoing. Unused property was offered for sale, other assets unrelated to core businesses are also prepared for sale.
All the results are calculated in accordance with International Financial Reporting Standards (IFRS).
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