– Q1 2014 financial results should be viewed as very good in spite of the fact that this year we have to deal with a number of factors that have an adverse impact on the situation of energy companies. Earnings topped market expectations. During the first three months of 2014 the following lines of business fared best: Renewable Energy Sources, Distribution and Heat, which posted a higher EBITDA than a year ago - says Dariusz Lubera, CEO of TAURON Polska Energia.
- Satisfactory levels of EBITDA, which reached PLN 1088m, and EBITDA margin are worth noting. It should also be stressed that a slight drop of EBITDA year-on-year is due to the fact that Q1 2013 was an unusually robust period. Let me remind you that during that time we were dealing with a very favorable market environment for the Supply that took advantage of record low prices of green certificates, which led to their low redemption costs. Additionally, in Q1 2013 the electricity sale price realized by the Generation was significantly higher than in Q1 2014. - says Krzysztof Zawadzki, CFO of TAURON Polska Energia.
Operating data
|
Key operating data |
[Unit] |
Q1 2014 |
Q1 2013 |
Change |
|
Commercial coal production |
mln Mg |
1.25 |
1.52 |
82.2% |
|
Electricity generation |
TWh |
3.69 |
5.15 |
71.7% |
|
Electricity generation from the Group’s renewable sources |
TWh |
0.47 |
0.28 |
167.9% |
|
including RES net production |
TWh |
0.20 |
0.12 |
166.7% |
|
Heat generation |
PJ |
5.92 |
7.49 |
79% |
|
Electricity distribution |
TWh |
12.25 |
12.42 |
98.6% |
|
Electricity retail sales |
TWh |
10.17 |
10.94 |
93% |
|
Number of customers – Distribution |
'000 |
5 354 |
5 307 |
100.9% |
– Distributed electricity volume in Q1 2014 was flat as compared to last year (more than 12.2 TWh), while the number of customers connected to the Group’s distribution grid increased by 44 thousand year-on-year (reaching more than 5.35m in total). We have also observed surging volumes in the Renewable Energy Sources which is the result of commissioning two wind farms at the end of last year. We would like this trend to continue in the future – says Krzysztof Zawadzki.
Commercial coal production in Q1 2014 was lower than a year ago, reaching 1.25m tons. Also, generated electricity volume fell down to 3.69 TWh in the first three months of this year.
In Q1 2014 the output of conventional power plants was reduced as a consequence of, among others, the very warm winter and the declining demand for electricity.
Financial results
|
Key financial data (PLN thousand) |
Q1 2014 |
Q1 2013 |
Change |
|
Sales revenue |
4 887 264 |
5 164 102 |
94.6% |
|
EBIT |
632 434 |
789 400 |
80.1% |
|
EBITDA |
1 088 208 |
1 222 156 |
89.0% |
|
Net profit |
398 686 |
580 798 |
68.6% |
|
Net profit attributable to shareholders of the parent company |
395 930 |
559 158 |
70.8% |
Sales revenue
In Q1 2014 TAURON Group posted sales revenue of PLN 4.88bn, i.e. 5.4 percent lower than a year ago. The main reasons for the decline of revenue are lower electricity sale prices and lower volume of electricity sold. This adverse effect was partly compensated by the revenue achieved by the Generation (increased revenue from the system regulation services and capacity reserves, larger electricity volume sold on the balancing market) and the Distribution – for the distribution service provided (higher tariff rates, lower OPEX).
In comparison to Q1 2013 TAURON Group posted higher sales revenue in the following lines of business: Distribution, RES and Customer Service. The strongest revenue growth was reported by the RES segment.
EBITDA and net profit
Q1 2014 EBITDA reached PLN 1 088m and it was 11 percent lower than in Q1 2013. The biggest impact on EBITDA was the result of: adverse situation on the electricity market leading to lower electricity sale prices and higher property rights purchase prices in Q1 2014 versus a year ago. Net profit in the first three months of 2014 was PLN 399m.
CAPEX and debt
In Q1 2014 TAURON Group's CAPEX upward trend continued. In comparison to Q1 2013 CAPEX grew 4.5 percent to reach PLN 565m. The largest outlays were in the Distribution (construction of new connections: PLN 84m and grid assets' upgrades and restoration: PLN 261m).
– The most important event of the first months of this year was the signature of the agreement with Rafako-Mostostal Warszawa consortium for the construction of a 910 MW unit at Jaworzno III Power Plant. Furthermore, in March we signed the agreement with the Polish Investments for Development (Polskie Inwestycje Rozwojowe - PIR) on the financing of the construction of a 413 MW CCGT unit at Łagisza Power Plant. The implementation of these two projects means that over the next few years TAURON Group's largest CAPEX will be related to the Generation. The total value of the Jaworzno project is approx. PLN 6.2bn, and its completion is planned in 2019 – explains Dariusz Lubera.
TAURON Group’s debt as of the end of Q1 2014 was PLN 6.3bn. Bonds constitute the majority of outstanding debt with their share reaching approx. 78 percent of the total. The net debt to EBITDA ratio is at a safe level of 1.68.
