Stable EBITDA, net result impacted by impairment charges and provisions

  • Sales revenue was PLN 18.4bn
  • EBITDA topped PLN 3.5bn, while EBITDA margin was 19.2 percent
  • Consolidated net loss as a consequence of the impairment charge related to the Group's generation assets and provisions, reached PLN 1.8bn
  • High volumes in Distribution (up 2.7 percent yoy) and Generation (up 8.2 percent yoy)
  • Segments that made the largest contribution to the company’s earnings: Distribution (EBITDA approx. PLN 2.37bn), Generation (EBITDA of PLN 755m) and Supply (EBITDA of PLN 380m)
  • Total capital expenditures reached nearly PLN 4.2bn. The largest CAPEX went into Generation (PLN 1.9bn), Distribution (PLN 1.9bn) and Mining (PLN 211m)

(all the data for Q1-Q4 of 2015, consolidated data)

– 2015 EBITDA turned out to be close to the market consensus. The earnings were supported by good macro data and the rising demand for electricity which was reflected in the higher electricity generation and distribution volumes. We also took advantage of the right trading strategy with respect to electricity sales by the Generation segment. Since the prospects for 2016 and the subsequent years pose a big challenge for the entire industry we have to undertake appropriate adaptation measures quicklywe are launching a new, three-year efficiency improvement program worth PLN 1.3bn – says Remigiusz Nowakowski, CEO of TAURON Polska Energia.

– TAURON Group's 2015 EBITDA is slightly lower than the 2014 EBITDA. Unfortunately, the Group posted a net loss due to the completed impairment charges tests related to the generation assets. The market conditions, unfavorable for electricity generators, led to the need to adjust the carrying amount of the Generation segment's unprofitable generation units on the balance sheet. There is no doubt that the market and the regulatory factors will impact the long term prospects for electricity generation – says Marek Wadowski, CFO of TAURON Polska Energia.


Operating data

Key operating data


Q1-Q4 2015

Q1-Q4 2014

Change (percentage)

Q4 2015

Q4 2014

Change (percentage)

Commercial coal production

Mg m







Commercial coal sales

Mg m







Electricity generation
(Group’s net production), including:








Electricity generation from renewable sources (biomass, wind, hydro)










Heat generation








Electricity distribution








Electricity supply








Number of customers – Distribution


5 418

5 378


5 418

5 378



TAURON Group produced 4.9 million tons of commercial coal In 2015, while selling 5.1 million tons during that time. The output decline versus last year is mainly the effect of the more challenging mining and geological conditions at the Group's coal mines. The higher hard coal sales volume versus the production volume is due to the inventory sales.

The Group increased electricity production by 8.2 percent thanks to the favorable market conditions due to the rising demand for electricity and the higher load factor of the hard coal fired generation units. The increase in the volume of electricity generated by the Group's generation units was markedly higher than the national average of 3.3 percent. Unfavorable hydrological conditions led to the decline of the hydroelectric power plants' output, while continued low prices of green certificates resulted in the low profitability of electricity generation from biomass. These factors led to the 11 percent drop of electricity production from renewable sources.

Good economic conditions and the rising industrial output had a positive impact on the increase of demand for electricity among TAURON Group's customers. The volume of electricity distribution rose year on year by 2.7 percent – up to the record breaking level of 49.2 TWh, while the number of customers connected to the Group's distribution grid increased by 40 thousand.

Financial results

Key financial data

(PLN ‘000)

Q1-Q4 2015

Q1-Q4 2014

Change (percentage)

Q4 2015

Q4 2014

Change (percentage)

Sales revenue

18 375 224

18 577 479


4 740 983

4 859 798



3 523 303

3 694 544


682 227

769 168


EBITDA margin (percentage)







Net profit

- 1 804 215

1 185 560


- 2 883 370

132 502

-2 176.1

Net profit margin (percentage)






-2 230.6

Net profit attributable to the shareholders of the parent company

- 1 807 317

1 180 893

-153,0 proc.

-2 883 958

132 192

-2 181.6


Sales revenue

Last year TAURON Group posted sales revenue of nearly PLN 18.4bn, maintaining the sales at the level close to the one achieved in 2014. The revenue drop related to the December 2014 spin-off of Zakład Wytwarzania Nowa (Nowa Generation Plant) and Elektrownia Blachownia (Blachownia Power Plant) from TAURON Group's structure and the transfer of these assets to TAMEH Polska, was offset by the higher revenues in Generation (up 8.3 percent), Distribution (up 6.2 percent) and Supply (up 4.6 percent).


The Group's 2015 EBITDA reached PLN 3.5bn, i.e. it was 4.6 percent lower than in 2014. Invariably the largest contribution to EBITDA was made by Distribution (67 percent), followed by Generation (21 percent) and Supply that generated approx. 11 percent of the Group's total EBITDA.

Distribution segment's EBITDA went up by more than 9 percent versus 2014 as a consequence of rising volumes of distributed electricity and a 4 percent higher average distribution service rate. Generation segment’s EBITDA was almost 5 percent lower year on year as a result, first of all, of the higher costs related to setting up the provision for the shortage of CO2 emission allowances, lower revenue from the operating capacity reserve and the spin-off of ZW Nowa to TAMEH Polska.

Improved profitability of the Distribution segment offset the declining EBITDA in the Mining segment resulting from the challenging conditions in the mining sector overall, lower prices of hard coal sold and rising other operating expenses.

Impairment charges, provisions and net profit

In Q1 2016 impairment charges tests were conducted in the Generation segment that includes the production of electricity and heat, as a result of which impairment charges due to the losses on the tangible and intangible fixed assets' carrying amount and the company's goodwill in the Generation segment for the total amount of approx. PLN 3.6bn were recognized in the TAURON Capital Group's consolidated statements. The impairment charges were related to the generation units of varying capacity (in particular 200 MW and 150 MW), biomass fired and co-generation units.

The separate (stand alone) financial statements of TAURON Polska Energia S.A. for 2015 include an impairment charge of PLN 4.9bn due to the loss on the fixed assets' carrying amount and the loss on the carrying value of shares and interests in the subsidiaries TAURON Wytwarzanie S.A. and TAURON Ciepło Sp. z o.o. on the balance sheet.

The need to recognize impairment charges was primarily triggered by taking into account in the tests of the continued market conditions that are unfavorable for electricity generators.

Furthermore, due to the termination by Elektrociepłownia Stalowa Wola S.A. of its contract with the general contractor of the CCGT unit at Stalowa Wola (the project carried out jointly with PGNiG), provisions were set up in the company's separate (stand alone) and consolidated financial statements in conjunction with the agreements related to this project for the total amount of approx. PLN 183m.

Due to recognizing the impairment charges and provisions TAURON Group's net loss reached PLN 1.8bn in 2015, while the net loss of TAURON Polska Energia S.A. (parent company) was approx. PLN 3.5bn.



TAURON Group's CAPEX reached almost PLN 4.2bn in 2015, i.e. an increase by 35 percent versus 2014. The majority of the capital expenditures were spent on the distribution grid upgrades and new customer connections as well as the construction of the 910 MW hard coal fired generation unit at Jaworzno III Power Plant. Planned total CAPEX related to the construction of this unit amounts to approx. PLN 6.2bn. The unit will be commissioned in 2019 and it will be generating approx. 6 TWh of electricity per annum. In 2015 also upgrade works (installation of the flue gases denitrification systems) were completed on the 200 MW units at Łaziska Power Plant and 18 MW of wind capacity (Marszewo wind farm's 2nd stage) was commissioned.

- Currently the Management Board is focusing on updating the corporate strategy in which we will redefine the strategic objectives so as to adapt, as best as possible, to the changing environment. We are verifying in detail all the investment projects underway and planned. We have to find an optimum growth path that will be in line with Poland's energy strategy but that will, first of all, bring benefits for the company and its shareholders. We are also planning to introduce a new capital group management model, adapted to the updated strategy. Our goal is to simplify to the maximum degree the way the company is managed which will reduce the overhead costs and improve the efficiency of the entire organization – says Remigiusz Nowakowski, CEO of TAURON Polska Energia.

Debt and financing

In November 2015 TAURON signed an agreement with the consortium of banks under which a bond issue program was set up, underwritten by the banks, for the total amount of PLN 6.27bn. The program's value is one of the highest that has been obtained on the domestic banking market under a single program up to date which confirms the Group's financial standing.

The new bond issue program will increase the security of financing the CAPEX program in the subsequent years and provide the source for refinancing the PLN 3bn worth of debt with the maturity date falling at the end of 2016. What is important, under the new program the allowed net debt/EBITDA ratio was raised to 3.5x.

- The Group's priority will be to maintain a sound balance sheet, its current rating and cash flows that will be sufficient to carry out the Group's revised CAPEX program. Let me remind you that the decisions related to the individual investment projects were made a few years ago, at electricity prices much higher than today and with the lower share of the renewable energy sources in the energy mix. Currently, due to the low electricity prices that have continued for three years, it is necessary to review the effectiveness (profitability) of the individual projects, as well as to introduce support mechanisms for the conventional generation sources – says Marek Wadowski, CFO of TAURON Polska Energia.

As of the end of December 2015 the net debt to EBITDA ratio reached 2.2x.

Contact for media

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40-114 Katowice