POLENERGIA GROUP 3Q 2018 Results

Transcription

1 ENERGETYKA WIATROWA ENERGETYKA KONWENCJONALNA DYSTRYBUCJA OBRÓT POLENERGIA GROUP Results 14 November 2018

2 Highlights 1 Market environment Auction on ca. 1GW for onshore wind farms took part on November 5, Polenergia submitted four projects with a total capacity of 199MW. Auction for PV is planned in November Polenergia plans to participate with a portfolio of capacity of 8MW. Increase in GC price to 134,7 PLN/MWh on and to 162,7 PLN/MWh on Slight decrease in electricity prices on spot and forward market. Still high price of CO 2 emission allowances amounted to 21,2 EUR on Decrease in price to 17,6 EUR on Supreme Administrative Court decided in favour of communities in case of real estate taxes paid in. Council of Ministers approved the draft amendment of Energy Law which is aimed to introduce 100% power exchange obligation for energy trading. Due to dynamic growth of energy prices, independent energy trading companies have financial problems. Six companies ceased providing electricity sales this year (Energia dla Firm, Corrente, Elektrociepłownia Andrychów, Energetyczne Centrum, Gaspol and GOEE Energia). 2 Group activities ENS received correction of the gas compensation for, ca. 47,6m PLN. Completion of auction preparation for four wind farm projects with a capacity of 199MW (auction took place on 5.11.) and PV projects with a capacity of 8MW. Continuation of the restructuring Biomass segment Disposal of Biomass North assets in October 2018 for 0.6m PLN Ongoing talks with the bank financing Biomass East and search for an investor in the project. AUCTIONS FOR NEW WIND FARMS ARE OPPORTUNITIES FOR NEW INVESTMENTS CONTINUATION OF GREEN CERTIFICATES PRICE INCREASE TERMINATION OF ELECTRICITY PRICE GROWING TREND 2

3 Key indexes and market prices 1 Green certificates and electricity prices 2 Stock performance of Polenergia S.A. PLN/MWh The average price of GC in the period - weighted by transaction volume GC price [left] EE price (IRDN24) [right] 134, / / / / / / / / / /2018 *The average price of GC in 1H amounted to 37,7 PLN/MWh 162,7 95,9 255,7 209,2 PLN/MWh PLN/share ,7 Share price at the end of the month Volume in k [right] Share price [left] 10 01/ / / / / / / / / / ,7 19,8 thousands of shares Electricity forward prices 4 Polish coal and CO 2 emission allowances prices PLN/MWh , ,3 11,4 289, , ,6 10,8 271,7 21,2 10,6 17, , , ,8 0 01/ / / / / / / / / / / / / / / / / / / / /2018 PLN/GJ EUR/T FWD 3Q18 FWD 4Q18 FWD Cal19 Polish coal EUA 3

4 Summary of key operational parameters Wind energy segment 1 WF production (gross) and LF % 2 Average cost per MW* [kpln] (without balancing) 3 Average revenues per MWh (after balancing costs) at the Group level [PLN/MWh] Quarterly 145,5-15% 124, % Electricity -14% Green certificates +31% 27% 23% Q 3Q Q Load factor (%) Q Production (GWh) RET Other expenses YTD 493,5-7% 459, % Electricity -9% Green certificates +56% 31% 28% Actual 2018 Actual Actual 2018 Actual YTD Load factor (%) YTD Production (GWh) RET Other expenses *The result normalised by effect of RET declaration adjustment and partial reversal of historical costs in Mycielin (7,3m PLN in total) 4

5 Summary of key operational parameters 4 Distribution segment sales [GWh] 5 Biomass segment production [thousand tons] 6 Conventional energy segment sales [GWh] and average prices [PLN/MWh] Quarterly +1% -69% 0% +8% 36 +7% ,3-45% 7,3 4,0 3, % 59 +2% % % Energy Sales Energy Distribution 3Q North 3Q East Sales of electricity (GWh) Heat Generated (TJ) Cogeneration certificates (GWh) Electricity price (PLN/MWh) 3Q Heat price (PLN/GJ) Cogeneration certificates price (PLN/MWh) YTD 0% -21% +1% +8% % ,4-53% 10,5 36,5 29, % % % % 112 Energy Sales Energy Distribution North East Sales of electricity (GWh) Heat Generated (TJ) Cogeneration certificates (GWh) Electricity price (PLN/MWh) Heat price (PLN/GJ) Cogeneration certificates price (PLN/MWh) YTD YTD YTD 5

6 Financial Highlights 3 Q Q YTD 2018 YTD +16% +9% Revenues (excluding Trading segment) 130,9 151,3 392,2 427,0 Increase due to higher revenues of the conventional energy and wind power segments. (normalized) +17% 54,9 64,4-11% 136,2 121,7 3Q: Increase in as a result of the higher of the conventional energy segment. YTD: lower as a result of the loss on the Trading segment in 1H Net profit (normalized) +30% 15,8 20,6 20,6-59% 8,5 3Q: Higher net profit due to higher operating result compensated by higher income tax. YTD: Lower net profit due to lower operating result. HIGHER REVENUES AND DECREASE IN AS A RESULT OF THE LOSS ON ELECTRICITY TRADING CONTRACTS IN 2Q 6

7 by operating segments 3 Q Comments 54,9 1,1 12,3 (0,2) (1,0) (1,2) (1,3) (0,1) 64,4 Wind power: effect of higher green certificates and electricity sales prices and lower operating costs (mainly property tax), partially compensated by lower production Conventional energy: higher revenues from correction of gas compensation for 3Q Wind power Convent. Energy Distribution Biomass Trading Unallocated costs Development Distribution: higher cost of energy purchase compensated by lower operating costs YTD 8,4 (1,0) (1,4) Biomass: lower result due to deteriorating situation on the biomass market which results in lower sales volume and higher price of the raw material 136,2 9,9 (24,5) (5,9) 0,1 121,7 Trading: lower result on electricity trading as a consequence of the loss on trading segment caused by sudden increase in electricity prices in 1H 2018 Unallocated costs: additional costs connected with sale of stake in Offshore projects two processes of tender offers and the impact of VAT settlements for and 2018 YTD Wind power Convent. Energy Distribution Biomass Trading Unallocated costs Development Development: no material variance vs last year IMPROVEMENT IN WIND POWER SEGMENT AND CONVENTIONAL ENERGY SEGMENT COMPENSATED BY LOWER IN OTHER SEGMENTS MAINLY THE EFFECT OF THE LOSS ON TRADING CONTRACTS IN 2Q 7

8 Consolidated cash flow 3 Q Comments WC (28) CFI (47) (24) (71) CFF Credit prepayment (6) (1) CIT Other (12) NCF WC: mainly changes in working capital in the trading segment and conventional energy segment CFI: impact of Offshore projects financing, ENS overhaul and Polenergia Dystrybucja investment plan CFF: mainly debt service in the wind power segment and conventional energy segment. Includes credit prepayment in the amount of 23,7 mpln due to the end of restructuring of Gawałowice, Skurpie and Rajgród farms. YTD Comments (80) (56) (136) Credit prepayment (21) 1 38 WC: mainly changes in working capital in the trading segment and conventional energy segment. CFI: settlement of sale of 50% stake in Offshore projects compensated by the impact of above mentioned 3Q events CFF: mainly debt service in the wind power segment and conventional energy segment. Includes credit prepayment in the amount of 55,7 mpln. WC CFI CFF CIT Other NCF IMPROVEMENT IN NET CASH FLOW DUE TO SETTLEMENT OF SALE OF STAKE IN OFFSHORE PROJECT COMPENSATED BY LOAN PREPAYMENT IN WIND POWER SEGMENT 8

9 Debt structure as of 30 September 2018 Debt by segments Debt in Wind Power segment 5% 1% 2% 5% Wind power Biomass Distribution Restructured debt 76,7% 23,3% The remaining debt Convent. Energy 88% Trading 912 mpln 806 mpln Debt interest rate hedging Debt by currency (EUR vs. PLN) Net debt ( vs. 3Q ) Unsecured debt 79,7% 97,8% 2,2% Debt in EUR (576) (713) 20,3% Debt secured Debt in PLN 912 mpln 912 mpln 3Q FURTHER DECREASE IN NET DEBT NO CURRENCY RISK INTEREST RATE RISK SECURED IN ABOUT 20%. 77% OF WIND FARMS DEBT SUCESSFULLY RESTRUCTURED 9

10 Summary of segment results 10

11 Operating segments Wind power - production Production (net), YTD YTD Load Produktywność factor (%) (%) YTD Production Produckcja (GWh) 108,9 94,9 92,7 83,2 94,2 103,4 464,3-8% 428,2 29,6 21% 23,5 16% 54,3 24% 45,4 20% 35,2 22% 30,6 19% % 30% ,2 30% 44,7 27% % 29% % 34% 13% 2, % 26% 2018 Dipol Amon Talia Gawłowice Rajgród Skurpie Mycielin Krzęcin Razem Total Productivity of Polenergia wind farms above average* 45,4% 40,7% 38,9% 36,8% 35,0% 32,6% 30,9% 31,4% 26,1% 39,1% 24,8% 37,0% 25,3% 26,7% 33,4% 34,4% 30,6% 22,2% 19,9% 20,9% 29,3% 27,0% 27,4% 23,3% 22,9% 21,7% 22,8% 19,2% 17,3% 19,0% 1Q2015 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016 3Q2016 4Q2016 1Q 2Q 3Q 4Q 1Q2018 2Q2018 3Q2018 Średnia Average produktywność load factor of farm wind wiatrowych farms in Poland w Polsce Średnia Average produktywność load factor of farm Polenergia wiatrowych wind Polenergii farms * Based on net productivity (after own consumption and losses) due to the availability of data APPLICATION OF MODERN TECHNOLOGIES, EXCELLENT LOCATIONS AND THE EXPERIENCED TECHNICAL TEAM ALLOW FOR ACHIEVING PRODUCTIVITY ABOVE MARKET AVERAGE 11

12 Operating segments Wind power - 3 Q 1 build-up Comments 18,9 9,3 (1,9) (11,1) 0,7 15,9 Lower EE production volume by 20,8 GWh. Higher average price of green certificates and electricity (in case of projects selling on market prices). Operating costs lower mainly due to lower RET in 2018 partially compensated by higher balancing costs (higher unit price in 2018) Electricity Green certificates Balancing costs Operating costs Other 2 bridge 14,8 (0,5) 1,5 (0,2) 15,9 +7% (5,0) 5,2 3Q Volume effect Price effect Balancing costs Operating costs Other HIGHER GREEN CERTIFICATES PRICES AND LOWER OPERATING COSTS 12

13 Operating segments Wind power - YTD 1 build-up Comments 70,7 28,4 (7,3) (29,6) 3,0 65,2 Lower production volume by 36,0 GWh. Higher average price of green certificates and electricity (in case of projects selling on market prices) Operating costs lower due to lower RET in 2018 and lower technical costs (reversal of historical costs in Mycielin and the effect of the gear change in FW Puck in 1H ) partially compensated by higher balancing costs (higher unit price). Electricity Green certificates Balancing costs Operating costs Other 2 bridge 55,3 (8,0) 13,9 (2,4) 8,5 (2,2) 65,2 +18% YTD Volume effect Price effect Balancing costs Operating costs Other HIGHER GREEN CERTIFICATES PRICES AND LOWER OPERATING COSTS 13

14 Operating segments Conventional Energy 3 Q 1 build-up Comments 1,7 0,4 41,2 Higher margin on electricity due to higher stranded costs compensation (impact of change in electricity price in 2019). 8,0 1,4 29,7 Higher revenues from gas compensation due to higher adjustment for (+20,8m) announced in July 2018 in relation to adjustment for 2016 (+13,6m) announced in July. Electricity * Heat Gas compensation Yellow certificates Other 2 bridge 28,9 5,1 0,0 7,6 (0,1) (0,4) 41,2 +42% 3Q Electricity * Heat Gas Yellow compensation certificates Other * Includes compensation for stranded costs and revenues from black-start services STABLE OPERATIONAL PERFORMANCE. HIGHER DUE TO INCREASE IN STRANDED COSTS COMPENSTATION AND HIGHER REVENUES FROM GAS COMPENSATION. 14

15 Operating segments Conventional Energy YTD 1 build-up Comments 8,4 3,6 Electricity * Heat 50,0 Gas compensation 9,2 Yellow certificates 1,1 Other 72,3 Higher margin on electricity due to higher stranded costs compensation (impact of change in electricity, gas and CO 2 prices). Higher revenues from gas compensation due to 1) higher adjustment for (+20,8m) announced in July 2018 in relation to adjustment for 2016 (+13,6m) announced in July., 2) higher gas cost in 2018 (higher variable price) compensated partially by lower forecasted value of Wg index. Lower revenues from yellow certificates due to lower amount of certificates (lower heat generation) and lower price. 2 bridge 72,3 (0,7) (0,6) 8,3 63,9 +13% 1,5 (0,1) YTD Electricity * Heat Gas Yellow compensation certificates Other * Includes compensation for stranded costs and revenues from black-start services STABLE OPERATIONAL PERFORMANCE. HIGHER DUE TO INCREASE IN STRANDED COSTS COMPENSTATION AND HIGHER REVENUES FROM GAS COMPENSATION. 15

16 Operating segments Distribution 3 Q 1 build-up Comments 4,7 (2,3) 1,6 0,2 4,9 Lower margin on electricity sale due to higher electricity cost. Higher distribution margin results from higher volume (investment plan effect) Lower OPEX due to savings on external services, payroll and RET costs. 0,7 Sale of electricity Distribution OPEX Other Polenergia Kogeneracja 2 bridge 5,0 (0,5) 0,3 (0,1) 0,0 4,9-3% 0,2 3Q Sale of electricity Distribution OPEX Other Polenergia Kogeneracja STABLE OPERATIONAL PERFORMANCE. LOWER DUE TO INCREASE IN ELECTRICITY PURCHASE PRICE PARTIALLY COMPENSATED BY LOWER OPEX AND BETTER RESULT OF DISTRIBUTION SEGMENT 16

17 Operating segments Distribution YTD 1 build-up Comments 13,6 (7,1) 2,0 0,5 12,0 Lower margin on electricity sale due to higher electricity cost. Lower distribution margin mainly due to lower connection fees in 1H 2018 Lower OPEX due to savings on external services, payroll and RET costs 2,9 Sale of electricity Distribution OPEX Other Polenergia Kogeneracja 2 bridge 13,0-8% (1,6) (0,1) 0,6 0,0 0,1 12,0 YTD Sale of electricity Distribution OPEX Other Polenergia Kogeneracja STABLE OPERATIONAL PERFORMANCE. LOWER DUE TO INCREASE IN ELECTRICITY PURCHASE PRICE PARTIALLY COMPENSATED BY LOWER OPEX 17

18 Operating segments Trading 3 Q 1 build-up Comments 4,7 (0,7) 5,0 (2,8) 6,3 Higher result on trading portfolio mainly due to increase of green certificates price. Lower margin on electricity sales from WF due to lower production and the need to buy back some of the energy on the market to close the hedging contracts and the effect of the revaluation of certificate store in 3Q with a significant increase in price during the quarter. Increase in margin on other contracts due to ongoing optimization. Margin - trading Margin - wind farm portfolio Margin - other contracts Operational costs and provisions 2 bridge -16% 7,5 2,5 (8,1) (0,3) 6,3 4,7 3Q Margin - trading Margin - wind farm portfolio Margin - other contracts Operational costs and provisions LOSS ON TRADING PARTIALY COMPENSATED BY INCREASE IN MARGIN ON OTHER CONTRACTS 18

19 Operating segments Trading - YTD 1 build-up Comments Loss on trading portfolio mainly due to sudden increase of electricity price in 1H (12,3) (1,1) 6,3 (8,1) Lower margin on electricity sales from WF due to lower production and the need to buy back some of the energy on the market to close the hedging contracts and the effect of the revaluation of certificate store in 3Q with a significant increase in price during the quarter. Increase in margin on other contracts due to ongoing optimization. (15,3) Margin - trading Margin - wind farm portfolio Margin - other contracts Operational costs and provisions 2 bridge 9,2 (23,9) (5,7) 5,6 (0,5) (15,3) YTD Margin - trading Margin - wind farm portfolio Margin - other contracts Operational costs and provisions LOSS ON TRADING PARTIALY COMPENSATED BY INCREASE IN MARGIN ON OTHER CONTRACTS 19

20 Operating segments Biomass 3 Q 1 build-up Comments 2,9 (1,3) Lower revenues, raw material costs and operating costs caused by sale of the Biomass South plant and lower sales volume in other plants. In October sale of assets of the Biomass North plant in the amount of 0.6 mpln. (2,0) Przychody Sales ze revenues sprzedaży Koszt Cost of surowca raw material Koszty Operational operacyjne and other i pozostałe costs (0,5) 2 bridge 0,5 (4,0) 1,6 (0,5) 1,5 3Q Przychody Sales ze revenues sprzedaży Koszt Cost surowca of raw material Koszty Operational operacyjne and other i pozostałe costs LOWER SALES VOLUME AND HIGHER RAW MATERIAL PRICES. RESTRUCTURING PROCESS IN THE BIOMASS SEGMENT IN PROGRESS. 20

21 Operating segments Biomass - YTD 1 build-up Comments 13,1 Przychody ze Sales sprzedaży revenues (6,3) Koszt surowca Cost of raw material (8,1) Koszty Operational and operacyjne other costs i pozostałe 1,2 Wpływ sprzedaży Sale aktywów of assets 0,0 Lower revenues, raw material costs and operating costs caused by sale of the Biomass South plant and lower sales volume in other plants. At the level of YTD visible effect of sale of assets of the Biomass South plant above the book value allowing for the recognition of a positive results on sales in the amount of 1.2 mpln. In October sale of assets of the Biomass North plant in the amount of 0.6 mpln. 2 bridge 1,3 1,2 0,0 (6,9) 1,9 2,5 YTD Przychody ze sprzedaży Sales revenues Koszt surowca Koszty Cost of raw Operational operacyjne and material other i pozostałe costs Wpływ sprzedaży Sale aktywów of assets LOWER SALES VOLUME AND HIGHER RAW MATERIAL PRICES. RESTRUCTURING PROCESS IN THE BIOMASS SEGMENT IN PROGRESS. 21

22 Development activity Onshore RTB (Dębsk, Szymankowo, Kostomłoty, Piekło): Group possess project portfolio with total capacity of 199MW which are in final development phase and posses building permit. Projects took part in auctions which took place on 5 November Group has been waiting for auction results. Discussions on debt financing in progress. Offshore: Group develops two offshore wind farms (MFW Bałtyk II Sp. z o.o. and MFW Bałtyk III Sp. z o.o.) located on Baltic Sea with total capacity up to 1200 MW. Building term depend from implementation of proper regulation system. Additionally Group analyses potential to reinstate preparation works connected with project Polenergia Bałtyk I S.A. In 2Q 2018 agreement for sale of 50% stake in Offshore projects with Equinor (Statoil previously). Wińsko: Group develops biomass power plant with a capacity of 31 MW, connected to the power grid. In 2Q 2018 project received Integrated Permission and decision concerning prequalification to auction from ERO. Group considers disposal of the project before the auction or after the successful auction. PV: Group posses portfolio of PV project out of which 8MW will take part in auction in November 2018 Development works on other projects with a total capacity of 21 MW will be continued in 2018 and 2019 DEVELOPMENT OF OFFSHORE PROJECTS CONTINUES PARTICIPATION IN 2018 AUCTION FOR ONSHORE (199 MW) AND PV (8 MW). 22