TAURON Polska Energia : Current Report No. 29/2018

25.10.2018 17:00

Current Report No. 29/2018

Estimated results of TAURON Polska Energia Capital Group for 9 months of 2018 and Q3 2018

The Management Board of TAURON Polska Energia S.A. ('the Company') announces selected estimated consolidated financial results and operating data of TAURON Polska Energia S.A. Capital Group ('TAURON Group') for 9 months of 2018 and Q3 2018.

Selected estimated financial results for:

(a) 9 months of 2018: Sales revenue: PLN 13,302 million EBITDA (operating profit increased by depreciation, amortization and write-offs for non-financial assets): PLN 2,972 million, including: - Mining Segment's EBITDA: PLN (94) million - Generation Segment's EBITDA: PLN 649 million - Distribution Segment's EBITDA: PLN 1,957 million - Supply Segment's EBITDA: PLN 451 million EBIT (operating profit): PLN 1,306 million Gross profit: PLN 1,088 million Net profit: PLN 855 million CAPEX: PLN 2,325 million

(b) Q3 2018: Sales revenue: PLN 4,476 million EBITDA (operating profit increased by depreciation, amortization and write-offs for non-financial assets): PLN 778 million, including: - Mining Segment's EBITDA: PLN (29) million - Generation Segment's EBITDA: PLN 57 million - Distribution Segment's EBITDA: PLN 621 million - Supply Segment's EBITDA: PLN 125 million EBIT (operating profit): PLN 351 million Gross profit: PLN 363 million Net profit: PLN 286 million CAPEX: PLN 844 million Net debt as of 30.09.2018: PLN 8,166 million Net debt/EBITDA as of 30.09.2018: 2.24x

Selected estimated operating data for:

(a) 9 months of 2018: Commercial coal production: 3.61 million tons Commercial coal sales: 3.54 million tons
Gross electricity production: 11.90 TWh Heat production: 7.42 PJ Distribution of electricity: 38.84 TWh (including to final consumers: 37.25 TWh) Retail electricity sales: 25.37 TWh

(b) Q3 2018: Commercial coal production: 1.09 million tons Commercial coal sales: 1.04 million tons Gross electricity production: 4.35 TWh Heat production: 0.70 PJ Distribution of electricity: 12.83 TWh (including to final consumers: 12.25 TWh) Retail electricity sales: 8.17 TWh

Significant factors impacting Q3 2018 earnings (versus Q3 2017):

a) lower volume of commercial coal production resulting from the longwall retooling schedule at three mining plants of TAURON Group and difficult mining and geological conditions (Mining segment),

b) higher costs of the provision related to the purchase of CO2 emission allowances resulting from the increase in market prices of allowances and higher unit costs of hard coal consumption (Generation segment),

c) financial income from positive exchange rate differences on debt denominated in euro, which resulted in PLN 85 million increase in the gross financial result of TAURON Group in Q3 2018. In Q3 2017, the recognition of exchange rate differences on euro-denominated debt contributed to the reduction of gross financial result of TAURON Group by PLN 60 million (no impact on EBITDA).

The Company reserves that the figures presented above represent estimated values and may be subject to change. The final values will be presented in the consolidated report for Q3 2018, scheduled to be published on November 6, 2018. Legal basis: Art. 17, clause 1 of MAR - inside information