CR no 25/2020 on 31.08.2020 17:31 Estimated selected financial and operating data for the first half of 2020 and information on the result of impairment tests

The Management Board of PGE Polska Grupa Energetyczna S.A. ('PGE') publishes initial selected consolidated financial and operating data for the first half of 2020.

According to the initial estimates net electricity production at PGE generating units in the first half of 2020 amounted to approximately 28.6 TWh, distribution volume arrived at 17.3 TWh and sales to final off-takers came out at 20.1 TWh. Heat sales volume amounted to 27.8 PJ.

Consolidated EBITDA for the first half of 2020 amounted to approximately PLN 2 805m, including:

EBITDA of Conventional Generation segment PLN 774m,

EBITDA of District Heating segment PLN 493m,

EBITDA of Distribution segment PLN 1 127m,

EBITDA of Supply segment PLN 187m,

EBITDA of Renewables segment PLN 301m.

CAPEX amounted to PLN 2 504m. Estimated net debt amounted to approximately PLN 9 728m as at June 30, 2020.

Average electricity wholesale price realized by Conventional Generation segment in the first half of 2020 amounted to PLN 288.6 per MWh.

At the same time - with regard to the current report no. 22/2020 dated July 16, 2020 - the Management Board of PGE discloses that major works regarding tests for impairment of assets in accordance with the IAS 36 have been completed.

Results of conducted tests indicate the impairment loss of balance sheet value of property, plant and equipment in Conventional Generation segment amounting to approx. PLN 530 million.

Moreover, the tests results indicate the necessity to write off approx. PLN 482m due to the loss of value of shares held in Polska Grupa Górnicza S.A. (through a subsidiary PGE Górnictwo i Energetyka Konwencjonalna S.A.).

Accordingly, appropriate adjustments updating value of assets will be recognized in the consolidated financial statements of PGE for the first half of 2020. The above adjustments are of non-cash nature.

Total impact of impairments in the first half of 2020 on the PGE Group's net result is approx. PLN 988m. As a consequence of impairments, consolidated net result attributable to equity holders of the parent company amounted to approximately PLN -688m (i.e. earnings per share of PLN -0.37).

At the same time, as a result of tests for the loss of value of the PGE Obrót S.A. shares, the necessity has been identified to recognize an impairment of approximately PLN 278m in the standalone financial statements of PGE.

Disclaimer: Presented values are estimated and may change. Consolidated and standalone financial statements are still in the preparation process and are reviewed by the professional auditor. Final value of the impairments will be presented in the report for the first half of 2020, which will be published on September 15, 2020.