Pge Polska Grupa Energetyczna S.a. · GPW:PGE
Pge Polska Grupa Energetyczna — Q2 2024 Earnings Presentation
54 slides from Pge Polska Grupa Energetyczna's earnings presentation, Sep 10, 2024
Slide 1: Q2 and H1 2024 Financial and Operating Results
Q2 and H1 2024 Financial and Operating Results INVESTOR PRESENTATION September 10, 2024
Slide 2: Financials
Financials
Slide 3: Key financial data
Key financial data PLN m Q2 2024 Q2 2023 y/y HY 2024 HY 2023 y/y Sales 14 453 22 352 -35% 31 294 49 560 -37% EBITDA 2 604 2 445 7% 5 140 5 872 -12% 1 Recurring EBITDA 2 305 2 859 -19% 4 837 6 205 -22% EBIT 1 451 1 206 20% 2 859 3 549 -19% 1 Recurring EBIT 1 208 1 675 -28% 2 658 3 962 -33% 2 Net prof
Slide 4: One-off items
One-off items Computation of recurring EBITDA and recurring EBIT: [PLN m] Q2 2024 Q2 2023 y/y HY 2024 HY 2023 y/y Change of reclamation provision 392 -331 - 392 -331 - Change of actuarial provision 32 -52 - 32 -52 - LTC compensations -11 -31 -65% -7 -31 -77% Correction of estimated contribution to t
Slide 5: One-off items in the operating segments Q2 2024
One-off items in the operating segments Q2 2024 5 Gas-fired Conventional Energy Railway Renewables District Heating Distribution Supply Generation Generation Services Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 (PLN m) 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 EBITDA report
Slide 6: One-off items in the operating segments H1 2024
One-off items in the operating segments H1 2024 6 Gas-fired Conventional Energy Railway 1 Renewables District Heating Distribution Supply Generation Generation Services H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 (PLN m) 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 EBITDA repo
Slide 7: Development of EBITDA by major value drivers Q2 2024
Development of EBITDA by major value drivers Q2 2024 (PLN m) Q2 2023 EBITDA REPORTED 2 445 One-offs 414 Q2 2023 EBITDA RECURRING 2 859 Contributions to the Price Difference Payment Fund 1 1 428 - Price + of electricity (PLN -3 293m) (-260.2 PLN/MWh) + Volume (+390 mln PLN) (+0.5 TWh) Production Sale
Slide 8: Development of EBITDA by major value drivers H1 2024
Development of EBITDA by major value drivers H1 2024 (PLN m) H1 2023 EBITDA REPORTED 5 872 One-offs 333 H1 2023 EBITDA RECURRING 6 205 Contributions to the Price Difference Payment Fund 1 3 750 - Price + of electricity (PLN -8 091m) (-300.8 PLN/MWh) - Volume (PLN -394m) (-0.4 TWh) Production 2 Sales
Slide 9: Recurring EBITDA Q2'24 – composition and development
Recurring1 EBITDA Q2’24 – composition and development (PLN m) 399 35 24 2 305 280 1 228 267 266 -17 -177 Energy Gas-fired Conventional District Circular Renewables Distribution Railway Supply Other EBITDA generation Generation Heating economy Services Q2 2024 267 -17 -177 266 1 228 280 399 35 24 2 3
Slide 10: Recurring EBITDA H1'24 – composition and development
Recurring1 EBITDA H1’24 – composition and development (PLN m) 1 302 59 4 837 -11 559 2 220 646 776 -39 -675 Gas-fired Conventional District Energy Railway Circular Renewables Distribution Supply Other EBITDA generation Generation Heating Services economy H1 2024 646 -39 -675 776 2 220 559 1 302 59 -
Slide 11: Fundamentals of the distribution business (PGE Dystrybucja S.A.)
Fundamentals of the distribution business (PGE Dystrybucja S.A.) RAB (with RAB-AMI) development1 (PLN m) Regulated revenue composition1 3 863 (PLN m) 2 967 2 631 2 099 12 258 11 504 1 940 2 781 6 007 7 175 8 086 6 394 21 570 18 929 19 620 19 806 4 513 3 721 2 315 2 101 1 091 1 132 1 402 1 324 1 313
Slide 12: Fundamentals of Railway Energy Services
Fundamentals of Railway Energy Services Regulated Asset Base RAB (PLN m) Sales and Distribution of electricity (TWh) 1,10 1,13 1,00 1,00 1,01 0,78 0,78 0,72 0,72 0,72 4 221 3 559 2 835 WRA 2022 WRA 2023 WRA 2024 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Sales Distribution 2022 2023 2024 WACC: 4.82% 5.
Slide 13: CO2 allowances – regulations and settlement
CO2 allowances – regulations and settlement Accounting standards Allowances for proprietary consumption received free of charge are recognized at its nominal value – zero. Provision for allowances required for redemption is raised respectively to its actual shortage in a given period. Cost incurred
Slide 14: Financial data by segments
Financial data by segments
Slide 15: Contributions to the Price Difference Payment Fund
Contributions to the Price Difference Payment Fund [mln PLN] Q2 2024 Q2 2023 y/y HY 2024 HY 2023 y/y Conventional Generation 0 1 209 - -2 3 186 - District Heating -16 87 - -16 307 - Renewables 3 67 -96% 2 187 -99% Energy Railway Services -6 46 - -6 46 - Supply 1 1 0% -1 1 - Contribution to the Price
Slide 16: Renewables – EBITDA in Q2 2024
Renewables – EBITDA in Q2 2024 64 -5 26 33 -5 11 -90 267 233 Purchase 1 Revenues 2 Price 3 Revenues of electricity EBITDA from Capacity Personnel Difference EBITDA from for Other Q2 2023 property Market costs Payment Q2 2024 electricity pumped- rights Fund storage PP Change -90 11 33 26 -5 64 -5 EBI
Slide 17: Renewables – EBITDA in H1 2024
Renewables – EBITDA in H1 2024 25 185 36 98 -17 669 -317 646 -33 1 Revenues Purchase 2 Revenues Price 3 EBITDA from of electricity Capacity Personnel EBITDA from Difference Other H1 2023 property for Market costs H1 2024 electricity Payment Fund rights pumped-storage PP Change -317 -33 98 36 -17 185
Slide 18: Gas-fired Generation EBITDA in Q2 2024
Gas-fired Generation EBITDA in Q2 2024 8 163 -4 -17 -176 -3 -5 1 Capacity Market EBITDA Electricity Costs of EBITDA and ancillary Personnel costs Other Q2 2023 production natural gas Q2 2024 services Change 163 8 -176 -3 -5 EBITDA Q2 2023 -4 0 0 0 3 1 EBITDA Q2 2024 163 8 176 6 6 -17 1Managerial vie
Slide 19: Gas-fired Generation EBITDA in H1 2024
Gas-fired Generation EBITDA in H1 2024 8 173 -7 -39 -197 -5 -11 1 Capacity Market Other EBITDA Electricity Costs of EBITDA and ancillary Personnel costs H1 2023 production natural gas H1 2024 services Change 173 8 -197 -5 -11 EBITDA H1 2023 -7 0 0 0 6 1 EBITDA H1 2024 173 8 197 11 12 -39 1Managerial
Slide 20: Conventional Generation – EBITDA in Q2 2024
Conventional Generation – EBITDA in Q2 2024 642 463 427 89 -177 749 -76 -26 1 208 -3 301 -352 4 1 1 2 3 EBITDA Electricity Electricity Capacity Price Costs CO2 costs Cost of Personnel Other EBITDA Q2 2023 production production Market and Difference of fuel Commercial costs Q2 2024 difference differe
Slide 21: Conventional Generation – EBITDA in H1 2024
Conventional Generation – EBITDA in H1 2024 1 372 -106 240 1 286 -675 -177 -42 1 556 3 188 -7 111 -881 4 3 EBITDA Electricity 1 Electricity 1 Capacity Price Costs CO2 costs Cost of 2 Personnel Other EBITDA H1 2023 production production Market and Difference of fuel Commercial costs H1 2024 differenc
Slide 22: District Heating – EBITDA in Q2 2024
District Heating – EBITDA in Q2 2024 202 115 3 -78 240 353 -177 266 -300 11 103 -110 -96 1 Revenues from Price Heat Heat 1 Electricity Electricity 2 3 EBITDA Capacity support of Difference Costs Personnel EBITDA production production production production Cost of fuel Other Q2 2023 Market highly-eff
Slide 23: District Heating – EBITDA in H1 2024
District Heating – EBITDA in H1 2024 292 -187 151 -2 -36 597 1 269 -705 776 35 323 -596 -365 1 Revenues Electricity Price 3 Heat Heat 1 Electricity from support 2 EBITDA productio Capacity Difference Cost Personnel EBITDA production production production of highly- Costs of CO2 Other H1 2023 n- Mark
Slide 24: Distribution – EBITDA in Q2 2024
Distribution – EBITDA in Q2 2024 70 17 -9 12 -25 13 215 1 228 14 998 -77 Additional estimation of Other EBITDA Electricity Change of Network balancing Connection Real Personnel Other EBITDA Q2 2023 distribution distribution losses2 fees distribution estate tax cost4 Q2 difference services volume tar
Slide 25: Distribution – EBITDA in H1 2024
Distribution – EBITDA in H1 2024 667 32 127 45 -58 -22 121 2 272 -55 2 220 -909 Additional estimation of Other EBITDA Electricity Change of Network balancing Connection Real Personnel Other EBITDA H1 2023 distribution distribution losses2 fees distribution estate tax cost4 H1 difference volume tarif
Slide 26: Railway Energy Services – EBITDA in Q2 2024
Railway Energy Services – EBITDA in Q2 2024 52 -25 21 -9 280 269 -7 -21 1 EBITDA Q2 2023 Result on sale Result on Other acitivities Personnel costs Price Difference Other EBITDA Q2 2024 of electricity distribution Payment Fund Change -9 -21 21 -7 52 -25 Change EBITDA reported Q2 2023 269 One-offs Q2
Slide 27: Railway Energy Services – EBITDA in H1 2024
Railway Energy Services – EBITDA in H1 2024 52 279 21 -25 -9 -7 -21 559 269 1 EBITDA Q1 2024 Result Result on sale Result on Other acitivities Personnel Price Difference Other Q2 2024 EBITDA H1 2023 of electricity distribution Q2 2024 costs Q2 2024 Payment Fund H1 2024 Q2 2024 Q2 2024 Q2 2024 Change
Slide 28: Supply – EBITDA in Q2 2024
Supply – EBITDA in Q2 2024 315 -41 374 477 399 -55 -17 -566 -13 -75 EBITDA Result on Result on Additional Revenues Result Personnel Other operating Other4 EBITDA Q2 2023 electricity electricity estimation from services on sale expenses3 income and Q2 2024 - volume - margin of balancing provided to o
Slide 29: Supply – EBITDA in H1 2024
Supply – EBITDA in H1 2024 525 500 909 -95 1 302 -67 -231 2 39 -280 EBITDA Result on Result on Additional Revenues Result Personnel Other operating Other4 EBITDA H1 2023 electricity electricity estimation from services on sale expenses3 income and H2 2024 - volume - margin of balancing provided to o
Slide 30: Cash flows and debt
Cash flows and debt
Slide 31: Cash from operations, investments and net debt
Cash from operations, investments and net debt Consolidated Cash Flows . . . . . . PLN m Q2 2024 Q2 2023 H1 2024 H1 2023 Operating CF 8 444 7 167 6 105 339 Investing CF -2 562 -3 846 -4 702 -5 491 Financial CF -6 555 -1 714 -3 786 3 633 Change of cash and equivalents -673 1 607 -2 383 -1 519 Consoli
Slide 32: Debt development and structure (June 30, 2024)
Debt development and structure (June 30, 2024) Gross debt and net debt (in PLN million) 25 000 20 000 15 000 10 000 5 000 0 -5 000 Gross debt Net debt Currency profile of drawn debt Fixed vs floating rates (including hedging transactions) (drawn debt) 0,8% 4,5% Fixed 68% 94,7% Floating 32% 32 EUR PL
Slide 33: Debt maturity and available financing
Debt maturity and available financing Drawn debt and availability of external financing (in PLN m) as at June 30, 2024 9 000 8 000 7 000 6 000 5 000 4 000 3 000 2 000 1 000 0 Environmental funds EBRD EIB Current account credit Domestic bonds' program EMTN program Revolving loan BGK Other Drawn Undra
Slide 34: Stable finances
Stable finances H1 2024 Q1 2024 Gross Debt (PLN bn) 13.3 19.7 Net debt (PLN bn) 10.0 15.7 Net Debt/LTM EBITDA 1.07x 1.72x Debt position Net Economic Financial Debt (PLN bn) 20.1 21.2 NEFD/ LTM EBITDA recurring 2.15x 2.14x Net Debt/Equity 0.20x 0.32x MOODY’S FITCH Long-term company rating (IDR) Baa1
Slide 35: Capital expenditures
Capital expenditures
Slide 36: Capital expenditures in H1 2024
Capital expenditures in H1 2024 PLN 400 m Conventional Generation CAPEX Key projects PLN 199 m in H1 2024 Railway Energy Services 4% 8% PLN 613 m PLN 1 054 m 13% District Heating Construction of CCGT units in PGE Gryfino PLN 340 m Generation Gas-fired 20501 Generation 22% TOTAL CAPEX 13% PLN 615 m C
Slide 37: Capital expenditures
Capital expenditures Segment (PLN m) Q2 2024 Q2 2023 y/y HY 2024 HY 2023 y/y Renewables, including: 357 272 31% 615 437 41% Modernisation and replacement 75 43 74% 111 78 42% Gas-fired Generation 613 198 210% 1 054 356 196% Conventional Generation 221 233 -5% 400 431 -7% District Heating 330 352 -6%
Slide 38: Operations
Operations
Slide 39: Key operating data
Key operating data Net generation of electricity by fuels, sales to final clients and distribution [TWh] Q2 2024 Q2 2023 y/y H1 2024 H1 2023 y/y Net electricity generation, by fuels: 12.91 12.30 5% 27.51 28.02 -2% lignite 7.36 6.68 10% 14.99 14.85 1% incl. Turów 7 unit 0.44 0.24 83% 0.83 0.80 3% har
Slide 40: Key operating data
Key operating data Average realized wholesale price of electricity, average cost of CO2 Average realized wholesale price of electricity1 [PLN/MWh] Q2 2024 Q2 2023 y/y H1 2024 H1 2023 y/y Conv. Generation segment 574.60 749.13 -23% 578.52 759.54 -24% District Heating segment 592.17 592.06 0% 635.77 7
Slide 41: Generation volume by fuel – H1 2024 y/y
Generation volume by fuel – H1 2024 y/y Conventional Generation 27,51 28,02 H1 2024 Generation volume: Decline in production by -1% y/y mainly due to lower load factor of hard coal power plants. TWh H1 2023 Lignite: increase in generation by 1% y/y due to higher generation of 14,99 14,85 Bełchatów P
Slide 42: Generation volume by fuel – Q2 2024 y/y
Generation volume by fuel – Q2 2024 y/y TWh 12,91 12,30 Q2 2024 National Power System (y/y):. Domestic energy consumption in Q2 2024 up by 1.0 TWh, Q2 2023 (+2.6%) y/y. Net electricity import 0.7 TWh 7,36 (change of balance of foreign exchange +1.0 6,68 TWh) → higher generation of electricity by 2.0
Slide 43: Electricity market - balance of energy
Electricity market - balance of energy Trend reversal of falling demand and production Domestic consumption and generation [GWh] Q2 Q2 2023 2024 17.000 Consumption 2.6% (+1.01 TWh y/y) 16.000 15.000 Balance of foreign exchange (-0.99 TWh y/y) 14.000 13.000 Generation 12.000 5.4% (+2.00 TWh r/r) 11.0
Slide 44: Electricity market - price
Electricity market - price Decline in fuel prices reflected in electricity prices BASE Forward next year and CO2 prices Q2 2024 [PLN/MWh] 2.000 1.800 Forward Y+1 Average BASE_Y-25 1.600 Average RTT Y+1 • Price of BASE_Y-25 1.400 contract throughout the CO2 first half-year of 2024 1 112 1.200 fluctua
Slide 45: Generation assets - conventional
Generation assets - conventional Lower load factor of conventional power plants and CHPs Availability Capacity Factor 85,1% 89,0% 86,9% 87,9% 85,6% 83,9% H1 2024: 57,5% 53,6% • Lower load factor of lignite power plants due to decline 47,8% in generation in Q1 2024. Increase in RES generation 41,6% i
Slide 46: Generation assets – wind farms
Generation assets – wind farms 97,0% 95,8% -1,3% • Higher load factor due to more favourable wind conditions in Q2 20,2% 21,3% +5,5% Q2 2023 Q2 2024 Availability Load factor 97,0% 96,1% -1,0% Slightly higher lower load factor due to more favourable wind conditions in H1. 28,0% 28,3% +1,0% H1 2023 H1
Slide 47: Assets of Distribution segment
Assets of Distribution segment 6,6% Network losses [%] (moving average last 12 months)1 Volume of distributed electricity (PGE Dystrybucja) (TWh) 5,6% • Higher distribution volumes 18,64 18,62 • Slightly higher level of network losses at 1% the end of June 2024. 18,13 17,97 4,6% 9 bp 17,82 17,29 3,6
Slide 48: Output and sales of electricity in H1 2024
Output and sales of electricity in H1 2024 llustrative Energy Railway Services Households Conventional 1.50 TWh 2 Generation 0.72 TWh 4.75 TWh 21.30 TWh (H1 2023) 4.80 TWh 21.43 TWh (H1 2023) Wholesale and (H1 2023) balancing Supply market 31% District Heating 16.76 TWh 15.54 TWh1 21.86 TWh 16.76 TW
Slide 49: Lower energy prices y/y at power exchange
Lower energy prices y/y at power exchange Hard coal (Polish Steam Coal Index PGE average wholesale price of electricity PSCMI1) (Conventional Generation)1 CO2 allowance (EUA_DEC_Y) PLN/GJ 33,7 33,6 PLN/MWh EUR/t 86,4 90,3 88,4 85,7 32,2 31,1 79,4 77,4 76,1 768 749 72,3 25,3 25,6 726 728 61,0 22,9 22
Slide 50: Invitation for webcast
Invitation for webcast On behalf of Dariusz Marzec President of the Management Board & CEO we kindly invite you to a webcast of the presentation of PGE H1 2024 results which will be held on Wednesday, September 11, 2024 at 10:00 am (CEST) Transmission will be available on https://infostrefa.tv/pge/
Slide 51: Sell-side analysts covering PGE
Sell-side analysts covering PGE Institution Analyst BOŚ Łukasz Prokopiuk Bernstein Bartłomiej Kubicki Citigroup Piotr Dzięciołowski Erste Group Research Petr Bartek IPOPEMA Robert Maj mBank Kamil Kliszcz Patria Cuong Mahn Le Pekao Marcin Górnik PKO BP Andrzej Rembelski Santander Biuro Maklerskie Paw
Slide 52: Disclaimer
Disclaimer This presentation has been prepared by the management of PGE Polska Grupa Energetyczna S.A. (the “Company” or “PGE”) and other entities. This presentation does not constitute or form part of and should not be constructed as, an offer to sell, or the solicitation or invitation of any offer
Slide 53: Investor Relations contacts
Investor Relations contacts Filip Osadczuk Krzysztof Dragan Stanisław Ozga CFA IR and ESG Director filip.osadczuk@gkpge.pl stanislaw.ozga@gkpge.pl krzysztof.dragan@gkpge.pl Tel: (+48 22) 340 12 24 Tel: (+48 22) 340 12 69 Tel: (+48 22) 340 15 13 Kom: +48 695 501 370 Kom: +48 887 171 324 Kom: +48 601
Slide 54: Thank you
Thank you
PGE Polska Grupa Energetyczna — Q2 2024 Earnings Presentation on 6ix