Pge Polska Grupa Energetyczna S.a. · GPW:PGE
Pge Polska Grupa Energetyczna — Q3 2023 Earnings Presentation
50 slides from Pge Polska Grupa Energetyczna's earnings presentation, Nov 21, 2023
Slide 1: Q3 and 9M 2023 Financial and Operating Results
Q3 and 9M 2023 Financial and Operating Results INVESTOR PRESENTATION November 21, 2023
Slide 2: Financials
Financials
Slide 3: Key financial data
Key financial data [IAS, PLN m] Q3 2023 Q3 2022 y/y 9M 2023 9M 2022 y/y Sales 21 515 19 355 11% 71 075 51 980 37% EBITDA 2 458 1 926 28% 8 330 8 318 0% 1 Recurring EBITDA 2 450 2 328 5% 8 655 6 540 32% EBIT 1 206 805 50% 4 755 5 059 -6% 1 Recurring EBIT 1 243 1 262 -2% 5 205 3 349 55% 2 Net profit (
Slide 4: One-off items
One-off items Computation of recurring EBITDA and recurring EBIT: . Q3 2023 Q3 2022 y/y 9M 2023 9M 2022 y/y Change of reclamation provision 0 -422 - -331 1 738 - Change of actuarial provision 0 0 - -52 -19 174% LTC adjustment 3 1 200% -28 3 - Correction of estimated contribution to the Price Differe
Slide 5: One-off items in the operating segments 9M 2023
One-off items in the operating segments 9M 2023 Conventional Energy Railway District Heating Renewables Distribution Supply Generation Services (PLN m) 9M 2023 9M 2022 9M 2023 9M 2022 9M 2023 9M 2022 9M 2023 9M 2022 9M 2023 9M 2022 9M 2023 9M 2022 EBITDA reported 1 323 2 687 1 317 49 846 1 402 3 252
Slide 6: One-off items in the operating segments Q3 2023
One-off items in the operating segments Q3 2023 Conventional Energy Railway District Heating Renewables Distribution Supply Generation Services (PLN m) Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 EBITDA reported 310 157 89 -10 167 561 1 001 668 356
Slide 7: Development of EBITDA by major value drivers
Development of EBITDA by major value drivers (PLN m) Q3 2022 EBITDA REPORTED 1 926 One-offs 402 Q3 2022 EBITDA RECURRING 2 328 Sales of electricity-Generation 542 +Price + of electricity (PLN +2 248m) (+176 PLN/MWh) - Volume (PLN -1 706m) (-2.8 TWh) Generation Heat sales 178 Cost of CO2 1 455 - CO p
Slide 8: Recurring EBITDA in 9M'23 – composition and development
Recurring1 EBITDA in 9M’23 – composition and development 58 405 8 655 625 421 3 273 836 1 355 1 682 Gospodarka Conventional District Heating Renewables Distribution Energy Railway Supply Obiegu Other EBITDA Generation Zamkniętego 9M 2023 1 682 1 355 836 3 273 625 421 58 405 8 655 Share in 9M 2023 19
Slide 9: Recurring EBITDA in Q3'23 – composition and development
Recurring1 EBITDA in Q3’23 – composition and development 382 21 127 2 450 356 1 001 167 310 86 Energy Railway Conventional Generation District Heating Renewables Distribution Supply Circular economy Other EBITDA Services Q3 2023 310 86 167 1 001 356 382 21 127 2 450 Share in Q3 2023 13% 4% 7% 41% 15
Slide 10: Fundamentals of the distribution business (PGE Dystrybucja S.A.)
Fundamentals of the distribution business (PGE Dystrybucja S.A.) Regulated revenue composition1 RAB (with RAB-AMI) development1 (PLN m) (PLN m) 2 967 2 781 2 631 1 940 7 175 8 086 11 504 6 394 18 929 19 620 19 806 4 513 3 721 2 101 1 091 1 132 1 324 1 313 1 301 1 050 1 140 1 685 RAB 2021 CAPEX recog
Slide 11: 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 12: Financial data by segments
Financial data by segments
Slide 13: Contributions to the Price Difference Payment Fund
Contributions to the Price Difference Payment Fund [PLN m] Q3 2023 Q3 2022 y/y 9M 2023 9M 2022 y/y Conventional Generation 958 0 - 4 144 0 - District Heating 84 0 - 391 0 - Renewables 42 0 - 229 0 - Energy Railway Services 40 0 - 86 0 - Supply 0 0 - 1 0 - Contributions to the Price Difference Paymen
Slide 14: Conventional Generation – EBITDA in 9M 2023
Conventional Generation – EBITDA in 9M 2023 1 498 12 269 -4 144 -1 790 -2 259 -217 -352 -44 1 682 970 -4 249 4 5 1 1 2 3 EBITDA Electricity Electricity Capacity Price Costs CO2 costs Cost of Personnel Other EBITDA 9M 2022 production production Market and Difference of fuel Commercial costs 9M 2023 d
Slide 15: Conventional Generation – EBITDA in Q3 2023
Conventional Generation – EBITDA in Q3 2023 311 2 625 185 -958 2 576 -390 -17 -157 310 -1 867 1 EBITDA Electricity 1 Electricity Capacity Price Costs CO2 costs Cost of 2 Personnel Other 3 EBITDA Q3 2022 production production Market and Difference of fuel Commercial costs Q3 2023 difference differenc
Slide 16: District Heating – EBITDA in 9M 2023
District Heating – EBITDA in 9M 2023 283 1 592 -1 -391 598 -1 213 1 280 -617 -52 -53 1 355 39 -110 1 1 2 EBITDA Heat Heat Electricity Electricity Capacity Revenues from Price Cost of fuel Costs of CO2 Personnel Other EBITDA 9M 2022 production production production production Market support of Differ
Slide 17: District Heating – EBITDA in Q3 2023
District Heating – EBITDA in Q3 2023 30 114 4 -21 -84 -9 211 2 -73 -20 86 -8 -60 1 1 2 EBITDA Heat Heat Electricity Electricity Capacity Revenues Price Cost of fuel Costs of CO2 Personnel Other EBITDA Q3 2022 production production production production Market from support Difference expenses Q3 2023
Slide 18: Renewables – EBITDA in 9M 2023
Renewables – EBITDA in 9M 2023 224 -18 -37 1,401 9 -455 -229 -59 836 EBITDA Revenues 1 Revenues Purchase Capacity Market Personnel Price Other EBITDA 9M 2022 from from of electricity and costs Difference 9M 2023 electricity property for auxiliary Payment Fund rights pumped-storage PP services Change
Slide 19: Renewables – EBITDA in Q3 2023
Renewables – EBITDA in Q3 2023 561 211 -9 -10 -42 -12 -469 167 -63 1 EBITDA Revenues Revenues from Purchase Capacity Market Personnel Price Other EBITDA Q3 2022 from property of electricity and costs Difference Q3 2023 electricity rights for auxiliary Payment pumped- services Fund storage PP Change
Slide 20: Distribution – EBITDA in 9M 2023
Distribution – EBITDA in 9M 2023 1 438 71 469 -19 -71 -990 3 273 2 147 -105 2 4 EBITDA Electricity Change of 1 Network losses Additional 3 Real estate tax Personnel cost Other EBITDA 9M 2022 distribution distribution tariff estimation of 9M 2023 volume balancing difference cost Change -143 2 078 -1
Slide 21: Distribution – EBITDA in Q3 2023
Distribution – EBITDA in Q3 2023 640 -228 58 -9 -9 -83 1 001 668 -36 1 2 Additional 3 EBITDA Electricity Change of Network estimation Real estate tax Personnel cost Other EBITDA Q3 2022 distribution distribution tariff losses of balancing Q3 2023 volume difference cost Change -36 640 -228 -9 -9 -83
Slide 22: Energy Railway Services – EBITDA 9M 2023
Energy Railway Services – EBITDA 9M 20231 184 651 -86 -258 -86 625 220 Result on sale Result on Other acitivities Price Difference Personnel costs Other EBITDA 9M 2023 of electricity distribution Payment Fund Change 220 651 184 -86 -258 -86 625 EBITDA recurring 9M 2023 220 651 184 -86 -258 -86 625 O
Slide 23: Energy Railway Services – EBITDA Q3 2023
Energy Railway Services – EBITDA Q3 2023 71 379 -40 -129 -39 356 114 Result on sale Result on Other acitivities Price Difference Personnel costs Other EBITDA Q3 2023 of electricity distribution Payment Fund Change 114 379 71 -40 -129 -39 356 EBITDA recurring Q3 2023 114 379 71 -40 -129 -39 356 One-o
Slide 24: Supply – EBITDA in 9M 2023
Supply – EBITDA in 9M 2023 -69 -486 320 1 613 -460 450 191 421 -993 -145 1 2 2 3 Revenues from EBITDA Additional Result on services provided Result Result 9M 2023 EBITDA Result on estimation of Personnel electricity to other on sale of gas on sale Other 9M 2022 electricity balancing expenses - volum
Slide 25: Supply – EBITDA in Q3 2023
Supply – EBITDA in Q3 2023 -26 381 22 9 486 -182 382 23 -276 -55 EBITDA Result on Result on Additional 1 Revenues 2 Result Result 2 Personnel Other 3 EBITDA Q3 2022 electricity electricity estimation of from services on sale of gas on sale expenses Q3 2023 - volume - margin balancing provided to and
Slide 26: Cash flows and debt
Cash flows and debt
Slide 27: Cash from operations, investments and net debt
Cash from operations, investments and net debt Consolidated Cash Flows . . . . . . PLN m Q3 2023 Q3 2022 9M 2023 9M 2022 Operating CF 9 192 3 524 9 531 8 539 Investing CF -2 704 -1 922 -8 195 -4 642 Financial CF -3 893 -751 -260 1 177 Change of cash and equivalents 2 595 851 1 076 5 074 Consolidated
Slide 28: Debt development and structure (September 30, 2023)
Debt development and structure (September 30, 2023) Gross debt and net debt (in PLN million) 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) 4.5% 9.2% Fixed 66% 86.3% Floating 34% 28 EUR PLN
Slide 29: Debt maturity and available financing
Debt maturity and available financing Drawn debt and availability of external financing (in PLN m) as at September 30, 2023 10 000 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
Slide 30: Stable finances
Stable finances Q3 2023 H1 2023 Gross Debt (PLN bn) 14.4 17.8 Net debt (PLN bn) 1.6 7.6 Net Debt/LTM EBITDA 0.18x 0.94x Debt position Net Economic Financial Debt (PLN bn) 18.5 19.3 NEFD/ LTM EBITDA recurring 2.00x 2.11x Net Debt/Equity 0.03x 0.14x MOODY’S FITCH Long-term company rating (IDR) Baa1 BB
Slide 31: Capital expenditures
Capital expenditures
Slide 32: Capital expenditures in 9M 2023
Capital expenditures in 9M 2023 PLN 812 m Conventional Generation CAPEX Key projects PLN 638 m in 9M 2023 Supply, Circular Economy & other* 9% 12% PLN 625 m Construction of CCGT units in PGE Gryfino PLN 990 m PLN 292 m Generation Railway Energy 9% District Heating 2050 Services TOTAL 15% CAPEX Const
Slide 33: Capital expenditures
Capital expenditures Segment (PLN m) Q3 2023 Q3 2022 y/y 9M 2023 9M 2022 y/y Conventional Generation 381 143 166% 812 400 103% District Heating 396 257 54% 990 522 90% Distribution, including: 1 086 578 88% 2 935 1 215 142% New clients connection 412 261 58% 1 159 607 91% Distribution grid 421 218 9
Slide 34: Operations
Operations
Slide 35: Key operating data
Key operating data Net generation of electricity by fuels, sales to final clients and distribution [TWh] Q3 2023 Q3 2022 y/y 9M 2023 9M 2022 y/y Net electricity generation, by fuels: 13.10 16.02 -18% 41.12 48.34 -15% Lignite 7.14 10.03 -29% 21.99 29.94 -27% incl. Turów 7 unit 0.18 0.44 -59% 0.98 1.5
Slide 36: Key operating data
Key operating data Average realized wholesale price of electricity, average cost of CO2 Average realized wholesale price of electricity1 [PLN/MWh] Q3 2023 Q3 2022 y/y 9M 2023 9M 2022 y/y Conv. Generation segment 726.31 575.69 26% 747.59 505.13 48% District Heating segment 547.52 625.25 -12% 686.04 4
Slide 37: Generation volume by fuel – Q3 2023 y/y
Generation volume by fuel – Q3 2023 y/y 16,02 National Power System (y/y): Lower TWh Q3 2023 demand for electricity. Domestic energy 13,10 consumption lower by 1.6 TWh y/y (-4% y/y). Q3 2022 Net electricity import 0.2TWh (change of 10,03 balance of foreign exchange 1.5TWh) → lower generation by 3.2
Slide 38: Generation volume by fuel – 9M 2023 y/y
Generation volume by fuel – 9M 2023 y/y Conventional Generation 48,34 41,12 9M 2023 9M 2022 Generation volume: Decline in production by 20% y/y TWh due to lower load factor of lignite power plants 29,94 21,99 Lignite: significantly lower generation in ELB by 6.6 TWh y/y and ELT by 1.3TWh y/y due to
Slide 39: Electricity market - balance of energy
Electricity market - balance of energy Continuing trend of declining demand and import of electricity Domestic consumption and generation [GWh] 17.000 Q3: Consumption Q3 Q3 -4% (-1.64 TWh y/y) 16.000 15.000 Balance of foreign exchange (+1.54 TWh y/y) 14.000 13.000 Q3: Generation 12.000 -8% (-3.18 TW
Slide 40: Electricity market - price
Electricity market - price Decline in fuel prices reflected in electricity prices BASE Forward next year and CO2 prices [PLN/MWh] 2.000 Q3 1.800 Forward Y+1 Average BASE_Y-24 1.600 Average RTT Y+1 • Price of BASE 2024 1.400 contract during the first CO2 nine months of 2023 1 112 1.200 fluctuated bet
Slide 41: Generation assets - conventional
Generation assets - conventional Lower load factor of lignite power plants Availability Capacity Factor 86,6% 91,0% 86,1% 82,7% 83,0% 76,2% 73,2% • 9M 2023 : 56,5% • Lower generation on lignite due to decline in demand for electricity and reallocation of 39,2% generation to hard coal 33,1% 32,0% 34,
Slide 42: Generation assets – wind farms
Generation assets – wind farms 96,0% 96,8% +0,8% 18,0% 17,7% -1,7% Q3 2022 Q3 2023 • Lower load factor due to unfavourable wind conditions. Availability Load factor 96,5% 96,9% +0,4% 24,4% 24,5% +0,4% 42 9M 2022 9M 2022
Slide 43: Assets of Distribution segment
Assets of Distribution segment Volume of distributed electricity 6,6% Network losses [%] (TWh) (moving average last 12 months)1 5,6% 27,94 -4% • Declining distribution volumes 27,55 27,08 27,12 • Slightly higher level of network losses at the end of September 2023. 26,46 4,6% 26,27 3 bp 3,6% • Quali
Slide 44: Q3 2023 Output and sales of electricity
Q3 2023 Output and sales of electricity Illustrative Energy Railway Services Households Conventional 0.72 TWh1 Generation 2,16 TWh 11.35 TWh 1.96 TWh 14.55 TWh Wholesale and (Q3 2022) (Q3 2022) balancing Supply market 28% District heating 11.75 TWh 7.77 TWh1 16.23 TWh 8.24 TWh 1.08 TWh (Q3 2022) 72%
Slide 45: Lower SPOT prices y/y at power exchange
Lower SPOT prices y/y at power exchange Hard coal (Polish Steam Coal Index PGE average wholesale price of electricity CO2 allowance (EUA_DEC_Y) PSCMI1) (Conventional Generation)1 PLN/GJ 32,2 33,7 33,6 PLN/MWh 90,3 88,4 EUR/t 86,4 85,7 82,0 79,4 77,4 25,3 25,6 768 749 726 68,2 57,2 576 560 15,0 457 4
Slide 46: Invitation for webcast
Invitation for webcast On behalf of Wojciech Dąbrowski President of the Management Board & CEO and Lechosław Rojewski Vice-President for Finance & CFO we kindly invite you to a webcast of the presentation of PGE Q3 2023 results which will be held on Wednesday, November 22, 2023 at 10:00 am (CET) Tra
Slide 47: Sell-side analysts covering PGE
Sell-side analysts covering PGE Institution Analyst BOŚ Łukasz Prokopiuk Citigroup Piotr Dzięciołowski Erste Group Research Petr Bartek IPOPEMA Robert Maj mBank Kamil Kliszcz Pekao Marcin Górnik PKO BP Andrzej Rembelski Santander Biuro Maklerskie Paweł Puchalski Societe Generale Bartłomiej Kubicki T
Slide 48: 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 49: Investor Relations contacts
Investor Relations contacts Filip Osadczuk Krzysztof Dragan Stanisław Ozga CFA IR and ESG Director filip.osadczuk@gkpge.pl krzysztof.dragan@gkpge.pl stanislaw.ozga@gkpge.pl Tel: (+48 22) 340 12 24 Tel: (+48 22) 340 15 13 Tel: (+48 22) 340 12 69 Mob: +48 695 501 370 Mob: +48 601 334 290 Mob: +48 887
Slide 50: Thank you
Thank you
PGE Polska Grupa Energetyczna — Q3 2023 Earnings Presentation on 6ix