PGE first-quarter net profit falls nearly 20%

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Poland's biggest utility PGE GPW:PGE reported lower first-quarter net profit as weaker power sales margins and higher carbon emission costs outweighed stronger heating demand and output from new gas units.The company said net profit fell by nearly a fifth from a year earlier, while retail margin earnings from electricity sales dropped to 234 million zlotys ($64 million) from 621 million zlotys as caps on household tariffs stopped it from fully passing on higher wholesale power costs.• The state-controlled company's net profit fell to 1.94 billion zlotys from 2.42 billion zlotys reported a year earlier• Reported earnings before interest, taxes, depreciation and amortisation (EBITDA) dropped 5% to 4.08 billion zlotys• PGE's net electricity generation grew 3% to 16.49 terawatt hours, driven by lower outdoor temperatures that boosted heat generation by 13%• Lower wholesale and retail electricity sales margins heavily weighed on the results, particularly in the supply segment, where core profit fell 51% to 365 million zlotys• Rising emission costs also pressured earnings. In the district heating segment, CO2 costs surged by 203 million zlotys to 1.05 billion zlotys due to a 14% increase in emissions• The coal energy segment saw its core profit fall 39% to 249 million zlotys, hit by a 344 million zlotys negative change in provisions for onerous contracts and lower lignite output($1 = 3.6434 zlotys)

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