Enea S.A. — Earnings Release 2018

Nov 8, 2018

Current Report No: 59/2018

Date of preparation: 8 November 2018

Short name of issuer: ENEA S.A.

Subject: Information on preliminary financial results for Q1-Q3 2018

Legal basis: Article 17 item 1 of MAR - confidential information

Content of report:

In relation to the information obtained by the Management Board of ENEAS.A. ("Company") on 8 November 2018 concerning preliminary financialresults and operating data of ENEA Capital Group for Q1-Q3 2018, theCompany hereby makes public the preliminary results, as presentedhereinbelow.

Consolidated financial results of ENEA Capital Group for Q1-Q3 2018:

Net sales revenue: PLN 9,384 million

EBITDA: PLN 1,973 million

EBIT: PLN 920 million

Net profit: PLN 620 million

Net profit attributable to shareholders of the Parent: PLN 584 million

EBITDA in individual areas of operations:

Trading: PLN 38 million

Distribution: PLN 872 million

Generation: PLN 663 million

Mining: PLN 400 million

Selected operating data:

Net coal production: 6.82 million tonnes

Net total generation of electricity: 19.94 TWh

Sales of distribution services to end users: 14.935 TWh

Sales of electricity and gaseous fuel to retail customers: 15.862 TWh

The preliminary EBITDA generated by ENEA Capital Group in Q1-Q3 2018 wasaffected by the following events:

- Trading Area - throughout the entire 2018, the most important for theretail trade was the fact that the increased volume and higher prices ofelectricity sold to end users did not compensate for the rising costs ofenvironmental obligations and of electricity purchase; the wholesaletrade remained under pressure to growing price of CO2 emissionallowances;

- Distribution Area - the stable result generated in this area wastraditionally supported by an increase in the volume of sales ofdistribution services; in the reported period, the result of otheroperating activities improved mainly due to the compensations received,lower provisions for grid assets and higher revenues from gratuitouslyacquired non-current assets as a result of rectifying conflicts on gridassets;

- Generation Area - the result was affected by a number of factors:

a)conventional generation: in addition to the increased generationcapacity as compared to 2017, a number of limitations in theavailability of generation units related to planned overhauls, upgradeworks related to the adaptation of units to the BAT conclusions,warranty inspections, about which the Issuer also informed in previousquarters of 2018, the result of the area remained under pressure fromthe market conditions concerning electricity trading, rising variableproduction costs (primarily with respect to the prices of power coal,the cost of transport thereof and the prices of CO2 emissionallowances), with the decreasing number of free carbon dioxide emissionallowances not being without significance;

b)throughout the entire 2018, generation based on renewable energysources posted higher results than in the corresponding period of 2017,which was most significantly influenced by growing revenues from thesale of electricity backed by higher prices of green certificates;

- Mining Area - after the difficulties experienced in the first quarter,the subsequent periods, on the back of the stabilization of theproduction level and the increased sales price, helped restore theresults to the level recorded in the corresponding period of 2017.

Non-consolidated financial results of ENEA S.A. for Q1-Q3 2018:

Net sales revenue: PLN 3,423 million

EBITDA: PLN - 18 million

EBIT: PLN - 19 million

Net profit: PLN 712 million

The non-consolidated net financial result generated by ENEA S.A. inQ1-Q3 2018 was mostly affected by two factors:

- the negative result on operating activities related to the sale ofelectricity to end users, where the increase in the volume and prices ofelectricity sales did not compensate for significant cost hikes inrelation to environmental obligations and electricity prices on thewholesale market;

- the positive result on financial activities being the effect of thestable activity of subsidiaries belonging to ENEA Capital Group.

At the same time, the Issuer hereby informs that, as a result of IFRS 15implementation, the effects of contracts, for which Companies belongingto ENEA Capital Group serve as agents, are recognised in revenues in netvalues, which significantly reduces the relevant income and expenseitems as compared to the corresponding period of the previous year, butdoes not affect the operating results of the individual Companies.

The final results will be published in the extended consolidatedquarterly report of ENEA Capital Group for Q3 2018, which is scheduledto be released on 23 November 2018.