Enea S.A. — Earnings Release 2020

Aug 25, 2020

Current Report No.: 39/2020

Date of Preparation: 25 August 2020

Issuer's Abbreviated Name: ENEA S.A.

Subject: Information on preliminary financial and operating results forH1 2020

Legal Basis: Article 17(1) of the Market Abuse Regulation - confidentialinformation

Body of the report:

In connection with the adoption, on 25 August 2020, by the ManagementBoard of ENEA S.A. ("Company", "Issuer"), of information on preliminaryfinancial and operating results of the ENEA Group for the first half of2020, the Company hereby publishes the said preliminary results.

Consolidated financial results of the ENEA Group for H1 2020:

- Revenue from sales and other income: PLN 8,949 million,

- EBITDA: PLN 1,822 million,

- Profit (loss) before tax: PLN -10 million,

- Net profit (loss) for the reporting period: PLN -82 million,

- Net profit/(loss) attributable to shareholders of the parent company:PLN -99 million.

EBITDA in the various operating areas:

- Mining: PLN 214 million,

- Generation: PLN 872 million,

- Distribution: PLN 681 million,

- Trading: PLN 40 million.

Selected operating highlights:

- Net coal production: 3.7 million tons,

- Total net electricity generation: 10.4 TWh,

- Sales of distribution services to end users: 9.5 TWh,

- Sales of electricity and gaseous fuel to retail customers: 10.5 TWh.

The EBITDA result generated by the ENEA Group in H1 2020 was drivenlargely by the following factors (compared to H1 2019):

In the Mining Area, the segment's lower result is attributable mainly toa decrease in revenue from sales of coal (lower sales volume at a higherprice) in connection with the unfavorable oversupply of coal in themarket.

In the Generation Area, the segment's result was favorably affected bythe increase in revenue from sales of electricity (higher energy prices)and property rights, despite the negative deviation of the costs of coalwith transport and CO₂ emission allowances.

In the Distribution Area, the higher result was driven by higher marginson licensed activities (affected by, among others, a higher rate of thefixed grid charge in the approved 2020 tariff) and a higher result onother operating activities (driven mainly by changes in the provisionsfor grid assets).

In the Trading Area, the segment's result was favorably affected by theincrease in the average sales price of energy and the updated valuationof CO₂contracts. At the same time, the energy purchase prices increased(mainly due to the increase in the price of CO₂ emission allowances) andso did the costs of environmental obligations.

Standalone financial results of ENEA S.A. for H1 2020:

- Revenue from sales and other income: PLN 3,051 million,

- EBITDA: PLN -64 million,

- Profit (loss) before tax: PLN -411 million,

- Net profit (loss) for the reporting period: PLN -374 million.

The preliminary results take into account the impact of the impairmentallowance recognized for shares in ENEA Wytwarzanie Sp. z o.o. and animpairment allowance recognized generating assets of the ENEAWytwarzanie Sp. z o.o. subsidiary, as well as the impact of impairmentallowances related to the loan granted, as well as ENEA S.A.'scommitment to ENERGA S.A. to refund half of the loans with interest,which were granted by that entity to Elektrownia Ostrołęka Sp. z o.o.and the recognition of a provision for future investment commitments toElektrownia Ostrołęka Sp. z o.o. and ENERGA S.A in the standalonestatements of ENEA S.A and in the consolidated financial statements ofthe ENEA Group in accordance with Current Report No. 36/2020 of 11August 2020.

These events affected the standalone financial statements of ENEA S.A.by reducing the Company's pre-tax profit and net profit for thereporting period by approx. PLN 674 million.

These events affected the consolidated financial statements of the ENEAGroup by reducing the its pre-tax profit by approx. PLN 879 million andnet profit for the reporting period by approx. PLN 779 million.

The events described above are non-cash items and therefore have noimpact on either the consolidated or standalone EBITDA for the reportingperiod.

The final results will be presented in the consolidated financialstatements of the ENEA Group and the standalone financial statements ofENEA S.A. for H1 2020, the publication of which is scheduled for 3September 2020.

Please note that the term EBITDA is defined as the value of operatingprofit (loss) + depreciation and amortization + impairment losses onnon-financial non-current assets (values for the reporting period).EBITDA is a standard measure of the effectiveness of a business, inparticular for the industry in which the Issuer's Group operates. Theabove definition and methodology for its calculation are the same asthose for the calculation of this indicator in the Issuer's periodicreports. The definition in question is also provided in the glossary ofterms and abbreviations available on the Company's website(https://ir.enea.pl/slownik).