Enea S.A. — Earnings Release 2020

Mar 12, 2021

Current Report No.: 8/2021

Date of Preparation: 12 March 2021

Issuer's Abbreviated Name: ENEA S.A.

Subject: Information on preliminary financial and operating results for2020

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

Body of the report:

In connection with the adoption, on 12 March 2021, by the ManagementBoard of ENEA S.A. ("Company", "Issuer"), of information on preliminaryfinancial and operating results of the ENEA Group for 2020, the Companyhereby publishes the said preliminary results.

Consolidated financial results of the ENEA Group for 2020:

- Revenue from sales and other income: PLN 18,195 million,

- EBITDA: PLN 3,302 million,

- Profit (loss) before tax: PLN -2,604 million,

- Net profit (loss) for the reporting period: PLN -2,234 million;

- Net profit/(loss) attributable to shareholders of the parent company:PLN -2,268 million.

EBITDA in the various operating areas:

- Mining: PLN 470 million,

- Generation: PLN 1,530 million,

- Distribution: PLN 1,313 million,

- Trading: PLN -15 million.

Selected operating highlights:

- Net coal production: 7.6 million tons,

- Total net electricity generation: 22.5 TWh,

- Sales of distribution services to end users: 19.4 TWh,

- Sales of electricity and gaseous fuel to retail customers: 21.1 TWh.

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

In the Mining Area, the segment's lower result is attributable mainly toa decrease in revenue from sales of coal (lower sales volume offset to acertain degree by the higher selling price) in connection with theunfavorable oversupply of coal in the market, with a simultaneousdecrease in employee benefit costs due to the subsidy obtained fromanti-crisis shield.

In the Generation Area, a significant decrease in EBITDA was recorded inthe System Power Plants Segment, driven down by the absence of a factorsuch as the reversal of the provision for the acquisition of theSkoczykłody wind farm in 2019 and a decrease in the margin on generationcoupled with a simultaneous increase in the margin on trading and theBalancing Market. In the Heat Segment and the RES Segment, an increasein EBITDA was recorded.

In the Distribution Area, the increase in EBITDA was driven by highermargins on licensed activities (affected by, among others, a higher rateof the fixed and variable grid charge in the approved 2020 tariff andhigher revenues from grid connection fees) as well as a better result onother operating activities (driven mainly by changes in the provisionsfor grid assets and higher revenue from contractual penalties andindemnities).

In the Trading Area, the segment's result was favorably affected by theincrease in the average sales price of energy and the updated valuationof CO₂ contracts. 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.

Consolidated financial results of the ENEA Group for Q4 2020:

- Revenue from sales and other income: PLN 4,731 million,

- EBITDA: PLN 667 million,

- Profit (loss) before tax: PLN -2,694 million,

- Net profit (loss) for the reporting period: PLN -2,191 million;

- Net profit/(loss) attributable to shareholders of the parent company:PLN -2,206 million.

EBITDA in the various operating areas:

- Mining: PLN 145 million,

- Generation: PLN 321 million,

- Distribution: PLN 319 million,

- Trading: PLN -74 million.

Selected operating highlights:

- Net coal production: 2.1 million tons,

- Total net electricity generation: 5.6 TWh,

- Sales of distribution services to end users: 5.1 TWh,

- Sales of electricity and gaseous fuel to retail customers: 5.5 TWh.

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

- Revenue from sales and other income: PLN 6,191 million,

- EBITDA: PLN -186 million,

- Profit (loss) before tax: PLN -3,398 million,

- Net profit (loss) for the reporting period: PLN -3,357 million.

These preliminary results take into account the impact of the impairmentallowances recognized on shares in and generating assets of ENEAWytwarzanie Sp. z o.o., as was disclosed by the Issuer in Current ReportNo. 7/2021 of 25 February 2021. The key factors affecting the impairmentallowances resulted from changes in the market prices of CO₂ emissionallowances, electricity, energy origin certificates and forecasts ofmacroeconomic indicators.

The final results will be presented in the consolidated financialstatements of the ENEA Group and the standalone financial statements ofENEA S.A. for 2020, the publication of which is scheduled for 25 March2021.

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 efficiency of a business activity, inparticular for the industry in which the Issuer's Group operates. Theabove definition and methodology for its calculation are the same asthose used to calculate this indicator in the Issuer's periodic reports.The definition above is also included in the glossary of terms andabbreviations available on the Company's website(https://ir.enea.pl/slownik).