Enea S.A. — Earnings Release 2023

Nov 17, 2023

Current Report No.: 40/2023

Date of Preparation: 17 November 2023

Issuer's Abbreviated Name: ENEA S.A.

Subject: Information on preliminary financial and operating results forQ1-Q3 2023

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

Body of the report:

In connection with the adoption of information on preliminary financialand operating results of the ENEA Group for Q1-Q3 2023 by the ManagementBoard of ENEA S.A. ("Company", "Issuer") on 17 November 2023, theCompany hereby publishes the said preliminary results.

Consolidated financial results of the ENEA Group for Q1-Q3 2023:

- Revenue from sales and other income: PLN 35,903 million,

- EBITDA: PLN 3,440 million,

- Profit before tax: PLN 776 million,

- Net profit for the reporting period: PLN 662 million,

- Net profit attributable to shareholders of the parent company: PLN 558million,

- Capital expenditures on property, plant and equipment and intangibleassets: PLN 2,098 million,

- Net debt / EBITDA ratio: 0.48.

EBITDA in the distinct operating areas:

- Mining: PLN 674 million,

- Generation: PLN 1,740 million,

- Distribution: PLN 1,309 million,

- Trading: PLN -67 million.

Selected operating highlights:

- Net coal production: 4.6 million tons,

- Total net electricity generation: 16.0 TWh, of which 1.6 TWh from RES,

- Sales of distribution services to end users: 14.9 TWh,

- Sales of electricity and gaseous fuel to retail customers: 17.0 TWh.

On account of the application of settlements with eligible offtakerspursuant to the Act of 7 October 2022 on special solutions to protectelectricity offtakers in 2023 in connection with the situation on theelectricity market and on account of the application of the maximumprice in accordance with the Act of 27 October 2022 on emergencymeasures to reduce electricity prices and support certain consumers in2023, the ENEA Group recognized compensation revenues in the totalamount of PLN 3,010 million in the period of Q1-Q3 2023 and PLN 895million in Q3 2023.

ENEA Group companies are obliged to transfer charges to the PriceDifference Fund pursuant to Article 21 of the Act of 27 October 2022 onemergency measures to reduce electricity prices and support certainconsumers in 2023 - as electricity producers and as energy companiesengaged in electricity trading business. The ENEA Group recognized thecost of charges to the Price Difference Fund in the amount of PLN 2,203million in the period of Q1-Q3 2023 and in the amount of PLN 621 millionfor Q3 2023.

The EBITDA result generated by the ENEA Group in Q1-Q3 2023 was drivenlargely by the following factors (compared to Q1-Q3 2022):

In the Mining Area, the decrease in EBITDA was caused primarily by adecline in the coal sales volume and an increase in operating expenses(an increase in the unit mining cost). Despite the decline in theproduction and sales volumes, higher revenue from sales of coal wasrecorded due to the higher realized sales price.

In the Generation Area, EBITDA increased in the System Power PlantsSegment (mainly due to the lower base in the corresponding period of theprevious year (as a result of the provision for onerous contractsrecognized in Q1-Q3 2022)) and an increase in the unit generationmargin, the repurchase and Balancing Market margin, while a new costitem was added, namely costs of a charge for the Price Difference Fund),and in the RES Segment (mainly due to the lower base in thecorresponding period of the previous year (as a result of the provisionfor onerous contracts recognized in Q1-Q3 2022) and higher electricityprices; at the same time, the cost of biomass increased and costs of acharge for the Price Difference Fund were recognized). At the same time,there was a decrease in EBITDA in the Heat Segment (mainly a decrease inthe unit margin on heat, an increase in fixed costs and recognition ofcosts of the charge for the Price Difference Fund).

In the Distribution Area, the higher EBITDA is mainly due to the highermargin realized from the concession business, with simultaneous increasein operating expenses.

In the Trading Area, the lower EBITDA was mainly due to a decrease inthe margin on the retail market. At the same time, compensation incomewas recognized, the use of provisions related to onerous contracts wasrecorded as well as lower provisions for expected losses and potentialclaims.

Consolidated financial results of the ENEA Group for Q3 2023:

- Revenue from sales and other income: PLN 11,881 million,

- EBITDA: PLN 1,124 million,

- Profit before tax: PLN 899 million,

- Net profit for the reporting period: PLN 716 million,

- Net profit attributable to shareholders of the parent company: PLN 703million,

- Capital expenditures on property, plant and equipment and intangibleassets: PLN 897 million,

- Net debt / EBITDA ratio: 0.48.

EBITDA in the distinct operating areas:

- Mining: PLN 151 million,

- Generation: PLN 673 million,

- Distribution: PLN 450 million,

- Trading: PLN -138 million.

Selected operating highlights:

- Net coal production: 1.3 million tons,

- Total net electricity generation: 5.4 TWh, of which 0.6 TWh from RES,

- Sales of distribution services to end users: 4.8 TWh,

- Sales of electricity and gaseous fuel to retail customers: 5.4 TWh.

The preliminary results take into account the provision related to theintroduction of a mechanism for reducing the amounts payable byhouseholds to electricity trading companies for 2023, in the amount ofapprox. PLN 264 million, on which the Issuer reported in its currentreport no. 39/2023 of 20 October 2023.

Standalone financial results of ENEA S.A. for Q1-Q3 2023:

- Revenue from sales and other income: PLN 14,796 million,

- EBITDA: PLN -308 million,

- Profit before tax: PLN 259 million,

- Net profit for the reporting period: PLN 289 million.

The Company reports that the foregoing figures are estimates and as suchare subject to change, and that their final amounts will be presented inthe periodic report of the ENEA Group for Q3 2023, which is expected tobe published on 22 November 2023.

The Company clarifies that the term EBITDA is defined as the value ofoperating profit (loss) + depreciation and amortization + impairmentlosses on non-financial non-current assets (values for the reportingperiod). The Net debt / EBITDA ratio is equal to (loans, borrowings andnon-current and current debt securities + non-current and currentfinance lease liabilities + non-current and current financialliabilities measured at fair value - cash and cash equivalents -non-current and current financial assets measured at fair value -non-current and current debt financial assets measured at amortized cost- other short-term investments) / EBITDA LTM. EBITDA LTM means EBITDAfor the last 12 months.

The above definitions and calculation methodologies are the same asthose used to calculate these ratios in the Issuer's periodic reports.The definitions of these terms are also included in the glossary ofterms and abbreviations available on the Company's website(https://ir.enea.pl/slownik).