TAURON Polska Energia (TPE) Q3 2024 earnings summary

Executive summary

• Focus on client-centric initiatives, digitalization, and renewable energy contracts, with 70,000 nine-year price-guaranteed, 100% renewable contracts signed for 2024.

• Special low-price energy offer provided to 80,000 flood-affected households.

• New strategy to be presented on December 17, covering dividend policy, sustainability, and future transformation.

• Significant progress in RES (renewable energy sources) expansion, with multiple wind and photovoltaic projects commissioned or underway.

• For the nine months ended 30 September 2024, reported a net loss of PLN 207 million, compared to a net profit of PLN 2,263 million year-over-year, driven by lower electricity prices, reduced demand, and significant impairment losses.

Financial highlights

• Revenue for the first three quarters dropped by nearly 30% year-over-year to PLN 23,030 million, mainly due to market price normalization and lower sales volume.

• EBITDA for the period was PLN 4,606 million, down from PLN 5,471 million year-over-year, but exceeded market consensus.

• Adjusted for one-off events and provisions, EBITDA would be close to PLN 1.5 billion, up 26% year-on-year.

• Net loss of PLN 207 million for the nine months ended 30 September 2024.

• CAPEX increased, with focus on Distribution and RES segments.

Outlook and guidance

• New strategy and dividend policy to be unveiled on December 17, emphasizing sustainability and market leadership.

• Power market auctions expected in Q1 or first half of next year, with focus on maintaining coal units only if economically viable.

• Ongoing transformation towards renewables and grid modernization, with significant investments planned.

• The Group expects a loss on electricity sales to G tariff group customers in Q4 2024, estimated at PLN 205 million, but anticipates full compensation in 2025 revenues, assuming no legislative changes.

• Ongoing pursuit of National Recovery Plan funding for Distribution segment.