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35/2021 POL: INITIAL SELECTED CONSOLIDATED FINANCIAL RESULTS FOR FIRST HALF 2021

2021-08-02

The Management Board of Polenergia S.A. (“Issuer”) hereby announces publicly selected, initial, estimated and consolidated financial results for the first half of 2021.

In the first half-year of 2021, the adjusted EBITDA result of the Polenergia Group (“Group”) reached PLN 187.2 million and was higher by PLN 39.4 million as compared to the result in the analogous period of the previous year. This was primarily the outcome of a higher result in the segment of gas and clean fuels (by PLN 55.4 million) and in the segment or trade and sale (by PLN 18.4 million) in relation to the optimisation of operation of the Nowa Sarzyna Combined Heat and Power Plant (“CHP Plant”) in line with the provisions of the Agreement on Provision of Portfolio Management Services and Sale of Electricity, Gas Fuels and Emission Allowances (“SLA”). The higher result was partially compensated by a lower result in the segment of onshore wind farms (by PLN 32.6 million) caused by a lower level of production resulting from lower windiness.

In the first half of 2021, the Group's adjusted net profit was at PLN 95.1 million, which is an increase by PN 26.1 million as compared to the result in the analogous period of the previous year.

The adjusted EBITDA result in the second quarter of 2021 reached PLN 111.5 million and was higher by PLN 57.8 million as compared to the result in the analogous period of the previous year. This was primarily caused by a higher result in the segment of gas and clean fuels (by PLN 44.8 million) and in the segment or trade and sale (by PLN 15.2 million) in relation to the optimisation of operation of the CHP Plant in line with the provisions of the SLA.

In the second quarter of 2021, the Group's adjusted net profit was at PLN 60.8 million, which is an increase by PLN 42.9 million as compared to the result in the analogous period of the previous year.

A significant factor affecting the results of the first half of 2021 and the second quarter of 2021 was commencement of the process of “reversing” the futures hedging the CHP Plant’s production and sale in the third and fourth quarter of 2021 and in the first quarter of 2022 as part of the process of optimising the operation of the CHP Plant. Changes in the level of margin resulting from changes in price levels of electricity, gas and CO2 emission allowances related to production of electricity in the CHP Plant, the so-called “Clean Spark Spread” (“CSS”) allowed for deciding about limiting the planned production and gradual closing of the items on the futures market for the aforementioned periods. In consequence, valuation of relevant financial instruments was carried out in compliance with IFRS 9 resulting in a diagnosis of the result of the second quarter of 2021 on the level of the Group in the amount of PLN 51.7 million, which comprises: (i) result on the forecast CHP Plant’s production for the aforementioned period to which the concluded futures referred (PLN 18.5 million) - it is a time shift, and (ii) impact of additional optimisation and beneficial changes in the CSS (at the end of June, the CSS was negative) in the amount of PLN 33.2 million. The effect of these actions is presented in the segment of trade and sale (PLN 13.9 million) and in the segment of gas and clean fuels (PLN 37.8 million).

The presented values are estimates and may change. The final results will be presented in detail in the mid-year abbreviated consolidated financial statements of Polenergia S.A. Capital Group for the first half of 2021, the publication of which was scheduled for 11 August 2021.

Legal basis: Art. 17(1) of Regulation of the European Parliament and Council (EU) No. 596/2014 on market abuse and repealing Directive 2003/6/EC of the European Parliament and Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (Journal of Laws of the European Union L of 2014, No. 173, p. 1)