Letter from the President of the Management Board

Irrespective of market conditions the TAURON Group is generating solid financial results, steadfastly implementing the assumptions of its corporate strategy. Last year the Group’s revenue reached PLN 18.4bn, while EBITDA was PLN 3.6bn, i.e. it was comparable to 2013 EBITDA



Dear investors,

I have the pleasure to present to you the TAURON Group’s Annual Report summarizing the 2014 financial results and highlights. Last year was full of important events for the entire market and ones that directly affected the TAURON Group.

In 2014 we faced adverse market conditions in the energy sector. This was reflected by a 3.7 percent drop in overall electricity production; however, in hard coal-fired generation the production decline topped 5 percent. Domestic electricity consumption was also unsatisfactory, rising only 0.5 percent. Nevertheless, last year brought significant improvement in wholesale market electricity prices that stabilized in the region of approx. PLN 180/MWh.

Irrespective of market conditions the TAURON Group is generating solid financial results, steadfastly implementing the assumptions of its corporate strategy. Last year the Group’s revenue reached PLN 18.4bn, while EBITDA was PLN 3.6bn, i.e. it was comparable to 2013 EBITDA. The increase in the EBITDA margin to approx. 20 percent is remarkable. Distribution and Supply were the key segments, collectively generating 76 percent of the Group’s EBITDA. Significant events that had a positive impact on the posted earnings include, in particular, the revenue from the Operational Capacity Reserve, savings realized through the efficiency improvement program underway and minimal costs related to CO2 emissions. On the other hand, the financial result fell, among others, following restoration of the obligation to redeem red and yellow certificates, lower electricity volumes and prices, as well as one-off events. Net profit attributable to the holding company’s shareholders was almost PLN 1.2bn in 2014, i.e. down 9.7 percent from the year before. I would like to emphasize that the company consistently shares its profits with its shareholders. In 2014 we paid a dividend of PLN 333m corresponding to 25 percent of the Group’s profit generated in 2013.

Taking note of the volatile market environment we updated our corporate strategy in June 2014. Its foundations remain unchanged, however we aligned the strategy assumptions to the European Union’s energy policy and its ambitious CO2, emission targets that, to a large extent, will determine the shape of our energy market.

The updated strategy assumes, among others, an increase of generation capacity as a result of commissioning high efficiency power generation units based on various technologies, with a total capacity of 2.2 GW. Distribution and Supply will also be important growth segments. The TAURON Group’s total CAPEX in 2014-2023 will be approx. PLN 37bn. One of the flagship investment projects is the construction of a 910 MW hard coal-fired unit at Jaworzno III Power Plant. The agreement with the contractor – the Rafako-Mostostal Warszawa consortium – was signed in April 2014. We are also implementing investment projects in other segments – among others we are continuing construction of a CCGT unit in the Stalowa Wola Combined Heat and Power Plant and a co-generation unit in Tychy. In Mining the construction of the 800 m level at Janina coal mine and of Grzegorz shaft at Sobieski coal mine is underway. TAURON is successfully acquiring funds from external sources to finance its CAPEX. Last year’s oversubscribed bond issue provided the Group with PLN 1.75bn, while strong investor interest allowed us to obtain attractive interest rates. We also acquired a loan from the European Investment Bank in the amount of approx. PLN 300m and we issued fifteen year bonds on the German market. The Group’s debt ratios continue to be at a safe level reflected by the Fitch ratings.

In parallel, we conducted a number of other corporate initiatives. We signed an agreement with ArcelorMittal on establishing the TAMEH Holding joint venture to pursue industrial power generation related tasks. We continued work to reduce minority shareholdings in our subsidiaries. Currently, in almost all subsidiaries we hold nearly 100 percent of their share capital. We conducted actions aimed at developing and maintaining good relations with customers by expanding our product portfolio, making customer service channels more efficient and running numerous promotional and educational campaigns. We expect the economy to accelerate in 2015. Forecasts indicate that the GDP growth rate will top 3 percent in subsequent quarters and the economic situation is the most important element driving electricity demand. Based on this premise we expect rising volumes in Generation, Heat and Mining. However, we are also facing challenges, including higher cost of purchasing emission allowances (carbon credits), lower revenue from the operational capacity reserve and a reduction of the return on capital in the Distribution. I would like to assure our shareholders that the Management Board of TAURON Polska Energia will do its utmost to achieve the best possible results on such a challenging market. It is worth noting that this year we will celebrate the fifth anniversary of our presence on WSE – I am confident that it will be a successful year for our shareholders.

Taking this opportunity I would like to sum up briefly our investor-related activities. Last year we held approx. 200 meetings with financial investors, analysts issued 33 recommendations, including 12 buys. Furthermore, we completed a number of initiatives focusing on retail investors, including the Individual Investor Day. The quality of our information policy has been recognized, among others, by the board of The Best Annual Report competition that awarded the company the main prize for its annual report and an honorable mention for the annual report posted on its website.

On behalf of the Management Board I would like to thank our shareholders, Members of the Supervisory Board and our employees for their commitment to attaining the TAURON Group’s strategic goals.

Yours respectfully,


Dariusz Lubera
President of the Management Board


close menu
Letter from the President of the Management Board [43KB PDF]Open
Auditor's Opinion [477KB PDF]Open
Consolidated annual report for the year 2014 [3MB PDF]Open
Standalone annual report for the year 2014 [1MB PDF]Open
Quarterly Reports 2014 [4MB ZIP]Open
Consolidated annual report for the year 2013 [4MB PDF]Open
Consolidated annual report for the year 2012 [8MB PDF]Open
FY 2014 Selected figures [24KB XLSX]Open
You can open a single file or download the selected files in ZIP format.