Selected financial data
In 2014 TAURON Group posted sales revenue of PLN 18.4bn, i.e. a 3.6 percent drop year on year. The declining revenue was first of all the consequence of declining electricity supply volumes, lower electricity sales prices and falling volumes of hard coal sales outside the Group.
Higher revenues were posted by the following segments: RES (up 37 percent), Customer Service (up 24 percent), Distribution (up 1 percent) and Heat (up 1 percent). On the other hand, the following segments reported declining sales revenues: Mining (due to the challenging situation on the hard coal market and lower hard coal market prices), Generation (due to lower prices and falling volumes of generated electricity sales) and Supply (due to lower volumes and prices).
In this challenging market environment the TAURON Group generated EBITDA of more than PLN 3.6bn (only 0.9 percent lower than in 2013). Extremely important for maintaining stable EBITDA was the effective commercial strategy and the steadfast implementation of the operational efficiency improvement program. Savings generated last year reached approx. PLN 400m ensuing from the implemented cost optimization programs. As a consequence, the 2014 EBITDA margin rose to 19.7 percent from 19.1 percent a year ago. Invariably, the Distribution and Supply lines of business continue to be the largest contributors to the Group’s EBITDA (76 percent in total).
Net profit attributable to the shareholders of the parent company was almost PLN 1.2bn in 2014, some 9.7 percent lower than a year ago. 2014 earnings were adversely affected by higher financial costs incurred in conjunction with the higher debt level related to the CAPEX projects underway, as well as provisions and impairment charges, with the largest component thereof being an increase of the provision for employee benefits. Due to the systematic process of buying out minority shareholders, including the acquisition of a 47.5 percent stake in TAURON Wydobycie (Mining) from Kompania Węglowa, the profit attributable to majority shareholders has risen. Currently, almost the entire net profit generated by the Group is attributable to shareholders of TAURON Polska Energia.
In 2014 TAURON Group’s CAPEX topped PLN 3bn, down by 18.3 percent since 2013. The declining CAPEX was due to commissioning a number of projects in 2013 and the postponement of the construction of a 910 MW unit in the Jaworzno III Power Plant.
The TAURON Group is undertaking an extensive CAPEX program. It encompasses the Generation, Heat and Mining as well as Distribution segments. The Group’s largest project is the construction of a 910 MW hard coal fired unit at Jaworzno III Power Plant. Earthworks related to the foundations of the main building of the boiler room, machine room and cooling tower were commenced in March 2015.
The total planned capital expenditures on the unit’s construction are approx. PLN 6.2bn. The unit will be commissioned in 2019 and is slated to generate approx. 6 TWh of electricity per annum.
During the 2014-2023 period the TAURON Group’s capital expenditures will be approx. PLN 37bn, including roughly PLN 29bn to be spent by 2020. Total estimated investment outlays in the Distribution segment will be approx. PLN 21bn. The second key investment area is the Generation segment where generation capacity in the region of approx. 2 200 MW is planned to be commissioned.
At the end of 2014 the TAURON Group’s financial debt was approximately PLN 8.1bn, including PLN 6.8bn in bonds and PLN 1.1bn in loans from the European Investment Bank. On account of the Group’s stable financial standing, its debt’s interest rates are very favorable. At the end of 2014 the net debt/EBITDA ratio was at a safe level of 1.85, while the financing available was approx. PLN 3.5bn.