INITIAL SELECTED CONSOLIDATED FINANCIAL RESULTS FOR NINE MONTHS OF 2022

The Management Board of company operating under the business name Polenergia S.A. with its registered office in Warsaw, Poland (“Issuer”) hereby publicly announces selected initial and estimated consolidated financial results of the Capital Group of Polenergia S.A. (‘Group’) for nine months of 2022.

The Group’s results accomplished in the period of nine months ended on 30 September 2022 (in particular in the second and third quarter) were affected by the unprecedented scale of variability of electric energy and natural gas prices, as well as the difficult situation of the electric power systems in Europe. It resulted, among others, in a significant increase of the cost of profile, negatively affecting the revenues from sale of electric energy from wind farms and photovoltaic farms and the result on sale of electric energy to recipients.

In the course of nine months ended on 30 September 2022, the adjusted EBITDA of the Group was PLN 244.3 million and was lower by PLN 38.0 million as compared to the result in an analogous period of the previous year. This was primarily caused by:

– lower result on optimisation of work of the Nowa Sarzyna CHP Plant (“NSP”) in 2022 (which positively affected the result in 2021);

– lower result on sale of electric energy from the RES assets (owned by the Group and external ones) in consequence of a significant growth in the cost of profile and volume divergences of asset production from the sale hedging position;

– the effects above were partially compensated by a higher result in the segment of onshore wind and photovoltaic farms caused by a higher volume of production related to better wind conditions in the first quarter of 2022 and an increase in the generating capacity as compared to the analogous period of the previous year.

The adjusted EBITDA result in the third quarter of 2022 reached PLN 33.0 million and was lower by PLN 62.1 million as compared to the result in the analogous period of the previous year. This was primarily caused by:

– lower result on sale of electric energy from the RES assets (owned by the Group and external ones) in consequence of a significant growth in the cost of profile and volume divergences of asset production from the sale hedging position;

– lower result on sale of energy to recipients in consequence of a significant growth of the cost of profile of recipients and volume divergences from positions hedging the expected consumption;

– lower result on the optimisation of the operation of the NSP (in relation to the lack of favourable market conditions) which positively affected the result in the analogous period in 2021,

– the effects above were partially compensated by a higher result in the segment of onshore wind and photovoltaic farms caused by an increase in the generating capacity as compared to the analogous period of the previous year.

In the period of three quarters of 2022, the adjusted net profit of the Group was PLN 107.7 million, which is a drop as compared to the result in the analogous period of the previous year by PLN 41.0 million. Only in the third quarter of 2022, the adjusted net profit of the Group was -PLN 11.3 million, which is a drop as compared to the analogous period of the previous year by PLN 65.0 million. The drop of the adjusted net profit in the period of three quarters of 2022 and in the third quarter of 2022 only was primarily caused by the factors described above, affecting the adjusted EBITDA, higher amortisation resulting from an increase in the generating capacity and a significant growth in financial costs caused by a growth of the generating capacity, higher interest rates and higher use of the instruments financing hedging deposits for transactions entered on the regulated market and settlements with clients.

The presented values are estimates and may change. The final consolidated results will be presented in detail in the consolidated quarterly report of the Group for the third quarter of 2022; its publication is scheduled for 23 November 2023.

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 as amended).