The Distribution Segment reported a 4% sales revenue increase, while EBIT and EBITDA went up by, respectively, 29% and 16% in 2020, as compared to 2019.
The changes to the results posted were affected by the following factors:
- an increase of the average rate for the distribution service sales to the final consumers,
- a decline of the total electricity delivery by 1,464 GWh, including to the final consumers by 1,381 GWh, first of all in the B and C tariff groups, as a result of the economic slowdown and the visible impact of the COVID-19 pandemic on the economy,
- higher costs of purchasing the transmission and distribution services,
- an increase of the other revenue from the distribution operations, i.e. due to the passive energy off-take exceeding the contractual connection capacity (power) and the grid connection fees,
- an increase of the costs of purchasing electricity to cover the balancing difference as a result of the higher volume, the higher purchase price,
- dissolution, in 2020, of the provision for the payment of the equivalent for electricity,
- a rise of the other fixed costs, including the labor costs as a result of the wages agreements signed, as well as an increase in the benefits in connection with the applicable regulations and the costs of the taxes on the grid assets due to the increase of the value of the assets as a result of the investment projects conducted.
Distribution Segment’s 2019-2020 financial data
Export to Excel| Item (PLN ‘000) | 2019 | 2020 | Dynamics (2020/2019) | Change (2020-2019) |
|---|---|---|---|---|
| Sales revenue | 6,594,864 | 6,866,354 | 104% | 271,490 |
| distribution and trading services | 6,299,847 | 6,577,492 | 104% | 277,645 |
| grid connection fees | 80,885 | 83,319 | 103% | 2,434 |
| revenue due for fixing power line collisions | 45,058 | 37,446 | 83% | (7,612) |
| other revenue (rent, goods and materials, construction and assembly services) | 169,074 | 168,097 | 99% | (977) |
| EBIT | 1,443,741 | 1,857,009 | 129% | 413,268 |
| Depreciation and write-downs | 1,162,067 | 1,165,997 | 100% | 3,930 |
| EBITDA | 2,605,808 | 3,023,006 | 116% | 417,198 |
Distribution Segment’s 2019-2020 financial data
Distribution Segment’s EBITDA along with significant factors affecting the change y/y
Major investments (CAPEX)
The Distribution Segment’s total capital expenditures came in at PLN 1,908 million in 2020. The main CAPEX directions included:
- PLN 924 million on the investment projects related to connecting new consumers to the grid,
- PLN 827 million on the investment projects related to the grid upgrades (refurbishments) and replacements,
- PLN 52 million for the construction of a dispatcher communications system.
In addition, the expenditures in the total amount of approx. PLN 103 million were also incurred on: communications and IT, buildings and structures, means of transportation, in 2020.
CURRENT AND FORECAST FINANCIAL AND ASSETS SITUATION
In the Distribution Segment, the level of remuneration (return) on the invested capital and the cost efficiency improvement measures undertaken will play a key role in impacting the operating result. The updating of the regulatory model will have a significant impact on the results in the coming years, and in particular the update of the parameters used to determine the weighted average cost of capital, the correction factor used to determine the justified operating expenses and the balancing difference factors used to determine the justified volume of the balancing difference. Undoubtedly, the financial situation of the enterprise will also be affected by the government actions related to supporting the development of the renewable sources and the local energy communities, curbing the emissions of harmful substances to the atmosphere and developing the infrastructure for charging electric vehicles.
