A state of epidemic caused by the SARS-Cov-2 coronavirus was introduced in Poland in March 2020. The virus and its effects as well as the effects of actions taken by the state to combat the pandemic have had influence over the condition of the domestic economy, also in 2021. Following the end of another wave of Covid and the implementation of a mass vaccination program, most of the economic restrictions were lifted, which resulted in a clear rebound in macroeconomic indicators. The effects of this affected ENEA Group in the following ways:
- Higher demand for coal is visible in the Mining segment (approx. 31% in comparison with the same period of 2020). The COVID-19 pandemic did not have as much impact on the activities of Lubelski Węgiel Bogdanka until the date on which these consolidated financial statements were prepared as it had had in 2020. Additionally, thanks to the crew’s intensive efforts and the optimisation of longwall structuring and scheduling, aimed at the optimal use of production capacities, during a period of higher demand for coal, it was possible to achieve record-breaking production results, which translated into improved financial results in 2021.
- In the Trade segment, the total electricity and gas fuel sales volumes went up in 2021 by 3 393 GWh, or 16%, in comparison with 2020. This growth was mainly driven by electricity sales in the business customer segment. In the business customer segment, the volume of electricity sales went up by 3 101 GWh, i.e. 21%, and was caused by a higher contracting level for 2021 than in the preceding year. Electricity sales volume in the household segment grew by 56 GWh, i.e. 1%. The volume of gas fuel sales also increased on a year-to-year basis (by 236 GWh, or 18%). Total revenue from the sale of electricity and gas fuel sales went up in 2021 by PLN 1 055 million, i.e. 17%. Revenue increased in both the business and household customers segments (by 20% and 7%, respectively).
- Electricity output in the Generation segment in 2021 was 17% higher than in 2020. This translates into higher revenue in this segment (by approx. 21% y/y).
- In the Distribution segment, the Group recorded higher sales of distribution services to end customers in 2021 by 5% on a y/y basis, mainly driven by higher sales in tariff groups B and G.
- From the onset of the pandemic, the Company has been regularly carrying out additional analyses of the COVID-19 pandemic’s potential impact on receivables impairment. Expected losses are verified on the basis of these analyses. The level of this additional impairment loss – from the start of these analyses – is negligible from a reporting viewpoint, nonetheless the Group assesses that if restrictions related to the COVID-19 pandemic are maintained and thus economic activity is further reduced, the receivables turnover ratio might deteriorate given a reduced payment capacity on the part of electricity customers.
- Due to work being re-organised and because of enhanced safety measures mandated by the state of epidemic and a temporary unavailability of contractors, the Group sees a risk of delays in completing scheduled repairs and modernisations of generation assets, including adaptations to BAT conclusions. The effects of this risk materialising would be visible over time and depend on the current market conditions, among other factors.
At the date on which these consolidated financial statements were prepared, it is difficult to predict how the situation will develop in 2022 and what the potential negative effects for the Parent’s and the Group’s operating and financing activities will be in the future. Another wave of the virus may cause restrictions to be reinstated and economic activity to slow down. The Group is taking preventive action to reduce this type of risk.
A crisis and coordination command, appointed by the Management Board, is operating at ENEA S.A., and all Group companies have appointed teams that coordinate tasks related to ensuring the continuity of ENEA Group companies’ operations in the context of the coronavirus threat. The Management Board of ENEA S.A. is coordinating all activities in this area through the crisis coordination command. The command and teams engage in activities intended to protect the health of employees by providing personal protective equipment (face masks, anti-microbial gels, gloves), implementing safe work rules (including introducing, wherever possible, remote work, limited direct meetings in the workplace, disinfection of rooms, introducing a limit on the number of employees in a room, maintaining safe distances between employees). The precautions taken in order to prevent the spread of the coronavirus have an impact on operating costs, which together with changes in revenue will ultimately affect the consolidated net result.
At the date on which these consolidated financial statements were prepared, the Group sees no going-concern risk.