Electrica Regs Regulatory News (ELSA)

Summary of the IFRS-EU Consolidated Results for H1 2024

Growth of EBIDTA at consolidated level in H1 2024, up to RON 614.7 mn., and a net profit at consolidated level of RON 102.1 mn..

The evolution of the main indicators for 2024:

§ EBITDA - RON 614.7 mn., an increase of RON 35.0 mn. (6%) compared to H1 2023;

§ Operating income - RON 4,720.3 mn., a decrease of 29.4% compared to H1 2023;

§ Net result - net profit of RON 102.1 mn., a decrease of RON 40.3 mn. compared to H1 2023;

§ CAPEX PIF (commissioned) - RON 199.2 mn., a slight decrease of 6.2% compared to RON 212.4 mn. in the first 6 months of 2023.

Declaration from Chirita Alexandru-Aurelian, CEO of Electrica S.A.:

"In the first half of the year, the Electrica Group recorded a 6% increase in EBITDA compared to the first semester of 2023, as a result of solid strategies aimed at optimizing operations, particularly in the distribution segment, where revenues increased by 15%, supported by higher regulated tariffs and the growth of distributed electricity volumes. Operational profit remains similar to that of the first semester of 2023; however, net profit recorded a decline due to the unfavourable dynamics of the supply market.

We remain focused on our key priorities, investing in the modernization of the distribution infrastructure while maintaining a strong focus on implementing measures aimed at stabilizing results and generating sustainable long-term growth."

Analysis of the consolidated financial indicators

The main results presented below are extracted from the condensed consolidated interim financial statements as at and for the six-month period ended 30 June 2024 prepared in accordance with IFRS-EU:

*Amounts are rounded to the nearest whole value

** The values are restated - see note 5 of the simplified consolidated interim financial statements

Source: Electrica

In the first six months of 2024, EBITDA at Electrica Group level increased by 6%, respectively by RON 35.0 mn., reaching a value of RON 614.7 mn., compared to the value of RON 579.7 mn. achieved in the first six months of 2023. The EBITDA growth was mainly driven by the operational performance of the distribution segment on the back of the increase in electricity distribution revenues by approximately RON 292.0 mn., (or 15.0%), to RON 2,244.4 mn. from RON 1,952.4 mn. in 2023.

The operating profit registered is kept at the same level compared to the same period of the previous year at a value of RON 322.8 mn. in 2024, respectively RON 322.5 mn. in 2023.

The net result of the Electrica Group for 2024 decreased of RON 40.3 mn., reaching a value of RON 102.1 mn. from RON 142.4 mn. from the same period of the previous year.

On the distribution segment, revenues increased by approximately RON 292.0 mn. (or 15.0%) to RON 2,244.4 mn., from RON 1,952.4 mn. in the first half of 2023, mainly due to the effect of the increase in distribution tariffs (a reminder that in Q2 2023 the distribution tariffs increased by approx. 20% (26.1% in the MN area; 21.5% in the TN area and 10.9% in the TS area) compared to the tariffs in Q1 2023 by ANRE Order no. 27/2023, and starting with January 1, 2024, the tariffs were increased by ANRE Order 115/2023 by approx. 5.8% compared to those of Q2 2023), a positive effect to which is added the increase of electricity volumes distributed by approx. 4.9% and also the increase in revenues recognized in accordance with IFRIC 12 (recognized on the basis of the stage of completion of works, in accordance with the accounting policy on the recognition of network investments in connection with concession agreements). The contribution of the electricity distribution segment to the Group's consolidated revenue is 29.6%.

For the supply segment, the revenues from electricity and natural gas supply decreased in 2024 by approximately RON 757.2 mn., (or 20.5%), to RON 2,937.8 mn. from RON 3,694.9 mn. in 2023, this variation was mainly due to the effect of lower sales volumes in electricity by 3% and lower purchase cost for electricity by 49%, in the regulatory context explained further. The decrease in the cost of acquisition was seen in the forward and DAM markets. This decrease is also propagated in the decrease of the revenue from the sale of electricity and the decrease of the revenue from subsidies (by approx. 74% - electricity) because, according to GEO 27/2022, as subsequently amended, the final price to be invoiced to customers is represented by the minimum value between the capped price, the contract price and the final price calculated with the cost plus method (i.e. realized purchase cost + supply component). The contribution of the supply segment to the Group's consolidated revenues is in the proportion of 69.7%.

As of 30 June 2024, the estimated amount for subsidies receivables was RON 2,461.5 mn. (31 December 2023: RON 2,614.5 mn.) of which the amount of RON 1,903.1 mn. represents unpaid requests submitted to the state authorities (of which RON 1,278.8 mn. represents the amount estimated to be received from the Ministry of Energy, respectively RON 624.3 mn. from the Agency County Department of Payments and Social Inspection) and RON 558.4 mn. representing requests that have not yet been submitted to the state authorities as of 30 June 2024. In the period 1 July - 5 August 2024, subsidies amounting to RON 1,283.7 mn. were collected.

OTHER IMPORTANT OPERATIONAL INFORMATION

§ Distributed electricity volumes - 8.68 TWh, up by 4,9% compared to the first half of 2023. DEER serves approx. 3.9 mn. users, over an area covering about 40.8% of Romania;

§ Volumes of electricity supplied to final customers on retail market - 3.8 TWh, down by 3.1% compared to 2023, amid the general downward trend of electricity consumption; Electrica Furnizare supplies electricity to approx. 3.5 mn. consumption places overall, also places on the competitive market, as well consumption places in universal service and as last resort supplier;

§ Supply market share - Electrica Furnizare is the largest supplier, with a total market share of 16.18% and a competitive market share of 10.88%, according to the latest ANRE report available (April 2024);

§ Electrica Group continues to pursue the expansion of its portfolio in the field of electricity production, especially from renewable sources, having at this time projects in different phases of execution with a capacity of approx. 300 MW. In the case of the Vulturu project, is in the construction implementation phase with a degree of completion of approximately 80%, with a completion date of September 2024, and in the case of the Satu-Mare 2 project, works have begun and have a completion date of December 2024;

§ The Regulated Asset Base (RAB), in nominal terms, with inflation of 4.6% for the year 2024 is estimated at the end of the first half of 2024 at RON 7.4 bn..

§ At the end of the first six months of 2024, the operator Distributie Energie Electrica Romania (DEER) has the average degree of execution of PIF investments in the first semester of 2024 of 71.7% of the planned value in 6 months, respectively RON 199.2 mn. against the planned RON 277.9 mn.

***

The documents related to the H1 2024 results are available on Electrica's website at the following link:  https://www.electrica.ro/en/investors/results-and-reports/financial-results/financial-statements-for-h1-2024/ , as well as in the pdf file attached below.

http://www.rns-pdf.londonstockexchange.com/rns/7943B_1-2024-8-27.pdf

We remind you that Electrica's management is organising on 30 August 2024, 16:00 (Romanian time), a web conference for analysts and investors: Presentation of Electrica Group H1 2024 Financial Results. The web conference can be accessed online under the following link: https://87399.themediaframe.eu/links/electrica240830.html

Contact Details: Electrica Investor Relations - ir@electrica.ro ; +40731796111

CEO CFO

Alexandru-Aurelian Chirita Stefan Alexandru Frangulea