Current reports
Current report no. 15/2022
Information on the intention to recognize one-off events in the financial statements for 2021 and their estimated impact on financial results
Legal basis:
Art. 17 sec. 1 MAR – inside information
Contents of the report:
ZE PAK SA („Company”), due to the completion of works on impairment tests of assets, in accordance with the requirements of IAS 36 and KSR No. 4, publishes information about the identification of the need to make revaluation write-downs on the value of fixed assets, their impact on the financial results and other events related to changes in the baseline scenario of exploitation of coal assets and their impact on financial results.
The change in the baseline scenario of the exploitation period of coal mining and generation assets had the greatest impact on the test results. The current scenario assumed the operation of coal-fired units 1, 2 and 5 at Pątnów power plant until 2024, while 474 MW unit (former Pątnów II Power Plant) was to be operated no longer than until 2030. Currently, the base scenario is the operation of all the Group's coal units until the end of 2024, i.e. until these assets are supported in the form of the capacity market mechanism. The company perceives the current market situation in terms of the relationship between energy prices and CO2 emission allowances as highly volatile and risky, and the dynamics of these changes has increased even more in the last year. Coal mining and production after 2024 will have to involve a number of investments, including enabling further exploitation of Tomisławice open pit and adjusting 474 MW unit to environmental requirements. The company sees the possibility of incurring such investments and extending the operation of coal assets after 2024, but it definitely makes such measures conditional on the introduction of a support mechanism after 2024, which would reduce the risk of operations of the Group's generation assets to be discontinued. Due to the fact that at present such a mechanism does not exist after 2024, the Company, guided by the principle of reasonable expectations, shortened the expected lifetime of coal mining and production assets. At the same time, the Company does not exclude the possibility of extending the lifetime of coal assets if the support mechanism is established in a satisfactory form after 2024.
With regard to the consolidated financial statements of ZE PAK SA Capital Group for 2021, the tests for the impairment of assets showed the legitimacy of creating an impairment loss for property, plant and equipment of CGU Elektrownia Pątnów. During the preparation of the financial statements, other one-off events were also identified that were related to the change in the base scenario for the exploitation of coal assets. The most important ones include: other impairment write-downs on fixed assets and fixed assets under construction, impairments write-downs on mining assets, impairment write-downs on materials, changes in the amount of provisions for reclamation and adjustments in the scope of deferred income tax.
The above-mentioned events will reduce the Group's EBITDA by approximately PLN 26 million, and in terms of the consolidated net result - by approximately PLN 550 million.
With regard to the standalone financial statements of ZE PAK SA for 2021, prepared in accordance with the Accounting Act, the tests for impairment of assets have shown the legitimacy of creating an impairment loss for CGU Elektrownia Pątnów. Other one-off events identified in the Company include: impairment write-downs on materials, changes in the amount of provisions for reclamation and adjustments in the scope of deferred income tax.
The above-mentioned events will reduce the Company's EBITDA by approximately PLN 33 million, and in terms of the standalone net result by approximately PLN 452 million.
Simultaneously, the Company informs that the operations mentioned in the report are non-cash, accounting and do not affect the liquidity situation of the Company and the Group.
The expected estimated consolidated EBITDA result for 2021 will amount to PLN 243 million. As a result of the events described above, the expected estimated consolidated net loss of ZE PAK Group for 2021 will be PLN 309 million.
The expected estimated EBITDA result for ZE PAK SA for 2021 will amount to PLN 169 million. As a result of the events described above, the expected estimated net loss of ZE PAK SA for 2021 will be PLN 302 million.
The company reserves that the consolidated and standalone statements are being reviewed by a certified auditor, therefore the above amounts may change.
Signatures of persons representing the Company:
Piotr Woźny – President of the Management Board
Maciej Nietopiel – Vice President of the Management Board