The Group accelerated the pace of its investment processes – after the first two quarters of 2010 the total amount of capital expenditures equalled PLN 1.86bn, i.e. 12 per cent more than in the same period of 2009.

The influence of the long-term Power Purchase Agreements on the financial results of the PGE Capital Group

In the first half of the year the Group's financial result was influenced strongly by a fall in the level of compensations for the early termination of the long-term power purchase agreements (a decrease from PLN 818m in the first half of 2009 down to PLN 170m in the first half of 2010). In comparison to the first two quarters of 2009, the PGE Capital Group's net consolidated profit fell by 20 per cent from PLN 2.31bn to PLN 1.84. In the same period revenues decreased by 4.3 per cent from PLN 10.57bn to PLN 10.11bn.

Despite this falling trend, the Group is maintaining a high level of the EBITDA margin at 35.5 per cent . EBITDA reached the amount of PLN 3.6bn in comparison to PLN 4.21bn in the first half of 2009.

Excluding the PPA compensations, the revenues of the PGE Capital Group rose by 2 per cent, and EBITDA by 1.1 per cent. For us, this is a positive signal proving that we are able to focus on the development of our core business. We believe that in the following quarters we will manage to maintain a high level of profitability,  says Wojciech Topolnicki, PGE Management Board Vice President for Development and Finance.

A stable level of electricity generation and sales In the first half of 2010 the PGE Capital Group's sales remained at a high level, close to that of the same period in 2009 (28.49 TWh and 28.72 TWh respectively).

Electricity sales to individual customers rose in the period by 2 per cent - from 14.70 TWh in 2009 to 15.01 TWh. This increase was due to a rising demand for electricity caused by the improving economic situation and the acquisition of new customers. Electricity generation was also maintained at the level close to that of 2009.

In the first half of 2010 the Group generated 26.21 TWh of power, in comparison to 26.35 TWh in the same period last year. The implementation of key investment projects gains momentum In the first half of 2010 the PGE Capital Group's CAPEX equalled PLN 1.86bn. A 12 per cent increase in investment expenditures over those in the first two quarters of 2009 results mostly from headway in the implementation of Conventional Power Generation investment projects. The most resources - PLN 460.9m – were spent on the construction of generation unit no. 13 in the Bełchatów power plant. According to the schedule, the unit will be commissioned in 2011. The next largest investments were the modernizations of units no. 3-12 in the Bełchatów power plant and the development of the distribution system related to the connection of new customers – PLN 190.7m and PLN 170.1m respectively.