The Company started the implementation of the Consolidation Programme and the investment programme is right on schedule. A successful debut on the Warsaw Stock Exchange allowed the Company to acquire almost PLN 6 billion.


High profits despite lower demand for electricity

The PGE Group ended the year 2009 with a 62% rise in the consolidated net profit - from PLN 2.67 billion in 2009 to PLN 4.337 billion in 2009. The consolidated revenues amounted to PLN 21.623 billion and were by 11.4% higher than those in 2008. EBITDA rose by 36.5% - to PLN 7.983 billion. EBITDA exclusive of compensations for the termination of long-term power purchase agreements increased by 42.6% year to year.

"The achievement of these results is a considerable success in light of the difficult situation in the market. In 2009, for the first time since 2005, we observed a fall in demand for electricity; however, it was counterbalanced with rising prices and payments of compensation for the termination of long-term power purchase agreements, which consequently allowed us to increase our revenues year-to-year by over 11%,"  said Mr Tomasz Zadroga, Management Board President at PGE Polska Grupa Energetyczna S.A.

"Although the year 2009 was more difficult than the previous ones, we managed to confirm our position as one of the most profitable power companies in Europe. In accordance with our forecasts, we were able to maintain a very good pace in the growth of EBITDA," added Mr Wojciech Topolnicki, PGE Management Board Vice President for Development and Finance.


Rise in EBITDA in retail sales driven by higher sales to business customers

Conventional power generation remains PGE's most profitable business activity. The share of this operating segment in the consolidated EBITDA equalled 69%. The highest rise in EBITDA was recorded in the retail sales segment. In this case, the key factors were higher sales to business customers and a rise in average electricity prices. 


The structure of the consolidated EBITDA of the PGE Capital Group:

 Type of activity

EBITDA (PLN millions)

Mining and generation5 550

Distribution1 093

Wholesale trade465

Retail sales405

Renewable power generation203


TOTAL7 983


The process of the consolidation of the Capital Group is on schedule

One of the most important strategic projects announced by PGE in 2009 is its Consolidation Programme. It provides for the simplification of the PGE Capital Group's organizational structure with a view to improving decision-making processes. The completion of the formal and legal process of mergers among the Capital Group companies is planned for 31 August 2010. In consequence of the process, the existing 42 subsidiaries involved in the PGE Group's core business will be consolidated into 5 companies managing the following operating areas:

Conventional power generation Nuclear power generationRenewable power generationDistributionRetail sales 

The holding company, PGE Polska Grupa Energetyczna S.A., will manage the Group's wholesale electricity trade. PGE established an entity responsible for managing non-core assets and a shared services centre.

In 2009 a series of tasks related to the Consolidation Programme was performed. They included, for example, an assessment of the economic benefits of the consolidation, the selection of companies - integrators responsible for the particular operating segments. A dialogue with the social partners also constitutes an integral part of the Consolidation Programme.

The largest investments in conventional power engineering

In 2009 the total amount of investment expenditures in the PGE Capital Group was PLN 3.726 billion. The most capital was invested in the mining and power generation operations as well as distribution - PLN 2.5 billion and PLN 1.0 billion respectively. About PLN 0.7 billion was spent on the modernization of 9 power generation units at PGE Bełchatów Power Plant (units 3-12); PLN 0.6 billion on the construction of the new unit no. 13 at PGE Bełchatów Power Plant, while PLN 0.3 billion was the cost of opening the new Szczerców lignite mining field at PGE Bełchatów Lignite Mine. Also in 2009, the tendering procedure for the construction of 2 new power generation units at PGE Opole Power Plant was started and work on the preparation of the tendering procedure for PGE Turów Power Plant continued. With respect to distribution operations, the most expenditure was invested in connecting new customers to the grid - PLN 0.4 billion and the expansion of the grid - PLN 0.3 billion.

"The investment and consolidation programmes are for us the top priorities and the key factors for improving PGE's competitive advantage in the future. We are satisfied with the pace of the implementation of both programmes. The investment tasks are being performed efficiently and what is the most important is the fact that we are capable of financing them without a significant increase in our indebtedness," said Mr Wojciech Topolnicki, PGE Management Board Vice President for Development and Finance.

There was considerable progress in the nuclear power generation programme - in 2009 PGE established a new company, PGE Energia Jądrowa [Nuclear Power], to manage the new business line. The Company signed memoranda with Electricite de France and GE Hitachi Americas with a view to examining the possibilities of using their nuclear reactors in Poland's future nuclear power plants. "We expect to sign memoranda with further business partners in the nearest future," added Mr Tomasz Zadroga, PGE President. Besides continuing analytical research, PGE has established its first special purpose entity and is working on the selection of the location of the first nuclear power plant.


Additional information:

PGE Polska Grupa Energetyczna is the largest power engineering company in Poland and one of the largest such companies in Central and Eastern Europe. Thanks to the combination of its own fuel (lignite) resources, power generation and final distribution networks, PGE guarantees a safe and reliable power supply to 5 million households, businesses and institutions. The Company's net power generation amounts to 54 TWh. The installed capacity equals 12.4 GW.

The PGE Capital Group has operated under its current structure since 2007. The PGE Capital Group's major areas of activity comprise the mining of lignite and generation of heat and electricity from conventional sources, the wholesale trade of electricity and related products, the retail sales of electricity and heat, the distribution of electricity as well as the generation of electricity from renewable sources.

Since 6 November 2009 PGE Polska Grupa Energetyczna S.A. has been one of the largest companies listed on the Warsaw Stock Exchange.