The cost discipline and expenditure optimization introduced by the PGE Management Board on the scale of the entire PGE Group is beginning to bring the first visible financial effects. According to the assumptions of the new Strategy, in the coming years the value of the Group will be built on the basis of the distribution segment and dynamic development of renewable energy sources.
In yet another quarter of 2020, the Management Board of PGE is consistently implementing the plans announced at the beginning of the year. In the opinion of the Management Board of PGE, the General Agreement signed in October this year, within the framework of the Holding Council established in June, has strengthened the effectiveness of activities and increased benefits from cooperation between the companies in the Group. Holding management has increased cost discipline in the PGE Group. The high level of accumulated cash in the amount of PLN 3.3 billion at the end of Q3 2020 will allow the PGE Group to pay for upcoming payments for CO2emission allowances, implement the demanding investment program of the PGE Group and the planned acquisitions.
The Management Board of PGE is consistently implementing the plan to increase the profitability of the PGE Group. We analyse financial and operational data on an ongoing basis. In this way we are able to identify and manage potential risks effectively. Thanks to the optimization programmes introduced, in this difficult period, the funds generated from operating activities in the amount of over PLN 8 billion made it possible to finance a comparable level of capital expenditure on an annual basis and additionally to partially repay liabilities incurred in previous years. According to our new Strategy, we focus on the cost side. I hope that the efficiency measures will bring measurable benefits – says Wojciech Dąbrowski, President of the Management Board of PGE Polska Grupa Energetyczna.
Energy transformation in the context of the new PGE's Strategy
In October this year, PGE Polska Grupa Energetyczna presented a new Strategy for the PGE Group until 2030 with a perspective to 2050, which is the first document prepared by a company with State Treasury participation to comprehensively indicate the path of energy transition.
Parallel to the work on the Strategy, the PGE Group is working on the transformation of regions where conventional energy is an important employer. According to the plans of the Management Board of PGE, they will become a place for investments in renewable energy sources. PGE will also actively support the inhabitants of these areas in the area of sport, culture and education, as well as with a view to creating new jobs, redirecting them and extending their internship and mentoring programs.
Energy independence of Poland is a priority for us. It must take place in a real time perspective, without transferring costs to society and without redundancies. PGE will not leave the regions where the energy transition will take place without specific solutions. Therefore, in PGE's new Strategy, we have presented a concept for the division of the Group, which will secure conventional assets and - most importantly - jobs and will allow for the creation of a strong renewable energy sector in Poland, producing energy at competitive prices - emphasises Wojciech Dąbrowski.
Outlook for 2021
The decrease in energy intensity of the Polish economy and the growing imports and growth of production from renewable energy sources leave less room for conventional production in the power system. As a result, the demand for electricity from hard coal and lignite fired power plants is decreasing in favour of cheaper energy sources. The transition plan of the PGE Group aims to achieve the goal of climate neutrality by 2050. This will be achieved through investments in low and zero-emission energy sources and grid infrastructure. These assets will support the growth of the PGE Group's financial results and determine its future value for shareholders.
PGE's EBITDA perspective for 2021 accurately reflects our vision from the Strategy – with the deteriorating conditions for the operation of conventional power generation, we are building value on the remaining segments of the PGE Group's operations – concludes Wojciech Dąbrowski, President of the Management Board of PGE Polska Grupa Energetyczna.