−In the Trade segment in 2020, the total volume of electricity sales increased in comparison with 2019 by 774 GWh, i.e. by 3.8%. The volume of gas fuel sales also increased on a year-on-year basis (by 270 GWh, i.e.
by 25.5%). In 2020, revenue from the sale of electricity and gas increased in comparison with 2019 by PLN 618 million, i.e. by 11.1%. Revenue grew in both the business customer segment and in the household segment.
−The Generation segment is recording lower electricity output based on hard coal in 2020 (approx. 15%, compared to 2019), which was offset by a considerable increase in electricity sales in trade, leading eventually to a grow in revenue in this segment (approx. 4%, compared to last year).
−In the Distribution segment, the Group in 2020 recorded a decline in the sale of distribution services to end customers by approx. 2%, compared to last year. However this did not result in a decline in EBITDA in this segment.
−Swings in global markets in 2020 also caused considerable changes in the prices of electricity, CO2 emission allowances, commodities and major swings in equity markets. The Group has analysed these trends with a view toward testing the assumptions used in impairment tests and conducted impairment tests on non-financial assets held by ENEA Wytwarzanie Sp. z o.o., ENEA Nowa Energia Sp. z o.o., ENEA Ciepło Sp. z o.o., ENEA Elektrownia Połaniec S.A. and LWB. The test results are presented in a note concerning the impairment of non-financial assets.
−In 2020 and as at 31 December 2020, the Company carried out an additional analysis of the COVID-19 pandemic’s potential impact on receivables impairment. Following this, expected losses were verified. However the size of the additional impairment was negligible from a reporting viewpoint. Nonetheless, the Group assesses that if restrictions related to the COVID-19 pandemic are introduced again and thus economic activity is further reduced, the receivables turnover ratio might deteriorate given a reduced payment capacity on the part of electricity customers.
−Due to work being re-organised and because of enhanced safety measures mandated by the state of epidemic, the Group sees a risk of delays in completing scheduled repairs and modernisations of generation assets, including adaptations to BAT conclusions. The effects of this risk materialising will be limited in terms of time and dependent on the current market situation, among other factors.
At the date on which these consolidated financial statements were prepared, it is difficult to predict how the situation will develop and what the potential negative effects for the Parent’s and the Group’s operating and financing activities will be in the future. A further spread of the virus may lead to the introduction of additional restrictions and a decline in economic activity (currently numerous restrictions apply to: hotels, restaurants, coffee shops and shopping galleries), decline in electricity demand and in consequence lower electricity output, which might impact the Group’s revenue from sales. It also cannot be ruled out that a larger number of Covid cases at the Group will affect risks related to the business continuity of Group companies. Potential interruptions in operations could have a negative impact on the Group’s revenue from sales.
A crisis and coordination command, appointed by the Management Board, is operating at ENEA S.A., and all Group companies have appointed teams that coordinate tasks related to ensuring the continuity of ENEA Group companies' operations in the context of the coronavirus threat. The Management Board of ENEA S.A. is coordinating all activities in this area through the crisis coordination command. The command and teams engage in activities intended to protect the health of employees by providing personal protective equipment (face masks, anti-microbial gels, gloves), implementing safe work rules (including introducing, wherever possible, remote work, limited direct meetings in the workplace, disinfection of rooms, introducing a limit on the number of employees in a room, maintaining safe distances between employees). The precautions taken in order to prevent the spread of the coronavirus have an impact on operating costs, which together with changes in revenue will ultimately affect the consolidated net result.
A range of adaptive and optimisation activities were undertaken in order to alleviate the negative impact of the coronavirus on LWB’s financial results. One of them was the submission by that company of an application to the Voivodship Labour Office for funding from the Guaranteed Employee Benefits Fund to protect jobs (as part of the Anti-Crisis Shield 4.0). The application was approved, and on 6 October 2020 the company received information on being awarded PLN 33.7 million from the Guaranteed Employee Benefits Fund. This funding was paid out in three tranches, starting in October 2020. On 24 November 2020, LWB filed a supplementary application for funding from the Guaranteed Employee Benefits Fund to protect jobs. The company received information on this application being approved on 25 November 2020. This funding included PLN 0.65 million as subsidy for salaries for November and December 2020 and January 2021. In the long term, it is expected that once the pandemic ends the domestic economy will get back on the path of stable growth and demand for electricity will increase, which will translate into higher demand for the energy-generation coal that is mined at LWB. It should also be noted that on 29 September LWB updated its production objectives for 2020, expecting total annual net extraction to reach approx. 7.4 million tonnes. The annual output eventually exceeded 7.6 million tonnes, however this is still below what could be expected under normal circumstances and is the result of a variety of factors. Demand from power plants and heating plants for energy-generation coal declined considerably in the first half of the year, resulting from both a warm and windy winter and a decline in economic activity due to the coronavirus pandemic. Geological and mining factors also came into play in the third quarter of 2020, limiting the expected progress at longwalls and reducing extraction volumes. These included an increase in deformation pressure, which caused extraction sites near longwalls to have reduced functionality. In connection with staff shortages due to the rising number of COVID-19 cases and the need to isolate employees who have had contact with infected people, these conditions turned out to be sufficiently burdensome to cause a major reduction in extraction volumes. However, it should be emphasised that these difficulties are temporary, according to the company.
At the date on which these consolidated financial statements were prepared, the Group sees no going-concern risk