ENERGO-PRO Releases Results of Operations for the Three Months Ended 31 March 2024

Prague, 21 June 2024 

ENERGO-PRO a.s. (the “Company” or “EPAS”) has today published its results of operations for the three months ended 31 March 2024. 

• Generation: Total hydropower generation volume in 1Q 2024 amounted to 1,197 GWh, an increase of 737 GWh or 160% from 460 GWh in 1Q 2023. The generation volume in 1Q 2024 includes 228 GWh attributable to Xeal in Spain, acquired on 4 October 2023, and 201 GWh attributable to Murat Nehri in Türkiye, acquired on 8 January 2024. Excluding the effect of these acquisitions, hydropower generation volume increased by 308 GWh or 67%, as a result of better hydrological conditions in Georgia and Türkiye, while generation in Bulgaria was slightly lower. The average free market sales price of our generated hydropower in 1Q 2024 fell in Bulgaria from the elevated levels recorded in 1Q 2023, and declined in EUR terms also in Türkiye, while in Georgia unregulated prices rose in both GEL and EUR terms. 

• Distribution and supply: In 1Q 2024, the Company distributed 1,647 GWh of electricity in Bulgaria and 1,306 GWh in Georgia, which represents an increase of 3% and 5%, respectively, compared to 1Q 2023. Compared to 1Q 2023, grid losses in 1Q 2024 declined by 0.1 percentage points to 7% in Bulgaria and by 0.3 percentage points to 10.4% in Georgia. In 1Q 2024, the Company supplied 1,899 GWh of electricity in Bulgaria and 1,024 GWh in Georgia, an increase of 4% and 5%, respectively, compared to 1Q 2023. 

• Consolidated revenue in 1Q 2024 amounted to EUR 356.3m, broadly unchanged compared to EUR 358.5m achieved in 1Q 2023. Excluding the effect of Xeal and Alpaslan 2, which amounted to EUR 51.8m, revenue decreased by 15% or EUR 54m to EUR 304.5m. This decrease was primarily due to lower revenue in the distribution and supply segment in Bulgaria and, to a smaller extent, Georgia, principally due to lower average electricity sales prices and supply and distribution tariffs, respectively. 

• EBITDA in 1Q 2024 reached EUR 107.6m, a 60% increase compared to EUR 67.1m in 1Q 2023. Xeal and Murat Nehri contributed EUR 32m or 79% of this increase. Excluding these acquisitions, EBITDA increased by EUR 8.5m or 13% to EUR 75.6m, primarily due to higher EBITDA in the generation segment. 

- EBITDA in the generation segment increased by EUR 45.8m to EUR 65.4m in 1Q 2024. Xeal and Murat Nehri accounted for EUR 31.1m or 68% of this increase1. Excluding the effect of Xeal and Murat Nehri, EBITDA in the generation segment increased by EUR 14.8m to 1 Total EBITDA of Xeal and Murat Nehri for 1Q 2024 amounted to EUR 32m, of which EUR 31.1m was included in the generation segment. The difference reflects EBITDA of Xeal’s ferroalloy business, which is included in the Other Business segment. 2 EUR 34.4m in 1Q 2024. The increase was primarily attributable to higher EBITDA in the generation segment in Georgia, where EBITDA increased by EUR 14.7m, mainly due to improved EBITDA in both the non-regulated and the regulated business (principally as a result of more favourable hydrological conditions and resulting higher generation volumes and, to a smaller extent, higher prices) and an increase in other income and a decrease in other tax expenses related to internal group cash management activities. EBITDA in RH Turkey (our legacy business in Türkiye) increased by EUR 3.8m in 1Q 2024, mainly as a result of more favourable hydrological conditions and resulting higher generation volumes, partly offset by lower average electricity sales prices in EUR terms. The increase in EBITDA in the generation segment in Georgia and in RH Turkey was partly offset by a decrease in EBITDA in the generation segment in Bulgaria, which fell by EUR 3.8m, mainly as a result of significantly lower average electricity sales prices. 

- EBITDA in the distribution and supply segment fell by EUR 7.8m to EUR 43.2m in 1Q 2024. The decrease was primarily attributable to the distribution and supply segment in Georgia, where EBITDA decreased by EUR 11.8m to EUR 9.6m in 1Q 2024, mainly as a result of (i) significantly lower distribution as well as end customer (supply) tariffs from 1 January 2024, (ii) higher prices (in GEL/MWh terms) paid for purchased electricity, and (iii) higher labour costs, partly offset by (iv) a decrease in other tax expenses and an increase in other income related to internal group cash management activities. EBITDA in the distribution and supply business in Bulgaria increased by EUR 4m to EUR 33.6m for 1Q 2024, mainly due to (i) higher EBITDA in the distribution business (as a result of (A) lower cost of power purchased to cover grid losses, (B) higher volume of electricity distributed, (C) higher income from new customer connections and (D) lower labour costs, partly offset by (E) lower distribution tariffs from 1 July 2023), as well as (ii) higher EBITDA in the regulated supply business (mainly due to higher realised margins due to a positive EWRC price decision as of 1 July 2023 on broadly unchanged volumes of electricity sold to end customers), partly offset by lower EBITDA in the free market supply business (mainly due to lower free market electricity prices which reduced gross profit). 

• Capex in 1Q 2024 amounted to EUR 39.3m, an increase of 79% (EUR 17.4m) from EUR 21.9m spent during 1Q 2023. This increase was primarily driven by higher investments in our distribution and supply segment in Georgia (+EUR 12.9m), specifically in network improvements and new connections. Investments in the generation segment also increased, mainly related to (i) higher investments in construction of the Chorreritas HPP in Colombia, (ii) higher capex for HPP rehabilitations in Georgia, and also (iii) the effect of Xeal and Murat Nehri. 

• Gross debt (including guarantees) stood at EUR 1,147.2m at 31/03/2024, an increase of EUR 133.5m (13%) from the 2023 year-end position of EUR 1,013.7m. The increase was mainly due to the project debt in Murat Nehri (EUR 117.8m) being included in the Group in 1Q 2024. 

• Cash and equivalents were EUR 201.7m at 31/03/2024 compared to EUR 120.9m at the end of 2023. At 31/03/2024, approx. EUR 182.5m of additional liquidity was available under our committed credit facilities. 

• On 8 January 2024, EPAS completed the acquisition of 100% of shares in ENERGO-PRO Hydro Development, s.r.o. which, through Murat Nehri Enerji Üretim A.Ş. (“Murat Nehri”), owns 100% of Alpaslan 2 dam and hydropower plant (“Alpaslan 2”), from DK Holding Investments s.r.o. (“DKHI”), the Company’s sole shareholder. Alpaslan 2 is situated on the Murat River in the Mus province of the Eastern Anatolian region in Turkey, has total installed capacity of 280 MW, and operates under a generation license valid until 6 September 2059. The purchase price was EUR 476m and was settled on a non-cash basis by a set-off against the corresponding amount of the Company’s receivables against DKHI, which arose as a result of distributions in prior periods. Murat Nehri benefitsfrom the renewable energy resources support mechanism (YEKDEM), as well as receiving a domestic equipment incentive uplift, allowing it to sell its entire production for the 3 TRY equivalent of a fixed price of USD 86 per MWh from 1 January 2021 until 31 December 2025 and USD 73 per MWh from 1 January 2026 until 31 December 2030.

• Pro forma for the acquisition of Xeal and Murat Nehri, the Company’s LTM 1Q 2024 EBITDA was EUR 409m. 

“The first quarter of 2024 marked the first time the Group operated in its new, enlarged form, fully incorporating the results of Xeal as well as Murat Nehri – and both contributed materially to the growth in EBITDA that we delivered in the quarter. But our legacy generation businesses also performed well, especially in Georgia, thanks to higher generation volumes as well as a more supportive pricing environment. The results of our distribution and supply businesses diverged, with solid performance in Bulgaria outweighed by the normalization of our results in Georgia following several years of outperformance. Overall, we expect our full year 2024 results to be in line with the EBITDA guidance of EUR 280 – 320 million that we published in April, with the new assets providing a welcome boost.“