ENERGO-PRO a.s. Releases Results of Operations for the First Six Months of 2024

ENERGO-PRO a.s. (the “Company” or “EPAS”) has today published its results of operations for the six months ended 30 June 2024. 

• Generation: Total hydropower generation volume in 1H 2024 amounted to 2,430 GWh, an increase of 986 GWh or 68% from 1,444 GWh in 1H 2023. The generation volume in 1H 2024 includes 357 GWh attributable to Xeal in Spain, acquired on 4 October 2023, and 424 GWh attributable to Murat Nehri in Türkiye, acquired on 8 January 2024. Excluding the effect of these acquisitions, hydropower generation volume increased by 205 GWh or 14%, as a result of better hydrological conditions in Georgia and Türkiye, while generation in Bulgaria was lower. The average free market sales price of our generated hydropower in 1H 2024 fell in Bulgaria from the elevated levels recorded in 1H 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 1H 2024, the Company distributed 2,808 GWh of electricity in Bulgaria and 2,563 GWh in Georgia, which represents a broadly unchanged level and an increase of 8%, respectively, compared to 1H 2023. Compared to 1H 2023, grid losses in 1H 2024 declined by 0.1 percentage points to 6.3% in Bulgaria and by 0.7 percentage points to 10% in Georgia. In 1H 2024, the Company supplied 3,469 GWh of electricity in Bulgaria and 1,934 GWh in Georgia, an increase of 4% and 5%, respectively, compared to 1H 2023. 

• Consolidated revenue in 1H 2024 amounted to EUR 675m, a 5% increase compared to EUR 642.8m achieved in 1H 2023. Excluding the effect of Xeal and Alpaslan 2, which amounted to EUR 103.9m, revenue decreased by 11% or EUR 71.7m to EUR 571.1m. 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 1H 2024 reached EUR 206.1m, a 22% increase compared to EUR 169.4m in 1H 2023. EBITDA in 1H 2024 included EUR 64.6m attributable to Xeal and Murat Nehri. Excluding these acquisitions, EBITDA decreased by EUR 28m or 17% to EUR 141.4m, primarily due to lower EBITDA in the distribution and supply segment, which was only partly offset by higher EBITDA in the generation segment.

 - EBITDA in the distribution and supply segment decreased by EUR 39.1m to EUR 81.7m in 1H 2024. The decrease was primarily attributable to the distribution and supply segment in Georgia, where EBITDA decreased by EUR 34.1m to EUR 26.8m in 1H 2024, mainly as a result of (i) significantly lower distribution as well as end customer (supply) tariffs from 2 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 (both related to internal group cash management activities). EBITDA in the distribution and supply business in Bulgaria decreased by EUR 5m to EUR 54.9m for 1H 2024, mainly due to (i) lower EBITDA in the free market supply business (mainly due to (A) lower free market electricity prices which reduced gross profit, (B) lower margin from transactions on the wholesale market and (C) customer attrition as competitive pressures continued to increase), partly offset by (ii) higher EBITDA in the distribution business (as a result of (A) lower cost of power purchased to cover grid losses, (B) higher income from new customer connections and (C) lower labour costs and other operating expenses, partly offset by (D) lower distribution tariffs from 1 July 2023), as well as (iii) 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 on the regulated market).

- EBITDA in the generation segment increased by EUR 72m to EUR 131.2m in 1H 2024. Xeal and Murat Nehri accounted for EUR 62.4m or 87% of this increase1 . Excluding the effect of Xeal and Murat Nehri, EBITDA in the generation segment increased by EUR 9.6m to EUR 68.8m in 1H 2024. The increase was primarily attributable to higher EBITDA in the generation segment in Georgia, where EBITDA increased by EUR 17.6m, mainly due to (i) improved EBITDA in both the non-regulated and regulated businesses (principally as a result of more favourable hydrological conditions and resulting higher generation volumes and, to a smaller extent, higher prices in both GEL and EUR terms) and (ii) an increase in other income and a decrease in other tax expenses (both related to internal group cash management activities). EBITDA in RH Turkey (our legacy business in Türkiye) increased by EUR 0.9m in 1H 2024, as more favourable hydrological conditions and resulting higher generation volumes were almost entirely 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 8.9m, mainly as a result of significantly lower average electricity sales prices and lower generation volumes. • Capex in 1H 2024 amounted to EUR 81.4m, an increase of 78% (EUR 35.7m) from EUR 45.6m spent during 1H 2023. This increase was primarily driven by higher investments in our distribution and supply segment in Georgia (+EUR 26.1m), 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 (+EUR 5.8m), (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 1,143.7m at 30/06/2024, an increase of EUR 130m (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 107.4m) being included in EPAS in 1H 2024 and, to a smaller extent, exchange rate fluctuations. 

• Cash and equivalents were EUR 196.3m at 30/06/2024 compared to EUR 120.9m at the end of 2023. At 30/06/2024, approx. EUR 191.4m of additional liquidity was available under our committed credit facilities. 

• Pro forma for the acquisition of Xeal and Murat Nehri, the Company’s LTM 1H 2024 EBITDA was EUR 389.5m. 1 Total EBITDA of Xeal and Murat Nehri for 1H 2024 amounted to EUR 64.6m, of which EUR 62.4m was included in the generation segment. The difference reflects EBITDA of Xeal’s ferroalloy business, which is included in the Other Business segment. 3 

Petr Milev, Chief Executive Officer, commented on the results: 

“We are pleased with our results for the first half of 2024. The strong EBITDA growth that we delivered in the period benefited materially from the contribution of Xeal and Murat Nehri. Our legacy generation businesses also performed well, especially in Georgia, thanks to higher generation volumes as well as a more supportive pricing environment. On the other hand, our distribution and supply business in Georgia continued on the path of normalization of its results following several years of outperformance. In light of the results for the first half of the year, current trading, as well as our current expectations for the remainder of 2024, we are increasing our 2024 EBITDA guidance to EUR 310-330 million.