WOOD Flash – Polish utilities: 4Q20E previews – boring quarter, with full focus on carve out now (results due in the coming weeks)
The Polish utilities (PGE, Tauron and Enea) are due to release their 4Q20E preliminary numbers in the coming weeks, before publishing their full-year financials in March. Energa reported its preliminary numbers last week, before PKN’s numbers. We expect strong EBITDA growth yoy at Tauron and PGE. On the opposite side, Enea’s EBITDA is likely to fall in 4Q20E. However, the strong results are largely the effect of the low base caused by one-offs last year, and we expect a neutral reaction to the companies’ figures, as the market is well aware of the low base. Quarter-on-quarter, we expect weaker EBITDA figures at all three utilities. Currently, we see the government’s final decision on the carve out, expected in March, as the main trigger for the sector, overshadowing earnings figures. In January, we released a new update on the utilities and we stick to our ratings, with Tauron being our top pick. We also like PGE, and we newly rated Enea a HOLD, due to the lack of clarity currently on the company’s outlook in the planned carve out.ENEA is engaged in production of electricity and heat; trade in electricity; and distribution of electricity.
PGE Polska Grupa Energetyczna is an electricity company based in Poland. Co. is engaged in the generation and selling of electricity. Co. is a predominant power producer and supplier in Poland and a major heat and power sector company in Central and Eastern Europe. Co. supplies over 5 million households, businesses and institutions through a combination of its own fuel resources (lignite), power generation and final distribution networks. Co.'s activities focus on the following areas: Conventional Power Generation, Renewable Power Generation, Nuclear Power Generation, Wholesale, Distribution and Retail. Co. has 12.2 GW of installed generation capacity.
Tauron Polska Energia is engaged in the generation, transmission, distribution, and sale of electricity and heat in Poland. Co. generates electricity from various conventional and renewable energy sources, including hard coal, lignite, natural gas, biomass, wind, solar, and hydro power. It is also involved in quarrying, crushing, and breaking of limestone; quarrying of stone for the construction industry; mining of hard coal; trading in electricity; and production of technical gases. In addition, Co. engages in the repair and maintenance of machinery and electrical equipment; electrical installations; and construction of power lines.
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