TAURON Polska Energia : Current Report No. 3/2017

14.02.2017 13:50

The Management Board of TAURON Polska Energia S.A. (the 'Company') informs that considering the completion of major work associated with impairment tests of assets as at 31 December 2016, on 14 February 2017 the Management Board of TAURON Polska Energia S.A. decided to recognise write-offs due to the loss in the carrying amount of generation units of the Generation segment in the Generation Segment. The Generation Segment comprises companies generating electricity and heat from conventional and renewable sources.

The requirement to recognise those events in financial results arises mainly from the following changes in the market environment taken into account in the tests:
- regulations in the area of renewable energy sources,
- decline in prices of certificates of origin for energy from renewable sources,
- continuing unfavourable market conditions (in terms of profitability of coal-based power industry).

The write-offs recognised as at 31 December 2016 in the consolidated financial statements of TAURON Polska Energia S.A. for the year ended on 31 December 2016 (related to companies of the Generation Segment):
- the value of created write-offs related to wind farms: approx. PLN 281 million,
- the value of reversed net write-offs (i.e. the surplus of reversed write-offs against their value at creation) related to the generation assets in the area of electricity and heat generation: approx. PLN 204 million,
- the total net write-off amount (i.e. the excess of created write-offs over their value at reversal): approx. PLN 77 million,
- the total estimated impact on charging the net financial result: approx. PLN 62 million.

The write-offs recognised as at 31 December 2016 in the separate financial statement of TAURON Polska Energia S.A. for the year ended on 31 December 2016 (related to companies of the Generation Segment):
- the value of created write-offs due to the loss in the carrying amount of stocks and shares held and the intragroup loan: approx. PLN 613 million,
- the total estimated impact on charging the net financial result: approx. PLN 613 million.

The value of the aforementioned write-offs will not affect the EBITDA result, understood by the Company as EBIT increased by depreciation and write-offs for non-financial assets.

The Company reserves that the values presented above represent estimated values and may be subject to change. The final results of the tests and amounts of impairment write-offs due to the loss in the carrying amount of assets will be presented in the financial statements of TAURON Polska Energia S.A. for 2016, to be published on 15 March 2017.

Article 17 item 1 of MAR - confidential information