1.2 Information on the PGE Capital Group
The Capital Group of PGE Polska Grupa Energetyczna S.A. consists of the parent company, i.e. PGE S.A., and 80 consolidated subsidiaries. Consolidation covers also 2 entities constituting so-called joint operations, 5 associates and 1 jointly controlled entity. For additional information about subordinated entities included in these consolidated financial statements, please refer to note 1.3.
These consolidated financial statements of the PGE Capital Group cover the period from 1 January 2023 to 31 December 2023, and include comparative data for the period from 1 January 2022 to 31 December 2022, as well as at 31 December 2022.
The financial statements of all subordinated entities were prepared for the same reporting period as the financial statements of the parent company, using consistent accounting principles. An exception to this rule is companies acquired in the course of the financial year, which prepared financial data for the period from their acquisition by the PGE Group.
The major object of the PGE Capital Group is conducting business activities in the following areas:
- generation of electricity,
- distribution of electricity,
- wholesale and retail trade in electricity, energy origin rights, CO2 emission allowances and gas,
- generation and distribution of heat,
- provision of other services related to the aforementioned areas.
Business activities are conducted under appropriate concessions granted to the particular entities making up the composition of the PGE Capital Group. The PGE Capital Group conducts business activities primarily in the territory of Poland.
Going concern
These consolidated financial statements have been prepared based on the assumption that the major companies of the Group will continue as a going concern for a period of at least 12 months from the reporting date.
In 2023, PGE Obrót S.A. incurred a net loss of PLN (2,458) million and showed negative equity of PLN (1,867) million as at 31 December 2023. This was mainly the result of regulatory changes in the retail electricity trading market and the President’s approval of a for households that did not fully cover the cost of energy purchases. PGE Obrót S.A. has access to financing provided by PGE S.A., therefore the going concern assumption for this company is justified. The impact of regulatory changes on the operations of the PGE Capital Group is described in note 32.4 to these financial statements.
In 2021, ENESTA sp. z o.o. (now ENESTA sp. z o.o. under restructuring) terminated unfavourable agreements for the supply of electricity and natural gas. In 2022, some counterparties took their claims to court. After unsuccessful attempts to reach an agreement with the counterparties, ENESTA filed for restructuring proceedings. On 21 June 2022, the restructuring (recovery) proceedings were initiated. At the end of 2022 and in February 2023, verdicts unfavourable to ENESTA were given in the pending proceedings. The verdicts established the existence and validity of agreements for the sale of electricity and natural gas. At the end of 2022, a provision of PLN 37 million was created for onerous agreements in connection with the necessity to continue the performance of the aforementioned sales agreements. In addition, provisions were created for potential litigation in connection with reserve sales carried out by the seller under an official order in 2022, in the amount of PLN 56 million. During the course of 2023, all provisions for onerous agreements were reversed. Sales revenue is invoiced in accordance with final court verdicts. In September 2023, ENESTA’s capital was increased by PLN 32 million. All shares in the increased capital were acquired by PGE Obrót S.A. In December 2023, another resolution was passed regarding a capital increase of PLN 34 million. The new shares were acquired by PGE Obrót in 2024.
As at 31 December 2023, ENESTA’s assets, capital and liabilities amounted to PLN 135 million and its equity amounted to PLN (173) million.
Apart from the issue described above, as at the date of the approval of these financial statements for publication, no circumstances were identified that would indicate any threat to the major PGE Group companies continuing as going concerns.