Polenergia S A : CONSOLIDATED QUARTERLY REPORT FOR 1Q 2023

In case of divergence between the language version, the Polish version shall prevail

Polenergia S.A. Group

CONSOLIDATED QUARTERLY REPORT

FOR THE FIRST QUARTER OF 2023

Michał Michalski - President of the Management	Tomasz Kietliński - Vice President of the Management Board
Board

Iwona Sierżęga - Member of the Management		Piotr Maciołek - Member of the Management Board
Board

Warsaw, 24 May 2023

Polenergia S.A. Group

Contents

A. INTRODUCTION TO THE CONSOLIDATED QUARTERLY REPORT

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2. Detailed commentary regarding financial results for the 3-month period ended on 31 March

2023 and other significant information on the Group's standing.	.......................................................... 6
3. The Group's organizational structure	17

1. INTERIM CONDENSED FINANCIAL STATEMENTS FOR A 3-MONTH PERIOD ENDED ON 31

MARCH 2023

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1. Information on the rules applied in preparation of the interim condensed consolidated

financial statements	23
1.1	The rules underlying the interim condensed consolidated financial statements	23
1.2	Rules applied in preparation of the financial statements	23
1.3	Functional and reporting currency	23
1.4	Seasonality and cyclical nature of operations	24
2. Adjusted EBITDA and Adjusted Net Profit	24
3.	Operating segments	25
4.	Other notes	29
4.1	Sales revenue	29
4.2	Cost according to type	29
4.3	Other operating revenues	30
4.4	Other operating expenses	30
4.5	Financial income	30
4.6	Financial expenses	31
4.7	Cash flows	31
4.8	Goodwill	31
4.9	Fair value of futures and forward contracts	31
4.10	Trade creditors and other receivables	34
4.11	Effective tax rate	35
4.12	Changes in provisions	35
5. Interest bearing bank loans and borrowings	36

1. Information on the issue, redemption and repayment of debentures and equity securities 36
2. Information on dividend distributed (or declared) in total and per share, broken down into

ordinary and preferred shares

37

8. Information on changes in contingent liabilities or contingent assets that occurred since

the end of the last financial year

37

9. Identification of proceedings before a court, an arbitral tribunal or public administration

body with respect to liabilities or receivables of the issuer or an Issuer's subsidiary

37

10. Information on any surety issued by the Issuer or any subsidiary with respect to a loan or a borrowing or any guarantee issued jointly to a single entity or a subsidiary of such entity, if the

total amount of the existing sureties and guarantees is material

40

11. Other information that, in the Issuer's opinion, is important in the evaluation of its personnel, property and financial situation, as well as in the assessment of its financial performance and changes thereof and information that is important for the assessment of the

Issuer's ability to perform its obligations	40
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Consolidated Quarterly Report for Q1 2023 ended on 31 March 2023

Polenergia S.A. Group

12. Identification of factors that, in the opinion of the Issuer, will impact its performance in

the perspective of at least the immediately following quarter	40
13.	Liquidity risk	40
14.	Information on significant transactions with associates	41

15. Identification of event which occurred following the day of preparation of the quarterly condensed financial statements and not included in such financial statements however

potentially significantly impacting the future financial performance of the Issuer	41
C. OTHER INFORMATION PERTAINING TO THE CONSOLIDATED QUARTERLY REPORT	42

1. Discussion of key financial and economic data contained in the quarterly financial statements, in particular factors and events, including non-recurring ones, with a material effect on the Issuer's operations and profits earned or losses incurred in the financial year, as well as

discussion of the Issuer's development prospects at least during the next financial year

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2. Concise outline of significant achievements or failures of the issuer in the reporting period

including a list of related major events

44

3. Management Board's position on the feasibility of meeting the previously published

forecasts for a given year in light of the results presented in the quarterly report

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4. Description of factors and events, in particular those of non-typical nature, of significant

impact on the financial performance achieved

44

5. Identification of shareholders holding, directly or indirectly through subsidiaries, at least 5% of the total number of votes at the general meeting of shareholders of the Issuer as at the day of delivery of the quarterly report, including the specification of the number of shares held by such companies, their percentage share in the share capital, number of votes attaching to them and their percentage share in the total number of votes at the general meeting, as well as identification of changes in the ownership structure of substantial share interest of the Issuer in

the period since the delivery of the most recent past quarterly report

44

6. Identification of effects of changes in the entity's structure, including changes resulting from mergers, acquisitions or disposals of the group entities, long-term investments, splits,

restructuring or discontinuation of operations	45
D. QUARTERLY FINANCIAL INFORMATION OF THE COMPANY POLENERGIA S.A	46

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Consolidated Quarterly Report for Q1 2023 ended on 31 March 2023

Polenergia S.A. Group

A. INTRODUCTION TO THE CONSOLIDATED QUARTERLY REPORT

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Consolidated Quarterly Report for Q1 2023 ended on 31 March 2023

Polenergia S.A. Group

1. Consolidated income statement for a 3-month period ended on 31 March 2023

Within the 3-month period ended on 31 March 2023, the results of Polenergia Group (the "Group") in terms of the adjusted EBITDA and net profit amounted to PLN 201.3 m and PLN 122.2 m, respectively, which means a YOY increase by PLN 22.4 m and PLN 6.7 m, respectively.

	Polenergia Group Income Statement (PLN m)	3M 2023	3M 2022	Difference YOY	Difference
	YOY [%]
	Sales revenues, including:	1 466,9	2 475,5	(1 008,6)	-41%
	trading and sales segment	1 205,7	2 287,3	(1 081,7)
	other	261,2	188,2	73,0
	Cost of goods sold, including:	(1 246,6)	(2 266,4)	1 019,8	-45%
	trading and sales segment	(1 116,9)	(2 173,3)	1 056,4
	other	(129,7)	(93,1)	(36,6)
	Gross profit on sales	220,3	209,1	11,2	5%
	Selling expenses and general overheads	(61,5)	(54,8)	(6,7)	12%
	Other operating revenue/expense	4,5	(0,3)	4,7	1869%
A	Operating profit (EBIT)	163,3	154,0	9,3	6%
	Depreciation/Amortization	37,9	24,7	13,1
	Impairment losses	0,1	0,1	(0,0)
	EBITDA	201,3	178,9	22,4	13%
	Normalizing adjustments:	-	-	-
	Adjusted EBITDA*	201,3	178,9	22,4	13%
B	Financial income	10,5	1,5	9,0
C	Financial costs	(22,3)	(19,0)	(3,3)
A+B+C Gross profit (loss)	151,5	136,5	15,0	11%
	Income tax	(30,7)	(26,9)	(3,8)	14%
	Net profit (loss) from continuing operations	120,8	109,6	11,2	10%
	Profit from discontinued operating activities	-	-	-
	Profit on disposal of discontinued operations	-	-	-
	Net profit (loss)	120,8	109,6	11,2	10%
	Normalizing adjustments:
	Purchase price allocation (PPA)	0,7	0,1	0,6
	Foreign exchange differences	(0,1)	5,5	(5,6)
	Loan valuation using the amortized cost method	0,8	0,3	0,5
	Impairment losses **	0,1	0,1	(0,0)
	Adjusted net profit (loss)*	122,2	115,5	6,7	5,8%
	Adjusted EBITDA*	201,3	178,9	22,4	13%
	Adjusted EBITDA Margin*	13,7%	7,2%	6,5%
	Adjusted EBITDA (excl. trading segment)	153,4	107,4	46,0	43%
	Adjusted EBITDA margin (excl. trading segment)	58,7%	57,1%	1,7%
*) Adjusted for non-monetaryone-off revenue (cost) recognized in a given financial year
**) Reversal of the impairment losses connected with projects development

The sales revenues of Polenergia Group for the first quarter of 2023 were lower by PLN 1,008.6 m year on year, mainly due to lower revenues in the trading and sales segment (by PLN 1,081.7 m), which was partly offset by higher revenues in the wind farm segment (by PLN 72.0 m).

Adjusted EBITDA result in the discussed period amounted to PLN 201.3 m and was higher by PLN 22.4 m YOY mainly due to better performance of the wind farm segment (by PLN 63.3 m) which mainly result from the commencement of production at the Debsk and Kostomloty wind farms, as well as higher electricity and green certificate sales prices compared to 2022 (in which prices were a consequence of hedging transactions concluded in previous years) and lower profile costs. This result has been partly offset by lower result in the trading and sales segment (by PLN 23.6 m), lower result in the gas and clean fuels segment (by PLN 7.8 m) and lower result in the distribution segment (by PLN 8.1 m).

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Consolidated Quarterly Report for Q1 2023 ended on 31 March 2023