A very warm welcome at the conference announcing the results of PGE for 2025. The event will be attended by CEO Dariusz Lubera, Vice President for Finances Przemysław Jastrzębski, Director of Finance Division Piotr Sudoł, and I will have the pleasure of hosting this meeting.

You might remember from our previous events that we will traditionally start with a presentation, which will be followed by a Q&A session with an opportunity for you to ask questions. Dariusz Lubera, the floor is yours, CEO.

Good morning, ladies and gentlemen. A very warm welcome at our conference presenting the results of the group for 2025.

It was a year that was exceptional for the group. Also, it was exceptionally hardworking time for us.

In mid-year, the group announced its new strategy. The strategy was announced in June.

The timeline is until 2035, and the key figures following from this strategy involve capex by 2035 at 235 billion, of which 150 billion PLN account for investment budget that will be spent in Polish companies. When we talk about results for 2025, we need to boast our record-high EBITDA, recurring EBITDA, which reached almost 13 billion PLN.

There was also an increase in capex up to over 11.5 billion, with a simultaneous decrease in net economic debt by 1.4 billion PLN. Last year, we also saw a diversification of production mix at PGE.

We reached almost 1.5 GW of installed power at in renewable energy sources. A major impact of the gas segment influenced the functioning of our production plant.

2025 was the year of full operationality of the power plant Gryfino Dolna Odra. For the first time, we earned on the gas as energy sources.

Also, we need to remember to have capital expenditures. Last year we were at 11.5 billion, drawing on European funds, mainly from the Resilience Program.

In 2025, we had exceptionally large amount of such funds, over 21 billion PLN. This translated into an increase in the value of our company compared to January previous year by 40% in terms of stock exchange value.

As for the figures for our today's conference, we will now address individual segments in investments. 2025 saw a continuation of the completion of our largest steam plant unit in Rybnik with 182 MW power.

Key part of works were completed in 2025, leading to the advancement of the project up to the level of 80% of completion. It is already very impressive now with the stack of 75 m height.

It is worth having a look at it because we already have something to boast about, and we will hand it for operation by the end of 2027. We are aware of the impact of gas on the Polish power system and its flexibility, and at the same time, we treat gas as bridge between coal energy and zero-emission sources.

As we are planning construction of two more units in OCGT technology in Rybnik and Gryfino, each with the power of 600 MW. Both projects have approved have obtained 15-year contracts in the power market up to 2030, and we signed a contract for completion of both units.

Good news is that the leader of the consortium that will build the whole project is a Polish company that, by the way, is also involved in our other gas gas-powered projects, a company in which we have hold a stake, Polimex Mostostal. Both units will be handed over for use at the turn of 2029-2030.

Now another very important area of investments of the group, namely offshore wind farms. The most advanced project there is, of course, Baltica 2.

At the beginning of this year, I mean 2025, we secured funding of the project in the amount of 15 billion PLN. The sources of this funding is loans from Polish and international financial institutions and about 5.5 billion from the Recovery and Resilience Program.

That means that finally we moved from the planning stage of this offshore wind farm to its construction phase. The first offshore works started like removal of boulders on the seabed where the turbines will be erected, as well as preparation of tunnels and corridors in which cables will be laid to connect the land with individual elements of the farm.

In parallel, we started a process of manufacturing foundations in the form of monopiles in on the area of almost 13 ha. We are on land we are preparing a transformer station for Baltica 2.

We have already prepared the construction part, energy infrastructure, and, again, a Polish company, Enprom, was selected as the contractor to provide the equipment here, which will allow us to connect the offshore and the on-land part of the infrastructure with cables. That will be all done by Polish companies.

In Ustka, in turn, we started the construction of the operating and servicing base. In January, we obtained a permit to complete this base, and we started recruitment of staff to work there.

Currently, in Baltica project, we are preparing the seabed for the laying of the cables between turbines, and in the second quarter, we will start installation of the foundations in the form of monopiles. Those are coming to Bornholm, and from there, they will be installed on the site.

From there, we will also install the foundations, while turbines will be installed next year with the starting point being the new terminal in Gdańsk. Another major project that PGE Group pursues is Baltica+.

For this project, an important event last year, at the end of last year, was our winning of an auction that was the first auction in Poland for offshore wind farms. This allowed us stable financial conditions and stable foundations for further development.

Another major step was taking over from EWE 350 MW capacity, and as you know from our press releases in the March this year, that came to an end. Another very important element of the system which we want to develop are the investments in energy storage facilities.

As we already have pumps that are used for storage purposes. Now we are investing in battery-powered storage facilities, and the first project is the investment in Żarnowiec, the construction of which started in 2025.

Here again, I can say that we have a domestic component because 75%, thanks to cooperation with LG Energy Solution, the entire capex of 1.55 billion PLN will be done domestically, and also we obtained funds from the Recovery and Resilience Fund in the amount of 75 million PLN. Another topic relates to the preparation of another major investment, the storage of energy in Gryfino with a capacity of about 400 MW and more than 800 MWh.

Again, that was a consortium of Polish companies that is a contractor here, and we are very happy that local content is tangible reality rather than just a declaration. Obviously, this situation would have never have happened if it hadn't been for major investments in energy.

That's something that we have to bear in mind. In 2025, just distribution involved 4.5 billion PLN expenditures.

In the past, distribution could only dream of this level of spending, I'm happy that we are now able to catch up on the expenditures that were not incurred in the past. The effects of those activities translate into connection of 40,000 new photovoltaic installations, 3,000 new clients as enterprises connected, and about 50,000 households.

As part of renovation activities, we modernized and built over 2,500 km of medium and low-voltage lines, as well as over 900 km of new medium-voltage lines, and that is a record-high result in PGE Dystrybucja. Also, we have segment of railway energy distribution.

There we had expenditures for 75 new and modernized substations for traction and transformers. Again, local content: in distribution, the share of local content is the highest in capital expenditures, exceeding 85%.

As for heat generation, we continued our strategy of decarbonizing this area, and in 2025, we handed over for use the largest gas-powered heat plant, Czechnica 2, with the capacity of 179 electrical and 315 heat generation power. Then we had EC Bydgoszcz, 52.6 MW in electricity based on gas engines, and heat storage, gas boiler generator, steam generator, and electrode boiler.

Last year also saw the launch of our new investment. We started in EC Kraków building a new gas plant with electricity capacity of 50 MW in electricity and 50 in heat generation.

In quarter two this year, we want to launch a new generation source in EC Gdynia, also based on gas engines with the power up to 50 MW. To wrap up, let me just summarize the local content that I've already mentioned.

We are quite well aware that it is not an single individual event, but it's a launch of a decade-long process. The support to Polish enterprises through the cooperation and the use of their potential that sometime ago, when the Polish economy transformation started, was either scarce or just non-existent, but right now, we're at a stage where being aware of the fact that we have local content means that we have an extra momentum for the Polish economy.

In our energy and electricity sector, it's very important, as we are demonstrating this on this slide. We have specific contracts that have already been signed.

LG Energy in Wrocław for the construction of the energy warehouse in Żarnowiec, Doraco for the operational and service base in Ustka, Smulders Projects Poland, the production of 107 additional steel construction for the foundations of Baltica 2, and the Baltic Group from RPE that produces and delivers platforms for service vessels and anode, and Enervigo, that I've already mentioned, ESB Uni-Kat and ESB Energy are all accountable for projects that are here implemented by domestic Polish enterprises. We have a partner for all our gas projects, that is Polimex Mostostal.

Thank you very much, and over to you, sir, Mr. Jastrzębski.

Good morning.

Moving on to the analysis of the information concerning the financial results and what happened in specific financial areas, perhaps first few words about the energy market as such and what happened in quarter four as well as 2025 as a whole. In the last quarter of 2025, we saw a significant increase in the domestic use of electricity.

You see this in the orange line on the graph. Now, that's 2.8% year-on-year, 1.2 TWh.

Due to the decrease of the need in the first three quarters of that period that we're talking about, we were able to end the year with the decrease of 0.9%. The consequence of the decreasing prices of gas and what I'm going to talk about later, low winds in Poland, have contributed to the fact that the market needed to use import of electricity to support its capacity, and in quarter four, 0.8 TWh of electricity was imported.

For the whole period, that is the whole year 2025, this value of import accounted for 1 TWh. Now, regarding the energy production in Poland, quarter four, it was maintained on the level that's comparable to what we saw in quarter four 2024.

However, there was an increase in the demand that was covered with the import of energy that I mentioned earlier. Throughout the year, energy production in Poland decreased noticeably by about 0.5 TWh, and I think the driver of that decrease was a drop in demand.

Now, for the renewable sources in quarter four, we have observed a decrease year-on-year, and as a result of low winds, poor conditions for on- inland wind farms, 0.6 TWh. For photovoltaics, we have a slight increase, 0.1, these, however, did not neutralize one another.

Now, what's important is that we have seen an increase in gas-generated energy, 0.8 TWh; coal, also 0.7 increase; and a significant decrease on lignite, that's 1 TWh. Throughout 2025, the renewables generation increased by 0.6 TWh.

However, what stands out here positively is photovoltaics, where the increase was 1.8 TWh. However, onshore wind farms were slightly deficient last year because there was a decrease throughout the period of 1.2 TWh.

We noted an increase in gas-generated generation, 2.3 TWh, but there was a decrease in coal, 0.4, and a very significant decrease of generation from lignite throughout the year. The the the level of that decrease was 2.5 TWh.

Now, regarding temperatures in quarter four, they were close to the climate average, there were no significant deviations here. However, the wind conditions were quite poor, all of that has meant that the prices on the spot market were positive, they grew by about 61 PLN vis-à-vis quarter three per megawatt-hour.

Now, the energy prices in 2025 grew by 26 PLN compared to 2024 to 442 PLN per megawatt-hour. This is the the main two factors are poorer conditions for renewables generation in over the period and the increase of CO2 prices.

In quarter four, the daily volatility of prices decreased, and what was frequent problematic on the market for us and for other players on the market was the negative prices, right? In quarter four, the number of these hours was relatively low or sporadic.

However, throughout the year, if we were to compare throughout the 12 months of 2025 vis-à-vis 2024, there was larger volatility, in fact, and there was a significant of increase of hours with negative prices. However, this problem always appears in spring and summer, where the generation from photovoltaic is the biggest.

Now for the fourth quarter continued increases on the market, and the main driver was the the rising CO2 prices, and the contracts for the next year grew from 430 PLN at the beginning of fourth fourth quarter to 450 at the end of that quarter. Now, CO2 emissions rights prices grew in quarter four from €78 to €88, more or less, euros per ton at the end of December, and that was caused by certain expectations of the market for tightening the balance of the emissions rights for 2026.

There was some fears that there was going to be lower supplies. Referring to what's happening already now 2026, we are observing that due to the discussions in some concepts appearing on the table concerning potential amendments of the ETS functioning, there are some signs from EU level and government level from the nation member states meaning that the system is going to be liberalized, and that's already impacted the market prices of CO2.

We're talking about right now, we're talking about this year already. Moving on, operational results: our production dropped by 0.96 TWh, that's about 2%.

Now, the decrease was mostly in lignite and coal. The lower level results from lower demand, but first of all, market pressure due to higher generation from photovoltaics and higher levels of generation from gas units in the system.

Lower production on lignite and coal were partially compensated by higher production in the gas power plant in Gryfino. That's almost 2 TB more.

We systematically completed units 9 and 10 in 2024, and then 2025 had 12 months of generation from these two units. Additionally, we also completed the Nowa Czechnica GT unit, and that also impacted the increase, and that was 0.6 TWh.

Now, regarding winds, I already said that in the areas where we had wind farms, there were noticeable noticeably poorer conditions, there was lower production by 0.2 TWh. Now, for heat production, which is generation and the sales, that's increased by 2.6 PJ.

That's quite That's or that's more than 2% increase vis-à-vis the preceding year, 2024. The average temperature totally throughout the year was lower by 0.2° than the previous year.

Doesn't seem to be a lot, but it impacts quite significantly the demand for heating, and that's been a good factor for us. Now, for distribution, PGE Dystrybucja, we had a higher distribution of energy, that's an increase by 1%.

We have more customers in the G tariff, and the development of SMEs and large enterprises, that's impacted this positive development, and I'm talking to about tariff B. Now, for railway energy, the volume of distributed energy also grew by 4%, and that mostly resulted from a higher volume in the traction segment.

This was true both for passenger as well as cargo transport. Now, for retail sales, we have noted a decrease, 1.4 TWh year-on-year.

That's -4%. We've noted a decrease in sales in tariffs B and C.

The next slide, it's a standard we always present it to you, main factors for our EBITDA, as it was mentioned by the CEO already. We generated repeated EBITDA 12.9 billion.

That's an increase of 14% year-on-year, and that's a historic high for the group, a very positive development. Now, for the generation part, it was better by 300 million, mainly due to lower cost of CO2, lower cost of fuel, and higher revenues from heating, which I've already mentioned.

This was partially obviously compensated with lower revenues from electricity, and that, again, was impacted by lower prices and decreasing sales volumes. The increased margin in the heat segment and gas energy, we have a decrease of results in coal energy.

In quarter four, we saw a decrease in margins in energy generation by 0.7 billion. There's lower margin on coal and lignite generation mostly, mostly due to the fact that there was lower demand for energy from this origin and lower prices.

Mechanisms of support contributed significantly, the balance power in the power market in 2025, we have a positive impact here and contribution to the increase of margin via total of 1.1 billion, and it's worth noting here that there was additional revenue from the supplementary auctions from the power market in the second semester. That impacted our margin significantly and a larger traffic in the remaining units.

As regards sales of energy to final users, we have 1.7 billion increase. That's a one-off because in 2025, we made up for the lower margin from 2024 resulting from G tariff lower results, but that was a one-off, which in the future will not be repeated.

At least we do not assume any such development as of now. Positive impact on distribution came from our investments because they began to translate into returns on investment with lower costs of energy purchases.

We saw an increase at 0.6 billion PLN. In railway energy, where we also have a major component of energy distribution, the growth was generated at 0.2 billion, that is 200 million PLN.

We also had a negative impact of a deviation on the provision for encumbrance-generating contract. That's that was where we had energy contracts, and PGE Obrót, where the main driver is the G tariff, and also consolidation adjustments.

That's something typical with consolidation. The results of social bargaining, in general, growth by 260 million PLN, and relatively small item under the heading Other.

It comprises a lot of sub-items, but they are not material. If you have any specific questions, we will provide you the split of this aggregate, but altogether it makes less than 100 million PLN.

If we move on, here in this slide, we present our capital expenditures in 2025. As the CEO has already mentioned, the amount was over 11.5 billion.

That was 1.2 billion higher than in 2024. The greatest increase in capex in renewable energy with the greatest input coming from Baltica 2 project that is becoming increasingly advanced in its completion.

We had the preparation of the foundations for offshore transformer stations, and that will gather pace because the project is getting more advanced, plus we will have the most massive payments to make. We also paid an advance payment to the general contractor in our project of building energy storage in Żarnowiec.

As for distribution, the growth was relatively slow, low, 52 million PLN. We mainly connected new consumers.

We installed remote readers, and there was also the cabling program. With heat generation, the level was similar to 2024, and here we mainly completed projects in Gdynia and Kraków.

We also settled the construction of EC Czechnica. We saw a major decrease in coal energy, 290 million PLN.

That is a positive development. We show here that we are efficient in what we have been talking about for quite some time, namely that we are very disciplined in investments in this segment, mainly focusing on maintenance.

We do not plan any new developments here, and we stick to this course of action. We only do the maintenance work that is necessary to provide continued security and operations of those assets.

As for railway energy, we saw a 109 million drop. Again, at our previous meetings, we explained to you that we were not 100% in control of the investment schedules because we are dependent to some extent on the works performed by Polish Railways, and this mainly relates to MUZA power supply systems.

We also had some mismatch—well, maybe mismatch is not the perfect word here—but we had different split of payments over time schedules. In 2025, we mainly made payments related to the Rybnik unit.

To sum up, 1.2 billion growth changed upward from 2024. Later, I will tell you more how we see our future developments, but generally, we want to stick to our strategy, and the investments need to grow.

As for net debt, as the CEO mentioned, at the end of 2025, net debt amounted to 4.2 billion, and we are talking about standard, non-economic debt, and it was 5.3 billion lower than in 2024. The factors that contributed to this level were EBITDA generated at 12.9 million PLN, change in CO2 settlements 0.6 billion, capex 11.5 billion that has a negative impact on growth of debt, 1.7 billion that was corporate income tax, 1.1 billion that was decrease in debt, difference in valuation of the loan from Recovery and Resilience Fund 2.8 billion, and the other factors were less significant in this total.

CO2 settlements, a quarter-to-quarter that grew by 300 million, but year-on-year, we had 1.4 billion decrease. Economic debt of the group amounts to 15.8 billion, which translates into debt net to 12-month EBITDA, recurring EBITDA, at 1.23.

In this slide, you can see also the standard presentation that you might remember from our other conferences, and that shows our outlook for 2026. We expect stable EBITDA developments as a result of increase of capacity in wind and photovoltaic farms, with expected lower revenues from balancing power.

We expect a further increase in competition in this market and the resulting systematic decrease in prices. Additionally, we expect lower revenues because of the assumed decrease in the prices of green certificates.

Then stable EBITDA in gas energy with expected greater margin on sales, however, constrained by lower revenues from the market of balancing powers. In coal energy, stable level of EBITDA with continued development of renewable energy sources that drives out this segment from the market, and as a consequence, we have lower volumes.

Just like with other generation segments, we expect lower revenues from balancing powers. Positive impact should come on from provisions on contracts generating expenditures.

In July, we should know further details regarding future generations, future regulations, and depending on how the market reacts to the new regulations, how the market perceives the discussed or already introduced solutions, the CO2 prices might change, and as a consequence, in the second half of the year, we can see the impact on finances of enterprises with major payments. We do not know the direction yet, it's hard to make any assumptions at all.

In heat generation, we expect stable EBITDA levels, lower revenues from sales of electricity to be offset with lower costs of fuels, expected higher revenues from highly efficient cogeneration. We had a full year of Czechnica operations, gas engines in Bydgoszcz, and we will put into operation new engines in Gdynia.

Distribution, here we expect stable EBITDA, lower WACC for 2026, increased regulatory value of assets exceeding 25 billion PLN, and as for the final result, it will be to a large extent determined by electricity consumption. In railway energy, we accept a decrease in EBITDA mainly because of the expected lower profit on sales of energy.

In trade, the reason for the expected drop is related to new activities stemming from the implementation of the strategy. In the following slide, you can see a new table that we present for the first time today.

Here you can see our outlook for 2026, but with regard to capex. In very broad terms, we expect the dynamics in the growth of capex in 2026 to accelerate and amount to several dozen percent, so that will be significantly higher with a market increase.

Renewable energy is the segment where we expect the greatest growth. Baltica 2 is getting into increasingly advanced operational stages, and that will mean greater expenditures.

We will continue to incur expenditures related to the battery-powered storage. In Gryfino, we are planning to sign a contract in the near future, and also we announced a tender for the supply of storage units and transformer stations for smaller four facilities situated next to wind farms.

In gas, we have CCGT in Rybnik, but the greatest driver will be the start of new OCGT units in Gryfino. Then very briefly, heat, increase in expenditures will be related to the decarbonization program.

In 2026, it will involve investments in Kraków, Gdańsk, Gdynia, where we are installing gas engines and heat sources. Railway distribution is the segment where we expect a major growth in distribution.

The growth should exceed 5 billion PLN, and a basis of those expenditures are the funds from Recovery and Resilience Fund. We will be focusing on modernizing the grid in order to be able to connect new customers.

The two new slides are also new due to the fact that we have quite significant noticeable differences between the net profit in quarter four, which was over 3 billion PLN, but on the other hand, we have a loss of 3.4 billion for the year. I wanted to present the main factors that contributed to this situation.

In quarter four, the repeatable EBITDA was encumbered with reserves, provisions for the coal segments. Now, the total was 766 million.

The provision was made due to negative margin on these energy sales contracts for 2026-2028, and this also includes partial overheads that are not covered from the mass market. Now, in the distribution, this will not be a surprise on this market, there's of over 400 million, that's G tariff.

The reported EBITDA dropped in quarter four by 1.2 billion due to individual events, mainly the fund for the disbursement of the price difference, that's 600 million, and the recultivation provisions, 356 million. We had a positive financial balance balance at the time during the update of the derivative instrument price valuation, CFD, in Baltica 2.

The impact was 180 million and plus. Now, large net profit on 3.2 billion was attained mostly due to the asset in PGNiG.

In October, there was a tax group created, and that enables us to settle the losses generated by [unclear], which is a component that has contributed to this outcome, this result that we have presented for quarter two quarter four. Now, the next slide, regarding the results for 2025, we reported a loss of 3.4 billion PLN.

There's a number of components here, but really the highest, unsurprisingly, driver of what's happened was a massive write-off that updates most of the carbon assets mid-year. Mostly they were non-cash write-offs, but about 9.9 billion PLN in total, and that was a component that weighted down really our financial statement and our results for 2025.

Now, regarding net profit, we need to point out that for the outcomes in 2025, we had the positive impact of the deferred tax that's much smaller. It actually got neutralized, but what happened with the write-off of the carbon assets, that's 2.5 billion of the write-off.

That equalized, and hence the the positive impact is a lot higher than it would then then it was for the for the quarter for the last quarter of 2025 alone. I think that sums up my presentation.

I hope this was not boring for you, and let's go to the Q&A. Traditionally, we have already collected a number of questions.

Let's start with those, and then, traditionally again, we will give the floor over to the audience.

Moving on to the first question I have here with reference to what's already been said, ETS: how will the revision of ETS principles expected for July this year, how will it impact the business segments of PGE and PGE's strategy? CEO, please.

Indeed, ladies and gentlemen, the announced and expected July revision of ETS will have a significant impact on the group's situation and how we perhaps update the strategy. Let me just remind you that one of the major costs of the group is the annual spending on the level of 20 billion PLN for the emissions rights of CO2, and that is a key amount that has a significant impact on our operations.

Depending on the direction that the whole revision will take, well, it has been announced, and I personally do not expect there to be any specific solutions put on table already in July, but if some outlines are specified, perhaps these could be impactful. Potentially, there might be a reserve for market stability to be used when we have significant increase of CO2 or depending on how this translates into the rates of the CO2 rights.

That will impact in short term because we are not really assuming that it'll cause a significant drop in CO2, especially that we don't even know whether this is going to be the course of action for this revision at all. Now, if there is a short-term window, operational window for carbon assets, then that will potentially impact the events of 2028 and moving further when there's no longer the power market operational for carbon assets.

That could potentially translate into us having to take this fact into consideration in our strategy.

Thank you, sir. You have made reference to the strategy a couple of times in your intervention, a follow-up question: when can we expect the update of PGE's strategy?

Originally, we said that the strategy that was adopted in mid-2025 and put into practice that, due to the volatility of our external situation, will have to be reviewed and potentially updated. What I can say is that is already happening.

Originally, we thought that we were going to inform you about at the end of June, after a year of the strategy's operation, about potential updates, but since the ETS revision has been tabled for July, well, then even if there are some outlines present in July, then naturally it would follow from that that we may not take into consideration what was going to happen in July into our strategy. What I can say today is that I would be more inclined to say that the updated strategy might be presented perhaps early in September, since there's also a holiday season in July and August.

Briefly speaking, we do want to take into consideration what's going to happen in July in our updated strategy.

Thank you very much. Our next questions are about the expectations of the board on the WACC value in distribution in the following years from the strategy perspective and its impact on investment outlay.

Right. WACC in distribution is a topic that is and is going to be popular.

The level of WACC is something that determines our investment capacity, and we point to the fact that as far as distribution is concerned, despite being able to generate very high EBITDA, which is often raised, actually, the vast majority of the EBITDA is reinvested, which, as a matter of fact, is a necessary thing. It has to happen if the market is to further grow and then the distribution and distribution grids are the backbone of the system.

In general terms, we think that WACC should be on the adequate level that will enable us to further put in practice the ambitious investment process. Right now, our assumption is that WACC will be over 9% an average a year.

That's our assumption, a strategic one. Now, this is, of course, an element of our annual discussions with the regulatory authority.

We will find out every year the status quo, but we have some arguments that are definitely strong ones in favor of WACC being set on a reasonable level that will weigh off all the for and against from both parties, both sides. What I'd like to emphasize is that a stable approach to WACC would be satisfactory to us because that allows us in mid-term to adequately plan our investments.

Once we know that we have a guaranteed level that there is a consensus regarding it or the cooperation between us and the regulatory authority, it's definitely easier for us to plan investments, and it's always good for us to be able to plan investments in a stable way that will prevent any turbulence from happening. We will always point out to the fact that the level of WACC is not a factor that would largely trigger any costs for the clients because even an increase by 100 basis points of WACC translates to 1% or 2% increase in the ultimate bill for our customers.

For 1 MWh, that's a few zlotys only, assuming that a household uses about 2 MWh a year, that is not a very big or unacceptable level. We do, of course, understand that every zloty, every penny counts for the customer, for the payer.

We need to balance these arguments, and we're hopeful that this debate with the energy regulatory authority will be beneficial for us. Thank you.

Just a follow-up comment: we did not imagine that there could be a drastic decrease of this indicator due to the fact that it's a very important component of the whole transformation. When we talk about distribution networks, distribution grids, if there were any significant interruptions in the investment in their modernization and development, this could naturally halt our connection capacity for the renewables and energy warehouses.

We are assuming that there will be some understanding from the regulatory side. Still, like Przemysław has said, this is always a dialogue with the regulator during the tariff period.

Thank you.

The last question, please prepare your microphones, the audience: what are the expectations of the board on the G-tariff rate for the cost of energy for 2027 and the year forwards?

We are now early in the year. Most of the events that we are talking about, both WACC and G tariff, will materialize after the holiday, later in the year.

Right now, it's too early to determine the retail price levels for next year. The contracting of energy for 2027 is in progress.

There are two key uncertainties on the market, and that's no surprise, is the natural gas price and CO2. Natural gas price is driven by what happens globally, Persian Gulf, the Middle East, we don't know how it's going to develop and whether it's going to be a long-term impact on the gas market, and CO2, again, there's uncertainty growing from what we've just described.

Perhaps in July, we will find out more about any potential planned amendments. All of that means that a conversation here in this area is, it's like having a glass ball, and it's really telling tales.

You can't really say much at this stage and be specific. Now, regarding the prices of energy, wholesale prices of energy are more or less 440-490 PLN.

Our position really, in mid-term, G tariff should cover our costs, reasonable costs, fully. That's our position.

This is becoming increasingly difficult because of prosumer issues and difficulties in balancing off, but we have a major and dynamic growth of micro-PV installations. This is something we are grappling with, but as you well know, this is always a discussion between us as the company and the regulator, and a final decision is always made by the regulator.

We have our arguments that we will put forward in a dialogue, and just like with WACC, we will see how the situation develops, hoping that the decision will be well-balanced. Thank you.

Thank you. Now we have the microphone in the room.

Please introduce yourself. Maybe not more than two questions, let's give a chance to everyone present.

Bartłomiej Sawicki, Dziennik Rzeczpospolita, Parkiet.

Two questions as requested. My first question is about EBITDA in distribution, that's a popular topic as the CEO mentioned.

As follows from your presentation, 41% of distribution of 41% in the entire result of the group accounts for distribution. Taking into account WACC, and that's going to drop this year from almost 13% to just above 9, do you expect—or your presentation said you did not expect that—but do you expect a decrease in the importance and share of distribution in the overall result of the group?

That has been the case for years. Distribution has driven your results, that was also the case in your competitors.

Maybe restrictive policy of the regulator can contribute to reducing the overall result of the group, just because your driving force will be less strong to drive your results. The second question, power market beyond 2030: when will you need the information from the government and European Commission about the developments of power market beyond 2030?

Thank you.

Right. The first question regarding EBITDA, distribution, and WACC level: as I said, this is always the decision of the regulator, and depending on what decisions are made year by year and how WACC develops, in a very negative scenario, if WACC is significantly lower than the level I have just mentioned that we have in mind, that's pure mathematics.

There will be some negative impact. However, as of now, we do not expect this to be a major impact.

WRA is growing, on balance, mathematics tells us that there should be no dramatic downturn here. As of now, with our assumptions of WACC that is +9%, we do not see any major threat here for a disruption in our financial results.

Commenting the results on 2025, it was record-strong, maybe it was specific. We are still facing major challenges, but it is our job to cope with those challenges, and we'll see what final results that generates.

However, as of now, there are no major concerns in this regard. As I said, we always see how things develop year by year.

There was a question about power market beyond 2030. I would first look at what happens beyond 2028, that relates to coal assets.

We can see increasingly in the market that coal units are driven out from merit order, and the last winter showed that their presence is, however, needed, necessary. We are in dialogue with other stakeholders interested in developments in this regard, that is the operator of the transmission networks, and we are working on developing solutions first for beyond 2028 and then for more distant future.

I can just say that the sooner we come up with clear solutions in this time horizon, the better. Today, we can see that in particular coal units are no longer an element of market dynamics.

However, they do play a role in the overall systems of energy security, which also has some costs. Let me remind you, and that is no secret, that both the operator and the president of the Regulatory Office released information that one day of blackout in Polish economy costs about 40 billion PLN in losses.

If we look at these numbers, and if we look at the needs linked to energy security, I think that relatively soon we will see a solution,

be that the mechanism of cold reserve or something else, some mechanism needs to come up. Ireneusz Chojnacki, WNP.

To continue on the theme of coal, did you decommission any coal units in the group, and if so, on what scale and what plans do you have on this for 2026? Will there be any decommissioning, and if so, if any?

The second question regarding offshore, or two in one: do you uphold the date of handing over Baltica 2 for operation in 2027, and if so, what level of CFD can be expected then? What are the plans now of your plans and of other partners regarding Baltica 3?

Will you continue this project? Will you abandon it?

How will that develop because the reconfiguration is rather time-consuming here?

Let me answer the first question. We decommissioned the units in Dolna Odra last year, yes.

Two units were decommissioned last year at the end of the year. Now we are still analyzing when we will decommission the units in Rybnik, but that is still the subject of our internal studies.

Baltica 3, indeed, it is still in the process of reconfiguration and optimization. We are hopeful at the moment, and we plan to revive the project by the end of the year.

You asked whether it was abandoned. No, it is not abandoned.

It is being analyzed, and our first choice scenario is to have something positive still this year. In this first phase, yes, that is extension.

We got an extension till 2032. The first part of your question, Baltica 2: do you uphold 2027 as the year of handing over for operation, and then what CFD do you expect then?

As for Baltica 2, everything is on plan, we do not see any risk of delays, no indications of that with the project going very well. As for CFD and prices, you need to make certain assumptions, assuming a certain inflation rate, and I do not have the numbers with me now, and that will be adjusted annually.

The price in 2027 or 2028 will be just for the 12 months of a specific year because that's how the model is structured. You have the 319.60 as the starting point and CPI, and CFD below or above market price, and when you start sales.

When you start sales, as we pointed out, the prices are between 40 and 4 400 and 490 for this year, and that's likely to be that range. Thank you.

I can see Mr. Zasuń raising his hand.

That was a hostile takeover.

Rafał Zasuń, WysokieNapięcie. I have two questions.

The first is about the provision for contracts. Can you say something more, what contracts is that about?

Contracts on the exchange or for 2026, but I do not see why it should also apply to 2027. The second question is about the dispute with the Regulatory Office.

Have you applied to the court for removing the clause of immediate enforceability?

You are talking about this extra amount. As for the provision for contracts in coal energy, that is term contract that was sold for 2026 and to some extent for 2027.

What we look at the current situation and potential margin that we are going to generate on these contracts, it might not be satisfactory, and that's why we needed to establish this provision. We do not look at it as a whole amount, but specific units.

You are talking about swap contracts? Yes, yes, we are not talking about bilateral contracts that generated losses.

These are term contracts on the least efficient units. As for the second part of the question, or the second question: yes, this was paid as the first piece of information, but we are still on the position that in this dispute, we are right.

We filed the case with the court, but the question whether the court addresses this and when we see the result is something I cannot really comment on.

Paid, and we are now in court. I'm interested in the procedure because I understand that considering the merits might take a few years, but is there any chance for the court to consider sooner the application for removing the clause of immediate enforceability, which would give you a chance to recoup the money?

That's a legal issue, and I would prefer not to comment on this. I'm not an expert on those legal nuances, maybe after this conference, we will double-check and what further course of action we can expect.

Just to follow up, the reason why we paid is to mitigate the risk in case these decisions was sustained. The whole court case supposedly will take a few years even.

When the court will be ready to take up the debate, well, as soon as it happens, we would like it to be proceeded, but really, it's not really up to us how fast it can happen. We will test it, and we will see what the legal obligations are in case there is a clause of immediate enforceability applied.

Hello. Łukasz Piasecki, mBank Security.

What are your CO2, gas, and other fuel securities? What is the situation in 2026, 2027?

To wrap up my question, I'd like to also know with low and cheap financing, what are you expecting from these warehouses? I imagine they are supposed to be just a support for your whole infrastructure and to mitigate the mixture of the balancing strategy.

I'm not saying that this is the lowest level, the minimum level, but support is always significant, and we always try to get it because it improves IR levels quite a lot depending on the scale of support, of course. This could be several dozen percent of an impact, but if we assume that 100 is the level of support, then with the support, the IR is several dozen percent bigger than it would be if there were no support.

About the IR itself, I don't want to really disclose any information. It varies depending on the project.

Double-digit, right?

You can make an assumption, yes. Hedging.

Your hedging for CO2,

well, I understand it's done systematically per contract, it's fully hedged. Payments are for CO2.

For natural gas, we also contract this out in the exchange, the hedging is also close to full, right?

Just a second, today's macro is slightly unpredictable. What is your outlook on working capital?

Is it going to grow, not grow? What is the pathway, expected pathway here?

It's hard to say, really. We haven't analyzed this.

We are analyzing, but it's very difficult to talk about the scale of capital increase right now. It's hard to make a reference, really.

You're talking about macro uncertainty. In general terms, in our policy, seeing what we're observing, that in all the analyses and the managing of liquidity, we have a certain buffer of security, right?

This is what we always assume to make sure that the buffer is higher in a period such as today, which are, well, not very certain, right? We don't know what's going to happen in three months, but I cannot talk about details, how many percent, etc.

I'd have to go back to the source materials, but we wouldn't be disclosing that. It's our internal know-how.

Please address us with some details, we may supplement.

Bloomberg News, hello. Two questions, really.

One regarding the Gryfino warehouse: what has caused this company to be awarded, not LG, for example? Was it the price or the parameters of the storage, or lack of production capacity that LG had, or anything, specific requirements?

The second question is about the dividend: two energy companies, state-owned, have offered dividend, you haven't. Do you think that next year the situation will allow you to offer a dividend?

Regarding Gryfino, first of all, the price was a factor, and also there was another factor, that was the outcome of the decision. The dividend, that's a standard question, and I'm not surprised to hear it.

It's in the interest of the shareholders, but not much has changed, really. Still, what we've been saying for months or quarters, still we are not quite fully aware, we haven't got full clarity about what the capital group's operation will be in terms of carbon assets.

Potentially, in the years to come, this is a large challenge for us, and until we have clarity regarding what the CEO has just mentioned about the potential new support system after 2028, right, if we don't get this, there will be a problem because there will be some solutions that we don't know at this stage. This could be a better or a worse outcome for us.

I think we're the only energy group in Poland that has the massive challenge related to lignite, and this is why, given this issue and the massive capex that we're planning to roll out our strategy, we recommend non-payment of the dividend, as we communicated earlier. Now, if these components that I've just mentioned started to shape up, and if we had a better forecasting capacity internally for the operation of this carbon and lignite component, and to what extent it's going to be a challenge, we could come back to this and retable this topic.

I think that's the right recommendation to make at this stage, however, but I do understand the interest and I do understand your question. Thank you.

Hello. Jędrzej Stachura, Energy Drink Podcast.

Here is my question. We can see an increased consumption of natural gas in your results.

We know that the prices have been volatile lately. Let me ask you about the role of natural gas after the Iran crisis, and in your opinion, is it worth putting so much gas into energy and heating?

That's provocative question, I realize, but thank you nevertheless.

Like I said in my presentation, we treat natural gas as a transitory fuel. This is an element of a far-reaching transformation of the sector and the group.

The recent events in the Middle East are not something that we are able to predict. It's a force majeure.

In our view, gas fuel and the units that are already operational are showing us that this is the right course of action to take at this stage, and we ourselves are already part of the gas purchase exercise, regardless of the main supplier of this fuel. Still, we have quite a lot of diversification in terms of gas supply.

Only about 10% come from the East. Right now, we are not rating this gas situation as critical.

Filip Osadczuk, the bank's brokerage office. I'm glad the gas topic was taken on board, but a slightly different question that I have is the impact of developing capex and the market of gas turbine suppliers.

I think I should congratulate you on the closure for the CCGT proceedings. Tauron did not succeed.

Now, I wanted to ask your opinion, since you're close to the gas turbine market, what is the market right now and where could it go? Tauron informed that they had been hopeful that the Middle East crisis could perhaps translate into a slightly smaller supply market due to certain projects being canceled for the development of natural gas in the Middle East, but I see that the destructions in Asaluyeh could create the need to reconstruct gas turbines to liquify gas.

What is your position here?

As you said yourself, all of these projects that we reported for auctions were completed. I believe that the problem is there and it's going to grow, not just because of what's happened recently in the Middle East, but there are two factors, really: availability, and if it happens and it's decreasing, there's also the question of price.

That's an important factor. Gas projects that we've spoken about so far, especially in our heat industry, are based on gas engines that are now available at good prices.

Definitely no need to launch projects unless the slot has full coverage that could ensure full rollout, according to our view.

I understand that the potential new gas investments you were planning, Ostrów or Toruń, they will be subject to revision as part of your strategic process.

I think that as part of our strategy revision, we will make reference to it quite clearly.

Thank you.

Hello. Hubert Sosnowski, Polityka Insight.

I have a question about your strategy. In the upcoming update, can we expect a bigger share of offshore and nuclear energy in the group's strategy?

My second question: does the lack of a fresh update of the Polish nuclear energy come as an obstacle in your talks with potential nuclear suppliers? Thank you.

Maybe Przemysław can answer the question about offshore, and I will comment on nuclear power. Let me remind you that in our currently valid strategy, of course, we always operate on the basis of a strategy and we function following this strategy.

I'm very happy that we have something to stick to. It follows from this strategy, as of now, after the takeover of half of the stake from PAK, we have PGE EJ, that was 100% taken over, and this company is now exploring two sites: Konin, that's more advanced, and the other one that is of our interest, and namely Bełchatów.

Originally, by the end of March, we wanted to update the Polish policy for nuclear power. Of course, the lack of this policy until now does not help, and we as PGE are fully aware that we cannot dare to say we will definitely be an investor because these decisions are to be made at the governmental level, at the state level.

However, if any opportunities in this respect come up, for sure we will be interested in exploring them. If any commercial SMRs are available, we will be interested, but now we are as we are.

As for offshore, please notice that in our strategy, the level that we would like to achieve within the strategy horizon is 4 GW. If we consider Baltica 2, Baltica 9+, and Baltica 3, and if we put those together, we are very close to that target.

As of now, a pipeline by 2032 is complete, and as for next projects, here to a large extent the question will be linked to the state policy and the overall approach to offshore. We have some projects that could be completed in the next phase, but we are waiting for decisions that will be made beyond us and beyond our control.

As for the completion of our strategic goal, we are very close to reaching this target of installed capacity, and we feel comfortable about that.

Wojciech Jakóbik, podcast Energy Drink. I would like to ask about Bełchatów and lignite in the context that merit order is pushing away conventional sources, and the Iranian crisis, just like the crisis in Ukraine, showed that coal extraction and burning lignite is safe, beneficial in terms of energy generated in such sources.

Is that an argument in your discussions in Poland or in Europe about a possible change of the market to make those units work a bit longer?

Indeed, what you have just mentioned, first of all, we had last winter, secondly, and just to be clear, when the temperatures were the lowest, all units were operational, and that made everyone realize that in the context of possible risk of blackout, it's impossible to function without coal and lignite units in the near future in a secure manner. These have to be increasingly treated as some element of energy security on which some form of outlays will have to be envisaged, and that's the responsibility and the burden on the operator of the transmission system.

Does not mean that we are waiting passively for any solution to come. We have in place a program of optimization of the operation of our entire grid, and to some extent, we are adjusting to market developments.

However, the society at large is increasingly aware of the need for some support system. The famous cold reserve or whatever other system is needed to ensure energy security of the Polish system in long term.

Thank you very much.

Thank you. I do not see any further hands raised.

Bartłomiej Sawicki, last question.

Let's say it's the last question before the end. My last question is about Gryfino.

In the context of selecting this contractor, do you know who is the supplier of technology? Which country supplies the technology for Gryfino?

I can say that this is not a third country which, in accordance with EU and our regulations, should be excluded. That's from the US, actually.

Thank you.

Thank you, ladies and gentlemen. If you wish to stay a little longer with us, you are welcome to do so unofficially.

Thank you very much for attending our conference.