Consolidated financial statements
In 2016, the PGNiG Group generated revenue of PLN 33,196m, down PLN 3,268m (or 9%) from the year before when it reached PLN 36,464m. With operating expenses lower by 10% and amounting to PLN 29,836m, the PGNiG Group generated a consolidated operating result (EBIT) of PLN 3,360m (up 2% yoy). The operating result before depreciation and amortization (EBITDA) was PLN 5,974m, i.e. slightly lower, by PLN 105m (or 2%), than the year before. This level of performance was achieved despite the low prices of crude oil on the global markets and despite the low prices of gas in Central Europe in a situation of ongoing deregulation of the gas market in Poland. The Group’s sales activities coupled with lower temperatures resulted in a 6% increase in the volume of gas sold by the PGNiG Group from 23 bcm in 2015 to 24.3 bcm in 2016.
Changes in EBITDA 2015 vs. 2016
PLNm
The consolidated financial statements for the financial year ended December 31st, 2016 are available on the website www.en.pgnig.pl/investor-relations/reports/periodic. An independent statutory auditor’s opinion together with a report supplementing the opinion on the audit of the consolidated financial statements for the financial year ended December 31st, 2016 is included in the consolidated annual report of the PGNiG Group for 2016.
Financial highlights of the PGNiG Group
for the year ended December 31st 2016
Scrollbar is below the table
| PLNm | 2016 | 2015 | Change y/y |
|---|---|---|---|
| Sales revenue | 33,196 | 36,464 | (3,268) |
| Total operating expenses, including | (29,836) | (33,174) | 3,338 |
| Depreciation and amortisation | (2,614) | (2,790) | 176 |
| Operating profit (EBIT) | 3,360 | 3,290 | 70 |
| Profit before tax | 3,210 | 3,014 | 197 |
| Net profit | 2,349 | 2,136 | 213 |
| Net cash flows from operating activities | 5,922 | 7,271 | (1,349) |
| Net cash flows from investing activities | (3,842) | (3,147) | (695) |
| Net cash flows from financing activities | (2,269) | (829) | (1,440) |
| Net increase/(decrease) in cash | (189) | 3,282 | (3,471) |
| 2016 | 2015 | ||
| Total assets | 49,672 | 48,292 | 1 380 |
| Non-current (long-term) assets | 36,236 | 35,643 | 593 |
| Current (short-term) assets, including | 13,436 | 12,649 | 787 |
| Inventories | 2,510 | 2,229 | 281 |
| Total equity and liabilities | 49,672 | 48,292 | 1,380 |
| Total equity | 32,016 | 30,741 | 1,274 |
| Total non-current liabilities | 7,303 | 11,262 | (3,959) |
| Total current liabilities | 10,353 | 6,289 | 4,064 |
| Total liabilities | 17,656 | 17,551 | 105 |
Consolidated statement of profit or loss
for the year ended December 31st 2016
Scrollbar is below the table
| PLNm | 2016 | 2015 |
|---|---|---|
| Revenue from sale of gas | 26,429 | 30,263 |
| Other revenue | 6,767 | 6,201 |
| Revenue | 33,196 | 36,464 |
| Cost of gas sold | (18,320) | (22,005) |
| Other raw materials and consumables used | (2,427) | (2,211) |
| Employee benefits expense | (2,573) | (2,714) |
| Transmission services | (1,106) | (1,156) |
| Other services | (1,412) | (1,235) |
| Taxes and charges | (765) | (628) |
| Other income and expenses | (332) | (515) |
| Work performed by the entity and capitalised | 868 | 953 |
| Recognition and reversal of impairment losses on property, plant and equipment and intangible assets | (1,155) | (873) |
| Operating profit before depreciation and amortisation (EBITDA) | 5,974 | 6,080 |
| Depreciation and amortisation | (2,614) | (2,790) |
| Operating profit (EBIT) | 3,360 | 3,290 |
| Net finance costs | (76) | (225) |
| Profit/(loss) from equity-accounted investees | (74) | (51) |
| Profit before tax | 3,210 | 3,014 |
| Income tax | (861) | (878) |
| Net profit | 2,349 | 2,136 |
| Net profit attributable to: | ||
| Owners of the parent | 2,351 | 2,134 |
| Non-controlling interests | (2) | 2 |
| Weighted average number of ordinary shares (million) | 5,867 | 5,900 |
| Basic and diluted earnings per share (PLN) | 0.40 | 0.36 |
Profitability
as at December 31st 2016
Scrollbar is below the table
| PLNm | 2016 | 2015 |
|---|---|---|
| EBIT operating profit |
3,360 | 3,290 |
| EBITD operating profit + depreciation/amortisation |
5,974 | 6,080 |
| ROE net profit to equity at end of period |
7.3% | 6.9% |
| Net margin on sales net profit to sales revenue |
7.1% | 5.9% |
| ROA net profit to assets at end of period |
4.7% | 4.4% |
Liquidity
as at December 31st 2016
Scrollbar is below the table
| PLNm | 2016 | 2015 |
|---|---|---|
| Current ratio current assets to current liabilities (net of employee benefit obligations, provisions and deferred revenue) |
1.5 | 2.5 |
| Quick ratio current assets less inventories to current liabilities (net of employee benefit obligations, provisions and deferred revenue) |
1.2 | 2.0 |
Debt
as at December 31st 2016
Scrollbar is below the table
| PLNm | 2016 | 2015 |
|---|---|---|
| Debt ratio total liabilities to total equity and liabilities |
35.5% | 36.3% |
| Debt/equity ratio total liabilities to equity |
55.1% | 57.1% |
Consolidated statement of comprehensive income for the year ended December 31st 2016
Scrollbar is below the table
| PLNm | 2016 | 2015 |
|---|---|---|
| Net profit | 2,349 | 2,136 |
| Exchange differences on translating foreign operations | 23 | 15 |
| Hedge accounting | 783 | (431) |
| Revaluation of financial assets available for sale | 2 | – |
| Deferred tax | (149) | 82 |
| Other comprehensive income subject to reclassification to profit or loss | 659 | (334) |
| Actuarial losses on employee benefits | (29) | (35) |
| Deferred tax | 5 | 2 |
| Share of other comprehensive income of equity-accounted investees | (2) | – |
| Other comprehensive income not subject to reclassification to profit or loss | (26) | (33) |
| Other comprehensive income, net | 633 | (367) |
| Total comprehensive income | 2,982 | 1,769 |
| Total comprehensive income attributable to: | ||
| Owners of the parent | 2,984 | 1,767 |
| Non-controlling interests | (2) | 2 |
Consolidated statement of cash flows for the year ended December 31st 2016
Scrollbar is below the table
| PLNm | 2016 | 2015 |
|---|---|---|
| Cash flows from operating activities | ||
| Net profit | 2,349 | 2,136 |
| Depreciation and amortisation | 2,614 | 2,790 |
| Current tax expense | 861 | 878 |
| Net gain/(loss) on investing activities | 884 | 578 |
| Other non-monetary adjustments | 368 | 430 |
| Income tax paid | (611) | (833) |
| Movements in working capital | (543) | 1,292 |
| Net cash from operating activities | 5,922 | 7,271 |
| Cash flows from investing activities | ||
| Payments for acquisition of tangible exploration and evaluation assets under construction |
(713) | (986) |
| Payments for other property, plant and equipment and intangible assets |
(2,255) | (2,168) |
| Payments for shares in related entities | (1,027) | (59) |
| Other items, net | 153 | 66 |
| Net cash from investing activities | (3,842) | (3,147) |
| Cash flows from financing activities | ||
| Payment for treasury shares | (645) | – |
| Increase in debt | 451 | 1,948 |
| Proceeds from derivative financial instruments | 89 | 84 |
| Decrease in debt | (1,021) | (1,578) |
| Dividends paid | (1,062) | (1,180) |
| Payment for derivative financial instruments | (78) | (81) |
| Other items, net | (3) | (22) |
| Net cash from financing activities | (2,269) | (829) |
| Net cash flows | (189) | 3,295 |
| Cash and cash equivalents at beginning of period | 6,021 | 2,726 |
| Foreign exchange differences on cash and cash equivalents | (4) | (1) |
| Cash and cash equivalents at end of period | 5,832 | 6,021 |
Consolidated statement of financial position for the year ended December 31st 2016
Scrollbar is below the table
| PLNm | 2016 | 2015* | 2014* |
|---|---|---|---|
| ASSETS | |||
| Property, plant and equipment | 33,149 | 32,967 | 33,528 |
| Intangible assets | 1,079 | 1,138 | 1,113 |
| Deferred tax assets | 100 | 42 | 58 |
| Equity-accounted investees | 1,229 | 840 | 856 |
| Other assets | 679 | 656 | 642 |
| Non-current assets | 36,236 | 35,643 | 36,197 |
| Inventories | 2,510 | 2,229 | 3,189 |
| Receivables | 4,288 | 3,379 | 4,241 |
| Derivative financial instruments | 623 | 709 | 567 |
| Other assets | 129 | 146 | 132 |
| Cash and cash equivalents | 5,829 | 6,022 | 2,728 |
| Assets held for sale | 57 | 164 | 147 |
| Current assets | 13,436 | 12,649 | 11,004 |
| TOTAL ASSETS | 49,672 | 48,292 | 47,201 |
| EQUITY AND LIABILITIES | |||
| Share capital and share premium | 7,518 | 7,640 | 7,640 |
| Accumulated other comprehensive income | (4) | (637) | (270) |
| Retained earnings | 24,499 | 23,733 | 22,794 |
| Equity attributable to owners of the parent | 32,013 | 30,736 | 30,164 |
| Equity attributable to non-controlling interests | 3 | 5 | 5 |
| TOTAL EQUITY | 32,016 | 30,741 | 30,169 |
| Financing liabilities | 1,346 | 5,799 | 5,069 |
| Employee benefit obligations | 702 | 565 | 604 |
| Provision for well decommissioning costs | 1,641 | 1,540 | 1,580 |
| Other provisions | 198 | 188 | 223 |
| Grants | 815 | 843 | 843 |
| Deferred tax liabilities | 1,932 | 1,557 | 1,525 |
| Other liabilities | 669 | 770 | 815 |
| Non-current liabilities | 7,303 | 11,262 | 10,659 |
| Financing liabilities | 5,006 | 583 | 769 |
| Derivative financial instruments | 346 | 1,165 | 593 |
| Trade and tax payables [A] | 3,179 | 2,765 | 3,306 |
| Employee benefit obligations | 334 | 352 | 284 |
| Provision for well decommissioning costs | 20 | 33 | 28 |
| Other provisions | 560 | 661 | 692 |
| Other liabilities | 908 | 730 | 701 |
| Current liabilities | 10,353 | 6,289 | 6,373 |
| TOTAL LIABILITIES | 17,656 | 17,551 | 17,032 |
| TOTAL EQUITY AND LIABILITIES | 49,672 | 48,292 | 47,201 |
[A] Including income tax of PLN 180m (2015: PLN 53m).
* Restated.
Consolidated statement of changes in equity for the year ended December 31st 2016
Scrollbar is below the table
| Equity attributable to owners of the parent | Equity attributable to non-controlling interests | Total equity | ||||||||||
| PLNm | Share capital and share premium, including: | Accumulated other comprehensive income: | Retained earnings | Total | ||||||||
| Share capital | Share premium | Treasury shares | Exchange differences on translating foreign operations | Hedging reserve | Revaluation of financial assets available for sale | Actuarial gains/(losses) on employee benefits | Share of other comprehensive income of equity-accounted investees | |||||
| As at Jan 1, 2015 | 5,900 | 1,740 | – | (66) | (216) | – | 12 | – | 22,794 | 30,164 | 5 | 30,169 |
| Net profit | – | – | – | – | – | – | – | – | 2,134 | 2,134 | 2 | 2,136 |
| Other comprehensive income, net | – | – | – | 15 | (349) | – | (33) | – | – | (367) | – | (367) |
| Total comprehensive income | – | – | – | 15 | (349) | – | (33) | – | 2,134 | 1,767 | 2 | 1,769 |
| Dividend | – | – | – | – | – | – | – | – | (1,180) | (1,180) | – | (1,180) |
| Changes in the Group | – | – | – | – | – | – | – | – | (15) | (15) | (2) | (17) |
| As at Dec 31, 2015 | 5,900 | 1,740 | – | (51) | (565) | – | (21) | – | 23,733 | 30,736 | 5 | 30,741 |
| Net profit | – | – | – | – | – | – | – | – | 2,351 | 2,351 | (2) | 2,349 |
| Other comprehensive income, net | – | – | – | 23 | 634 | 2 | (24) | (2) | – | 633 | – | 633 |
| Total comprehensive income | – | – | – | 23 | 634 | 2 | (24) | (2) | 2,351 | 2,984 | (2) | 2,982 |
| Dividend | – | – | – | – | – | – | – | – | (1,062) | (1,062) | – | (1,062) |
| Acquisition of treasury shares | – | – | (645) | – | – | – | – | – | – | (645) | – | (645) |
| Cancellation of treasury shares | (122) | – | 645 | – | – | – | – | – | (523) | – | – | – |
| As at Dec 31, 2016 | 5,778 | 1,740 | – | (28) | 69 | 2 | (45) | (2) | 24,499 | 32,013 | 3 | 32,016 |
Operating segments for the year ended December 31st 2016
Scrollbar is below the table
| PLNm | Exploration and Production |
Trade and Storage |
Distribution | Generation | Other Segments | Total | Reconciliation with consolidated data | Total |
|---|---|---|---|---|---|---|---|---|
| Sales to external customers | 2,776 | 27,740 | 1,078 | 1,472 | 130 | 33,196 | ||
| Inter-segment sales | 1,515 | 440 | 3,837 | 723 | 110 | 6,625 | ||
| Total revenue | 4,291 | 28,180 | 4,915 | 2,195 | 240 | 39,821 | (6,625) | 33,196 |
| EBITDA | 1,285 | 1,410 | 2,559 | 759 | (61) | 5,952 | 22 | 5,974 |
| Depreciation and amortisation | (1,066) | (252) | (924) | (360) | (14) | (2 616) | 2 | (2,614) |
| EBIT (operating profit) | 219 | 1,158 | 1,635 | 399 | (75) | 3,336 | 24 | 3,360 |
| Recognition and reversal of impairment losses on property, plant and equipment and intangible assets |
(1,089) | (28) | (4) | (16) | (18) | (1,155) | – | (1,155) |
| Profit/(loss) from equity-accounted investees |
(53) | – | – | (21) | – | (74) | – | (74) |
| Expenditure on acquisition of property, plant and equipment and intangible assets | (1,314) | (121) | (1,123) | (391) | (9) | (2,958) | (10) | (2,968) |
| Property, plant and equipment | 12,881 | 4,227 | 12,765 | 3,378 | 110 | 33,361 | (212) | 33,149 |
| Workforce* | 7,720 | 3,520 | 10,846 | 1,870 | 1,315 | 25,271 |
*Excluding the workforce of equity-accounted investees.
Operating segments for the year ended December 31st 2015
Scrollbar is below the table
| PLNm | Exploration and Production |
Trade and Storage |
Distributiona | Generation | Other Segments | Total | Reconciliation with consolidated data | Total |
|---|---|---|---|---|---|---|---|---|
| Sales to external customers | 3,148 | 31,274 | 654 | 1,215 | 173 | 36,464 | ||
| Inter-segment sales | 1,707 | 468 | 3,931 | 672 | 152 | 6,930 | ||
| Total revenue | 4,855 | 31,742 | 4,585 | 1,887 | 325 | 43,394 | (6,930) | 36,464 |
| EBITDA | 2,426 | 623 | 2,339 | 679 | 12 | 6,079 | 1 | 6,080 |
| Depreciation and amortisation | (1,331) | (242) | (889) | (312) | (18) | (2,792) | 2 | (2,790) |
| EBIT (operating profit | 1,095 | 381 | 1,450 | 367 | (6) | 3,287 | 3 | 3,290 |
| Recognition and reversal of impairment losses on property, plant and equipment and intangible assets |
(839) | (3) | (2) | (30) | 1 | (873) | – | (873) |
| Profit/(loss) from equity-accounted investees |
– | (51) | – | – | – | (51) | – | (51) |
| Expenditure on acquisition of property, plant and equipment and intangible assets | (1,460) | (171) | (1,180) | (353) | (7) | (3,171) | 17 | (3,154) |
| Property, plant and equipment | 13,378 | 4,290 | 12,573 | 2,840 | 133 | 33,214 | (247) | 32,967 |
| Workforce* | 8,903 | 3,462 | 10,678 | 1,071 | 1,305 | 25,419 |
*Excluding the workforce of equity-accounted investees.
