Tauron Q1 2025 presentation: Net profit surges 40% despite flat revenue

Introduction & Market Context

Tauron Polska Energia SA (WSE:WA:TPE) presented its Q1 2025 financial results on May 22, showing substantial profit growth despite nearly flat revenue. The Polish energy company delivered a 40% increase in net profit and a 24% rise in EBITDA compared to the same period last year, while maintaining strategic investments in renewable energy projects.

The presentation, delivered by CFO Krzysztof Surma and other executives, highlighted the company’s performance against a backdrop of fluctuating energy and fuel prices in the European market.

As shown in the following market overview chart, Tauron operated in an environment with significant price movements in electricity, hard coal, and CO2 emission allowances:

Quarterly Performance Highlights

Tauron’s Q1 2025 results revealed impressive bottom-line growth despite revenue remaining essentially flat at PLN 9,632 million (-0.3% year-over-year). The company reported EBITDA of PLN 2,331 million (+24% vs Q1 2024) and net profit of PLN 1,131 million (+40% vs Q1 2024). Notably, EBITDA exceeded analyst consensus by PLN 343 million (+17%).

The company’s key financial and operational metrics for the quarter are summarized in the following slide:

The EBITDA growth was particularly noteworthy given the flat revenue. When examining comparable EBITDA figures (excluding one-time items), the growth remains strong at 19%. The company benefited from a PLN 184 million G tariff correction and PLN 27 million in compensation due to loss of profit, as illustrated in this breakdown:

Detailed Financial Analysis

Tauron’s performance varied significantly across business segments. The Distribution segment remained the largest EBITDA contributor at 53% of the total, while the Supply segment showed the most substantial growth. The RES (Renewable Energy Sources) segment experienced a decline in both absolute contribution and percentage of total EBITDA.

The following chart illustrates each segment’s contribution to revenue, EBITDA, and EBIT:

Looking at the year-over-year changes by segment, Supply (+PLN 264 million), Distribution (+PLN 120 million), and Generation (+PLN 70 million) drove EBITDA growth, while RES declined by PLN 49 million. The waterfall chart below visualizes these changes:

The Distribution segment’s strong performance was driven by improved margins on distribution services and a positive impact from the regulatory account. Meanwhile, the RES segment faced challenges from lower electricity prices and reduced production volumes, particularly in hydro power generation which fell by 50% year-over-year.

Strategic Initiatives

Tauron continued to strengthen its financial position while investing in future growth. The company’s net debt to EBITDA ratio improved to 1.6x as of March 31, 2025, down from 2.2x a year earlier. Available financing stood at PLN 4.8 billion.

The debt structure and maturity profile are illustrated in the following slide:

Capital expenditures increased by 27% year-over-year to PLN 1,072 million, with the Distribution segment receiving the largest allocation (PLN 768 million). The company also increased investments in Supply and RES segments compared to the previous year.

The following chart breaks down CAPEX by segment:

Forward-Looking Statements

Tauron continues to expand its renewable energy portfolio with 378 MW of projects currently under development. These include three wind farms (Nowa Brzeźnica, Sieradz, and Miejska Górka) and two photovoltaic farms (Bałków and Postomino), with completion dates ranging from Q2 2025 to Q2 2027.

The company’s renewable energy development pipeline is detailed in the following slide:

The ongoing investments in renewable energy align with Tauron’s strategic shift toward cleaner energy sources, though the company continues to generate significant revenue from conventional power generation. The balance between traditional and renewable sources remains a key focus as Tauron navigates the energy transition while maintaining profitability.

Despite challenges in the RES segment during Q1 2025, the company’s overall financial performance demonstrates its ability to generate strong profits while continuing to invest in future growth initiatives. With an improved debt position and ongoing capital expenditures, Tauron appears well-positioned to continue its strategic transformation while delivering financial results.

Full presentation:

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