Poland's PGE expects 2023 recurring core earnings to rise in distribution ops

GDANSK, March 22 (Reuters) - Poland's biggest state-owned utility PGE (PGE.WA) expects recurring core earnings rising in its distribution segment this year, but falling in conventional energy, district heating, and renewable energy and supply, it said on Wednesday.

PGE said results in its generation and supply segments this year will be hit by regulations aimed at reducing electricity prices and supporting certain recipients.

In 2022 the company's recurring core earnings, or earnings before interest, tax, depreciation and amortisation (EBITDA), fell by 12% on the year to 7.12 billion zlotys ($1.64 billion).

Recurring EBITDA in its distribution segment rose 3% last year to 2.84 billion zlotys.

The company posted on Tuesday a 16% year-on-year decline in full-year net profit to 3.33 billion zlotys due to a drop in gross electricity consumption, slightly below the company's estimates of about 3.36 billion zlotys.

Sales revenue rose 39% on the year to 73.44 billion zlotys, with core profit adding up to 8.66 billion zlotys compared with 9.54 billion zlotys in the previous year.

"The year 2022 was exceptionally turbulent for the energy sector, not only in Poland, but also in the world," CEO Wojciech Dabrowski said in the statement.

"Despite this, we have achieved many milestones that lead us to the implementation of strategic goals."

"For the second year in a row, our renewable energy segment also recorded a good result, which generated EBITDA higher by 77% than last year. This is a good harbinger for our green investments, which will soon be the basis of our production," he added.

In 2022 capital expenditure rose to 7.05 billion zlotys from the previous year's 4.66 billion zlotys, with the utility provider's attention turning increasingly to renewable energy sources such as offshore wind farms.

PGE expects capital expenditure in renewable energy to rise further this year, with acquisitions as well as organic development possible.

"We are involved in many acquisition projects. We will see what comes out of it", the CEO said during a conference call on Wednesday.

The company also sees an increase in capex for the construction of new low-emission gas blocks, and a rise in the unit cost of CO2 emission allowances by about 50% in 2023.

PGE said on Tuesday management will also recommend skipping a dividend from 2022 net profit.

($1 = 4.3477 zlotys)

Reporting by Adrianna Ebert, Patrycja Zaras, Mateusz Rabiega; Editing by Muralikumar Anantharaman and Jan Harvey

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