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The Warsaw Voice » Other » October 22, 2008
Privatization in Poland
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Positive Energy
October 22, 2008   
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Paweł Mortas, chairman of ENEA SA company, talks to the Voice.

When will ENEA's shares be floated on the Warsaw Stock Exchange?
Our stock market debut is scheduled to take place by Nov. 12. As for the situation on the stock exchange, we will in a way become a forerunner for the Polish energy sector, which may prove to be an added advantage for us. We may get to pay a price for this role, but the financial benefit from the debut will without a doubt be very important to our company.

Who do you want to sell your shares to?
We are looking for stable investors both in Poland and abroad. We can see interest from financial institutions in London as well as American ones. The energy sector is a guarantee of stable business. Despite occasional breakdowns and power cuts, the sector in Poland has great potential for development. The energy sector requires long-term investment, but it is resistant to market fluctuations that affect companies in other sectors. We are not looking for speculative investors but for those who are ready to invest in the long term.

What is the main focus of your development strategy?
Right now I would say it is modernization and construction of new power units. The top priority are two new units at the Kozienice power plant, followed by perhaps a few other locations. We have also been considering acquiring other businesses. At the end of last year ENEA accounted for 14.6 percent of total energy sales in Poland and for 7.9 percent of total energy production nationwide.

How should these figures increase under the company's strategy?
Electrical power engineering is a highly monopolized market. Territorial expansion and taking over the market are rather abstract terms here. Our focus is thus not on struggling to win new customers, but on providing those that we have with better service, for example by introducing CRM-type IT solutions. Another possible direction is to sell "energy-related" products such as wind turbines. That could help us increase the amount of renewable energy in our sales volume.

What is the target output of ENEA?
At Kozienice, we have set up a special-purpose company to enable faster work on the two new power units with a capacity of 1,000 megawatts.

What about the P±tnów-Adamów-Konin Power Plant Group (PAK)?
ENEA wants to acquire PAK, but the State Treasury first needs to reach a compromise with the Elektrim company, represented by the winding-up officer.

How much longer can ENEA wait until the situation at PAK clarifies?
The plan to buy PAK and other investments by ENEA are not related in any way. We have been working on a number of new projects.

Does this mean that ENEA is still unable to decide precisely if the funds raised from the stock exchange should go to Kozienice, Szczecin ZEDO, or PAK?
The ENEA group consists of around 30 companies. We not only produce energy, but also have a sales division that requires funds so that we can provide customer service of the highest standard. We must also assign a part of our outlays to distribution so as to make the power grid as efficient as possible and minimize losses during the transmission of electricity. We could easily spend all the funds from the initial public offering on any of these three divisions alone. But to us the stock market means not only financial support, but also an opportunity to make our company more efficient. Besides, funds raised on the Warsaw Stock Exchange will automatically boost our capacity for external financing. So far ENEA has made almost no use of loans.

What factors can improve ENEA's financial performance and increase the value of the group?
So far we have mainly dealt with the distribution and sales of electricity. At Kozienice, we are only able to produce half the energy we need and thus need to buy the rest on the wholesale market. ENEA is currently in good condition, but the structure of the market works to our disadvantage compared with other companies [such as PGE and Tauron Polska Energia-ed.] whose power output is higher than their sales. This means that the more power plants we own, the more profit will be retained at ENEA and our profitability will increase.
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