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1. Company Snapshot

1.a. Company Description

Energa SA, together with its subsidiaries, generates, distributes, trades in, and sells electricity and heat in Poland.It operates through Distribution, Generation, and Sales segments.The company generates electricity through hydropower, wind, biomass, and photovoltaic power plants.


As of December 31, 2021, it had total installed generation capacity of approximately 1.4 gigawatt of electrical power, as well as 193 thousand kilometers of power lines.The company serves approximately 3.2 million customers.It also provides contracting and design, lighting, financing, repair and maintenance, logistics and supply, and property management services, as well as accounting, payroll, administrative, and security services; and information and communication technologies.


The company was founded in 2006 and is headquartered in Gdansk, Poland.Energa SA is a subsidiary of Polski Koncern Naftowy ORLEN Spólka Akcyjna.

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1.b. Last Insights on ENG

Energa SA's recent performance was hindered by a lack of significant short-term catalysts, despite the company's efforts to modernize Poland's power grid. The operator secured a substantial $1.8 billion investment in February, aimed at enhancing energy security and reducing costs for consumers. However, this initiative's impact is likely to be long-term, and the company's recent earnings release did not provide any notable surprises. Furthermore, the recent loan secured by ORLEN for electricity network expansion in Poland, totaling $442 million, may have created some competition for Energa in the market.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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ORLEN secures $442m EIB loan for electricity network expansion in Poland

Mar -21

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Energa-Operator secures $1.8bn to modernise Poland’s power grid

Feb -20

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ORLEN Group secures funding to boost electricity distribution in Poland

Nov -13

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.21%)

6. Segments

Sale

Expected Growth: 5.5%

The sale of electricity distribution assets by Energa SA is expected to drive growth, as the company focuses on renewable energy and grid operations, aligning with the global shift towards sustainable energy sources and increasing demand for clean energy.

Distribution

Expected Growth: 4.5%

Growing demand for electricity, increasing urbanization, and government initiatives to promote renewable energy sources drive the distribution segment's growth in Poland.

Production

Expected Growth: 5.3%

Increasing demand for renewable energy, government incentives, and Energa SA's focus on wind and biomass energy sources drive growth in the production segment.

Others

Expected Growth: 4.5%

Growing demand for energy-efficient solutions and increasing focus on sustainability drive the growth of Energa SA's miscellaneous revenue streams, including sales of energy-efficient solutions and other non-core activities.

7. Detailed Products

Electricity Distribution

Energa SA is responsible for the distribution of electricity to households, businesses, and industries in its operational area.

Electricity Trading

Energa SA engages in the trading of electricity on the wholesale market, buying and selling electricity to balance the grid and optimize energy supply.

Renewable Energy Sources

Energa SA invests in renewable energy sources, such as wind farms and photovoltaic power plants, to generate clean energy and reduce carbon emissions.

Energy Efficiency Services

Energa SA offers energy efficiency services, including energy audits, energy management, and energy-saving solutions, to help customers reduce energy consumption.

Electric Vehicle Charging Infrastructure

Energa SA develops and operates electric vehicle charging infrastructure, supporting the growth of electric mobility in Poland.

8. Energa SA's Porter Forces

Forces Ranking

Threat Of Substitutes

Energa SA operates in the energy sector, which is characterized by a moderate threat of substitutes. While there are alternative energy sources, such as renewable energy, the switching costs for customers are relatively high, limiting the threat of substitutes.

Bargaining Power Of Customers

Energa SA's customers have limited bargaining power due to the company's dominant market position and the lack of alternative energy providers in the region.

Bargaining Power Of Suppliers

Energa SA's suppliers, such as fuel providers, have a moderate level of bargaining power due to the company's dependence on them for fuel supply. However, the company's large scale of operations and diversified supplier base mitigate this risk.

Threat Of New Entrants

The threat of new entrants in the energy sector is low due to the high barriers to entry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The energy sector is highly competitive, with several players competing for market share. Energa SA faces intense rivalry from other energy companies, which can lead to pricing pressures and reduced market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 34.25%
Debt Cost 5.19%
Equity Weight 65.75%
Equity Cost 5.19%
WACC 5.19%
Leverage 52.09%

11. Quality Control: Energa SA passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Ascopiave

A-Score: 6.8/10

Value: 5.6

Growth: 6.1

Quality: 6.2

Yield: 8.1

Momentum: 6.0

Volatility: 9.0

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Enea

A-Score: 5.8/10

Value: 9.3

Growth: 5.8

Quality: 5.1

Yield: 1.9

Momentum: 9.5

Volatility: 3.0

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Zespól Elektrowni PAK

A-Score: 5.2/10

Value: 9.6

Growth: 5.0

Quality: 5.8

Yield: 0.0

Momentum: 9.5

Volatility: 1.3

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Genie Energy

A-Score: 4.7/10

Value: 4.6

Growth: 6.1

Quality: 5.4

Yield: 5.0

Momentum: 2.0

Volatility: 5.0

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EnviTec Biogas

A-Score: 4.7/10

Value: 8.1

Growth: 5.2

Quality: 6.2

Yield: 6.9

Momentum: 0.0

Volatility: 1.7

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Energa

A-Score: 4.5/10

Value: 7.9

Growth: 6.0

Quality: 1.7

Yield: 0.0

Momentum: 5.5

Volatility: 5.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

18.9$

Current Price

18.9$

Potential

-0.00%

Expected Cash-Flows