TAURON Polska Energia Aktie

Good morning, ladies and gentlemen. Welcome to our conference where we present the results of TAURON Financial Group for the first half of the year. A warm welcome to everyone joining us live here in person and online. My name is Olga Kostrzewska-Cichon, and I'm Head of Media Relations of TAURON Group, and I'm going to be the interlocutor of this meeting. Let's welcome Grzegorz Lot, President of the Management Board of TAURON Energia; Krzysztof Surma, Vice President of the Management Board for Finance; Michal Orlowski, Vice President of the Management Board of Asset Management and Development; and Pawel Jablonski, Executive Director of Portfolio Management. We have also presented a speech by Krzysztof Zawadzki, Vice President of the Management Board for Trade.

Our meeting is going to be divided into 2 parts. Firstly, we are going to present our results. And then, of course, you are welcome to asking any questions and -- in the second part. So this will be a Q&A session.

Mr. Lot, the floor is yours.

Ladies and gentlemen, I'll be brief. First half year has been very dynamic. You might notice it already by looking at us. And we are proud of what we've been doing because we have made a commitment when we announced our strategy. Our hashtag is we deliver, and this is crucial. And this is visible in our company. We've been delivering. We will get into details afterwards. Distribution has been carrying out its projects, and we've been converting quite a lot of processes right now. And we have a focus on local content in it. So the AMI readers, procurement, so we are choosing the contractor by the price, but also based on the local content. Is it easy? Well, it's doable. It's challenging but doable. So we've been implementing these elements in a systemic way.

And we are extremely proud of one thing in distribution. And this is apart from our everyday work, it's the customers, it's clients. In our strategy, we want to grow the distribution in a dynamic way, CapEx and projects, but the customers matter. 75% of our connection requests have been done online. And this is something that makes us stand out. This is what we offer to customers, and it's a great value, I think. I could talk quite a lot about customers, but let's leave it for Q&A.

One very important thing for us is the renewables, 1 giga of connected capacity. Miejska Gorka has been speeding up. It was planned for autumn, but in June already, it was executed and new units will be launched soon. This affects our results, but also shows that we are very determined to connect it -- to make it operational. And there is one very important and sensitive thing for us. This is energy warehouses. We know that the first one to come to this market will be the winner. We can see one important challenge here. This is the cost. The price of electricity will be going down, but the cost of the profile is something we need to handle. Energy storage is crucial here. It's important for the stabilization of the grid.

Now heat. Marcin Staniszewski is with us here. So he's at your disposal. We won the cogeneration auction over PLN 3 billion for projects that are underway and tenders that are in the pipeline for the new Lagisza. It's going to be electricity and heat combined block, a very modern one with a reasonable price. It's already underway. And it's also in line with the strategy. Our customers, clients, again, I'm very enthusiastic about it. So a few years ago, we made the bid and it's 3 years into this already TAURON New Energy, a 9-year price guarantee. We are now reaching 400,000 customers, 385,000 customers contracted energy for 9 years.

So if someone asks for the price for households, well, it's unpredictable totally. But in our company, it's clear for our customers, almost 400,000 customers. Heat pumps, et cetera, perfect solutions for larger consumers. Someone might ask, and if the price falls down? Well, every consumer in Poland can leave the contract -- the fixed-term contract without penalties and choose any other product. We are convinced here. We are not afraid. We don't want to corner our customers. To the contrary, we want to compete with security and quality, 400,000.

Dynamic tariffs are also an important interesting thing, ninefold growth. The total amount is still small compared to the total base of the customers, but this is the future for us. The interest has been growing. We have launched a new product. This is the dynamic traffic with a -- tariff with a price cap because we can see that customers have their concerns. The price of electricity might go down PLN 495 and for some, it's even PLN 300. So we have a cap. So we communicate that you can save a lot of money if you change your habits. And this will be a gain for you.

And also one very important thing for us. Over 40,000 new customers, a huge growth with the cheap hours. It's an upgrade of the dynamic tariff. If you don't want to be directly involved, we provide a solution of very specific prices in very specific hours of the day of the year. So customers, it's very clear for them when they can make savings and the cheap weekends. And this has attracted many new customers.

Over 51% of TAURON customers are already outside of the tariffs and in the products. So this is hard work to work together with the customers to convince them to join this transition. For us, it's money. For customers, it's security and price stability. It's very important for what we want to do, which is switching from the classical model to the model based on dynamic tariffs, renewables and energy storage, customer engagement. We want to lower the cost of the profile, and you can only achieve it through shared engagement. And this is what guarantees lower prices.

Also, digitization is our continued project. Over 50% here, it's small font here, so you can see it better in the chart. So this is the number of customers who already are serviced online, invoices, contact point. Some people are very willing to do it. And we've had a strong focus on developing the digital channel, the Internet and smartphones. Last but not least, profitable transition and just transition 2 years ago when we talked about it. We talked about what it would be like. Now we know that we won the capacity auction for the previous year, and it was a very good decision. It was very profitable for us and also very good for the system stabilization.

Now a huge capacity auction, which also was won for all the units apart from the backup ones. I'm not going to get into details now. It's huge money and work for the next year. This is also a message to local communities that the units will be operational in the next year. We have embarked on huge transition projects. I would like to invite you to Katowice on the 1st of October, the Energy Days roundtable. We will show you not the dreams. We will show you the specific plans for the transition of the sites which are now conventional.

So Siersza, Jaworzno, Lagisza, I'm not going to mention all of them. So there is a specific plan for every site for OCGT and conventional solutions. I don't want to spoil it, but it's -- everything is planned and measured and it will be announced there. This shows our approach to transition. That's why 2, 3 years ago, we undertook to guarantee business continuity because we want the business to continue to be profitable so that our shareholders remain interested in the project, and this is how we deliver on it. I'm very proud for our team. This is largely an achievement by my colleagues.

So one applause we -- the tender has been announced. It was difficult to buy the gas turbines, a lot of publicity, but it's a closed topic now. We have contracted 2 turbines instead of one, 2x 315 OCGT in Jaworzno. It's an ongoing project that will be delivered as planned. So much from me. And later on, I will be at your disposal during the Q&A.

Now we are going to see Krzysztof Zawadzki's speech addressed to us.

Good morning, ladies and gentlemen. Let me begin with the energy market and the key factors shaping current market conditions. We continue to see wider intraday price ranges in both the spot and balancing markets. To give you an example, the highest hourly day ahead price recorded since the 1st of January this year was PLN 2,560 per megawatt-hour, while the lowest was minus PLN 1,309 per megawatt-hour. The widest price spread within a single day during the first half of this year was PLN 2,409 per megawatt-hour. These figures illustrate a shift in the way the market operates.

Short-term fluctuations in renewable generations are playing an increasingly important role. They also create price risk, which means we need to actively manage our portfolio hedges and trading position. We can also observe the further growth in PV capacity. According to PSE, it reached 27.6 at the end of the first half, up to -- up from 23.7, an increase of around 16%. The scale of these new connections is increasingly the influence of solar generation on electricity prices, particularly in the afternoon. And this widens the gap between daytime and evening prices and makes balancing the national power system more challenging.

We are also observing a decline in the number of hours of negative prices, 237 hours last year compared with 253 in the first half of this year. We expect the full year total to be between 250 to 300 hours. The numbers of hours of negative prices fell by 19% year-on-year, but negative prices remain an important feature of the electricity market. A problem of prudent generation surpluses have not disappeared, although they were less pronounced than in the first half of 2025.

We are also observing higher Clean Dark spreads. So coal costs have fallen and electricity prices have risen, while the cost of CO2 emissions allowances has increased. This means that hard coal-fired generation was more competitive relative to gas-fired generation in the first half of this year. Higher electricity output compared with the half of last year supports this assessment. Overall, the economics of coal-fired generation improved significantly year-on-year.

Average temperatures during the heating season were lower. So this translated into higher heat sales and better utilization of our heating cogeneration assets. Conditions for wind generation, however, were considerably less favorable. In fact, wind conditions were the worst in 10 years, capacity factor fell from 24.2% year-on-year and generation was down 14.6%. This adversely affected the result of the RE segment and reduced the share of low emission generation in the national electricity mix.

Hydropower generation increased slightly from 31.2% to 31.9%. However, July and August demonstrated how difficult hydrological conditions in Poland have become. So taking those months into account, we expect full year generation to be broadly in line with last year. The full year outlook, therefore, remains modest. Yes, as I mentioned, weak output in July and August caused by difficult hydrological conditions limit the scope for generation growth in the second half. Overall, renewable generation fell by 0.9% in absolute terms. This reflects a significant improvement in renewable output in the second quarter following a clear decline -- quite clear decline of 1.1% in the first quarter.

However, when we take the increase in installed capacity into account, output per megawatt of capacity was down by around 10%. It means the benefits of additional capacity were, therefore, largely offset by less favorable generation conditions, particularly for wind. Electricity generation from fossil fuels increased by 7.4%, driven by higher output from gas and hard coal. This helped compensate for weaker renewable generation and meet growing domestic electricity demand. Hard coal-fired generation increased by around 10%, making up for lower renewable output. And this confirms that conventional generation continues to play a key role in balancing the national power system when renewable availability is lower.

And domestic electricity consumption increased by 4.6% year-on-year. And over the same period, GDP growth averaged around 3.65%. At the same time, PMI, an indicator of economic conditions was down by around 1.4 points. Manufacturing PMI remained below 50 throughout the first half, averaging around 48.1 in the first half of 2026. Manufacturing is, therefore, not keeping pace with the broader economy.

Another important development concerns cross-border electricity flows at about 1 terawatt-hour year-on-year, reaching nearly 2 terawatt-hours for the first half as a whole. So exports exceeded imports in every month except February. This balance reflects price differences between Poland and neighboring markets, particularly Germany. It also reflects renewable generation across the region, the availability of domestic generating units and the cost of fuel and CO2 emission allowances. So the conclusion is that these cross-border flows reflect the growing competitiveness of domestic generation and high capacity utilization.

The scale of redispatching in Poland is also increasing. Compensation paid by the operator to renewable generators does not cover all the revenue that we lost by the affected installation. It is calculated using balancing market prices rather than the prices under the commercial contracts. In the first half of this year, redispatching reached almost 1.2 terawatt-hours, which is an increase of 42% year-on-year. This is a substantial increase. It reflects the growing challenges of integrating renewables into the national power system. Contributing factors may include local grid constraints, inefficient management of surplus generation and transmission limitations.

For electricity trading, the main implication is a greater risk of differences between planned and actual generation. An interesting example is that the amount of the electricity would be enough to cover the yearly consumption. So to put the development into perspective, it would be enough to cover a full year of electricity consumption by Polish state railways, for example, PKP or 6 months of electricity consumption by all residents of Gornoslasko-Zaglebiowska Metropolis.

Now let me turn to our generation portfolio. Our electricity generation increased by 24% year-on-year. Conventional units were the main driver with output up 87% of our total net generation. Renewable generation increased only slightly by 0.3% year-on-year. However, we should remember that on 30 June last year, we installed renewable capacity, and it stood at 874 megawatts and reached 1,210 megawatts by the end of the second half of this year, which is an increase of 39% and output per unit of installed capacity, however, fell by around 27%.

The first half shows a widening gap between growth in renewable capacity and actual growth in generation. And this underlines the need to expand grid infrastructure and above all to be energy storage facility that would allowed us to store surplus electricity when generation is higher and make use of [indiscernible]. At the same time, improved competitiveness allowed us to increase output from conventional units by 28%. This again demonstrates the importance of TAURON Group's diversified generation portfolio.

Heat generation increased by 8%, supported by lower temperatures during this year's heating season, as I mentioned earlier. CO2 emissions rose by around 24% as a result of higher conventional generation. We also recorded an increase of around 7% in the average cost per unit of CO2 emitted. Together, 24% increase in emissions and 7% increase in average emissions costs mean that those costs have a greater impact on the Generation segment's result.

Coal consumption also increased by 25%, reflecting higher output from our coal-fired plants. At the same time, the average unit cost of coal consumed fell year-on-year. It was this reduction that helped improve the competitiveness of our coal assets. Renewables accounted for 13% of net generation, down 3.1 percentage points compared with the first half of last year. As in the wider market, unfavorable weather conditions reduced output from our renewable assets relative to their installed capacity, and this limited renewable generation despite the increase in capacity.

Renewable generation curtailment increased by 31% to almost 62 gigawatt hours. The ratio of curtailed generation to net generation also increased from 3.9% in the first half of last year to 7.1% in the first half of this year. The volume of redispatching affecting our renewable units rose particularly sharply to more than 5x its previous level. This is also reflected in the compensation due to us. Estimated compensation receivables for redispatching in the first half of this year have already reached 80% of the estimated total for the whole 2025. And that gives a clear indication of the scale of this issue.

Turning to the availability of our generating units. Our hydropower plants maintained a high availability with only a slight decline year-on-year. Our wind farms improved their availability and continue to maintain a high level of technical availability. Our solar plants recorded a slight decline, but availability remained high. Coal-fired plants, particularly those at TAURON Cieplo increased their availability compared with last year, demonstrating a high level of operational readiness.

For coal-fired power plants, however, availability fell by 15.1% compared with last year. This mainly reflected outages caused by equipment failures or plant shutdowns. Almost every unit experienced an outage of this kind during the first half. Average generating unit availability across the national power system remains higher than in our own portfolio.

Let me now turn to our sales portfolio. So electricity sales volumes increased strongly by 8.2% year-on-year, with the largest increases in the household segment at almost 9% and the business segment at more than 16%. In the household segment, the number of metering points increased by more than 52,000. In the business and SME segments, growth was driven mainly by higher sales volumes. The growth rate of TAURON Group's electricity sales was almost twice the rate of growth in domestic electricity consumption, which is, as I mentioned, 4.6%. This supports our position as a leading electricity supplier and reflects, in my view, the strength of our offering for both household and business customers.

Turning to the renewable share of our electricity sales. We recorded a slight decline of 1.6%. Purchases of renewable electricity, the numerator in this calculation, grew more slowly than the sales volumes. To reach a share of 100%, we would need to document the renewable origin of all the electricity purchased for sale. The decline, therefore, reflected slower growth in renewable electricity purchases than in overall sales.

As a result, the renewable share of the electricity we sold was noticeably lower. We also recorded substantial growth in customers under the Nova Energia program. The number of metering points increased by almost 170,000 compared with the first half of last year. Of these, 80% were household, 327,000. And then small and medium-sized enterprises accounted for 50% and large businesses for around 1%. This growth confirms increasing demand for electricity backed by green certificates and more broadly for renewable electricity. And the household segment is the main driver, accounting for 80% of the total increase in the customer base. The pattern of growth shows that the Nova Energia program is currently being driven primarily by household customers and the SME segment. There is also further growth potential in the business segment.

Turning to electricity fed into the grid by prosumers. We recorded a slight decline of 1.3%. In the first quarter, the volume fell by around 25% year-on-year, and this was due to higher consumption, probably because of the colder winter. In the second quarter, electricity fed into the grid increased by 7.3%, and this growth came mainly from prosumers using net billing, primarily those with new installations. I will not repeat the earlier points on heat sales. So that increased supported by higher demand on lower -- and lower average temperatures.

Our Tania Godzina tariff continues to attract customers. At the end of last year, it had 25,000 customers. By the end of the first half of this year, the number had exceeded 40,000, an increase of almost 62%. And this suggests growing interest in an offering that helps customers use electricity more efficiently. It also -- so we can say that this interest is really, really growing. And we need to prepare those offers and use electricity more efficiently. And it also demonstrates the effectiveness of our sales and promotional activities to tell them that they can use and -- their portfolio and we are helping this way customers to understand that they can actively manage when they use electricity and better align with their consumption needs.

Let me close with a few words about our efforts to raise customers' awareness of electricity use. So we are currently running an educational campaign called TAURON that's obvious choice. It encourages customers to save electricity and make informed use of time of use tariffs. It also promotes our online energy adviser, the Tania Godzina and Tani Weekend offers and, of course, dynamic prices.

And the most visible effect of our campaign is this traffic on our website. So among the main results, we have seen also an increase of around 11% in interest in these tariffs on our website compared with the corresponding period. And interest in our online adviser service has also increased. So we do hope that these initiatives will encourage customers to choose tariffs and better match their consumption patterns and of course, help them reduce their electricity bills. And that concludes my presentation. Thank you so much.

Just a comment. Mr. Zawadzki is with us emotionally, although he is absent today. He has talked quite a lot about coal, but I want to pass a clear message. The long-term strategy of TAURON has a focus, clear focus on renewables, storage customers supported by OCGT and all the things I've talked about. And now we are simply using a market opportunity. These units are essential to stabilize the system and have a very specific tangible value. So operational discussion is one thing, and then there is a strategic point of view. And I don't have to repeat myself.

Now Vice President for Finance, Mr. Surma.

Good morning, ladies and gentlemen. The results of H1 2026 are a bit lower than in 2025. But let's remember that there is the underlying effect. '25 was the record year, the best ever in the group. Hence, the differences year-to-year. They are negative, but still, we think that the results for the H1 are sound. Now revenue, it's over PLN 17 billion comparable year-to-year. Two factors -- juxtaposed factors. So the price of energy fell and the volume and distribution had a significant increase, energy sold, heat. So Krzysztof has already talked about it. I'm not going to repeat it, but these were the 2 juxtaposed factors. EBITDA, I will later get into detail, but the level is PLN 3.7 billion, and it's 12% worse year-to-year.

But let's have a look at the comparable EBITDA. '26, we think there were no one-offs that would have an effect to the comparable EBITDA. And in '25, we did have some one-offs, mainly the tariff question, which I already discussed. But in 2024, to remind you, the regulator adopted a tariff for 18 months, which was extraordinary. It was not favorable in 2024. It didn't cover the costs fully because the price of energy went up. And in 2025, in 3 quarters, this was turned -- this lower tariff was turned. So it's not comparable. That's why we have an additional effect of around PLN 200 million on EBITDA. Therefore, if we take this away and compare EBITDA year-to-year, the difference is around 8%.

Now net revenue, it's over PLN 1.5 billion. Yes, it's also lower year-to-year and it's mainly due to the drop in EBITDA. And the additional things that affect this figure is the deferred tax, which is higher and the current tax is lower. And the net income is better because of the interest cost and the derivative instruments. This comes partially from the securities accounting, which we implemented last year in October. Now investment outlays, CapEx has gone up a bit and mainly distribution has had the largest effect, but Michal will talk in detail about it later on. Now net debt to EBITDA, a very good level, 1.2. This affected mostly by the decrease in debt.

Now let's split it into segments. No changes here. Distribution remains the most important segment, 64% of share in EBITDA. In H1, EBITDA nears PLN 2.4 billion. So its position is stable and then followed by other segments. So #2 this year is generation because of the favorable conditions for conventional generation. EBITDA, PLN 464 million H1. Now there has been a change. Sales is not ranked second anymore, but the third now. I will tell you why later on. And EBITDA here is PZN 272 million. And the next new segment is renewables, PZN 445 million and heat which has been catching up and nearing renewables, PZN 235 million in H1.

And now the specific reasons behind the weaker EBITDA year-to-year. Well, as you can see, most of the segments have lower results, but the reasons are mostly out of company's control. So distribution first, the balance of the regulatory account, the position of it is crucial. This is the difference between the actual volume and the volume set in the tariff, and it will be cleared in the year-end plus 2. And last year, the account was positive. And this year, actually, it's negative. Over PLN 170 million for the whole year of clearing the volume of 2024. Because of that, already in H1, the result year-to-year was negative, minus PLN 222 million on this account. And this is actually what largely determines the result of distribution.

There were 2 more factors, which are also very important. The regulator assets grew in value, PLN 2 billion difference, and this improved the result, but also WACC went down by 1.34 points. So this has had an adverse effect. But both factors offset each other. Plus, there was a negative effect on the balancing difference. Overall, the effect on distribution was negative, but also there is good news. It's important for our strategy. As you know, we believe that the electricity consumption will grow in the country. And this year, for the first time, we can see it in the distribution, 3% growth in the volume of electricity distributed.

Now renewables. So on the one hand, the market prices have fallen, as Krzysztof has mentioned, and this has had a bad effect on our results this year. Good news. Well, we have launched new units. This brings up EBITDA -- this brings up volume and consequently EBITDA, but also some negative events. Wind conditions have been worse year-to-year. So we have launched new units, which unfortunately has been offset by less wind, and this has had a worse effect on the whole segment.

Now heat. This is the only one that actually grows year-to-year. Two factors here. First, the volume growth, lower temperatures during the heat season. This is the first factor. And the second one is the increase in the tariff, and it has been a positive effect in the segment. And also, there has been a higher margin on electricity. Costs fell generation costs. As a result, year-on-year, the results have been better. So this is the segment that is positive and stands out because of that in H1. Last year in H2, there were one-offs, write-downs, regulators issues, free allowances, CO2 allowances. So all of these will be reversed in the next quarter.

Now supply and wholesale trading. I think that it's the worst performing segment. A few factors at play here. The first one-off is the G tariff in 2025 performed exceptionally well. And on the other hand, the cost of G tariff went down and near the line of profitability. Therefore, it's not possible to get a positive margin in this segment. Also, the lower unit margin on supply to business operators and SMEs.

Now good news, the structure of supply has been evolving. Customers prefer increasingly listed products and not a fixed price, and this lowers the risk for the company. So 65% of our business customers already prefer the listed price stock exchange. So this mitigates the risk. So good news. Well, the growth of volume for the first time in a longer period. So supply has gone up. And for many years, there had been drops. So it's an increase. It's a positive development.

And now the last segment with a small loss year-to-year. It's generation. But we consider that the results are good anyway. There is a fall in price year-on-year because of that EBITDA is slightly lower, but the volume is better both of sales and production. And the balancing capacity revenue has gone up. And year-on-year, we've had -- last year, we had some compensations, which hasn't been the case this year, but the segment looks good really despite a slight drop in the first half of the year.

Now we can talk about the debt to EBITDA ratio that we have seen before. So the one reporting to the bank, the difference is about PLN 2 billion year-on-year. And I would like to show you also the economic net debt. And this net debt is on a very similar level to previous year. Why? And the main issue here is the way when we -- the date of CO2 strike-down -- write-down when it was redeemed. So now we can redeem the certificates for CO2 emission a little bit later. And in 2025, some of the transactions, there were forward transactions, which were adjusted to the previous redeeming period.

And right now, we adjusted them to our liquidation to our cash flow, and we delayed this date. So we adjust forward transaction to CO2 redemption. So about PLN 2 billion of write-downs, which means those PLN 2 billion, we are going to spend a little bit later for the certificates. Those certificates were bought at the turn of August and September, and this is the main difference year-on-year why we have this net debt a little bit different.

Another factor, which is also quite vital for the future -- for future financing costs, it's on NRRP. So in 2026, we included PLN 1.5 billion of preferential funding in the arrears. And therefore, of the preferential funds and the grants are now included in our reporting. But of course, influences the debt. And now when you look at debt, so you can see that we have exchanged the most expensive debt in our balance, which we had the most expensive debt in previous year. And now we exchanged both debt right now, both financing ways decrease our debt.

So I would like to also pay attention to our leasing. There, we can see an increase, but our leasing is not a typical financing leasing. Mostly, these are mortgages and lease. So lease for the property, lease for the land, and they are going to increase the value of our debt on increase -- on lease. And the last information in this slide you can see that our group is in a very good position -- financing position. We have PLN 6.42 billion secured. And I believe this is enough of a 12-year gap to finance it. And so we have also PLN 14.2 billion available financing under the NRRP project, and it's going to be started commissioned after the execution of the contract. So first, we need to commission the investment and then will be financed by those funds.

And now let's talk a little bit more about NRRP financing. So we are not going to stop. We deliver our strategy. We obtained more than PLN 400 million from those projects, mostly on renewables and lighting, on the distribution and the chargers for EV for electric vehicles. As you can see on the 30th of July, we had PLN 18.4 billion funds of preferential financing. So we are just a step ahead from the strategy to reach it. And remember that it's just 2 years since we announced the strategy. So we have a lot of grants and provincial loans that we apply here. And we are still searching the cheapest possible financing. So in my part, that's probably all. Now I would like Michal to talk about the investment part.

Krzysztof talked about losses, and there are a fewer of them. But still, the results, I believe, are really great. So there is a lot of optimism. You need to remember that besides those negative information, the results are really optimistic, and we all received dividends, and we always fight for those results, but they're, let's say, pretty interesting.

Ladies and gentlemen, now we are going to talk about CapEx. So they increased year-on-year by 6%. PLN 2.8 billion is the average CapEx. So now we are going to talk about distribution. We invested PLN 1.7 billion. And then we are going to talk about the structure that you can see in the year in the slide and the CapEx investment, but it doesn't really reflect our perspective because the last quarters were very intensive and years of intensive securing preferential funding grants for RES cogeneration auctions. But then, of course, I'm going to refer to them.

So when we talk about the investments, we are in the procurement process, and we want to start also some construction sites. So therefore, maybe this CapEx scale is pretty low. And of course, later, I'm going to talk about them in more details in particular slides. Now if you look at the distribution only, so construction of new grid connections is PLN 811 million and renewables -- so construction, it's about 7.8 gigawatts in our capacity.

And also, we speeded up with modernization. In practice, it's about 1.5 kilometers of the grid of the network, modernized, of course, right now. So we create a great scale program of distribution, which is supposed to increase the ratios and indicators.

And then when we talk about wind farms, so actually, construction of three wind farms was the biggest challenge and the biggest investment for us for us as well as modernization of hydroelectric power plant in Piechowice. Then if we talk about heat the main source, -- the main sources where we spend our money was head sector decarbonization project and also connection of new facilities to the district heating networks. And in other segments, -- so this is about PLN 74 million in lightning and light fiber, but it, of course, was also financed by the National Recovery Plan.

Talking about generation. So we don't have CapEx from Jaworzno but we are expecting them to come in the next quarters at large scale. So Nowe Jaworzno, it's now 910 megawatts. And it's also, of course, undergoing the modernization process. And there are a lot of systems that are going to be replaced because historically, they cost a lot of problems. And I believe that in the next quarters, those problems are going to be solved and the disposition dispatching will be higher.

Now moving on to the wind farm in Miejska Górka first electricity was manufacturers and already? Or does this still start phase, but we are testing the turbines and commissioning them one by one. And we are now in the process of final operational approvals for line through the power line. Importantly, the project is already generating energy and it's going to be visible. So it was about PLN 8 million of income in August. And once more turbines have been launched after the test, the production will grow, and next year, we expect in Q2, the project to be fully operational.

Importantly, we received dedicated financing from the European Investment Bank for this project, which is quite favorable compared to commercial terms, and we have 18 years to pay it -- to repay the loan. So again, this is a project that enjoys very attractive financing terms.

Now the outlays and spending. This is an interesting thing here. The expenditure was PLN 75 million in June. This is the expenditure, the spending of PLN 11 billion. This is because the turbines were prepaid and the outlays do not reflect fully the progress of the project.

And also between '26, '27, we will recognize the costs as outlays expenditure, which will increase this item in the balance sheet significantly. Now going to the storage. And the first H1, we were preparing the tenders. Now we are choosing the right contractors in total for the energy storage and renewables, 492 megawatts are covered by the tenders and this will help us start the execution that the physical construction of the project. Other projects are under construction and are to be hand over this year.

Kuznia Raciborska, we are on the final stage of fitting and construction. So soon they will be -- will join our pool of storage batteries. Now PV and wind projects. We have already mentioned Miejska Górka, but there are also other projects we launched which are PVs or hybrid facilities. Let me focus on two examples here because I think that they are a good example of our philosophy in this segment.

As we know, PV is under significant pressure. We have discussed the prices of energy on the market, the price is under pressure. And our projects in practice are projects are value-added. So take Myslowice, 55 megawatts, huge scale. It was a former landfill. So it was very difficult to repurpose the land for other users. It was also a burden from the point of view of real estate tax.

So we got financing from the National Recovery Plan, 90% in loans minus 20 points as the underlying rate. This has solved the problem and also it's a potential for the future because the farm is located next to Jaworzno. There is a possibility to directly hook up new assets, including an electrolyzer. So on the one half, we have preferential loan. We have repurposed a post-industrial site, which was our and which has been now incorporated into the fleet, the hybrid facility in Ogrodzieniec is also an interesting project. It's our own development developed internally.

This is a strategic promise we made in our strategy. We will build a PV facility here, 65 megawatts of capacity and storage 55 megawatts. PV also enjoys funding from the National Recovery Plan. And the batteries got a grant from the National Environmental Protection Fund. So this is also an interesting solution. Our own resources have been used or double preferential financing. So I think this shows very well what our philosophy is of creating the best value for our shareholders with the best possible and available support.

Now moving on to the OCGT unit. Many questions, many doubts were involved whether we will be able to contract these turbines to meet the capacity contract we made. And we have succeeded. We are very happy with the conditions of this contract. Why we succeeded? Well, first of all, technological flexibility. We have 1 turbine solution, Class H turbine here, but also there's a 2 turbine solution to Class F turbines and this 2-turbine solution turned out to be more feasible in this specific setting, and also the model of investor deliveries.

We split the turbines from the construction contracting and this made more companies interested in the supplies and that will help us also to boost the number of companies interested in the construction contract, EUR 293 million and out of that, EUR 193 million goes for the turbine supply. The installed capacity ability will be higher than planned because now with 2 turbines is going to be 630 megawatts electricity megawatts. So if you compare that to the situation in the Polish market, it's around 30%, 25% cheaper than some recent contracts made on the market.

So our contract is 25% cheaper. So this is an interesting contract. The turbine can be built outdoor with containers. So this means that prefabricated modules can be brought to the site, which will shorten the construction process and reduce the spending on the construction works. Now we need to get the approvals. This is crucial and the environmental decision and the construction permit. We also need to prepare the specs. We need to hire the contractor, the engineer for the site and the tender is ongoing.

We want to finalize the design in the beginning of the next year. So the construction part and the turbine part will be split, and this means that there will be more companies interested which will impose the competitiveness and also local content for construction parts.

Now the carbonization of heat. The CHP unit in Lagisza is the key project for us. 1.2 billion PLN. This is the largest budget plus over PLN 2 billion of funds from the cogeneration auction, which will be paid between 2031 and '45. This is our crucial asset in there of Silesia and provides power to provide energy to most of our heat system over there, and it stabilizes heat deliveries for most part of Silesia.

Now the tender for turbines and supplies is underway, 2 turbines are planned, and we expect to get the bids in September and choose the contracts are based on that. Jaworzno heat utilizing is an important project for us as well. So first, it's important because it will provide heat to the city of Jaworzno, but also it will provide energy to the unit -- the steam unit in the Jaworzno.

And once it is commissioned, we will be able to put out of service some coal units in the power plant Jaworzno 2, which now generate loss. It will have a significant result on our results. The CHP auction was won in June and we will launch earlier this in 2029, but the gas boilers will be launched earlier in Bedzin, in Jaworzno, we will use storage and electrode boilers. 30 megawatts in Lagisza the electrode boilers. So the idea is that outside of the peak heat season, we want to use negative prices for hot water for households.

So we do have huge projects, but also we have won many CHP auctions, Olkusz, Zawiercie, Kamienna Góra. These are smaller locations, not as meaningful, but this means additional revenue and profitability and profitable decarbonization of smaller sites. Thank you.

Ladies and gentlemen, now I would like to welcome you to Q&A sessions. So the first question here.

I have three questions actually. First, refers to the Slide #4. When you're talking about the generation portfolio, you inform us that year-on-year, the consumption of coal rose about 35%. Of course, it's very difficult to foresee what's going to happen in the Q3 and Q4.

However, it's a fact that since August, we are facing a little bit different reality, especially at capacity larger than we were in June of course, for clear reasons. So therefore, I would like to ask if the consumption of coal is going to rise in Q3 and Q4, bearing in mind the geopolitical situation?

Day before yesterday, the Coal Mine Congress, it was said that almost -- there was nothing, no coal in the warehouses, in the storage sites. So are you going to buy some extra additional coal supplies. And if yes, where from? The warehouse storage sites are empty.

And second question, it's a very interesting information that in your renewables portfolio, there are batteries storage -- energy storage batteries. So do you have previous experience, do you think it can be a game changer -- based on the second quarter and of course, I would like to ask about three sites, Lagisza, Jaworzno, and Siersza, in the context of the capacity market.

Do you believe that what's happening, I mean like every year, some kind of black scenario is going to happen starting from COVID. So is there any chance that the three sites are going to operate in your portfolio after 2028? Thank you so much.

I would like to answer the first question. So if it goes about coal in our group and coal supplies in our group, so we can see that it's increasing and it's a kind of a consequence of our strategy. So we try to secure the supplies, but we also like are open to some new solutions. And you can see that what we can see in the first quarter is a consequence of procurement processes and offers on the market.

Of course, we bore in mind the availability of coal. So what can happen in the second half of the year? The dynamic is pretty high. It's dependent on geopolitical situation, on the weather conditions and, of course, availability of our units. So what we have already said, Nowe Jaworzno is in outage right now.

In October, we are also -- there will be an outage in Lagisza -- so we -- so the demand for coal is going to be a little bit different in the second half of the year. And of course, we are talking about hedging contracts. So yes, coal is coal supplies are secured.

Now I would like to refer to this battery storages to the warehouses. So I believe it's just the beginning of a very fast way that we are going to accomplish soon. The results are better than we assumed. So actually, what I would like to say is that our portfolio is secured of 600 megawatts in our warehouses, both on the capacity market and also with grants from the environmental fund, we have received the most of all capacities financed by state.

So we were the second company financed by environmental fund. So what do we expect actually.

only the question is do you -- if we think that it will support our financial result in the second half of the year? Yes, I believe it will.

So the warehouses and, should eliminate this value. It can be, of course, spend on the margin or on lowering the costs, on improving our competitiveness and increasing the volume. Yes. And as Michal said, it's 700 of megawatt, mega it's another warehouse. So yes, we can see a great potential without such warehouses on such a scale, also dispersed one, this transition will be very difficult. And it will be very difficult to deliver the price, which is now present in the European Union. So that's the question.

And now the third question is a difficult one. So we are getting back a little bit to the history that happened 3 years ago. And now the question refers also to 2028. So it's a kind of capacity market in 2028, 2025. In 2025, we won, it was a good decision. With this unit, we could provide stable system. So regardless of this transition that you are undergoing right now, I think we are able to face it. So we also won a contract for 2027 in the capacity auction. And I think we need to win the auction for 2028. So and then we'll be able to discuss this year.

So there are projects undergoing but the reality will verify everything. Pragmatism is crucial. Our position here is that as long as we don't commission the units -- gas units, renewable units, we need to have kind of backup because we need to provide our customers with energy 24/7.

There is an option and we are like now under -- it's right now under discussion. So we are ready. We have a strategy that we are presenting right now, zero emission, opening the world of new energy. And I believe that we can compete with these units. We have a precise specific offer. We can work longer, even in 2029, 2030, when you look at the legislation in the European Union, there are several regulation that talk about 350 kilograms per kilowatt and then you can run your business activity.

It means that those units can work on a particular number of days throughout the year. So it means that they are also needed. So of course, it requires special legalizations, legislation and decisions. The system of work on these units, which somehow makes them work different than they were designed, doesn't help at all.

So on one hand, capital expenditure that needs to be done and on the other hand, the supplementary system of support. It is possible. We believe in it. On those units can operate. But of course, there needs to be demand for it and it can need also a proper business plan and business case.

Wojciech Jakóbik, would like to ask another question, so let us give him the floor.

A quick question about the profitability of more investments like offshore because TAURON used to communicate about it. Now there are many geopolitical issues. And I can see that it's not as profitable as before. What's its effect on the long-term plan?

And also energy prices because Polska Grupa Energetyczna gave the specific cost of energy from coal and gas. And the conclusion is now that coal production is more profitable right now. It is over PLN 200 of difference? And what's your data on it?

The first question first. Well, our strategy is clear when it comes to the renewables, wind farms will continue to be the default. We have a share in one joint project with PGE offshore, and this is not a project which has been undergoing an intense phase of preparation. So there are no plans to boost the scale of offshore planning. And if you think about profitability of renewables. Now commercial PV without storage is a difficult business case. That's why we are looking for preferential funding options or any additional advantages from projects, also with hybrid formula with storage and wind onshore, here, the supply is quite low. The general master plans in Poland are now coming into effect. So this blocked new project for some time. So now you can either buy existing projects or buy projects we have a long and difficult history.

Now if you have a good and well configured project with good wind conditions is and will be profitable, but there are a few projects that meet these conditions, but this situation is going to change. Two years ago, there was a legislation amendment. So once the master plans have been approved. This is expected to happen this year already.

There will be more projects available. And we think that they might be attractive economically speaking.

Talking about the prices, it's of course, most profitable to benefit from wind and from sun from the sunlight, which means that coal is to be eliminated. Of course, we are talking about the long-term plan. And with the high prices of gas, a lot of countries like load their battery storages. So it's more profitable now to use gas -- hold them from gas. That's the reality.

Getting back to the first question, actually, if there is a lower demand for supply of coal, and there's going to be a demand. So again, the market is going to react. So somehow we don't know what the situation is going to be like? I mean the supply versus demand. And we don't know what's going on between gas and coal, what's going to happen there.

So I feel quite humble to talk precisely what's going to happen in a few months. I don't want to predict anything like for sure.

And answering your question, yes, we have some data, but we don't share them in a really transparent way. As President, Mr. President said, we can see that our profitability has risen, especially the production from coal, and we just applied it in the first half of our year. And we can see an increase in production and increase in supply on the market, especially in the situation with higher prices. We'll try to take benefit of this situation, and we try to build on the margin on the commercial use.

And another question is coming.

I would like to ask you about the G tariff price. From your perspective, with your contracts, is it possible to have the same level of the tariff also bearing in mind that there is going to be election in Poland and depression is going to be high.

And the second question is that I have seen EBITDA and volume. But can you show us the number of customers, the number of customers in small and medium enterprises and business. Is this number growing or falling?

And so second answer is growing. We are going to find this number soon. So there is an increase in small and medium enterprises and of course, households as well. So this is the trend that we somehow changed. It was challenging. And right now on this competitive market, small and medium enterprise the most competitive market.

So we've managed to change the trend. They are coming back to us. So this increase is really positive. We have more and more customers. And the first part of the question was some kind of, I think, hack, intellectual hack me. So of course, I'm not going to talk about the G tariff for the next year. But I would like to say one thing. I think that we spent too much time on tariffs.

I can tell you the price of energy for the next year and even for the next 10 years. We don't need to wait for this tariff actually because the price of energy which is PLN 495 can be the same for the next 4 or 5 years or 9. And when it goes about the tariff. I understand your idea why you ask such a question. Actually, it's ahead of us.

There was a resolution that has just been into effect, so it means that we are going to do -- subscription fees are going to be changed and moved or split into two in the permanent ones and right now, we are applying to the regulatory office. And then we are going to apply for the next year. 9 years -- yes, 9 years plus this permanent charge, and there was also a kind of guarantee for that.

So there's a kind of guarantee for the customer that the product is going to leave our company, and we run such company with Polish insurance company, PZU. And that's a particular value and 50% of our customers have already had products with such guarantees. I mean, dynamic products with TAURON gene. And this is the direction that we believe the most interesting one.

So in each tariff group, we have had an increase in households in businesses and in large businesses was the highest. Actually, in every tariff group, there has been an increase, half year on half year. it's about 8% on average. But in large business, it was even, I believe, 10%.

But somehow, I have a feeling that I didn't address the question straightforward. As you understand, it's a really sensitive element of our work.

Another question?

I am Marek Kolanowski, WNP. The first question is, when are you expecting to award the job of the contract engineer for Jaworzno? And going back to the capacity auction except for Nowe Jaworzno. So what capacity of coal units will be outside of the capacity market as the big 2027, what will be the role?

Will there be a backup for the contract units or will they have a different function? Thirdly, as to your expert knowledge and side information, what are the chances for the exchange traded bonds listed bonds for electricity to come back, is it likely to come back? Thank you.

So let me begin with the issue of the contract engineer that the procedure is ongoing. And in Q4, it should end and we will select the engineer depending on the questions in the procedures, et cetera, it might be October or later, but this is the expected deadline.

And now the capacity auction. With every auction, the strategy and the situation is different. Now 200 units are a backup for other units. This is how we joined the capacity market. We won the capacity market for all the units and the 200 units are now operating in Laziska, Jaworzno, Lagisza, Siersza. So yes, everywhere.

This is because of stress. They function based on the terms of the capacity market or as a backup and let me not reveal the secret of what and where because next year, we are also going to take part in the auction. And it's different than last year. Probably next year, it's also going to be different.

Unfortunately, it's off mic. I don't know. We always adapt to the regulatory situation. So the fewer the changes the better for us. Speaking about the bonds, we were clear in our communication about our position, and this hasn't changed, but whether this will come back, well, we have no idea. And also, there are many things now ongoing. The financing, huge investment projects, the capacity auction issues, the transition of the industry -- so there are many variables here. We need to take into consideration.

Pawel Puchalski, Erste Bank Polska. I have two simple questions. First, the level of contracting in TAURON. I'm speaking about the energy sold for 2027. And Chair, you focus on customers, but I'm always focused on EBITDA. And I'm looking at the EBITDA in Q2. There was a loss of PLN 7 million. Is it something you would expect to repeat in the quarters to come? Or maybe there was an exceptional situation that took place in this quarter?

Well, speaking about the contractation, the segment of supply while you have to split the portfolios. You have the tariff portfolio which means that the purchases made ahead and most of the electricity is already secured. I'm not going to give you the specific figures. But this is the general market practice in this portfolio.

Now the business segment. My answer would not be a direct one. We are very conservative there in terms of backing up. So here, this is back to back. Every supply contract as secured simultaneously on the market. So we secured 100% of the energy, but the peak season is already ahead of us the peak contracting and so we will have to secure the portfolio additionally in this time.

We told you last year that there is this risky element last year of business construction. This is what we communicated last year. That's why for the whole year, we've been working to convert our customers to make them switch to the market-based options where the risk is smaller and this has an effect on the margin as well. But it's very good in terms of the risk, especially if the price is volatile. So there has been a question about the law. So strategically, I will pass this on to Krzysztof.

Yes. As I've said, this segment is not performing very well this year in terms of EBITDA. We are under a huge pressure here because the G tariff is relatively low and the profile cost is growing. So Q3 is not going to be favorable for the profile cost because this is when this cost is the highest and the price differences that are highest usually. So the segment will continue to be under pressure through the end of the year.

Ladies and gentlemen, are there any more questions? Just please be brief.

There is one very emotional issue for consumers, like the clearing. Why the first August was set as the clearing date because it's not good for those who use more energy and winter because they will pay more in winter, and they will want to be able to get the money back until the summer. It would be easier to set the date for 31st of December.

Yes, you could have done it, but the settlement clearing actually sets the actual use of energy, the actual consumption, which affects your bills. So consumers, the best option for them. So in metering, please bear in mind that this 1.2 million customers. It's a huge promo program. Customers use the network as storage. This is a huge topic, a huge burden for industry.

But yes, we opted in now 6- or 12-month settlement periods period as a huge disruption for the segment. Because you have to make forecast for the consumption and generation of electricity. So you can easily make a mistake and these costs and also, it's a burden for the customer service. It's also problematic for the customers themselves.

All the consumers have smart meters and 24 hours data. They have an app. So the real actual 1-month settlement prior period or 2 months is the best for both parties. You pay per use or then you gain thanks to storage.

So now let's move on to questions online, which are asked in our form. The first one is how much has been already spent from the pool of low-cost loans under the national recovery plan? And when will we see a more significant reduction in financing costs as a result?

So as you could see in this slide, the preferential financing and also financing in the program. So it's about PLN 2.6 billion on the 30th June, and it was received from National Recovery Plan. This is kind of refinancing. So it means, first, we spent and then we apply for refinancing.

So in the next slide -- on the next slide, you can also see that it's about PLN 17 billion. And now the cost of financing which you could see in the first half of the year, there was a significant decrease, about PLN 80 million. It's the interest cost half year on half year. So I believe it's a significant decrease.

And how much -- how big is the influence of National Recovery Plant versus other financing. So it also applies to the value of the market in the next several years when this debt is going to be due. So it's 1 point -- percentage point, PLN 601 billion. So with a simple assumption, we can say it's 5 percentage points between the markets.

So the year scale is about more than PLN 100 million, PLN 130 million, let's say. So the difference is 5 percentage points. If we consider the whole scale of PLN 17 billion, so 1 percentage point is about PLN 170 million of savings per year. So actually, we are not able to say really precisely the cost of financing in a perspective of several years. If we can -- if you can observe the costs of financing bonds and profitability, which is about 6 percentage points and if we know that the majority of the statement is 0.5 percentage points.

So this is the difference of 5% points between the preferential financing and commercial debt. But whether the profitability and financing is going to be about 6%, I believe it's quite high percent, but I cannot predict it. So it's about PLN 170 billion a year.

What impact are the shop prices energy prices having on the company's results? And does this not pose risk for trading next year? How does this affect energy repurchase in conventional generation.

And the answer is going to be divided into two periods. Current year, which we have already mentioned, so our hedging policy is conservative. So entering the year of execution. Most of our positions are closed. So -- and there's no exposition to risk, which is actually is pretty limited. So -- and this is how it happened, and I mentioned it before. So we took advantage of this change and the CDS were used by us and now referring for the part of influence. So it affects our productivity, so increase our productivity and the sales from repurchase.

And now to show you the scale, so the repurchase was about 700 gigawatts per hour. And now it's about 600 -- 700 right now. And the contracting is undergoing right now and the increase in prices of the energy is not really significant as much as volatility. So the price changes. And we want to see it as a kind of chance rather than risk. So we want to also secure risk on the side of costs.

Is the increase in coal consumption and conventional generation within the group accounting continuing in the third quarter and likely to persist in the coming months. And if so, our supplementary coal purchase is required? And what are the volume sources of the coal and, of course, prices involved?

And again, I think I've already answered this question. So just to sum up, the energy sale contracts all have like include secured contracts.

Next question. I would like to ask what year-on-year growth in capital expenditure can we expect in 2026?

So capital expenditure in 2026 are going to foster a lot of -- and acceleration of projects. which are in the first phase right now, but then are we going to start this stage of financing. There are some events which can affect the result -- yearly result, especially the difference between investment and expenditure like Miejska Górka. So it can really affect the expenditure, and there are some projects of acquisition of renewable sources of energy, which can be like kind of finish in a positive or negative way.

But generally, the distribution in those projects year-on-year is as in the first half year. So renewables and in wind farms, in heat sector, so they are accelerating. It's hard to say because there are other factors that can influence this level. However, this expenditure are going to rise much more quickly than previous year. And I believe that this year is going to be more than last year, but let's say, maybe 20% and 30%, but it depends on a lot of factors.

The consensus EBITDA for 2026 is approximately PLN 6.62 billion. Do you consider these to be ambitious assumptions?

You know that we don't post our forecast. So this consensus and the forecasts are pretty wide. There is no one answer, let's say. However, is it ambitious? I would like to bear in mind the financial results from the first half of the year. And maybe yes, maybe I can say it is an ambitious scenario.

If you analyze some situation. And you believe it's something really ambitious. So then we try to like really deliver it even if it's on the border with kinds of miracles. So somebody is listening to our conference today.

So if we're talking about prosumers and the payment is going to be done every month. So it's going to be a monthly payment per real use and production generation. But everything what the prosumer has gathered in the batteries. It also brings benefits. I mean, amounts, for example. So everything is going to be included in monthly settlements. So for example, if somebody has use energy in the winter, but start in summer is going to influence the price. The way -- the method of payment does an influence of how much energy has been stored. So there is no possibility. It's going to be like zero payment.

Can you -- can you say something about DPS for 2027. The consensus is PLN 20 or PLN 0.2 per share. Is it realistic, given the CapEx?

Well, let me make a reference to our policy and our dividends payment for 2025. Well, there are many factors that play here at our financial results, liquidity and the planned CapEx but 2026, we communicated that we would like to start paying the dividend, and we would like it to be a permanent process, not a one-off. I'm not going to speak about the amount. We have set our goals and communicated that clearly.

And this doesn't change. Well, we will always be conservative when it comes to our financial capacities, but this was our goal in mind when we started paying dividend at 2026.

So this management board has the ambition to carry through a transition and also share the profit. So dividend is very important to us as we said from the very beginning, we will do whatever we can to make it possible.

Ladies and gentlemen, thank you the conference ends now, and you can continue talking after the break and the earnings call for Q3 will be organized in the middle of November. Please join us, and thank you. Also, there is one important event. The Energy Day is ahead of us. Energy Days, the first of October at half past 11, there will be a round table, TAURON’s round table.

And I would like to advertise [indiscernible] power, Haninge. This is a very good program. Thank You.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Ladies and gentlemen, welcome to the press conference of the TAURON Group, where we will present the financial results for the first quarter of 2026. My name is [indiscernible] and I am the representative of TAURON. I will moderate the meeting. The first part will present the financial results and the second part will be your questions, answering your questions that you ask through our forum on our website. Now I will introduce our participants, Mr. Krzysztof Zawadzki, the Vice President of the Management Board for Trade; Mr. Krzysztof Surma, Vice President of the Management Board for Finance; and Mateusz Lewandowski, Executive Director for Investments in TAURON Polska Energia S.A. Please proceed with the presentation of the results.

Good morning. We are starting traditionally with the situation in the energy sector, several pieces of information in the current quarter. The increase of daily amplitudes increase. We can say that the highest price from January till today, 2,000 -- more than 2,000 and the lowest 1,300. We can see the discrepancy is increasing and it becomes the characteristic feature of our sector. We also noted increase of installed power in the photovoltaic, it is 25.7 gigawatts and the increase -- we don't yet have the information on the end of March, but we expect the increase. We noted a slight decrease of the hours, but we expect the yearly increase in hours. Last year, we had 362 negative hours. So this year, I think it will be more than 400. We also noted the decrease of the coal prices. And on the other hand, the increase of the power energy prices.

In 2026, we could say that the generation on coal was more competitive compared to gas. We also noted the drop of average temperatures compared to last year, which increased the sale of heat, the negative phenomenon of worse conditions for wind generation. It was worse in a decade. Now it's 23%. Quarter-to-quarter, it's a drop, and it is 8.3% drop. Water generation by quarter -- quarter-by-quarter is slightly higher, 12% to 13% generation, but we're looking at the higher hydrologic conditions, we cannot expect good results.

Increased production from hard coal and gas by 7.3% at the cost of the other sources. And in the same period, PKB grew by more than 33% compared to last period, but the growth increased by 0.2%. It is it is also not advantageous that we can expect increased power consumption in the nearest future. RES dropped about 1.1%. But bearing in mind that we have increased installed power in the system, it was dropped by about 30%.

The hard coal and gas also dropped together with the brown coal and -- the balance between -- among the last and this year, the import balance was in February is PLN 414 million in March and in April, it was increased -- the export balance was increased. Redisposition was -- this is increasing in the energy system, unfortunately. The negative fact is that the compensations paid do not cover the lost revenue. As the settlement is at the prices of the balancing market. So it is slightly not related -- not closely related to the actual commercial conditions.

The generation portfolio, what we observed in our case, the increase by -- in production generation by 18%, and this is with RES increase by the 13% -- in this period, we have 24% increase in the installed power. The productivity dropped a little. This is the characteristic feature of the whole energy sector and the RES units, increase of heat production due to the lower temperatures. CO2 emissions increased by 14%, mainly by the increased production from conventional sources. Similarly, in case of the consumption of coal, which is associated with increased generation from coal. RES share, 13% drop. It's lower compared to last year.

Remitation of 40% increase of the reduction in the RES. This has changed -- this limitation of this production has changed, its structure changed. It dropped compared to last year in the economy. It means -- generally, it means that a big portion of energy is being lost. This is the energy that cannot be used effectively. What else? I assume this is the cost of transformation and the feature of the system. From the point of view of the group, it is -- the redisposition is more profitable than settling the production in negative prices.

Water plants -- water electric plants slightly lower wind and heat, increased this availability. Coal units are decreasing average 81% availability, mainly due to plant and non-plant stoppages in Jaworzno in 2025. Selling portfolio, sales of -- electricity sales increased by 9.3%, which is households and small business. For households, we see increased number of collection points -- consumption points.

In small and medium enterprises, it is increased by the volume. The green sales ratio, it is quotient of the purchased green energy divided by the total green energy sold. The decrease is caused by the fact that we have the increased total energy. Number of Nova Energia customers, as we can see, mostly it's households, 21% is the small businesses. Large business is below 1%.

Energy for fed into the grid by the procurement. It's either -- the drop is caused by either the increase of self-consumption or lower production in that period. As we know, in generally, RES we just had to lower production. So these 2 can may be combined.

Heat sales to the market is increased in the first quarter because of the lower temperatures, cold weather. Cheap hours customers, this is the tariff with differentiated varied rates. It is dedicated for educated clients for those who are aware how to adjust. We had 25,000 customers at the end of last year. So we have about 40% increase. And what we do with regard to educating our clients, we conduct educating campaign with regards to the knowledgeable use of energy. We propose products with dynamic prices. We propose our adviser. And we -- our attitude is to -- our approach is to educate customers to lower their bills.

Now we can go to the second part. I give the floor to my colleague.

Ladies and gentlemen, the results of the group for the first quarter are good, of course, compared to the record results of the last year, they are slightly lower, but these are still very good results and effects. Revenues dropped slightly compared to last year. It's -- the drop caused by the slowly lower energy rates. But if we remove compensations, we would have an increased revenue, '25 was the last year of the compensation, more than PLN 300 million revenue was from that last year. EBITDA, it was 10% lower compared to last year. It reached PLN 2.4 billion in the first quarter of this year. When we compare it and deduct the one-off events in 2025, we -- it's a year-over-year comparison.

In '25, we had one-off events. One was concerning the compensation in the Generation segment and the other event concerned the tariff. It's even 1 year before mid-'24, the tariff was set untypically for 1.5 years and the costs were unevenly distributed on our side. And the costs weren't transferred fully and they were recovered in '25. That's why we had abnormally good result, and that's why this quarter seems not to be so good.

And the analytical consensus was exceeded by PLN 150 million. In the group, net profit was related to the operating results and it is connected with the increasing depreciation level. It's the derivative of the investments in the group. This result was corrected, adjusted in plus due to the lower interest and tax. Cost CapEx increased slightly by 7%. Mateusz will talk about it in more detail. But the net debt to EBITDA from the point of view of our financial institutions and from the estimate performed by them, it is the same as at the end of '25 and slightly better compared to the first quarter of '25.

If we go to the segment slides, we have unchanged leader, the distribution, close to PLN 1.2 billion. And if we look at the further places, they are pretty equal. EBITDA of about PLN 200 million is the next 3 segments. It's -- it's Sales, Generation and heat more than PLN 200 million EBITDA for all of them. And the last one, the heat has been -- has had the best quarter in history. And since our publication for generation and heat are published, then heat is -- the first time when the heat is higher than RES. We will talk about it in more detail later.

Another slide shows the differences year-over-year. So let's start from distribution. It's -- the difference is minus PLN 42 million. There were 2 positive and 2 negative factors. The negative factors were the regulation account settlement. Last year, we had the positive balance of the regulation account. This year, it's negative, and it's PLN 111 million difference more or less. Generally, as I said before, the regulation account is the difference between the actually executed volume and the volume allocated in the tariff. If the actually performed volume is higher than the volume located in the tariff, then it sets negatively on the regulation account and vice versa. Over the years, it's then settled.

The balance of the regulation account will be slightly positive next year. The other negative factor of that segment is the WACC drop by -- more than 1.3 percentage points. It's right now 9.5%. The positive factors is the increase of the value of the regulated assets. It's PLN 2 billion increase year-over-year. And another positive influence is the increase of volume by 2 percent points year-by-year, and it mitigated the negative regulation account.

When we look at the RES segment, I started to say that this is the weakest segment in this quarter. But of course, it's still with positive results. It was mostly affected by the lower market prices, both in the energy market and in the green certificates market. They were the dominant factor. But of course, we also accounted for a better result based on historical data. But these wind conditions were much lower right now. And if it wasn't for the new power, we would have a drop of 7% from the wind production.

With Heat segment, we can say it's only good news. Here, we had significantly lower temperatures this year, this winter. So as Krzysztof said, the volumes of heat sales were higher, and it positively affected the results, including the -- added to the better tariff. So we had EUR 50 million increase of EBITDA year-by-year. And we also consume results from TAMEH Polska, which received means from the TAMEH Czech, which was a positive result effect on the whole segment sales segments.

I've touched that a little. We had a very good first quarter in tariff G last year. This year, it will be the opposite phenomenon. We will have no margin, and it will determine our results. This result will certainly be strongly dependent on the cost of the profile that will affect the company in the quarters 2 and 3. And the results of the pricing differences will strongly determine the results of this segment in the latter part of the year.

And then we also show that we -- we changed the reserve last year, we concluded a reserve for tariff G. We estimated it for PLN 150 million, and it will be released in individual quarters. It will positively affect the EBITDA of this year.

As far as the Generation segments are, we have good results, a bit slightly more than PLN 40 million lower than last year. 2 key factors, the one-off event of the compensation payment. It concerns the previous year's compensations in the first -- paid in the first quarter of '25 and slightly lower margin caused by the lower level of sales, as Krzysztof also mentioned. But this year, we had the phenomenon of much higher production versus redemption repurchase from last year. Last -- in previous years, we had much more repurchase, which was at a much higher margin. And this year, the production, in fact, eliminated part of the repurchase due to the market situation because we always analyze whether repurchase of production is more beneficial. That's why the margin this year is slightly lower.

If we move on to the Debt and Financing slide, as I mentioned before, the ratio is at quite a good level. I mean, 1.4, relatively low, especially when we look at the historical record of the group and what influenced that then? I believe mainly EBITDA, EBITDA for the last 12 months because it was a bit higher when we compare the quarters. And of course, I mean the 12 months back and especially the first quarter 2025 versus 2026. So you can see PLN 400 million on the right-hand side. And the second factor is a decrease in the debt. I believe the net debt that we report to the bank as well as the economic debt, which we can see here in this graph. In both cases, it's about PLN 100 million year-over-year.

I would like to draw your attention to the graph and especially to those factors. I mentioned them in the previous conferences as well, but I believe that this increasing funds coming from KPO, I mean, national recovery plan are high. This is PLN 2.2 billion at the end of the first quarter 2026, PLN 1.354 billion was in kind of subsidy, which I mean is a kind of interperiod settlements after discounting the debt, which was granted with the 0.5% rate. It was discounted with the market rate, and it comes also from the result between the nominal value and the discounted value. And this is this inter-periodical settlement, and they are going to be depreciated just like the assets financed by this loan.

The second factor is, as we promised, we paid back all the debt. At the end of the first quarter, we have no stocks, no bonds. It was the biggest part of our debt. So everything has been paid back in first deadlines according to the contracts on the bonds or the loans.

The third point I would like to draw your attention to is leasing. It's increasing gradually, but I believe this is a natural derivative of the business growing, especially in the distribution sector, all of the mortgage or the property agreements are included here in this category -- in the leasing category as debt. So I would like to emphasize that the group has a very good position when we consider the cash flow, the liquidity. The company has PLN 6.3 billion of funds. So according to our policy, these resources are always guaranteed to cover investment in the next 12 months. So that's all what I would like to present.

And now Mateusz is going to talk about our investment program.

So when it goes about investment, so we have realized the CapEx and PLN 1.64 billion. It's more than in previous year quarter-over-quarter. No surprises that you can say 70% in the distribution sector, then RES assets -- it's about 80% of our investment in the first quarter. And now talking about each segment, I would like to start with the biggest one, which is Distribution. So PLN 800 million in the CapEx. So this is 100% of our realization. We met the targets in this period of time.

And then when talking about the investment directions about the connections that we built, about the modernization and replacement of grid assets. So I believe that was the majority of our CapEx. And thanks to that, we could connect about 400 megawatts of RES installations, 900 kilometers of new energy lines, and we keep this direction with all this direction right now. So our customers covered by intelligent smart ratios is about 47%. It's the coverage. Right now, in this segment, it's more than 95% of the CapEx, which means that we are pretty optimistic about our plan for this year.

Then RES. So the CapEx was related to realization of 3 big wind farms, Nowa Brzeznica, Sieradz and Miejska Gorka. The 2 first were commissioned in the first quarter of this year, and they started working and generating EBITDA effectively. Miejska Gorka, our biggest project, -- we are really advanced into this project, into implementation of this project. So I hope that if there is nothing unexpected, then that the commissioning of the object will take place in this half of the year.

But as far as the cash flows are concerned, this moment is crucial. What I would like to draw your attention to is also our program of batteries, energy storage facilities. I'm going to talk about it later on as well. And in this segment, there was also a modernization of hydro power plants and one of our crucial plants in Pilchowice in the first quarter of this year. There have been several investment decisions related by the capital funding. So we have started with the tendering procedure for big photovoltaic farms in [indiscernible].

Now let's talk about the Heat segment. So I'm going just to summarize it. So the CapEx in this segment mostly related to modernization and generation and connections. So we have some existing generating units, but those CapEx is now are related to the facilities where these assets are placed. What else you know decarbonization of these projects. There are a few of them, but I'm going to talk about them later on. When we talk about Supply and other segments, I would like to focus on the investment in the infrastructure, IT infrastructure, street lighting and fiber optic network.

Now I would like to pay more attention to particular projects. So as I talked before about photovoltaic farms, you could see everything on the former slide. Now I would like to take one of our key projects -- key element in our investment portfolio. I mean, BESS projects. So as you can see, -- it's 558 megawatts under construction and 8 of them are already -- have already been commissioned. But this portfolio is full of projects besides those standard expositions, I mean, generating profits related to the volatility of the prices, whether this is the power market or the investment support market.

So the cash flows related to these projects will have this kind of really stability and stable investment support. I've mentioned 2 projects that have already been commissioned. I mean, [indiscernible] and they were commissioned this year. So I would like to mention the really fast implementation project because it took about half a year only. And this year, we are going to add 16 more megawatts to this 1 from the project in Proszowek and Kuznia Raciborska. This should be finalized by the second quarter, I mean, second -- next month. And then the portfolio of projects of more than 500 megawatts, which are in the first preliminary phase of implementation, but still really advanced. I believe that we are going to gradually open the tendering procedures, the procurement procedures so that this year, we can sign the contracts and realize our targets.

Moving on to the next project. So the projects in the heat generation segment. I mean the key information here is that in the first 2 auctions that took place this year, we managed to have the support -- operational support for 5 projects and the biggest one is the project in Lagisza, which is based on 2 cogeneration turbines, about 100 megawatts of energy, but it's worth underlining that the configuration of this project is much wider.

And our model for the asset should include also some other constructions and more support -- and the realization of this project right now is also in the phase of contracting the turbines because as in the project in Jaworzno, we are going to use this investor model as far as the supplies are concerned. And then construction of gas engines at [indiscernible] and the Jaworzno warm heat unit. So right now, we are about 35% of the implementation of this project. And to the best of my knowledge and our assessments actually, as far as you know this timeline is concerned, there are no threats to it. In Jaworzno, there is some kind of hybrid project, which is supposed to combine 2 functions. The heat source for the city of Jaworzno is one of them. Right now, we are at the stage of contracting it, and we are trying to work on this procurement process. Of course, each year, such situations are included in our timelines, and we are ready for such obstacles.

To finalize this investment section, I would like to talk about our biggest project in this Generation segment, this construction of a boiler house in Jaworzno, which works in the open cycle. And mid-April, we were unfortunately -- we had to stop this project. We had to cancel it due to a lack of bids. So -- but somehow we were ready. And it was nothing surprising for us because there was a kind of scenario which somehow predicted such a situation. So finally, we decided that the best model, especially when we talk about the supply -- supplement imbalance, we believe that a new single-source procurement procedure should be initiated. And it's, of course, possible due to this law. So we invited a company from Italy to participate in this project. It's based on 2 turbines that work in an open cycle and in the outdoor construction facility.

Right now, we are negotiating. But somehow this is a kind of solution, which will enable our key parameters to be implemented. I mean the CapEx buying this technology and of course, the timeline of our implementation, which is like clue when we think about the contract. So we believe in the few next weeks, the project will be finalized.

Thank you so much, gentlemen, for your presentation. Now it is the Q&A session.

The first question comes -- the first question is when we're talking about the power supply market, at which stage are the works right now? What can we expect?

So right now, we run a consultation with the European Commission. We don't know the effects and details of these conversations, this consultation, but we believe that the solutions will be very close to the current mechanism, maybe with some modifications. However, I will refer to the details after it will be published after the consultation with the European Commission.

What about the government commission related to tariffs? Where are we now at which stage?

So this topic is quite comprehensive. The special team that's been involved to cope with this issue coordinated by the Ministry of Energy. And we've got some assumptions and the work is now going towards the division of the costs between the customers, and we want to increase the safety of these systems, electricity systems. And of course, all the work also aim at the infrastructure and increasing it. [Audio Gap] I can say that right now, the market is volatile. Maybe the volatility is a little bit higher, and our hedging strategy is based on quite conservative assumptions. And on an ongoing basis, we try to follow the trends, especially the price trends. We include the volatility of the market. And I believe we try to adjust the strategy to minimize the risk and the chances on the market. We monitor the market, the regulatory aspects. So we try to adjust this strategy to the market.

So what about the contracting in Jaworzno and what kind of costs can we expect? What about other gas projects? Does this delay in this project will influence other units?

So OCGT project in Jaworzno has already been commented. So maybe I can refer it again. So currently, we are going to address a single contractor with a [ Assalto ] company from Italy, and we believe that it's going to take about several weeks. The level of costs that we can expect, we have like no doubt that it can -- probably it won't exceed the levels that we assumed, especially in the unit aspect. They are being prepared right now. Probably you know that 2 of these projects were really effective and ready to be commissioned. So now we are ready to commission them. Still, nothing changed. But I believe it's also important whether we get this mechanism of support or not.

And talking about other projects, we don't assume any problems. This project is being contracted right now. And consequently, I don't believe this is a base scenario for us. If so, probably we'll need to carry on further discussions.

So can you comment, please, on CapEx on this year, talking about each particular segment?

So I'm not going to refer to values. However, talking about segments. So let me talk about Distribution first. So we can see that it's related to seasons. The CapEx is related to seasons. And usually, in the first quarter, it's lower than in next quarters. So somehow, as you can see, this implementation is multilinear. However, in the quarter 3, 4, it's higher than in quarter 1 and 2.

Then talking about RES segment, I believe there should be some kind of impact of Miejska Gorka project. So let me talk about maybe CapEx of wind farms more. You cannot see that, but there are some advanced payments right now. So it's -- we've got funds for it and the values in the next part are going to be visible in CapEx, so we can expect some additional values.

In further segments, as it goes about Generation. So I believe that our 2 huge projects, I mean, the heat system and OCGT block are going to influence our CapEx, especially as it goes about advanced money. I believe that there are going to be some values -- significant values seen.

And other segments, I believe that Heat segment should be concerned as well, especially when we talk about CapEx and our decarbonization program. It's like speeding up. We are starting new procurement programs, new tenders procedures, new projects. So I guess those CapEx are going to relate to properties to sites and future construction works. And this development work.

How do you assess the consensus of EBITDA at PLN 6.5 billion? Is it ambitious or basic?

We -- now you know that we don't publish forecasts, but if we try to say anything, first of all, the quarters are unevenly distributed along the year. You know it from history. But if it's -- is it an ambitious or basic scenario? It's not a certain scenario. But if we -- to achieve this level of EBITDA, several factors, many factors would have to happen. The key indicators -- key factors.

First of all, is the issue of cost of the profile. The second and third quarters will significantly tell us how the profile cost will be higher or similar to the previous one. The managing the cost profile cost will be a challenge to the group. And the second issue independent of us, the weather conditions. As we said, the wind conditions are low in the first quarter. We will see what it will look like later in the -- further in the year. Of course, we know that the wind is crucial here in addition to water and so on, but wind conditions are the most important.

So depending on the situation in this segment, then the EBITDA will depend on that strongly. And the last item that is not fully controlled by the group is the issue of temperature. Right now we are talking mostly about the autumn and winter heating season. It will determine the heating conditions. It would also depend about...

[Audio Gap]

It seems that -- in reality, the group results were meant the possibility of regulating EBITDA. I answered this a little in my previous -- the previous question touched that problem. The factors of the possibilities of generating profits. What are the indications? We have stable segments like Distribution, the Tariff is known. The asset value is known. The issue of the balance differences, it is not fully controlled. And the other thing is the volumes of the distributed energy, but it seems to be quite a stable result -- predictable result.

With regard to RES segment, we are -- as I said, the wind conditions, the Heat segment is the temperatures in the fourth quarter. The results should be better. We expect them to be better. The Generation segment, mainly concerns the market prices, the Middle East conflict may determine the spot market and the market prices in the spot market will in fact determine the value of production versus repurchase. And we will see what it will look like in the fourth quarter.

About the gas availability, the prices, it will definitely determine the results in this segment. For Generation, we must say that the lower wind conditions in the whole country, then our generation assets will work and generate EBITDA because they are fulfilling completing the system in Poland. With the Sales segment, here, we have the profile issue. Second and third quarter, the cost -- profile cost will determine EBITDA with this regard.

Next question. How much has been left to spend the CapEx for Miejska Gorka?

From -- we have incurred about 80% of the planned expenditures on that project. As we already said, we can see these expenditures in the presentation of CapEx. But with regard to the cash flow, it's finance flow is 20% of the of the budget.

What about the safety of turbine supply to new units?

Let's split it into 2 parts. We contract turbines to the various units, and these are different cases. With regard to Jaworzno, a lot has been already said. I can add that it seems that we are close to the situation when we are finished with the high risk of the contractation, and it should be cleared in the next weeks. Other cases is the Lagisza and [indiscernible] with these procedures still open. These machines are different. These are medium power, medium capacity. They are serial production -- and it's several hundreds of machines per year. And definitely, the fluidity of the slots and the availability is much higher.

We want to have the situation that at least 3 leading manufacturers can fit our needs. And then also the -- share of the CapEx in this project is not as strong as in the other cases. So it's not that risky. We, of course, are humble about the market situation, but I think we are moderately optimistic.

One more question. How can we include KPO in the investment budgets projects and so on?

As far as the information that we have is concerned, this team manages the -- with WACC. WACC is not concerned there because it's about the energy consuming issues. WACC is the discussion between the URE President and the other groups. We had a yearly annual model, and we hope for -- hope to be able to work out some long-term mechanism for the distribution. But also, of course, and one of the elements of it is the discussion on using KPO. But with regard to distribution, we have a negative cash flow. So using the resources from KPO will let us use the technological gap and consumers and provide basis for the energy transformation.

We have no further questions.

Thank you for your questions, for your attendance. See you at the next results making conference to sum up the first half of the year. Thank you very much. Goodbye.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

I'd like to welcome you during the press conference [Foreign Language]

Vice President of the Management Board for Asset Management; Vice President of the Management Board for Finance, Krzysztof Surma; and Vice President of the Management Board for trading, Mr. Krzysztof Zawadzki. Meeting traditionally will be divided into 2 parts. First the presentation of the earnings and then questions, both those that you will ask in the room as well as the ones that will be asked by our viewers who are watching our broadcast. And I'd like to welcome them. I'd like to hand over to the President of the Management Board, Grzegorz Lot.

Thank a lot. Good morning. It's been 2 years since we've been here with you together. So thank you for the 2 years on March 7. That's the anniversary. When we have a pleasure to present what happened in 2025, 2 years ago when we met, and we spoke about the strategy of about potential dividend.

That's the first message that we, as the management board, we are recommending the payout of a dividend for 2025. The details will be provided by Krzysztof. And that's one of the most major news that we delivered for '25, very good earnings. Probably you already became acquainted, if not, Krzysztof will be giving you the details, PLN 7.5 billion of EBITDA. PLN 3.3 billion in net profit. These are very good numbers. Almost PLN 6 billion of CapEx on the investments, renewables, heat with a year of very hard effort, a lot of hard work, but also very good results, very good outcome that the market sees and the customers see.

And we are very proud of that. In our strategy, we communicated that 20% -- 30% of investment funds, investment outlets will be acquiring from various sources. And I'm proud to present here, but almost 20% we already achieved. So we are the market leader regarding the obtaining of funds, including the national recovery plan. The team that is taking on the challenges -- we believe that thanks to that, we will not only accelerate the transition that we plan, but also what we are doing steadfastly and you know in our renewable strategy is the strategic direction onshore. That's the main part of our investment plan. We topped 1 gigawatt this year. And this is the direction that we are steadfastly taking. We'll have a chance to present to you the project that we've done and the ones that are being planned and the ones we'll be implementing.

Definitely also behind the scenes, we have questions about ESMRs, all those new technologies, we'll present to you and we'll be ready to answer as part of the Q&A session. Better energy storage facilities, renewables and grid investments, all those things are important, but on one condition, but at the end, there is a customer, as we said in the strategy, what's the core of the strategy, 6 million customers connected to the grid and everything we do takes into account the point of view of the customer. What we've done is, first of all, the quality of customer service improvement. Of course, we are not perfect, but we are far from it. However, every day, we are one day better, we get better. The example of that is an invoice that's been implemented without any regulations, without any pressure from the outside.

Our people implemented and prepared it, it gave us at least 20% less fewer contacts regarding billing. This is an impact not only about the customer service quality, but also up on the cost. As you will see on this slide, all the metrics that we are measuring, quality metrics, NPS, CSIRE indicate that we are moving in the right direction. However, with each quarter that we are implementing something, customers are asking us to implement new things. The main element being digitization and simplification where 90% of customers already have electronic invoice. This is specific savings and specific quality, also handling -- remote handling, 1 million contacts per month, 50% of those are remote contacts. We're talking about the online and so on. So please note that if it wasn't for the digitalization, we wouldn't be speaking about this.

So digitization is key. What's also important, customer service is not only sales and the customer service. In this strategy, we have a rapid pace of growth of the distribution and the customer orientation. I give you an example, working on the expansion of the grid, the first thing that the distribution line of business did is a dialogue with the local government units and the social partners that work before the grid expansion plans were developed, the dialogue and discussion took place where this grid is to be expanded. The next thing is the fact that 50% of the grid connections for the household segment are issued electronically. Easy banner things, but they make life easier and automatically improve the customer service.

Okay. The strategy that we discussed, we also take into account very strongly the so-called just transition. It's both just and profitable because these 2 things we take into account in our work. Mainly, it is focused on the conventional energy. That's the main part of the strategic is line with our declarations. We didn't withdraw for any area that we are operating in. We are building a new life everywhere. On the one hand, we are maintaining the conventional energy because it's necessary to supply energy here and now to the economy, but also to supply energy for the transition. We won the capacity market for over 200-megawatt units, full stabilization of 910-megawatt units. So the conventional energy is doing well. We are preparing now for the subsequent auctions for '27. But in each area, we are conducting the social dialogue, both by people in the local communities, and we are building new solutions.

Michal will describe to you what's happening to [ Jaworzno ]. When we won the capacity market for the peaking gas-fired unit. We are working on the battery energy storage systems. We are building also a hydrogen hub. So in each of the areas that we were conducting operations and we are conducting operations, we'll continue conducting operations. Of course, profitable from the investors' point of view. What we are looking at, we are listening to what's happening. What is the -- what are the trends, expectations -- we are talking about the local content. We are speaking about building the competitive advantage of the Polish economy. So wherever we can provide support, of course, respecting the legal elements, the competition -- we are conducting maintaining such a relationship with the suppliers.

Let me tell you itself, at least 90% now with the local content. You can look at what the new tender is -- the way the new tender is done for the energy meters [indiscernible] meters when we look at the supply market, and we are making sure that we have fair -- very fair competition. An excellent thing that we managed to do, maybe not manage, but just did is to reduce the entry barriers for the small entities. 2 years ago, we're looking at the organization that was highly centralized. So as a matter of fact, only large consortia, large companies were able to take part in the tender proceedings. We split those solutions. We allowed a lot of small companies. This way, we are building those local markets.

Now a lot of small companies can start working with us. And what we can see, what's important is those companies have the basis to start investing. The main entry barrier or growth barrier for the small and medium enterprises was the fact that the energy companies such as ours were unpredictable regarding their CapEx, regarding their expansion regarding the delivery on what they were declaring that would do after those 2 years, those companies have become convinced and that this PLN 100 billion plan that we announced is being steadfastly implemented. And based on that, those companies can invest in automation and new solutions and that we can see that. And this means that the technology on the support that we get is much more advanced.

And the final thing regarding we deliver is I'd like to demonstrate how we approach the communication issues. You can see how -- what is the position of TAURON, how it is positioning itself. We want to promote the brand that is for the customer, and this is most important. It's important how we being perceived. Other things that happened during that time. The Ksiaz Castle in [indiscernible] Silesia. We have our customers there, but also a unique special place and wonderful people that we can work with.

We became -- we acquired the naming rights sponsor of the Silesian Park. It's a place in Silesia that's very important, the people have meetings there. We've been conducting very good cooperation with TAURON Arena. We continue that. We are a sponsor of Polish Volleyball League and the Hockey League. Currently, we are working on further projects -- maybe there's an opportunity, I'll be able to tell you that. And if there are questions, we'll share our insights. So looking from the point of view of whether we deliver, it's a subjective assessment. We do deliver.

Let me hand over the floor to the colleagues. It's also important, excuse me -- two things I'd like to bring up yet. When Piotr Gbiowski was still a member of our Management Board, I must say because he's watching us, you have greetings, and he thanks for that. And you have Krzysztof with us, Krzysztof Zawadzki. He is the Head of the Trading, of course, of the entire customer. So in 2026, that's the composition, a very strong full of energy. So welcome Krzysztof on Board.

And now officially moving forward, 2026. Thank you very much. Good morning, ladies and gentlemen. It's a great pleasure for me to be here after more than 10 years. Let me move on to the details of the situation on the energy market. Let me move on to the details of the situation on the energy market. Let me bring -- present several key facts regarding 2025, which, to a certain extent, characterized the past year, increase of intraday spot and balancing market price amplitudes.

This is asset due to certain system problems and an opportunity for optimization that we'd like to take advantage of. This optimization can be done through buying renewable energy and then buying -- selling at a higher price. For instance, this price enables putting online the 200-megawatt units, for instance, at the prices that will cover the operation at least for the negative hours of the system. The increase of installed capacity in photovoltaic farms, quite a big growth, 11.6% in 2025.

So this also has an impact upon the problem that I just brought up. The growing number of negative hours in the absolute values, these are not big volumes, but they show a certain trend and problem that, in my opinion, will be reappearing and recurring in the subsequent year. We also observed the rising CDS in 2025. That's true that the price of the coal went down 30% year-over-year almost. However, the carbon permits went up and the electricity prices went up. We had also lower average outdoor temperatures in 2025.

Let me refer to the temperatures when I present the data up on the sales and supply of heat and production from our sources. A slight decrease of the national electricity consumption. It's an interesting piece of information. The GDP went up 3.3% and the national electricity consumption didn't go up. This indicates 2 phenomena.

So first of all, the correlation of GDP with the national consumption -- power consumption definitely dropped down. This correlation a few years back was 0.95, which meant that as the GDP went up, the national consumption went up. Now we don't see this correlation. We don't see for the second reason -- we have a decline of coal-fired production, [ 4.7% ]. This was replaced with renewables and the cross-border exchange close to 1 terawatt hours. That's the imports balance, just information in the context of what's happening now and the situation related to the Middle East conflict, we can see that there's been a change.

Now the balance almost 1.5 terawatt hours situation supports the situation where electricity is pushed to adjacent countries where the electricity prices are much higher than Poland. And the redispatching, that's also quite a critical element, a feature of 2025, almost 90%. Let me just remind you that 2025 dispatching was 0.9 gigawatt hours. Now we can see this problem growing. It's related to the increasing volume of renewables in the system. Annual contracting starting from '25 -- '22, '23 and plus 1 and plus 2 and plus 3. You can see the trend regarding the annual contracts is downward trend versus 2027, it became more flat and now the prices are stable.

Our generation portfolio. Regarding the electricity production, net, we have an increase plus 7% in the left down corner at the bottom, we can see the composition of this production. It's mainly related to the production from conventional sources. We have an increase in renewables, but the shell in the entire energy mix is not too high.

Let me just draw attention to the hydropower electricity production, quite a significant drop. Hydrogen consumption in 2025 were dramatically bad. In the first quarter of this year, we don't see any improvement similar as in case of wind conditions, an increase of heat production, 11.4 petajoules. This is related to the previous year's temperatures. So we have an increase of the CO2 emissions plus 6%. The cost of redeemed is lower than in 2024. This is due to the fact that we contracted prices for 2025 in 2024 and the increase is related to 2025 consumption of coal plus 4%.

I'm talking about our conventional sources. And we have an increase of renewables in net production, 15.3%. That's in line with our strategy. This share will be going up. Renewables production curtailments, a strong growth here. I will elaborate on that in a moment. So curtailments, redispatching. These are our actions [indiscernible]. We want to avoid the negative prices. We can see a clear increase. However, we have an enormous growth and the limitations that are due to the limitations of the system. System operator is quite clear is the energy that's not including the national power system and the solution over the next few years is battery energy storage facilities and the ability to use this energy that's not used in the system, but it's enormous growth year-over-year.

Regarding generating unit availability, I will not be describing it in detail, but this is our units versus the average availability rate in the national power system in case of hydropower. So we are above the average value. However, in the case of the coal-fired units, 82.3 we are below the sales supply portfolio, electricity supply, we have a decline, almost 6% down. You can see clearly that this decline is mainly to the business customers and mainly the SMEs, almost 1.7 terawatt hours in those low-margin segments. Our strategy assume that we want to acquire customers at the appropriate level of margin.

We are trying to restore this volume in the subsequent years, assuming the minimum profitability that we have assumed. The increase of the greening of our supply, 13.6% this year, we assume in line with our strategy that this growth will be continued in the subsequent years. The electricity fed into the grid by the prosumers, the old system under in force until 2022 till April.

As a matter of fact, this difference is due to the production volume, but the new system, the net billing system, the number of consumers that feed the electricity into the grid is going up 20% year-over-year. Heat supply to the market, 13.8 petajoules can easily calculate by taking account our production, about 17% of energy we buy from other sources and a few comments about our flagship products related to our tariffs. The new energy product, the fixed price product over a 9-year time frame, quite a rapid growth of the product that was launched in 2024 in June, 316,000 (sic) [ 316,453 ] customers. In January, we acquired 13,000 new contracts, mainly these are households, [ 166,000 ] consumption points [indiscernible]. These are SMEs customers.

And the cheap hours product, a very interesting product for customers who are highly conscious, highly well -- of electricity consumption. They can manage the consumption to appropriate tariffs. We have 26 different hourly rates that we can adjust, adapt to our devices. So it leads to major savings, 25,000 customers at the end of January, another 6,000 customers, the priority of this product is going up.

And on this slide, we are showing this in a transparent manner. For the first time, we are showing this slide what type of auctions we won, what revenue will be expected stemming from those capacity markets until up to 2046. Regarding the auctions we won in 2025, we have guaranteed PLN 4.5 billion. Maybe a preemptive answer to the question, how much capacity we have contracted about 70% -- 75%. In 2025, we had 9% of capacity under auctions versus in 2026 is 78%. But we assume that we will be taking part in the additional supplementary auctions and this ratio will go up to the level that we observed in the previous years.

Let me move on to the financial data and hand over the floor to Krzysztof.

Thank you. Ladies and gentlemen, we are talking about the record-breaking year. As the CEO mentioned at the very beginning, the financial results had a record-breaking level, although the revenue is 3% lower. However, this is impacted by the market conditions, the decline of electricity price, the withdrawal from the compensation payment system and a bit lower volume, as Krzysztof mentioned, in the supply line of business.

If you look at EBITDA, more than PLN 7.5 billion, a record-breaking result, more than PLN 1 billion more than last year. I will elaborate on the individual details -- on individual segments. If we move to the net profit, more than PLN 3 billion, we haven't yet recorded such results. This is, of course, impacted, first of all, by the good operating results, but also let us remember, in 2025, we didn't deal with any impairment charges, which is very important, any write-downs. These write-downs were affecting the group very strongly in the previous years.

And the second thing, the write-down on the result of the deferred tax year-over-year was also better. Very good financial results enabled us for the first time after 11 years to recommend the payout of a dividend more than PLN 350 million. That's PLN 0.2 per share. We recommended as of now to -- in June to be the day of record. So at the beginning of July, we could pay out the dividend for the shareholders. Regarding the level of capital expenditure went up by 10% year-over-year. It topped PLN 5.6 billion. Michal will elaborate on that during his part of the presentation.

Regarding the net debt-to-EBITDA ratio, it went down significantly materially year-over-year. It was impacted by very good earnings, operating results, very good EBITDA, but I mentioned before, on the other hand, the lowering of net debt, I will elaborate on that further on in the presentation. What's important is worth noting that EBITDA -- reported EBITDA and the comparable EBITDA are at a very similar level. And we're talking about the one-off events that took place in 2025. They were fully focused in the supply concentrate in the full line of business. In the supply line of business, and they offset one another and the positive impact of the result of the tariff implemented in 2025. We mentioned in the beginning of 2024, the President [indiscernible] set the tariff for 1.5 years. This tariff in 2024 was at the level but didn't fully cover the cost. Therefore, the earnings of '24 in the second half of the year in the G tariff were negative.

We showed it on the bridge for comparable EBITDA for '24. And in 2025, to a certain extent, we made up for that for the shortfall in the first quarter, President Grzegorz took the decision to change the tariff for the fourth quarter, which means that the first 3 quarters allowed us to recover a major portion of this EBITDA about PLN 400 million. But at the end of '25, we were affected by 2 negative factors. The first factor being the setting of the G-Tariff for 2026. It didn't fully cover the cost. And therefore, the group took the decision to set up a provision for -- in the fourth quarter of 2025 in the amount of about PLN 246 million. And the second negative factor the summon by the President Grzegorz office, which is after the balance sheet date, the summon of President Grzegorz related to the potential improper settlement of write-offs to the price difference payout fund, PLN 270 million, the President Grzegorz office stated we set a provision Q4 2025 in this amount.

The payment was made in March this year. However, the company will be appealing against this decision. If we move on to the slides that are directly related to the individual lines of business segments, let's look at the nominal values of EBITDA. Here, of course, the group is made up to a large extent to the distribution EBITDA. We have PLN 4.8 billion, a significant increase year-over-year. I will elaborate on that in a moment. It's not a surprise. It represents 64% of EBITDA of the entire group. However, surprising results in the Generation segment. Last year, it took the second spot, almost PLN 180 million of EBITDA. One can say it's a very good result for the conventional segment, spot #3 on the podium, the supply and wholesale about PLN 660 million of EBITDA.

It's a very good result. We hope we can get the results also in subsequent years, although it's going to be very difficult, especially in the next year, but I will elaborate on when I present the outlook. If we look at the individual factors behind the increase or decline of individual segments versus 2024. Of course, the key segment for the group continues to be the distribution line of business. It was a very good year for the distribution. We had a number of positive impacts on the earnings. The first one being the growing value of regulatory asset base. I will [indiscernible] at the end of the presentation. The second factor is the growing WACC, weighted average cost of capital. The third thing is the growing, but not so markedly volume.

That's a very good result. Krzysztof mentioned in the entire system, we had this 0 minus result. But in our distribution line of business, our result was slightly positive volume. Regarding volume and it generated additional funds. And what's very important in the context of results year-over-year, I will elaborate on in the further part of the presentation is that the amount of the regulatory account. The value of regulatory account was negative 2024. And the same thing it was positive 2025. So therefore, the year-over-year result was very positive. And let us remember that as a matter of fact, the value of regulatory account is the settlement of volume that is diverted between the tariff and the actual performance. If the actual performance was better than what we had envisaged in the tariff under the tariff, then we get the negative adjustment on the regulatory account, then it's being accounted for settled 2 years later.

And -- the difference on this account determines to a large extent, the result of the distribution line of business. I will [indiscernible] talking about the outlook for 2026. If we look at the Renewables segment, unfortunately, a decline around PLN 112 million year-over-year. Why? Because we had several factors. First of all, the declining prices, electricity prices and the prices of the green certificates. Then we have to add to the poor weather conditions, as Krzysztof mentioned, and in spite of commissioning for more capacity, new capacity, so the volume wasn't that good. So the weaker prices determined the results. Regarding the heat segment, the result is quite good. Although the segment had a minus -- slight minus, minus PLN 6 million year-over-year. However, this result was determined by the one-off event that took place in 2024 related to the deconsolidation of TAMEH [indiscernible] company, subsidiary.

If we look at the operating results themselves after we strip out the one-offs, then the result would have been positive. This was, first of all, impacted by the volume. Krzysztof mentioned much lower temperatures year-over-year during the heating season meant that in the heat line of business, we generated a substantially positive result, which had -- the decline of the price on the market had a negative impact upon the margin. So the margin [indiscernible] was a bit lower. But generally, the overall earnings in the segment heat segment were good. Looking at the Supply and Wholesale Trading segment here, partly, I described these results. I talked about the one-off events. But if we look at the entire picture, generally, the margin -- additional margin in the G-Tariff and the margin in the entire business was very good last year.

However, something that surprised us, additional cost -- profile costs that were year-over-year around additional cost of PLN 280 million. And one can say that this will be impacting us as long as the energy storage business are not running at full speed. So we will be affected by that strongly due to the substantial increase of renewables assets. That's a problem affecting the entire sector. And one can -- it's worth noting that TAURON is one of the leaders regarding the balancing. So probably this problem is as big as important, taking into account the fact that we are the leader regarding the balancing, it will be relatively greater -- this problem relatively greater in other energy groups. Regarding one-off events, the provision is setup, I already mentioned the very beginning when I talked about the EBITDA -- comparable EBITDA.

If we move on to the distribution segment, -- as I mentioned, talking about -- talking about the nominal EBITDA, PLN 250 million, a very good result in growth year-over-year, more than PLN 200 million. First of all, we mean 2 factors, increase of volume, as Krzysztof mentioned, very good earnings in our segment, looking very good against the backdrop of the entire sector.

Let us remember that the coal sector drop declined nationwide, and we went up, we rose. Also another thing regarding volume regarding capacity market, let's remember that the capacity contracts apart for the ones that we are winning, those historically concluded for the multiyear contracts, they are adjusted based on the inflation rate from the year minus 2%.

It also had a major impact, positive impact upon the earnings, and we also took advantage of a new balancing capacity market reduced in the middle of 2024. Moving on to the debt. Here, good news is also the debt year-over-year went down. Net debt went down by more than PLN 800 million regarding the overall result where we are showing all areas of debt, including CO2, the decline was about PLN 0.5 billion. Let me draw attention to 2 -- 3 factors in the entire bridge. The first thing is the gradual departure from the subordinated bond. It was the most expensive part of the financing in our portfolio. Of course, it meant the reduction of net debt-to-EBITDA ratio because we included in the -- wasn't included in this calculation of this leverage ratio, but we are partly withdrawing from it departing it. It was part of plan and partly acquired from the BGK. The last final tranche will repay in March this year. And in the future, you will not see this part in the bridge review anymore.

So we are smoothly converting into the cheapest financing in the portfolio, increasing the financing from the national recovery plan. Last year, we drew around EUR 1.6 billion as part of the national recovery plan. First of all, digitization and the monetization and the construction of the new power lines in the distribution line of business. What's important, we explained in previous conferences, we are realistically splitting this component due to the fact that this preferential financing from the national recovery plan regarding the grid is at a very attractive level, 0.5% fixed interest rate for the entire period of financing. So we are stripping out the component to the financial reporting standards. We are stripping out the preferential component and the preferential component as part of the prepayments and accruals is not included in the debt in the financial reporting, financial statements.

The difference between the nominal component, the nominal debt and the one that we include in the financial statements is last year came in at about PLN 1 billion, and we are showing it in the bridge view. It's a very significant value. And to that degree, it depends upon the moment how close we are to the maturity deadline, what are interest rates on the market but has a significant impact upon the difference between the net debt and the gross debt. So the full debt calculated according to the nominal value. That's why we are transparently showing in the bridge. The last thing I'd like to draw attention to is the leases. because remember, there's not -- these are not classical leases, but these are to a large extent, the long-term easements, leases according to the definition introduced of IFRS 16 introduced some time ago.

So these long-term contracts that are natural for our distribution line of business or green energy will be increasing significantly the value of the leases. If we move on to and go back to, Grzegorz brought up at the very beginning, we deliver -- it's worth praising our key strategic components, stable financial position. We don't -- we're not forgetting it. And last year, one should indicate, first of all, not only the maintaining of investment grade by improvement, the upgrading of this outlook. The rating agency revised this outlook in the fall last year. The second thing that I'd like to draw attention to is the value of preferential funding obtained. Ladies and gentlemen, we promised in our strategy that the total value of the preferential funding for the entire time frame of the strategy up to 2035 with respect to the entire CapEx of PLN 100 billion would be at the level of about 20% to 30%.

We are today, let's say, 1.5 year -- less than 1.5 years since we announced the strategy, we already have PLN 18 billion, 8% of that was already obtained, including PLN 5.6 billion in 2025 alone. Here, we are talking about the national recovery plan programs for the grid for the digitization and the renewables addition, we acquired subsidy from the modernation fund for the better energy storage systems and a number of other subsidies for the hydrogen and fiber optics.

TAURON, let me break here. TAURON is the #1 leader in the country regarding the funds acquired from the national recovery plan. Addition, one should indicate that TAURON has also secured guaranteed secured financing programs that fully cover at least a 12-year lead time in the financing according to our strategy, but at least 12 months ahead, we always want to be 12 months ahead covered those guaranteed lines of credit at the end of '25 amounted to PLN 6.2 billion. That's all in this section, main financial section. I'll go back to the finances talking about the outlook. But I'll hand over the floor to Michal, who will speak about the CapEx program.

Gentlemen, but 2025 is a record-breaking year regarding the earnings capitalization, but also the CapEx. In 2025, we invested more than PLN 5.6 billion. This is a 10% growth year-over-year. The most important segment in our CapEx continues to be the distribution line of business that we have PLN 3.8 billion was allocated to. It's worth emphasizing the structure of our expenditures in the distribution changes. Up to now, it was the construction of the new grid connections, our regulatory obligation back to the preferential financing. We're able now to implement also to a larger extent, the upgrading the modernization of grid assets, which was the original assumption of efficient transition cost and the original assumption of WACC in this segment. So that's why we are implementing those changes successfully, which has an impact upon the material growth of our infrastructure, among others, 3,400 new power lines and distribution grid, 900 kilometers of upgraded lines, 700 new stations, more than 400 upgraded substations.

So we are preparing the grid for the future expansion of the grid and expand -- improve the metrics. The next important area is the smart meters. As of today, 43% of our customers have smart meters. This is 8% above the regulatory target for 2025, which was stood at 35%. So we are going faster -- moving faster than the regulatory requirements. We want to provide as many as possible customers -- our customers to provide the modern meters that are necessary for using the dynamic tariff. Regarding the renewables segment, the decline year-over-year to PLN 881 million in CapEx, although in this segment, as a matter of fact, the outlays are important because a large portion of implementations are based on advanced payments. The outlays in the segment came in at PLN 1.4 billion, which is a more correct image of the actual progress on those projects about the details of those projects, I will expand on during the slides.

The heat segment, the main thing is we are at the stage of launching the investment projects. Last year, we launched the gas-fired engine builds 30-megawatt electric capacity, which moved on to the implementation phase. The key investments regarding the generation asset we want to modernize by 2030 will be made this year. As a matter of fact, this year, we will launch the majority of the projects in this segment. Apart from the construction of the new generation source, we also have maintenance and the connecting of the new facilities. Last year, we connected more than 30 thermal megawatts to our grid. Regarding the supply and other segments, PLN 200 million in the IT investments, apart from the maintenance of the lighting infrastructure and expansion of fiber optic network. These are the most important items. Year-over-year expenses went up -- expenses went up in the [indiscernible] generation.

This is due to the maintenance cycle of Lagisza power plant. Let me remind you, power unit #10 in Lagisza is the second most efficient unit in our generation [indiscernible]. It also has a heating component that provides [indiscernible]. So a large battery system is a necessary component for this [indiscernible] system. And this major overhaul is a final major overhaul plan for this unit in line with today's assumptions for its life cycle. The unit cannot be operated until 2030 as of today. And this major overhaul secures the possibility of operating by the deadline. Apart from that, the CapEx related to the replacement and repair program of our Nowe Jaworzno, our latest unit. This is a matter of adaptation of certain components that is required modernization, especially the coal mills and the INC instrumentation control and the OCGT the largest conventional project that in December won the capacity auction as part of which secured the revenue of about PLN 4 billion.

Now we are at the stage of contracting of the turbine. We are expecting the bids middle of April, and this time will allow us to give you a better, more precise answer regarding the assumed CapEx for this facility. Moving on, 2025 was a record-breaking year regarding the commissioning of renewables projects. We commissioned 195 megawatts thanks to which along with the biomass recently managed to top 1 gigawatt of the rest installed capacity. So a big milestone achieved on the road to the implementation of our strategy regarding the project that we commissioned. First of all, in wind farms, Nowa Brzeznica and Sieradz, which we commissioned last year. However, we have the Miejska Górka underway. This project, the project is moving ahead in line with the plan.

We have practically completed the cabling work that transformed GPO, the power supply in line, about 90% advancement. 35 out of 53 turbines have already been installed. Therefore, the wind farm is moving ahead in line with the plan. We are planning to commission in the middle of 2027. Regarding the photovoltaic farms project, 2 projects were commissioned in the Balków and Postomino project, Postomino project is an interesting project because it's a cable pooling with our existing Myslowice 100 megawatts of wind farm. So a large-scale cable pooling running, operating normally now and also launched 2 interesting projects in Ogrodzieniec and Myslowice. Why I'm saying it very interesting. First of all, because these are in-house development project, both products were prepared by ourselves Krzysztof and I are on site, on third-party site, it's also land reclaiming to the cultivation of the potential site will be included in this, but those projects have also preferential financing in place from the national recovery plan, PLN 286 million of financing was acquired for this, the interest minus 200 bps.

So it's a highly preferential financing. We asked questions about what the PV projects are for this type of preferential financing. We have no doubt about the investment in this area. So we are using the preferential financing to launch further projects. Moving on. Recently, one of the key things that we are doing was to secure the profitability of the battery energy storage systems projects. In total, we implemented -- we commissioned more than 560 megawatts. It was possible, thanks to obtaining the preferential financing and the secured capacity market auctions. All the projects that we launched have either the grants of a national environment protection fund of capacity 1 market for 2029 or 2030 delivery time, especially the grant EUR 538 million for 460 megawatts in projects.

Financing is a substantial amount that significantly improves the profitability of our battery energy storage projects. And those projects we are launching basically, we think that in this market, there will be some bonus for being first, first-mover advantage. So energy storage will be [indiscernible] other. So planning this investment project, we're, first of all, looking at the ability to get a grid connection. We're not waiting for the moment of the support being launched on the market, but we connect those facilities once it's possible based on the grid conditions. And we started with small projects in Dombe and Sieradz that were already commissioned, and this will allow us to test the procedures regarding, first of all, the acceptance of the investment project and the [indiscernible] investment projects. And on the other hand, operational and commercial management of those facilities so as to be ready to work with larger project to test the procedures and to be able to commercialize the other units in an optimum manner.

Right away after they take off and those energy storage systems will be gradually commissioned in the subsequent years. Soon, we will commission another 16 megawatts. However, the bigger 900-megawatt package in 2027, the majority of program completed in 2028. If we look at the total scale of the magnitude of the project that we implement in these 3 segments, wind farms, PVs and battery energy storage systems, we have 889 megawatts under -- in progress underway. So it's an unprecedented scale looking at the history of our company. As I mentioned recently, we topped 1 gigawatt in total capacity in renewables. Now we have about 900 megawatts underway. So we are speeding up, accelerating the investments in this segment. If we look at the implementation of our strategic goals regarding the renewables, when we can see various speeds. If we talk about the wind segment here, we can see that certain projects were commissioned.

However, we managed at least over the last 6 months to acquire new projects to be implemented. It's related to the fact that when we are looking at the targets in the nominal terms and the availability of profitable investment product, we opt for profitability of investment product. We are frank here, but the wind market is demanding. However, we're looking for solutions. We're looking at options to cooperate and secure project that had an earlier development stage. Among others, we signed further documents were negotiating with a national agriculture support program that could provide us with sites for wind farms and also looking for our external partner to get products at an earlier stage of development, [indiscernible] PV, our pipeline allows us to accomplish the strategic goals, but we're trying to optimize the financial decision, investment decision and use the external financing, as I mentioned in the case of [indiscernible] from a physical point of view, this goal is definitely manageable, achievable, but this depends upon the availability of the preferential financing where we are able to fully accomplish it.

But we had a major acceleration in the energy storage. We believe in the first-mover advantage and the majority of strategic goal accomplishment is already secured in this line of business. Moving on to the final part of the presentation, outlook for 2026. It's one of the most interesting parts, what will be happening. [indiscernible] it for you. So here, EBITDA in 2026, we assume that will not be as good as the one we achieved in 2025. If we look at the individual segments about the performance, how we see them performing, Distribution segment itself, we assume that EBITDA year-over-year will be lower. And here, we have positive and positive negative factor. Let's start with the positive one. The positive one is the increase of the regulatory asset base.

I will display one more bridge in a moment related to that. Second thing is increase of depreciation, but also improves the company's earnings. However, the result of investment carried out in the previous years. However, regarding negative factors, this is the decline of weighted average cost of capital down to 9.5%. This is a major decline year-over-year. However, the key factor that will determine the earnings year-over-year is the balance of regulatory account that I mentioned before, the balance was positive 2025, EUR 270 million. It will be negative in 2026, EUR 170 million. We have more than PLN 440 million difference year-over-year. So to a large extent, this will determine the result of the distribution line of business.

Regarding the renewables, we are expecting a similar result year-over-year, and we'll have 2 factors that will be determining that. The first factor -- let me start with a negative one. This is a matter of a decline of prices. The price year-over-year will be lower. First of all, we are talking about the electricity price. And the positive factors, we are commissioning new capacities, and we believe the new capacities, of course, to a large extent, it all depends upon the weather conditions. But we do believe that the new capacity will make up for the lost EBITDA due to the lower prices. Regarding the heat segment, here, we assume better earnings year-over-year. First of all, we are talking about the heat part, we assume the cost of generation will be a bit slightly lower in the heat generation area and the higher transmission tariff regarding the transmission.

Of course, the temperature -- the temperature will also have a major impact on the final earnings of this segment. However, the lower result, the lower margin we assume in the electricity production area, of course, it's not a key part of that segment. However, the lower result will be, first of all, due to the lower prices and the tightening CDSs. If we look at the Generation segment, we assume that it will not be possible to maintain that good results that we managed to post in 2025. First of all, the same factors we are dealing with here as in the hedge segment, but the impact is reverse of a determining factor is electricity, the decline of the prices and the tightening CDSs will lead to the lower margin electricity generation. We also have a little bit lower futures contracting, which will reduce the buyback potential and the final thing will have a positive impact.

But here as in the heat segment, but in the generation segment, it's a much lower impact. It's a positive impact of heat sales. The cost of generation will be year-over-year lower, which should lead to a better results on heat production. And as a matter of fact, the segment that, in our opinion, will have relatively the weakest earnings versus previous year year-over-year. It's the supply segment, we started with a positive factor Krzysztof already mentioned that. We are doing our best to restore to recover the volume, the profitable volume. As I mentioned before, we got rid of onerous contracts and were a burden to our results, to our earnings, and we are recovering this volume.

We hope that in 2026, we will recover this volume in a profitable manner, but the results of the segment will be strongly burdened by the decision on the G-tariff. The part of the provisions that was reflected was in 2025. We set up a provision for that. However, this means that we'll not be generating the margin on the tariff covered customers in 2026, at least if the tariff doesn't change within the year. And now one can say a few words about the CapEx. We expect to continue our CapEx program implementation, as we outlined in the [indiscernible] of the CapEx will go up year-over-year. And this plus a weaker EBITDA plus a higher CapEx will mean the deterioration of the net debt-to-EBITDA ratio. Regarding distribution itself, the final slide, we wanted to show you just to make it easier for you to understand our main segments.

So we're addressing the expectation of the analysts. There's always questions about this slide. We want to show what is the structure of the regulated revenue, what's the building of value of the regulatory asset base. Let me start with the first one. What I'd like to draw attention to. First of all, I like to draw attention to the fact that this revenue is made up of 4 key portions. And we are always focusing on the key one for the group is the level of weighted average cost of capital. If you look at the structure of energy bill for the customer in 2026 due to the decline of WACC, it would represent only 17%. So any movement in WACC any fluctuations will not have a major impact upon the energy bill for the customer. Overall it was talking about the change of rate, not the main component that changes the energy bill.

The passed on fees, the charges are the main component of the changes in the energy bill. The main component being in '25 is the value of the capacity charge. And this is part of the energy bill that is not up to Tauron, it's passed on further to the TSO. And as a matter of fact, this is the main determining factor behind change, behind the change. Regarding the other components, the increasing depreciation already mentioned, of course, this component as the program is moving ahead will be going up. However, this cost component of our cost that is declining year-over-year is mainly the determining factor being the settlement of the regulatory account. If we look at the regulatory asset base, let me draw attention to one important factor here.

We are dealing with an increase between '25 versus '24 by about PLN 2 billion, something that came up for the first time in 2025. Now it will be continued in 2026. Will add 35% to the regulatory asset base, 35% of the planned CapEx over the coming year. Before '25, it didn't exist. So '25, it meant a step change increase of regulatory asset base. And let me emphasize that exactly the same mechanism will be applicable in 2026. It increases the regulatory asset base value in total about PLN 1.5 billion. As I said, ultimately, the value that we expect is about PLN 26.6 billion for 2026. That's all regarding the presentation. Now let's move on to the Q&A session.

So we agreed our mark as part of our presentation. So we delivered -- we delivered. So one cannot exceed this value because you might be angry with us. We don't want that. Ladies and gentlemen, let's move on to the questions. You can see questions coming up online in our form, and let's start with the persons present in the audience. Any of you would like to ask a question? Good morning Puchalski, Santander.

Let me refer to practically the last slide, the distribution and the increase of the regulatory asset base. Because based on what I can see, this new formula, 35% of the current year is responsible for a majority of the increase of regulatory asset base. So 2 questions. First of all, whether at a certain point in time, because you, in fact, you're eating part of a cake that you haven't yet implemented, you are planning to implement it. So will there be a time where this mechanism, 35% of previous last year and 30% next year will be finished? Because at that point in time, hypothetically, I'm just thinking there will be no -- totally no growth of regulatory asset base in a certain year. That's one thing. Second thing, why your CapEx for this year and next year in distribution is not twice as high?

Because based on this graph, you can see that simply it's worth investing in the regulatory asset base.

Let me respond to the first part. As of now, we don't have any information regarding a change of the model. Of course, for some time, there has been a discussion with the President of Energy Office whether the distribution model should change. But today, there are no new -- there's no new information on that. And since this mechanism was implemented, I also assume that at no point in time, no one will withdraw from that because it will be -- will set us back and it would stop the increase of regulatory asset base at a certain point in time. So I do not assume this will materialize. We do not take into account the fact that this mechanism regarding the calculation of asset base would be changed.

Regarding the value of regulated asset base and value of CapEx, let me hand over the floor to Michal in a moment. But let us remember, we stated that amount in the strategy, the amount of CapEx in this line of business that was PLN 60 billion. So as a matter of fact, the biggest portion of PLN 160 billion, we plan to spend in distribution alone.

It seems so significantly a lot. That's one thing. We have to keep the financial discipline in place. We promised the maintaining of investment grade rating, grade rating and the leverage ratio to be at the right level. And about the execution market, the implementation market, 100% increase of CapEx will not be also handled by this market. If we do it, we would implement the inflation rate increase. We will not be able to complete the CapEx plan. Would you like to add something?

Well, I consistently spoke during the previous conferences that the stable growth of construction companies is about 20% year-over-year. and we've been sticking to that so far. And I think it's also worth mentioning another issue, the tariff issue. Here, a substantial increase of CapEx would also involve higher pressure on the tariff. So therefore, this process of reaching agreements, the growth plan is year-over-year agreed upon with the President of energy's office. It's not easy to implement to increase this 2x to have an impact upon the energy bills in the short term. So we consider this level of growth rate is to be rational based from the contractor's point of view and the tariff point of view.

Yes, but my question is more related to the comparison of TAURON versus PGE. PGE has a higher CapEx and has this work about. I don't remember 11%, you have a lower one and you have 9.5%. So let me be frank, I prefer 11% versus 9.5%, especially that this parity has been in place for 2 years in a row. So why isn't TAURON like PG in the distribution segment?

Let me be frank, but we will not be commenting on the legislative process. I think in our opinion, according to our knowledge, we have -- that's true below PGE, but basically higher than the majority of market players. We are increasing gradually this CapEx plan. We have a commitment to the distribution in our business. We hope that in the subsequent years, we will be able to achieve relatively good rate of return versus rest of [indiscernible]. Let me just add, we will not be referring to PGE. PGE hasn't had an earnings conference yet. They didn't demonstrate -- didn't show you what WACC they will have. We can just expect what level it will be at. But let's remember that PGE also has a special subsidies for the Eastern part of the country. We don't have those grants. And that's also an important portion of CapEx.

So generally, one would have to strip out what's the level of CapEx with the grants and excluding grants. But remember then the grant is not included in the return -- rate of return. So the question is whether the CapEx includes the difference in the CapEx, does it include the grants or not? I wouldn't say this lack of [indiscernible], the President of Energy Office is saying that you have an increase of investment and automatically, the increase of the WACC will be the same. We would like to have it more strictly defined. It's not just one-to-one process.

One more question regarding your collateral, your hedging policy. Can you disclose how are you hedging the conventional and renewable segments? I'm talking about electricity prices.

We try not to disclose the contracting. However, regarding the renewables, I can say what percentage of in-house production we have hedged regarding 2026 with an internal PPA agreements. We have 100% contracting secured for 2026 and 75% for 2027 as part of internal PPAs, yes. Thank you. But please note the information, what's the point here? the business unit generation, renewables, internal trading that takes place and the external customers. Please note that the so-called PPAs we are talking about is the combining of renewables production output with the trading mixing, profiling and allocating this electricity with the final customers. So the contracting of generation on one hand is combined with the sales of electricity under long-term contracts with customers under various models. We have one of the highest, most developed dispersed PPAs in Europe, definitely 100,000 customers that have contracted electricity supply for 9 years ahead.

Krzysztof mentioned before, volumes, large scale. I don't remember the numbers, but we could repeat in a moment. But -- so this is the entire philosophy is such that securing and hedging of our production, and new product defines automatically contracting on the customer side. So the model we are talking about the customer profile, 6 million customers and systematic contracting for various types of products. Therefore, we're talking about go green, going green. So energy mix, the production mix. So we are talking about something like that, that we are investing onshore because the production profile from the onshore output is most aligned to the customer consumption profile. So therefore the profiling, the balancing is lowest. We supplement it with PVs and the energy storage that can help us profiling and reducing the profile cost.

Any unit of electricity generated by our renewable sources find the place in the contracting with the customer. So that's why we're talking about the PPAs, internal PPAs. This is something more with the traditional classic [indiscernible] production trading and the exchange, power exchange. Next question. Yes, we have a gentleman here. [indiscernible].

I have quick -- 3 questions, if I may. The first one is related to the report, annual report, where we can read that you're planning or you're assuming that coal will continue operating until 2030, when you're writing then the contracts are valid of the economics of the so-called old coal. [indiscernible] is 2028. So I'd like to ask then when can we expect a change of a decision regarding the commissioning of coal-fired units at fixed sites since we are reading that the group is planning to phase out coal for production of heat and commissioning of coal units by 2030. And we know the decisions, corporate decisions of 2021, if I remember correctly, assume that in those sites, those sites, those coal will be phased out in '28. The first question I want to ask about the ETS. Tomorrow, we are supposed to find out the first indications of European Commission about the changes to the ETS.

I'd like to ask about how much you spent last year to purchase carbon credits and how much you're planning to spend this year? And the third question a bit referring to what President Grzegorz mentioned, placing a bet on the in-house development, a number of projects already are surfacing the one that you develop in-house. But for you, will be a positive effect, the grid law, the act on the grid that is awaiting the signature of the president, it is signed, then will you be consolidating the small and medium renewables developers and you'll be taking over them, either projects or businesses and hire them.

Okay. Thank you. As I said before, the answer first. First thing is that what is written in the strategy is still up to date in 2021, the then Management Board passed a resolution and says that if the coal-fired units are not profitable that you need to phase them out, decommission them. That's also in line with [indiscernible] company's provisions. If something is not profitable, that you need to restructure it, shut it down or improve profitability. That's one prospect pain point of view. In the said, we said that the capital market for those 200 megawatts is valid till 2028. This is the legislation today. So the regulatory condition says as follows: that 2028 is the final year of the 200-megawatt units operations. If this ratio were as today as it's written in the laws and documents.

If a ton megawatt units are not able to maintain the cell from electricity production because the operational hours maybe below 2,000 hours, 1,500 hours, 1,200 hours, it's a lot. So there's no chance to have profitable sales from such units long term. So our function is security, providing security, as we mentioned, but we have a different function that have a function security. [Indiscernible], the President of TSO PC clearly says -- unequivocally says that the new market -- capital market is present today that's a part of the competitiveness. So situation is such that on one hand, we have a transition power sector transition, renewables, nuclear PV storage facilities. But its time, there are conflicts that arise. I know what will be situation like. We are saying that we have our own coal assets, 200-megawatt units.

And if there is a demand on the market, then we are able to offer the service -- security service as part of within the technical needs with the approval, along with the approval of [indiscernible] that we have. We are talking about ring-fencing the profitability and so on and so on. So we have taken into account such flexibility for the nationwide because not only profitability arises, but it's very important. And as you can see, we have no doubt about it, and we guarantee this profitability. However, also there is the security dimension, we got 24 hours, 7 days a week, everybody wants to have electricity at home. So the situation is until there's enough renewables capacity energy storage or gas-fired units come up in the right number. And we know exactly how difficult it is to get the slots for turbines, production slots for gas-fired turbines or gas-fired engines and so on and so on.

We know how difficult it is to get the supply chains in place in the offshore and the nuclear markets. So these are challenges that are for looking from the category of economic national West dome. We have those assets that will be utilized as long as they are required to ensure the security of supply. And that's it. That's okay. In our strategy, we said that the transition of conventional transition classic one, classic traditional one is necessary to carry out the transition. From my point of view situation is such that we need to accelerate that transition. We need to accelerate the construction of the onshore facilities. We need to accelerate the construction of nuclear. So escape forward, it's the best solution. That's why the message is from Michal. We are speeding up to maximum degree of energy storage facilities. It's 80%. We're doing our best to get into the new investment project on the offshore side.

We consider this to be the best form of securing cheap energy and security until it's not available. It's not in place. We'll not be able to have 100% certainty in Poland that we have delivery of security of supply secured. So we have to use those assets. I know what mechanism will be in place. I don't know, but President [indiscernible] mentioned something like that, that negotiation is underway. There are works underway, how it can be done past 2028. Definitely as an organization that we want to have cooperation, but also specific trading. We're talking about this that we have those units in place, we are able to present appropriate profitable offering, so the products such as energy security can be proposed. Director, anything to this point?

Let me just say that based on the statement that was quoted, I think there was a separation between the conventional units that Grzegorz mentioned and the heating units. And remember, as Grzegorz mentioned, the strategy is still in place in the heating plants, we are accelerating our investment plan, the CapEx plan and this conversion until -- by 2030 into different type of sources is confirmed of the sentence quotation from the report. We are upholding it. More questions. Second question was related to the CO2, if I remember correctly. You mentioned it, yes. And the CO2, you're talking about the cost of CO2 emissions in the group for '25 and how much in '26. If I remember correctly, group-wide '25 carbon credit price for cancellation is PLN 3.1 billion includes both TAURON generation and TAURON heat. For 2026, we expect comparable level of.

Let me comment on the third question regarding the UC84 and the potential acquisition of developers. Let me say that UC84 act is objectively good for everyone. It eliminates the basic problem, which is the virtual booking of capacity on installation that will never be built, virtual filling up of overcrowding congesting of grid, but we are not able to issue further grid connection. So we are issuing for very long-term dates on the distribution side. So because those initial investments block us for us the grid connection capacity. So it's an inefficiency of the system, which leads to being able to implement the investment product, but also leads to on our side, not necessarily the good dimensioning of infrastructure versus what should happen.

Therefore, change of rules in this is simply an improvement of the efficiency of the system, which is objectively good. Therefore, we do hope that the signature under this loan from the President will be made. It doesn't mean that we'll be able to take over smaller developers on the [indiscernible] market in practice as a matter of fact, for various transactions with developers and the swapping of land and discussion on the grid conditions is already taking place. Your question on conditions. It may mean that the financing of a project for this will be more difficult for smaller developers. Apart from our in-house development, we are using the so-called DSA development service agreement projects that developers projects for us to be ready to build and the solution will be trying to speed up in the near future.

We are ready to [indiscernible] here either under the project acquisition project takeover land swap of grid connection conditions. So definitely, we'll be able to cooperate. So definitely, this is an opportunity, not necessarily should be -- materialized through the takeover of companies. It brings new opportunities for us. I understand that the answers satisfied you. We can move on. So now Pireowski, Citibank.

Could I ask about the distribution cost in the tariff that you showed of almost PLN 4 billion. This is the revenue. Where is the cost in 2026 of distribution? I'm trying to find and ask the question whether there is any OpEx gap or outperformance or what's the situation like? And the second question about the distribution, the 10-year went up bond in Poland went up 100 bps or 80 bps quite a lot of strong growth. Will it have an impact upon the automatic revision of weighted average cost of capital in the subsequent year or maybe not? What's the expectation? This number, PLN 4.9 billion, what will be your cost because this is the revenue?

Well, of course, we are showing this from, let's say, from the cost and revenue. So the gap, the question is correct one, the correct one. Every year, we are trying to make the costs that are within the tariff, which is our revenue to -- in fact, to be not higher to -- than the ones that we are actually incurring. And this encompasses 2 parts. What's a little bit under this item. You can split it. One is the balancing difference, luckily not the ones that we mentioned before in the accounting manner, but was the purchase of electricity for the needs of the balancing difference and the other costs related to the labor costs, cost of works and the other things. So last year, this gap, if we look at both components was positive, so it was positive for the company. And the goal is to have those costs not higher in total because calculated joint in total, the purchase of electricity for the balancing difference is not to be higher than the tariff ones.

So gap is either 0 minus or 0 plus, but it's not material versus the entire group.

You took out -- you stripped out the regulatory account because it was.

yes, yes, because I strip out the regulatory account.

What about the WACC? WACC will it go up? Because once we had a 5-year system, then after COVID, it went towards 1 year, there's no true regulatory time frame. So what do you think about the, a, the WACC weighted average cash flow for subsequent year in the context of the 10-year bonds and pass on? Or will we go back to some longer-term regulatory regimes? One should mention that there's no clear connection. It's not linked automatically. It used to be longer.

So the profitability of the 10-year bonds calculated in various ways, calculated in different ways, average or annual automatically was included in the WACC when the transition card was signed with [indiscernible] level plus the investment bonus premium was in. So we moved away from the fluctuation of the bonds year-over-year.

So there's no link today. So will we revert to the link?

It's hard to say. It's always an argument and discussion with arguments for discussions with regulators. So this profitability rate would go up or it would be sustainable. But we know what's happening in the world. There's a conflict underway. So definitely, for this to be valid in longer term should be an argument for discussion with the regulator. There's no automatic mechanism. Will it be a long-term model in place. We would like to have it. We are working on it.

We are proposing some solutions to make the regime the model a long-term one, but as of TAURON's expectation. But as of now, no confirmation from the regulator. Okay. Our preference, however, it's also an element that is a challenge for us, gives a motivation and incentive to continuously improve is the long-term distribution tariff, the long-term model 3, 5 years. We think it will be the most adequate for this segment. We are doing investment projects in the 3-, 5-year term. Question about to President Lot.

So Lot recently, a lot of content, it has to be local content, how much more expensive local content versus no local content? Because, of course, going to the store, we can always buy Chinese or some other components. So I don't understand because at the end, it's a customer that pays. So PLN 14 billion, if we didn't go into a local content, what will be the number or maybe in a distributer not specific number in the absolute or generally holistically. Generally, if we could give some examples with the tender for meters and transistors, whatever, if you have 2 bids, so local content versus -- local content is one of the best investment projects that investment that this country can do. But let me answer. That's one -- the first thing.

So -- if I were to answer that in the short term, we will answer the question in a moment. But the first thing is such that looking at something more than profit generated tomorrow, but more in the longer term, there's no better investment in our country than investment in the local content that will be -- will have a specific dimension in a year, 2, 3, 5 years, 10 years because for example, of Italian, German, French economies that really made a big bet on that.

It's not to buy at a higher price from the local guest -- local people, but to generate such a culture of thinking to support the local solutions, local distributed sources also preferable to make it functions to be smart and to build this local environment. Second thing, the meter that you asked about today, there's a big difference. I don't want to show you what there will be results of the tender that we are doing. But there's a difference between the Chinese meters and the European one, European made. There's a difference in the price. There are security elements and so on. Now we are checking because we also announced a tender because we have in the grid set of meters from various countries in place. We can compare the tenders we did before in the last year or 2 years. So we are checking how it's going to be done when -- once we have tighter regulations. This tender should be announced this month, I think, or 2, 2 months.

Once we have the results, then I'll answer specifically this question during the next conference. We also have examples from the energy storage facilities. Also the local content can be done because we have local companies that can build it and deliver a certain component, but a lot of modules come from China.

There are things that there's quite a big price difference and the same type of level of quality, but it's difficult to win, and we choose what's the best in terms of price because we pass on to the customer, but there are certain things that we can see it makes sense regarding the security, durability and the inflow and/or return of funds to the local community.

It's most important for me for those companies to grow because if such an energy company like ours doesn't make a sense, its existence doesn't make sense. If there's no customer, there's no electricity consumption, it doesn't make sense for it to operate.

So -- but in the long term, to deliver electricity and distribution services at reasonable prices, we have to bring about the electrification, at least doubling by 2050 of electricity distributed. The only solution today to generate this competitive advantage for the economy and to be able to say that we are able to give businesses, but also the society, low cost of distribution services and electricity, of course, but distribution mostly, we have to increase the volume of electricity distributed.

[ Janusz Maruszewski, Strefa Inwestorow, Investor Zone. ] Congratulations on excellent results, excellent earnings. That's one thing. Looking at the implementation of a strategy announced around 0.5 year ago. It seems that in the number of areas, you are ahead of schedule in the installed capacity, renewables capacity or the financing area or the dividend area, which, of course, makes us happy.

And the first of the 2 questions, so what made you make the decision as a Management Board to recommend the payout of a dividend practically for years versus the deadline planned in the strategy?

The responsible -- business responsible corporate social responsibility earnings, first of all. Some of you met us, we had meetings directly after announcing the strategy. And systematically, afterwards, one of you asked, you -- it was an hour after the announcement of the strategy, when can we check whether the strategy is being delivered? I think you asked about it. And we said in a quarter, we'll meet when we present the reports, quarterly report, and it's the best time to check whether we deliver.

That's the DNA of this company. What we try to do, and I think we managed to implement it, but you need to deliver every day. Therefore, we are not shifting the decision for later, even if they are difficult decisions, risky, but we want to face it and deliver. This dividend is a long discussion that we were conducting because we are aware of the fact that we will pay out the dividend today, 3 years ahead of the time.

We'll be expecting dividend in the subsequent years. As President Surma mentioned, it's most important to have it stable, predictable and so on. We also said as follows that as Management Board that aware of the fact that we are to deliver the security and deliver cheap distribution service and energy, electricity.

We are a company that is being listed on the Warsaw Stock Exchange. The shares went up again. So we are responsible. I just looked at it. We're just responsible for the fact that investors that entrusted their money with us should have a benefit out of it. We're the stock-listed public company. By definition, should be capable of paying out the dividend. And this is our Management Board's obligation, duty and will ambition.

Second question to make it more detailed. Is this a one-off because 2025 was a record-breaking year? Or should we expect a change of a dividend policy because the one announced in strategy is 2028.

Krzysztof is a bigger diplomat regarding the finance, so he will explain it better than myself.

Well, as Grzegorz has partly responded to this question -- answered that question, we are assuming and that's our ambition to make it -- not to make it a one-off event. We repeat it during each quarterly earnings report. If we did make a decision to pay out the dividend, we don't want to be a one-off. But of course, here, the diplomacy, that Grzegorz mentioned, requires us to say that we always have a caveat and say, depending upon financial situation. Today, we have a crisis worldwide. We don't know at the end of the day how long it will take, over what time frame it will have an impact upon the condition, not so much of the group, but the whole country and then indirectly on the condition of the group, so -- position of the group. So let me put it this way, we'd like to have it. That's the ambition, but it's a recurring event. But of course, we reserve -- make a caveat but depending upon the appropriate liquidity and financial liquidity and financial results, that will be determined.

First one, what limitation or what curtailment of renewables production you expect this year more or less than last year through redispatching and self-curtailment? Second thing I'd like to ask about more -- for more information about this tender CCGT, OCGT, Jaworzno, those tenders mid-April, what are these for? This is under the turnkey solution or a split delivery of turbine and other works?

And the third thing, if we could say a few words more about the CapEx for 2026. President Surma mentioned, the growth, but can you give an amount, its structure by segment? And a small question at the end, but the group still incurs losses on the prosumers settlements in the net metering formula. If so, what order of magnitude is it?

If I understood correctly, the first question was regarding the curtailment of renewables production due to the non-market dispatching or self-curtailment. What do we expect this year? Let's start with the non-market dispatching. It's difficult to foresee, but trend is very clear, growing one. Rising share of renewables, that's my opinion, will lead to more redispatching until more utility scale, large scale, better energy storage systems. How much of it? You have to have a crystal ball to the decision of the operator. It's difficult to plan.

Regarding the self-curtailment, I assume the level will be comparable, maybe a bit higher than this year. So the balance will be an increase of curtailment. I think we might, but they might slightly go up regarding the self-curtailment. Regarding the market-based redispatching, it's difficult to say.

Second question regarding the tender that we -- that's underway, OCGT Jaworzno, we decided to carry it out in a separate contract for the delivery of a turbine and the formula that we are contracting is the delivery of a turbine, gas-fired turbine along with the stack and the ancillary systems and the long-term support, long-term service agreement, 15 years for turbines of the services that ensures the performance during the capacity markets.

Following this contracting will be the key tender for the general contractor which will develop new build. So mid-April that bids with the delivery dates for the delivery of turbine sequences. First of all, we determine the selection of turbine. Tender allows for a single turbine, 2 turbine system that will have a total capacity of in certain range. It's also possible to install outdoor, all installations directly outdoor and also the indoor system within a full building traditional power plant is done. So based on our knowledge, what's the technical decision regarding the turbine, we'll be able to precisely define the scope of the construction work that we are facing. So that's the sequence of tender and key importance is securing the slot for winter final delivery date. So that's the sequence to first deliver or secure the delivery of the turbine.

Third question regarding the CapEx and 2026 outlook. As Krzysztof mentioned, we assume that the level of CapEx will go up. Regarding details, that will be dependent on the details, distribution of CapEx in the generation related to the tender for the gas-fired turbine and our renewables activities. Regarding potential acquisitions or acquiring new projects as of today are not included in the forecast. So these expenditures will go up. To give you some indication, it's possible to have 7 digit -- 7 in front regarding our CapEx, so a significant increase, but it will depend upon the renewables and contracting on the TAURON generation subsidiary.

There's a question about consumers losses on the net metering. If I remember correctly, the total losses and costs incurred due to the prosumers energy being fed into the grid covered by the supply segment was [ PLN 750 million ] per annum. [ PLN 650 million ] losses in the net metering. The total cost and losses that are related to the prosumers feeding energy into the grid. We have distribution fees, the cost of the so-called storage, so [ PLN 150 million ]. So how do you cover that from the margin generated from sales. There's a part of the cost that's incurred by the supply segment, one of the largest CSR project that we're conducting, but also indicated that's part of a very strong transition.

Thanks to that, [ 1.5 million -- 1.5 billion people in -- 400 million people in Poland ], but not these are people that I meant the net metering. So the prosumers that connected -- got connected to the grid by the end of March 2022. So we have 450,000 customers in the grid and 400,000 as the net free, 470,000 are prosumers. So 1.5 million customers are prosumers, 1.2 million these are net metering customers.

They are the first customers that moved away from the economic point of view, these are the number -- majority of customers that have heat pumps, a larger consumption because these are full houses that have lower consumption. The truth is that according to the model, net metering model, this takes 15 years. So in a few years, there will be the first changes to the net billing. Net billing is an ideal solution, but gives also the possibility to promote dynamic solutions, time of use based and so on, but storage and net metering is a purely promotional effort, encouraging 1.5 million. So it's a European level phenomenon to progress the transition.

All the prosumers are generating electricity at the same time. We have to buy back this energy electricity from the customers at a specific price, resell it on the market. But of course, is at a given point in time is very cheap or even negative, and then ensure electricity for those customers in a different time of day, so because of virtual storage being the grid. So it's the balance that President mentioned fully as it is, but it doesn't mean that we don't have any mitigation actions, activities that include power to heat. So that the energy that we pick up from the consumers, not to put on the market at lower prices, but store it.

Therefore, we have a program that in Poland takes 15 years, we have to live with that. I'm not evaluating. I'm not giving an opinion, it's done, but the role of the professionals in this area is to make sure we're taking into account those legal framework. We have as little loss or cost to be passed on to the customers to take advantage of. That's why we have this business called the heat that we have in place and the transition to the power to heat technology because thanks to that, throughout summer, the hot water could be heated from the prosumers or PVs frequently at negative prices because, as Krzysztof mentioned here, that the number of hours with negative prices is going up year-over-year.

Let me just add to that. But of course, we are looking from the supply subsidiary, but it's partially mitigated by the distribution segment because there was distribution fees that are included in the debt number is the revenue for the distribution that extent constitute the margin of the distribution segment. So this -- globally, this figure from the consultant point of view is a bit lower, but it's a big problem. That's true but we are trying to deal with as the CEO mentioned.

Let's move on to the questions from our viewers who are patiently waiting, and there's quite a few of those questions. So let's move on to the questions asked via the phone. First one, what's your opinion of the consensus for 2026 at the EBITDA of PLN 6.5 billion?

We absolutely don't enter the discussion regarding the competencies of the analysts. I wouldn't afford. You do such excellent to do that. I'm not able to say anything about that. So my hats off to you. So I'm reading so much. That's it. Thank you.

Next question. What do you think about the attractiveness level of investments in the storage systems, energy storage? Polenergia recently gave up on the battery energy storage system despite having the grant subsidy award. Level of internal rate of return is assumed today for the battery energy systems for with the subsidy and without the subsidy.

Regarding energy storage facility itself, we say we are dealing with various products in our portfolio. Some of them have subsidies, some of them have contracts on the capacity market. However, as part of energy storage facilities, there's also the economy of scale, the required power supplying point, the less economic. The ones that are small are relatively cheap due to the cheaper power evacuation line and the certain economic scale versus certain capacity jumps that means that not fully linear economic scale.

The IRA is diverse, is variable. So also the faith in probability of the storage is based on the perception, the variability of the short-term variability of prices. So spread between the 2 highest and lowest hours during the 4 hours like that, depending upon the system setup, and we are dealing with an evolving power system that will have more and more renewables on one hand.

On the other hand, the storages will be auto cannibalizing themselves, more storage in the system, the lower profitability of a project. So we are trying to accelerate the implementation of this project, but -- and to a large extent, use the preferential sources and using the elements. Based on our assumptions regarding the spreads, we can see that this project is able to give -- generate a return in the double-digit IRR depending upon what is the subsidy. This IRR could be closer to the double-digit limit or maybe reach higher -- depending on those factors, higher double digits, but the later they are commissioned.

The less optimum configuration will be, the longer the grid connection. It's more difficult to build it. Looking at this market, it's relatively low entry barrier for storage. You need good conditions, relatively small sites, small land, small areas. So relatively easy process. Not all storage systems will be built in Poland. Only the best ones will be made. Either the ones will get preferential financing of the optimal configuration. The natural process is that some of those projects will not be implemented.

However, it's difficult to compare sometimes investment for it because for those who only have energy storage systems and no customers, they can -- the return could be different. When there's a situation when we're building the energy storage systems and they are used for -- to optimize the profile cost.

So the storage itself may have different roles. So that's why business case could vary. We have with 6 million customers. We are able to use the storage system in a number of places. So that's why Michal mentioned that we are speeding up and we want to be #1 on this market to have the largest potential capacity and benefits of storage to take advantage of.

How many new renewables energy storage capacity will be commissioned in 2026?

The decision that we've taken at the -- first of all, the stage of implementing our strategy and the investment decisions that were made in 2025 and beginning of this year require a certain construction time frame.

The company didn't have too many investment projects prepared, once we joined it that could be implemented already in 2026. Therefore, the majority of the effects that will disrupt to you will take place in '27, '28 because of these actions that were basically launched after the strategy was announced. So '26, storage systems will be building another 16 megawatts and partly the production will be commenced by the Miejska Gorka Wind Farm, 190 megawatts. This will be the production from the start-up and the actual sales will start this year and the commissioning -- official commissioning next year.

What's the process of contracting for the gas peaker where to one of the capacity market? What level of expenditure is expected?

Regarding the process, I already commented on that. Regarding the level of expenditures, it's a difficult question. In the previous conferences, I told you about the fact that the market-based range could be up to PLN 3 million. It could be per megawatt. It could be a lower amount. So this estimate that I gave you was based both on the worldwide benchmarks and our RFIs.

Our market dialogue and also as well as the opinion of the market adviser position, the gas turbine market is quite dynamic. I can tell you that historically, it was difficult. There are slots, but the market is a sellers' market, not the buyers' market. Now what we'll see, we'll see what the next few months will bring. We're dealing with a big disruption on the gas market, which on one hand, generates certain challenge and difficulty, but for the turbine suppliers means the canceled orders. So a large portion of orders were to go to the Middle East for some manufacturers.

So the situation may be changing rapidly. So as of today, I uphold the range that we have and the bigger, better estimate we'll be able to present to you during the next earnings conference once we complete the tender for the wind turbine.

What effects for this -- what impact on this year's earnings to expect stemming from the macro repercussions related to the Iran war?

We may -- it's worth saying that we have quite conservative approach to the hedging policy. The majority of positions we already have hedged. So the impact of the conflict in 2026 will not be material, will be negligible. However, it's worth saying that we have such weekly meetings. So every week practically we are monitoring the situation related to the conflict, the impact on the commodities, oil, gas, coal, we are observing what is the cross-border exchange.

And as I mentioned in April, we saw a lot of pushing out of electricity to the different countries, to Germany and Slovakia, which led to the higher generation, higher consumption of coal and decline of inventory levels. We noticed also that the mining companies are selling easier and constructing the coal inventory sales. However, we are not afraid of situation in 2026. So we -- as I said, we have finalized and we are monitoring the situation on an ongoing basis.

In '24 and '25 fourth quarter, what was the revenue from the balancing market and the electricity buyback market?

I think I can say that regarding the conventional segment, the total result on the balancing capacity and buybacks was -- came in, in 2025, about PLN 650 million in Q4, about PLN 160 million. And the other segments, renewables and heat was accordingly less, PLN 21 million in renewables of the whole year in the buybacks, [ PLN 31.5 million ] in the last quarter. However, heat, PLN 20 million regarding the part related to buybacks. In the last quarter, PLN 3.4 million. Request to keep it behind. It's between us, yes, of the record.

Do you see the risk of change in the distribution?

Well, regarding the regulatory regime, we already spoke about it. We have a regulatory model in place. So it's difficult to take into account the change risk. We assume that capital will be maintained by the efficient transition card mentioned specific revenue. We have expansion plan updated every now and then, but no major differences we are assumed here. If we ask about the WACC, WACC for this year already been announced 9.5%. In the subsequent years, let's remember, we have 7.5 plus 1 percentage point, and we assume that at least these are the values will be maintained.

Do you think about entering the data center business as a co-investor?

Definitely yes. Well, we are open to business opportunities. Number one, welcome everyone, all investors, including data center investors where TAURON is operating.

Just to give you an example, during the conference in Jaworzno, we presented a specific 7 or 8 such spots where here now you can build data centers. This is an official offering proposal. This is Upper Silesia. We know where we have sites, where we have capacity. Those capacities between 50 and 300 megawatts available here now in a moment.

So in many cases, there's also a heat possible can be retrieved. So data center investor who wants to find a part invest, then it's on the website of a distribution line of business, you can find it. You can contact us and build it. If data centers came to us and told us that we are building such a source, want to discuss with us, there's nothing against it to start thinking about the business opportunity, but in the power part because we don't have knowledge about the construction of data centers. We know about the heat recovery, heat collection, we can use it. We know we are experts in electricity generation as an energy partner, power partner under selection model, why not?

On the other hand, we are, as production companies, building electricity for themselves for their own needs, nothing against us securing some of the analytics process capability for our needs. We have 6 million customers, we have room to work in. The business is open. We are open. But actively, we are not -- we are looking for investors in our area of operations partners, but actively, we are not entering as an investor into data center business. But if there is a business opportunity, why not?

Okay, questions on the earnings. Question about the hedging of CO2 in percentage terms for '26 and '27, what's the group hedging? And the second, what is the level of fixed cost does the Management Board assume for entire 2026?

Regarding the first part of the question, as I said, a quite conservative approach to the hedging policy. So we secure upfront our carbon credits. So for this year, we are fully hedged, fully covered. That's all.

Fixed cost, well, we do not give detailed forecast. So generally, if we were to give you the level cost, we would disclose the one part of the forecast. So I will not answer this question.

Another question.

I can tell -- taking into account our energy mix, generation mix, I have an impression that the share of gas is so low versus coal that we don't expect any material change versus last year. So at such a level of installed capacity in gas, this impact is negligible.

No more online questions. So please anybody from the audience?

Ladies and gentlemen, therefore, let's finish. Thank you very much to the audience and those of you who watch us online, let me remind you that the broadcast from today's conference -- earnings conference will be available on our website. Thank you very much.

Thank you, ladies gentlemen. Thank you to the Management Board. Thank you very much.

Thank you. We are at your service here in a moment. So thank you. Of course, Management Board is available for your questions and discussions for journalists as well.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Good morning. I'd like to welcome you on the conference call -- earnings conference call for TAURON Group for the first 3 quarters of this year. Our meeting will traditionally be split in 2 parts. We will start with the presentation of the earnings that will be made by Piotr Golebiowski, the Vice President of Management Board for Trading; Krzysztof Surma, Vice President of Management Board for Finance; Michal Orlowski, the Vice President of the Management Board for Asset Management and Development.

Next, we'll move on to the Q&A session for media and analysts that you can ask via form. My name is Justyna Lukawska. I'm responsible for our communications within TAURON Group.

So let's start the presentation. I'd like to ask Mr. President, Piotr Golebiowski to take the floor.

Good morning, ladies and gentlemen. I'd like to present before we move on to the financial results of our assets. Let me show you how our assets were used. I'll start into -- split into 2 parts. Let's start with the generation portfolio and then the supply portfolio. Over 9 months have passed, we've increased by observing the increased CDS. This is mainly due to the decline of coal prices, which was partially compensated with the increase of carbon emission allowances. But the principle, the economics of the conventional units have been -- has improved. With respect to low efficiency units, 200-megawatt units, CDS are permanently negative, so nothing much will happen in this area.

Another important element that we observe is an increase of spot and next-day market bouncing markets, prices, lower wind conditions, weaker conditions and lower outdoor temperatures that had an impact upon our renewables operations. Unfavorable hydrological conditions. Also due to the 20% less water flows also led to degrading of ability to generate electricity from our hydroelectric power plants. We were dealing also with a relatively higher level of redispatching of renewable sources by the TSO that was about 1 terawatt hours, increased by about 65% -- this is quite a symptomatic event that we'll be observing probably also in the subsequent years, in the subsequent months. And additional element that definitely we felt in many business aspect was the number of negative hours. We had within the first 9 months, 354 on the first fixing versus last year's period, similar period, it was 196. So therefore, we've seen quite a strong growth here.

Regarding the electricity generation of our group 7.7 terawatt hours over the 9-month period is an increase by 5% versus the same period of last year. Regarding the split into conventional assets and the renewables assets in the conventional, it was a 5% increase as well in terms of renewables assets, which include wind, solar and water hydro locally speaking. So the level of production was maintained is flat versus the production last year, but we observed an increase of the production from our biomass fire units, which translated into a total increase of production assets, low emission at the level of 5% -- the result of a consequence of increase of production from the conventional units was an increase of consumption of coal, which came in at 3.2 million tonnes. It's a 3% increase versus the 9 months of 2024, an increase of consumption or demand for carbon credits at the level of almost 6.5 million tonnes. It was an increase by 6%.

I mentioned the dispatching by the TSO. Ou capacities as far as the share of our unit in dispatching is very low because it's at the level of 1%, which versus what's being dispatched all over Poland. But this is -- major contribution to it is due to our operations related to anticipating the negative hours auto dispatching of our generation units. Wind farms and photovoltaic farms, which meant that we had a saving of around PLN 4.5 million. The dispatchability of the units -- availability of the units, I assess it as a principle as satisfactory in terms of renewable assets, it went up versus 2024.

So our photovoltaic farms and wind farms were working very well. The wind farms had a 97% availability rate. And gradually, visibility rate of hydropower plants is going up, went up by 3%, but still, it stays at the level of around 86%. It's worth noting the availability rate of TAURON generation units, 75% of the availability rate caused by the overhaul -- major overhaul of the Lagisza power plant. It took 5 months. It had an impact on availability rate versus last year as well as a level of failure rate that we still have to face at Nowe Jaworzno, but we are still working on. It's too high.

With respect to the cogeneration units, an increase of availability rate by 2.5%. We consider it to be a satisfactory level and there are no major reasons except for the partial failures of units for this availability rate to cause any -- me to comment in any way.

Let me move on now to the portfolio -- supply portfolio, supply assets. The domestic electricity consumption was declined by 2.5%. During that time, our consumption of electricity on our distribution area remained at a stable level, flat. It didn't go down. We observed an increase by more than 3.4%. With respect to electricity consumption by the households. This was the result of connecting additionally about 50,000 consumers to the grid, that was compensated by about a 1% decline of electricity consumption among the B2B customers, partly caused by the reduction of production in the auto subsector, steelmaking subsector and the mining subsector.

In terms of electricity supply, we observed the level of 18 terawatt hours, 9% decline versus last year, but declined by about 1.8 terawatt hours was due to what we already indicated presenting results of first half of the year, putting in order or systematizing our supply portfolio. We are trying to eliminate the low-margin generating contracts, contracts that generate commercial trading risk. But let me be frank here, but also the decline of electricity supplies caused by the partial expansion of our competitive -- competing companies that, in particular, are focusing on SME customers. However, relatively steadfastly, we are observing a decline of this expansion activities. We are trying to protect our markets and this rate of acquiring of customers in our area by competitors went down by more than 50% versus last year. The new energy product supply sales are growing. It's about 1% level now. We have almost 15% of winning level of sales, the total consumption of electricity of customers that have bought our green product versus the total demand of portfolio of customers.

The number of customers interested in the new energy, the long-term 9-year product that we're offering at a fixed price went up by 22%. It is now almost 370,000 of such customers. At the same time, we launched in July, new product cheap hours. We are very happy with this product -- on this product now. We have almost 15,000 customers using this product. An important element I'd like to emphasize is the element of our product policy that incorporation of customers generates benefits in energy bills, utility bills that customers took advantage of our dynamic pricing within the first 9 months of this year, they gained an average sales price in the region of [ PLN 420 ]. So let me say that PLN 505 is a benchmark price [indiscernible] excise in the case of customers that are actively managing the demand, this level of price level went down significantly. It's clear indication of how much those products are required, high in demand and that they find a very high demand in this product offering that we are offering.

That's all regarding the results of our assets regarding the productivity and operations. So please continue.

Thank you, Piotr. Let me now try to present the financial results after the operational -- operating part. Regarding the key financial date, if we look at the revenue, the revenue year-over-year went down slightly, minus 3%. However, let's remember that a certain portion of this revenue is compensation payment. If we strip out the compensation payments, the sales revenue would go up by close to 4% year-over-year. As a matter of fact, those compensation payments are an effect of price freezing to a large extent, and they depend on the level of the market price and the prices set in the tariff. So now the space between the frozen price and the tariff price is much lower. So the level of compensation payments is much lower year-over-year. The number of consumers is smaller year-over-year.

If you look at EBITDA. EBITDA year-over-year went up very significantly markedly in a quarter of very good earnings. We are continuing a good trend in total versus 3 quarters of last year. The EBITDA went up by 23%. Here also we can boast the consensus of the analysts. We beat this consensus in the cumulative quarterly analyst by more than [ PLN 0.5 billion ]. The net profit, PLN 2.9 billion, the net profit, also a record-breaking performance in the history of our group. Here, the key issue versus last year was total rec of impairment charges write-downs. Last year, we booked major write-downs related to conventional assets.

As far as CapEx is concerned, close to PLN 3.7 billion. In total, it was very similar, almost flat versus last year. Michal will speak more about that in his section. However, as far as the net debt-to-EBITDA ratio, it currently stands at 1.4x and went down by 1x versus the comparable period of last year. Here, to a large extent, this was impacted by a very good operating earnings, [indiscernible] the decline of nominal debt. If you look at the comparable EBITDA is different this year-over-year is a bit lower. So we are saying that it went up by 15%. And the key aspects such as one-off events that had an impact on the fact that the reported EBITDA differs from the comparable EBITDA are all related to the supply segment and starting from next year -- from last year, we kept repeating it a number of times. We got a positive interpretation regarding the VAT deduction in the payments customers VAT on the [ PLN 125 by PLN 125 ], the individual customers' bills were reduced.

The other portion of those one-off events in the supply segment, one can say stems from the nonuniform allocation of revenue costs. This was due to the very nontypical event, so setting the tariff for 1.5 year in 2024. Let us remember that the beginning of July last year, the tariff in the middle of the year was changed, and it was set over a period of another 18 months. So at least that was the assumption that meant that the cost of electricity that already were hedged last year, they were higher than the tariff-based revenue. On the other hand, the cost for the current year were to be lower versus the tariff-based revenue. And this difference is PLN 275 million last year of losses on the margin of the G tariff this year, of course, had it not been for other event, this revenue should be higher accordingly in the 3 quarters by PLN 270 million. And this was mainly -- was the main reason for this comparable EBITDA to be slightly lower than the reported EBITDA.

Let's move on to the slide showing the EBITDA and the result of individual segments. Here, invariably, our #1 generating the key part of EBITDA in the group is distribution a year where more than 60% of EBITDA is generated by this segment. The second biggest contributor to EBITDA, it's worth mentioning that a little bit of first 3 quarters in the distribution segment reached more than PLN 8.3 billion. We have the second segment that is key in our case is the Supply and Wholesale Trading segment. Here, the EBITDA close to PLN 800 million. And again, this is the second biggest contributing segment to EBITDA. Number three, spot on the podium every year, this change to a certain extent and the renewables keeps alternating for the conventional generation segment. This year, the conventional generation segment generated better results versus the renewables. I will elaborate on the next slide.

Let me just add here that all the EBITDA are positive. So this is also a very good result in the context of the past years when not all segments generating positive EBITDA results. Moving on to the next slide, describing the individual segments. I mentioned the key segment distribution, an increase in the comparable period by more than PLN 700 million. 2 key factors. One can say one as far as the generated margin here, higher value of regulatory asset base. This is a result of the investments that we made in the past year. And the second factor is the weighted average cost of capital, but close to 0.4 percentage point went up year-over-year. This is the key factor behind the increase of the EBITDA in the distribution segment.

And the second factor, which is more variable over time is the settlement of the regulatory account. This year, we have a positive settlement of the regulatory account. Last year, regulatory account was negative. This year is positive. Next year is going to be negative again. This is a matter of fact the result of settlement of the volumes of the difference between what was agreed upon in the tariff and what was actually performed in the end last 2 time frame, 2 years later. The actual performance volume is accounted for in the segment with a 2-year lag delay.

Regarding the Renewables segment, the key factor unfortunately declined by PLN 71 million year-over-year. And the key factor behind it was the decline of the prices on the market. This is a direct impact upon the EBITDA of this segment.

Regarding the Generation segment, good results here, good earnings year-over-year. First of all, the volume went up. However, one thing is the sales volume that Piotr mentioned the production volume and sales volume. First of all, the sales volume is important here. In the current year, the margin due to an increase of sales volume went up by PLN 300 million. So we managed to generate good earnings, good results. It is generated in all 3 areas. It is a result of an increased futures sales increase on the balancing increased sales on the balancing market and increased sales on the spot market. All those factors contribute to the fact that year-over-year, we have a higher EBITDA by PLN 300 million.

Regarding the second important component of this growth, more than PLN 100 million was generated by the system services ancillary services increase of revenue from the capacity market. This is first of all, an inflation-based increase where this revenue is -- increased by this rate and as I said there is a lag and the conversion [indiscernible] contribution of high inflation rates from previous years in the balancing market a number of times. Last year in June, a new balancing market was launched. Of course, in Q3, it became highly normalized, but the first quarter generated a strong growth year-over-year.

Moving on to the Heat segment. Here, the result, one may say is worse year-over-year. However, if we stripped out the one-off event that in the core operation, the result is slightly better year-over-year, especially in the heating part results are better. Of course, here, the fact behind margin generated increase over transmission rate tariff. So the results are better but on the electricity sales results are better. But the main factor the year-over-year result was weaker is the effect of the deconsolidation of TAMEH Czech subsidiary last year in the recalculation of the deconsolidation, the company generated last year additional extra results in the region of PLN 64 million. It was a one-off event that couldn't have been repeated this year. So it was a determining factor for the results, earnings of the segment in the first 3 quarters.

Regarding the supply segment have an improvement year-over-year, more than PLN 100 million. The EBITDA went up. And here, one may say that 2 or 3 key factors behind it. after the negative one I already mentioned, it's negative. It's a one-off event that was positive in 2024, the positive tax interpretation, VAT tax interpretation but we have 2 factors, much higher margin on the sales of electricity to the business customers and the MSCs and a bit higher margin in the G tariff. Here, one could think why only such a difference, although the fact on the first bit, but we described the comparable EBITDA, we're indicating PLN 250 million. And let us not forget that -- other factors were negative -- the negative impact here. First of all, the negative impact came from the profile issuance, the consumer issuance, payments for the distribution in this segment. So these 2 factors have a negative impact. That's why it's not factors do not translate this one-off not translate on the increase of EBITDA that is due -- stems from the sale of electricity to individual customers.

If we can move on now to the issues related to debt. For some time now, we've been showing a full bridge of the gross economic debt as well as the net debt. And look, starting from the gross economic debt, it went down by more than PLN 2 billion year-over-year. Of course, the key aspect is the operating results. As before, we are much better year-over-year before the impact on the operating cash flow. And generally, it led to a decline of debt. What we also like to draw attention to is, of course, in the [indiscernible] last year, improved balance of capital. And if we look at the individual items that probably are interesting throughout this bid is a slight decline in the provision for carbon credits. This is due to slightly lower prices, average prices, including the average purchasing price of CO2 allowances. But what we have been showing for 2 quarters now -- previous quarters is the matter of including the national recovery plan funds. And here, we want to be [indiscernible] we are showing the full inclusion -- in the first -- in total, the spreads [indiscernible] the distribution segment, out of which [indiscernible] included in the prepayments and accruals according to IFRS 20. So in total, you can see [indiscernible] in the interest rates, [indiscernible] portion [indiscernible] the subsidy based on [indiscernible] prepayment and the accruals item.

Another thing [ that is relating to the ] previous quarters is the declining level of the bond, [ ordinated ] bonds. Of course, debt with higher interest rate due to its nature. And we are gradually exiting [indiscernible] in December last year, we exited and we explained that [indiscernible] our intention to repay the significant portion of the debt in December of this year and March next year. So this item will be going down. [indiscernible] to our growth in renewables and the distributor segment. [indiscernible] is stable [indiscernible] September 30. That's all regarding the financials.

Let me hand over the floor to Michal, who will speak about the investment portion.

Ladies and gentlemen, the total CapEx of TAURON Group [indiscernible] of PLN 3.7 billion stable level flat versus last year. Our largest segment remains distribution line of -- close to 70% of this year's CapEx with 46% was allocated to the construction of the new grid connection for sources and new consumers and about 37% for refurbishment and replacement of grid assets. Apart from that, we are continuing the replacement of meters with smart meters. Now in our grid, we have installed 2.4 million of meters. So we are complying with the regulatory regulation.

Targets at the current level. It's also worth to mention the dispatch we continue the integration of TETRA, which was especially important in the case of failure, disasters and problems and with also enables emergency communications price situation.

The second largest segment were renewables. Regarding the CapEx, year-over-year, we've observed a significant decline. The decline is partly due to our investment cycles. I will speak about it to a larger extent elaborate on it on the next slide, we have several investment projects that are close to completion. Therefore, the outlays not fullt reflect the tangible progress on these investment projects. We can expect that those investment projects in Q4 will accelerate. We are also facing the commissioning of further investment projects, launching [indiscernible] projects, especially the battery energy storage systems in case of getting funds from the national government [indiscernible] renewables.

Speaking of [indiscernible] we are talking about bringing our assets to make it usable to extend its life cycle in line with the strategy of our second most effective -- most efficient ingredient 460-megawatt unit also with a strong heating components to a much better economics than the 200-megawatt unit. This year, we are dealing with the final major overhaul, the life cycle of this unit operation strategy we plan at [indiscernible] power plant will be operating until 2030. [indiscernible] recent major overhaul was required to enable it to operate over a time frame. [indiscernible] we are continuing the repair program for above the 910-megawatt units. The availability rate this year was unsatisfactory for this units. So now we are performing prepare actions that were defined at the time when we're finalizing the talk -- the final adjustments to make the unit to operate at a higher level rate and in a more predictable manner generate electricity.

Regarding the [indiscernible] segment this year, we are completing 2 major investment projects that expired [indiscernible] already commissioned. However, the outage related to the completion of [indiscernible] yet visible here on the slide. This is due to the process of [indiscernible] contractors. We also launched a major product called [indiscernible] but next year [indiscernible] accelerate the majority of our expenses for a transitional [indiscernible] segment will be [indiscernible] next year, the majority of taking decisions on the transitional are related to next year and the [indiscernible] would be the majority of [ CapEx ].

Supply segment and [indiscernible] investments, we allocated [ PLN 100 million ], maintaining [indiscernible] about PLN 50 million, expansion of [indiscernible] part of the program subsidized from partly from the National Recovery Plan and the operational program, Digital Poland PLN 36 million.

And finally, implementation of the central information system market on the energy market and PLN 20 million within the first 3 quarters, the higher spending plan next year. Moving on to the investments in the renewables. We are about to finish complete [indiscernible] wind farms here. We are at the stage of final acceptances. So we are planning to complete both of these investments by the end of this year. The wind farm [indiscernible] is moving faster than we originally [indiscernible] schedule.

The first turbine [indiscernible] installed. Further turbines are being delivered. And in the coming quarters -- terminals will be installed. [indiscernible] PVs who also close to completion, [indiscernible] the end of the year. [indiscernible] They are basically already in the construction side, we had time of test by security and [indiscernible] We are planning to launch them to commission [indiscernible] product in the coming months. So we are facing a number of investments. This is regarding reproduction of the better energy storage systems.

That's all regarding investment projects. So let's move on to the Q&A session.

Thank you very much for the presentation. Let's move on to the Q&A session. [Operator Instructions]

And the first question, why did you make a decision in the dominating part to use the Chinese solutions for smart electricity meters [indiscernible] from the operating or maintenance point of view?

Ladies and gentlemen, letme remind you that in the distribution segment, we are dealing basically majority of technologies and resolutions coming from the domestic entities. Using is implemented locally [indiscernible] by far by the Polish companies. The meters that we are buying are certified meters. We buy them under the public procurement law procedure. And we also tested by us regarding the stability of our operation.

And in terms of complying with our cybersecurity standards. Today, in reality, we are mainly Chinese solutions because of price competitiveness. However, as part of the entire CapEx that we have, we have a relatively small portion, share of local is very significant. And the security, we have certified solutions that we [indiscernible] that we are fully certified.

Another question, are there any premises for TAURON to pay out dividend next year?

Let me take over this question. Of course, it keeps coming up again and again during our earning conference calls. And I will not change our reference too much because last time, we said that we intend to take to -- dividend after we have -- the full financial year. So have a full view of the full financial year.

And first of all, we are looking at the subsequent years as well. And based on that data, we will take a decision as far as the payout of dividend is concerned.

Reemphasize here that we would like once we start paying out the dividend, we want this to be a continuous process of the one-offs. So definitely, this projection of further subsequent major importance bearing on the decision to pay out the dividend. Thank you very much.

Next following questions are similar to the first one. What's the risk of a decline of [indiscernible] WACC weighted average cost grew 8.59% also on target revenue can drop or should we add the 35% of CapEx component [indiscernible] regulatory asset base this year?

[indiscernible] regarding the decrease of [indiscernible] process of [ improving tariffs ] [indiscernible] by how much [indiscernible] can go up in 2026?

Let me start, I'll ask Krzysztof to supplement my answer as far as the nontariff revenue and the financial perspective. So regarding our knowledge today. We know that we are in the tariff process expected results will come in the middle of December in parallel [indiscernible] the portfolio came out [indiscernible] the Minister of Energy [indiscernible] next quarter of next year.

As of today, it's difficult for us to comment [indiscernible] the result of [indiscernible] We are happy to see [ distribution companies ] [indiscernible] key trade organization of the sectors [indiscernible] as well. So we see there a good opportunity to discuss the mechanisms. A number of questions that came up during our earnings calls and during direct conversations for the financing [indiscernible] for investors each time, they ask about the weighted average cost of capital.

It's a good [indiscernible] to discuss it, not on how much the WACC will be in the given tariff period [indiscernible] long term. We have examples of Western countries in Spain, for example [indiscernible] time frame, we know that [indiscernible] now investment risk and at the same time translating to the decline.

Regarding the potential expectations of financing institutions that of course is a discussion of the long-term model for remuneration of distributable assets could be definitely worthwhile. And I think for all the participants of the market, it will be beneficial. However, the level themselves, the figure themselves, as of today, we know where [indiscernible] first quarter. Therefore, we actively through TAURON distribution. The subsidiary will definitely be [indiscernible] regulatory dialogue. But as of today, it is difficult to comment on specific levels as we understand that [indiscernible] combined interest of the [indiscernible]

I remind you that the distribution investments are key for [indiscernible] and consumption in the capacity of the production capacity and distribution backbone [indiscernible] pick up other systems [indiscernible] this dilution segment will allow us to support the tradition and implement our strategy.

Krzysztof, would like to add?

I'd like to refer also [indiscernible] parts of the questions that were asked here because there was a question about 35 [indiscernible] CapEx. Of course, this is, of course, connected to the entire tariff related discussion. However, in our opinion 35% of CapEx added to regulatory asset base as of the end of the year is justified. And so far, there were no discussions [indiscernible] tariff related [indiscernible] good, but this is a recurring component. So I understand [indiscernible] power positions or revenues from the [ past of energy ], [indiscernible]

Regarding the [indiscernible] tariff is very important. And EBITDA stemming from [indiscernible] very important for the group [indiscernible]. As I said, the model we still cash flow in the distribution earnings [indiscernible] base on the [indiscernible] magic that EBITDA of [ 3.54% ] is based upon the group's EBITDA, enables implementation [indiscernible] distribution for the group -- the whole group. Based on the debt capacities higher EBITDA and distribution, we can implement more [indiscernible] discussion also has an impact on the distribution, but on the debt capacity of entire group, that's all I think we can say about the distribution.

Next question, what is the risk of putting up provision in Q4 in the trading line of business?

[indiscernible] related to [ right of the charge of plans, ] [indiscernible] In this context, there's an indication from the energy regulatory office about the audits being [indiscernible] utilities related to the amount of charge or a write-off to the fund at the end of '22 and for 2023, we can't stay much above level of risk.

Only after the audit and the final conclusions, we'll be able to evaluate there's any discrepancy between our approach to calculation of the write-off versus the allowance versus what the President of Energy regulatory office position is. So [indiscernible], we will take a decision where this provision should be set up.

Thank you. [indiscernible] prices when 2026 can be lower than the once observed now on the spot market?

The current hard coal prices became equal to the ARA parts versus Polish prices, the Polish index. We suppose that this level of prices will not be lower but will be in a similar level as far as what we are observing today and we are forcing for next year.

Next question. What was the result in Q3 of 2025 on the [indiscernible] of electricity and on the balancing market in the Generation segment?

Total result on the [indiscernible] market and energy -- electricity buybacks in the context of capacity offers about PLN 150 million in Q3. With the expected negative impact the settlement of [indiscernible] in 2026 [indiscernible] We already know detailed figures of PLN 170 million in '26 alone. I'm not talking about year-over-year comparison -- we have positive minus PLN 170 million coming next year.

The next question, why is the renewables such a weak result of renewables in Q3?

Let me put it this way. That the key factor, as I mentioned in [indiscernible] lower prices year-over-year. However, as [indiscernible] about 2 other factors that -- volume also is lower, why the volume is lower, one can start thinking about it. But unfortunately, [indiscernible] conditions were not favorable [indiscernible] capacities and still the volume of, let's say, generated from when it's lower year-over-year.

Of course, we [indiscernible] the other hydroelectric power plants. So unfortunately, the volume [indiscernible] factor. And finally, [indiscernible] important, we have major decline on the [ green certificate markets ], not only some units of ours are losing those entitlements due to the 15-year time frame having lapsed on the. And secondly, the price market are [indiscernible] in the price of the market. Second factor of the volume and the first factor of a decline in price and the decreasing volume of green certificates.

Thank you. The next question [indiscernible] Isn't the company concerned due to the very low CapEx [indiscernible] significantly lower versus regulatory [indiscernible] decrease the WACC of TAURON '26 as it happened in 2025.

I'm a little surprised by the way this question is formulated like an increase of 80% year-over-year distribution. And calling it to very low [indiscernible] in fact, we're informing before between 15% and 25% increase of CapEx globally in distribution [indiscernible] over the implementation market [indiscernible] and provide proper supply [indiscernible] a number of permits for the implementation of investment [indiscernible] plan on track, we don't perceive this CapEx has been the lowest increase, but it's in line with what we assumed.

The strategy, of course, there was no split here per year, but this is [indiscernible] part of our assumptions, let me say. But last year, this year, we are a bit above the plan because we have certain flexibility of spending year-over-year. Wherefore definitely, we do not consider the interest of close to [ 18% ] at the first 3 quarters is a very small CapEx. And here, we don't expect this to be any individual specifically penalized due to the CapEx level.

Thank you. Next question, what capacities in the better energy storage systems do you expect to arrive at the end of 2026 and 2027?

We don't publish detailed figure -- detailed focus, we can say, we won projects, but we won the -- market option [indiscernible] capacity level. The production must start before 2027, a large portion of the products we're accelerating [indiscernible] a portfolio of products, but -- submitted for the national recovery plan funds for also national environment protection are waiting for the decision.

So I will not give you which exact figure basis [indiscernible] major acceleration we won at the end of 2027 to be talking about the potential hundreds megawatt, tens of megawatts. But in 2026, it's going to be still a year where we will not be able to reach those levels.

Other question over in the capacity market auction for 2030, will you take part of the gas-fired projects? If so, which ones?

We have [indiscernible] market auctions in 2030. I have another question about the [indiscernible] of readiness of those projects.

We are now at the point where [indiscernible] projects can take part in the capital market auction [indiscernible] payment is -- will decide in the coming days. [indiscernible] option for take part as far as detaols of the auction strategy [indiscernible] taking part in the [indiscernible] technology picking, so open cycle gas turbine.

Regarding the tenders, we were on the question about the tenders, the tenders have not been announced yet. However, they will be announced in the coming months.

Thank you very much. What are TAURON's plan in the context of December auction? I think [indiscernible]

Let's move on to the next [indiscernible] question. [indiscernible] upcoming customer market auction [indiscernible] projects and better energy sources systems products are dependent on acquiring support.

Regarding the gas projects, we discussed already as far as the [indiscernible] are concerned, we don't [indiscernible] for the possibility [indiscernible]. We are now dealing with the adjustment factors [indiscernible] facilities, we make the level of support for megawatt is relatively low [indiscernible]. Therefore, we don't see any connection to the market auction, but let me be frank [indiscernible] but it's very important in particular subsidy program only by National Environment Protection Fund, which haven't made an impact upon economics [indiscernible] better energy storage systems. But supposed to yes, but not necessarily the capacity market auction.

Regarding better energy store systems, we have supplemented the question [ regarding the risk of ] setting up a provision in the [ G-Group. ]

In the trading segment is difficult to evaluate, to assess. We filed the tariff application, get any feedback, yes, any response by office energy regulator is working. Over time, we don't have any feedback neither positive nor negative. We are patiently waiting for first assessment of the parameters of our regulated revenue what we propose. We'll see what happens.

[indiscernible] shares in one of offshore wind farm projects. Are you considering such an option?

I think that regarding our [indiscernible] we are a minority interest holder in the [indiscernible] The main -- I think [indiscernible] shareholder. At this stage, I will not be giving any detailed comments. We are at the stage of holding discussion [indiscernible] project, but held jointly with our partner and we'll be informing current report in the regulatory filing if the decision is made regarding this project.

Another question, what is currently the level of outlays on the picking gas-fired units per megawatt?

The topic is depending on the technology and details about [indiscernible] PLN 2 million per megawatts -- PLN 3 million per megawatt. These are roughly the amount we are talking about type of technology. Depending upon the detailed solutions, they may vary slightly.

Thank you very much. That was the last question. So that's all for today. Thank you very much for all the questions, for the answers for the presentation.

We encourage you to follow our activities on going basis. We wish you a good a nice day and see you at the next conference call. Thank you very much. Thank you. See you next time.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]