PGE shares are at their lowest level in half a year. Down by half a billion from the stock exchange “to welcome” the new boss
Dariusz Lubera instead of Dariusz Marc. As of Monday, we have a new president of PGE, i.e. for now, Mr. Luber is the acting president, but considering his professional experience, it can be assumed that he will hold this position for a longer time. He is the former long-time president of Tauron, who was replaced just after PiS took power, which also introduced Tauron to the stock exchange.
It is difficult to talk about the market's warm reception of the new president. Already in the morning, investors apparently expected that something was in the air, because the shares began to fall immediately after the opening of the session. These predictions could have been the result of the appointment of two new members to the PGE Supervisory Board on Thursday, December 4including Dariusz Lubera. A former president of a large energy company is not simply appointed to the supervisory board of another energy company.
On Monday, PGE shares fell by 2.4%. up to PLN 8.40but since Thursday it has already decreased by 5%. This means that the company lost PLN 457 million of market value in one day and PLN 983 million from changes in the supervisory board.
Why did the stock exchange react nervously to the change of president? After all, under the former government, the total loss of the PGE Group amounted to PLN 10.7 billion net, so there was no reason to be happy.
How did Tauron fare under the management of Dariusz Lubera?
During Dariusz Lubera's presidency at Tauron since 2008, the capital group's revenues increased by half, and profits increased by as much as 10 times in 2013 compared to 2008, so it's hard to find any negatives here.
On the other hand, after his successor took over the presidency at Tauron, write-offs were made and a loss for 2015 amounted to PLN 1.8 billion, which the company then made up for in two years.
It is also not news that new CEOs of state-owned companies like to “clean up” and conduct asset value tests, which usually lead to net losses and retain dividends. The fact that the write-offs are a realistic scenario is proven by the fact that the company's book value at the end of September was PLN 38.3 billion, and its market value after Monday's drop was only PLN 18.9 billion. So the market estimates that the company's assets are worth PLN 20 billion less than their value in the company's books. This is the basis for making copies.
Worthless PGE coal power plants
The financial report for the third quarter shows that PGE's coal-fired power plants are worthless apart from the Opole Power Plantwhich the company values at PLN 4 billion. In other words, a zero valuation was given to brown coal power plants: the Bełchatów mine-power plant complex, the largest energy producer in Poland, and the Turów complex. The Dolna Odra Power Plant and the Rybnik Power Plant, powered by hard coal, are also valued at zero.
PGE write-offs from the third quarter report 25
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PGE
You can even say that all these power plants currently have a negative value, because PGE contributes to their existence, not wanting to collapse the Polish energy market. Their losses are a consequence of the European Union's climate policy and CO2 emission fees (ETS).
