Annual Report
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ANNUAL REPORT Pražská plynárenská, a.s., and the Pražská plynárenská, a.s. Group 18 We get things moving. Contents 3 Foreword from the Chairman of the Board of 19 Report on the Business Activities of the Directors Pražská plynárenská, a.s. Group 5 Selected Company data 19 Information about operations and financial position 5 Basic information about the Company 19 Consolidated pre-tax profit/loss 5 Company Profile 20 Financial position 5 Importance of the Company and its contributions 21 Research and Development Activities to the region 21 Corporate social responsibility 7 Capital interests 21 Human resources management 8 Information about the Company Management and Bodies 22 Risk management 11 Report from the Board of Directors on the 23 Information on Organisational Units Abroad Company’s Business Activities and Asset 25 Important events at the beginning of 2019 Position 26 Expected development of the Group 11 Energetics in 2018 29 Financial Section 11 Information about operations and financial position 31 Individual Financial Statements 12 Pre-tax profit/loss 35 Notes on the Individual Financial Statements 13 Financial position 69 Consolidated Financial Statements 13 Summary description of the real estate property 73 Notes on the Consolidated Financial Statements owned by PP, a.s. 106 Information on Persons Responsible for the 13 Natural gas trading Annual Report and Audit of the Final Statements 14 Electricity trading 107 Report on relations between the controlling 14 Marketing and customer care and controlled entity and relations between 15 Clean mobility the controlled entity and other entities under the control of the same entity (affiliates) for 15 Corporate social responsibility 2018 17 Informatics 113 Abbreviations 17 Human resources management 115 Auditor’s Report 18 Risk management 18 Information about research or development of new products accounting period or procedures in the current accounting period This annual report was compiled pursuant to Act No 563/1991 Coll., on accounting, as amended, and Act No 90/2012 Coll., on business corporations and co-operatives (Corporations Act), as amended. All the documents and materials discussed in this annual report may be viewed at the Company's head office. Prague, 20 March 2019 Annual Report 2018 | Pražská plynárenská, a.s., and the Pražská plynárenská, a.s. Group 1 We light the way for the people, not only in Prague. We get things moving. 2 Introduction by the Chairman of the Board of Directors Dear ladies and gentlemen, The year just ended and again very emphatically reminded us all of the turbulence, the complexity, and to a great extent the game-changing nature of the period that currently reigns in the energy industry. We had to cope with many external influences, which brought difficult and many times unexpected situations. However, I am sure that we have coped with them honourably, and I proudly venture to state that we have again successfully fulfilled the objectives we set for ourselves and that we have achieved very good business results. I'm personally very pleased all the more that it happened without us having to reflect the ever-increasing price of natural gas on the wholesale markets in the retail prices for our customers, as many of our competitors did. In this respect, one of the fundamental factors was our willingness and capability to increase the efficiency of our operations and to identify reserves, which led to the savings necessary to cover the above-stated unfavourable developments. As stated in the introduction, fundamental changes are taking place in the energy sector, which are results not only of the development of energy policies but also of rapid technological developments that offer new opportunities and solutions for the changing preferences of customers. Themes such as diversification, decentralisation, renewable sources, savings, and accumulation are coming to the forefront, and we are seeing a gradual shift from fossil fuel sources to renewable sources, from centralised generation in large sources to decentralised systems. As a result, our Company is implementing major changes in the field of established business models practically on the fly, and is changing overall. This is unconditionally necessary if we want to continue being successful in the highly competitive energy market. We are already not only traders of natural gas and electric power, but we are also making an effort to present our profile as a provider of related services and clever solutions, which lead to higher customer comfort, efficient utilisation of resources, and energy savings. This is a long-term process that requires a completely new perspective and, to a certain extent, start-up thinking. I firmly believe that we have the necessary enthusiasm, capability, and experience to enable us to overcome with all the challenges and tasks we are sure to face in the future, and that we will also be able to state at the end of 2019 that it was 'another good year'. In conclusion, allow me, on behalf of myself and the entire management of Pražská plynárenská, a.s., to thank our customers for their confidence in us, our staff for their work well done, and our business partners for effective and faithful cooperation. Ing. Pavel Janeček Chairman of the Board of Directors Annual Report 2018 | Pražská plynárenská, a.s., and the Pražská plynárenská, a.s. Group 3 We are committed to clean mobility and low-emission transport. We get things moving. 4 Selected Company data The information in this section applies to the individual The average CZK/EUR exchange rate for 2018 was CZK financial statements provided unless stated otherwise. 25.643/EUR 1 and this value is used to convert all the The individual financial statements were processed data in the tables according to the IFRS in the form adopted by the EU. (also for preceding years). Basic information about the Company Business name: Pražská plynárenská, a.s. (also 'PP, a.s.' or 'the Company') Corporate Office: Prague 1 – Nové Město, Národní 37, Postal Code 110 00 Business ID No: 601 93 492 VAT No: CZ60193492 Incorporation in the Commercial Register: The Municipal Court in Prague, Section B, Insert 2337 Bank details: ČSOB, a.s., Account No 916780043/0300 Telephone: +420 267 171 111 Data Box ID: au7cgsv Business Offices: Jungmannova 31, Palác Adria, Prague 1 U Plynárny 500, Michle, Prague 4 Chelčického 1055/13, Hradec Králové Pražská 502/3, Liberec Website: www.ppas.cz, prazskaplynarenskaas, Pražská plynárenská a. s. the changing needs and requirements of its customers. Company Profile Within the framework of the highly competitive energy market environment that can often be unclear or even Pražská plynárenská, a.s., is the most important domestic incomprehensible from the viewpoint of the customer energy suppliers and acts as a reliable energy supplier to community, our Company upholds and asserts long- approximately 415,000 consumption points all over the held values such as reliability and fair conduct. Czech Republic. It is a Czech supplier for which ensuring comfortable customer service, energy security, and a wide In terms of energy use, the Company supports new, range of premium services, often unique in the Czech ecological, and effective technologies implemented Republic, are the main priorities in relation to customers. with a view towards long-term use, especially the use Its competitiveness is founded on the basis of a stable and of natural gas in transportation. strong company, responsible approaches, and, last but not least, on the ability to resiliently and quickly respond to Importance of the Company and its contributions to the region Although today the Company supplies energy throughout In addition to its business operations, Pražská the Czech Republic, its history is inseparably linked to plynárenská, a.s. has long been active widely beneficial the city of Prague, where its predecessor existed in the activities and the development of civic society. The form of municipal gasworks beginning in the mid-19th Company shares its success with the general public in the century. Since 2014, the current iteration of Pražská form of traditional and continuing support of various plynárenská, a.s., just like its predecessor, is owned by cultural, sports, and social projects. the Capital City of Prague, and it can be said without exaggeration that it has come full circle. Annual Report 2018 | Pražská plynárenská, a.s., and the Pražská plynárenská, a.s. Group 5 Basic economic indicators (2014-2018) 2014* 2015* 2016* 2017 2018 in thousands of CZK 14,221,895 15,891,270 12,158,535 12,506,588 12,491,073 Revenues in thousands of EUR 554,611 619,712 474,146 487,719 487,114 in thousands of CZK 812,636 771,589 1,337,553 1,436,643 795,576 Pre-tax profit in thousands of EUR 31,690 30,090 52,161 56,025 31,025 in thousands of CZK 735,471 647,051 1,155,047 1,226,959 633,955 After tax profit in thousands of EUR 28,681 25,233 45,043 47,848 24,722 in thousands of CZK 6,823,774 3,878,801 5,009,169 2,397,600 2,511,555 Equity capital in thousands of EUR 266,107 151,262 195,343 93,499 97,943 in thousands of CZK1 1,439,907 431,9723 431,972 431,972 431,972 Registered capital in thousands of EUR 56,152 16,846 16,846 16,846 16,846 in thousands of MWh 14,380.7 17,933.8 12,595.4 13,460.1 12,765.6 Sales2 Natural gas in millions of m3 1,354.5 1,684.7 1,178.0 1,262.4 1,197.7 Number of consumption points as at 397,073 393,994 384,608 374,121 369,190 31 December Sales in thousands of MWh 82.2 108.3 371.5 642.3 610.8 Electric power Number of consumption points as at 18,267 22,988 28,991 33,853 43,912 31 December * Economic indicators for the period 2014–2016 are reported in compliance with the Czech accounting regulations.