84/2022 - Completion of the cyclical review process of Trakcja S.A.’s long-term contracts for the 9-month period ending on 30 September 2022

The Management Board of  Trakcja S.A. (the „Company”, the “Issuer”) informs that today marks the completion of the cyclical review process of long-term contracts for the purposes of preparing the Company’s unit financial statements for the 9 months ending on 30 September 2022. Accordingly, the Company is providing the general public with information as to its impact on the Company’s financial performance for the period in question.
The Company carried out a cyclical review of ongoing construction contracts in the process of which contract budgets were updated with regard to the nature, amounts, time distribution and uncertainty of revenues and cash flows resulting from their performance. In the course of updating the budgets, an analysis of opportunities and risks was carried out, in which technical, performance and liquidity risks, as well as those related to the extension of contract performance, were identified and taken into account.
In Q3 2022, the impact of updating contract budgets on the Company's pre-tax result was negative and amounted to PLN -61,507,000.00.
The main factors that most negatively affected the amount of the budget update were:
1.    return to the premise of full performance of one of the railway contracts due to the cessation of obstacles preventing its performance, including the recognition of the expected expenses of its extension;
2.    the inclusion of higher design costs related to changes in the scope of work and price increases;
3.     ongoing inflationary pressures adversely affecting contract performance expenses;
4.    the recognition of estimated contractual penalty costs.
At the same time, the amount under review was positively impacted by the updating of contract budgets with regard to the value of valorisation revenues in Q3 2022.

Preliminary estimates of financial performance shall be provided to the general public upon the completion of the process of collecting financial data.

The final data of the Company’s and Group’s financial performance shall be provided in the consolidated quarterly report for the 9-month period ending on 30 September 2022, which, in accordance with the accepted report publishing calendar, shall be published on 24 November 2022.

Legal basis:
Article 17 (1) MAR