The 2004 profit of Południowy Koncern Energetyczny SA and its ten subsidiaries amounted to PLN 313 million. The Extraordinary General Shareholders’ Meeting of PKE SA. was held on August 25 in Jaworzno. The Meeting adopted, inter alia, the resolution regarding the approval of Management Board’s report of operations of PKE S.A. Capital Group for financial year 2004 and the approval of the consolidated financial statement drawn up as of December 31, 2004.

At the end of 2004, the concern held stock or shares of 40 companies (currently: 38): ten were the so-called subsidiaries in which PKE SA held, directly or indirectly, over 50 percent of votes in meetings; in 17 affiliated companies, PKE S.A. held 20-50 percent of votes in meetings; in other 13 – up to 20 percent of votes.

The consolidated balance sheet related only to PKE SA and its subsidiaries. The following entities were included: KW Czatkowice, Elektro, SCE Jaworzno III, PURE Jaworzno III, Proelmed, Polska Energia PKH, Elvita Jaworzno III, ZGE Sobieski Jaworzno III, ZGE Janina and the subsidiary SCE Jaworzno III – Ekopec.

As of December 31, 2004, the balance sheet total of PKE SA Capital Group amounted to PLN 5.8 billion and increased by PLN 53.2 million in comparison with the previous year. The consolidated profit and loss account demonstrated the net profit amounting to PLN 313 million, which was higher than the 2003 profit. The return on assets amounted to 5.4 percent and increased by 3.9 percent in comparison with 2003. The profit margin on sales increased from 2.2 to 7.9 percent. The ratio with the highest increase was the return on equity amounting to 13.4 percent, which was higher by 9.7 percent in comparison with 2003.

PKE SA Capital Group has been undergoing reconstruction since mid 2003, according to the accepted strategy of company development. The objective of the transformation is to strengthen the market position of its companies, simplify its management and supervision, adjust its branch structure to concern strategy and, first of all, prepare to privatise PKE SA.

In the future, there will be fewer companies (approximately 30) of lower diversity in the Capital Group. PKE SA Capital Group will include companies active in production consistent with the concern strategy, i.e. providing multi-utility services, executing the expansion to heat power engineering markets, dealing with raw material supplies, mainly fuels, ensuring activity diversification in areas related to power engineering or other related fields. Involvement in modern, profitable and developing fields of activity is not excluded.

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