Good day, and welcome to the PGNiG Group financial results for the second quarter and first half of 2021 conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to IR Manager, Marcin Piechota. Please go ahead, sir. Ladies and gentlemen, welcome to the conference on the PGNiG Group's financial performance in the second quarter of 2021. The meeting is hosted by Przemysław Wacławski, Vice President for Finance. He's accompanied by our investor relations and performance teams. Let us begin with a presentation of the financial results, and then we'll proceed to the customary Q&A session. Regarding major events in the second quarter of 2021. In April, the president of the Energy Regulatory Office approved a new retail tariff for PGNiG which increased the price of gas fuel by 5.6%. The new retail tariff is effective from May 1st. Also, a consent to establishment by PGNiG, PKN Orlen, and Energa, the joint venture of CCGT Ostroleka was granted. In May, the execution of a cooperation agreement between PKN Orlen, Grupa LOTOS, PGNiG, and the State Treasury concerning adoption of a scenario of PKN Orlen's acquisition of control over PGNiG and Grupa LOTOS was announced. The adoption scenario of merger by acquisition assumes that all assets of PGNiG and Grupa LOTOS will be transferred to PKN Orlen for shares, which PKN Orlen will grant to Grupa LOTOS and PGNiG's shareholders as part of one or two merger processes. As for market environment in the second quarter of 2021, the US dollar depreciated by PLN 0.33 year-on-year to PLN 3.76, while euro appreciated by PLN 0.03 year-on-year to PLN 4.53. The average oil price in the quarter rose by approximately 120% year-on-year to over $68 per barrel. Translated in the Polish złoty, the quarterly oil price rose by approximately 100%. Weighted average price of gas under contract traded on the Towarowa Giełda Energii was approximately PLN 88, up by 21% relative to the second quarter of 2020. During the quarter, average mean price on the day-ahead market rose by as much as 267% year-on-year to over PLN 122 per megawatt hour. Price increases in the foreign commodity markets were even sharper. Monthly gas fuel contracts on both TTF and GASPOOL increased as much as 350% year-on-year. In the second quarter, the group posted an EBITDA of PLN 1.8 billion, lower than the second quarter of 2020 when the reported EBITDA reached a record high of PLN 7.6 billion. Net of the effect of PLN 5.7 billion refund on account of overpayment for gas supplies under the Yamal Contract of the results for the second quarter of 2020 and impairment losses on non-current assets, adjusted EBITDA decreased by less than 9% year-on-year. The PGNiG Group's aggregate revenue was PLN 10.4 billion, up by PLN 3.1 billion from the second quarter of 2020. Revenue from sales of gas, taking into account hedging transactions, increased 50% year-on-year with a 10% increase in sales volumes year-on-year, which amounted to 6.9 billion cubic meters. Operating expenses, excluding depreciation and amortization, amounted to PLN 8.6 billion. The second quarter of 2021 saw a reversal of impairment losses on property, plant, and equipment of approximately PLN 266 million, while in the same period of 2020, impairment losses of approximately PLN 97 million were recognized. Let us now move on to discussion the performance of each segment. The upstream segment's revenue was approximately PLN 2 billion, much above the EBITDA of around PLN 850 million recorded the year before. The year-on-year improvement was attributable to gas and crude oil price in commodity markets, as well as the reversal of impairment losses on property, plant, and equipment of approximately PLN 296 million in the second quarter of 2021. Due to a rebound in the market prices of natural gas, the upstream segment reported an increase in revenue from sales of gas of more than 200% year-on-year, nearly PLN 800 million, more than in the previous year. Sales of crude oil rose by nearly PLN 356 million, with the average quarterly oil price in US dollars higher by +118% and stable oil sales volumes of 366,000 tons. Segment EBITDA was eight times higher year-on-year and reached a level of PLN 1.4 billion. The trade and storage segment posted an increase in total revenue to PLN 7.97 billion, or 48% year-on-year, with an 85% increase in operating expenses, excluding D&A, adjusted for one-off effect of the annex to the Yamal Contract. The result on settlement of hedging instruments designated to hedge accounting was negative at minus PLN 185 million in the second quarter of 2021 and was lower than the result achieved in the second quarter of 2020, which was a gain of approximately PLN 171 million. The results recognized in gas inventory as a reduction of procurement costs was plus PLN 67 million, compared with minus PLN 68 million recorded in the second quarter of 2020. In the second quarter of 2021, gas inventory write-downs of only PLN 8 million were recognized. The segment's EBITDA, adjusted for one-off effect of annex to the Yamal Contract, was approximately PLN 700 million lower than the year before. In the second quarter of 2021, the Distribution segment's revenue went up 18% year-on-year to PLN 1.2 billion. The segment's result benefited mainly from a 3.6% year-on-year increase in the distribution tariff, effective from February 1st, and a 25% year-on-year increase in gas distribution volumes, with the average temperature in the quarter down -0.3 degrees Celsius. As a result, the segment's EBITDA for the quarter rose by 34% year-on-year to PLN 542 million. The Generation segment posted a 14% increase in revenue from sales of heat for the second quarter of 2021. With a slight decrease in the average temperature in the quarter, the volume of heat sales was 4% lower year-on-year. In the second quarter of 2021, revenue for sales of electricity from all sources rose by 11% year-on-year, mainly on the back of higher electricity prices, which more than offset the 4% drop in sales volumes. In the second quarter of 2021, the segment's depreciation and amortization expense increased by 4% year-on-year to almost PLN 171 million, including amortization of CO2 emissions at PGNiG TERMIKA of approximately PLN 89 milli on. Overall, the segment's EBITDA amounted to PLN 170 million, down 45% year-on-year. Thank you for your attention. We're happy to take your questions now. Thank you. Ladies and gentlemen, if you wish to ask a question at this time, please signal by pressing star one on your telephone keypad. Please make sure the mute function on your phone is switched off to allow your signal to reach our equipment. If you wish to cancel your request, please press star two. Again, please press star one to ask a question. We will now take our first question from Piotr Dzięciołowski from Citi. Please go ahead. Hi, good morning, everyone. I wanted to ask you two questions. First one, what is the reason, according to you, behind the very high gas prices for the upcoming winter? Is it up to delays in the shipments of gas? Is it storage shortage? What is it in the European market that the gas prices are so high? Second, what impact it can have on your financials? Do you expect the tariff increase or are you going to apply for one? Can you elaborate a little bit of what could that mean for you, the front end of the curve at very high prices? Thank you, Piotr, for your questions. Well, the main reason behind the high prices, in our opinion, is that currently there's a demand from Asia, therefore, the LNG shipments are directed there. That's why there's a limited supply coming to Europe via tankers. This is one factor. The second one is that we are after the relatively cold winter season at the beginning of the year. That's what caused the depletion of the storages of gas. With currently still high demand for gas and limited supply coming from the pipeline connection, there is this rise in the current market prices. Regarding our financials, it's of course hard to say right now because we did not publish forecasts. As you can see in terms of what's happening on the Towarowa Giełda Energii, still the gas prices are relatively high. Therefore, based on the portfolio of gas that we are buying on the Towarowa Giełda Energii, especially by our retail subsidiary, there was changes in the tariffs that increased the gas prices in the tariff for retail clients, for household clients, due to the fact that the weighted average cost of gas on the Towarowa Giełda Energii increased. Currently we have a new tariff that is set until the end of the year. Whether there will be some changes in this tariff, it's hard to say right now because the recent change was just a month ago. Currently, looking also at the curves, we can see that in the near future, the prices should stay at these levels of current prices that we're seeing right now for forthcoming two months, and after the winter season, they may drop. That's our basically assumption for coming months. Okay. Can I ask a few follow-up questions? Please go ahead. I wanted to ask you about the Nord Stream 2. What is your expectation? When can the pipeline come online? Second, you recently won some case in European Court of Justice, I guess. It was that Nord Stream 2 has to obey the European rules in terms of how it's operating. What does this mean for this pipeline? Does it have to make an auction for its capacity? How do you see this? As the next follow-up, I wanted to ask you about the sale of Stalowa Wola. Are you still interested? What is the issue with this plant in terms of you buying it? Is it the price? I remember there was a contract with Tauron on the gas, and then they were dealing with the power. Can you explain the situation, what is going on there with this acquisition? Hello. Piotr Szlagowski, Head of Strategy. I would answer questions regarding Nord Stream. Our expectations are that the pipeline will not be operational until the full process of certification is completed. It is now under consideration of BNetzA, Bundesnetzagentur in Germany, and the procedure involves also participation of the European Commission. We assume that the pipeline should not become operational until the full European procedure, as provided by European directives and regulations, is completed. When could that be? Well, you can check out the deadlines, but it depends on the regulators. It should take, as we assume, several months. If you look at the dates and how these procedures typically look like, it's from several months to more, depending on how the regulator acts and how fast also Commission provides its opinions. Sure. We can see this pipeline being fully operational, right? Once the criteria from the certification are fulfilled, then yes. What will be the outcome of the proceedings and what model of unbundling of TPA, et cetera, will be implemented is up to the regulator and the interested party, which is Nord Stream 2 AG. Sure. This case which you won, so that means they have to go stick to the European rules, right? There has to be kind of auction procedures on this pipeline and so on. Yes. That case was about full derogation from European rules. There is such an option to apply for a full derogation from European rules, from the Third Energy Package, for pipelines which were finalized before a certain date provided in one of the regulations. Our position was that this criterion was not fulfilled by Nord Stream 2, and the court agreed with us, so the derogation could not be granted. This path for Nord Stream 2 AG is closed. Okay. Thank you. We will now move to our next question from Tomasz Krukowski from Santander. Please go ahead. Hello, everyone. This is Tomasz Krukowski, Santander. Just two questions regarding your upstream division and specifically gas. Would you please give your production guidance for the gas for the remainder of the year? The question is whether this 5 billion cubic meters guidance in full year is still valid, and if yes, then when do you expect your natural gas production to increase substantially? Because 1st and 2nd quarter were still below the average run rate, which this 5 billion could indicate. Second question is regarding the prices at which sell your natural gas in your upstream division. When it comes to international, especially Norway, is the spot price we should look or another price? When it comes to the part which is produced in Poland, what contract we should look just to have an indication of your realized gas price in Poland? Thank you. Okay. Thank you, Tomasz, for your questions. Regarding the production guidance, we stick to the 3.8 billion cubic meters of production of gas in Poland. Regarding gas production in Norway, for example, we are still awaiting for the approval of INEOS deal. This is a event that we are looking forward to because, if you may look into our news from March, INEOS alone will be improving our gas output in Norway by 1.5 billion cubic meters of gas per year. Until these approvals coming from Norwegian authorities, we stick to the guidance that we provided. The 5 billion cubic meters of gas should be the number that you are looking for 2021. Even without this deal, 5 billion cubic meters is realistic. The 5 billion cubic meters is without the INEOS deal. The INEOS deal, when completed, should increase the forecast for this year and for the coming years. This is an event that we are looking for. Until then, the 5 billion cubic meters, this is the output that we expect to have in 2021. Regarding the prices, of course, in Poland, our transfer price is a spot price on Polish power exchange. This is the benchmark you should look into. In terms of gas output in Norway, the gas produced in Norway is transferred to our subsidiary, PST, which operates in Germany. There you should look into the TTF prices as a benchmark for the settlement price on this production. Is there any hedging in place which could well substantially affect your effective prices in the second half this year? In terms of upstream, there is basically no hedging activities that you can see in the upstream division. The only hedging that we have is a hedging that operates in trade and storage, which is basically hedging activities that combines our selling contracts with our procurement contracts, and therefore also the upstream that we produce and transfer between the segments. Thank you very much. A reminder to ask a question, please signal by pressing star one. We'll pause for just a moment. We have a follow-up question from please go ahead. Hi. I was asking before also about if you can explain the situation with Stalowa Wola, and you didn't answer this question. If I can ask this one again, and also, can you maybe update us on where the transaction with PKN Orlen, what's the current schedule? We've seen in press that it may come maybe next year, not this year. It's a change. What shall we expect there? Okay. In terms of Stalowa Wola, we wanted to go back to your question, so sorry if I interrupted earlier. Tauron approached with idea to get rid of the stake in the Stalowa Wola plant. Basically, we are looking into it. Of course, there is a gas supply contract that is operated by us and selling contracts for electricity and for heat that is generated in Stalowa Wola. Those are the contracts that were on behalf of Tauron. We are currently looking into this project, and we do some diligence work to assess the offer. Then we'll see whether we'll approach further and go for all the remaining stakes that are currently up for sale from Tauron's side. Przemysław Wacławski, PGNiG CFO, with respect to PKN Orlen and the potential transaction, as all of us know, the process is being very much discussed lately. Last week, as it was announced by the colleagues from PKN, the potential transaction may take place in the first half of the next year, possibly in the second quarter. We are now in the process of analyzing all our business. Because I would expect that there will be a question also regarding our concessions for exploration. We are also analyzing very deeply how to transfer our concessions to keep the business going. Okay. Thank you very much. Thank you. As there are no further questions in the queue, I would like to hand the call back over to Marcin Piechota for any additional or closing remarks. Ladies and gentlemen, as our conference call is coming to an end, we would like to invite you to join our press conference, which will be held at 11:00 A.M. and streamed online on our website. Also, thank you very much for your participation in today's event. If you have any additional questions regarding Q2 results and developments of PGNiG operations, please contact our IR team. Thank you for your attention, and have a nice day. Goodbye. Thank you. This concludes today's conference call. Thank you for your participation. Ladies and gentlemen, you may now disconnect.