Poland's No.2 utility Tauron beat market expectations with 44% rise in net profit on high coal output and after consolidating of results of power distributor GZE it bought in 2011.

The state controlled group said it earned PLN 420 million in its Q3 compared with expectations for PLN 366 million and PLN 291 million in the same period last year. Tauron's coal mines produced over 1.5 million tonnes of coal in the period up 29% YoY.

Mr Stanislaw Ozga analyst at Warsaw based broker DM PKO BP said that "Coal output volume is at a record high and in this segment costs are fixed, so any rise in production automatically improves results. Tauron's results were additionally boosted by low prices of certificates that coal reliant utilities must buy to meet green energy targets.

Q3 power generation at the group fell 5% to 4.9 TWH and was down 14% in the first 9 months of the year as the group struggled to find buyers for its power amid competition from cheaper lignite fired units. Distribution rose 24% to 11.5 TWH helped by the consolidation of GZE bought from Sweden's Vattenfall last year.

The group also said it would publish the details of a new savings program for the years 2013 to 2015 in December after it almost completed PLN 1 billion restructuring plan in 2010 to 2012.