Zenith Energy

Zenith Energy Ltd. (“Zenith” or the “Company”) announced on September 15, 2026, that the Company has provided an operational and trading update for its Italian electricity generation and natural gas production activities for the eight months ended August 31, 2026. During the period, electricity production was broadly unchanged year-over-year at approximately 8,000 MWh, while the average selling price rose to approximately EUR 137 per MWh, resulting in net electricity revenues of approximately EUR 1.1m. With production costs remaining largely fixed at approximately EUR 35,000 per month, net operating contribution increased by approximately 22 % to approximately EUR 820,000. The Company further reported that Italian electricity prices strengthened into September, averaging approximately EUR 208 per MWh over the first ten days of the month.

---

Conclusion

In Analyst Group’s view, the update demonstrates the cash-generative quality of Zenith’s Italian energy operations and the operating leverage that comes from their largely fixed cost base. With production costs largely fixed, higher electricity prices feed through directly to operating contribution, and as volumes were broadly stable, the approximately 22 % increase is driven by stronger realized prices. Italian power prices have risen further into September, pointing to a materially higher near-term cash contribution should current levels persist. The fixed-cost structure is a clear structural advantage, and the additional cash flow strengthens Zenith’s ability to fund growth across its Italian energy and solar portfolio on a non-dilutive basis, reinforcing the self-funding character of its strategy.

Analyst Group’s View on the Cash-Generative Italian Energy Operations

Electricity production of approximately 8,000 MWh was broadly unchanged from the corresponding months of 2025, so the improvement in profitability is essentially price-driven. With production costs largely fixed at approximately EUR 35t per month, higher prices translate almost directly into a higher operating contribution, which is why net operating contribution rose despite flat volumes. At the price levels seen in early September, the Company points to monthly electricity revenues of approximately EUR 200t against those fixed costs, well above the average over the eight-month period, and while the September figure covers only the first ten days, it indicates a further step-up in cash generation at prevailing prices.

The stronger prices reflect a broad tightening of European energy markets. Because gas-fired generation typically sets the marginal price of electricity in Europe, the sharp rise in gas prices has fed through into power prices. According to the Company’s update, the Dutch TTF gas benchmark reached approximately EUR 84 per MWh in mid-September, its highest level since December 2022 and around two and a half times the level a year earlier, day-ahead power prices in Germany, France and the Netherlands moved above EUR 200 per MWh, and Brent crude traded near USD 109 per barrel, following disruptions to LNG supply and regional oil infrastructure earlier in the year. As Zenith sells its Italian electricity at prevailing market prices, this backdrop is directly supportive of near-term cash generation from the existing asset base.

Consistent with the Company’s stated plans, Analyst Group views the incremental cash flow as a useful, non-dilutive source of funding for further growth, including selective acquisitions, productivity improvements at existing assets and the continued development of the solar portfolio. In this respect the update complements the build-and-sell solar strategy, adding a cash-generative dimension to Zenith’s wider Italian energy platform.