CEZ Revenue, Profit Fail To Meet Analysts Estimates


Prague, Aug 6 (CTK) – CEZ power utility registered a year-on-year drop in net profit and sales in the first half of this year, according to estimates of analysts addressed by CTK, most of them expect net profit below Kc10bn and sales lower than Kc90bn


CEZ made a Kc16.7bn net profit in the first half of last year and its sales reached Kc100.9bn.


CEZ will make public business results for the first half of this year and second quarter of the year on Tuesday, August 7.


Analysts see the main reasons for the expected drop in the absence of extraordinary revenues which the company accounted in the second quarter of last year from the sale of shares of Hungary’s MOL and of flats in Prague-Pisnice.


The sale of MOL’s shares contributed around Kc4.5bn to the net profit and profit from the sale of the real estate in Prague-Pisnice exceeded Kc1bn.


On the other hand, good performance of nuclear power plants will have a positive influence on the company’s profitability, Fio banka analyst Jan Raska told CTK.


Temelin nuclear power plant ran without a shutdown in the second quarter of this year, in contrast to last year.


“I expect a slightly positive impact within the segment of traditional electricity production also from the side of moderately higher selling prices of baseload electricity, but it may be offset by higher costs of carbon credits,” Raska said.


“From the overall point of view, I estimate that the negative factors will slightly prevail and will cause a drop in operating profit,” he added.


Komercni banka analyst Miroslav Frayer pointed at the fact that the expected decrease in sales is influenced by a change in accounting of invoices for distribution to clients and contribution to renewable energy sources.


“The selling companies do not include any more in their profit and loss statement revenues and expenditures for distribution and related services which correspond with incomes of distribution and transmission companies,” CEZ spokesman Roman Gazdik earlier said.


Analysts also expect CEZ’s board of directors to keep the estimate of the company’s targets at the previously set level.


CEZ expects EBITDA profit at Kc51bn to Kc53bn and adjusted net profit at Kc12bn to Kc14bn this year.


“Out estimates compared with CEZ’s target mean a fulfilment rate at 54.4 to 56.5 percent for EBITDA profit and even at 63.5 to 74.1 percent for net profit,” said J&T Banka analyst Bohumil Trampota.


“With respect to the fulfilment rate, CEZ management could raise the targets, in particular for net profit. However, we expect rather a more conservative approach and potential adjustment only later in the course of the year, depending on results,” he added.


CEZ is the biggest Czech energy company. Via the Finance Ministry, the state holds some 70 percent in CEZ,


The company’s sales reached Kc201.9bn last year, 1 percent lower than in 2016. Its net profit increased by 30 percent to Kc19bn.