William Malcolm

CEZ Sees Net Profit Plummet 41% In First Quarter

The net profit of the ČEZ energy group in the first quarter of this year fell by 41 percent year on year to 8.4 billion crowns. Operating revenues, on the other hand, rose by four percent to 59.1 billion crowns. The group generated 15.9 terawatt hours (TWh) of electricity in the first three months of this year, four percent less than in the same period last year. 

Operating profit before depreciation (EBITDA) in the initial quarter reached CZK 19.9 billion. It was six billion less than last year.

According to the group, the year-on-year comparison of economic results was affected by temporary market effects of CZK 3.6 billion due to the revaluation of hedging contracts, mainly due to last year’s fall in commodity prices on wholesale markets following the spread of the coronavirus pandemic to Europe. In addition, in the first quarter of last year, ČEZ had a record profit of almost three billion from speculative trading in commodities.

Analysts expected a year-on-year decline in profit of about 30 percent to 9.8 billion crowns. The main reason given was the high comparison base from last year.

This spring, ČEZ completed the sale of its Romanian assets to Macquarie Infrastructures and Real Assets (MIRA). As a result, the group’s net debt decreased by CZK 27.5 billion. The company used part of the money from the sale to repay part of the bonds early.

Electricity production in the group’s coal sources fell by 23 percent in the first quarter. The decline was mainly due to the sale of the Počerady power plant and the shutdown of Unit 1 in Prunéřov. The share of coal resources in the group’s total production fell below one third.

On the other hand, electricity production in emission-free sources was higher. CEZ Group’s nuclear power plants produced eight percent more energy. Production from renewable sources increased by 17 percent. “The CO2 emission intensity of CEZ Group’s electricity production fell by 19 percent year on year in the first quarter,” Beneš said.

Electricity consumption in ČEZ Distribuce’s distribution area, which covers approximately two-thirds of the Czech Republic’s territory, increased by four percent year-on-year to 10.3 TWh. Taking into account calendar and climatic influences, it was higher by 1.9 percent.

Power consumption of large companies fell by two percent in the first quarter. On the contrary, in the case of households it increased by 16 percent

CEZ is the largest Czech energy company. Its majority shareholder is the state, which holds about 70 percent of the shares through the Ministry of Finance.