CEZ reports profits of almost CZK 9 billion in first quarter
The Czech state-owned energy giant CEZ has reported a net profit of CZK 8.7 billion for the first quarter of this year. This represented a 13 percent decline year-on-year. However, it was 15 percent higher than in 2015, the company said at a news conference on Tuesday.
The regional power giant said it had raised its estimate for net profit for the whole of this year to CZK 17 billion, primarily due to a successful sale of shares in Hungarian power company MOL.
Spokesman Ladislav Kříž said CEZ’s operating revenues in the first quarter were CZK 52.8 billion. This represented a 2% year-on-year increase, mapping growth in the amount of electricity generated by conventional power plants.
CEZ also considerably increased its generation of “new” energy, through the use of wind turbines, photovoltaic installations and small hydroelectric power plants.
Power generation by such facilities grew by 18%. CEZ said this was mainly due to the acquisition of wind parks in Germany in the latter part of last year, as well as increased generation by wind parks in Romania.
CEZ said it was continuing to perform well in the end-use customer sales market, with increased year-on-year sales of natural gas (26%), electricity (3%) and heat (2%).
CEZ chairman and CEO Daniel Beneš said the most important event in the first quarter in terms of annual financial performance was the sale of MOL shares and the concurrent redemption of convertible bonds.
Analysts contacted by the Czech News Agency said that the results announced on Thursday had somewhat exceeded market expectations.
Fio banka analyst Jan Raška said CEZ had revised this year’s outlook for adjusted net profit from the originally set interval of CZK 12 billion to CZK 17 billion to a flat CZK 17 billion. He said this was a positive development as his bank had expected a refinement to a CZK 15 billion boundary.
Mr. Raška also highlighted the positive impact of a settlement agreement with the company Sokolovská uhelná, amounting to CZK 0.7 billion, in the first quarter. This positive impact was unexpected, he said.
Komerční banka analyst Richard Miřátský said that the reported results were in line with the company’s outlook for a decline in profitability this year, which predicts annual EBITDA operating profit of CZK 52 billion.
Mr. Miřátský said the fact the results did not deviate significantly from market expectations meant there was unlikely to be a strong stock price reaction.