Czech Sokolovská uhelná group posts a CZK 2.2 billion loss after the previous year's profit

The Sokolovská uhelná group of companies posted a loss of almost CZK 2.2 billion last year. In 2023, it made a profit of CZK 885 million. The group's revenue fell sharply to CZK 5.2 billion from almost CZK 11 billion the year before. The reasons include the price of emissions allowances, a decline in mining and demand for coal, as well as uncertainty in the energy market. The group wants to focus on deepening its mix of different energy sources so that it can ensure supplies of heat and electricity. This is according to its annual report published in the Commercial Register.

"As in previous years, in 2024 electricity and natural gas prices, and above all the price of emissions allowances, had a fundamental impact on the energy market and thus directly influenced mining and electricity generation plans. Following a short-term increase in demand for lignite, the use of coal in the energy sector continued to decline. The market situation suggests that this trend will continue in the coming years," the company says in its annual report.

The Sokolovská uhelná group comprises Sokolovská uhelná itself and five companies in which it holds an ownership stake. The joint-stock company Sokolovská uhelná had revenue of CZK 3.8 billion last year, compared with CZK 7.4 billion in 2023. It posted a net loss of CZK 1.97 billion.

Sokolovská uhelná is engaged in mining and the production of heat and electricity. Elektrárna Tisová is also important to the group's financial performance. Last year, the power plant generated output worth CZK 2.07 billion, roughly half the 2023 figure. Elektrárna Tisová a. s. also posted a loss last year, of CZK 48 million. The group's other companies had only a minor impact on its overall performance.

According to the annual report, it is difficult to predict how the company's production assets—coal and gas—will be used to generate heat and electricity this year and in the years ahead. "This will largely depend on market conditions and legislative changes resulting from measures taken by the state and the European Union in connection with the energy transition and decarbonisation. (...) At the same time, we must contend with the fact that the state's plans for the 2025–2030 transition period have not yet been firmly established or explained. The Group will have to respond to the impact of these plans not only in electricity generation but also in heat production," the annual report says.

Last year, Sokolovská uhelná mined 2.2 million tonnes of lignite at its last active mine, Jiří, compared with almost 3.4 million tonnes in 2023. In 2020, almost 4.7 million tonnes of lignite were still being mined near Sokolov each year.

Electricity generation also declined, from 942 gigawatt-hours (GWh) in 2023 to 623 GWh last year. Heat production fell slightly, from 1567 terajoules (TJ) to 1491 TJ.

The number of employees across the group centred on Sokolovská uhelná is also gradually declining. The company employed 1165 people at the end of last year, compared with an average of 1309 in 2023.

The original Sokolovská uhelná, právní nástupce a. s. has been gradually transforming in recent years. It established a sister group, SUAS GROUP, to which it is transferring business activities that can operate independently of coal mining and processing. Its financial results for last year are not yet available.