Analysts: Czech utility ČEZ's quarterly profit down by up to 60% due to windfall taxes

Analysts expect the energy group ČEZ's profit to have fallen sharply in the first quarter of this year. The company's net profit for the first three months of the year is estimated at around CZK 10 billion, which would represent a year-on-year drop of roughly 60%. The main reason is the impact of revenue-based levies and the windfall tax. ČEZ's revenue, by contrast, is expected to rise year on year on the back of higher electricity prices. Analysts expect the company's full-year net profit to come in between CZK 30 billion and CZK 40 billion. The group will announce its first-quarter results on Thursday.

ČEZ group's net profit for the full year 2022 rose to a record CZK 80.7 billion, from CZK 9.9 billion the previous year. Operating revenue was up 27% year on year, reaching CZK 288.5 billion.

J&T Bank analyst Milan Lávička says the sharp year-on-year decline in net profit is mainly due to the impact of revenue-based levies and the windfall tax. He expects the company to pay the state a combined total of around CZK 16.5 billion in the first quarter as a result. With energy prices falling, these are also expected to be the highest levies of the year. Lávička also does not expect the company to repeat last year's exceptionally high profits from commodity trading, which will further accentuate the year-on-year drop in profit.