ČEPS Group posted a CZK 19.6 billion profit after a loss two years earlier, including acquisitions

State-owned energy group ČEPS, which in addition to its parent company also includes gas companies Net4Gas and Gas Storage, acquired last year, recorded a net profit of 19.6 billion crowns last year. The high profit was driven mainly by the valuation of the gas company acquisitions. This is according to the group’s 2023 annual report. Two years ago, the group posted a loss of more than 3.2 billion Kč, although at that time it did not yet include some of the companies.

ČEPS bought the gas companies Net4Gas and Gas Storage last year for a total of 17 billion crowns. However, according to Ekonomický deník, ČEPS assessed the fair value of both companies as significantly higher, generating a profit of more than 15 billion crowns. The company used international accounting standards to value them.

The purchase of the gas companies, particularly Net4Gas, came under criticism last year. Some experts and opposition politicians described it as an overpriced acquisition, especially given Net4Gas’s high debt.

ČEPS Chairman of the Board Martin Durčák highlighted last year’s acquisitions of gas companies in connection with the group’s financial results. „Gas will play and continue to play an important role in the transformation of the Czech and European energy sectors, which will require more new flexible energy sources in the future, while also expanding the use of low-emission gases. Security of gas supply will remain crucial for both the gas sector and the power sector,“ he said.

The group’s revenue last year amounted to almost 32.7 billion crowns, nearly 8.5 billion crowns more year on year. According to the group, capital expenditure rose by 15 percent to 6.5 billion crowns. The state-owned group’s debt, by contrast, increased by 20.7 billion to 64 billion crowns due to the new acquisitions.

ČEPS itself posted a net profit of 3.95 billion crowns last year, after a loss of 3.2 billion two years earlier. Gas pipeline operator Net4Gas, on the other hand, recorded a loss of 1.7 billion Kč. Two years ago, the company had posted a profit of more than 6.2 billion Kč. Gas Storage, the operator of natural gas storage facilities, more than tripled its operating profit year on year last year, to almost 1.4 billion crowns. The group also includes ČEPS Invest and Brawa.