Czech energy group ČEZ cuts net profit by CZK 6.4bn to CZK 23.4bn in the first three quarters

Energy group ČEZ earned CZK 23.4 billion in the first three quarters of this year, with the group’s net profit falling by CZK 6.4 billion year on year. The decline was driven mainly by lower profits from commodity trading and lower mining revenues. The company’s operating profit, by contrast, rose to CZK 100 billion. This is according to data released by the company today. The company’s management also raised its full-year EBITDA forecast to CZK 126–130 billion, and expects adjusted net profit of CZK 26–30 billion.

The company has already raised its full-year operating profit forecast once this year, expecting CZK 118–122 billion in mid-year. Its original estimates at the beginning of the year were CZK 115–120 billion. This year, operating profit has increased by CZK 5 billion compared with last year, mainly due to the end of the obligation to pay levies on excess revenues from generation in the Czech Republic.

„Our results for the first three quarters met our expectations. We are raising our full-year forecast for operating profit before depreciation mainly for two reasons – we took over GasNet, which is expected to contribute approximately CZK 4 billion to this year’s EBITDA, and the court upheld our claim in a dispute with the Czech Railway Administration over electricity supplies in 2010,” said ČEZ Chairman and CEO Daniel Beneš.

The group’s results now include, for the first time, its new acquisition, gas company GasNet, a majority stake in which ČEZ took over at the end of August. GasNet, which supplies natural gas to households and businesses throughout the Czech Republic except for Prague and the South Bohemian Region, has so far been reflected in the results for one month. This year, ČEZ bought a 55.2% stake in GasNet from Macquarie Asset Management for EUR 846.5 million (more than CZK 21.4 billion).

ČEZ’s investments in the first nine months amounted to CZK 34.8 billion, up CZK 6.8 billion year on year. According to the company, investment increased in all segments except Mining, particularly in renewable and nuclear generation and distribution networks. GasNet, the newly acquired company, has invested CZK 1.1 billion to date. ČEZ Distribuce invested CZK 1.1 billion more year on year, mainly due to an increase in customer requests to connect new renewable energy sources.

Electricity generation from renewable and nuclear sources was unchanged year on year at 25 terawatt-hours (TWh). While renewable sources generated 0.2 TWh more electricity, mainly thanks to above-average hydrological conditions, nuclear generation fell by 0.1 TWh due to planned outages at the Dukovany power plant. Generation from emissions-intensive sources fell by two percent year on year to 11.8 TWh, according to ČEZ. Electricity consumption in the distribution area of ČEZ Distribuce fell by one percent year on year to 24.6 TWh.

ČEZ is the largest energy company in the Czech Republic. The state is its majority shareholder, holding approximately 70 percent of its shares through the Ministry of Finance. Last year, the company recorded a net profit of CZK 29.6 billion, a 63 percent decline year on year. The main reason was extraordinary taxes and levies, on which the company paid around CZK 40 billion.

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