Czech energy group ČEZ sees net profit fall 34% year on year to CZK 22.3 billion

Energy group ČEZ earned CZK 22.3 billion in the first half of this year, with the company's net profit down 34% year on year. The decline was mainly caused by the windfall tax and levies on excess revenues. The group's operating revenues, on the other hand, rose 23% to CZK 169.7 billion amid high commodity prices. The company announced the figures today. The group also confirmed its full-year outlook, which forecasts a net profit of CZK 33-37 billion for 2023.

„Our first-half results are in line with our expectations and reflect the gradual stabilisation of energy markets. Following approval of a record dividend of CZK 145 per share, and taking into account the exceptional taxes on energy companies' revenues and profits, we expect the ČEZ Group to pay the Czech state CZK 110-120 billion this year in dividends, profit taxes and levies on excess generation revenues,“ said ČEZ Chairman of the Board and CEO Daniel Beneš.

According to the energy group, several factors affected its financial results and the year-on-year comparison. Revenues were affected by extreme fluctuations in commodity prices, particularly following Russia's military invasion of Ukraine last year. The largest impact on the resulting profit came mainly from government-imposed levies on excess generation revenues, which have so far cost the company CZK 11 billion, as well as the newly introduced 60% windfall tax, which added more than CZK 13 billion to costs. For the full year, the company expects the levies and tax to amount to CZK 30-40 billion.

ČEZ Group's net debt fell by CZK 113 billion in the first half. This was partly due to lower margin deposits on commodity exchanges following some stabilisation in the energy market. „However, three significant payments totalling CZK 117 billion were made between 1 July and 1 August: dividends of CZK 78 billion, a CZK 15 billion final payment of ČEZ's 2022 corporate income tax, and repayment of one billion euros of the loan from the Czech state, or approximately CZK 24 billion,“ noted Martin Novák, a member of the Board of Directors and director of the Finance Division.

Electricity generation from emissions-intensive coal and gas-fired sources fell significantly in the first half, declining 22% year on year to 7.8 terawatt-hours (TWh). This was due to lower utilisation of these sources in response to a fall in market electricity prices and movements in the prices of emissions allowances and natural gas. The share of generation from coal-fired sources was 27%, its lowest level to date. By contrast, electricity generation from nuclear and renewable sources rose 2% to 17.2 TWh. The increase was mainly driven by higher output from hydropower plants and greater availability at the Dukovany nuclear power plant.

Electricity consumption in ČEZ Distribuce's distribution area fell 4% year on year to 17.4 TWh. Consumption by large businesses and households declined by 4% in both cases, while consumption by small businesses was down 7%. The company attributed the decline mainly to customers reducing their consumption because of high commodity prices.

ČEZ Group recorded a record profit of CZK 78.4 billion last year. In June, the company's general meeting approved a dividend of CZK 145 per share, equivalent to almost all of last year's adjusted profit. The state will receive CZK 54 billion. The company began paying out the dividend in early August.