Czech utility ČEZ earned CZK 27.4 billion last year, net profit fell by CZK 1.7 billion year on year

Energy group ČEZ earned CZK 27.4 billion last year. The company's net profit therefore fell by CZK 1.7 billion year on year, or 5.8 percent. The main reason for the decline was higher depreciation and amortisation. Earnings before interest, taxes, depreciation and amortisation (EBITDA), operating revenues and profit adjusted for exceptional items, which is decisive for the dividend, also declined slightly. Despite this, the company exceeded its original expectations for last year's performance. This follows from data published by the company today.

According to the company, the main reason for the reduction in net profit was primarily a CZK 13.1 billion increase in depreciation and amortisation. This was mainly affected by the consolidation of the acquisition of gas company GasNet two years ago. Accelerated depreciation of coal assets also had an impact.

Operating earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to CZK 137 billion last year, representing a year-on-year decline of approximately CZK 400 million. Lower realised prices for generated electricity and lower profit from commodity trading contributed to this. On the other hand, operating profit was positively affected by the consolidation of GasNet, as well as electricity distribution and sales results and higher output from nuclear power plants.

Profit adjusted for exceptional items, which is key to the level of the dividend, also fell by more than CZK 3 billion year on year to CZK 28.1 billion. Under the company's current dividend policy, which provides for the payment of 60 to 80 percent of adjusted profit, this year's dividend should amount to CZK 31 to CZK 42 per share, meaning CZK 17 billion to CZK 23 billion would be paid to shareholders. However, the board of directors is likely to present its proposal later, with the company's general meeting ultimately having the final say. Last year, the company paid a dividend of CZK 47 per share, totalling CZK 25.3 billion.

ČEZ also recorded a decline in operating revenues, down three percent year on year to CZK 333.4 billion.

Despite the year-on-year decline, last year's financial results slightly exceeded the company's original expectations, which at the beginning of last year had anticipated somewhat lower operating and net profit. "We are successfully delivering our strategy of developing customer segments, strengthening our position in distribution and expanding our gas activities. Our nuclear power plants achieved their highest-ever electricity generation, exceeding 32 terawatt-hours (TWh)," said ČEZ chairman and chief executive Daniel Beneš. According to him, the results confirmed the company's stability during the transformation of the Czech energy sector.

ČEZ also presented its own outlook for the group's performance this year. According to the company's forecasts, EBITDA should fall to between CZK 103 billion and CZK 108 billion. The company expects adjusted net profit of between CZK 27 billion and CZK 31 billion.

The group's total investments amounted to CZK 56.1 billion last year, remaining at a similar level to the previous year. The company used a further CZK 5.8 billion in subsidies primarily to strengthen distribution networks.

Electricity consumption in the distribution area of ČEZ Distribuce increased by 1.3 percent compared with two years ago to 34.1 TWh. Gas distribution in the GasNet area, which covers around 80 percent of Czechia, rose by seven percent year on year to 63.3 TWh.

The ČEZ Group is among the largest energy companies in Czechia. Its majority shareholder is the state, which holds around 70 percent of the shares through the Ministry of Finance. The government of ANO, SPD and the Motorists has in recent weeks announced a plan to take full control of the company. It wants to complete this during the current electoral term.