Czech utility ČEZ’s board proposes dividend of Kč40 per share

At its meeting today, the board of energy company ČEZ decided on the date of the general meeting and on its proposed dividend from last year’s profit, which it will submit to this year’s general meeting of shareholders.

The board will propose a gross dividend of Kč40 per share (nominal value Kč100), the same as last year. If the general meeting approves this, a total of Kč21.4bn will be distributed among shareholders, of which Kč15.0bn will go to the majority shareholder, the Czech state. The general meeting will take place on 3 June 2016.

ČEZ has paid approximately Kč21bn in dividends for the fourth consecutive year. However, the dividend is likely to decline in the coming years, as adjusted net profit excluding one-off effects is planned at only Kč18bn for next year.

Net profit fell by Kč1.8bn year on year

ČEZ Group’s net profit last year reached Kč20.5bn, but it calculates its dividend from net profit adjusted for one-off effects, which amounted to Kč27.7bn. As we indicated earlier, no change to the dividend policy was expected.

The main factor determining ČEZ’s profit is wholesale electricity prices, which have been falling over the long term. At the beginning of this year, they dropped to as low as EUR21/MWh. Prices are now recovering and have already reached around EUR25/MWh. Along with electricity prices, ČEZ shares are also gaining value and are currently trading slightly above Kč450 per share.

The fall in electricity prices was caused mainly by lower emissions allowance prices and the low price of hard coal. Both emissions allowances and hard coal have returned to growth, as have electricity prices.

Extended outages at nuclear power plants had an extraordinary impact on last year’s finances. The outages particularly affected the Dukovany nuclear power plant, which shut down three of its four units last autumn due to extensive weld inspections. According to Daniel Beneš, the weld problems cost ČEZ a total of Kč2.5bn.

ČEZ’s profit was positively affected by a tax refund of Kč3.8bn and a successful court dispute with SŽDC over electricity prices worth Kč1.1bn.