Czech utility ČEZ's third-quarter 2015 results

Today, 10 November 2015, ČEZ Group held a press conference on its financial results for the third quarter. Despite significant negative factors, ČEZ reported net profit of CZK 18.6bn and earnings before interest, taxes, depreciation and amortisation (EBITDA) of CZK 48.4bn. For full-year 2015, ČEZ Group expects profit of CZK 27bn and EBITDA of CZK 64bn.

Compared with the original plan to achieve EBITDA of CZK 70bn, only CZK 64bn is now expected for 2015. The reduction in EBITDA was mainly caused by several factors:

• Longer outages of units at the Dukovany nuclear power plant, where problems emerged with documentation relating to the quality of welds
• Extension of outages at the Temelín nuclear power plant
• Delay in completing construction of the new supercritical coal-fired unit in Ledvice
• Decline in realised prices of generated electricity

In particular in view of the above facts, the full-year estimate for electricity generation volume has been reduced by 5.7 TWh.

Conversely, EBITDA benefited from a cost-saving programme, through which ČEZ said it had managed to reduce costs by CZK 1.6bn year on year. „This enables us to partly offset the negative impact of the reduction in electricity generation volumes on the full-year business outlook,“ ČEZ CEO Daniel Beneš said of the cost-saving programme.

„For the full year, we expect EBITDA of CZK 64bn and adjusted net profit of CZK 27bn“
Martin Novák, ČEZ chief financial officer

An exceptionally positive development for ČEZ's financial performance was, according to a press release, the refund of part of the gift tax on emission allowances for 2011 and 2012.

#ČEZ May plan for 2015 EBITDA of CZK 70bn, generation y/y +11%. Reality after 6 months: EBITDA of CZK 64bn and generation -2%. Problems at home and more acquisitions?

— Michal Snobr (@michalsnobr) 10 November 2015

Despite all the negative factors in 2015, the company's revenue increased year on year. This was mainly driven by higher sales volumes of electricity, heat and gas. The number of customers purchasing gas also increased, while customer departures in electricity supply were virtually halted.

ČEZ listed the lifting of mining limits at the Bílina mine and the resumption of green certificate allocations in Romania among its positive developments.

Internal restructuring of ČEZ Group

Like other European energy companies, ČEZ is being divided into two separate parts, albeit on a smaller scale. While E.ON will split into two companies in 2016, ČEZ will only internally reorganise into an Operations division and a Development division. The change does not entail further personnel changes and is intended to support the effective implementation of its strategy.

Power company RWE has also recently considered a possible split into two companies.

The Operations division is tasked with managing the company's traditional assets, in particular its nuclear and coal power operations. Its role is to ensure sufficient income for the company to develop new activities and pay dividends to shareholders.

The Development division is focused on new energy businesses. It is intended in particular to secure ČEZ's future growth based on decentralised energy and renewable sources. It will also include distribution and sales.