ČEZ reports higher profit and improved outlook: expects up to CZK 35 billion this year
Energy group ČEZ earned CZK 18.1 billion in the first half of this year. The company's net profit thus rose by 10% year on year. This was mainly helped by the end of the windfall tax. By contrast, the company's operating profit and revenues declined from last year. This follows from figures published by ČEZ today. The company's management has also raised its outlook for the full year, now expecting net profit of CZK 31 billion to CZK 35 billion.
ČEZ's operating revenues fell by 5% year on year to CZK 159.7 billion. Earnings before interest, taxes, depreciation and amortisation (EBITDA) also declined by a fifth to CZK 59 billion. According to the company, this was mainly due to lower realised prices for electricity generated. Adjusted net profit, which is relevant for the dividend proposal, rose by 7% year on year to CZK 17.8 billion in the first half.
In response to its financial performance, ČEZ raised its full-year targets for this year. It now expects EBITDA of CZK 109 billion to CZK 114 billion and adjusted net profit of CZK 31 billion to CZK 35 billion. According to the company, the main reasons for raising the outlook are improved performance in distribution, higher output from nuclear power plants and rising realised generation prices as a result of the Persian Gulf crisis, which has pushed up market prices for energy commodities.
"The increase in the full-year EBITDA outlook is a result of the stable and safe operation of our generation assets, shorter outages at nuclear power plants and an improved outlook for the Distribution segment. We want to maintain the stability and reliability of our generation assets and distribution networks in the future as well. The increase in investment corresponds to this," said Daniel Beneš, chairman of the board and CEO of the ČEZ Group.
According to him, the group's investments totalled CZK 30.2 billion in the first half, 30% more year on year. The company directed the funds primarily towards zero-emission generation, the modernisation and reinforcement of distribution networks, and the preparation of strategic energy projects.
ČEZ increased electricity generation by 1% year on year to 26.1 terawatt-hours (TWh), mainly thanks to a strong second quarter, when output from conventional power plants rose due to market conditions. Electricity distribution in the ČEZ Distribuce distribution area increased by 3% year on year to 17.8 TWh, or by 1.3% after adjustment for weather and calendar effects. Gas distribution in the GasNet group’s service area rose by 8% year on year to 36.8 TWh. Colder weather accounted for 3%, while the remaining 5% resulted from the acquisition of gas distribution company Gas Distribution.
The ČEZ Group is among the largest energy companies in the Czech Republic. Its majority shareholder is the state, which holds around 70% of its shares through the Finance Ministry. The ANO, SPD and Motorists government has in recent weeks announced plans to take full control of the company. It aims to complete this during the current electoral term. In recent weeks, ČEZ established a new subsidiary, ČEZ Energy, into which it plans to transfer the company's non-generation business. According to analysts, this is the first step towards nationalising the company.
