Czech utility ČEZ is so far meeting analysts' expectations, with net profit down year on year

Analysts say the performance of energy group ČEZ is so far in line with expectations this year. They estimate that the group’s net profit for the first half of the year should be around 18 billion crowns, which would represent a year-on-year decline of roughly 15 percent. They attribute this to the company’s higher operating costs and accelerated depreciation of some assets. The windfall tax is also having an impact. Last year’s acquisition of gas distributor GasNet, by contrast, is having a positive effect. Analysts therefore expect the company’s management to confirm its full-year targets. This is based on comments they gave to the Czech News Agency (ČTK). The company will publish its first-quarter results on Thursday morning.

ČEZ earned 12.8 billion crowns in the first quarter of this year, with the group’s net profit down approximately six percent year on year.

While analysts expect ČEZ’s net profit for the first half of the year to be significantly lower than last year, they forecast that operating profit (EBITDA) will rise by around six percent year on year to approximately 74 billion crowns.

"On the one hand, lower realised electricity prices will have a negative impact on the results; on the other, we should see a positive contribution from the consolidation of gas distributor GasNet. The windfall tax will once again have a significant impact on net profit," said Milan Lávička, an analyst at J&T Bank.

Bohumil Trampota, an analyst at Komerční banka, said that increased depreciation would also have a significant impact on ČEZ’s performance. "This is due to the integration of GasNet and accelerated depreciation of coal-fired power plants," he explained.

If analysts’ estimates are confirmed, ČEZ will have achieved around 60 percent of its full-year targets. These forecast operating profit of 127 to 132 billion crowns for 2025 and net profit of between 25 and 29 billion crowns.

At the same time, analysts note that the second half of the year is traditionally weaker. "We therefore expect ČEZ management to take a cautious approach and confirm its full-year targets," Trampota added.

Lávička also noted that ČEZ shares have gained 34 percent since the beginning of this year, reaching their highest level since 2008. "In addition to the rise in the market as a whole, with the PX index increasing at the same pace, this growth may reflect expectations that the windfall tax will end next year and possible speculation about a potential buyout of minority stakes, which Andrej Babiš and other ANO movement representatives have mentioned several times in the event of an election victory. From a fundamental perspective, we no longer see room for further share price growth," Lávička said.

ČEZ is one of the largest energy companies in Czechia. The state is its majority shareholder, holding around 70 percent of its shares through the Ministry of Finance.