According to Bloomberg, CEZ Group plans to consolidate three distribution companies (operating in Pleven, Sofia and Stolichno) into one subsidiary called CEZ Distribution Bulgaria. According to CEZ spokeswoman Eva Novakova, the change is planned for October 1 and the goal is a higher effectiveness, an improvement in control and an optimizing of distribution activities. Our view: It is positive that CEZ Group is taking step to increase efficiency of subsidiaries in Bulgaria. However, in our forecast we expect EBTDA margin of Bulgarian distribution companies to increase from 16.6% in 2006 to 17.0% mainly due to lowering distribution losses and higher effectiveness so as we have already incorporated improvements in our valuation we see the news as neutral.