CEZ had 65% of 2013 planned production “slightly above” 52 after 1H12 results. Regarding further decrese of baseload power prices both in Germany and Czech electricity markets, we expect CEZ could currently achieved an average hedged price close to 50,5 EUR/MWh for 94% of 2013 output. CEZ should disclose average achieved price at the conference call. This would mean 2 EUR/MWh decline y/y as CEZ has pre-sold 2012 power output @ 52,5 EUR/MWh. The total impact is hard to evaluate as it depends on hedged FX rate as well too (CEZ do not dislose such an information). Nevertheless, we expect of about 5-10 bln. CZK lower EBITDA in domestic power generation in 2013 (65% of total EBITDA). / It could be partly expected due to recent development of german power prices. However, CEZ's hedging sped-up during 3Q could also signal that the company itself lost its confidence in higher electricity prices in the middle term. /
CEZ also said exit from Albania is "most likely" solution. No wonder after 3Q12 results, we expect the exit could be linked with albanian investment write-off in an amount of 2-4 bln. CZK.