CEZ agreed on coal supplies with the firm Czech Coal, server Ceska pozice has announced. Pocerady power plant will be getting 5 million tonnes of coal a year for market price for some 40 years. The price for next year will grow to 39 CZK a gigajoule, which means roughly a 25 % increase against the current contract. Then the price will be growing gradually up to the size of two thirds of the coal price which now would be 54 CZK a gigajoule in 8 years. The contract should be signed in the second half of January. / All in all, slightly favourable outcome for CEZ in our view. CEZ will not need to sell highly profitable Pocerady to Czech Coal and also the risk of coal supply disruption to Pocerady should be gone. We would therefore expect black coal power plant Detmarovice to be sold as CEZ has been committed to the European Commission to divest a 800 MW coal plant. Output reduction as well as lost margin should therefore be marginal. On the othe hand, the profitability of Pocerady will decrease in 2013. We expect NI of Pocerady to be around 2 bln. CZK next year after roughly 3 bln. CZK this year as coal costs should rise to 3.1 bln CZK (after 2.5 bln. expected this year) and also CO2 costs should be roughly 0.6 bln. CZK after zero this year.