Changes by Romanian government might cut annual revenue of CEZ by up to 100 mln. EUR

The new Romanian left-leaning government plans to change the rules in July for renewable-energy subsidies (as it watches political chaos unfold in its southern neighbour Bulgaria due to rising electricity bills) which could mean a decline in its annual revenue of CEZ there of up to 100 mln. EUR, local press wrote today. / Romania announced in late February that it's set to slash overly generous incentives for wind energy. CEZ announced in late February that it will lower plans to build another 1,000MW by 2016 to 300MW. CEZ already has installed wind capacity there of 600 MW Fantanele and Cogealac wind farm. Wind power investors should face a drop of up to 75% in overall subsidies. CEZ has earned EBITDA of 2.5 bln. CZK in Romania in 2012. We expect Romanian earnigs could therefore be of about 1-1.5 bln. CZK lower in Romania since 2014, i.e. around 2% of total EBITDA, or cash-flow; We consider this to be slightly NEGATIVE.