CEZ has just released its 3Q13 results. Both EBIT and net income are significantly below consensus expectation especially due to impairment charges taken in Romania and Bulgaria (-4.8 bln. CZK incl. goodwill amortization). The company expects a total fixed assets impairment charge of about 8 bln. CZK this year and therefore it decreased the full-year net income numbers to 35 bln. CZK from 37.5 bln. CZK.
CEZ - 3Q13 results
| Revenues | 49 450 | 48 800 | 50 693 | 49 000 | -1,3% | -0,4% |
| EBITDA | 16 263 | 15 000 | 16 740 | 16 500 | -7,8% | -9,1% |
| EBIT | 9 278 | 3 400 | 9 240 | 8 600 | -63,4% | -60,5% |
| Net income | 6 214 | 3 100 | 6 674 | 6 200 | -50,1% | -50,0% |
* CEZ Cons.
Conference call: 12th November 2013; 15:00
CEZ - 9M13 results
| Revenues | 162 474 | 161 900 | 163 798 | 162 100 | -0,4% | -0,1% |
| EBITDA | 64 693 | 64 300 | 66 035 | 65 500 | -0,6% | -1,8% |
| EBIT | 44 718 | - | 44 421 | 44 000 | - | - |
| Net income | 33 382 | 31 700 | 35 275 | 35 000 | -5,0% | -9,4% |
We see the results as NEGATIVE and we expect a share to reverse some of its previous gains today.
As the impairment charge has no impact on cash-flow – a potential short-term correction may be a good point to accumulate some shares for longer-term investors we believe. We confirm our ACCUMULATE recommendation and target px of 600 CZK.