CEZ has provided an updaate on its Bulgarian operations, having invested BGN 65m (some EUR 33m) last year in three distribution companies, which were acquired in November 2004 for EUR 281.5m (67% stake). Investments were focused on the increase of efficiency and reducing electricity losses, which were lowered by 10% compared to 2004. At present, CEZ serves 1,915,497 customers in Bulgaria, an increase of 13,050 during the first year of operations there. Electricity sales increased by 3.9% y/y, to a total of almost 8bn kWh. According to CEZ’s regional manager, cost reductions have been achieved as well as the integration of the organisational structure and unification of supply contracts. CEZ is following its strategy to become a leader in the energy market of the CEE and SEE region. We see this news as positive and reiterate our Buy recommendation.