CEZ is to announce the result of its 2006 price auction today before market opens. Based on the previous auction of CEZ’s 400MW capacity and the demand for electricity, we expect the 2006 prices to be up 11-15% yoy. We believe that a price increase close to 15% would be positive for CEZ. On the other hand, a price growth around 10% yoy should already be priced in.
The S&P rating agency maintained CEZ”s long-term rating at BBB+ with a positive outlook should CEZ succeed in the tender for Dolna Odra with 1,950MW capacity.