CEZ's power production rose 5.5% y-o-y to 16.42 TWh in Q1 2004, which is better than our estimate of largely flat production (i.e., rising domestic sales offsetting lower exports). CEZ CFO D. Svojitka said that the winter had been favorable to domestic sales and that rising export prices offset the declining volume of exports. He also indicated that after "very satisfying" Q1 results, the outlook for H1 2004 remains positive. Positive.
Mr. Svojitka also commented on CEZ's acquisition policy:
* possible acquisitions in Poland, Romania and Macedonia are unfeasible before 2005 as they could be "very expensive"
* CEZ currently has insufficient resources for all the planned acquisitions and must thus first accumulate them; note that it plans to issue EUR 300-400m of bonds in June 2004
* despite this, the company will pay more attractive dividends than in the past years
* the possible acquisition of Slovenske elektrarne (SE), the dominant Slovak power producer, would be difficult for CEZ's BoD to approve due to "high risks of hidden costs".