CEZ released its Q1 results, the figures were approx. in line with our projections, but significantly above the market consensus. Sales reached CZK 15.6 (-3.23% y-o-y), EBIT CZK 5.7 bil. (-7.55% y-o-y). Operating profitability was negatively influenced by lower selling prices, total domestic demand stagnation due to higher average temperature in Q1, and decreased electricity purchases from one of the domestic distributors. Also, CZK 0.8 bil of revenues from Temelin NPP was not reflected in P&L but it was capitalized. Increased exports and costs savings went against these factors. Financial profit was significantly influenced by FX gains. Pre-tax profit amounted to CZK 5.8 bil., net profit to CZK 5.1 bil. (+9.13% y-o-y). We see the results as positive, since a bigger drop in profitability (mostly due to decreased selling prices) was expected by the market. CEZ estimates its full-year IAS net at CZK 6.5 – 7 bil., we believe it`s conservative.
Importantly, CEZ CEO J.Mil indirectly confirmed that besides selling 66% stake in its subsidiary CEPS (operating the transmission grid), CEZ will pay approx. CZK 17 bil. for the state`s stakes in the regional distributors. We estimate this transaction would boost CEZ value by at least CZK 10 bil. (CZK 17 per share).
CZK mil. Q1 2002 Q1 2001 Change
Sales 15,687 16,210 -3.2%
EBITDA 8,102 8,487 -4.5%
EBIT 5,692 6,157 -7.6%
Pretax profit 5,826 5,671 2.7%
Net profit 5,174 4,741 9.1%
(Jiri Soustruznik)