CEZ released its IAS consolidated 9M results yesterday. We expected the Q3 performance to continue the strong positive trend set in the first half of 2001, and the results confirmed this. While the results beat the consensus on both the operational and net income level, EBIT was CZK 0.5 bil. below our projection. Nevertheless, exchange-rate gains and lower income tax resulted in net income exceeding our projections (and the consensus) by almost CZK 1 bil. In comparison with the past, the new auxiliary services fee system is the main reason for the significant y-o-y profitability improvement. We keep our full-year net income projection at CZK 9.98 bil.; the CEZ CEO said he expects 2001 net income to be somewhat below CZK 10 bil. We reiterate our buy recommendation with a target price of CZK 110 per share.
(Jiri Soustruznik)
CZK mil. 9M2001 9M 2000 change
Sales 41,522 37,705 10.1%
EBITDA 18,549 14,124 31.3%
EBIT 11,587 7,595 52.6%
Pretax income 10,955 6,744 62.4%
Net income 8,939 5,234 70.8%