At a meeting yesterday with analysts, CEZ’s CEO Jaroslav Mil spoke about CEZ’s domestic pricing strategy for 2002 aimed at regaining domestic market share. The planned price reduction could result in zero net profit in the power-generation business in 2002 (this in terms of non-consolidated CAS results; the IAS consolidated results include also the transmission business). He also said that completion of privatization bids evaluation by December 2001 is achievable. He cited ambiguous domestic market liberalization rules and export restrictions to be among the negative factors that will influence CEZ’s performance in upcoming months. Although the planned profitability decrease could be seen as negative by some investors, we see the strategy focused on the domestic market share increase to be optimal given the available choices and we do not expect the news to influence the stock.
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Separately, the local Pravo newspaper says that, according to a study performed by Austrian experts on nuclear energy, the Temelin nuclear power plant is safe and there is no reason to shut it down. Positive, although unlikely to influence anti-Temelin opposition.
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(Jiří Soustružník)