The German Der Spiegel magazine reported that RWE intends to terminate the purchases of electricity from CEZ, following a similar decision by E.ON. CEZ first confirmed that it supplies approximately 3 TWh directly to RWE (approx. 3% of sales), but denied any direct sales to RWE later in the day. CEZ exports approx. 9 TWh in total to Germany utilities, 3 TWh (approx. 3% of sales) are supplied to E.ON and currently are subject to negotiation. Yesterday’s contradictory information could indicate that the remaining 6 TWh is vulnerable to the antinuclear campaign (related to Temelin) as well. The stock’s reaction was negative, falling 2.45% yesterday. Unless CEZ and/or RWE clearly deny the rumors, the weakening could continue today.
Separately, Czech power-sector labor unions said that they are ready to strike in order to achieve “socially acceptable” privatization in the sector. This could complicate the privatization and add further weakness to the stock.
Also, a CEZ AGM takes place today. A dividend may be approved (the management mentioned CZK 2–3 per share out of a 2000 EPS of CZK 12), with the record date for the dividend is likely to be set as June 13.
(Jiří Soustružník)