CEZ released better-than-expected consolidated QI 2001 IAS figures yesterday. Consolidated sales reached CZK 16,210 mil. (increased electricity generation, increased price of electricity sold, system-service fee collection). The sales increase was accompanied by only a moderate rise in operating expenses, resulting in improved EBIT (CZK 5,171 mil. in QI 2000, CZK 6,157 in QI 2001). Pretax profit increased from CZK 5,263 mil. to CZK 5,671 mil.; after-tax profit rose from CZK 4,085 mil. to CZK 4,741 mil.
The positive QI development is combined with a rather optimistic outlook: new contracts with REAS (regional distributors) should be signed soon, and the threat of restrictions on CEZ’s exports seems to be passing. However, some negatives remain (delays in Temelin’s activation, increasing pressure from imports, privatization delays). We reiterate our buy recommendation with a 12-month target price of CZK 140 per share.
(Jiří Soustružník)