As expected, July’s extreme heat wave together with other factors increased electricity consumption in Czech Republic by 6.3% y/y and reached 4,236 GWh. The average temperature in July was 22.3 degrees in comparison to long-term average of 17.8 degrees Celsius. Other significant factors include mainly booming Czech economy as CEZ’s spokesman informed.
Our view:
In our projections we expect CEZ’s 2006 domestic sales of electricity to increase by 18.4% y/y, mainly due to the same reason as stated above by CEZ’s spokesman, i.e. booming Czech economy. We reiterate our Buy recommendation with fair value CZK 1,065.