According to Energy Regulatory Office (ERU), the mild winter in February caused net electricity consumption to decrease by 5.9% y/y to 5.1 TWh. In spite of mild winter gross production of electricity increase by 0.6% y/y to 7.3TWh due to demand in foreign countries.
Our view:
We see the mild winter in the Czech Republic as negative for CEZ business, however we would see this news as neutral for today’s price as the expectations about the decrease in electricity consumption due to mild winter were already reflected in the share price. We currently expect the electricity consumption for the full year 2007 to increase by 3% y/y.