CEZ: Market share drops below 40% in medium and large customer segment

CEZ lost market share in corporate customer segment due to increased competition, according to Alan Svoboda, Head of Sales and Trading. For the first time, CEZ’s market share droped below 40% in medium and large customer segment, which in fact frees company from certain antimonopoly rules, e.g. loyalty programs or price packages.
Our view:
CEZ’s market share has been declining for some time due to liberalization of the market, which we see as natural process. CEZ’s share has declined several percentage points as they were slightly below 45% in mid-2006. Even though, the drop in market share is not positive for CEZ, the distribution creates only 18% of overall revenues thus we don’t see it as negatively. Plus we believe the decline will be somewhat compensated by higher electricity prices. We don’t expect further significant declines in the market share as company will become more competitive with its offers now.