CEZ's net profit falls by 34 pct yr/yr to Kc22.3bn in H1

Prague, Aug 10 (CTK) - Semi-state energy group CEZ saw its net profit fall by 34 percent yr/yr to Kc22.3bn in H1, mainly due to the windfall tax and levy on excess generation sales, while its operating revenues rose by 23 percent to Kc169.7bn thanks to high commodity prices, according to data the company released today.

The group confirmed its full-year outlook, which envisages a net profit of Kc33-37bn for 2023.

"The results for the first half of the year are in line with our expectations and reflect the gradual stabilisation of the energy markets. Following the approval of the record-high dividend of Kc145 per share and taking into account the extraordinary taxation of sales and profits of energy businesses, we expect CEZ Group to pay Kc110bn to Kc120bn to the Czech state in dividends, taxes on profits and levies on excess generation sales this year," CEZ CEO and board chairman Daniel Benes said.

According to CEZ, several factors contributed to the results and their year-on-year comparison. Revenues are affected by extreme fluctuations in commodity prices, particularly after Russia's military invasion of Ukraine last year.

The biggest impact on the profit came from the government-imposed levy on excess generation sales, which has so far cost the company Kc11bn, and the newly introduced 60 percent windfall tax, which has burdened the company with costs of over Kc13bn.

"For the full year 2023, we expect levies from these extraordinary measures to reach Kc30-40bn," said board member and Finance Division head Martin Novak.

CEZ group's net debt decreased by Kc113bn in H1. This was mainly due to a reduction in margin deposits on commodity exchanges as a result of partial stabilisation of the energy market.

Subsequently, however, in the period from July 1 to August 1, 2023, three significant payments totalling Kc117bn were made, including dividends of Kc78bn, a supplementary payment of tax on CEZ's income for 2022 of Kc15bn, and a repayment of EUR1bn on a loan from the Czech state, that is approximately Kc24bn, Novak said.

Electricity generation from coal-fired and steam-gas sources fell significantly in H1, decreasing by 22 percent yr/yr to 7.8 terawatt hours (TWh). This was due to lower deployment of the sources in view of the decline in market electricity prices and the evolution of emissions allowance and natural gas prices. As a result, the share of generation from coal-fired sources reached 27 percent, an all-time low.

In contrast, electricity generation from nuclear and renewable sources increased by 2 percent to 17.2 TWh. Higher production from hydropower plants and higher availability of the Dukovany nuclear power plant accounted for most of the increase.

Electricity consumption in the distribution territory of CEZ's distribution arm ČEZ Distribuce fell by 4 percent yr/yr to 17.4 TWh. Consumption by large enterprises fell by 4 percent, as did the consumption of households, while consumption by small enterprises decrease by 7 percent. The main reason for the decline was the reduction in customer consumption due to high commodity prices, according to the company.

Last year, CEZ posted a record profit of Kc78.4bn. In June this year, its general meeting decided to pay out dividend worth Kc145 per share from almost all of last year's adjusted profit. The state is to receive Kc54bn. The company started distributing the dividend at the beginning of August.

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