The ČEZ energy group earned 29.8 billion crowns in the three quarters of this year, so the company’s net profit fell by 43 percent year-on-year. The main cause of the decline is the windfall tax introduced this year, which increased costs by CZK 21 billion. On the other hand, due to the high market prices of commodities, the group’s operating profit (EBITDA) rose by six percent to CZK 95 billion. This follows from the data published by the company.
After the start of trading on the Prague Stock Exchange, the company’s shares reacted by weakening by up to 0.8 percent, later erasing some of the losses. At around 9:20 a.m., the title was trading at CZK 1,002, when it was depreciating by half a percent.
At the same time, the group confirmed the full-year management outlook, which expects a adjusted net profit of 33 to 37 billion crowns for the entire year 2023. The company increased its full-year EBITDA outlook to 115 to 120 billion crowns, previously it had stated 105 to 115 billion crowns.
“The economic results for the first three quarters reflect the gradual stabilization of the energy markets. After the approval of the record dividend of CZK 145 per share and taking into account the extraordinary taxation of sales and profits of energy companies, we assume that the ČEZ Group will pay 118 to 125 billion crowns to the Czech state this year in dividends, profit taxes and levies from excessive production sales,” said the CEO CEZ Daniel Beneš.
According to the company, several factors influenced the economic results and their year-on-year comparison. Revenues are affected by last year’s extreme fluctuations in commodity prices and subsequently introduced levies from excessive production sales, which have so far cost the company CZK 8.7 billion. The tax on windfall profits then amounted to CZK 21 billion. According to ČEZ financial director Martin Novák, the company should pay around CZK 37 to 45 billion in these levies for the whole year.
During the year, according to ČEZ statistics, the production of electricity from emitting coal and steam-gas sources gradually decreased, which decreased by 18 percent year-on-year to 12 terawatt hours (TWh). The reason is mainly the decline in market prices of electricity and the development of prices for emission allowances and natural gas.
So far this year, the share of production from coal is 28 percent, while it was still around 80 percent in the early 1990s. Production of electricity from nuclear sources also fell by one percent year-on-year due to longer planned shutdowns of both power plants. On the other hand, due to favorable climatic conditions, production from renewable sources increased by seven percent.
Electricity consumption in the distribution area of ČEZ Distribuce fell by four percent year-on-year to 24.8 TWh. Consumption by large enterprises fell by three percent, by households by five percent and by small enterprises by six percent. According to the company, the reason for the decrease is mainly a reduction in customer consumption due to high commodity prices as well as warm weather.
“Our indications were confirmed and ČEZ presented very decent figures in the third quarter, especially at the operating level of the economy. With its amount of 32.6 billion crowns, EBITDA even exceeds last year’s strong level and surpasses our estimate of 28.6 billion crowns,” Fio bank analyst Jan Raška evaluates the results.
“We acknowledge the increase in the EBITDA outlook, although overall the management’s prediction is slightly more conservative than our assumption. From an overall perspective, we evaluate today’s results report as slightly positive,” he adds.
“The results were slightly above estimates, thanks to an improving sales segment and better production from coal and a good margin in the manufacturing segment. The slightly increased EBITDA outlook is also positive, although ČEZ kept the adjusted net profit outlook unchanged due to the higher expected impact of extraordinary taxes. Overall, we assess the results as slightly positive,” said Petr Bártek, an analyst at Česká spořitelna.
CEZ is one of the largest energy companies in the Czech Republic. Its majority shareholder is the state, which, through the Ministry of Finance, holds roughly 70 percent of the shares. The group recorded a record profit of 78.4 billion crowns last year. This June, the company’s general meeting decided to pay a dividend of 145 crowns per share. The state received 54 billion crowns from this.
