CEZ expects better financial results next year

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Investiční bankovnictví KB

      Company’s management said in an interview with Reuters that negotiations about electricity sales for next year go well and the company should manage to increase its domestic market share from current 53% to about 57%. Higher domestic sales together with successful export policy will result in increased usage of generation capacities, which together with cost cutting efforts will improve company’s financial performance next year. CEZ considers dividend growth in a range of 3-7% in future. Nevertheless, the floods made the company to review its own projections for this year. Net profit should reached CZK 6.5-7bn compared to previously expected CZK 7-7.5bn due to lower electricity demand.

       We expect the increase in domestic market share is linked with the unsuccessful tender of Severomoravska energetika (SME), where it failed to select its electricity supplier. SME will probably have to purchase the electricity from CEZ. Given the fact SME did not purchase some electricity from CEZ this year, CEZ’s market share will increase in 2003.

       Minister of industry Jiri Rusnok spoke about privatization of CEZ. The government reportedly considers two main alternatives. One is to sell government’s stake to a strategic partner, while the second is to gradually float shares held by the government on the market. Decision should be made within next 12-15 months.

      

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