CEZ reports mixed first quarter

9 May – Czech Power Company (CEZ) reported an increase in profits of 55 per cent in its first quarter due to exceptional items without which results would have been worse than the same quarter in 2001.

The boost to profits came from a change in the way provisions are set aside for foreign exchange fluctuations. CEZ’s domestic market share decreased from 55.8 per cent to 51.1 per cent. This was mainly caused by an increase of imports into Czech Republic by companies other than CEZ of 108 per cent.

Although the company is still having problems with Temelin (its beleaguered nuclear power station), exports were higher compared with the same period of 2001.

In a statement CEZ said that it had been able to generate a profit in spite of the anticipated decrease in takings from selling electricity, resulting from the fact that the market had been fully (100%) opened for electricity producers. CEZ said it managed to achieve this by cutting costs and, more importantly, by higher financial revenues which increased especially because of the appreciation of the Czech crown.

“The operation result was influenced by the fact that the Temelin Nuclear Power Plant, which is much more cost-effective to run, has not been put into a full-scale operation as yet. However, the economic result was positively influenced especially by the appreciation of the domestic currency,” said Petr Voboril, the company Chief Executive for Finances and Administration. “This was the main factor thanks to which the financial revenue of CEZ increased by 2.7bn CZK ($80.2m), which also led to an increase of the overall revenues and in consequence resulted in considerably higher profit generated by our company,” said Voboril.

The overall demand for electricity in the Czech Republic in the first quarter of this year amounted to 15TWh, i.e. it dropped by 0.9 per cent in comparison with the same period last year. This was due to the extreme rise in temperatures in the first quarter of the year. However, CEZ is convinced that the long-term trend of growing demand will continue. If there had not been such an extreme rise in temperatures (the average temperatures over this period were 1.8oC warmer than in the first quarter of the last year), the demand would have increased by 0.3 per cent in comparison with the last year. Industrial consumption decreased by 0.5 per cent and retail consumption by 1.4 per cent.

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