Release Date: May 15, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CEZ AS (XPRA:CEZ, Financial) reported a 7% year-on-year increase in operating revenue, reaching 93.4 billion Czech crowns.
- The company's EBITDA also improved by 7%, reaching 43 billion Czech crowns.
- CEZ AS (XPRA:CEZ) successfully disposed of its Polish power plants, achieving a profit of 1 billion Czech crowns.
- The company signed a contract with the Czech government to transfer 80% of shares in a new nuclear project, which will not impact its balance sheet with future debt.
- CEZ AS (XPRA:CEZ) proposed a dividend of 47 Czech crowns per share, representing 80% of adjusted net income, indicating strong financial health.
Negative Points
- Net income declined by 6% compared to the first quarter of 2024, reaching 12.8 billion Czech crowns.
- CapEx saw a slight decline of 6%, reaching almost 7 billion Czech crowns.
- The company faced a negative impact of 5.5 billion Czech crowns due to declining power prices.
- Depreciation and amortization increased by 66%, driven by accelerated depreciation of coal assets and inclusion of gasnet.
- The generation segment experienced a decline of 5.5 billion Czech crowns, mainly due to price effects and lower output from renewables.
Q & A Highlights
Q: Can you explain the increase in depreciation and amortization guidance and its impact on net income?
A: Martin Novak, CFO, explained that the increase is due to higher depreciation on gas net assets and nuclear assets, which was underestimated. Despite the increase in EBITDA, the windfall tax impacts net income, particularly for power generators like CEZ, which is why the net income guidance remains unchanged.
Q: Are there any tangible plans for nationalizing CEZ under a different government?
A: Pavel Cyrani, Vice Chairman, stated that discussions about increasing government ownership are part of the election campaign, and it's difficult to comment on the rationale. The future strategy will depend on the election results and the new government's plans.
Q: With the sale of the new nuclear project, where do you see the best opportunities to reinvest freed-up CapEx?
A: Martin Novak noted that the sale preserves funds for planned investments rather than freeing up new funds. CEZ plans to invest heavily in distribution, renewables, and prolonging the life of current nuclear assets, with a focus on maintaining a balanced debt capacity.
Q: What is the current average power price and volume for this year?
A: Martin Novak stated that the current estimate is between €120 and €125 per megawatt hour, as included in their financial guidance.
Q: What are the implications of the nuclear project disposal on liabilities and operational roles?
A: Martin Novak clarified that the contingent equity liability of €1.7 billion is now removed. CEZ retains a 20% stake with a contract ensuring a 10% return on equity, with no significant risk involved.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
