Albania: CEZ gets regular payments for exiting Distribution company

, SEE Energy News

CEZ Group has received a tranche of 22 million euros from Albania as an amount that is given in exchange for return of property to the Albanian state.

At the end of June last year, ČEZ agreed with Albanian representatives that it will be paid about 100MEUR by 2018 in annual installments, that is an approximate equivalent of its initial investment in the acquisition of Albania’s distribution company CEZ Shpërndarje.

Net profit of energy group ČEZ fell by 11 percent to 570MEUR in H1 in annual terms and its sales rose by 1 percent to 102.9 billion Kč thanks to higher sales of electricity, gas and heat, ČEZ said on its website today.

Adjusted net profit was 19 percent lower at 15.7 billion Kč.

“Last year, we launched a vast program of savings and growth measures that helped raise electricity and heat sales and particularly gas sales in annual terms,” said board chairman and CEO of ČEZ Daniel Beneš.

“We have also managed to cut fixed operating costs by more than 1 billion Kč annually,” Benes said.

Electricity supplies rose by 8 percent, heat supplies by 9 percent and gas supplies by 28 percent, he said.

A longer shutdown of nuclear power plant Temelín and delayed completion of a new coal-fired source at Ledvice, northern Bohemia, make it impossible to raise production at nuclear and coal-fired power plants, Benes said.

The planned closure of the second unit at Temelín began on April 18 and was to end in mid-June but the unit reached full performance last Monday. There were problems with an internal steam generator leak.

Analysts expected ČEZ to generate a first-half net profit between 14 billion Kč and 15 billion Kč.

“Market estimates were somewhat more cautious following Q1 experience where the net profit figure of ČEZ was below market expectations,” BH Securities analyst Petr Hlinomaz stated.

J&T Banka analyst Bohumil Trampota said that ČEZ has reduced its operating profit EBITDA target for this year by 2 billion Kč to 68 billion Kč.

An outlook for net profit adjusted for extraordinary items remained unchanged at 27 billion Kč.

“It is important that the net profit target has not changed as dividends are distributed from net profits,” Trampota said.

“We see the results as positive mainly from a point of view of surprising sales and net earnings,” said Roklen analyst Lenka Dvořáková Švejdová.

“ČEZ is successfully raising sales volumes at home and abroad, which more than offset a drop in electricity production caused by unexpected shutdowns at nuclear plants,” Švejdová said.

The operating result reflected a victory in a dispute with rail track management company Správy železniční dopravní cesty (SŽDC) worth 1.07 billion Kč. This year, SŽDC has lost the court dispute over unpurchased electricity after five years.

The parent company ČEZ received more than 5.7 billion Kč during the period thanks to consolidation and cuts in financial exposure abroad.

In Q2 alone, ČEZ’s net profit grew by an annual rate of 7 percent to 7.8 billion Kč. Sales were 2.8 percent higher at 49.9 billion Kč.

ČEZ, the largest Czech energy company, is about 70 percent owned by the state via the Finance Ministry.

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