ČEZ headquarters in Prague – illustrative photo.
Prague – Energetická společnost ČEZ improved significantly last year, according to analysts' estimates. According to their estimates, the company's net profit for the whole year rose above 70 billion crowns, which would be up to seven times more than the year before. This will also be reflected in the payment of the dividend. Last year, the sharp rise in energy prices was reflected in the company's finances. Analysts contacted by ČTK agreed on this. The company will publish its financial results for last year next week on Tuesday.
Last year, ČEZ reported an increase in net profit from 6.7 billion crowns to 52.3 billion crowns for the first three quarters of the year. Operating revenues for the first three quarters of last year increased by 35 percent to 211.1 billion crowns.
“We expect significant growth at all levels due to the sharp rise in the price of electricity,” said J&T Bank analyst Milan Lávička. He reminded that while the year before last the average realized price of electricity was approximately 55 euros (about 1320 CZK) per MWh, last year it was twice as much. Lávička therefore expects that the adjusted profit will be on the upper edge of the outlook of the ČEZ management, which at the end of last year expected a net profit of between CZK 65 and 75 billion. Komerční banka analyst Bohumil Trampota expects a net profit of over CZK 71 billion. According to him, the company will thus fulfill its last year's goals.
According to analysts, it is still unclear whether the company will announce a specific dividend proposal next week. However, if ČEZ were to give 60 to 80 percent of the profit as dividends, the dividend could be about CZK 110 per share, Trampota said. That would mean a gross return of about 11 percent. Lávička expects a similar amount of dividend. According to him, the state as the main shareholder could then propose a possible payment of the entire profit. In such a case, the dividend per share would reach up to CZK 140. “Due to the extraordinary taxes, however, we do not expect the payment of the entire profit,” Lávička added.
In contrast to previous practices, ČEZ published this year's financial outlook already at the beginning of February, the company expects adjusted net profit in the range of CZK 30 to 40 billion, the analyst pointed out Fio Banka Jan Raška. According to him, ČEZ's profitability will be negatively affected this year by regulatory interventions in the form of price ceilings for power electricity and extraordinary taxation, the so-called windfall tax. “In particular, the existence of the windfall tax means a significant impact on the economy, the expected year-on-year decrease in net profit from approx. 70 billion CZK to 30 to 40 billion CZK is significant,” Raška added.
ČEZ 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.