Prague - Czech semi-state energy company CEZ's net profit dropped 40 percent to CZK 17.2 billion (EUR 620 million) in the first half of 2014. The decrease was caused by a drop in wholesale electricity prices and an exceptionally warm winter, says the company. Electricity prices decreased from almost EUR 60 per megawatt-hour in 2011 to approximately EUR 30 this spring.
The company's operating revenues decreased from CZK 113 billion (EUR 4.1 billion) to CZK 101.7 billion (EUR 3.6 billion). EBITDA was CZK 39.9 billion (EUR 1.4 billion).
CEZ expects to post a net profit of CZK 29 billion (a little over one billion euros) this year, a year-on-year decrease of almost 18 percent. Such a result would be the worst since 2006, when CEZ's net profit was CZK 28.8 billion.
Last year, CEZ reported a net profit of CZK 35.2 billion (EUR 1.3 billion), a 12 percent drop from 2012's profit of CZK 40.2 billion (EUR 1.4 billion).
“I consider the results 'moderately positive'. I praise a better-than-expected EBITDA and further cuts in fixed expenses,” said Patria Direct analyst Tomas Sykora.
Amid decreasing profits, CEZ is currently focusing at cutting expenses. CEZ plans to cut 16 percent of permanent operating costs in 2015 and 2016, said CEO and board chairman Daniel Benes.
CEZ is still the Czech Republic's most profitable company, but its shareholders have few reasons to be cheerful.
CEZ paid CZK 21.5 billion (EUR 770 million), or 61 percent of last year's net profit, as dividends to shareholders. Most of this sum, about CZK 15 billion (EUR 540 million) went to CEZ's biggest shareholder, the Czech state, which owns an approximately 70 percent stake in the energy giant.
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