By Sean Carney
PRAGUE--Czech power company CEZ AS (BAACEZ.PR) Thursday said its
fourth-quarter net profit declined more than 50% on the year due to
lower electricity prices, reduced power consumption and higher
operating costs.
Looking forward, the 70%-state-owned company said the main risks
it faces this year include national regulatory challenges in
south-eastern European countries, such as Bulgaria, European Union
regulatory and subsidy issues concerning renewable energy sources,
and the ongoing economic crisis in Europe.
CEZ posted a net profit of 6.9 billion Czech koruna ($353.5
million) for the three months ended Dec. 31, compared with CZK14.30
billion in the same period a year earlier. However, the company
said it met its guidance for full-year profit in 2012.
The market had expected a fourth-quarter net profit of CZK7.03
billion, according to a Dow Jones Newswires poll of analysts.
Revenue in the period was down 11% on the year at CZK52.6
billion, compared with market expectations of CZK60.39 billion.
CEZ said that in the period it booked a CZK1.5 billion downward
revaluation of the shares it holds in Hungarian oil and gas company
MOL Nyrt. (MOL.BU), a CZK800 million foreign-exchange loss and a
CZK800 million write-down on its Romanian assets.
Earnings before interest, tax, depreciation and amortization, or
Ebitda, for the whole year totaled CZK85.5 billion, and net profit
was CZK40.2 billion.
CEZ's guidance for 2012 called for Ebitda of CZK85 billion and a
net profit of CZK40 billion.
CEZ said it expects Ebitda of CZK80 billion this year and a net
profit of CZK37 billion, adding that the declines from last year
were due to the negative situation facing European utilities,
falling power prices and lower gains from emissions allowances.
The company will hold a press conference at 0900 GMT to discuss
its results.
CEZ's share price has fallen roughly 10% since the start of this
year after Albania's authorities revoked its operating license
saying the company failed to import sufficient energy and invest in
the country's power grid. CEZ is facing a similar situation in
Bulgaria.
CEZ shares closed down 1.7% on the day Wednesday at CZK597 amid
a higher overall market in Prague.
Write to Sean Carney at sean.carney@wsj.com
Go to http://blogs.wsj.com/emergingeurope/ for the WSJ blog on
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