ČEZ maintains 2015 profit target in spite of reverses


A continued squeeze on electricity prices and problems with its Dukovany and Temelín nuclear power plants have hit the Czech Republic’s biggest electricity company.

Photo: Filip JandourekPhoto: Filip Jandourek ČEZ delivered third quarter net profit of 3.2 billion crowns with profit for the first nine months of the year adding up to 18.6 billion crowns on Tuesday. Although operational earnings are down on expectations, ČEZ is sticking to its previous full year profit expectations of 27 billion crowns. It has ongoing cost cutting and the fact that it should reclaim some of the windfall tax on emissions permits imposed by the Czech government in 2011 and 2012 to thank for that feat.

ČEZ said Tuesday that it expects it three closed nuclear units at its Dukovany nuclear reactor to be up and running normally by Christmas. The three units have been closed with only one now running because of problems with X-rays taken of key piping at the units. The company sub-contracted to do the work provided blurred images with the work needing to be repeated and several dozen welds repaired.

Problems at both Dukovany and Temelín mean that ČEZ has already given up on its hopes of record output from its nuclear facilities this year.

Meanwhile, ČEZ is poring over the thousands of pages connected with Swedish power company Vattenfall’s plans to sell its lignite mines and brown coal-fired and hydro power plants in Germany. ČEZ, which says the German assets mirror its power production profile and know-how, will have to decide by December 21 whether to make an indicative bid. Czech companies EPH and PPF have teamed up to look at the Vattenfall assets as well with mining company Czech Coal also in the frame.

But compared to other European power companies, ČEZ can take some consolation. The woes of German company RWE are such that its market capitalisation has now dropped to around 220 billion crowns. That means, according to ČEZ, to it has now leapfrogged RWE and is now the seventh biggest European electricity producer.