Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CEZ AS (CZAVF, Financial) reported an 11% increase in EBITDA, reaching CZK69.2 billion.
- Net income grew by 5% to CZK21.1 billion compared to the previous year.
- The company raised its full-year EBITDA guidance to CZK118 billion to CZK122 billion.
- Distribution segment showed a positive impact of CZK1.4 billion, indicating stability.
- CEZ AS (CZAVF) ranks among the top 10% of companies globally in ESG performance.
Negative Points
- Operating cash flow was negative by almost 50%, attributed to margin payments.
- The trading profit decreased by CZK3.2 billion due to lower income from proprietary trading.
- Mining segment EBITDA was CZK1.5 billion below last year, affected by a warm winter.
- Net income faced a negative impact from higher depreciation, amortization, and interest expenses.
- The company is involved in arbitration with Gazprom over gas supply issues, adding legal uncertainty.
Q & A Highlights
Q: Could you elaborate on the financing model for the new nuclear units, especially considering the size of the CapEx requirement?
A: Martin Novak, CFO, explained that the financing for the new nuclear units involves a Special Purpose Vehicle (SPV) with the government providing more than 95% of the financing through a zero-interest loan. The structure is designed to minimize costs for future power deliveries. The framework is being adapted for two units, but it requires notification with the European Commission.
Q: Has there been any progress on the potential removal of the windfall tax for 2025?
A: Martin Novak stated that there has been no recent discussion or legislative process initiated to remove the windfall tax for 2025. The company assumes the tax will remain in place for 2024 and potentially 2025.
Q: What is the company's view on power prices for 2028 to 2030, given the current forward curve?
A: Ludek Horn, Head of Trading, mentioned that there are no current indications that power prices will increase above the current forward curve, which is around EUR73 for 2028.
Q: Can you clarify the timeline and financial commitment for the first reactor, and how would the second reactor be affected?
A: Martin Novak explained that the initial commitment is EUR200 million, with a cap of EUR1.7 billion if issues arise due to CEZ's fault. The timeline for construction is expected to start around 2028-2029, and the same financial terms are being discussed for the second reactor.
Q: What is the expected construction timeline for the new nuclear units, and when will they contribute positively to P&L?
A: Martin Novak indicated that the construction timeline for the new nuclear units is planned for 2036 and 2038. The positive contribution to P&L will be limited as the state will receive any benefits above the contract for differences.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
