Dominant Czech power company CEZ made a net profit of CZK7.5bn (euro298mn) in the second quarter, down 35% from a year ago, on revenue down 3% to CZK74.3bn, the 70% state-owned utility reported on August 8. Ebitda fell 3% to CZK28.8bn.

The results were better than expected, with lower profits from commodity trading and higher nuclear outages, but higher profits because of the end of the obligation to pay levies on excess revenues from power generation. CEZ shares rose 0.67% to CZK897 in early trading in Prague.

CEZ raised its 2024 full-year Ebitda outlook to CZK118bn to CZK122bn and confirmed its expected adjusted net profit of CZK25bn to CZK30bn. 

The outlook is based on an average realised electricity price of eur132-136/MWh (up from eur130-135), and an expected windfall tax payment of CZK27bn-34bn (up from CZK25bn-32bn). CEZ has already sold 71% of its production for next year at eur120/MWh.

CEZ is embarking on a huge investment programme. This year, it has already invested CZK20.5bn in the acquisition of fixed assets, up CZK3.6bn year-on-year.

Last month the Czech government unexpectedly chose South Korea’s KHNP to build two nuclear units at the existing CEZ Dukovany plant. In the next 3-5 years CEZ is to negotiate with the KHNP the possibility of constructing two further nuclear units at Czechia’s other nuclear power plant in Temelin.

The price per nuclear unit is CZK200bn (€7.9bn) at current prices. Construction of the first unit is expected to start in 2029, with the reactor to go online by 2036.

The government plans to make an interest-free 30-year loan to CEZ for the first unit, with repayments being introduced only after the nuclear unit becomes operational.  There will also be a contract for difference to guarantee CEZ a minimum price for the electricity produced. 

The European Commission approved Czechia's state support for the construction and operation of the new nuclear unit in May. It is far from clear that the EU will approve building of the other three units on the same basis.

CEZ is also investing heavily in its distribution network. CEZ Distribuce  announced in May it is to invest CZK18.6bn into distribution networks across the country, with CZK8.3bn aimed at easier connectivity of renewable resources, mainly photovoltaic power plants.

Electricity generation from renewable and nuclear sources fell by 4% year-on-year in the first half, the company reported. While renewables generated 0.1 TWh more electricity, mainly due to above-average hydrological conditions, nuclear generation fell by 0.7 TWh due to differences in the timing of planned outages and the availability of nuclear plants.

Electricity consumption in ČEZ Distribuce’s distribution territory fell by 2% year-on-year to 17 TWh, with household consumption falling by 5%, mainly due to the warm weather, while consumption by large industrial enterprises remained flat. Climate- and calendar-adjusted electricity consumption fell by 1%.