ČEZ announces lower Q1 net profit, sticks to 2012 forecast

Czech electricity group ČEZ announced a 16 percent year-on-year drop in first quarter profits to Kč14.4 billion. The result comes in lower than most analysts had expected.

The near 70 percent state-owned group blamed much of the deterioration on a decision by the Albanian energy regulator to increase electricity prices hitting ČEZ’s distribution unit there and the extraordinary derivatives and currency profits from the first quarter of 2011.

The group said it expects net profit for the whole of 2012 to come in at Kč  41.0 billion, sticking to its earlier prediction which is slightly above the Kč40.8 billion net profit for 2011.

Hopeful signs for the biggest electricity group in Central Europe were a 7.0 percent rise in first quarter earnings to Kč 60.8 billion on higher electricity prices and increased power production from coal and renewable capacity. Overall power production in the first quarter climbed by 3.0 percent year-on-year.

The Albanian hit centers on the regulator’s decision to impose a 90 percent hike in the price that ČEZ’s distribution company must pay for electricity while maintaining the prices it can charge customers.