CEZ (CEZ) Q2 2024 earnings summary

Executive summary

• EBITDA for H1 2024 increased by 11% to CZK 69.2 billion, while net income declined 5% year-over-year to CZK 21.1 billion; operating revenues fell 5% to CZK 161.7 billion.

• Operating cash flow dropped by nearly 50% due to margin movements and a one-off recovery in H1 2023.

• CapEx for H1 2024 was CZK 20.5 billion, up 21% year-over-year, driven by investments in nuclear, renewables, and distribution.

• The company outperformed analyst expectations for the quarter and first half.

• The Group continued its "VISION 2030 – Clean Energy of Tomorrow" strategy, focusing on low-emission transformation and climate neutrality by 2040.

Financial highlights

• EBITDA growth was mainly driven by the generation segment, especially nuclear, and the discontinuation of power price caps.

• Trading profit fell by CZK 3.2 billion year-over-year but remains above long-term averages.

• Distribution segment EBITDA rose 16% year-over-year, while mining EBITDA dropped 27% due to warm winter and lower coal sales.

• Sales segment EBITDA grew 20% year-over-year, led by retail and international energy services.

• Depreciation and amortization increased 5%; other income/expenses at CZK 4.5 billion vs. CZK 1.2 billion last year.

Outlook and guidance

• Full-year 2024 EBITDA guidance raised to CZK 118–122 billion; net income guidance unchanged at CZK 25–30 billion.

• Guidance reflects higher trading profits, lower distribution costs, and higher expected power plant deployment.

• Windfall tax remains a significant factor, with a marginal tax rate at 81% on incremental EBITDA; estimated at CZK 27–34 billion for 2024.

• No legislative process underway to remove windfall tax for 2024 or 2025.

• Guidance excludes potential Czech Gas Networks acquisition, pending EC approval.