CEZ (CEZ) Q3 2024 earnings summary

Executive summary

• Operating revenue for the first nine months of 2024 decreased by 1% year-over-year to CZK 244.1 billion, while EBITDA rose by 5% to CZK 100.0 billion and net income fell 21% to CZK 23.4 billion; adjusted net income was CZK 24.8 billion.

• CapEx increased by 25% year-over-year to CZK 34.8 billion, reflecting higher investments in nuclear, renewables, and distribution.

• Acquisition of a 55.21% stake in GasNet, Czechia's largest gas distributor, was finalized and consolidated from September 2024.

• Agreement to acquire a 20% stake in Rolls-Royce SMR, pending regulatory approval, to participate in small modular reactor development.

• Sale of Polish coal assets to ResInvest Group, with transaction closure expected in Q1 2025, marks a major portfolio shift.

Financial highlights

• EBITDA for the first nine months rose by CZK 5 billion (+5%) year-over-year, mainly due to higher realized prices and the inclusion of GasNet.

• Net income and adjusted net income both declined by over 21% year-over-year, impacted by higher income taxes and lower trading margins.

• Operating cash flow decreased 19% year-over-year, mainly due to lower inflows from margining and a one-off positive effect in 2023.

• CapEx rose 25% to CZK 34.8 billion, driven by investments in nuclear fuel, renewables, and distribution assets.

• Dividends of CZK 52 per share (total CZK 27,914 million) were approved and paid.

Outlook and guidance

• Full-year 2024 EBITDA guidance raised to CZK 126–130 billion, up from CZK 118–122 billion, driven by GasNet consolidation and better trading results.

• Adjusted net income for 2024 expected in the range of CZK 26–30 billion.

• Estimated windfall taxes for 2024 are CZK 29–33 billion.

• The company is transitioning its generation portfolio to low-emission sources, aiming for full climate neutrality by 2040 and a significant reduction in coal-based production by 2030.

• Key risks include generation facility availability, realized electricity prices, commodity trading profits, and windfall tax/deferred tax amounts.