EARNINGS POLL-Power firm CEZ Q2 net profit seen up 22 pct

...Jan Korselt 
    Net profit at Czech power firm 
CEZ  is expected to rise by 21.6 percent in the 
second quarter on higher electricity prices and acquisitions, 
which compensated for slowing growth in domestic demand, a 
Reuters poll showed on Monday. 
    The average forecast in a Reuters survey of nine analysts saw 
net profit of 7.1 billion crowns ($346 million) for the second 
quarter, compared with 5.8 billion in the same period last year. 
    Sales were seen at 39.7 billion crowns, up 11.3 
percent year-on-year. 
    "The higher sales on year-on-year basis are mainly due to 
the 16 percent increase of 2007 electricity prices and the 
inclusion of Polish power plants... and Bulgarian power plant 
Varna," said Jakub Zidon, an analyst at Ceska Sporitelna. 
    CEZ started to consolidate two Polish power plants in June 
2006, while the acquisition of Varna was finalised last October. 
    The average forecast for earnings before interest, tax, 
depreciation and amortisation (EBITDA) was 16.0 billion crowns, 
up 16 percent year-on-year. 
    In July, CEZ warned it faced a challenge to meet its 
full-year projection of 70.9 billion crown EBITDA, due to a mild 
winter that curbed demand for heating. 
    Therefore, analysts will closely watch any further comments 
on the company's outlook. 
    "Though the markets are nowadays more interested in the 
share buyback than the quarterly results, those could clearly 
suggest if we will have to revise the expected results for the 
full 2007," said Marek Hatlapatka, an analyst at the 
Cyrrus brokerage. 
    CEZ shares have risen by 10.5 percent so far this year, 
underpinned by a share buy-back which has so far drained almost 
4 percent of outstanding stock from the market. 
    On Friday afternoon, the stock closed at 1,062 crowns, 2.4 
percent lower on a broad market sell-off due to credit worries 
in the United States, retreating further from its all-time high 
from July. It opened 1 percent up on Monday. 
    The company, with a market capitalisation of $31.3 billion, 
is 68 percent state owned, but the government plans to sell 
a 7 percent stake this year to fund road building. 
     
    Consolidated figures in billions of crowns: 
 Q2/07                Average   Median      Range     Q2 2006 
 Sales                 39.66    39.80    38.20-41.51    35.64 
 Core profit (EBITDA)  15.97    15.90    15.59-16.40    13.77 
 Oper profit (EBIT)    10.48    10.40    10.00-11.18     8.39 
 Net profit             7.05     7.05     6.37- 7.60     5.80 
     
 H1/07                Average   Median      Range     H1 2006 
 Sales                 83.79    83.90    82.30-85.63    77.18 
 Core profit (EBITDA)  37.70    37.60    37.33-38.10    34.17 
 Oper profit (EBIT)    26.79    26.71    26.30-27.49    23.21 
 Net profit            19.69    19.73    19.05-20.00    15.79 
    NOTE - The following equity houses took part in the poll: 
Atlantik FT, BH Securities, Cyrrus, Erste Bank/Ceska Sporitelna, 
KBC/Patria Finance, Raiffeisenbank, Sal.Oppenheim, UniCredit 
Global Research, Wood&Company. 
 

[PRAGUE/Reuters/Finance.cz]