* Right time to sell power for 2012 - Svoboda
* Might help keep 2012 profits, dividend stable
* Below analysts' expectations who expect higher profits
By Adveith Nair and Peter Dinkloh
LONDON, March 15 (Reuters) - An unexpected upturn in power
prices might keep earnings and dividends of CEZ <>,
central Europe's biggest utility, stable next year, an executive
told Reuters on Tuesday.
The company is using the increase in prices to sell power to
be delivered next year to boost its profitability, said Sales
Director Alan Svoboda, after an earnings drop predicted for 2011
shocked investors two weeks ago. []
"The performance should improve in coming years, in fact
much better than what we expect in our financial projection,"
said Svoboda.
"If they (the government) expected that the payout would go
lower now with these prices it might actually not be the case or
if so only marginal," said the executive, reiterating the
state-controlled utility will pay out 50 to 60 percent of its
net income.
Power prices in Germany, Europe's largest power market and a
a benchmark for continental European prices, reached their
highest in more than two years on Tuesday at 58.15 euros
($81.31) a megawatt hour.
"I see good rationale for locking in the rest of 2012
(forward prices) right now," Svoboda said.
But CEZ's earnings expectations are still below market
expectations. Analysts expect earnings before interest, taxes,
depreciation and amortization to rise some 5 percent and net
income to increase some 10 percent next year, according to
Thomson Reuters StarMine.
"If EBITDA is going to grow net income would actually stay
flat as a back-of-the-envelope-calculation as to what these
prices could mean," the executive said.
Svoboda hinted the company could also be interested in
buying Swedish-German utility group Vattenfal's []
assets, especially those in Poland, after it contracts future
sales.
"It's a market where there are many sellers, and few buyers,
so that could be advantageous for us."
It was too soon to draw any conclusions with regards to
CEZ's projects to build nuclear power plants, Svovoda said.
"We need to understand what has really happened in Japan and
what are the safety concerns and what will be the procedure to
be established for a review in Europe," he said.
CEZ plans to build two additional units at its Temelin plant
near Austria as well as up to two other units in neighbouring
Slovakia and another at its Dukovany facility.
The Czech Republic has no immediate plans to review its
atomic expansion plans due to the nuclear crisis in Japan
following an earthquake and tsunami, the Czech's nuclear safety
office chief had said on Monday.
($1=.7152 Euro)
(Editing by Jon Loades-Carter)
