* CEZ sees 15 pct drop in 2011 net profit to CZK 40.1 bln
* Expects higher output in 2011 vs 2010, prices stay weak
* Pre-sold 65 percent of 2012, takes advantage of price rise
* Shares fall 2.4 pct
(Updates with company comment, analyst, details)
By Jan Korselt and Jason Hovet
PRAGUE, Feb 28 (Reuters) - Czech power group CEZ <>
forecast a 15 percent drop in 2011 net profit because of low
prices, new taxes and a firming currency, surprising the market
and sending its shares down 2 percent.
Central Europe's biggest listed company, with a market value
of $25.2 billion, said it expected a net profit of 40.1 billion
crowns ($2.3 billion) in 2011, continuing a slide from a record
51.9 billion posted in 2009 -- the last year CEZ was able to
book forward sales at pre-economic crisis prices.
The power group, 69.8 percent owned by the Czech state, has
cut planned investment by a fifth for coming years, partly in
response to weaker prices, and is pulling out of projects abroad
to focus on the domestic market.
The group had mistakenly released headline 2010 figures on
Feb. 24, showing it beat guidance, though it missed estimates by
more than 1 billion crowns in the fourth quarter after a
surprise 9 percent fall in net profit to 7.12 billion crowns due
to a writeoff in one of its foreign units. []
Shares in the company fell 2.3 percent to 810 crowns by 1224
GMT, a one-week low. Analysts said the outlook for 2011 was
harsher than they expected, but left room for raised guidance.
"The guidance is weak, lower than expected," Wood & Co
analyst Jan Tomanik said. "Nevertheless, that is standard
conservatism from CEZ."
BEATS 2010 GUIDANCE
CEZ said it expects full-year 2011 earnings before interest,
tax, depreciation and amortisation (EBITDA) at 84.8 billion
crowns, down 5 percent from 2010.
While it expects output to increase 2.6 percent in 2011 to
64.3 terawatt hours, the group, like other European utilities,
continues to face tougher market conditions.
Germany's RWE <RWEG.DE>, Europe's fifth-largest utility,
said last week it would cut investments and sell assets to limit
the burden of higher taxes and lower power prices that will lead
to three years of falling profits. []
CEZ started pre-selling most output in 2008, helping it
through the economic downturn before falling prices caught up
with the group last year.
CEZ is also facing new taxes on emissions allowances that
will cost it around 4 billion crowns, along with a strengthening
crown which is hurting hedging operations.
The company said it had booked 65 percent of power sales for
2012 and a fifth for 2013. The average price for next year is
about 51 euros to 52 per megawatt hour, similar to 2011 and
compared with 53 for 2013, sales chief Alan Svoboda said.
He added CEZ has sped up sales in the past few weeks of
electricity for 2012 delivery because of a rally in the
benchmark contract.
(Editing by David Holmes)
($1=17.79 Czech Crown)
