* Q3 net profit up 46 pct
* Share price attractive for buyback, company says
* Company expects only marginal impact from financial crisis
* Market disappointed on lack of a raised full-year forecast
* Stock closes down over 5.5 pct
(Adds comments from company, analyst, background)
By Jan Korselt and Jana Mlcochova
PRAGUE, Nov 13 (Reuters) - Czech power group CEZ <>
posted better-than expected third-quarter earnings and said
rising power demand will help it through the global financial
crisis.
However, the firm disappointed the market by not raising its
full-year forecast, and its shares ended 5.62 percent lower on
Thursday at 722 crowns, only slightly outperforming a 6 percent
fall in the main Prague index.
CEZ, central Europe's largest listed company, said
third-quarter net profit excluding minorities jumped 46 percent
year-on-year to 12.3 billion crowns ($606 million), beating an
analysts' consensus estimate of 11.33 billion, on the back of
rising electricity prices.
Revenues edged up 3 percent to 41.4 billion crowns, slightly
below market estimate.
"Overall, the results are very good and they confirm the
strong fundamentals of the company," said Petr Novak, an analyst
at Atlantik FT brokerage.
CEZ also said it expected to go ahead with a planned share
buyback as the share price, which has fallen 47 percent since
the start of the year, made it attractive.
"We always declared that there are two conditions that must
be fulfilled for us to carry on with another buyback, (one of)
which is an attractiveness of our share price," Chief Financial
Officer Martin Novak told a news conference.
The company reiterated its full-year outlook for net profit
including minorities of 48.6 billion crowns and earnings before
interest, tax, depreciation and amortisation (EBITDA) of 87
billion, saying a longer shutdown at a nuclear unit must be
compensated for by more expensive coal generation.
CEZ said it was ready to cut margins to ease pressure on
customers hit by the year-long financial crisis that has started
to squeeze central Europe's fast-growing economies.
Central European power prices playing catch up with German
levels has helped lift the majority state-owned power group's
profits three-fold since 2004, and many analysts had expected
guidance for this year to be lifted.
Acquisitions for the low-indebted company have proven
scarce, switching CEZ's focus to partnerships and greenfield
projects, and CEZ ended a year-long buyback in May that helped
hike its debt level to 1.2 times EBITDA from 0.3 time.
This time around, however, CEZ would likely pay for a
buyback with its own funds, as it has become more expensive to
borrow money.
"We will be pleased to use the free cash that we dispose of
for this buyback; we are unlikely to issue a massive bond in
order to buy our own shares within a month," Novak said.
CEZ had said it expected to maintain double-digit percentage
profit growth into 2010 as power demand grows, and European
power firms have been largely immune to the financial crisis.
On Wednesday, Germany's E.ON <EONGn.DE> confirmed an
expected rise in operating profit of up to 10 percent in 2008 as
a string of utilities reported forecast-beating results for the
quarter.
"In our expectations, the financial crisis will influence
CEZ's financial performance only marginally," Chief Executive
Martin Roman said. "Electricity consumption will grow, only the
pace will fall."
CEZ stock trades at 8.7 times forecast earnings, below a
sector average of 12, while Germany's E.ON <EONGn.DE> trades at
9.4 times forecast earnings, and Italy's Enel <ENEI.MI> at 8.1.
(Writing by Jason Hovet; editing by Simon Jessop)
