CEZ's Consolidated Quarterly Report on Operational, Economic and Financial Results for 1st Half 2001, in accordance with IAS

Main Features

  • Demand for electricity (27.5 TWh) increased by 2.6%
  • ČEZ power plants´ share in the electricity wholesale market increased from 56.4% to 57.1%, ČEZ´s share (including repurchased electricity) slightly decreased from 64.4% to 64.3%
  • Net income CZK 6.9 bn, an increase of CZK 1.9 bn (by 37.9%)
  • Maximum load reached 10,445 MW, 3.1% (317 MW) higher than in 2000
  • The annual general meeting took place in June; payment of dividends to shareholders was approved for the first time in company history
  • Assistance to The National Property Fund of the Czech Republic for completion of power privatization will be provided by Deloitte & Touche; the company WEIL, GOTSHAL & MANGES will be the solicitors

Prague, 31 st July 2001

Income Statement in Accordance with International Accounting Standards (IAS)   30 June 2001 30 June 2000 Index 01/00
Operating revenues CZK m 29,684 26,411 112.4 %
Operating expenses CZK m 20,284 19,186 105.7 %
Fuel CZK m 6,922 6,490 106.7 %
Purchased power CZK m 2,479 2,721 91.1 %
Depreciation and amortization CZK m 4,651 4,603 101.0 %
Operating income CZK m 9,400 7,225 130.1 %
Other expenses (income) CZK m 1,040 521 199.6 %
Income before taxation CZK m 8,360 6,704 124.7 %
Income tax CZK m 1,463 1,703 85.9 %
Net income CZK m 6,897 5,001 137.9 %
Earnings per share (EPS) CZK 11.6 8.4 138.1 %
Price earning ratio (P/E)* 1 5.9 7.3 80.8 %
Return on equity (ROE) net* % 7.0 6.8 102.9 %
Return on total assets (ROA) net* % 4.2 3.9 107.7 %
Assets turnover* 1 0.26 0.26 100.0 %
Total indebtedness (provisions excluded) % 25.7 26.8 95.9 %
Long-term indebtedness % 21.1 23.6 89.4 %
* For the last 12 months

 

Revenues, Expenses, Income

Income Statement, Balance Sheet and Cash Flow Statement have been converted to International Accounting Standards (IAS) from Czech Accounting Principles and may differ significantly from the same data prepared according to Czech Accounting Principles. Presented data includes full consolidated data of ČEZ and ČEPS, and equity earnings of the affiliate (37.21% of the profit was from SeveroČeské doly).

Net income for the period January to June amounted to CZK 6.9 bn, an increase of CZK 1.9 bn (37.9%) in comparison with the same period in 2000. This improvement resulted from higher EBIT (by CZK 2.2 bn) and lower income taxes (by CZK 0.2 bn). However, exchange rate gains in the first half of 2000 were CZK 0.2 bn, while current exchange rate losses are CZK 0.4 bn, i. e. a combined deterioration of CZK 0.6 bn.

The total revenues of ČEZ amounted to CZK 29.7 bn and were CZK 3.3 bn (12.4%) higher than in the first half of 2000.

Operating expenses amounted to CZK 20.3 bn, and were CZK 1.1 bn (5.7%) higher than in the previous year.

Other expenses doubled to CZK 1.0 bn in comparison with the same period of 2000.

Income taxes amounted to CZK 1.5 bn, a decrease of CZK 0.2 bn (14.1%) in comparison with the same period of 2000.

Earnings per share increased from 8.4 CZK to 11.6 CZK due to an increase in profit.

The price earning ratio decreased from 7.3 to 5.9 due to the reduction in share prices (by 7.6%), while profit (for the last 12 months) increased by 13.9%.

The net return on equity (for the last 12 months) increased from 6.8% to 7.0% as a result of a slight increase in the average capitalization in comparison with that of profit.

The net return on total assets increased (from 3.9% to 4.2%) due to a slight increase in the average total assets in comparison with that of profit.

Assets turnover (for the last 12 months) stayed at the same level.

Total indebtedness (provisions excluded) decreased and amounted to 25.7%; long-term indebtedness also decreased to 21.1%.

The number of ČEZ employees decreased from 8,795 at the beginning of the year to 7,995 as of 30 June 2001, a drop of 800 employees (9.1%). In comparison with the same period of 2000, this is a reduction of 1,116 employees (12.2%).

Sale of Electricity

Revenues from sales of electricity (CZK 27.7 bn) increased by CZK 2.7 bn (by 10.6%). This is because of a change in methodology, where auxiliary services are now paid by REAS to ČEPS for all electricity delivered by REAS to final consumers, not only for electricity sold by ČEZ to REAS (as in 2000). The sale of electricity to regional distribution companies was 19 002 GWh, an increase of 400 GWh (by 2.1%).

Demand for electricity in the Czech Republic increased in comparison with the same half of last year by 693 GWh (by 2.6%) and reached 27.5 TWh. High voltage consumption increased as a whole by 534 GWh (by 3.4%). Low voltage consumption rose by 160 GWh (by 1.5%), although only household consumption increased (as a result of temperatures being, on average, 1.7°C lower than those for the first half of 2000).

ČEZ power plants´ share in meeting demand for electricity in the Czech Republic increased from 56.4% to 57.1% due to larger sales to regional distribution companies and stagnation of other producers´ production, consumption and sales. ČEZ´s share in meeting demand for electricity (including repurchased electricity from inland and abroad) slightly decreased by 0.1% to 64.3%.

Investment Program

In total, capital investments reached CZK 7.0 bn, 2.3 bn less than in the previous year.

In the first six months of 2001 CZK 2.4 bn was spent on the NPP Temelín. Initiation of the 1 st unit continued and power levels up to 55% of the nominal load were attained before breakdown due to the turbo-generator’s vibrations. Repairs should be finished in early August when initiation will be resumed. Commissioning of the 1 st unit is expected to happen n December 2001. The work on the 2nd unit continued according to the approved schedule, hot tests are expected in the second part of August and the predicted term of fuel loading is the end of this year.

Financing

During the first six months of 2001 ČEZ fulfilled all its financial commitments.

Net cash provided by operating activities increased to CZK 11.2 bn (by CZK 3.1 bn) due to higher profit, better balance of prepayments and lower interest payments.

The favourable trend which started in the second half of 2000, when operating activities brought in a higher amount of cash than was spent on investment continues. These facts allowed a sum of CZK 2.8 bn to be used for payments on borrowings.

Other information

The annual general meeting of shareholders, which took place in June, among other things,

  • approved changes in articles of association
  • agreed, in connection with finishing ČEZ´s privatization, to provide information about the company to parties concerned with privatizing the State’s major stake as well as parties chosen for advisors
  • approved fulfilment of company due diligence in connection with cover of company financing for the next 3 years
  • approved payments of directors’ fees and dividends of CZK 2 (before taxation) per share of the nominal value of CZK 100. Dividend payments will be provided by Česká spořitelna from 1 st August to 31st October, 2001
  • approved some personnel changes of the Supervisory Board.

The Natio nal Property Fund of the Czech Republic signed an agreement in June with the company WEIL, GOTSHAL & MANGES as the solicitors for completing the privatization ČEZ and six regional distribution companies.

The Czech government decided in July that assistance to the National Property Fund of the Czech Republic will be provided by Deloitte & Touche.

At the request of E. ON, termination of the ČEZ - E. ON contract is being negotiated. Electricity deliveries from ČEZ have been interrupted since the 1 st of July. As the demand for electricity in the Czech Republic is rising and other exporting possibilities exist, ČEZ does not expect a reduction in the power plants’ production due to the termination of this contract

Income Statement in Accordance with International Accounting Standards (IAS) (CZK m) 30 June 2001 30 June 2000
Operating revenues 29,684 26,411
Sales of electricity 27,674 25,017
Heat sales and other revenues 2,010 1,394
Operating expenses 20,284 19,186
Fuel 6,922 6,490
Purchased power 2,479 2,721
Repairs and maintenance 1,187 1,198
Depreciation and amortization 4,651 4,603
Salaries and wages 2,012 1,797
Materials and supplies 871 924
Other operating expenses 2,162 1,453
Income before other expenses/income and income tax 9,400 7,225
Other expenses/income 1,040 521
Interest income -107 -108
Interest on debt, net of capitalized interest 266 256
Interest on nuclear provisions 732 633
Exchange rate losses (gains) 358 -199
Other expenses/income 115 143
Equity in earnings of affiliate -324 -204
Income before income tax 8,360 6,704
Income tax 1,463 1,703
Net income 6,897 5,001
Cash Flow in Accordance with International Accounting Standards (IAS) (CZK m) 30 June 2001 30 June 2000
Cash as at 1 January 3,219 4,357
Operating activities: 11,166 8,030
- Income before income taxes 8,360 6,704
- Depreciation and amortization 4,659 4,606
- Amortization of nuclear fuel 781 795
- Provision for nuclear decommissioning and fuel storage 371 199
- Changes in assets and liabilities -1,697 -2,466
Investment activities -6,988 -9,298
Financing activities -2,804 -2,529
Net effect of currency translation in cash -52 23
Cash as at 30 June 4,541 583
  30 June 2001 30 June 2000
Net electricity generation in the Czech Republic (GWh) 35,542 34,437
Electricity generation at ČEZ - net (GWh) 24,543 23,438
Electricity sold by ČEZ in the Czech Republic (GWh) 19,413 19,023
- Electricity sold by ČEZ to REAS (GWh) 19,002 18,602
- Price of electricity sold to REAS (CZK/MWh) 951 917*/
ČEZ´s electricity exports (GWh) 6,758 6,235
ČEZ´s electricity imports (GWh) 453 505
*/ The 2000 price is cleaned of transfer and control service fee, which has been paid directly from regional distribution companies to ČEPS, a.s. since 2001.
Balance Sheet in Accordance with International Accounting Standards (IAS)(CZK m) 30 June 2001 31 Dec 2000
Assets 225,669 222,260
Fixed assets 213,245 211,384
Plant in service 177,334 177,181
Less accumulated provision for depreciation 88,336 84,228
Net plant in service 88,998 92,953
Nuclear fuel, at amortized cost 5,877 5,764
Construction work in progress 108,557 103,591
Investment in affiliate 5,483 5,225
Other non-current assets, net 4,330 3,851
Current assets 12,424 10,876
Cash 4,541 3,219
Receivables, net 4,317 4,032
Materials and supplies, net 2,329 2,268
Fossil fuel stock 644 712
Prepayments 593 645
Shareholders´ equity and liabilities 225,669 222,260
Shareholders´ equity 135,155 129,442
Stated capital 59,209 59,209
Retained earnings 75,946 70,233
Long-term liabilities 68,990 70,606
Long-term debt, net amount due within one year 47,668 49,704
Accumulated provision for nuclear decommissioning    
and fuel storage 21,322 20,902
Deferred income taxes, net 8,455 8,057
Current liabilities 13,069 14,155
Short-term loans 0 1,104
Long-term debt due within one year 5,513 4,703
Accounts payable 4,774 5,035
Accrued liabilities 2,782 3,313
Consolidated Statement of Shareholders´ Equity in accordance with IAS (CZK m) Retained Earnings Total
December 31, 1999 62,996 122,205
Net Income for the period 1 - 6 / 2000 5,001 5,001
June 30, 2000 67,997 127,206
Net Income for the period 7 - 12 / 2000 2,236 2,236
December 31, 2000 70,233 129,442
Net Income for the period 1 - 6 / 2001 6,897 6,897
Dividends declared -1,184 -1,184
June 30, 2001 75,946 135,155
Capacity, Employees 30 June 2001 31 Dec 2000
Installed capacity ČEZ (MW) 10,146 10,146
Number of employees (pers) 7,995 8,795
Specific number of employees (pers/MW) 0.788 0.867