CEZ's Consolidated Quarterly Report on Operational, Economic and Financial Results for 1st Quarter 2001, in accordance with IAS
Main Features
- Demand for electricity (15.1 TWh) increased by 0.6% (estimated by ČEZ)
- ČEZ´s share in the electricity wholesale market increased from 64.1% to 64.4% (estimated by ČEZ) largely as a result of lower levels of generated electricity by other producers
- Net income CZK 4.7 bn, an increase of CZK 0.7 bn (by 16.1%)
- Maximum load reached 10,445 MW and is 3.1% (317 MW) higher than in 2000
- Twelve potential investors from EU and USA expressed preliminary interest in buying the state stake in ČEZ and six regional distributors
- The international commission, nominated on the basis of the Czech - Austrian government agreement in Melk, stated in April 2001 that NPP Temelín´s effect on the environment is low, imperceptible and acceptable.
Prague, 2nd May 2001
| Income Statement in Accordance with International Accounting Standards (IAS) | 31 March 2001 | 31 March 2000 | Index 01/00 | |
|---|---|---|---|---|
| Operating revenues | CZK m | 16,210 | 14,773 | 109.7% |
| Operating expenses | CZK m | 10,035 | 9,602 | 104.7% |
| Fuel | CZK m | 3,607 | 3,546 | 101.7% |
| Purchased power | CZK m | 1,485 | 1,538 | 96.6% |
| Depreciation and amortization | CZK m | 2,330 | 2,285 | 102.0% |
| Operating income | CZK m | 6,157 | 5,171 | 119.1% |
| Other expenses (income) | CZK m | 486 | -92 | x |
| Income before taxation | CZK m | 5,671 | 5,263 | 107.8% |
| Income tax | CZK m | 930 | 1,178 | 78.9% |
| Net income | CZK m | 4,741 | 4,085 | 116.1% |
| Earnings per share (EPS) | CZK | 8.0 | 6.9 | 115.9% |
| Price earning ratio (P/E) | 1 | 7.7 | 9.3 | 82.8% |
| Return on equity (ROE) net | % | 6.1 | 6.7 | 91.0% |
| Return on total assets (ROA) net | % | 3.6 | 3.7 | 97.3% |
| Assets turnover | 1 | 0.25 | 0.26 | 96.2% |
| Total indebtedness (provisions excluded) | % | 30.5 | 32.2 | 94.7% |
| Long-term indebtedness | % | 21.9 | 22.5 | 97.3% |
Revenues, Expenses, Income
Income Statement, Balance Sheet and Cash Flow are converted to International Accounting Standards (IAS) from Czech Accounting Principles and may differ significantly from the same data prepared according to Czech Accounting Principles.
Net income for the period January to March amounted to CZK 4.7 bn, an increase of CZK 0.7 bn (16.1%) in comparison with the same period in 2000. This improvement resulted from higher EBIT (by CZK 1 bn) and lower income taxes (by CZK 0.2 bn) . On the other hand, exchange rate gains in the first quarter of 2000 were CZK 0.3 bn while now exchange rate losses are CZK 0.2 bn, i. e. a deterioration of CZK 0.5 bn.
The total revenues of CEZ amounted to CZK 16.2 bn and were CZK 1.4 bn (9.7%) higher than in the first quarter of 2000.
Operating expenses amounted to CZK 10.0 bn, and were CZK 0.4 bn (4.7%) higher than in the previous year.
Other expenses amounted to CZK 0.5 bn, i. e. an increase of CZK 0.6 bn on the previous income of CZK 0.1 bn in 2000. This resulted, as mentioned, mainly from exchange rate changes.
Income taxes amounted to CZK 0.9 bn, a decrease of CZK 0.2 bn (21.1%) in comparison with 
the same period of 2000.
Earnings per share increased from 6.9 CZK to 8.0 CZK due to a higher profit.
The price earning ratio decreased from 9.3 to 7.7 due to the decrease in share price (by 15.6%), while the profit (for the last 12 months) increased slightly.
The net return on equity decreased (for the last 12 months) from 6.7% to 6.1% as a result of the slight increase in the profit in comparison with that of average capitalization.
The net return on total assets decreased (from 3.7% to 3.6%) due to the slight increase in the profit in comparison with that of average total assets.
Assets turnover decreased (from 0.26 to 0.25) as a result of slight increase of revenues in comparison with that of average total assets.
Total indebtedness (provisions excluded) decreased and amounted to 30.5%, long-term indebtedness also decreased and stood at 21.9%.
The number of CEZ employees decreased from 8,795 at the beginning of the year to 8,545 as of 31 March 2001, a drop of 250 employees (2.8%).
Sale of Electricity
In comparison with the same period in 2000, the electricity sales of CEZ as a whole increased by CZK 1.5 bn (10.9%) and amounted to CZK 15.4 bn. CEZ did not receive the first quarter 2001 balance of electricity in the Czech Republic from ÚED (Central Dispatch Centre) on time. The following numbers are CEZ estimations.
Demand for electricity is estimated by CEZ to be 15,060 GWh, an increase of 0.6% (93 GWh). CEZ expects high voltage consumption to have increased by 1% (86 GWh). Low voltage consumption as a whole increased by only 0.1% (5 GWh). Of this, household consumption was stable and the increase was only due to the commercial sector. CEZ estimates that
CEZ´s share in meeting the demand for electricity in the Czech Republic increased from 64.1% to 64.4%, largely as a result of lower amounts of generated electricity by other producers. While sales to regional distributors slightly increased by 33 GWh (0.3%), sales to CEPS for covering the transmission system losses decreased by 70 GWh (34%). On the whole, the total sales of CEZ in the Czech Republic slightly decreased by 19 GWh (0.2%). CEZ increased electricity exports by 72 GWh (2.3%) and lowered the purchase of electricity from other producers. This resulted in higher CEZ production by 146 GWh (1.1%).
Investment Program
In total, capital investment in the period January to March reached CZK 3.1 bn, a decrease of CZK 0.3 bn (9.7%) in comparison with 2000. The total amount spent on the NPP Temelín was CZK 1 bn.
During the specified tests of the 1st unit at the power levels of 30% some problems on the equipment in the secondary circuit, i. e. vibrations of the transferring steam pipe at the high-pressure part of turbo-generator and oil leakage, were being solved. This resulted in the interruption of tests in January/February. In March the State Office for Nuclear Safety granted permission for an increase of the power level to 55%.
The work on the second unit continued according to the approved schedule.
Financing
During the first quarter of 2001 CEZ fulfilled all its financial commitments.
Net cash provided by operating activities increased to CZK 6.8 bn (by CZK 2.5 bn) due to the higher profits, better balance of prepayments and lower income tax. As mentioned, the total cash used in investment activities reached CZK 3.1 bn.
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 2.2 bn to be used for payments on borrowings, especially for premature repayment of the revolving loan from 
CSOB/IPB of CZK 1.1 bn.
Other information
In January the National Property Fund published a tender for its advisor for the completion of the privatization of CEZ and six regional distributors. One of the refused applicants objected to the decision (regarding the choice of advisor). This objection was refused by the National Property Fund and the applicant later asked for the referral of this decision to the Antimonopoly Office. As a result, no advisor has been chosen up until the end of April 2001.
The mission of the International Atomic Energy Agency (IAEA) from Vienna (OSART) inspected NPP Temelín in February/March with a successful outcome for CEZ.
In April 2001 the international commission, nominated on the basis of the Czech - Austrian government agreement in Melk, stated that NPP Temelín´s influence on the environment is low, imperceptible and acceptable.
In January the rating agency Moody´s confirmed a credit rating of ?Baa1’ for CEZ and upgraded a negative outlook to a stable, current credit rating from Standard & Poor´s (confirmed in 2000) of ?BBB+’ with a positive outlook
| Income Statement in Accordance with International Accounting Standards (IAS) (CZK m) | 31 March 2001 | 31 March 2000 |
|---|---|---|
| Operating revenues | 16,210 | 14,773 |
| Sales of electricity | 15,358 | 13,851 |
| Heat sales and other revenues | 852 | 922 |
| Operating expenses | 10,053 | 9,602 |
| Fuel | 3,607 | 3,546 |
| Purchased power | 1,485 | 1,538 |
| Repairs and maintenance | 421 | 396 |
| Depreciation and amortization | 2,330 | 2,285 |
| Salaries and wages | 988 | 889 |
| Nuclear decommissioning and fuel storage | x | x |
| Materials and supplies | 353 | 396 |
| Costs of ash storage, air and water pollution and environmental claims | x | x |
| Other operating expenses | 869 | 552 |
| Income before other expenses/income and income tax | 6,157 | 5,171 |
| Other expenses/income | 486 | -92 |
| Interest on income | -51 | -48 |
| Interest on debt, net of capitalized interest | 168 | 146 |
| Interest on nuclear provisions | 366 | 316 |
| Exchange rate losses (gains) | 205 | -320 |
| Other expenses/income | 32 | 30 |
| Equity in earnings of affiliate | -234 | -216 |
| Income before income tax | 5,671 | 5,263 |
| Income tax | 930 | 1,178 |
| Net income | 4,741 | 4,085 |
| Cash Flow in Accordance with International Accounting Standards (IAS) (CZK m) | 31 March 2001 | 31 March 2000 |
|---|---|---|
| Cash as at 1 January | 3,219 | 4,357 |
| Operating activities: | 6,811 | 4,345 |
| - Income before income taxes | 5,671 | 5,263 |
| - Depreciation and amortization | 2,338 | 2,287 |
| - Amortization of nuclear fuel | 430 | 438 |
| - Provision for nuclear decommissioning and fuel storage | 170 | 100 |
| - Changes in assets and liabilities | -1,533 | -2,445 |
| Investment activities | -3,071 | -3,400 |
| Financing activities | -2,221 | 502 |
| Net effect of currency translation in cash | -42 | 21 |
| Cash as at 31 March | 4,696 | 5,825 |
| 31 March 2001 | 31 March 2000 | |
|---|---|---|
| Net Electricity Generation in the Czech Republic (GWh) | 18,705 */ | 19,012 |
| Electricity Generation at ČEZ - net (GWh) | 12,804 | 12,693 |
| Electricity sold by ČEZ in the Czech Republic (GWh) | 10,688 | 10,707 |
| - Electricity sold by ČEZ to REAS (GWh) | 10,514 | 10,481 |
| - Price of electricity sold to REAS (CZK/MWh) | 1,003 | 988 **/ |
| ČEZ´s electricity exports (GWh) | 3,172 | 3,100 |
| ČEZ´s electricity imports (GWh) | 258 | 286 |
| */ ČEZ by estimated **/ excl. auxiliary services paid by REAS on January 2000 | ||
| Balance Sheet in Accordance with International Accounting Standards (IAS)(CZK m) | 31 March 2001 | 31 March 2000 |
|---|---|---|
| Assets | 224,329 | 222,260 |
| Fixed assets | 211,974 | 211,384 |
| Plant in service | 177,083 | 177,181 |
| Less accumulated provision for depreciation | 86,266 | 84,228 |
| Net plant in service | 90,817 | 92,953 |
| Nuclear fuel, at amortized cost | 5,665 | 5,764 |
| Construction work in progress | 105,956 | 103,591 |
| Investment in affiliate | 5,459 | 5,225 |
| Other non-current assets, net | 4,077 | 3,851 |
| Current assets | 12,355 | 10,876 |
| Cash | 4,696 | 3,219 |
| Receivables, net | 4,094 | 4,032 |
| Materials and supplies, net | 2,464 | 2,268 |
| Fossil fuel stock | 483 | 712 |
| Prepayments | 618 | 645 |
| Shareholders´ equity and liabilities | 224,329 | 222,260 |
| Shareholders´ equity | 134,183 | 129,442 |
| Stated capital | 59,209 | 59,209 |
| Retained earnings | 74,974 | 70,233 |
| Long-term liabilities | 78,424 | 78,663 |
| Long-term debt, net amount due within one year | 49,040 | 49,704 |
| Accumulated provision for nuclear decommissioning | ||
| and fuel storage | 21,096 | 20,902 |
| Deferred income tax | 8,288 | 8,057 |
| Current liabilities | 11,722 | 14,155 |
| Short-term loans | 0 | 1,104 |
| Long-term debt due within one year | 4,536 | 4,703 |
| Accounts payable | 3,281 | 5,035 |
| Accrued liabilities | 3,905 | 3,313 |
| Consolidated Statement of Shareholders´ Equity in accordance with IAS (CZK m) | Stated Capital | Retained Earnings | Total |
|---|---|---|---|
| December 31, 1999 | 59,209 | 62,996 | 122,205 |
| Net Income for period 1 - 3 / 2000 | 4,085 | 4,085 | |
| March 31, 2000 | 59,209 | 67,081 | 126,290 |
| Net Income for period 4 - 12 / 2000 | 3,152 | 3,152 | |
| December 31, 2000 | 59,209 | 70,233 | 129,442 |
| Net Income for period 1 - 3 / 2001 | 4,741 | 4,741 | |
| March 31, 2001 | 59,209 | 74,974 | 134,183 |
| Capacity, Employees | 31 March 2001 | 31 Dec 2000 |
|---|---|---|
| Installed capacity ČEZ (MW) | 10,146 | 10,146 |
| Number of employees (pers) | 8,545 | 8,795 |
| Specific number of employees (pers/MW) | 0.842 | 0.867 |