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