CEZ's Consolidated Quarterly Report on Operational, Economic and Financial Results for 1st Quarter 2002, in accordance with IFRS
- Brief Report on Operational, Economic, and Financial Results January - March 2002
- Financial Statements
Brief Report on Operational, Economic, and Financial Results January - March 2002
Main Features
- Demand for electricity (15.0 TWh) decreased by 0.9%, but adjusted for developments in temperature the rising trend has continued
- There was a year-on-year considerable growth in imports via the independent transmission grid by 955 GWh
- Return on equity increased by 13.1%; earnings per share by 10%
- Year on year a decrease of total indebtedness (provisions excluded) by 1.4% and long-term indebtedness by 4.5%
- Salaries and wages went down by 4.6%
- The opening of the domestic electricity market, lowered demand for electricity and the state support of cogeneration resulted in an expected decrease in ČEZ''s share of the electricity wholesale market in the Czech Republic
- Net income was CZK 5.2 bn, an increase of CZK 0.4 bn (by 9.1%)
- The maximum load came to 10,225 MW (on 16 January 2002), 3.6% (379 MW) lower than in 2001
- The number of employees decreased by 1,083 (by 12.7%) year on year
- ČEZ is offering four other ''Rainbow Energy'' products
- Since 28 April the company has been managed from a new building at 2 Duhová Street, Praha 4; the registered office remains unchanged Prague, 30 April 2002
| Income Statement in Accordance with International Financial Reporting Standards | 31 March 2002 | 31 March 2001 | Index 02/01 | |
|---|---|---|---|---|
| CZK m | EUR m | CZK m | ||
| Operating revenues | 15,684 | 504 | 16,210 | 96.8% |
| Operating expenses | 9,995 | 321 | 10,053 | 99.4% |
| Fuel | 3,123 | 100 | 3,607 | 86.6% |
| Purchased power and related services | 2,168 | 70 | 1,802 | 120.3% |
| Depreciation and amortization | 2,410 | 77 | 2,330 | 103.4% |
| Operating income | 5,692 | 183 | 6,157 | 92.4% |
| Other expenses (income) | -134 | -4 | 486 | x |
| Income before income taxes | 5,826 | 187 | 5,671 | 102.7% |
| Income taxes | 652 | 21 | 930 | 70.1% |
| Net income | 5,174 | 166 | 4,741 | 109.1% |
| Unit | 31 March 2002 | 31 March 2001 | Index 02/01 | |
| Earnings per share (EPS) | CZK | 8.8 | 8.0 | 110.0% |
| Price/earning ratio (P/E) */ | 1 | 4.7 | 7.6 | 61.8% |
| Return on equity (ROE) net */ | % | 6.9 | 6.1 | 113.1% |
| Return on total assets (ROA) net */ | % | 4.2 | 3.6 | 116.7% |
| Assets turnover */ | 1 | 0.25 | 0.25 | 100.0% |
| Total indebtedness (provisions excluded) | % | 28.2 | 29.6 | 95.3% |
| Long-term indebtedness | % | 17.9 | 22.4 | 79.9% |
| */ For the last 12 months | ||||
Revenues, Expenses, Income
Our Income Statements, Balance Sheets, and Cash Flow Statements have been converted from Czech Accounting Standards to International Financial Reporting Standards (IFRS) and may differ significantly from the same data prepared according to Czech Accounting Standards. The figures presented include the fully consolidated data from ČEZ and ČEPS, and the data from the equity earnings of the affiliated company (37.21% of the profit came from Severočeské doly).
Net income
for the first quarter of 2002 amounted to CZK 5.2 bn, an increase of CZK 0.4 bn (9.1%) in comparison with the same period of 2001. While EBIT was lower by CZK 0.5 bn, EBT increased slightly by CZK 0.2 bn.
ČEZ’s turnoverwas CZK 15.7 bn in total, CZK 0.5 bn (3.2%) lower than in the same period of 2001.Operating expenses remained at the same level. Other income amounted to CZK 0.1 bn, an improvement on the other expenses of CZK 0.5 bn in the previous year. This resulted from exchange rate changes.Income taxes (CZK 0.7 bn) decreased by 29.9% (CZK 0.3 bn) in comparison with the same period of 2001. Earnings per share rose from CZK 8.0 to CZK 8.8 due to an increase in profits.The price-earnings ratio fell from 7.6 to 4.7 due to a decrease (by 24.6%) in share prices, while profits (for the last 12 months) increased by 21.1%.
The net return on equity
increased from 6.1% to 6.9% thanks to a rise in profits (for the last 12 months), partially compensated by an increase in the average equity. The net return on total assets increased (from 3.6% to 4.2%) as a result of a higher rise in profits (for the last 12 months) compared to a slight increase in the average value of total assets.
Assets turnoverremained at the same level. Total indebtedness (provisions excluded)decreased to 28.2%; long-term indebtedness also fell to 17.9%. At 31 March 2002the number of ČEZ employees stoodat 7,462 compared to 8,545 on 31 March 2001 - a 12.7% drop (1,083 employees) and compared to the beginning of 2002 a decrease by 90 employees (by 2.8%).
Sales of Electricity
On 1 January 2002 the wholesale electricity market opened up completely. ČEZ sells electricity to customers who have the right to choose their supplier, i.e. regional distribution companies, new traders, eligible customers, and ČEPS in order to cover transmission system losses. Other daily sales and settlements of balancing power for the activation of auxiliary services by the market operator are made.
Revenues from sales of electricity (CZK 14.1 bn) decreased by CZK 1.2 bn (7.9%) partially due to ČEZ''s competitively revised Rainbow Energy prices. The total amount of electricity sales remained almost at the same level year-on-year (Index 99.1 %). Sales of electricity in the Czech Republic decreased by 941 GWh (by 8.8%); exports of electricity were higher by 819 GWh (by 25.8%).
Demand for electricity in the Czech Republic, of 15 TWh, was down 134 GWh (0.9%) compared to the same period of 2001, due in part to extremely high temperatures in the first quarter of 2002. High voltage consumption decreased as a whole by 40 GWh (by 0.5%). Low voltage consumption decreased by 95 GWh (by 1.4%), of which in the commercial sector by 27 GWh (1.2%) and in the household sector by 68 GWh (by 1.6%), partially due, as mentioned, to higher temperatures in 2002 (by 1.8°C). If the temperature had been in line with the normal long-term temperature basis, the demand for electricity would have increased by 0.3%.
ČEZ power plants met 51.1% of the demand for electricity on the Czech market compared to 55.8% in the first quarter of 2001. This was due to an increase in imports by 645 GWh (72.2%) into the Czech Republic. ČEZ''s imports decreased by 41 GWh (15.9%), but the imports of other sector entities increased by 686 GWh (by 108%) and the imports via the independent transmission grid soared by 955 GWh. ČEZ’s share in meeting demand for electricity (including repurchased electricity from inland and abroad) went down to 58.3%.
Investment Programme
In total, capital investments amounted to CZK 1.0 bn; CZK 0.6 bn was spent on Temelín NPP. Test s on the 1st unit of Temelín NPP with output 90-100% successfully continued. Since mid-January 2002, the 1st unit of Temelín NPP has been operating with nominal output of 100%. In the second half of February the planned inspection of technological equipment started. This inspection comprised the replacement of valves (made in Germany) in the secondary part of the NPP. All work was finished on time, so the reactor was started up for the completion of the last part (dynamic tests) on 24 April. Following the completion of all remaining tests, a six-day tryout at nominal output is expected, plus eighteen months'' trial operation. During the tests in the first quarter of 2002, the net electricity generated by the first unit of Temelín NPP was 933 GWh. In the first half of March 2002 nuclear fuel was loaded into the second reactor of Temelín NPP, so this unit will be ready to begin activation tests at the beginning of May 2002.
Financing
Net cash provided by operating activities decreased to CZK 5.5 bn (by 19.5%). Given that only CZK 1.0 bn was spent on investments, combined with the effect of the better exchange rate of CZK, it was possible to reduce long-term borrowings by CZK 3.2 bn.
In January 2002, revolving credit totalling USD 70 m was renewed. The manager of the revolving credit is Sumitomo Mitsui Banking Corporation; the syndicate also consists of other international banks: Česká spořitelna, Citibank, Credit Lyonnais, Deutsche Bank, HSBC, ING Bank, Mizuho Bank, Sanpaolo IMI, and Magyar Kulkereskedelmi Bank.
Current credit rating for ČEZ from Moody’s ''Baa1'' with a stable outlook, from Standard&Poor’s ''BBB+'' with a stable outlook.
Other information
The most important current event is the beginning of gradual electricity market liberalization in the Czech Republic, initially for final customers with an annual consumption more than 40 GWh. Since the beginning of the year ČEZ and other producers have been selling their production in a fully competitive environment. Regional distributors and licensed traders have the same right to choose their supplier as newly categorized eligible consumers.
As a result, the wholesale market has been fully opened up for foreign and internal competitors. Importer access to the Czech market is now far easier than into neighbouring countries (considering the prohibition of Czech electricity exports to Austria, the need to re-export electricity imported to Poland and to the eastern federal states of Germany, and the high charge of using cross-border interconnectors to Germany). The company’s position is also encumbered as a result of the state’s unequal approach in its support of combined heat and power generation, whereby legal regulations specify the compulsory purchase of such cogeneration. When setting the advantageous minimum price, however, the Energy Regulation Office focused solely on the procurement of electricity not connected to the transmission grid. What is more, it gives preference to sources with an installed capacity of up to 5 MW.
Under Decree No. 250/2002, the Czech government approved the sale of the National Property Fund''s majority stake in five and minority stake in three regional distribution companies to ČEZ and, conversely, the sale of a majority stake in ČEPS from ČEZ to entities appointed by the state.
Since May, ČEZ has been offering four new electricity products to customers on the Czech market under its Rainbow Energy strategy. The Rainbow Energy portfolio now covers eleven products, which are offered to distributors, license holders and eligible customers.
In April, the ČEZ headquarters was relocated to a new building at 2 Duhová Street, Praha 4; the registered office remains unchanged. New phone number: +420-2-7113 1111, new fax number: +420-2-7113 2001
Financial Statements
| Income Statement in Accordance with International Financial Reporting Standards (IFRS) (CZK m) | 31 March 2002 | 31 March 2001 |
|---|---|---|
| Operating revenues | 15,687 | 16,210 |
| Sales of electricity | 14,141 | 15,358 |
| Heat sales and other revenues | 1,546 | 852 |
| Operating expenses | 9,995 | 10,053 |
| Fuel | 3,123 | 3,607 |
| Purchased power and related services | 2,168 | 1,802 |
| Repairs and maintenance | 381 | 421 |
| Depreciation and amortization | 2,410 | 2,330 |
| Salaries and wages | 943 | 988 |
| Materials and supplies | 337 | 353 |
| Other operating expenses | 633 | 552 |
| Income before other expenses/income and income tax | 5,692 | 6,157 |
| Other expenses/income | -134 | 486 |
| Interest income | -32 | -51 |
| Interest on debt, net of capitalized interest | 97 | 168 |
| Interest on nuclear provisions | 374 | 366 |
| Foreign exchange rate losses (gains) | -936 | 205 |
| Other expenses/income, net | 550 | 32 |
| Income from associate | -187 | -234 |
| Income before income tax | 5,826 | 5,671 |
| Income taxes | 652 | 930 |
| Net income | 5,174 | 4,741 |
| Cash Flow in Accordance with International Financial Reporting Standards (IFRS) (CZK m) | 31 March 2002 | 31 March 2001 |
| Cash and cash equivalents at beginning of period | 3,365 | 3,219 |
| Operating activities: | 5,481 | 6,811 |
| - Income before income taxes | 5,826 | 5,671 |
| - Depreciation and amortization and asset write-offs | 2,414 | 2,338 |
| - Amortization of nuclear fuel | 474 | 430 |
| - Provision for nuclear decommissioning and fuel storage | 205 | 170 |
| - Changes in assets and liabilities | -1,281 | -1,533 |
| Investing activities | -1,040 | -3,071 |
| Financing activities | -1,430 | -2,221 |
| Net effect of currency translation in cash | -27 | -42 |
| Cash and cash equivalents at end of period | 6,349 | 4,696 |
| 31 March 2002 | 31 March 2001 | |
| Net electricity generation in the Czech Republic (GWh) | 19,026 | 19,038 |
| Electricity supply from ČEZ power plants - net (GWh) | 12,753 | 12,804 |
| Electricity sold by ČEZ in the Czech Republic (GWh) | 9,747 | 10,688 |
| - Electricity sold by ČEZ to REAS (GWh) | 8,502 | 10,514 |
| - Price of electricity sold to REAS (CZK/MWh) | 922 | 1,003 |
| ČEZ´s electricity exports (GWh) | 3,992 | 3,172 |
| ČEZ´s + ČEPS´s electricity imports (GWh) | 217 | 258 |
| Balance Sheet in Accordance with International Financial Reporting Standards (IFRS) (CZK m) | 31 March 2002 | 31 Dec 2001 |
| Assets | 231,531 | 229,027 |
| Fixed assets | 215,097 | 216,306 |
| Plant in service | 180,466 | 180,069 |
| Less accumulated provision for depreciation | 94,728 | 92,431 |
| Net plant in service | 85,738 | 87,638 |
| Nuclear fuel, at amortized cost | 5,780 | 5,967 |
| Construction work in progress | 112,799 | 112,799 |
| Investment in associate | 5,705 | 5,518 |
| Investments, net | 3,984 | 4,110 |
| Intangible assets, net | 1,091 | 1,144 |
| Current assets | 16,434 | 12,721 |
| Cash and cash equivalents | 6,349 | 3,365 |
| Receivables, net | 4,501 | 3,933 |
| Income tax receivable | 0 | 0 |
| Materials and supplies, net | 2,523 | 2,489 |
| Fossil fuel stock | 590 | 657 |
| Other current assets | 2,471 | 2,277 |
| Shareholders´ equity and liabilities | 231,531 | 229,027 |
| Shareholders´ equity | 141,900 | 136,726 |
| Stated capital | 59,050 | 59,050 |
| Retained earnings | 82,850 | 77,676 |
| Long-term liabilities | 62,981 | 64,477 |
| Long-term debt, net of amount due within one year | 41,352 | 43,081 |
| Accumulated provision for nuclear decommissioning and fuel storage | 21,629 | 21,396 |
| Deferred income taxes, net | 10,130 | 9,870 |
| Current liabilities | 16,520 | 17,954 |
| Short-term loans | 0 | 514 |
| Current portion of long-term debt | 5,028 | 5,126 |
| Trade and other payables | 7,850 | 8,651 |
| Income tax payable | 857 | 953 |
| Accrued liabilities | 2,785 | 2,710 |
| Consolidated Statement of Shareholders´ Equity in accordance with IFRS (CZK m) | Stated Capital | Retained Earnings | Total Equity |
| 31 December, 2000, as previously reported | 59,209 | 70,233 | 129,442 |
| Net Income for period 1-3/2001 | 4,741 | 4,741 | |
| 31 March, 2001 | 59,209 | 74,974 | 134,183 |
| Effect of adopting IAS 39 | -496 | -496 | |
| Acquisition of treasury shares | -159 | -159 | |
| Dividends declared | -1,184 | -1,184 | |
| Net Income for period 4-12/2001 | 4,382 | 4,382 | |
| 31 December, 2001 | 59,050 | 77,676 | 136,726 |
| Net Income for period 1-3/2002 | 5,174 | 5,174 | |
| 31 March, 2002 | 59,050 | 82,850 | 141,900 |
| Capacity, Employees | 31 March 2002 | 31 Dec 2001 |
| ČEZ Installed capacity (MW) | 10,146 | 10,146 |
| Number of employees (pers) | 7,462 | 7,552 |
| Specific number of employees (pers/MW) | 0.735 | 0.744 |
This report has not been audited.