Net profit of CEZ (non-consolidated) for 2005 amounted to17.6bn CZK and was over 7bn CZK up on the previous year

Last year was very successful for us. The historically highest profit, which we reached last year, was the result of that. We surpassed even our own estimate from the beginning of last year. We will surely keep the trend this year, when, I firmly believe, our results will be even better. What is important is the fact that our investors believe in the results and trend as well as the stocks quotation rose by another 116 % and the value of our share-holders´ assets went up by 234bn CZK. CEZ Group extended its operation on the Balkans, when the Romanian distribution company Electrica Oltenia joined the three Bulgarian distributors. We adopted steps on the Polish market, where we acquired two power plants, Skawina and Elcho. At home CEZ Group branched out by Severoceske doly, we managed to keep Severoceska energetika in the group and gained full control over Skoda Praha. In addition we opened foreign sales agencies in a number of neighbouring countries. All that anticipates a rise in the financial results in the future. said Martin Roman, Chairman of the Board and CEO of CEZ.

Operating profit increased by more than 50 per cent to 19.6bn CZK due to higher electricity incomes, which were additionally accompanied by a 2.6% decrease in costs. The year-on-year improvement of 1bn CZK in the financial area was mainly influenced by dividends received from daughter companies.

We are pleased with the fact that we managed to keep a check on our costs during such an outstanding increase in revenues, and even after exclusion of the positive influence of CO2 allowances sold. We reduced significantly repair costs in costs related to electricity production. It was partly influenced by smaller volume of overhauls but also by fuel costs., said Petr Voboril, Financial Manager of CEZ.

The introduction of CO2 allowances trading, together with the reduction of export opportunities led to a new system of optimizing a business margin. CEZ focused mainly on the Czech market. It supplied 51.4 TWh to the domestic market, which represented a year-on-year increase of 1.6 TWh. High competitive quotations of CEZ resulted in a rise in CEZ´s market share by 2.3 % to 69.2 %.

In the following years we are also going to continue concentrating on the Central-European market. We suppose that our sales on the domestic market will keep growing, as the yearly growth in the consumption in the Czech Republic is 2-3 %. We will also supply more electricity to the Slovak market, where one nuclear and a number of coal-fired units will be shut down at the end of the year. On the other hand we make allowances for a lack of sufficient output in our plants for keeping former exports to the west. Revenues from supporting services also rose significantly, by 0.9bn CZK i.e. 18 %, last year. That was, besides others, due to the fact that CEZ started to provide these services also in Slovakia, said Alan Svoboda, Vice-Chairman of the Board and sales manager of CEZ.

Table: Economic results of CEZ (non-consolidated) for 2005 (preliminary)

(million CZK) year-on-year change

Operating revenues - electricity incomes	67 644 65 199	+ 8,7 % + 8,7 %
Operating costs	48 035	- 2,6 %
Operating profit	19 609	+ 52,1 %
Pre-tax profit	20 458	+ 61,0 %
After-tax profit	17 635	+ 69,7 %

Note: according to the international accounting standards

Ladislav Kriz, press officer

2. 3. 2006