The profit of CEZ increased by over 107 per cent and reached 13.9 billion CZK

We are pleased by the fact that we have managed to sell larger volumes of electricity and therefore increase our related revenues, including backup services, by more than 11 per cent, in spite of reductions in the prices of electricity we supplied to our domestic customers in 2003. Our total economic performance improved by 0.7 billion CZK, even though the depreciation costs rose by 2.2 billion CZK, following a full trial launch of the Temelin nuclear power plant. The above proves our successful commercial strategy, said Petr Voboril, the Vice-Chairman of the CEZ Board of Directors and the company Executive Director for Strategy. CEZ increased the electricity sales by more than 10% over the period of one year, although the prices of electricity had dropped by 6 per cent at home, while export prices had risen by 15%. CEZ assumes successful electricity sales this year as well. About 96% of the assumed volume of electricity sales on the domestic market for this year, were already sold as for 31 December 2003, compared to 92% in the same period of the year before.

The volume of electricity generated by CEZ power plants was 60 934 GWh, and surpassed the last year´s historic production (54 118 GWh) by over 12.6 per cent. CEZ coal-fired power plants generated 34 044 GWh, 1.5 per cent more than in 2002, and they accounted for 55.9% of the CEZ total production. Nuclear power plants rose their generation output by over 38% to 25 872 GWh, as a result of gradual launch of the reactor units in the Temelin nuclear power plant. Nuclear power plants accounted for 42.5 per cent within CEZ. Hydro power plants-due to dry weather and still damaged (after the floods in 2002) power plants of Orlik and Stechovice - generated only 1 010 GWh, which was a drop by nearly 45 per cent compared to last year.

CEZ spent 4.3 billion CZK on investment (without financial investment), 1.7 billion CZK less than over the same period in the year before. The main investment project of the moment is modernization of the Dukovany power plant, investment into a disposal of refuse and other ecological measures. The planned amount for these investments is 6.4 billion CZK this year.

Due to continuing rationalising measures, aimed at optimising the organisational structure of the company, the company downsized personnel by 470 employees (6.5 %) in comparison with the previous year; the rightsizing took place namely in the nuclear power plants section. As of 31 December 2003, CEZ was employing 6 894 people, compared to 16 407 employees in 1992, at the time of its foundation.

The beginning of July saw the launch of the first stage of the REAS Project?, most of whose participants were employees of individual regional power utilities integrated in the CEZ Group. The first stage sought to identify potential for cost cutting within the entire CEZ Group, amounting to 2 billion CZK. October saw the launch of the second implementation stage, which included, among other things, the unification of REAS organisational structures (i.e. the regional power utilities associated in the CEZ Group) accompanied by downsizing over 6 per cent of personnel and the whole project is to be completed by the end of this year.

The CEZ´s aim will be to continue the movement of the long-term good operating performance. However, we can not rely on such strong, extraordinary, single influences as the sale of CEPS last year. On the contrary, we must prepare well for the full liberalization of the electricity market from 2006, for the opening of the markets in the past has negatively influenced the profitability of most of European power companies. Our further aims will be to fulfil the ambition of CEZ to become, owing to acquisition in foreign countries, the leader of the Central European electricity market, and establish functioning and efficient CEZ Group by the completion of the integration of regional power companies?, claimed at the end Martin Roman, the Chairman of the Board of Directors and ingoing Chief Executive Officer of CEZ.

	(CZK millions)	index 03/02
Total revenue - revenue for electricity and backup services	79 998 51 986	+ 42,9 % + 11,0 %
Total cost without income tax	61 372	+ 28,0 %
Operating profit	8 616	+ 8,6 %
Profit before taxation	18 626	+ 131,9 %
Profit after taxation	13 931	+ 107,5 %
Profit after taxation (without influence of CEPS sale)	5 583	- 16,8 %

Note: non-consolidated data according to the Czech Accounting Standards

Ladislav Kriz, press officer CEZ

27. 2. 2004