Press releases pg. 67

In the first half of 2016 CEZ Group has achieved a net profit of CZK 13.8 billion, down by 10% year-on-year. Earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled CZK 33.1 billion, falling by CZK 2.4 billion year-on-year. This has primarily been caused by the lower exercise prices of produced electricity. This influence has resulted in a year-on-year decline of CZK 3.2 billion.

In accordance with the Updated National Energy Strategy, ČEZ is prepared to initiate the process of a comprehensive environmental impact assessment (EIA) of the planned construction of new units in the Dukovany Nuclear Power Plant. Therefore, the company has today submitted to the Ministry of the Environment all the documents required to launch the EIA process. This is the first step in the company’s effort to fulfill the National Action Plan for the Development of Nuclear Energy to ensure the long-term energy self-sufficiency of the Czech Republic. The purpose of the EIA is to identify, describe and comprehensively assess foreseeable impacts of the planned projects on the environment and public health in the relevant context. The EIA is conducted in cases defined by law, always before all the requisite permits are obtained and before the actual project implementation begins. The European energy sector has been going through a period of significant changes and uncertainties, and ČEZ wants to be prepared for all options of future development.

Today the ČEZ Group officially filed a Request for Arbitration against the Republic of Bulgaria with the International Centre for Settlement of Investment Disputes (ICSID), by which it officially commenced international investment arbitration proceedings due to Bulgaria’s failure to observe the investment protection provisions of the Energy Charter Treaty. It decided to take this step following a number of actions of Bulgarian authorities damaging ČEZ companies in Bulgaria, causing the long-term critical situation on the local energy market that is not improving. The claim amounts to hundreds of millions of Euros.

CEZ Group’s net income in Q1 2016 was CZK 10bn, which is a 32% increase year-on-year. EBITDA grew by 5% year-on-year. The growth was achieved in spite of a further decrease in wholesale electricity prices, primarily thanks to the Company’s successful business strategy.