Press releases pg. 88

The CEZ Group’s year-on-year earnings increased by four billion crowns (7%) to attain a level of CZK 60.8 billion. Operating profit prior to depreciation (EBITDA) decreased year-on-year by CZK 0.3 billion (1%) to CZK 26.3 billion and net profit decreased by CZK 2.8 billion (16%) to CZK 14.4 billion. The main reason behind the year-on-year decrease in profit was the unfavourable tariff decision adopted by the Albanian regulator, combined with extraordinary derivative and exchange rate profits during the first quarter of 2011. Over the course of this year, the ČEZ Group expects to see a year-on-year increase in net profit to CZK 41 billion.

CEZ Energy intends to consider the possibility of a strategic partnership in the completion of the Temelín Nuclear Power Station. It is usual in Europe that nuclear projects are built and subsequently operated by consortiums of several companies; the French EdF, several times larger than CEZ, is also implementing the Flamanville project in a consortium with Enel. CEZ has received bids from several interested parties and, since a partnership sounds logical, CEZ has decided to select the potential partner in a transparent tender. Given the fact that the selection of a supplier for the completion of Temelín is carried out pursuant to the Public Contract Act and that the information in this public contract is highly confidential, the partnership will probably be formed after the contract with the selected supplier is signed, which is expected to happen in 2013.

The Net Profit of the CEZ Group exceeded the expected all-year figures by CZK 0.7 billion, reaching CZK 40.8 billion. The CEZ Group significantly surpassed last year’s planned figures in Operating Profit Before Depreciation (EBITDA), which exceeded the plan by CZK 2.5 billion and reached more than CZK 87.3 billion. Although the Operating Profit for 2011 is by 1.7% lower than in 2010, CEZ eventually delivered a higher profit to its shareholders than planned.

The contractual relationships between CEZ and Skoda Power have been at arm’s length and set in a usual formal manner, including provisions on liquidated damages. Having examined the documentation pertaining to CEZ’s contracts for Skoda Power, Internal Audit found no evidence of informal relations that would indicate any improper, unethical or corrupt conduct.