CEZ Group

The Board of Directors and the Supervisory Board of ČEZ have today approved an amended version of the Settlement Agreement with the European Commission, which represents a major step towards putting an end to the investigation conducted by the European Commission against ČEZ since 2009. Already in June 2012, ČEZ offered the EC to conclude the investigation in this manner; that is by committing to sell one of the following power plants: Počerady, Chvaletice, Dětmarovice, or Tisová together with Mělník 3. All of these are power plants for which ČEZ does not plan any major upgrades but rather foresees their gradual shut down as the facilities reach the end of their technical service life. The amended Agreement no longer mentions the Dětmarovice power plant. This Agreement will take force once it has been approved by the European Commission.

Despite negative market developments, the ČEZ Group managed to fulfill its planned financial results. Revenues rose by more than CZK 5 billion year on year, reaching CZK 215.1 billion. Operating Profit Before Tax (EBITDA) declined by 2.1% year on year (by CZK 1.8 billion) to CZK 85.5 billion, but exceeded expectations by 0.5 billion. Net Profit showed just a slight year-on-year slip by 1.5% to CZK 40.2 billion (CZK 0.2 billion more than expected). In 2013, the ČEZ Group expects its EBITDA to reach some CZK 80 billion, with Net Profit around CZK 37 billion. The expected profit decline reflects the adverse developments in European energy markets, a substantial drop of electricity prices, lower allocations of emission allowances for power generation, and declining power generation in the Czech Republic.

Today, ČEZ has officially informed the Albanian Government about its intention to initiate international arbitration. The ground is the non-protected investment in the power distribution company of CEZ Shpërndarje. The ČEZ Group expects to receive compensation for the damage incurred as the company is entitled to the compensation according to international law.

Albania regulator has decided today to revoke the business license of CEZ Shpërndarje. According to ČEZ, these steps are in violation of the local legislation, and the corporation is going to lodge a formal protest against the decision. At the same time, ČEZ is going to take first steps to initiate an international arbitration.

The ČEZ Group has initiated a process to sell its Albanian distribution business, CEZ Shpërndarje. Potential buyers may thus express their interest during January, and a decision on the subsequent steps will be made afterwards. At the same time, the ČEZ Group continues to negotiate with the Albanian authorities how to resolve the situation at hand.

The last one of 240 wind turbines in the Fantanele-Cogealac wind park in Romania has been connected to the grid today. The total installed capacity is now 600 MW, and the largest continental wind park in Europe can thus supply power to over one million Romanian households every year.

Due to repeated unforeseeable and now even illegal steps taken by Albania, which have negatively affected the operations of ČEZ Shperndarje as the local power distribution company, the ČEZ Group has taken the first steps to claim the World Bank’s guarantee.

ČEZ Shperndarje has resorted to disconnecting power supply to all Albanian state-owned waterworks that have failed to settle their debts in the long run. The total sum of receivables from such companies has reached EUR 38 million. ČEZ decided to disconnect the water companies after a series of unsuccessful negotiations with the Albanian counter-party concerning the high debt settlement.

ČEZ has invited bidders to participate in Round 2 of the selection procedure to sell its Dětmarovice black-coal power plant. The deadline for submitting offers is November 22.

ČEZ has received bids from four bidders in its tender for the Sale of the Dětmarovice Power Plant. After examining the formal details of each of the bids, ČEZ has had to exclude a bid submitted by Česká energie from the tender. The bid failed to meet the tender requirements which, among other things, required the bidders to have a certain size and creditworthiness. The bid concerned did not guarantee a successful completion of the sale, which is required to fulfill the settlement with the European Commission should ČEZ decide to consummate the settlement agreement specifically by divesting its Dětmarovice Power Plant. The tender thus continues with three bidders: BXR, Energetický a průmyslový holding, and Gascontrol.