CEZ Group

The energy company CEZ is aware that the government is considering several options of selling a part of the CEZ shares. The decision is fully within its competence, as well as the decision on utilisation of the funds acquired. CEZ only informs the government and the Ministry of Industry and Trade about the possibilities and implications of separate steps.

The Power Company is going to offer the purchase of the shares to minority stockholders of Skoda Praha. The concrete offer will probably be released by the end of January 2005.

CEZ obtained necessary transmission capacities for electricity export to Germany and Poland for next year. CEZ obtained the capacities in a tripartite auction organized by CEPS, a transmission system operator.

On December 7, 2004, a settlement agreement between CEZ Power Company and Dalkia France (and Dalkia International) was signed. At the same time, a mutual agreement of termination of arbitration, which had been filed at the International Chamber of Commerce in Paris after an appeal of Dalkia France, was concluded. Dalkia France assessed the losses resulting from non-performance of the business plan of the joint-venture with CEZ at 25 million USD. The agreement about this business plan was concluded in December 1999.

The net profit of CEZ Group increased by 67 per cent

CEZ´s attorneys, on behalf of CEZ Power Company, have lately filed for a change of a precedent decision of the UOHS (Office for the Protection of competition), which had decreed that CEZ, apart from other things, should sell a majority share in one of Czech distributional firms of the CEZ Group. CEZ has decided that the possibly sold company would be Severoceska energetika (SCE), where CEZ owns 56.93 %.

The Bulgarian government has approved a privatization draft agreement for a sale of 67 per cent of shares in distributional companies in the Sophia and Pleven areas and in the city of Sophia. Under the Bulgarian government decision the agreements must be signed by both sides within ten days.

The operating revenues of CEZ Power Company increased by 32.2 per cent to 8.4 billion CZK in the first three quarters of this year. The electricity sale incomes increased by 6.6 billion CZK (by 17.6%) and reached 44.2 billion CZK. The economic results of last year were influenced by the single and unrepeatable income from the sale of 66 % share in CEPS, which has been only partly offset by this year´s sales of 34 % shares in CEPS and Prazska energetika. As a result the net profit has decreased by 27.3 % to 9.9 billion CZK compared to last year. If we excluded this influence, the net profit would be higher than last year.

Pursuant to the option contract about the sale of the remaining minor shares in the regional power companies SME a SCE owned by the E. ON Group, which was signed by CEZ and E.ON in July last year, the stocks were actually transferred and finance settled between both companies on 27 October, 2004.

Jiri Borovec has been elected a new member of the CEZ Board as from 22. 10. 2004 at today´s meeting of the Supervisory Board.