CEZ Group

In the last year the CEZ Company reached a net income after taxation in the height of 2,259 Kc mln, i.e. ca by 64.5 % less than in the previous year. We had presupposed a decrease of the profit, even more severe, in the beginning of this year. There are several reasons for it, but the key factors are three - decrease of the domestic demand for electricity, stop of the power plant Tusimice I Retrofit and fall of the Czech crown exchange rate.

The Minister of Industry and Trade Miroslav Gregr came today for his already seventh check-day at the Temelin nuclear power plant. In the beginning of his visit lasting for more than three hours, the Minister met representatives of the investor, major contractors and the State Office for Nuclear Safety. Within a working discussion, he was informed about progress of building works, process of starting up and start of hot tests of the first Temelin unit.

The mining company MUS and the power-generation company CEZ signed today (25th February 2000) a contract for this year purchases of lignite. Simultaneously, both parties executed to their mutual satisfaction an agreement of settlement solving the recent disputes concerning bills for lignite which CEZ had failed to accept in 1999.

The power-generation company CEZ, a.s. has appointed The Sumitomo Bank, Limited, Japan as the arranger of the syndicated security amounting to EURO 85 million in favor of the European Investment Bank (EIB). The security to be given for five years is a prerequisite for drawing the second tranche of the loan granted by EIB, amounting to EURO 85 million.

The State Office for Nuclear Safety (SONS) has granted on 31 st January 2000 to the power-generation company CEZ its permit to locate the construction of the central in-process store of spent nuclear fuel at Skalka. SONS had examined fitness of this locality with regard to nuclear safety and radiation protection and CEZ application with regard to particulars as stipulated by the "Atomic Act".

The Austrian Federal Ministry for Economic Affairs had examined at the beginning of this year supplies of electricity by CEZ to the Austrian market. The Federal Ministry is obligated under EIWOG Act (§ 13) to do so at each purchase of electricity from third countries.

The power-generation company CEZ was served last week the ruling of the Bureau for Protection of Economic Competition claiming that CEZ had misused its dominant position to the detriment of the mining company Mostecka Uhelna by reducing its purchases of lignite from that company due to the lower demand for electricity in the last year. For this breach of law, CEZ was penalized with a penalty amounting to CZK 10 million.

The irregular general meeting of the power-generation company CEZ which was held today reconfirmed all items of agendas which had already been approved by CEZ irregular and regular general meetings held last year. By that, the legal uncertainty has been removed on the parts of the company, its shareholders, as well as any third persons, which uncertainty was caused by the complaint lodged by a minority shareholder who had questioned the validity of the irregular general meeting of 5th January 1999 and, consequently, also the validity of resolutions adopted by the general meeting of 22nd June 1999.

Our power-generation company CEZ and Dalkia Co. (part of the supranational concern Vivendi) have established a joint-venture called JVCD, the objects of which include complex economic and environment-friendly optimization of heat and electricity generation in the north of Moravia. Dalkia has 51 % and CEZ 49 % in the registered capital of the new company, revenues will be divided in the ratio 60 % for CEZ and 40 % for Dalkia.