PRAGUE (Reuters) -CEZ lifted its full-year earnings outlook on Thursday, after the Czech utility posted a threefold rise in adjusted net profit in the third quarter on its way to record earnings for the 12 months as electricity prices soar.
The group, 70% owned by the Czech state, posted 18.7 billion crowns ($772.15 million) in adjusted net profit, exceeding a Reuters poll average estimate of 14.0 billion crowns.
CEZ profits have shot up this year as wholesale power prices jump, following Russia’s invasion of Ukraine and a cut in Russian gas supplies to Europe.
CEZ forecast its 2022 full-year adjusted net profit to rise to all-time levels, in a range of 65 billion to 75 billion crowns, up from a previous outlook of 60 billion to 65 billion crowns, as it books more income in commodity trading and higher realised electricity prices.
After nine months, CEZ’s net profit had risen to 52.3 billion crowns, above a previous record profit of 51.9 billion crowns posted in 2009.
The Czech government, though, has sought to tax excess profits of companies, as well as cap revenues in the case of electricity producers like CEZ in order to help fund schemes to ease the burden of soaring energy bills for households and companies.
On Wednesday, the government approved caps on electricity producers’ revenues that it will combine with a special tax on windfall energy profits from 2023 to raise budget revenues.
CEZ shares are down almost 30% since June, when they hit an almost 14-year high. Shares rose 2.5% to 858.50 crowns, a one-month high, in early trading on Thursday.
The company said its earnings forecast indicated a record dividend payout from 2022 profits for shareholders.
For next year, the company had pre-sold 35.2 terawatthours (TWh) of its expected 2023 delivery of 47-48 TWh as of end-September, with the average price at 108 euros per megawatthour (MWh), up from 90.5 euros seen mid-year.
Output for 2024 was pre-sold at 120 euros per MWh.
CEZ said in a presentation it decided in August to discontinue hedging market risks of generation through contracts on energy exchanges and to take measures to reduce trading exposure on energy exchanges.
($1 = 24.2180 Czech crowns)
(Reporting by Jason Hovet; Editing by Rashmi Aich and Simon Cameron-Mooore)
