PRAGUE (Reuters) -Czech utility CEZ expects to pay a record dividend after its adjusted net profit surged in 2022 on the back of soaring electricity prices, a boon for investors before new taxes and levies dent earnings this year.
CEZ posted on Tuesday a record 78.4 billion crown ($3.50 billion) adjusted net profit for last year, a more than threefold rise over 2021, as energy markets jumped after Russia’s invasion of Ukraine a year ago and Moscow cut gas supplies.
Earnings before interest, tax, depreciation and amortisation (EBITDA) doubled to 131.6 billion crowns, compared with the company’s forecast range of 115-125 billion crowns.
It said income from commodity trading on foreign markets helped it beat its own guidance.
Record production at its nuclear power plants also boosted earnings.
“The achieved profit for 2022 indicates a record dividend for shareholders,” Chief Executive Officer Daniel Benes said.
J&T Banka analysts said if CEZ set its dividend at the upper end of its policy range, it would mean a 117 crown a share payout, compared with 48 crowns for 2021, giving a 11.3% dividend yield.
The company, 70% owned by the Czech government, has already flagged an earnings hit in 2023, as it faces a new tax on windfall profits and levies on generation as the government seeks to help households and firms hit by rising energy costs.
Its shares are down from a 14-year high hit last summer but are still up over 20% in the past year. They gained 1.6% to 1,052 crowns in early Tuesday trade.
CEZ reiterated its 2023 outlook for adjusted profit of 30-40 billion crowns and EBITDA of 105-125 billion crowns.
It said a windfall tax would cut earnings by up to 25 billion crowns in 2023, while some of the exceptional EBITDA made from trading last year would not be repeated.
The company has also sharply slowed its hedging of future production, with nearly no activity in the fourth quarter.
It said it would continue to be cautious in this regard.
CEZ has pre-sold 35.9 terawatt hours (TWh) of its 2023 output at an average price of 117 euros per megawatt hour (MWh), and 21.2 TWh of 2024 generation at 120 euros per MWh.
($1 = 22.3990 Czech crowns)
(Reporting by Jason Hovet; Editing by Rashmi Aich and Mark Potter)
