PRAGUE (Reuters) -Majority state-owned Czech electricity producer CEZ proposed on Thursday to pay a record dividend of 117 crowns ($5.51) per share after soaring energy markets boosted earnings last year, while new taxes and levies are set to drag income down in 2023.
CEZ said on Thursday adjusted net profit fell by 60% year-on-year to 10.8 billion crowns ($508.43 million) in the first quarter, and earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 26% to 32.5 billion crowns.
Fluctuating commodity markets after Russia’s invasion of Ukraine in early-2022 drove electricity prices sharply higher last year, creating bumper earnings for firms but causing governments to seek extraordinary profits to aid a public hit by crushing power bills.
With expectations of a big dividend, CEZ shares ended Wednesday at 1,222 crowns, the highest closing level since 2008.
But shares dropped 1.4% on Thursday as investors took profits.
The Czech government, owning 70% of CEZ, introduced a windfall tax and levies on power production. CEZ said levies cost it 10 billion crowns in the first quarter and the tax amounted to 9 billion crowns.
Chief Financial Officer Martin Novak said lower trading income weighed on the quarter after strong gains last year.
“The trading result is lower also because there is lower volatility,” he told reporters.
The company tightened its earnings outlook for 2023 while lowering the upper range, expecting adjusted profit of 33 billion to 37 billion crowns, down from 78.4 billion last year.
EBITDA should drop in to a range of 105 billion to 115 billion crowns.
It said it had pre-sold 24 terawatt hours of expected 2024 output at an average price of 123 euros ($135.40) per megawatt hour, slightly higher than a previous average.
CEZ’s proposed dividend for 2022 was more than double its previous high of 53 crowns paid out from 2009 profits.
Shareholders will vote on it at a June 26 general meeting.
The Finance Ministry said on Thursday it did not plan a counterproposal to the dividend.
CEZ said it would pay more than 100 billion crowns to the Czech state in dividends, income taxes and levies on production sales this year.
($1 = 21.2420 Czech crowns)
($1 = 0.9084 euros)
(Reporting by Jason Hovet and Jan Lopatka; editing by Uttaresh Venkateshwaran and Christina Fincher)
