CEZ 1Q 20 - Czech premium on prices and trading boost results
CEZ posted increasing results almost across the board but for mining and crushed our and consensus estimates by a sweeping margin on the back of soaring electricity prices (+CZK 3.9 bn yoy) and the "overhedge" from the increasing premium of Czech prices vs. German ones, which added CZK 1.4 bn to EBITDA. On top of that, New Energy recorded higher prices in Romania and better output in Germany (+ CZK 0.3 bn yoy), Distribution thrived on lower grid loss cost in SEE and Sales EBITDA jumped on lower energy purchase prices. Mining EBITDA, which was in line with RCBe, fell on lower demand for lignite from outside customers.CEZ Group is a dynamic, integrated electricity conglomerate based in the Czech Republic and with operations in a number of countries of Central and Southeastern Europe and Turkey. Co. is an international group consisting of nearly 120 companies, Czech and foreign. Co.'s primary activities involve the production and transmission of electricity through nuclear, coal-fired and hydro power stations; production and distribution of heat and processing of secondary products generated during the production of electricity and heat as well as coal mining. Co. has operating companies in Poland, Bulgaria, Romania, the Netherlands, Ireland, Germany, Hungary, Albania, Turkey, Serbia, and Slovakia.
The Institutional Equity Research team of Raiffeisen Bank International AG covers 85 stocks from Austria, Central & Eastern Europe with sell-side research and thus levers our local broker status with excellent company relationships. For corporates in Austria, CEE and Western Europe, we offer co-sponsored research, which includes research coverage and marketing activities to investors. Additionally, through our Spotlight Research product we also shed light on leading European small and micro-caps, seeking greater visibility with investors.
The Institutional Equity Research team consists of roughly 15 analysts, both in Vienna and the CEE countries. Our analysts provide long-standing sector expertise in tandem with profound local market know how and a sectoral approach across the entire region.
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