ČEZ continues its negotiations with bidders in its tender for the completion of Units 3 and 4 of the Temelín NPP
ČEZ continues its intensive negotiations with bidders under its tender for the completion of Units 3 & 4, which started in early April 2013; nevertheless, there are still numerous open issues.
The two nuclear power plants in the Czech Republic repeatedly rank among the most reliable nuclear operations in the world. However, maintaining their safety and performance requires ongoing capital expenditures. This applies to all power plants anywhere in the world. Since the Dukovany and the Temelín nuclear power plants have been launched, ČEZ has invested nearly CZK 30 billion in upgrading these facilities. The capital invested has made hundreds of major and minor improvements possible.
ČEZ today notified the Albanian party of its decision to seek compensation for damage incurred due to its non-protected investment in the power distribution company of CEZ Shpërndarje, with the International Arbitration Tribunal according to the Energy Charter Treaty.
The Net Profit was up by 24 percent year on year (CZK 3.5 billion), reaching CZK 17.9 billion, which is the second best result ever recorded by the ČEZ Group in the first calendar quarter. Operating Profit Before Depreciation (EBITDA) rose by CZK 2.1 billion year on year (up by 8%) and ended at CZK 28.3 billion. The primary factor that contributed to the year-on-year profit growth was the termination of business activities in Albania combined with extraordinary profits from trading in emission allowances, and also Energotrans’ integration in the ČEZ Group. Thus, the ČEZ Group has so far successfully compensated the adverse trend of declining electricity prices and the unfavorable developments in the European energy sector.
ČEZ and Vršanská uhelná (Czech Coal group), a mining corporation, have appended their signatures to a contract to finally secure the supply of coal to the Počerady power plant for a term of up to nearly 50 years. In view of the long-term nature of the contract and the fact that the contract significantly stabilizes the situation in the entire coal market but also in the electricity market, it can be considered as an end to one of the most complex and difficult negotiations in the Czech energy sector.
ČEZ has selected the highest offer it had received in its process to divest some of its coal-fired power plants. Today, ČEZ signed a contract to sell the Chvaletice power plant to Litvínovská uhelná a. s. The selling price is CZK 4.12 billion. Moreover, ČEZ will annually obtain 90% of the market value of CO2 emission allowances allocated for free to the Chvaletice power plant, which will then be used to further upgrade its power plants. This concerns 5.3 million tons of allowances in a total value of some CZK 450 million in their current prices. The signed contract does not cover any coal supply arrangements with ČEZ. The European Commission now just needs to confirm that the buyer, Litvínovská uhelná a.s., is sufficiently qualified.
Despite negative market developments, the ČEZ Group managed to fulfill its planned financial results. Revenues rose by more than CZK 5 billion year on year, reaching CZK 215.1 billion. Operating Profit Before Tax (EBITDA) declined by 2.1% year on year (by CZK 1.8 billion) to CZK 85.5 billion, but exceeded expectations by 0.5 billion. Net Profit showed just a slight year-on-year slip by 1.5% to CZK 40.2 billion (CZK 0.2 billion more than expected). In 2013, the ČEZ Group expects its EBITDA to reach some CZK 80 billion, with Net Profit around CZK 37 billion. The expected profit decline reflects the adverse developments in European energy markets, a substantial drop of electricity prices, lower allocations of emission allowances for power generation, and declining power generation in the Czech Republic.
ČEZ Approved Amended Settlement Agreement with the European Commission, and Commits Under the Agreement to Divest Either the Počerady or the Chvaletice Power Plant, or the Tisová and the Mělník 3 Power Plants Combined
The Board of Directors and the Supervisory Board of ČEZ have today approved an amended version of the Settlement Agreement with the European Commission, which represents a major step towards putting an end to the investigation conducted by the European Commission against ČEZ since 2009. Already in June 2012, ČEZ offered the EC to conclude the investigation in this manner; that is by committing to sell one of the following power plants: Počerady, Chvaletice, Dětmarovice, or Tisová together with Mělník 3. All of these are power plants for which ČEZ does not plan any major upgrades but rather foresees their gradual shut down as the facilities reach the end of their technical service life. The amended Agreement no longer mentions the Dětmarovice power plant. This Agreement will take force once it has been approved by the European Commission.
Today, ČEZ has officially informed the Albanian Government about its intention to initiate international arbitration. The ground is the non-protected investment in the power distribution company of CEZ Shpërndarje. The ČEZ Group expects to receive compensation for the damage incurred as the company is entitled to the compensation according to international law.
Albania regulator has decided today to revoke the business license of CEZ Shpërndarje. According to ČEZ, these steps are in violation of the local legislation, and the corporation is going to lodge a formal protest against the decision. At the same time, ČEZ is going to take first steps to initiate an international arbitration.