Half-year reports

Selected Events in H1 2022

January

• CEZ Group joined the UN Global Compact initiative.

February

• The Russian Federation launched a military operation in Ukraine; several rounds of sanctions and counter-sanctions by the European Union, the United States, and the Russian Federation followed, restricting trade and payments between them; these events led to further unprecedented increases in commodity prices and uncertainty in Europe.

March

• On March 15, 2022, a decision was issued on the provision of financial resources from the State Environmental Fund of the Czech Republic intended for photovoltaic power plants above 1 MWp; investment support of CZK 1.0 billion for 17 projects with a total capacity of 173 MWp was approved for ČEZ under the RES+ Call No. 2/2021.
• A tender procedure for the contractor to construct a new nuclear power plant at the Dukovany site has been launched; three bidders are participating, namely the US-Canadian company Westinghouse, the French company EdF, and the Korean company KHNP; the deadline for the submission of initial bids is the end of November 2022, and Q4 2023 for final bids.
• The Russian Federation has made it compulsory for customers from countries on the list of “not friendly countries” to pay for natural gas in Russian roubles from April 1, 2022; Czechia has been on the list since May 2021.

April

• On April 6, a EUR 600 million Sustainability-Linked Bond was issued, maturing in 2027 with a coupon of 2.375%; it is the first ever EUR-denominated sustainability-linked bond issued by an energy company in Central and Eastern Europe.
• MSCI upgraded ČEZ's ESG rating on April 8 to AA (up 2 levels from BBB).
• ČEZ and GEOMET signed a memorandum with the Ústí nad Labem Region to support lithium production and the construction of a battery cell factory for electric vehicles.

May

• On May 26, the State Office for Nuclear Safety issued a permit for the continued operation of Unit 2 of the Temelín Nuclear Power Plant for an indefinite period of time; ČEZ must continuously demonstrate to the authority that it meets all conditions related to safe operation.
• In line with the strategy in the heating sector, a decision was taken to merge Elektrárna Dětmarovice into ČEZ on January 1, 2023.
• The international SBTi (Science Based Targets initiative), which provides companies from all over the world with expert assessments of their climate targets, has verified that CEZ Group's short-term targets meet the conditions of the Paris Climate Agreement.

June

• On June 28–29, the Shareholders' Meeting of ČEZ, a. s., was held, at which, among other things, the dividend of CZK 48 per share, a change in the composition of the Supervisory Board, and an updated business concept were approved.
• Following a tender procedure, ČEZ concluded contracts with the US-Canadian company Westinghouse and the French company Framatome for the supply of fuel assemblies for the Temelín Nuclear Power Plant; deliveries for more than 10 years will begin in 2024.
• ČEZ announced that it will become a 100% owner of ŠKODA JS, a major nuclear industry supplier.
• With the completion of a modern 110/22 kV transformer station on the outskirts of Uničov in the Olomouc Region, CEZ Group has secured sufficient power supply for the electrification of the modernized Olomouc—Uničov—Šumperk railway line with a line speed of up to 160 km/h.

Selected Events until the Closing Date for the Half-Year Report

July

• The Ministry of Industry and Trade of the Czech Republic together with ČEZ have negotiated a capacity of three billion cubic meters of natural gas per year for Czechia at a new LNG terminal, including transport routes to Czechia; the terminal will be located in Eemshaven, the Netherlands; the contract has been concluded for 5 years; the capacity will be commercially managed by ČEZ; options for capacity assignment and cost sharing with the Czech state are included.
• The European Parliament approved the temporary and conditional inclusion of nuclear power and natural gas as green investments under the European Sustainable Investment Taxonomy.
• ČEZ signed a credit agreement with the Ministry of Finance of the Czech Republic for up to EUR 3 billion (approx. CZK 73 billion) to cover liquidity risks associated with a potential surge in the requirements for temporary extraordinary increases in margin deposits (security deposits) on energy exchanges and to trading counterparties; on July 13, ČEZ drew down EUR 2 billion (approx. CZK 49 billion) in accordance with the agreement, and another EUR 1 billion (approx. CZK 24 billion) is available within 5 days upon request.
• ČEZ has signed an agreement to sell its 50% stake in the Turkish joint venture AKCEZ Enerji to the Turkish Torunlar Group; the transaction is conditional, among other things, on refinancing the existing debt of AKCEZ Enerji by the new co-owners; the transaction is also subject to approval by the Turkish Antitrust Authority and the local energy regulator.

August

• Following the reduction of natural gas supplies from the Russian Federation and rising inflation in Europe, wholesale electricity prices for delivery in 2023 reached new all-time highs, exceeding EUR 500/MWh.

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CEZ Group - Half-year Financial Report 2022

Selected Events in H1 2021

January

• The sale of Romanian assets related to the generation, distribution, and sale of electricity by the Romanian State Security Council is approved.
• The sale of Bulgarian assets was approved by the Bulgarian Commission for Energy and Water Regulation.

February

• The digitization of nuclear power plant processes continues with the deployment of the “Mobile Support for Operation and Maintenance Preparation” application at both nuclear power plants; maintenance preparation is now fully managed through this digital application, which increases efficiency and ensures safe execution of work.

March

• On March 31, the sale of seven Romanian companies (the distribution and sales companies and the Fântânele and Cogealac wind farms, four small hydroelectric power plants, and a shared services center) was completed; the shares of the companies were handed over to the buyer, Macquarie Infrastructure and Real Assets against payment of the full purchase price.
• The conditions for supporting the construction of RES from the Modernization Fund in Czechia were specified.
• A SÚJB permit for the location of two new nuclear units at the Dukovany site was obtained and the plant was authorized under the Energy Act.
• An award of the arbitration tribunal in the international investment arbitration of ČEZ, a. s., against the Bulgarian state was issued, which confirmed the legitimacy of the arbitration within the current jurisdiction and thus moved the proceedings to the next phase, in which the merits of the dispute will be assessed.

April

• In February, a joint ESCO venture was formed with a strong local partner SPP in Slovakia to develop decentralized energy and comprehensive energy services and commodity customer portfolio sold to SPP.
• The overhaul of Units 21 and 22 of the Tušimice power plant was started, including the implementation of additional greening measures, enabling the units to operate in accordance with the new BREF/BAT limits.

May

• CEZ Group's accelerated strategy, VISION 2030—Clean Energy for Tomorrow was announced, based on transforming the generation portfolio to low-emission one, achieving carbon neutrality by 2050, and providing the most cost-effective energy solutions and best customer experience in the market; CEZ Group's focus on social responsibility and decarbonization in line with the Paris Agreement deepens.
• The largest ČEZ ESCO energy savings project in Slovakia has been completed; thanks to the modernization of the University Hospital and Health Center in Nové Zámky, which included replacement of lighting in selected buildings, a new boiler room, laundry, and reconstruction of the air conditioning system, the hospital will save up to CZK 20 million annually in operating costs. It will also reduce CO2 emissions by 2,000 tons per year.
• A new information website, https://www.cezdistribuce.cz/cs/pro-vyrobce, was launched, offering clear information and instructions on how to proceed when applying to connect a generating facility or micro-source, with an emphasis on self-care channels.

June

• In connection with the accelerated VISION 2030—Clean Energy for Tomorrow strategy and a significant deterioration of the medium-term market conditions for coal-fired power in Q2, updates of the concepts for the future operation of the coal-fired portfolio and the use of all generation sites in Czechia were initiated; priority was given to the sites of Mělník and Dětmarovice, where the operation of facilities is linked to a large supply to the centralized heat supply systems.
• Three bidders for the construction of a new nuclear power plant at Dukovany (approved by the Czech state) were sent an invitation to participate in the safety assessment; following confirmation of their interest and fulfillment of the conditions, preliminary tender documents were sent to all three bidders.
• ČEZ Prodej has entered into a strategic partnership with Česká pošta with the aim of getting closer to its end-use customers in the regions in terms of service; the current network of 24 customer centers and other contact points of ČEZ Prodej will be gradually supplemented by 73 branches of Česká pošta in 2021 and 2022.
• A new parking lot with a photovoltaic power plant was opened at the Dukovany Nuclear Power Plant; the carport, a roofed parking lot for more than 320 cars of the plant's employees and contractors, consists of 2,600 photovoltaic panels and, thanks to its capacity, will generate about 850 MWh of electricity per year emission-free, which will cover the year-round consumption of almost three hundred households.
• The Shareholders' Meeting of ČEZ, a. s. was held, at which, among other things, a dividend of CZK 52 per share was approved.

Selected Events until the Closing Date for the Half-Year Report

July

• On July 15, ČEZ ESCO became a 100% owner of EP Rožnov, a Czech market leader in comprehensive services in the design and implementation of cleanrooms, especially for the electrical, automotive, pharmaceutical, and medical industries.
• On July 27, the sale of seven companies in Bulgaria, including distribution and sales companies, was completed; against payment of the full purchase price of EUR 335 million, the shares of the companies were handed over to the buyer—Eurohold Bulgaria; the sale of assets has no impact on the international investment arbitration against the Bulgarian state, which is ongoing and represents a potential additional return for CEZ shareholders.
• On July 27, the Ministry of Industry and ČEZ concluded a memorandum regarding the preparation of a project for a battery cell factory for electric vehicles, the so-called gigafactory, with the assumption of subsequent involvement of the automotive industry and battery manufacturers representatives; the investment in the project with an annual generation capacity of 40 GWh is assumed at the level of EUR 2 billion, 2,300 jobs should be created; within the contemplated investor consortium, ČEZ could act as a developer, which, among other things, will provide the necessary land and take care of energy supply and energy services.
• The achievable capacity of Unit 1 of Temelín NPP increased by 4 MWe (to 1,086 MWe); the increase was achieved by installing two new separators—steam heaters in the non-nuclear part of the plant, which increased the efficiency of the unit while maintaining the reactor capacity.

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Half-year Report 2021

Selected Events in H1 2020

February

• An agreement was made with US company GE Hitachi Nuclear Energy to investigate the economic and technical feasibility of the potential construction of a BWRX-300 small modular nuclear reactor in Czechia.

March

• Joining a call by large European energy companies whereby a total of seven companies ask the European Commission to leave nuclear energy on its list of sustainable economic activities.
• A siting permit application for the construction of a new nuclear power plant at Dukovany was submitted to the State Office for Nuclear Safety.
• Timely measures were taken to minimize COVID-19 pandemic risks for and impacts on key activities and to protect the health of CEZ Group companies’ employees. The measures were coordinated with national crisis staff even before a state of emergency was declared.
• A state of emergency was declared in the Czech Republic due to the COVID-19 pandemic (March 12 to May 17, 2020).

April

• A 51% stake in GEOMET s.r.o. was acquired through Severočeské doly. GEOMET, a Czech company, is the holder of preferential exploration and production rights to a lithium mineral deposit at Cínovec.

June

• The parameters of the fifth regulatory period, spanning 2021–2025, were approved for ČEZ Distribuce.
• The Prunéřov I coal-fired power plant, which generated 139 TWh of electricity throughout its lifetime, was put out of operation.
• An additional stake of 49.9% in ČEZ Energo was acquired by ČEZ ESCO, becoming the sole owner of the company.
• A smaller battery system for customers purchasing a photovoltaic installation from ČEZ was presented. The system is intended for smaller family houses and low-energy houses.
• Inven Capital sold its share in CyberX, an Israeli company specializing in industrial cybersecurity, to Microsoft.
• Binding offers were received concerning the sale of assets in Romania. The sale involves, most importantly, distribution and sales companies and the Fântânele and Cogealac wind park.
• The annual shareholders’ meeting of ČEZ, a. s., was held; a dividend of CZK 34 per share was approved.

Selected Events until the Closing Date for the Half-Year Report

July

• On July 27, 2020, the Czech government discussed an act on measures for Czechia’s transition to low-carbon energy with the aim of enabling the state to order the construction of a nuclear power plant with a fixed commissioning date, generation volume, and elektricity purchase price and also to provide some funding for the project.
• On July 28, 2020, the Czech government signed a framework agreement and an implementation agreement with ČEZ, a. s., and Elektrárna Dukovany II, a. s., for stage 1 of the construction of a new nuclear power plant at Dukovany.

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Half-year Report 2020

 

Selected Events in H1 2019

January

• Wind turbine projects with an installed capacity of up to 119 MW were purchased in France.
• The www.bezstavy.cz site was launched for ČEZ Distribuce customers, where they can get, for example, information about power outages during natural disasters and expected power restoration times.
• Inven Capital, CEZ Group’s investment fund seeking opportunities in the new energy sector, bought a share in Driivz, a company whose modular charging management system is used by 300,000 drivers globally.

February

• Inven Capital sold its stake in sonnen, a Bavarian battery system manufacturer; the selling price was about two times the purchase price.

March

• The European Parliament excluded nuclear, coal, and gas power from the category of sustainable finance, increasing the risk of a future change in EU regulation-as contrasted to sustainable sources having a “green investment label.”
• INVEN CAPITAL acquired a share in CyberX, an Israeli company delivering comprehensive solutions for industrial cybersecurity.
• A memorandum on crisis communication during natural disasters was signed by Czech energy distribution companies ČEZ Distribuce and E.ON Distribuce of the one part and telecommunications infrastructure operators of the other part.

April

• The agreement with Inercom for the sale of CEZ Group’s assets in Bulgaria was terminated.
• CEZ Group began selling electric vehicles to households and sole traders.

May

• A decision was taken to update the dividend policy as follow-up to an update to CEZ Group’sstrategy, which no longer anticipates any major investments in renewables abroad; the payout ratio was raised to 80%-100% of consolidated net income adjusted for extraordinary effects.
• HERMOS, a German group involved in ESCO services, was acquired.

June

• An agreement was made with Eurohold for the sale of CEZ Group’s assets in Bulgaria for EUR 335 million (about CZK 8.6 billion).
• INVEN CAPITAL acquired a share in Neuron Soundware, a Czech company delivering smart solutions for machinery diagnostics based on acoustic analysis of machine operation.
• A WANO international review began at the Temelín Nuclear Power Plant; final results of the mission will be available in October.
• The 28th annual shareholders’ meeting of ČEZ was held, approving, among other things, an update to the business policy of CEZ Group and ČEZ, a. s.

Selected Events in H1 2018

January

• SÚJB’s decision granting an operating license for an indefinite period of time for Units 3 and 4 of the Dukovany nuclear power plant came into effect.
• ČEZ Distribuční služby ceased to exist as a result of a merger by acquisition by ČEZ Distribuce.
• ČEZ Inženýring ceased to exist as a result of a merger by acquisition by ČEZ, a. s.
• A 100% stake was acquired in Polish company Metrolog sp. z o.o.
• A 25% stake in ENESA was acquired by ČEZ ESCO, becoming its sole shareholder.

February

• A sales contract was signed for the sale of CEZ Group’s assets in Bulgaria (Oreshets and Bara power plants as well as electricity distribution, sales, and trading, including the provision of support services).
• A change in the legal form of INVEN CAPITAL from a closed-end investment fund to an investment company with variable capital (SICAV) was completed, fulfilling the condition for the management of EUR 50 million from the European Investment Bank.

March

• A technical and economic study of the long-term operation of the Temelín Nuclear Power Plant was completed, confirming the feasibility of the long-term operation of the source by 2060 for Unit 1 and 2062 for Unit 2; no significant safety engineering limitations were identified in the study for operation even beyond this horizon.
• An integrated permit for the first of CEZ Group’s prepared wind farms in France (Aschères-le-Marché) came into effect.
• ČEZ Distribuce launched notification of planned outages and failures via email and cell phone texts.

April

• We opened the first of fast-charging stations for electric vehicles planned in collaboration with the Kaufland retail chain in Czechia.
• Engineering modifications to the high-pressure stage of the turbine increased the achievable capacity of Unit 1 of the Temelín Nuclear Power Plant by 2 MWe.

May

• A ČEZ HEATING SERVICE was launched to provide customers with comprehensive maintenance services for their gas boilers.
• A pilot project for a 3MW lithium-ion battery system was launched at Tušimice; the system should provide ancillary services to the transmission system operator.
• A favorable opinion was received from the Ministry of the Environment of the Czech Republic on the EIA report for the New Fluidized-Bed Boiler and Gas-Fired Boiler Plant project at Mělník.

June

• The annual shareholders’ meeting of ČEZ was held, approving dividend payment, among other things; the dividend awarded was CZK 17.8 billion.
• We opened the first of fast-charging points for electric vehicles planned in collaboration with the Benzina gas station network in Czechia; furthermore, we put into operation CEZ Group’s 100th charging station for electric vehicles in Czechia.
• A series of public hearings concerning the EIA report for a new nuclear power plant at Dukovany took place in Hungary and Czechia and public debates were held in Austria and Germany.
• ČEZ published its Sustainability Report for 2017.

Selected Events Until the Closing Date for the Half-Year Report

July

• American journal Institutional Investor published its international rankings according to which ČEZ has the best investor relations and the best corporate governance system among developing utilities in the EMEA (Europe, Middle East, and Africa) region; Martin Novák was ranked as the best CFO and Daniel Beneš ranked second among the region’s CEOs.
• ČEZ Prodej’s code of conduct was updated in accordance with the Energy Regulatory Office’s template, now stricter, especially in the supplier switching process; the code of conduct describes rules for traders’ dealings with customers as well as rules for dealings between traders.
• The transaction to sell CEZ Group’s Bulgarian assets was disapproved by the Commission for Protection of Competition in Bulgaria; the buyer, Inercom, brought an administrative action agai nst the decision.

August

• ČEZ brought an administrative action against the decision of the Bulgarian Commission for Protection of Competition concerning the sale of CEZ Group’s Bulgarian assets.

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Half-year Report 2018

Selected Events in H1 2017

January

• Transfer of shares in Tisová Power Plant from ČEZ to Sokolovská uhelná (SU) under an agreement between ČEZ and SU, which resulted in a new contract for coal deliveries until 2025, an agreement resolving all long-term trade disputes, sale of Tisová Power Plant to SU, and termination of all ongoing lawsuits and legal proceedings.
• Rebranding of CEZ Distributie as of January 3; the Romanian distribution company was renamed to Distributie Energie Oltenia S.A. and uses a new Distributie Oltenia logo.

February

• Launch of a battery system rental service, renting battery systems made by sonnen to end-use customers in Czechia.

March

• Merger of the New Energy division and the External Relations and Regulation division into a newly established division named New Energy and Distribution as of March 1.
• Rules governing support for renewable electricity generation, increasing the transparency of the whole RES support system, entered into effect in Romania on March 31.

April

• Completion of a review of the Dukovany Nuclear Power Plant, the fourth of its kind, by WANO’s international mission experts, which identified 9 areas for improvement and 2 good practices transferable to other power plants.
• Settlement of the sale of a block of shares in Hungarian company MOL and the early redemption of convertible bonds, ending almost ten-year holding of 7.5% of the company’s shares, with a total positive cash-flow balance of CZK 3.4 billion for CEZ Group (the sale of shares not sold in the block sale was completed in May).

May

• The Supervisory Board of ČEZ, a. s. refused to give its prior consent to the Board of Directors’ proposal to sell Elektrárna Počerady, a.s.
• Decision to create a separate Nuclear Power division as of June 1; Bohdan Zronek, previously the director of the Temelín NPP and a new member of the Board of Directors of ČEZ, a. s. since May 18, became head of the new division. The organizational units of Temelín NPP, Dukovany NPP, and relevant central functions will be transferred from the existing Generation division to the new Nuclear Power division as of September 1 and the purview of the new division will include ČEZ Energoservis, ÚJV Řež, and other relevant subsidiaries. The new Nuclear Power division will also be responsible for preparing new nuclear units at Dukovany and Temelín.
• On May 14–23, ČEZ successfully underwent the first WANO Corporate Mission, which reviewed corporate processes especially in headquarters management and administration, performance promotion, communication, and human resources. The mission acknowledged 2 good practices and recommended 2 areas for improvement.
• A minority share was acquired in Saxon company CLOUD & HEAT Technologies GmbH through Inven Capital

June

• The 25th annual shareholders’ meeting was held, which approved a dividend of CZK 33 per share, among other things.
• Signing of an acquisition of 14 operated wind turbines with a total installed capacity of 35.4 MW at Lettweiler Höhe, Germany.
• Entry into the French market in renewable energy sources by acquiring development projects for 9 wind parks with a planned capacity of up to 101.8 MW. Connection to the grid and the first revenues are expected in 2019–2022.
• Completion of a sale of residential property in Prague-Písnice for CZK 1.3 billion.

Selected Events Until the Closing Date for the Half-Year Report

July

• SÚJB’s decision granting an operating license for an unlimited period of time for Unit 2 of the Dukovany Nuclear Power Plant came into effect on July 11.
• Construction of CEZ Group’s new data center, planned to be put into operation in 2019, was started at the site of the former Tušimice I power plant.
• Entry into the German ESCO market by acquiring Elevion, a successful company that is one of the largest providers of comprehensive energy services in Germany (specializing in the installations, modernizations, and reconstructions of energy facilities in commercial and industrial buildings). The company’s annual sales are about CZK 8 billion. It employs over 1,800 people.

August

• Binding offers for ČEZ assets in Bulgaria were received from several parties; the offers are being evaluated.

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Half-year Report 2017

Selected Events in H1 2016

February

• Units 1 and 2 of the Dukovany Nuclear Power Plant resumed operation.
• Standard& Poor’s credit rating of ČEZ was reaffirmed at A− including a stable outlook,
• CEZ Group became a partner of Rockstart, a Dutch startup accelerator, where it will become a minority stakeholder in three portfolios with a total of 30 innovative companies under the Smart Energy program in 2016 to 2018; supported projects aim at innovations intended to make more efficient use of energies.

March

• An operating license for an indefinite period of time was received for Unit 1 of the Dukovany Nuclear Power Plant; the validity of the license is conditional on meeting a number of operating conditions.
• ČEZ Energy Services Forum was organized for the first time, presenting the ČEZ ESCO group’s objectives and products to three hundred business, municipal, and institutional customers.

April

• A new product line for electricity, ČEZ ELE WITH REWARD, was introduced, offering customers a 20% discount off the basic price list for entering into a three-year contract.
• Internal investigation into issues associated with insufficient checks of welded joints at the nuclear power plants was finished and systemic measures were adopted.
• A stake was acquired in tado GmbH, a Bavarian technology company offering smart temperature controllers for homes.

May

• Unit 4 of the Dukovany Nuclear Power Plant resumed operation.

June

• The 24th Annual General Meeting was held, which approved, among other things, a gross dividend of CZK 40 per share and the spin-off of a part of the enterprise – the “NJZ ETE” and “NJZ EDU” organizational units.
• Two units of the Prunéřov II Power Plant were accepted for service.
• The individual notification of support for renewable electricity generation at the Fântânele Vest and Cogealac wind parks in Romani a was approved by the European Commission (DG COMP).

Selected Events until the Closing Date for the Half-Year Report

July

• The last of the three units of the Prunéřov II Power Plant was accepted for service, completing the comprehensive renovation.
• Documents needed for the start of the process of comprehensive environmental impact assessment (EIA) of the planned construction of new units at the Dukovany Nuclear Power Plant were delivered to the Ministry of the Environment on July 20, 2016.
• A request for arbitration against the Republic of Bulgaria was filed, whereby ČEZ officially commenced international investment arbitration for the non-protection of its investment under the Energy Charter Treaty.
• An application was filed with the SONS for the extension of the existing operating license for Unit 2 of the Dukovany Nuclear Power Plant, which is valid until December 31, 2016, for until July 10, 2017.

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Half-year Report 2016

Selected Events in H1 2015

January

• Operation of the coal-fired power plant in Varna, Bulgaria is suspended.
• CEZ Group’s Code of Conduct enters into effect as a comprehensive summary of the rules of ethical conduct, with a focus on external relations, employee relations, the environment, occupational safety and health, and security of CEZ Group.

March

• An extraordinary exercise with a secret scenario is successfully performed at the Temelín Nuclear Power Plant, with the objective of testing reactions to an unplanned situation.
• A new product, ČEZ WITH REWARD, is launched for natural gas supplies; with a three-year contract, customers are guaranteed prices 7%, 8%, and even 10% below the standard product of the main supplier in the given distribution area in the first, second, and third year, respectively; customers also get an immediate bonus depending on their consumption when entering a contract.

April

• The International Court of Arbitration of the ICC in Paris dismisses an overwhelming majority of claims exceeding EUR 81m (CZK 2.2bn) brought against ČEZ by the Romanian company Electrica (and its successor in the case, Societatea de Administrare a Participaţiilor în Energie S.A.) for alleged breach of ČEZ’s obligations under the 2005 privatization agreement; the Court admits only a bare minimum of the claimant’s claims, which is not of material nature.
• The second coordinated exercise in the restoration of the Czech Republic’s electricity system following a major power outage (blackout) takes place.

May

• ČEZ, a. s. decides not to exercise its first option to sell the Počerady power plant to Vršanská uhelná a.s., a mining company from the Czech Coal group.
• ČEZ, a. s. updates its dividend policy, increasing the dividend payout ratio to 60–80% of consolidated net income adjusted for extraordinary effects.
• The OSART 2015 Corporate Follow-Up Mission takes place, verifying that most findings from the OSART 2013 Mission have been resolved; the remaining three findings are found to show sufficient progress.
• The Government of the Czech Republic approves the updated State Energy Policy, which anticipates, among other things, greater diversification of sources and preservation of the existing full independence in heat and electricity supply but without any major exports of generated electricity.
• The project for “Teplice District Heating—Reducing Heating Costs and Emissions in Teplice” (a district heating system) is named Project of the Year 2014 in the “Development of Heat Supply Systems” category.

June

• The 23rd annual general meeting of ČEZ, a. s. is held, adopting a decision to pay a dividend of CZK 40 per share.
• CEZ Group announces its plan to reduce its greenhouse gas emissions to zero by 2050.
• Based on a court decision, ČEZ Prodej receives a total of CZK 1.1bn from Správa železniční dopravní cesty (Railway Infrastructure Administration) on account of a 2010 electricity supply contract.

Selected Events Until the Half-Year Report Closing Date

July

• The Albanian government duly pays another installment of EUR 21.75m (approx. CZK 0.6bn) under the EUR 95m Settlement Agreement, having paid a total of EUR 31.75m since the start of payments; further payments are to be made in yearly installments until 2018.
• CEZ Group acquires a minority stake, together with the right to participate in the German company’s strategic decision-making, in Sonnenbatterie GmbH, the world leader in the production of battery energy storage systems.

August

• New regulatory conditions for distribution and sales in Bulgaria are announced with effect from August 1, 2015; the end-customer price is lowered by 1.99%

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Half-year Report 2015

Selected Events in H1 2014

January

• The European Commission approved allocation of emission allowances for electricity and heat generation in the Czech Republic in 2013.

February

• EUR 470.2m issue of bonds convertible into MOL Nyrt. Shares.

March

• Initiation of revocation proceedings concerning the Bulgarian subsidiary’s electricity selling license
• A law restricting support for renewable energy sources, including the Fântânele and Cogealac wind parks, came into force in Romania
• First boiler ignition at the Egemer, Turkey CCGT plant
• Consolidation of engineering capacities approved with the aim of matching them to internal customers’ requirements and the market situation; cumulative savings are expected to reach more than CZK 1 billion over 4 years.

April

• ČEZ, a. s. decided to cancel the award procedure for the construction of two new units in the Temelín Nuclear Power Plant
• Settlement of a buyback of ČEZ, a. s. bonds maturing in 2015 and 2016 with a total value of EUR 300 million, without an option to exchange the bonds for new bonds.

May

• CEZ Group Customer Code published; it summed up the scope and level of services for households and small businesses
• The Ledvice heating network project (central heating system) became a Project of the Year 2013 in the “Development of Heat Supply Systems” category at the District Heating and Energy Days 2014 in Hradec Králové
• An IAEA OSART follow-up mission visited the Temelín Nuclear Power Plant and issued a favorable review of the effectiveness of measures taken in organization and management, operations, maintenance, technical support, feedback, chemistry, radiation protection, and emergency management based on recommendations from 2012; out of the eleven recommendations made in 2012, seven are resolved completely, with the remaining onesin progress.

June

• Announcement of ambitious goals for cuts in fixed operating costs, aiming to save 16% in comparison to the business plan for 2015 and 2016; the target values of division and segment savings range from 14% to 27%; all economy measures remain conditional on compliance with all safety, legal, and regulatory requirements
• A settlement agreement made with the Republic of Albania, under which CEZ, a. s. will get back (provided that the conditions precedent are met) EUR 100 min payment of receivables and for the transfer of its share in CEZ Shpërndarje.
• The annual general meeting of CEZ, a. s. was held
• Outage started at Unit 1 of the Temelín Nuclear Power Plant in order to exchange three low-pressure turbine components and replace the existing low-pressure oil control system at the turbine with a new high-pressure system to increase the achievable capacity
• SAFEGUARD Dukovany 2014 exercise successfully conducted, focusing on practicing collaboration between the Czech Army, Czech Police, and CEZ when ensuring the power plant’s external safety
• CEZ CEO discussed the restriction of support for renewable sources in Romania with the country’s Prime Minister and Minister for Energy.

Selected Events Until the Closing Date for the Half-Year Report

July

• The structure of the CEZ Group customer line in the Czech Republic was simplified, reducing the time of contact with the IVR system by 60%
• A new price decision of the Bulgarian regulatory authority SEWRC has been in effect since July 1, 2014; as a result, the margin of the distribution company will drop by app. 4% and that of the sales company by app. 33%.

August

• A contract to provide CEZ, a. s. power plants’ production capacity was made with Vršanská uhelná for converting their coal to electricity; expected revenue from the provision of the 200MW capacity is hundreds of millions of CZK per year; the contract was made for 2015, with an option to continue with its execution under similar conditions until 2020.

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Half-year Report 2014