CEZ's Consolidated Quarterly Report on Operational, Economic and Financial Results for 1st Three Quarters 2001, in accordance with IAS
Main Features
Demand for electricity (39.1 TWh) increased by 2.7%
- ČEZ power plants´ share in the electricity wholesale market increased from 58.1% to 59.3%, ČEZ´s share (including repurchased electricity) increased from 65.2% to 65.7%
- Net income CZK 8.9 bn, an increase of CZK 3.4 bn (by 61%)
- Maximum load reached 10,445 MW, 3.1% (317 MW) higher than in 2000
- ČEZ offers “rainbow electricity? for 2002
- The completion of ČEZ and six distribution companies privatization continues, three potential owners started due diligence of ČEZ
- Initiation of the 1st unit of the Nuclear power plant Temelín up to 75% power levels, hot tests of the 2nd unit started
Prague, 31 October 2001
| Income Statement in Accordance with International Accounting Standards (IAS) | 30 Sept 2001 | 30 Sept 2000 | Index 01/00 | |
|---|---|---|---|---|
| CZK m | EUR m | CZK m | ||
| Operating revenues | 41,522 | 1,222 | 37,705 | 110,1% |
| Operating expenses | 29,935 | 0,881 | 28,630 | 104,6% |
| Fuel | 9,965 | 0,293 | 9,578 | 104,0% |
| Purchased power | 3,212 | 0,094 | 3,637 | 88,3% |
| Depreciation and amortization | 6,962 | 0,205 | 6,895 | 101,0 % |
| Operating income | 11,587 | 0,341 | 9,075 | 127,7% |
| Other expenses (income) | 0,632 | 0,019 | 1,752 | 36,1% |
| Income before taxation | 10,955 | 0,322 | 7,323 | 149,6% |
| Income tax | 2,016 | 0,059 | 1,772 | 113,8% |
| Net income | 8,939 | 0,263 | 5,551 | 161,0% |
| Unit | 30 September 2001 | 30 September 2000 | Index 01/00 | |
| Earnings per share (EPS) | CZK | 15,1 | 9,4 | 160,6% |
| Price earning ratio (P/E)* | 1 | 3,3 | 8,1 | 40,7% |
| Return on equity (ROE) net* | % | 8,0 | 6,6 | 121,2% |
| Return on total assets (ROA) net* | % | 4,8 | 3,8 | 126,3% |
| Assets turnover* | 1 | 0,26 | 0,26 | 100,0% |
| Total indebtedness (provisions excluded) | % | 24,6 | 27,9 | 88,2% |
| Long-term indebtedness | % | 20,3 | 24,2 | 83,9% |
| * For the last 12 months | ||||
Revenues, Expenses, Income
Our Income Statements, Balance Sheets and Cash Flow Statements have been converted to International Accounting Standards (IAS) from Czech Accounting Standards and may differ significantly from the same data prepared according to Czech Accounting Standards. The data presented includes the fully consolidated data from ČEZ and ČEPS, and the data from equity earnings of the affiliated company (37.21% of the profit came from Severočeské doly).
Net incomefor the period January to September amounted to CZK 8.9 bn, an increase of CZK 3.4 bn (61.0%) compared to the same period in 2000. This improvement resulted from higher EBIT (by CZK 2.5 bn) and a better exchange rate for the Czech crown (by CZK 0.9 bn). The exchange rate losses in I. - III. quarter of 2000 were CZK 0.4 bn, while the current exchange rate gains are CZK 0.5 bn.
ČEZ’s turnover was CZK 41.5 bn in total, CZK 3.8 bn (10.1%) up on the same period in 2000. Operating expenses came to CZK 29.9 bn and were CZK 1.3 bn (4.6%) up on the same period of the last year. Other expenses dropped to CZK 0.6 bn (by CZK 1.2 bn) compared to the same period in 2000. Income taxes (CZK 2.0 bn) increased by 13.8% (CZK 0.2 bn) compared to the same period in 2000. Earnings per share rose from 9.4 CZK to 15.1 CZK due to an increase in profits. The price earnings ratio fell from 8.1 to 3.3 due to a 44.3% drop in share prices, while profits (for the last 12 months) increased by 35.9%. The net return on equity (for the last 12 months) increased from 6.6% to 8.0% thanks to a slight increase in the average equity combined with a substantial rise in profits.The net return on total assets increased (from 3.8% to 4.8%) as a result of a slight increase in the average value of total assets compared to a higher rise in profits. Assets turnover (for the last 12 months) remained at the same level. Total indebtedness (provisions excluded) decreased to 24.6%; long-term indebtedness also fell to 20.3%. As of 30 September 2001 the number of ČEZ employees stood at 7,726 compared to 8,795 on 31st December 2000 - a 12.2% drop (1,069 employees). In the last 12 months we have reduced our headcount by 1,281 employees (14.2%).
Sale of Electricity
Revenues from sales of electricity (CZK 38.9 bn) increased by CZK 3.1 bn (8.8%) thanks to a change in payment methods for auxiliary services. REAS now pay ČEPS for all electricity delivered by them to the final consumers and not, as was the case in 2000, just for electricity sold by ČEZ to REAS. The sale of electricity to regional distribution companies was 27,022 GWh, an increase of 252 GWh (by 0.9%). Exports of electricity 9.4 TWh were up by 176 GWh (1.9%).
Demand for electricity in the Czech Republic 39.1 TWh was up compared to the same period last year by 1,013 GWh (2.7%). High voltage consumption increased as a whole by 709 GWh (by 3.1%). Low voltage consumption rose by 304 GWh (by 2%) due principally to a rise in household consumption (temperatures between January - September 2001 were on average 1.1°C lower than during the same period in 2000). ČEZ power plants met 59.3% of the demand for electricity of the market in the Czech Republic compared to 58.1% from January - September 2000. This was due to an increase in ČEZ sales in the Czech electricity market and a decline in the production and consumption of other domestic producers. ČEZ´s share in meeting demand for electricity (including repurchased electricity from inland and abroad) went up by 0.5% to 65.7%.
Investment Program
In total, capital investments reached CZK 10.7 bn, 3.1 bn less than in the previous year.
In the first nine months of 2001 CZK 3.6 bn was spent on the NPP Temelín. The repair of 1st unit’s turbogenerator was finished and, after synchronising it with the transmission grid on 15th August, tests continued at power levels up to 55%. After the Nuclear Safety Authority gave permission, tests at power levels up to 75% started in the second half of October.
The leakage tests of the 2nd unit were completed and, after the Nuclear Safety Authority gave permission, hot tests began.
Financing
xxxxxxxxxxxxxxxxxxDuring the first nine months of 2001 ČEZ fulfilled all its financial commitments.
Net cash provided by operating activities increased to CZK 15.1 bn (a rise of CZK 1.1 bn) thanks to higher profit and lower interest payments.
The favorable trend which started in the second half of 2000, when ope rating activities brought in a higher amount of cash than was spent on investment, continues. A sum of CZK 3.5 bn was used to reduce borrowings despite CZK 1.2 bn being given to shareholders in dividends issued by Česká spořitelna.
Other information
The completion of the privatization of ČEZ and six distribution companies continues. The steering committee short listed 4 from 12 potential investors: Belgian Electrabel, French Electricité de France and two consortiums: Italian Enel/Spanish Iberdrola and American NRG Energy/British International Power. The three companies/consortiums, except for Electrabel, began due diligence of ČEZ in October by studying information in the data room, meeting selected managers and visiting the power plants. At the end of October ČEZ management presentations were given to these potential investors.
The electricity market in the Czech Republic will open up in 2002 and ČEZ has gone to the market with a new marketing strategy and has offered "rainbow electricity" to its customers (each type of electricity is characterised by own colour and price). At first we offer specific amounts of electricity to distribution companies and then the remaining volumes by auctions. The first offer for the cheapest "yellow electricity", which will be supplied by nuclear power/coal basin power plants was accepted by all distributors, with one exception - Severomoravská energetika. The second offer of another three colours (green, red and blue) was accepted by all distributors. ČEZ guarantees, that the average price (for all colours) in 2002 of electricity offered in the Czech market will be lower than in 2001. The goal of this price strategy is to maintain and strengthen our position in the market when it will be fully opened up for all producers from the beginning of next year.
| Income Statement in Accordance with International Accounting Standards (IAS) (CZK m) | 30 Sept 2001 | 30 Sept 2000 |
|---|---|---|
| Operating revenues | 41 522 | 37 705 |
| Sales of electricity | 38 913 | 35 775 |
| Heat sales and other revenues | 2 609 | 1 930 |
| Operating expenses | 29 935 | 28 630 |
| Fuel | 9 965 | 9 578 |
| Purchased power | 3 212 | 3 637 |
| Repairs and maintenance | 2 236 | 2 156 |
| Depreciation and amortization | 6 962 | 6 895 |
| Salaries and wages | 2 895 | 2 692 |
| Materials and supplies | 1 304 | 1 409 |
| Other operating expenses | 3 361 | 2 263 |
| Income before other expenses/income and income tax | 11 587 | 9 075 |
| Other expenses/income | 632 | 1 752 |
| Interest income | -154 | -138 |
| Interest on debt, net of capitalized interest | 643 | 652 |
| Interest on nuclear provisions | 1 097 | 949 |
| Exchange rate losses (gains) | -480 | 382 |
| Other expenses/income | 39 | 221 |
| Equity in earnings of affiliate | -513 | -314 |
| Income before income tax | 10 995 | 7 323 |
| Income tax | 2 016 | 1 772 |
| Net income | 8 939 | 5 551 |
| Cash Flow in Accordance with International Accounting Standards (IAS) (CZK m) | 30 Sept 2001 | 30 Sept 2000 |
|---|---|---|
| Cash as at 1 January | 3 219 | 4 357 |
| Operating activities: | 15 090 | 14 036 |
| - Income before income taxes | 10 955 | 7 323 |
| - Depreciation and amortization | 7 045 | 6 918 |
| - Amortization of nuclear fuel | 1 161 | 1 179 |
| - Provision for nuclear decommissioning and fuel storage | 497 | 299 |
| - Changes in assets and liabilities | -1 681 | -1 566 |
| Investment activities | -10 664 | -13 752 |
| Financing activities | -4 742 | -387 |
| Net effect of currency translation in cash | -86 | 43 |
| Cash as at 30 June | 2 817 | 4 297 |
| 30 Sept 2001 | 30 Sept 2000 | |
|---|---|---|
| Net electricity generation in the Czech Republic (GWh) | 50 459 | 49 583 |
| Electricity generation at ČEZ - net (GWh) | 35 539 | 34 495 |
| Electricity sold by ČEZ in the Czech Republic (GWh) | 28 153 | 27 395 |
| - Electricity sold by ČEZ to REAS (GWh) | 27 022 | 26 771 |
| - Price of electricity sold to REAS (CZK/MWh) | 934 | 908*/ |
| ČEZ´s electricity exports (GWh) | 9 363 | 9 187 |
| ČEZ´s electricity imports (GWh) | 454 | 515 |
| */ The 2000 price is cleaned of transfer and control service fee, which has been paid directly from regional distribution companies to ČEPS, a.s. since 2001. | ||
| Balance Sheet in Accordance with International Accounting Standards (IAS)(CZK m) | 30 Sept 2001 | 31 Dec 2000 |
|---|---|---|
| Assets | 225 740 | 222 260 |
| Fixed assets | 214 364 | 211 384 |
| Plant in service | 177 967 | 177 181 |
| Less accumulated provision for depreciation | 90 493 | 84 228 |
| Net plant in service | 87 474 | 92 953 |
| Nuclear fuel, at amortized cost < /TD> | 5 521 | 5 764 |
| Construction work in progress | 111 391 | 103 591 |
| Investment in affiliate | 5 672 | 5 225 |
| Other non-current assets, net | 4 306 | 3 851 |
| Current assets | 11 376 | 10 876 |
| Cash | 2 817 | 3 219 |
| Receivables, net | 4 689 | 4 032 |
| Materials and supplies, net | 2 503 | 2 268 |
| Fossil fuel stock | 631 | 712 |
| Prepayments | 736 | 645 |
| Shareholders´ equity and liabilities | 225 740 | 222 260 |
| Shareholders´ equity | 137 197 | 129 442 |
| Stated capital | 59 209 | 59 209 |
| Retained earnings | 77 988 | 70 233 |
| Long-term liabilities | 67 281 | 70 606 |
| Long-term debt, net amount due within one year | 45 809 | 49 704 |
| Accumulated provision for nuclear decommissioning | ||
| and fuel storage | 21 472 | 20 902 |
| Deferred income taxes, net | 8 951 | 8 057 |
| Current liabilities | 12 311 | 14 155 |
| Short-term loans | 500 | 1 104 |
| Long-term debt due within one year | 5 322 | 4 703 |
| Accounts payable | 3 993 | 5 035 |
| Accrued liabilities | 2 496 | 3 313 |
| Consolidated Statement of Shareholders´ Equity in accordance with IAS (CZK m) | Stated Capital | Retained Earnings | Total |
|---|---|---|---|
| December 31, 1999 | 59 209 | 62 996 | 122 205 |
| Net Income for the period 1 - 6 / 2000 | 5 551 | 5 551 | |
| June 30, 2000 | 59 209 | 68 547 | 127 756 |
| Net Income for the period 7 - 12 / 2000 | 1 686 | 1 686 | |
| December 31, 2000 | 59 209 | 70 233 | 129 442 |
| Net Income for the period 1 - 6 / 2001 | 8 939 | 8 939 | |
| Dividends declared | - 1 184 | -1 184 | |
| June 30, 2001 | 59 209 | 77 988 | 137 197 |
| Capacity, Employees | 30 Sept 2001 | 31 Dec 2000 |
|---|---|---|
| Installed capacity ČEZ (MW) | 10 146 | 10 146 |
| Number of employees (pers) | 7 726 | 8 795 |
| Specific number of employees (pers/MW) | 0,761 | 0,867 |