Sunday 27 March 2016

Cez annual report 2015

Cez, annual, report, 2015, front page

My Czech electricity company Cez arrived with their annual report. They are, like most other utility companies, having a tough time at the moment. The one big difference with Cez in comparison to for instance E.On and RWE is that they are still making money.

For the report in full please go here, to see the previous summary please visit Cez report Q3 2015 and to find out more regarding Cez then click on analysis of Cez 2015 (a new one will arrive shortly).

Looking at the financial statement below then we see that they have done very well in terms of increasing their sales by around 5%. Costs are however up and other operating income is unfortunately down by far in comparison to 2014. They also purchased a lot of power and related services which in the end unfortunately gives us a worse result than back in 2014 by around -10% which gives us 38.8 CZK per share in earnings which should be compared to that Cez have been paying out 40 CZK or more for the last five years in dividend. 

Cez, 2015, financial statement

The outlook for Cez in 2016 was not a nicely painted picture. They expect much lower earnings.

Conclusion: Cez have for the last two ytears felt the pain as have all the other electricity companies. They have still not been forced to take on impairment costs and for this reason they are still showing a positive, even though decreasing, earnings. At some point they wanted to buy the Vattenfall assets in Germany but now they have slightly withdrawn their interest and future will tell what will happen. Buying the coal mines and coal power station is risky in the todays environment even though what they were really after were the hydropower that was part of the deal. I will remain shareholder in Cez and I keep my fingers crossed that they will not be forced, in the future, to take impairment costs like RWE and E.On.

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