# CEZ shares jump as 2022 profit, dividend outlook brightens
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-05-10
Category: INVESTING
Category URL: https://financedigest.com/category/investing
Meta Title: CEZ Shares Climb After Profit Outlook Boost
Meta Description: CEZ shares soar as its profit outlook spikes, driven by rising electricity prices and commodity trading income. Quarterly earnings show impressive growth.
URL: https://financedigest.com/cez-shares-jump-as-2022-profit-dividend-outlook-brightenshtml

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PRAGUE (Reuters) – Shares in CEZ jumped to their highest level since 2008 after the Czech energy group sharply raised its profit outlook on Tuesday, with rising electricity prices and commodity trading income boosting prospects for a record dividend this year.

The company, central Europe’s biggest listed utility, said its first-quarter adjusted net profit jumped more than threefold to 26.7 billion crowns ($1.13 billion), well above a Reuters poll average estimate of 16.2 billion crowns.

Earnings before interest, tax, depreciation and amortisation (EBITDA) soared by 119% year-on-year to 43.7 billion crowns.

CEZ said its results were largely impacted by record profits from commodity [trading](https://www.financedigest.com/a-brits-guide-to-understanding-commodity-trading.html "A Brit’s Guide to Understanding Commodity Trading") in western European markets and “enormous” growth in commodity prices as markets jumped in the wake of Russia’s invasion of Ukraine.

CEZ shares, which have surged [nearly 70% in the past year](https://www.financedigest.com/cepsa-to-nearly-double-investments-over-next-3-years-as-profit-soars.html "Cepsa to nearly double investments over next 3 years as profit soars"), were up 2% in early trade, hitting 1,035 crowns in Prague for the first time since October 2008, as markets took in the brighter outlook.

Quarterly earnings were also [boosted by temporary effects of nearly 8 billion crowns that will fade this year](https://www.financedigest.com/crop-merchant-louis-dreyfus-gets-profit-boost-in-volatile-year.html "Crop merchant Louis Dreyfus gets profit boost in volatile year").

The biggest was income from the [sale of emission allowances for electricity](https://www.financedigest.com/sales-of-electric-bicycle-motors-market-to-record-exponential-growth-during-2017-2025.html "Sales of Electric Bicycle Motors Market to Record Exponential Growth During 2017 – 2025") generation due to a decision to strengthen liquidity to cover margin risks on exchanges. This [income will be eliminated as part of higher](https://www.financedigest.com/macquarie-posts-record-profits-on-higher-income-from-commodities-arm.html "Macquarie posts record profits on higher income from commodities arm") provisioning for generation emissions, CEZ said.

The group, 70% owned by the Czech state, [expects adjusted net profit](https://www.financedigest.com/portuguese-airline-tap-swings-to-profit-earlier-than-expected.html "Portuguese airline TAP swings to profit earlier than expected") to at least double year-on-year in 2022 to a range of 45 billion to 49 billion crowns – above guidance in March of profit of 38 billion to 42 billion.

EBITDA should [rise this year](https://www.financedigest.com/world-food-prices-rise-for-first-time-in-a-year-fao.html "World food prices rise for first time in a year- FAO") to 95 billion to 99 billion crowns, versus a previous outlook of 85 billion to 89 billion crowns.

CEZ said its [outlook implied a dividend](https://www.financedigest.com/lockmaker-assa-abloy-boosts-dividend-but-wary-on-outlook.html "Lockmaker Assa Abloy boosts dividend, but wary on outlook") under its current payout policy of 67-73 crowns per share, above a record 53 crown dividend paid from 2009 earnings.

Further ahead, CEZ said it had pre-sold 26.3 terawatt hours of 2023 output at an [average price](https://www.financedigest.com/taylor-wimpey-espana-remain-cautiously-optimistic-as-average-selling-price-increases-by-20-4.html "Taylor Wimpey España ‘remain cautiously optimistic’ as average selling price increases by 20.4%") of 70.9 euros per megawatt hour, up from a price of 61.5 euros reported in March. Pre-sold 2024 [output was booked at 69.2 euros](https://www.financedigest.com/euro-zone-industry-output-falls-sharply-with-ireland-plunge.html "Euro zone industry output falls sharply, with Ireland plunge") per MWh.

Debt also decreased in the quarter to a ratio of 0.9 to EBITDA, CEZ said.

In the long-term horizon, such low indebtedness is not effective and we expect that in the longer term, the group could address the [debt optimisation by means of an extraordinary dividend or a share](https://www.financedigest.com/european-shares-weighed-by-us-debt-ceiling-concerns-slide-in-financials.html "European shares weighed by US debt ceiling concerns, slide in financials") repurchase,” J&T Banka said.

($1 = 23.6630 Czech crowns)

(Reporting by Jason Hovet; Editing by Kim Coghill and Susan Fenton)


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