CEZ Proposes Dividend and Plans Significant Investments

PRAGUE (Reuters) -Czech electricity producer CEZ proposed a 47 crown ($2.11) per share dividend on Thursday, or 80% of last year's profit, while reporting a smaller than expected decline in first-quarter net profit amid lower electricity prices.

The dividend, watched by investors, is below the previous payment of 52 crowns per share, but at the top of the company's typical payout ratio of 60% to 80% of adjusted net profit.

CEZ shares have risen 30% in the past year and were up a touch at 1,196 crowns in mid-morning trade.

Profits spiked in 2022 when energy prices surged following Russia's full-scale invasion of Ukraine, but have slipped since, with the Czech state, which owns 70% of CEZ, introducing windfall taxes.

CEZ said on Thursday it planned around 400 billion crowns of investments by 2030 - almost double the previous five years. It just sold a majority stake in an $18 billion project to build new nuclear power units to the state that will free up debt capacity.

Finance chief Martin Novak said CEZ would have had to consolidate debt if it remained majority owner of the project. "So it would significantly impair, if not almost exclude, investment into other businesses," he said.

Investments will focus on renewables, distribution, and nuclear as CEZ also looks at small modular reactors.

Net debt to core earnings (EBITDA) was 1.3 times in the first quarter, CEZ said, and could rise to up to 3.5 times by 2030 according to plans.

CEZ's adjusted net profit fell 9% to 31.8 billion crowns in 2024. On Thursday, it confirmed 2025 profit guidance of 25 billion to 29 billion crowns.

First-quarter profit fell 6% to 12.7 billion crowns, affected by higher depreciation and amortisation of coal assets and the acquisition of gas distributor GasNet.

EBITDA rose 7% year-on-year in the quarter to 43 billion crowns, and CEZ nudged up its full-year EBITDA forecast to 127-132 billion crowns, versus 137.5 billion in 2024.

CEZ said it had pre-sold around two-thirds of its expected 2026 generation output at an average 94 euros per megawatt-hour, versus an average realised price of 120-125 euros assumed for 2025.

($1 = 22.2570 Czech crowns)

(Reporting by Jason Hovet. Editing by Mrigank Dhaniwala and Mark Potter)