CEZ Distribution Q2’20 bottom line improves by BGN 12.1m (POSITIVE)

31.07.2020 Source: CEZ Distribution; FFBH

Q2’20 unconsolidated revenue of CEZ Distribution was up 10.3% YoY, due to growth of distribution tariffs while distributed electricity declined 3.5%. Total expenses declined by 8.9% YoY, mainly on lower energy losses (6.52% vs 6.73% in Q1’20) and lower price of electricity for technological losses. Note that CEZ purchase it on the free market where the price dropped with COVID-19 restrictions. As a result, EBITDA rose 61.9% YoY to BGN 33.3m. Below the line, depreciation charges added 5.7% while net financial cost dropped by 63.9%. Bottom line came to BGN 10.6m net income (EPS of BGN 5.52) vs BGN 1.5m net loss in the comparable period. In H1’20, revenue increased by 7.2% YoY while EBITDA improved by 68.5% to BGN 75m. Technological losses declined below the regulatory limit of 8% (7.71% vs 8.52% in H1’19) and the average price of electricity for energy losses was down to BGN 121/MWh, -18.3% YoY. Furthermore, cost of hired services was down by 2.7% YoY which also helped profitability improvement. Net income surged 8-fold YoY to BGN 29.6m (EPS of BGN 15.35). IB debt was down by BGN 7.9m from end-2019 to BGN 164.2m (IB debt to equity of 25.4%) while CAPEX for the period amounted to BGN 40.2m. Cash balance swelled by BGN 37.4m as non-cash working capital was further down by BGN 14.7m to negative BGN 30.3m.