CEZ Electro audit confirms preliminary results (NEUTRAL)

2019 audit confirmed preliminary results of CEZ Electro. Revenue was up 11.8% while gross mark-up widened to 8.3% vs 7.5% in the comparable period or above the regulatory set mark-up of 6.51% before cost of balancing. EBITDA added 5.9% to BGN 18.4m despite the BGN 10.9m one-off gains (written-off liabilities and penalties on contracts) in the comparable period. Further down the line, the higher depreciation charges and net financial cost resulted in 0.8% lower net profit to BGN 15.3m (EPS of BGN 3 056). On the balance sheet, PPE increased by BGN 4.2m on the introduction of IFRS 16 from the beginning of 2019 and the same amount was recognised as lease liabilities. Cash level added BGN 22m during the year to a new record high of BGN 144.2m (cash per share of BGN 28 831.60).