PRAGUE: Czech electricity producer CEZ expects its adjusted net profit to drop by 8.5 percent to 27.0 billion crowns ($1.1 billion) in 2015 as falling power prices cut into earnings for a sixth straight year, the company said on Tuesday.
The majority state-owned power utility posted adjusted net profit, which strips out extraordinary items such as impairments, of 29.5 billion crowns in 2014, just above its forecast of 29.0 billion crowns.
The company's guidance for 2015 net profit was above the average estimate of 25 billion crowns in a Reuters poll of analysts.
CEZ, central Europe's biggest listed utility, is feeling the strain of wholesale electricity prices that have fallen by more than half since the global economic crisis hit Europe in 2008, cutting profit by a similar order since a record 2009.
Earnings before interest, tax, depreciation and amortisation (EBITDA) fell 9.5 percent to 72.5 billion crowns in 2014.
For 2015, CEZ forecasts EBITDA to drop to 70.0 billion crowns, a result almost 5 billion higher than analysts had forecast. CEZ said its budget this year counts on 4.9 billion crowns in cuts to fixed costs.
The company booked asset impairments of 7.0 billion crowns in 2014. Including that, net profit dropped to 22.4 billion crowns last year from 35.2 billion in 2013.
In the fourth quarter alone, CEZ posted net profit of 2.8 billion crowns down from 3.5 billion the year before, well below analyst expectations. EBITDA was flat at 17.8 billion crowns.
The company expects its 2015 domestic output, accounting for the largest share of production, to rise this year to 64.7 terawatthours (TWh) from 58.3 TWh in 2014.
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