Earnings call transcript: ČEZ Group Q3 2025 beats EPS forecast

ČEZ Group reported its Q3 2025 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of 10.3, compared to the forecasted 8.84. The company also reported a revenue of 72.86 billion CZK (equivalent to $16.3 billion over the last twelve months). Despite the earnings beat, the stock remained stable in pre-market trading, holding at 498.4 CZK, reflecting a neutral investor sentiment. According to InvestingPro data, ČEZ is currently trading at a PEG ratio of just 0.36, suggesting it may be undervalued relative to its growth prospects.

Key Takeaways

• ČEZ Group’s EPS significantly exceeded forecasts by 16.52%.
• The company’s net operating cash flow decreased by 40%, raising concerns.
• ČEZ is expanding its nuclear capacity and gas distribution assets.
• Power prices are expected to decline, potentially impacting future revenues.
• The company maintains its EBITDA guidance despite market volatility.

Company Performance

ČEZ Group demonstrated resilience in Q3 2025, achieving a 3% year-over-year increase in EBITDA to 103.2 billion CZK. However, net income fell by 7% to 21.5 billion CZK, attributed to declining power prices and lower hydro generation volumes. The company continues to strengthen its competitive position in nuclear and renewable energy, supported by strategic acquisitions in the gas distribution sector.

Financial Highlights

• Revenue: 72.86 billion CZK
• EBITDA: 103.2 billion CZK (+3% YoY)
• Net Income: 21.5 billion CZK (-7% YoY)
• Adjusted Net Income: 22.2 billion CZK
• CapEx: 38.7 billion CZK (+11%)

Earnings vs. Forecast

ČEZ Group’s EPS of 10.3 significantly beat the forecasted 8.84, marking a 16.52% surprise. This performance is notable compared to previous quarters, indicating strong operational execution despite challenging market conditions.

Market Reaction

The stock price of ČEZ Group remained unchanged at 498.4 CZK in pre-market trading. This stability suggests that while the earnings beat was positive, other factors such as declining power prices and reduced cash flow may have tempered investor enthusiasm.

Outlook & Guidance

ČEZ Group maintained its EBITDA guidance for 2025, ranging from 32 to 137 billion CZK, despite market volatility. The company anticipates a decline in power prices by approximately 30 EUR/MWh in 2026, which could impact future earnings. Capital expenditures are projected to exceed 400 billion CZK through the end of the decade.

Executive Commentary

"We are keeping our EBITDA outlook at CZK 32-137 billion," stated Martin Novák, CFO, emphasizing the company’s confidence in navigating market challenges. He also noted, "Our average achieved price for 2025 is estimated at 121-124 EUR per megawatt hour," highlighting the company’s strategic pricing approach.

Risks and Challenges

• Declining power prices could pressure future revenues.
• Political interference concerns may impact strategic decisions.
• Volatility in carbon credit prices could affect cost structures.
• The transition away from coal may present operational challenges.
• Macroeconomic factors could affect energy demand and pricing.

Q&A

During the earnings call, analysts inquired about potential political interference and its impact on ČEZ’s operations. Executives addressed concerns about nuclear generation utilization and detailed their strategy for gas distribution acquisitions, emphasizing the company’s focus on maintaining flexibility in capital expenditures.

Full transcript - CEZ as (0NZF) Q3 2025:

: Hello, everyone, and welcome to the ČEZ Group financial results conference call for.

Meeting Coordinator: This meeting is being recorded. This meeting is being transcribed.

It’s my pleasure to welcome Martin Novák, Chief Financial Officer, and Luděk Horn, the Head of Trading, who will be going through the presentation and be available for the questions. I’m now handing over to Martin to start the presentation.

Martin Novák, Chief Financial Officer, ČEZ Group: Thank you. Good afternoon, good morning. So I will quickly go through our presentation and then we can jump to the Q&A session. So if you look at slide three, our total financial results, our EBITDA is about 3% higher than in the same period of last year. We achieved CZK 103.2 billion. Our net income is 7% lower, CZK 21.5 billion, and adjusted net income that is a base for paying dividends is CZK 22.2 billion. Our net operating cash flow is down by 40%. This is due to very strong net operating cash flow in 2024 when we were still receiving back some cash from margining from previous years. And then we had 11% higher CapEx spending that reached CZK 38.7 billion. Important slide. On slide number four, you can actually see main causes of year over year change in EBITDA, 3% or CZK 2.9 billion.

As I already said, we have a few negative effects and a few positive effects. The negative effect is actually the strongest is actually a decline in power prices. Our average achieved price for 2025 is estimated at 121-124 EUR per megawatt hour versus something above 130 in 2024. So this effect of kind of 10 EUR per megawatt hour causes a 10.5 billion CZK decline on generation facilities. Another negative effect is actually lower generation volumes of hydro plants due to mild winter and not enough snow in 2025. On the other hand, positive is actually impact of fuel cycle extension and increased capacity at the Dukovany nuclear power plant, which is 3.5 billion CZK positive. Other effects, mainly higher fixed expenses of 200 million CZK. Trading activities are down by 3 billion CZK.

We have low trading margins by CZK 2.6 billion compared to previous period. And those are actually negative effects in trading and generating. Mining is somewhat down as well due to lower coal sales volumes and low price of coal. Positive is actually coming from three main factors. One is actually just distribution, meaning power distribution, which is helping us with CZK 4.6 billion. We have higher allowed revenue thanks to growing investments in distribution assets in the past, which is CZK 2.1 billion. Then we have so-called correction factors, CZK 1.3 billion, both from two years before, meaning 2023, and also something that we will be handing over back in 2027. But positive effect on 2025 is CZK 1.3 billion. GasNet, important acquisition of 2024.

GasNet is a Czech distribution of gas, natural gas, which we actually started to consolidate as of September 1, 2024, meaning it was not in our numbers for eight months in 2024, only the ninth month, and actually, 2025, it is in our numbers for the full year, so that’s why there is such a huge variance of CZK 7.4 billion. Sales segment is also doing better, 4.3 billion improvement, mainly due to lower cost of commodity acquisition, impact of sales of undelivered commodity of just per day. They actually had to sell some undelivered commodity in 2024 at a lower price compared to current year when they delivered it to end customers, and also proceeds from litigation with the Railway Administration that actually brought us last year CZK 1.3 billion. It didn’t this year, so overall sales segment improvement is CZK 4.3 billion, and it gets us 203.2.

Year-on-year change in net income. By far, the most important change is actually in the depreciation and amortization line. You can see pretty significant increase in depreciation and amortization. It has a few reasons. One of them is actually consolidating GasNet that we did not consolidate last year almost at all. And it is CZK 6.7 billion higher depreciation. We also started to depreciate or accelerated depreciation of our lignite assets that are being depreciated much faster in 2025, 2026, and of course, lower towards the end of 2030, basically copying hours of production, which is an allowed method under accounting, IFRS accounting, when you can see the end of the asset and uneven power generation. We started this type of depreciation as of October 1, 2024. So this accelerated depreciation is not in a comparable period of 2024 at all because now we are comparing only nine months.

The difference is actually a net difference of CZK 5.6 billion of accelerated depreciation on coal assets. Those are the main variations. Then, of course, we have higher interest income expenses, mainly due to lower, actually lower interest received as the interest rates go down, and the deposits that we have bear lower interest than in the past. And that’s basically it. There is lower income tax due to lower pre-tax profit. And finally, we get to net income of CZK 21.5 billion and CZK 22.2 billion is adjusted net income. Next slide, you can see volumetric data, which I will skip. And we’ll go to slide seven, which is a financial outlook. We are keeping our EBITDA outlook at CZK 32-137 billion.

We are narrowing the range of our estimate for adjusted net income that was CZK 26-30 billion, now it is CZK 26-28 billion. We are coming closer to the end of the year, so we are able to narrow down this range. You can see selected assumptions on power prices and carbon credits, and also on the level of windfall tax, which is now estimated at CZK 31-34 billion. Important milestone in our acquisition, the territorial acquisitions, we acquired a gas distribution operator on the south of the country. This is called GasNet, and it’s actually dark green color on the chart. So now we control the entire area of the Czech Republic gas distribution with the exception of capital city of Prague, that is controlled by a municipal company. So this was an important add-on to our assets.

We acquired actually gas distribution through GasNet. So we are not 100% owners. It makes sense to do this through the entity that already owns the vast majority of gas distribution in the country. The transaction should be closed during the first quarter after all the antimonopoly decisions are made and the approvals are received. It’s a relatively smaller compared to what we actually already own. EBITDA is about CZK 800 million, net income about CZK 100 million, no debt. So very interesting company into our portfolio. Now, let’s switch to generation mining segment. It’s important to see actually how our generation mining did. I already made a few comments on that on the EBITDA slide at the beginning of the presentation.

It’s important to note that actually, as I said, power prices, despite some positives, like for example, positive operating effects on Temelín power plant, mainly fuel cycle extensions and so on, are still not high enough to beat the decline in power prices. So declining power prices on our zero-emission generating facilities, on nuclear facilities, is about 3%, or declining EBITDA, which is mainly caused by declining power prices. On renewables, it’s more significant, with 26% down, mainly due to insufficient water conditions in 2025, the beginning of this year. Emitting generating facilities generated, as you will see later on, almost the same and will generate almost the same amount of electricity. However, EBITDA is down by 61% or 6 billion CZK, mainly due to, again, decline in power prices and narrowing margins in coal-fired power plants.

Trading for 1.6 billion CZK of net income, which is 65% down compared to previous year. Entire generation segment and mining in total is actually down 17%, reaching 64.8 billion CZK EBITDA. When you look at nuclear and renewable generation on slide 11, you can see actually charts comparing first nine months and also estimate for 2025. We should be achieving pretty much the highest level of our nuclear generation, close to 32 terawatt hours, mainly due to fuel cycle extension that is now longer than it used to be in the past. There are years, which is this year, when we will be running nuclear units without interruption during that year, which is the case for Temelín power plant this year. That’s an increase of planned increase of 7% year-on-year.

Decline in renewables of 13% that I already commented on, and total number to be achieved, 75.1. Electricity generation from coal is on slide 12, pretty much in line with last year, with one exception, which is steep decline in Poland. As many of you know, the first or second week in February 2025, we finally disposed of our Polish coal assets, and that’s why there is no more EBITDA coming and generation, of course, in terawatt hours coming from those assets. That’s why there is such a significant decline. There will be a decline on CCGT, a little decline actually on natural gas, and a little decline on coal generation in the Czech Republic, which will be about 2% lower. However, in EBITDA numbers, as you could see, it was a 60% decline. One of the most important slides is actually our hedging on page 13.

You can see 2026 average achieved price of EUR 94 so far, declining to EUR 72 in 2029, but we are only 5% sold or secured for 2029. So it’s a pretty material number. Same for carbon credits on the right side of the chart. And at the bottom, you can see the percentage of power sold, which means there will be a significant decline in average sales price because average sales price for this year is estimated between EUR 121 and EUR 124 per megawatt hour, which is something like EUR 30 decline year-on-year, which is pretty significant and will definitely be seen in our sales numbers and EBITDA numbers next year. Distribution and sales segment is doing rather well.

Distribution segment is up by 75%, mainly due to gas assets that contributed CZK 8.1 billion for the first nine months versus CZK 100 million, which was a number for September 2024 because it was consolidated as of September. So CZK 7.4 billion improvement. And then actually, distribution and electricity distribution, our number is 30% better than it was last year, but 1.3 are those correction factors that I discussed from year minus two and year plus two in total for CZK 1.3 billion difference compared to last year. The details of distribution segment are then listed on the slide. Another important factor is the most important factor above correction factors is actually higher allowed revenue thanks to growing investment base in distribution assets. Year-on-year development of electricity and gas distribution. Electricity distribution on Czech distribution territory is up by 1% in total. Basically, little change.

Residential customers are somewhat higher, but this is mainly due to climate. When you actually adjust for climate, it is a decrease of 0.2%. And calendar, if you adjust it for a number of days, it’s increased by 0.3%. So pretty much steady distribution numbers. Gas distribution increased by 9%. Climate-adjusted consumption only by 1%. So it is colder winter 2025 than 2024. Sales and EBITDA. Sales segment EBITDA in total, actually CZK 10.7 billion, which is 67% improvement. You can see the details in ČEZ Prodej, which is Czech retail business, 84% improvement, and then ESCO companies in various countries. There are a few positive effects influencing ČEZ Prodej or retail business. One of the most important half of the difference, actually most of the difference, actually full difference, is lower cost of commodity acquisitions and lower cost of deviations thanks to the market stabilization after it was deregulated.

So that is the main chart here. On page 18, we have volume of electricity and gas sold and number of customers. So electricity. You are allowed to unmute. To unmute yourself, press star. Six. Number of customers is basically steady. We lost little in electricity being the dominant player and gained 5% actually in gas business. So in total, number of customers is pretty much not changing. Their customers are much less involved in changing supplier than they were before the crisis when many of the smaller companies or even large companies went bankrupt and they had to switch to different suppliers under fairly stressful conditions, I would say. Revenues from sales of energy services, meaning ESCO.

ESCO activities are actually 8% down, but we expect them to be pretty much in line with last year or only 2% down, mainly because we had a few kind of big significant projects last year that were invoiced last year that did not repeat themselves now. However, organic growth is fairly reasonable, and that’s why we are able to make up actually on a full-year basis. So that’s all for the presentation. And now I think we are ready to take questions. You can just raise your hand, and when I call your name, you will be able to ask your question. So the first question comes from Emanuele Oggioni. Hello, can you hear me? Yes, we can hear you. Okay, perfect. Thank you. Thank you for the presentation and for taking my questions. The first one is on the distribution and EBITDA guidance for 2025.

We have seen another increase after the increase in the guidance in H1 for this business unit. So basically, from the beginning of the year, the change would have been between 7 billion CZK and 9 billion CZK. Now it’s between 12 billion CZK and 13 billion CZK, so more than 50% compared with the start of the year. So probably you explained this in slide 30. So you could add more color on the slide 30. And this incrementally positive distribution factor is repeatable or not in 2026? And what is your expectation on 2026 about this business unit? You exceeded the original guidance to a larger strength in 2025. So the question is not only an explanation on 2025 based on slide 30, but also about the outlook on 2026. This is the first question.

The second is on the guidance on the sales, EBITDA sales, which in this case, there is an increase. There was an increase two times in a row. Also in this case, the question is if the positive drivers, the positive moving parts which lead to this increase are also valid and visible for 2026. We can expect sustainable profitability after a stronger than expected profitability in 2025, also in 2026. The third and last question by my side for the time being is on the generation business, on the development of the data centers market in Czech Republic and also in Central Europe because it’s related. The power price is related also to the power price of Germany. The question is, what is the situation as regards to development of the projects of data centers in Central Europe and obviously in your country?

This could change, in your opinion, in the midterm, obviously not in the short term, not next quarter or next year, but could change something in better to sustain the electricity prices in Central Europe thanks to the development of data centers. Thank you. Distribution, as you rightly noted, there is a significant increase in distribution segment, and it’s mainly due to acquisition of GasNet, which is actually natural gas distribution on the slide 30, which is in abundance. Just because it was basically we did not consolidate, we did not own GasNet first eight months of 2024. So that’s why there is such a huge move. In electricity distribution, it is improvement of CZK 4-5 billion compared to last year. Half of it is investment CapEx, actually increased asset base from last year, last year’s actually of investment.

The rest are correction factors that one year go in your favor, next year they go against you. Now, actually, we have a positive effect of CZK 1.3 billion, out of which half will have to be returned in 2027. So in 2027, there will be a negative impact of something like half of this CZK 1.3 billion of this amount. So it is, but generally, I would say that regulatory framework, especially due to our CapEx, is favorable. We would not expect other than those correction factors to decrease our profitability in power distribution in the future. However, it is a regulated business, so you don’t have much space for any significant increases of EBITDA either. Gas distribution is very similar. Again, you can make certain changes.

You can make certain improvements in the business, but again, it will not be. You are not able to double the number other than through acquisitions. So, of course, acquisition of GasNet, which is actually the company that we acquired and that will be put into our numbers as of next year, will bring another CZK 1 billion, close to CZK 1 billion of EBITDA next year. Sales segment is very strong this year. I would say that this is a real coincidence of the market conditions. Normally, we did not have that high EBITDA in the past, as you can see compared to previous year. And that’s why, actually, for first nine months, actually, especially, so I would think that profitability might be lower in the future. Coming back to normal, I would say, but by how much it is, of course, difficult to predict.

You can see that actually now we are 84% higher on retail, which is probably something that will be hard to repeat in the future as well, and generation data centers, there is some discussion, but we really didn’t see much real kind of projects in the region so far, especially when you compare it to other geographic locations like U.S. Power price is much higher here in Europe than in the U.S., so it’s difficult to compete. We had a few contacts with potential investors, but so far didn’t really work out, and I don’t know of many new kind of huge projects in this region that will really come to final decision, so let’s see how it goes, but as you said, we are tied to German price plus distribution tariffs.

So the power is not that cheap, and power is actually the commodity that you need for data centers. So maybe in the future, there are some discussions. For example, if you have nuclear units, you would be supplying data centers directly from them, but so far we are not there. We have our own data center. We are planning one more. They are all within perimeters of our power plants. So they are connected directly to the power plant, taking power from the plant, not from the distribution grid, but that’s for our own use. So that’s it. Thank you. Thank you so much. We can take the next question from Oleg Galbur. Hi, good afternoon. I hope you can hear me well. Thank you for the presentation and for the opportunity to ask questions. I have several, actually.

And let me start with a question regarding your full-year guidance for the nuclear electricity generation of 31.9 terawatt hours, which implies quite a high utilization both for the fourth quarter, so almost 90%, but also for the full year, 85%. So what I’m trying to understand is what should we expect going forward on the annual basis? Should, for example, this 85% be like a new normal, or how do you comment on that? And then a similar question on the guidance for electricity generation from coal. The 14 terawatt-hour guidance implies an increase in coal generation to almost 4 terawatt hours in the fourth quarter. And if this is really the case, how is such an increase justified by the low, if not even negative, level of coal spark spreads?

Lastly, according to my calculation, the proprietary trading was negative in the third quarter and significantly lower, obviously, in comparison to the first half results. Maybe you could provide a bit more details on what has caused this result in the third quarter and perhaps also shed some light on the expectations for the fourth quarter or for the full year, again, on the trading result. Thank you. Okay. Thank you for questions. Close to 32 terawatt hours or 31.9 is something that we will be hopefully seeing from time to time. The reason is that we moved actually from 12-month refueling cycle, which means that every reactor was at least for a few days shut down for refueling every single year, to 16 or even 18-month cycles for Dukovany and Temelín.

This means that utilization oscillates between 80%-85% depending on how many outages fall into a given year. In utilization in Q4, it will be high because there is no outage actually in Temelín plant, and there was actually an outage of eight weeks in Q4 2024 in Temelín, second unit. In 2026, both Temelín units will have plant outage, and therefore, nuclear utilization will be lower compared to 2025. It will be around 80%, so we would expect our power generation roughly of 30 terawatt-hours, and then in 2027, again, there will be no outages, so it would be close to 32 terawatt-hours, so our utilization now will be kind of oscillating between 30 and 32, depending which years will be hit by refueling and which years will be run without any interruption and any refueling.

Second question, coal spark spread is actually not negative because we are hedging the power. So we actually sold power at those 121-124 EUR per megawatt-hour, while carbon credits were at a level of 90, maybe, at the time when we were selling it. So actually, the spread was very positive. And it’s also important to note that our power plants are making most of the power and also heat because all of them are heat plants in Q1 and Q4. So Q4 is kind of a very important quarter because it’s winter. It’s October, November, December, usually very cold months. That’s why lignite plants are running at full speed at that season, so seasonal business. The trading results so far for first nine months of 2025 are approximating 1.6 billion CZK.

In this segment, we are not only showing prop trading as such, but also evaluation of derivatives. Estimate at the end of the year is that they will make something like CZK 1-2 billion more. So trading could achieve CZK 2.6-3.6 billion of the result. Clearly, it was less than interest in the past. But on the other hand, we are back to volatility we were used to in the past. I mean, in the before the energy crisis in 2021, 2023, so the volatility was easily EUR 500 per day. Today, it’s definitely not that. The market has stabilized, and with volatility of a few euro cents per day, it’s very hard to make profit of CZK 20 billion as it was in the past. So I would say we are back to normal.

Normally, or usually, our trading was making something between one and two billion Czech crowns annually as a standard result in a standard environment. So that’s it for me. Thank you. Thank you very much. That’s very useful. We can take the next question from Anna. Hi, Anna. Webb from UBS. You can hear me okay. Just one question for me on the gas distribution acquisition. I was just wondering if you see kind of any synergies from now controlling almost all of the gas distribution in Czechia, kind of above and beyond just the contribution from gas distribution. I mean, I’m aware it’s quite a modest contribution from that business you brought from E.ON, but just wondering if you see kind of synergies and cost savings for the overall gas distribution business, as in gas distribution in Czechia, including GasNet.

Now you’ve got that kind of majority of the business, and obviously, you’ve now had GasNet for a year. And how you see that evolving would be great to hear. Thank you. Yes, clearly, we do. And that’s the reason why, actually, the gas distribution was acquired by GasNet and not by us directly. It makes sense to consider all gas distribution assets under one company. So we would expect to have synergies from technical management of the assets, all the call centers, all the financial systems, but it’s too early to say how much it would be. Gas distribution is not that sizable company, as you pointed out rightly. So there would be some synergies, but now it’s too early to say. And probably, given the size of our overall business, they will not be very material. Thank you. We can take the next question from Piotr Dzieciołowski. Hi.

Yes, good afternoon, everybody. Two questions, please. So first one, I wanted to ask you because there were some headlines about your total CapEx until the end of a decade. Do you think so the question around it would be, where do you think your leverage will end up at the end of a decade? And do you think you will need to revisit the dividend policy in light of this high CapEx requirement? And the second follow-up, I have if you assuming the takeover story has some legs and the government goes ahead with it and it imposes the objective on the company to do a buyback, how much of this CapEx, the total CapEx envelope, is flexible that you would not need to do it?

Is it a reasonable scenario to assume that you could cut a certain amount, like one-third of this CapEx, if there was a need to do it to facilitate some other objectives? Okay. First question, our CapEx is above CZK 400 billion to be spent till the end of this decade. We are aiming at our target ratio of 3.5 net asset EBITDA by then. We should be able to make it with the projection of power prices that we are now seeing actually on the power exchange and also paying the dividend in the range of 60%-80% of our adjusted net income that you know we are usually sticking closer to 80% rather than to say 60%. All those things kind of fit the puzzle, and we should have no issues to do any changes.

Regarding share buyback, we don’t comment at all on this topic. It was mentioned in actually proposition of the government, of the kind of what government proposes, but it’s preliminary. It has not been approved by the government, actually, future government. So until it is a more stable document, we are kind of not commenting on political announcements, so. Thank you very much. And a quick follow-up, just technical follow-up on this three and a half times net debt. We are talking here about the financial net debt. So we would have to assume that the nuclear provisions come on top, right? Yes. Yes. Okay. Thank you very much. Okay. Next question from Jan Raška, please. Hello. Can you hear me? Can you hear me? Yes, very well. Yeah. Good afternoon. I have one question about, once again, gas distribution company. You indicate annual EBITDA almost CZK 1 billion.

As you said, the GasNet acquisition was realized, so it means 55% effective ownership share. But do I understand correctly that you will fully consolidate EBITDA of gas distribution to Czech EBITDA? Yes. That’s how we would operate one-third accounting rules. And then actually, in adjusted net income, we are actually taking out the minority share of net income that is attributable to 45% shareholders. Okay. Thank you. So CZK 1 billion to EBITDA and then correction at the end of the quarter. Okay. Thank you very much. Thank you. Okay. We can take the next question from Arrieta Ferrizoli. Hi. Thank you. Thank you for the call. I just had one question more on the political side in the Czech Republic, specifically if you had any comments about any kind of potential political interference or nationalization, for example. There were a few headlines. So any update on that?

I already answered that we actually don’t comment on any political pronouncements until they actually reach our doors, which has not happened. So that’s all we can say. Okay. Thank you. And we have a follow-up question from Oleg Galbur. Yes. Thank you very much for that. Two short, first of all, on the CapEx. Could you please tell us what level of CapEx in the generation segment should we expect for the full year? And maybe you can also remind us what would be the expectations for the full-year CapEx at the group level. And secondly, on the acquisition of the gas distribution company in the third quarter, could you disclose the price or the multiples that you paid? Anything that would be very useful. And more of a general question.

You mentioned in your presentation that due to the declining power prices, you expect also a negative impact on your EBITDA. Probably the lower generation in the coal assets due to a gradual phasing out that will also have a negative impact in the medium term. My question is, what is the strategy or what are the measures that you are considering taking in order to at least partially offset the impact of these developments on the generation business earnings? Thank you. First, thank you for the question. First of all, CapEx, full-year CapEx is now estimated at CZK 60 billion, out of which power generation would be close to CZK 34 billion. Then mining close to CZK 2 billion, distribution about CZK 19 billion, sales about CZK 6 billion. This is around 60 in total. It is less than originally anticipated. So far, we spent close to CZK 39 billion.

Usually, fourth quarter is pretty strong in spending CapEx, so we assume that we will be able to do that. Price for gas distribution is not announced. We agreed with the seller that it will not be announced until we close the transaction next year, and then it will be properly reported, and the third question was on what can we do to offset the decline in generation. We will be, of course, offset it through future projects and entire our business. But how we will actually deal with coal assets, we will definitely decline power generation. It will be run for the following few years in kind of winter-summer mode of operations. In winter, it will be running, providing also heat as an interesting byproduct. In summer, it will be running much less.

And towards the end of the decade, those power plants will likely be decommissioned together with coal mining activities. And generally, as a group, of course, we are concentrating more on services like ESCO activities, which will be growing distribution assets, for example, through acquisition of gas distribution and growing our distribution EBITDA. And of course, replacing coal heat plants with gas plants and all those renewables and all those projects. Okay. Thank you very much. I was asking the third question also in light of your comments earlier today in the press conference. At least this is what Bloomberg is writing, that although you expect the lower prices to negatively impact EBITDA, you’re quoted here saying that, but on the other hand, some other acquisitions could take place, so things may look different. So I was also expecting maybe some more comments on this statement, if it’s possible.

Thank you. Yeah. I think it’s probably what you can say now, but that’s what it is. Okay. Understood. Thank you. Okay. Now, we can take a question from Bram Buring from Wood & Company. Hi. Two questions, please. The first, I guess, well, the second, but related to the previous comment, acquisitions in distribution assets, you’re kind of full up in the Czech Republic, if I’m not mistaken. Are you potentially interested in acquiring abroad? That would be the first question. The second question, again, you’ve already sort of touched on it, but I’m thinking about coal generation for 2026. Will the margins allow you to produce what? Should we be looking for closer to 10 or closer to six for 2026 in the coal generation? Thank you. So, you are right in the gas distribution. I don’t think we can get more in the Czech Republic.

On the other hand, we are not looking at foreign gas distributions. I think we already kind of divested, actually, power distribution companies abroad in a few Balkan countries. And gas distribution is interesting for us for a few reasons. First, it’s in our home country where we have the same regulator for power and gas, so we are able to actually bundle the negotiations together. We also have a side effect of building a fleet of CCGTs and gas-powered heat plants where having access to gas grid definitely helps in terms of gas connection. This is something we would not necessarily do abroad. So we are not looking abroad at gas distribution. And then power plants, it’s really hard to say what will be power generation of power plants now.

I think we’ll announce it actually in our March press conference where we’ll be announcing what will be our EBITDA expectations and power generation and so on. So it’s March information. Okay. Thank you. We can take the next follow-up question from Jan Raška. No, no. Thank you. No question. No. Thank you. Okay. So then Andrzej Dzierski. Hello. My question is regarding the energy price curve. Do you think that the current curve may be too long? For example, if we assume that CO2 prices would rise, even if we assume that gas prices will be lower in a few years. So what are your expectations on the future electricity prices? Okay. I will take the answer from trading perspective. We expect that gas prices will go down, as you mentioned, in the midterm future, connected with, let’s say, oversupply of U.S. LNG and so on and so on.

But it’s hard to say how it will be converted in electricity prices in Europe because the coal plants and gas plants are, let’s say, not marginal plants as it was before so often. So maybe even with a higher CO2 price, we will have, on average, lower electricity price. So there are different scenarios how it could look like, but it’s hard to say how it finally will be. Okay. Thank you. Okay. We can take the next question from a telephone line, starting with +33. Yes. Hello. This is Arthur Sitbon from Morgan Stanley. Can you hear me? Yes, we can hear you, Arthur. Yes. Apologies. The right hand was not working on Teams. So yes, my question was about the outlook, well, beyond 2025. I imagine it’s a bit too early to give precise guidance for 2026 net income, but you did make some comments.

You made some comments around the fact that in distribution, distribution EBITDA is currently higher than its normalized level. You also flagged the fact that realized power price should come down on the power generation segment in 2026. But on the other hand, I know there is the removal of the windfall tax. So I was thinking overall, well, first, are we missing any key moving parts in EBITDA and in profit for 2026? And second, I see consensus as significant growth in net income in 2026 versus 2025. I don’t know if you can be very precise, but is a significant pickup in net income in 2026 something that you’re comfortable with? Thank you very much. So you are right. You actually named it all. I think it is a significant decline in power prices.

I think one of the most significant declines we have ever seen in the history, 30 EUR per megawatt hour year on year, is quite a lot. Then we will have lower generation on nuclear plants because 2026 will be the year when we will be actually refueling the Temelín nuclear power plant. Then correction factors in distribution, yes, probably lower sales results because of kind of getting back to normal on the sales side. And against it as a big positive is windfall tax to be discontinued, that this year, in 2025, will hit our P&L of 31-34 billion CZK. However, I cannot really comment on 2026 numbers yet because they are not out yet, and they will be in March.

But I saw some of the estimates of net income for next year, and I think they are kind of not taking into consideration those negative factors as much as they should. So that’s all I can say. Thank you very much. That’s helpful. Okay. It seems it was the last question. Therefore, let me conclude this call. But as always, investor relations is always available if some further clarifications are needed. Thank you very much and goodbye. Goodbye. Goodbye. This meeting is no longer being transcribed. This meeting is no longer being recorded.

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