* CEZ cuts CZK 78 bln off 2010-2014 investment plans
* Change mainly affects foreign projects
* Q3 net profit falls less than expected to CZK 11.45 bln
* Shares rise 2 percent, outperform wider market
(Adds analysts, share reaction, background)
By Jason Hovet
PRAGUE, Nov 9 (Reuters) - Czech power group CEZ <>
said on Tuesday it was cutting its investment by 78 billion
crowns ($4.41 billion) over the next four years, pulling out of
projects abroad to focus on the domestic market and combat
weaker power prices.
The company also posted a smaller-than-expected dip in
third-quarter earnings, on higher revenue, beating even the most
optimistic forecast in a Reuters poll.
CEZ, central Europe's largest listed company, with a market
capitalisation of $23.5 billion, had said this summer it would
slow its foreign expansion and concentrate on its home market.
The investment reduction announced on Tuesday, cutting the
2010-2014 investment plant by 21 percent to 297 billion crowns,
was the first time the majority state-owned power group had put
a price on the change in strategy to reflect a drop in power
prices as a result of the economic crisis.
The stock rose 2 percent after the news, beating a flat
market.
"The financial crisis and the impact of fundamental changes
in the market are of a rather mid-term nature and create an
opportunity for the CEZ group to consolidate and later start up
further growth," CEZ said in a third-quarter earnings
presentation on Tuesday.
Analyst Petr Bartek of Ceska Sporitelna said both the
investment plans and the third-quarter results were positive for
the stock, which has lost 9.8 percent so far this year, compared
with the 4.4 percent gain in the Prague PX <> index.
CEZ shares have been hurt by lower power prices as well as
new tax on carbon credits planned by the government.
[]
"This (investment sum) is lower than I expected, and for me
it is positive they were able to lower investment spending by
such an amount. I believe this partly a result of cost savings,
not only from cancelled investments," Bartek said.
"Most of the cuts, like some gas plants in southeastern
Europe, are good to do because most of these investments were
difficult and now there is no need for additional capacity in
the short run."
CEZ said it was moving ahead with its flagship project, the
planned expansion of the Temelin nuclear power plant which is
the biggest-ever Czech procurement deal. It plans to pick the
supplier in 2013, after delays announced previously.
EARNINGS DOWN
Net profit fell to 11.45 billion crowns in the third quarter
from last year's restated 11.94 billion crowns, beating the
average estimate in a Reuters poll of 10.3 billion.
KBC Securities said the better results were due to a 6.1
percent rise in electricity output, expansion in the heating
market, a lower-than-expected drop in prices and a one-off
foreign exchange gain.
CEZ, central Europe's largest traded company and 69.8
percent owned by the state, said revenue rose to 45.71 billion
crowns from last year's 43.76 billion, above expectations for
44.04 billion.
The utility confirmed its outlook for full-year net profit
before minorities of 46.7 billion crowns, and earnings before
interest, tax, depreciation and amortisation (EBITDA) of 88.7
billion.
It cut its full-year production outlook to 62.8 terrawatt
hours from 64.5 TWh.
(Additional reporting by Jana Mlcochova and Jan Lopatka;
Editing by Hans Peters and Louise Heavens)
