*CEZ CFO Novak says sees no reason to change guidance
*CFO Novak sees no quick recovery in consumption
*Sees 2010 result similar to 2009
*Shares climb above 1 pct
(Adds more comments, background)
By Jana Mlcochova and Jan Korselt
PRAGUE, June 24 (Reuters) - The steepest drop in electricity
consumption is probably over and demand has stabilised with no
quick improvement in sight, the chief financial officer of Czech
power group CEZ <> said on Wednesday.
Martin Novak said in an interview with Reuters that CEZ is
sticking to its full-year earnings forecast as the decline in
consumption and power prices are both in line with the company's
assumptions.
In 2010 the company's results should not be dramatically
different from this year, Novak said.
CEZ shares rose 1.25 percent following the remarks. They
closed 3.37 percent up at 860 crowns, above the main PX index
<> which closed 2.12 percent higher.
"The big hit in consumption has probably passed... for now
the situation does not point to a massive recovery so
consumption keeps at lower levels but it does not decline
steeply either," he said.
"Year 2009 will certainly not be the one when the situation
will turn around, rather the recovery will come in 2010...."
The poor consumption and low prices were expected and are
included in the company's earnings outlook, Novak said.
"It is all included in our guidance and more or less the
reality oscillates around our estimates," Novak said. "If you
mean that for these reasons we should cut our estimates then it
does not look that way for now," he said.
CEZ expects to raise net profit before minorities by 6
percent year-on-year to 50.2 billion crowns ($2.70 billion) in
2009. Earnings before interest, tax, depreciation and
amortisation (EBITDA) should rise by 2 percent to 90.3 billion.
CEZ sells part of its output for years ahead in the form of
future contracts and Novak said the company has already sold
around 55 percent of the 2010 output for prices above 50 euros
per megawatt hour.
He said next year prices should be the same on average as
this year.
"The result of 2010 will certainly not differ from the year
2009 in some extreme way," Novak said when asked if low demand
and a downward pressure on prices could negatively affect CEZ's
2010 results.
Baseload power prices peaked above 90 euros per megawatt
hour in 2008 as commodity prices soared before pulling back in
the second half of the year. Novak said volumes traded at the
peak levels were thin.
"The year 2009 had higher prices when we were selling in
2008 but on the other hand a part of unsold production and a
part of unrealised sales has diluted it somewhat so on average
if you look at 2009 and then 2010 they can be very similar."
Novak said CEZ remains a net buyer of CO2 emissions as the
current price of around 13 euros each was relatively cheap.
He also said CEZ may return to the debt market and issue
more bonds within its mid term 4 billion euros ($5.63 billion)
bond plan, depending on acquisition opportunities which he said
were increasing.
(Editing by Greg Mahlich and David Cowell)
