* Change mainly affects foreign projects
* Q3 net 11.45 bln crowns vs f'cast 10.03 bln
* Shares rise 2.4 percent, outperform wider Czech market
(Adds price forecasts, update shares)
By Jan Korselt and Jason Hovet
PRAGUE, Nov 9 (Reuters) - Czech power group CEZ <>
cut its investment by 78 billion crowns ($4.4 billion) for 2010
through 2014, pulling out of projects abroad to focus on the
domestic market and respond to weaker power prices.
Central Europe's largest listed company also posted a
smaller-than-expected dip in third-quarter earnings, beating
even the most optimistic forecast in a Reuters poll.
The company said it expected power prices to creep up in the
years ahead but not to reach the pre-crisis levels that had fed
ambitious investment plans and record profits in recent years.
CEZ, the no. 8 European power 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 reduction announced on Tuesday, cutting the 2010-2014
investment plan 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 as a result of the economic crisis.
The European energy sector has been retrenching, with
Germany's E.ON <EONG.DE> rethinking strategy and RWE <RWEG.DE>
saying it would have to update in February its earnings outlook
for 2013.
Analyst Petr Bartek of Ceska Sporitelna said both the
investment plans and the results were positive for the stock,
which has lost 9.8 percent so far this year, compared with a 4.4
percent gain in the Prague PX index <>.
"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," Bartek said.
CEZ shares, hurt by lower power prices and a tax on carbon
credits planned by the government, rose 2.4 percent to 783
crowns by 1127 GMT, in a Czech market which was up 0.7 percent.
[]
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.
PRICE OUTLOOK
CEZ sales director Alan Svoboda said the company had been
selling 2011 and 2012 power for 51 to 52 euros. While the
company had sold out 94 percent of the 2011 baseload capacity,
it is not in a hurry to sell 2012.
"In 2012 we expect that the trends will turn around a
little, that the gas price, which affects electricity prices,
will recover, and possibly the price of carbon permits will grow
and the electricity market will allow higher spreads," he said.
He said he saw prices climbing to 55-60 or possibly 65 euros
in the coming years, below the 70 euro level seen in 2008-2009.
CEZ's net profit for the third quarter of 2010 fell to 11.45
billion crowns from last year's restated 11.94 billion. That
compares with an average forecast of 10.03 billion, according to
Reuters poll of 16 analysts.
KBC Securities said the higher-than-expected results were
due to a rise in output, expansion in the heating market, a
lower-than-expected drop in prices and a one-off foreign
exchange gain.
CEZ, 69.8 percent owned by the state, said revenue rose to
45.71 billion crowns from last year's 43.76 billion.
It 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.
CEZ cut its full-year production outlook to 62.8 terrawatt
hours from 64.5 TWh.
(Additional reporting by Jana Mlcochova; Writing by Jan
Lopatka; Editing by Hans Peters and David Holmes)
($1=17.67 Czech Crown)
