The only electricity distributor in West Bulgaria CEZ Distribution reported a loss in Q2 2015 after a positive Q1, comment ELANA Trading analysts in the latest equity research report on the company.
Volatility in CEZ results and environment
The revenues of CEZ Distribution declined by 14.7% y-o-y due to the lower revenues for transmis- sion, imposed by the regulator, which once again proves the sensitivity if the company to the conjuncture in the sector.
However, the sister company CEZ Electro, the electricity supplier in Western Bulgaria, registered profit for Q2 and decreased its loss from BGN 6.6m to BGN 0.7m. It reported higher sales to households and business consumers.
No dividend this year
Another sad news for the investors came from the CEZ Distribution shareholders’ decision not to distribute dividend this year and to capitalize the small profit of 2014. This decision is not a surprise regarding the required investments in mid-term horizon but it has negative influence on investors’ confidence.
In 2014 the dividend of CEZ Distribution (BGN 25.00 per share, 14.9% yield) was due to the pressure from minority shareholders.
CEZ Distribution performs the operation of the electricity distribution network and facilities in Western Bulgaria. CEZ Electro supplies the electricity in the same region and manages the Group’s marketing and sales strategy.
CEZ Distribution and CEZ Electro with majority owner the Czech CEZ Group got listed on the Bulgarian Stock Exchange in 2012 when the Bulgarian state privatized 33% stake in the companies through the stock market.