EZ: Absence of levy from excessive needs, dividend proposal – Estimates of the result

Date of publication of result: Tue, 14 May 2024 at 7:00 CET

The results for the first quarter of this year will be compared in the meantime. One of the reasons is the absence of deductions from excessive needs. Total EBITDA of CZK 38.4 billion (+18.2% y/y) and a certain profit of CZK 12.1 billion (+11.4% y/y). The economy has a special tax on non-equivalent profits, which applies even this year. Let’s assume that there will be a proposal for a dividend from last year’s profit, which will correspond to the upper limit of the dividend policy (39-52 CZK). Let’s repeat the entire projection.

Let’s assume that the realized price of electronics in 1Q24 was roughly the same as last year. Total trbi compared to the same period last year, they should increase by +7.6% to CZK 100.5 billion. The main difference is in levies from excessive needs (CZK 10 billion), which last year were only in the first quarter. Profit EBITDA should reach according to our projections CZK 38.4 billion, which would mean growth of +18.2% y/y. certain profit will again be affected by the special tax on non-equivalent profits, which applies for the years 2023-2025. Together with the increase in the standard corporate tax from 19% to 21%, according to our estimates, the effective tax rate could be around 55%. We estimate a net profit of around CZK 12.1 billion (+11.4% y/y).

Dividend: We perceive the reported quarterly sales as an invitation to the public proposal of a dividend from last year’s profit. Note that the dividend proposal must be on the agenda for the general meeting. It must then be published at least one month before it ends. This year, the date has not yet been set. The tradition is held at the end of July (last year, July 26). A dividend policy of 60-80% of certain profit indicates a dividend of 39-52 CZK to the action. Let’s assume that the draft of the EZ board will be in this range. We estimate so optimisticallythat, similar to last year, the Ministry of Finance submitted a counter-proposal to this proposal and will want to pay cel losk profit. That would do the trick 65 CZKper share, i.e. gross dividend input +7.3 %.

Projection 2024: Let’s assume eu complicity result for 1Q24 there will be no change in the entire window. Even though our estimates for 1Q24 are a high 32.7% and 44.2% of full-year EZ targets for EBITDA and net profit, respectively. Let’s hope that the EZ leader will repeat the insight CZK 115-120 billion for EBITDA profit and CZK 25-30 billion for IST profit. Possible updates to the projection could occur later in the year.

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