EZ: economic estimates for 1Q 2024

Let’s expect EZ to increase its operating profitability in the first half of the year. We predict EBITDA to be flat K 39.1 billion, an increase of 20.3%.

In our view, it should be a clear growth impulse absence of a price ceiling for power electronics, or the so-called levy of excessive needs. This regulatory element covered the profitability of EZ exclusively for the first quarter, to the tune of K 10.3 billion.

Other influences should not be so prominent in comparison to the above factor. Let’s expect positive impacts from the side prices of electricity silos. At the end of 2023, EZ showed a preliminary realization price of around 129 EUR/MWh for this year, and we estimate approximately 90% of the sold volume. Electricity prices on the energy exchanges fell by 30-40% in the last six months, while contracts corrected by around 45%. So let’s put a slight negative pressure on the price of electricity. Nmi predicted 125,126 EUR/MWh reached at the end of the period will still exceed EUR 123 reported in 1Q 2023. According to our estimate, this will bring, even with the negative pressure of the increasing expenditure on emission allowances, a positive effect on EBITDA for 1Q 2024 of around 0.5 billion K.

In our view, stabilization on the energy markets, increased volatility and the subsequent negative impact of the market could, on average, support the domestic sales segment with a positive impact on operating profitability of around 0.5 billion kroner.

The development of the other segments (except stable distribution) is expected to be quite negative. After the energy crisis, coal prices were pushed down and sales volumes increased, the situation in the heating segment should normalize this year. V1Q 2024 oekvme meziron drop in EBITDA expenses by approx. 2 billion K. A negligible impact on operating profitability of around 1 billion K, so let’s assume from the side production of nuclear power plants. A different schedule of paid installments in Dukovany and the equally short unpaid installments in Temeln should increase the kmeziron weak production by about 7%.

Overall, however, in our view, the factor of the absence of a price ceiling plays an important role and should shift EBITDA fromfrom K 32.5 billion to K 39.1 billion in changes. The expected positive development at the operational level of the economy should also have a positive effect on profitability. Interannual growth, however, will not be as significant as the impact of EBITDA, when in 1Q 2024 we will not experience strong positive exchange rates and monetary effects as in the first quarter. So we estimate a certain profit equal to K 12.5 billion, an increase of 15.7%.

The management of the EZ set the entry limit leton insight into EBITDA, or actual certain profit in the range of K 115,120 billion, or 25 30 billion K. Let us assume that the insight will be confirmed. Meanwhile, we still see the economy of EZ near the upper edge of the interval, or let’s keep our estimates of EBITDA and actual certain profit in vi 123.5 billion K, or K31.3 billion.

Let’s assume that the company’s management will also announce the annual dividend proposal. The actual net profit of K 34.8 billion and the dividend payout ratio between 60 and 80% indicate a dividend of K 39 52 per share this year. We confirm our basic estimate of K52 per share (5.9% dividend income), i.e. due to the company’s low debt, we expect the realization of the upper limit of the applicable ratio. After the experiences of last year, when the company finally pushed through the payment of the entire certain profit at the general meeting, however, the EZ management proposal does not necessarily mean the end of dividends. The dividend divided by the total profit would thus reach the limit of 65 K (7.3% yield). And it will be this year’s dividend, regardless of the variant, every day due to the existence of extraordinary dates, a drop of 145 K will be recorded.

Shares of EZ (BAACEZ) fell by 0.28% to 889 K at the opening of the stock exchange, at 884.50 K on the RM-SYSTEM.