CEZ Group negatively affected by performance in Albania

TIRANA, Aug. 14 – Czech Republic based CEZ Group says its profits during the first half of 2012 were negatively affected by the Albanian regulator’s decision on the tariffs and conditions of business for the power distribution company in the country and the growth of the market prices of electricity imported to Albania to cover the loss. “Nevertheless, we succeeded at obtaining a new decision from the regulator, which reduced the input price of electricity purchased from the state-owned KESH power stations from 2,830 to 2,200 ALL/MWh with retroactive effect on electricity supplied since January 1, 2012. Moreover, a study has been approved that defines a more objective method of calculating the initial amount of the distribution company’s bad debt in line with an independent analysis,” CEZ Group said.
The sales generated by the ČEZ Group which operates in electricity generation, distribution, and trade in several regional countries increased by CZK 9.4 billion (9%) year on year, and reached thus CZK 113 billion. The group’s Net Profit rose by CZK 3.3 billion (14%) year on year to CZK 27.2 billion.
Last May, Albania’s Energy Regulatory Entity (ERE) lowered power prices for Czech-owned distribution operator CEZ Shperndarje by 23 percent after losing a legal battle with the company on the bad debt and continuous complaints about the unaffordable prices risking investments and CEZ’s presence in Albania. ERE decided to lower power prices state-run corporation KESH charges on CEZ to 2.2 lek kWh, down from 2.84 lek kWh since Jan. 2012 when CEZ suffered a 90 percent increase in tariffs. CEZ Shp쳮darje, a subsidiary of ČEZ Group since 2009, owns and operates the entire 110kV distribution network in the country for a total length of 69,000 kilometers, serving around 1.1 million customers. CEZ took over former state-owned OSSH in March 2009, when it signed a contract with the Albanian government buying the majority 76 percent stake for 102 million Euros.