CEZ Selling $50 Million Phone Network to Counter Net DropKrystof Chamonikolas
CEZ AS, the biggest power utility in the Czech Republic, is selling its telecommunications network to save costs after its quarterly profit shrank to a two-year low.
The utility is offering assets including optical cables running along the country’s high-voltage power lines for a fixed price of 1 billion koruna ($50 million), company spokesman Ladislav Kriz said today. CEZ will purchase telecommunications services from the buyer, he said in an e-mailed response to Bloomberg News.
Prague-based CEZ lowered its full-year profit forecast by 6.7 percent yesterday after reporting a third-quarter profit that missed all analyst estimates because of asset impairments. The company is battling a slump in electricity prices and weak demand as the country struggles to recover from a recession.
The divestment seeks “to achieve savings and streamline telecommunications services to individual companies within the CEZ group,” Kriz said.
Telefonica Czech Republic AS and the Czech unit of Deutsche Telekom AG have shown interest in CEZ’s tender that will pick the buyer of assets and service provider, the spokesman said.
Net income attributable to common shareholders for July to September shrank to 3.8 billion koruna from 6.5 billion koruna a year earlier, CEZ said yesterday. That was the lowest profit since the third quarter of 2011 and less than the 6.3 billion-koruna median estimate of 10 analysts polled by Bloomberg.
The shares fell 1.7 percent to 558.6 koruna by 11:15 a.m. in Prague, sliding from a six-month high. They are down 18 percent this year, compared with an 8.5 percent gain for western Europe’s Stoxx 600 Utilities Index, which CEZ joined Sept. 23.