CEZ Loses Output From Nuclear Cash Cow on Workers Shortage

  • Dukovany outages will `inevitably' impact earnings, UBS Says
  • CEZ shares underperforming Prague's PX index amid halts

Two units at CEZ AS’s nuclear power plant Dukovany in the Czech Republic have been offline since Sept. 19 and probably won’t be benefiting the bottom line of central Europe’s biggest utility for weeks.

The dates for restarting idled units 2 and 3 on Jan. 6 and Dec. 9, respectively, are only indicative and will almost certainly change, Jiri Bezdek, a spokesman at the plant in the southern part of the country, said Monday by phone. The plant is struggling with “insufficient capacity” of skilled workers carrying out safety checks, he said.

“Dukovany is one of CEZ’s most profitable assets and continued outages will inevitably impact earnings,” Alberto Gandolfi, a UBS Group AG analyst in London, said Monday in a note to clients. He expects that the utility will probably cut its dividend by 50 percent to 20 koruna ($0.81) per share, while its earnings per share may drop 30 percent by 2017.

CEZ is also struggling with unplanned outages at Temelin, another domestic nuclear plant, and analysts from UBS to Erste Group Bank AG have warned the utility may have to revise its 2015 earnings outlook. Some of the lost income may be compensated for with a 3.8 billion-koruna tax refund on carbon emissions allocated by the European Union in 2011 and 2012, according to J&T Banka in Prague.

CEZ shares lost 14 percent since Aug. 12, underperforming the nation’s benchmark PX index, when its second Temelin unit was disconnected after a malfunction was detected on its cooling system. With both reactors at Temelin idle, the Czech Republic had to briefly import power instead of exporting as usual.

Price Increase

Czech power for next month surged 13 percent in the two weeks from Oct. 15, when the utility said works on the two Dukovany units could be extended until the end of the year.

“Outage of Dukovany nuclear power plant significantly reduces the availability of reserve power to supply the Czech Republic before the upcoming winter season,” Barbora Peterova, a spokeswoman for Czech power transmission network operator CEPS AS, said by e-mail.

CEZ’s six nuclear reactors produced 52 percent of the company’s electricity last year, according to its website.

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