* Q1 net profit beats estimates
* Firms FY forecast to upper end of previous range
* Boosted by higher-than-expected MOL stake gains
* Shares hit 3-week high
(Adds details, shares)
PRAGUE, May 11 Czech electricity producer CEZ
on Thursday firmed up its net profit forecast for
2017, getting nearly the full amount that had been expected from
severing ties with Hungarian group MOL.
However, CEZ, central Europe's largest listed utility, still
expects an eighth straight year of deteriorating profit as it
and other European power groups face weaker wholesale
It reported a 12 percent drop in first-quarter adjusted net
profit to 8.8 billion crowns on Thursday and said it expected
the full-year result at 17 billion crowns ($697 million).
In 2016, CEZ posted adjusted net profit, which strips out
extraordinary effects and from which dividends are paid, of 19.6
The new profit outlook was at the upper band of a forecast
range it had given in March before realising gains from
offloading its MOL shares. It had acquired the stake in a
strategic tie-up almost a decade but plans to build gas-fired
power plants were never realised.
CEZ will get 3.3 billion crowns for selling the MOL shares
and redeeming bonds, along with an additional 1.2 billion crown
gain for recognising the revaluation of its MOL options in 2017
revenue, it said. It had previously pencilled in a figure of 4.8
Revaluation gains also boosted first-quarter profit, helping
it beat the average estimate in a Reuters poll, which had seen
profit falling by around a third.
Revenue also came above expectations, rising 2 percent but
earnings before interest, tax, depreciation and amortisation
(EBITDA) dropped 5 percent.
CEZ confirmed its guidance for full-year EBITDA to fall 10
percent to 52 billion crowns
The company's shares rose more than 2.6 percent on the
results to a three-weak high and were up 1.9 percent at 437.70
crowns by 0836 GMT.
(Reporting by Jason Hovet and Robert Muller; editing by David