Czech inflation rose further, from 1.9% yoy in March to 2.5% yoy in April. This was in line with market consensus but slightly above our own and the CNB forecast, which had both expected April inflation at 2.4% yoy. The final data for April thus confirmed the preliminary inflation estimate and provided detailed information on the structure of price developments.

Czech inflation rose further, from 1.9% yoy in March to 2.5% yoy in April. This was in line with market consensus but slightly above our own and the CNB forecast, which had both expected April inflation at 2.4% yoy. The final data for April thus confirmed the preliminary inflation estimate and provided detailed information on the structure of price developments.

Fuel prices continued to increase. Fuel prices rose by an average of 7.3% mom in April, following an increase of almost 20% mom in March. Consequently, annual fuel price growth accelerated further, from 13% yoy in March to 24.5% yoy in April. This was also driven by the base effect, as fuel prices had fallen in spring 2025. The further acceleration in fuel price growth was the main driver of the increase in headline inflation in April, contributing 0.3-0.4pp according to our estimate. This was marginally offset by the reduction in excise duty on diesel, which came into effect in April. The statistical office estimates that tax changes had an overall impact of -0.069pp on April’s mom inflation.

Food price growth remained subdued. Prices for food and non-alcoholic beverages fell by 0.4% mom in April, while prices for alcohol and tobacco rose by 0.9% mom. The overall food price category, including all beverages and tobacco, then posted a 0.1% mom increase. In yoy terms, food and non-alcoholic beverage prices were 1.3% lower in April, while alcohol and tobacco prices were 5.2% higher. Food prices are likely to gradually reflect higher energy, transport and fertiliser costs, but their current growth is likely still being influenced by last year’s strong agricultural harvest.

Regulated prices have increased only slightly so far. They were 0.2% mom higher in April. As regards household energy prices, only heat and hot water supplies rose by 0.9% mom in April. By contrast, electricity and gas prices continued to fall, likely reflecting the delayed effects of favourable developments in wholesale energy markets prior to the conflict in the Middle East. Electricity prices declined by 0.1% mom in April, as in March. Gas prices fell by 0.4% mom in April, following a decline of 0.5% mom in March. Apart from fuel prices, the current shock has thus not materially impacted other energy prices.

Core inflation remained at 2.9% yoy, but the annual increase in service and rent prices continued to accelerate. Core inflation was unchanged in April, after having risen from 2.7% to 2.9% yoy in March. This was in line with the central bank’s and our own forecasts. Meanwhile, services inflation rose further from 4.7% yoy in March to 4.8% yoy in April, with imputed rents accelerating from 5.4% to 5.5% yoy. The momentum of imputed rents remained strong at 0.4% mom in April. This was likely driven by the continued rapid growth in house prices, as well as the renewed rise in construction material prices resulting from the conflict in the Middle East. Moreover, growth in paid rents increased from 6.1% yoy in March to 6.3% yoy in April. Airfare prices, which could be under upward pressure due to rising fuel costs, fell slightly by 0.4% mom in April, partially offsetting the 4.4% mom increase in March.

We expect inflation to average 2.2% this year, before accelerating to 2.7% next year. However, given the ongoing blockade of the Strait of Hormuz, the risks to our forecasts are skewed towards even higher inflation. We expect headline inflation to accelerate gradually over the rest of the year, approaching 3% yoy by the end of the year. We expect the effects of the Middle East conflict to feed through to non-energy components of inflation only gradually. We provide more details on our updated forecasts in our recently published Czech Economic Outlook: https://bit.ly/CEO_2Q26_EN.

For the first quarter, we estimate a 20% yoy decline in EBITDA to CZK34.4bn. Realized electricity prices will be lower this year, and we also expect operating costs to rise. However, net profit will rise by +10.5% yoy and, according to our estimates, will reach CZK14bn. Since the windfall tax is no longer in effect this year, the effective tax rate will drop significantly, positively impacting net profit.

Announcement date: Thursday, May 14, 2026, at 7:00 a.m. CET

For the first quarter, we estimate a 20% yoy decline in EBITDA to CZK34.4bn. Realized electricity prices will be lower this year, and we also expect operating costs to rise. However, net profit will rise by +10.5% yoy and, according to our estimates, will reach CZK14bn. Since the windfall tax is no longer in effect this year, the effective tax rate will drop significantly, positively impacting net profit.

The price of electricity sold has fallen significantly this year. While CEZ sold electricity for approximately EUR124/MWh last year, our estimate is that it will be around EUR105 this year. However, since the start of the conflict in the Middle East, electricity prices have been nearly EUR10/MWh higher. We do not expect this to significantly impact the average price this year. It could, however, partially increase selling prices for future years. Revenues for 1Q26 are estimated at CZK89.9bn (-3.7% yoy). EBITDA is expected to decline by 20.1% yoy, reaching CZK34.4bn. The Generation sector is expected to account for slightly more than half of this, while the Distribution is expected to account for about 36%. We estimate an increase in operating costs (personnel, services). We also expect a slight decline in depreciation and amortization. We estimate net profit for the first quarter of this year to be CZK14bn. This corresponds to yoy growth of +10.5%. The difference in this line compared to the same period last year is primarily due to the tax rate. The special tax (WFT) no longer applies this year. In Q1 of 2025, the effective tax rate was 49.7%, whereas we estimate a standard rate of 21% this year. 

2026 Guidance: On March 12, CEZ published its current targets, which project EBITDA of CZK103–108bn and net profit of CZK27–31bn. Our estimates are more optimistic. According to our model, EBITDA should be CZK112.5bn, while net profit should be CZK37.4bn. We acknowledge that projections are usually conservative at the beginning of the year. We view the release of quarterly results as an opportunity for an update. Our estimates for 1Q26 are approximately 33% and 48% of CEZ’s EBITDA and net profit targets, respectively.