The Czech economy grew by 0.4% qoq in 2Q, accelerating from the 0.2% recorded in 1Q. On a year-on-year basis, the figure was revised downwards by one-tenth of a percentage point to 1.9%.

The Czech economy grew by 0.4% qoq in 2Q, accelerating from the 0.2% recorded in 1Q. On a year-on-year basis, the figure was revised downwards by one-tenth of a percentage point to 1.9%.

The breakdown showed that strong domestic demand remains a robust growth driver in the Czech economy. Household consumption continued to grow. The qoq growth rate of household consumption accelerated from 0.3% in 1Q26 to 0.5% in 2Q26. In yoy terms, growth in private consumption reached 2.7% in 2Q26, down from 3.3% in 1Q26.

Another positive development is the continued strong growth in fixed investment. Although its qoq growth rate slowed slightly from 2.0% in 1Q26 to 1.5% in 2Q26, it nevertheless remained robust, as it had been throughout the previous year. Consequently, fixed investment in 2Q26 was up 7.1% yoy. Quarter-on-quarter growth was primarily driven by investment in dwellings (+9% qoq), other buildings and structures (+4.5%), and intellectual property (+3.5%). Thus, investment appears to have reflected a recovery in both residential and infrastructure construction, the latter of which is likely linked to government investment. Government consumption rose by 0.15% qoq in 2Q26.

Despite strong domestic demand, net exports also made a significant positive contribution to the 2Q GDP result. They contributed a positive 0.7pp to qoq GDP growth, whereas in 1Q26 they contributed a negative 0.9pp. Exports increased by 0.9% qoq in real terms and by 3.3% yoy, primarily driven by exports of motor vehicles, computers, electronic and optical instruments and equipment, and electrical equipment. Meanwhile, imports remained unchanged qoq, rising by 3.7% yoy. Change in inventories negatively impacted the result in 2Q. Their negative contribution of 1pp to qoq GDP growth more than offset the increase in net exports.

The improvement in net exports was reflected in the export-oriented manufacturing sector, where gross value added increased by 0.3% qoq in 2Q, following a fall of 0.8% in the previous quarter. Gross value added in other industrial sectors outside of manufacturing also increased significantly, by 6.4% qoq. Overall, gross value added increased by 0.4% qoq in the second quarter.

These results therefore confirm our forecast of continued robust growth in the Czech economy, which we predict will grow by 2.1% this year and accelerate to 2.6% next year.

CEZ announced its results for 2Q26, with net profit rising by +8% yoy, but falling short of market expectations. This was primarily due to the revaluation of trading instruments. Conversely, CEZ increased output at its nuclear and coal-fired power stations, while its Distribution division also performed better. CEZ also demonstrated a strong ability to generate free cash flow (WFT-free). The company's management has raised its FY targets for both EBITDA and net profit.  

CEZ announced its results for 2Q26, with net profit rising by +8% yoy, but falling short of market expectations. This was primarily due to the revaluation of trading instruments. Conversely, CEZ increased output at its nuclear and coal-fired power stations, while its Distribution division also performed better. CEZ also demonstrated a strong ability to generate free cash flow (WFT-free). The company's management has raised its FY targets for both EBITDA and net profit.  

Revenue for the second quarter totaled CZK74.7bn. This represents a slight yoy increase of +0.8%. However, EBITDA fell by 23% yoy to CZK23.8bn. This is 8.7% below the consensus estimate. As expected, the decline in EBITDA was negatively impacted by lower electricity prices, which affected the Generation segment. This sector also recorded a loss from Trading where positions were revalued. However, Mining and Distribution both saw yoy growth. Net profit, adjusted for exceptional items and non-controlling interests, increased by +8% yoy to CZK4.3bn. As anticipated, this growth was driven by a substantial decrease in the effective tax rate, due to the absence of a special tax (WFT).

The leverage ratio, measured as net debt to EBITDA, remained unchanged at 1.6x on a quarterly basis. However, both debt and cash increased due to the dividend payment in August.

Guidance for 2026: CEZ has once again increased its targets for this year. This is based on higher electricity prices, which are set to rise to EUR106–110MWh (previously EUR104–108MWh), higher output from nuclear power stations, and higher profits in the Distribution sector. According to the new forecast, EBITDA is expected to reach CZK109–114bn (+1.8% compared to the previous forecast of CZK107–112bn), while net profit is expected to reach CZK31–35bn (+3.1% compared to the previous forecast of CZK30–34bn).

According to our model, EBITDA should total CZK112.5bn, while net profit should total CZK37.4bn. The market is expecting CZK112.6bn and CZK36.8bn respectively.

The results reported for 1H26 represent 53% of CEZ’s revised full-year target for EBITDA and 54% for net profit (mid-range).

Compared with previous expectations, the estimated output from the gas-fired power station and the nuclear units has increased. Conversely, the outlook for renewable energy sources has been revised downwards.