Issuance activity: Tomorrow, MinFin is scheduled to auction CZK3.0bn of 2036 floater. So far this year, MinFin has issued a total of CZK260.5bn CZGBs on the primary market (MinFin projects CZK270 370bn for the full year), as well as an additional CZK121.8bn on the secondary market. The issuance calendar for October indicates that CZK16.0bn will be sold on the primary market. However, the Ministry of Finance usually increases the amount issued compared to the amount indicated in the calendars, with the year-to-date total amount sold being roughly double the indication.

Issuance activity: Tomorrow, MinFin is scheduled to auction CZK3.0bn of 2036 floater. So far this year, MinFin has issued a total of CZK260.5bn CZGBs on the primary market (MinFin projects CZK270 370bn for the full year), as well as an additional CZK121.8bn on the secondary market. The issuance calendar for October indicates that CZK16.0bn will be sold on the primary market. However, the Ministry of Finance usually increases the amount issued compared to the amount indicated in the calendars, with the year-to-date total amount sold being roughly double the indication.

Market situation: With the price of Brent crude oil back above 100 USD/bbl and the sell-off of global bonds having resumed, CZGB yields are reaching new multi-year highs. Meanwhile, both ASW and CZGB-Bund spreads lack any strong idiosyncratic impulse. Last Friday, S&P raised the outlook on the Czech sovereign rating from stable to positive while confirming the long-term foreign-currency rating at AA- and the long-term local-currency rating at AA, the latter of which is already one notch above the ratings of Fitch and Moody’s. S&P cites the Czech economy’s resilient growth, relatively low public debt, strong external balance sheet, the CNB’s effective monetary policy, and sound banking system as key factors in the outlook improvement.

Rates outlook: As for the short end of the CZK curve, our baseline scenario still anticipates that the CNB repo rate will remain at its current level for an extended period. However, energy-related risks and a public finance deficit of 3.5% of GDP next year (compared to the CNB’s August forecast of 2.9%) mean there is a risk of the CNB tightening its monetary policy further. In any case, market pricing of an additional five hikes within a one-year horizon seems excessive. Longer CZK IRS and CZGB yields are likely to continue to mimic the foreign environment, with neither 10-year Bund yields nor 10-year EUR IRS having peaked yet, according to the external assumptions in our updated forecast.

According to our estimates, Philip Morris ČR will report total revenue of CZK10.7bn for the first half of this year. This is virtually unchanged yoy. We estimate an overall decline in the number of products sold in both the company’s main markets. Net profit will fall by 9% yoy to CZK1.5bn. This equates to CZK532 per share. For the full year 2026, we expect EPS and a dividend of CZK1,080, corresponding to a gross dividend yield of +5.8%.

Announcement date: Wednesday, September 30, 2026  

According to our estimates, Philip Morris ČR will report total revenue of CZK10.7bn for the first half of this year. This is virtually unchanged yoy. We estimate an overall decline in the number of products sold in both the company’s main markets. Net profit will fall by 9% yoy to CZK1.5bn. This equates to CZK532 per share. For the full year 2026, we expect EPS and a dividend of CZK1,080, corresponding to a gross dividend yield of +5.8%.

We anticipate the number of products sold will fall in the first half of the year. This is likely to be the case for the traditional cigarettes category. According to our projections, PMCR’s total revenue for the first half of the year should reach CZK10.7bn. This represents a very slight yoy increase of +0.1%. The gross margin is expected to fall from 43.0% to 42.3% due to cost inflation. We also expect increases in distribution costs (+6.5% yoy per unit) and administrative costs (+7.7% yoy). Operating profit for the first half of 2026 will fall by 7.2% yoy to CZK1.8bn. According to our estimates, net profit will also be lower yoy, reaching CZK1.5bn (-9.0% yoy). On an EPS basis, this corresponds to CZK532.

Dividend: Philip Morris CR typically distributes its entire net profit to shareholders. We consider it to be a dividend stock. We forecast a net profit of CZK3.0bn for this year. This equates to CZK1,080 per share (EPS). We also expect the dividend per share (DPS) to be the same amount. Compared with the current market price, this corresponds to a gross dividend yield of 5.8%.