Czech inflation increased from 1.7% yoy in July to 1.9% yoy in August. This was in line with our estimate, the CNB’s forecast and the market consensus. Similarly, the structure of consumer price developments broadly matched our expectations.

Czech inflation increased from 1.7% yoy in July to 1.9% yoy in August. This was in line with our estimate, the CNB’s forecast and the market consensus. Similarly, the structure of consumer price developments broadly matched our expectations.

The increase in annual inflation in August was mainly driven by higher fuel prices. Petrol station prices rose by 7.2% mom in August, following the renewed escalation of the conflict in the Middle East and the associated rise in crude oil prices, building on July’s 3.5% mom increase. This resulted in a significant acceleration in annual fuel price growth from 16.8% in July to 26.3% in August. However, this was partly due to the base effect, as prices at petrol stations had fallen in August last year.

By contrast, food prices continued to fall significantly. Prices of food and non-alcoholic beverages fell by 1.1% mom in August, which contributed to a deepening of their annual decline from 3.1% to 4.3%. This offset the 0.6% mom rise in alcohol and tobacco prices, which were 4.7% higher yoy.

Regulated prices were flat mom in August. However, they continued to fall at an annual rate of over 1%. This remained mainly driven by the 11.2% yoy decline in household electricity prices, partly reflecting the administrative impact of the transfer of renewable energy payments to the state. Compared to July, electricity prices were unchanged. Gas prices fell by 0.3% mom and 4.8% yoy in August. Households are benefiting from greater protection against fluctuations in wholesale energy markets due to an increased proportion of fixed-price energy contracts, which should continue in the coming months. After rising in previous months, heating prices remained stable in August and were 1.5% higher yoy.

Core inflation has not changed from July, remaining at 3% yoy. This matched our estimate but exceeded the CNB’s forecast of 2.8% yoy. Despite slowing slightly in August, seasonally adjusted core price momentum remained elevated at 0.2-0.3% mom, according to our estimate. Services inflation eased from 4.7% to 4.5% yoy in August, but goods price growth accelerated from -0.2% to 0.2% yoy (this includes food, fuel and energy prices). The persistently high services inflation is still being driven by rapid increases in rents, although the pace of this growth has not accelerated further. Growth in paid rents remained unchanged at 6.1% yoy in August, while imputed rent growth slowed from 5.7% yoy in July to 5.4% yoy in August.

Although Czech inflation remains close to the CNB’s 2% target for the time being, we expect it to rise further in the coming months. Headline inflation is currently being kept close to 2% by favourable food price developments, which likely still reflect last year’s good agricultural harvest, as well as by falling electricity and gas prices for households. However, given the prolonged conflict in the Middle East and the impact of this year’s severe drought and other climate-related issues, it can be assumed that the favourable trend in these two components will gradually reverse. As a result, we expect inflation to rise further for the rest of the year, peaking in February 2027 at just over 3% yoy. While we estimate headline inflation for this year at 2.0%, we expect it to rise to 2.6% next year. Core inflation should remain close to 3% until the start of next year, before falling gradually towards 2.5% yoy by the end of the year, according to our forecast.

Announcement date: Thursday, September 17, 2026, before the market

According to our estimates, Colt CZ is set to report a significant improvement in its financial performance in 2Q26, mainly due to the consolidation of high-margin SNC. We anticipate revenue growth of +55% yoy in 2Q26 to CZK8.5bn. We also expect Colt to report EBITDA of CZK2.2bn, up +89% yoy. These would be the best figures in the company’s history. We expect Colt to reiterate its FY guidance and aim for the upper end of the target range.

Announcement date: Thursday, September 17, 2026, before the market

According to our estimates, Colt CZ is set to report a significant improvement in its financial performance in 2Q26, mainly due to the consolidation of high-margin SNC. We anticipate revenue growth of +55% yoy in 2Q26 to CZK8.5bn. We also expect Colt to report EBITDA of CZK2.2bn, up +89% yoy. These would be the best figures in the company’s history. We expect Colt to reiterate its FY guidance and aim for the upper end of the target range.

We estimate Colt’s total revenue for 2Q26 at CZK8.5bn, representing yoy growth of +55%. We anticipate growth in both the Firearms and Ammunition segments, while the new Energetics segment will also be included in the quarterly report. The acquisition of Synthesia Nitrocellulose (SNC), completed at the beginning of this year, was already reflected in the 1Q26 results. Sales in Europe will be crucial, partly because we expect the US firearms market to remain weak. By contrast, Europe should benefit particularly from increased sales of ammunition and energy materials, which should more than offset weaker overseas sales. EBITDA is expected to increase by +89% yoy to CZK2.2bn. We estimate the 2Q26 margin at 25.5%, implying yoy growth of 4.6pps. Net profit for 2Q26 is expected to reach CZK735m, representing a yoy increase of +61%.

2026 Guidance: We estimate that Colt’s 1H26 revenue and EBITDA will reach 50% and 55% of the midpoints of the respective FY guidance ranges. We anticipate that Colt CZ will reaffirm its full-year outlook. EBITDA is expected to reach CZK7.4–8.2bn on revenue of CZK30–33bn, with Colt CZ likely aiming for the upper end of these ranges.