The economy is set to remain resilient despite the energy shock We forecast economic growth to slow slightly to 2.3% this year, before picking up again next year to 2.8%. In both years, GDP growth is still likely to be driven mainly by domestic demand – including consumption and investment – and expansionary fiscal policy.

Inflation should gradually increase to 3% due to higher energy costs We expect inflation to average 2.2% this year, before rising to 2.7% next year as higher fuel and energy prices feed through to other areas of the economy. We see both headline and core inflation remaining in the upper half of the CNB’s tolerance band for most of 2026 and 2027.

The economy is set to remain resilient despite the energy shock We forecast economic growth to slow slightly to 2.3% this year, before picking up again next year to 2.8%. In both years, GDP growth is still likely to be driven mainly by domestic demand – including consumption and investment – and expansionary fiscal policy.

Inflation should gradually increase to 3% due to higher energy costs We expect inflation to average 2.2% this year, before rising to 2.7% next year as higher fuel and energy prices feed through to other areas of the economy. We see both headline and core inflation remaining in the upper half of the CNB’s tolerance band for most of 2026 and 2027.

The CNB looks set to stay on hold, but risks are tilted towards a hike The central bank is in a favourable position, with interest rates still slightly restrictive and the koruna remaining strong. However, in our scenario of robust domestic demand and strong fiscal expansion, alongside the impact of higher energy prices, there is a risk of higher inflation and CNB rate hikes.

Market rates are likely to remain elevated The short end of the koruna interest rate curve could be pushed down slightly if the CNB’s monetary policy stance remains unchanged, and the Middle East conflict gradually de-escalates – as we assume. The longer end of the curve should remain high due to accelerating inflation and the effects of fiscal policy easing.

The koruna holds firm, for now So far, the Czech currency has reacted only mildly to the Middle East conflict. However, we think downward pressure could return. This could be fuelled by increased uncertainty, a deterioration in the external balance of the economy, or a narrowing of the interest-rate differential amid ECB monetary policy tightening and stable CNB rates.

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.