Strong growth in industrial production in June and continued solid export performance continue to signal the ongoing cyclical recovery in Czech industry, in our view. Leading indicators from the industrial sector also continue to paint a fairly favourable outlook, despite higher energy prices. Construction output contracted mom throughout the second quarter but still recorded a qoq growth compared with 1Q. Residential construction is showing signs of a modest recovery, which was reflected in the growth in building construction in June. Although the seasonally adjusted foreign trade balance narrowed in June, the Czech economy’s export performance continued to improve.

Strong growth in industrial production in June and continued solid export performance continue to signal the ongoing cyclical recovery in Czech industry, in our view. Leading indicators from the industrial sector also continue to paint a fairly favourable outlook, despite higher energy prices. Construction output contracted mom throughout the second quarter but still recorded a qoq growth compared with 1Q. Residential construction is showing signs of a modest recovery, which was reflected in the growth in building construction in June. Although the seasonally adjusted foreign trade balance narrowed in June, the Czech economy’s export performance continued to improve.

Industrial production rose significantly by 1.2% mom in June, confirming the strong industrial performance in 2Q. Industrial output was up by 7.2% yoy (NSA), which was well above the market consensus of +2.6%, whilst our estimate was closer at +6.9%. Adjusted for the difference in the number of working days, industrial production in June was up 4% yoy, marking the strongest yoy growth so far this year. Czech industry performed well in 2Q despite geopolitical uncertainty and higher energy prices and rose 2% qoq, having fallen by 0.9% qoq in 1Q. In addition to actual industrial output figures, leading indicators of sentiment and new orders data also point to a fairly favourable outlook for Czech industry.

Foreign trade remains in surplus

The foreign trade balance in June showed a surplus of CZK15.5bn, falling slightly short of the market consensus (CZK17.2bn). Trade in motor vehicles remains the main contributor to the trade surplus, with a positive balance of CZK65.7bn (+CZK 3.8bn y/y). The second-largest surplus was recorded in machinery and equipment (CZK 14.8bn). This was mainly offset by deficits in the crude oil and natural gas, base metals and chemicals sectors.

Residential construction is now the main driver of the construction sector

Construction output stagnated mom in June, following declines in the previous two months. In both April and May, it recorded a 1.1% mom decrease. Although construction output has not been particularly strong over the last three months, the sector recorded a qoq increase of 1.5% for 2Q as a whole. However, this mainly reflected a carry-over effect from the strong results achieved in February and March. As a result of the deterioration in performance during 2Q, there was also a significant slowdown in the yoy growth of construction output in June, from 4.4% to 2.0% (after adjusting for the different number of working days).

We expect EBITDA to reach CZK26.5bn in the second quarter (-14% yoy). This yoy decline is mainly due to a fall in the realised price of electricity. However, net profit will rise by 99% yoy to CZK7.9bn. Despite the decline in EBITDA, net profit is growing because the special tax is no longer payable this year; only the standard rate applies.

Announcement date: Tuesday, August 11, 2026, at 7:00 a.m. CET

We expect EBITDA to reach CZK26.5bn in the second quarter (-14% yoy). This yoy decline is mainly due to a fall in the realised price of electricity. However, net profit will rise by 99% yoy to CZK7.9bn. Despite the decline in EBITDA, net profit is growing because the special tax is no longer payable this year; only the standard rate applies.

The decline in revenue in 2Q26 is due to a fall in the price of electricity sold. This year, we estimate the average realised price of electricity to be EUR105MWh, whereas last year CEZ sold electricity at EUR124MWh.  Although the geopolitical situation in the Middle East has pushed up electricity prices, we do not expect this to significantly impact this year's financial performance, given that most of this year's output has already been sold. It will, at least in part, have a positive impact on selling prices in subsequent years. Revenue for 2Q26 is expected to total CZK69.4bn (-6.4% yoy). According to our estimates, EBITDA is set to fall by 14.3% yoy to CZK26.5b. We estimate that just under half of this will come from the Generation segment, with the Distribution segment accounting for around 40%. Net profit for 2Q26 is expected to reach CZK7.9bn. This represents a yoy increase of +98.5%. This sharp rise is due to the effective tax rate, as the special tax (WFT) levied on profits in previous years is not applicable this year. We expect the standard corporate tax rate of 21% this year. Last year, the rate stood at 74% in 2Q. Net profit is adjusted for exceptional items and non-controlling interests (GasNet).

2026 Guidance: Our estimates for 1H26 (e2Q26 plus the already reported 1Q26) correspond to 56.4% of CEZ’s updated full-year forecast at the EBITDA level, and to 67% in terms of net profit. Nevertheless, we expect CEZ’s management to confirm its FY forecasts. However, in a positive scenario, these could be revised upwards. Following the 1Q26 results, CEZ updated its targets to stand at EBITDA of CZK107–112bn and net profit of CZK30–34bn.