Czech utility giant CEZ raised its full-year 2026 financial outlook after posting first-quarter earnings that beat expectations, buoyed by stronger electricity prices and improved generation volumes tied to tightening energy markets.

The Prague-listed company reported EBITDA of CZK 35.3 billion ($1.5 billion) for the first quarter, down 18% from a year earlier as lower realized electricity prices weighed on operating performance. Revenue slipped 9% year-on-year to CZK 85 billion.

Despite the weaker operating result, net profit climbed 13% to CZK 14.5 billion following the end of the Czech Republic’s windfall tax on excess energy profits. Adjusted net profit rose 6% to CZK 13.5 billion.

CEZ now expects full-year EBITDA in a range of CZK 107 billion to CZK 112 billion, up from its previous guidance, while adjusted net profit is forecast between CZK 30 billion and CZK 34 billion.

The company attributed the improved outlook largely to higher realized electricity prices and stronger generation and coal extraction volumes amid rising global energy prices linked to escalating tensions in the Persian Gulf. Concerns over disruptions to energy shipments through the Strait of Hormuz have pushed commodity markets higher in recent months, supporting European power producers with unhedged output exposure.

CEO Daniel Beneš said the company benefited from stable operations across its generation fleet, favorable winter weather conditions, and disciplined procurement strategies in its retail business.

Power generation fell 4% year-on-year to 13.8 TWh during the quarter, primarily due to extended planned outages at the Temelín nuclear power plant as part of a transition to a longer fuel cycle. CEZ indicated the modernization work should improve operational efficiency in future years.

At the same time, output from the Po?erady combined-cycle gas plant surged nearly 50%, highlighting the increasing role of gas-fired generation in balancing regional electricity markets.

Electricity distribution volumes in CEZ Distribuce’s network rose 4% to 9.9 TWh, while gas distribution volumes across GasNet’s territory climbed 8% to 25.5 TWh. The increase reflected colder weather as well as the impact of CEZ’s acquisition of additional gas distribution assets.

The utility also accelerated investment spending as it pushes ahead with decarbonization and infrastructure upgrades. First-quarter capital expenditures jumped 130% year-on-year to CZK 15.7 billion, with spending directed toward renewable and low-emission generation projects, transmission and distribution upgrades, and strategic energy infrastructure.

Among the key projects advancing during the quarter was the launch of construction on the M?lník waste-to-energy facility, part of CEZ’s broader effort to replace coal-fired assets with lower-emission alternatives.

The company remains central to the Czech Republic’s long-term energy strategy as the country works to phase down coal use while maintaining energy security. The majority state-owned CEZ is also expected to play a leading role in future nuclear expansion plans and grid modernization efforts.

By Charles Kennedy for Oilprice.com

More Top Reads From Oilprice.com

Malaysia Warns of Surge in Iranian Ship-to-Ship Oil Transfers

Cuba Runs Out of Diesel and Fuel Oil as Blackouts Worsen

BP Buys 40% Stake in Uzbek Oil and Gas Blocks

Oilprice Intelligence brings you the signals before they become front-page news. This is the same expert analysis read by veteran traders and political advisors. Get it free, twice a week, and you'll always know why the market is moving before everyone else.

You get the geopolitical intelligence, the hidden inventory data, and the market whispers that move billions - and we'll send you $389 in premium energy intelligence, on us, just for subscribing. Join 400,000+ readers today. Get access immediately by clicking here.