Hello everyone, this is ČEZ Group full year 2023 conference call. It's my pleasure to welcome today's speakers, Martin Novák, Chief Financial Officer, and Pavel Cyrani, Chief Strategy Officer. I will now hand over to Martin.
Good afternoon, good morning everybody. Let me cover first 2 sections and then I hand over to Pavel. Looking at slide number 3, you can actually see our financial highlights. Our EBITDA reached CZK 124.8 billion. We exceeded actually our November 9 outlook, which was CZK 115 billion-CZK 120 billion. Positive impacts or positive changes between our outlook from November 9 and real numbers for 2023 include trading segments CZK 3.5 billion better results; CZK 2 billion are better results from prop trading; CZK 1.5 billion is actually revaluation of derivatives that hedge our position for 2024 and later. We also had better mining segment numbers by CZK 700 million compared to our estimate, and revenues from ancillary services and sales of heat in Czech Republic of CZK 1 billion. Our adjusted net income was estimated at CZK 33 billion-CZK 37 billion, and we actually achieved CZK 34.8 billion.
On next slide, you can see achieved adjusted net income of CZK 30.8 billion, which actually is composed mainly or 74% of it is actually from emission-free activities, and only 26% is generation from emission facilities and mining. Our the level of our income when we actually take into consideration our payout ratio of 60%-80% of adjusted net income shows that we would be able to pay 39-52 CZK per share dividend, or CZK 21-28 billion dividend in total. So our average, or long-term average of our payout ratio since the first dividend we started to pay, which was in 2003, is 70% of adjusted net income. Average industry standard is actually around 50% these days. On next slide, you can actually see that power prices are going down, and they are basically reaching levels of 2021.
It is very well visible on the chart. Of course, the most significant change is in 2024. As you can see, the power price is now at something like EUR 69 for three quarters of 2024, and significantly lower than was actually a forward price in 2022 for 2024, which was EUR 254. Sharp increase of the prices was caused by Russian invasion to Ukraine after LNG supplies to Europe were secured. In 2022 and 2023, the power prices started to be significantly reduced due to reduction in gas prices. It was clear that there is enough and will be enough of natural gas, and also the effect of uncertainty is basically minimum.
Current situation indicates that actually, when you look at power prices and then, carbon credit prices, that, we can see clear indication that coal assets will be discontinued definitely by the end of decade in most cases for most power generators. And, there is, a lot of investment into stability of transition and distribution networks, switching to gas plants, building renewables ahead of us, which also, requires certain changes in legislation. On next slide, you can actually see our, key highlights, in energy security area where we secure supplies of, new non-Russian gas, first through, LNG terminal in the Netherlands, where we have contracted, the capacity for five years, in 2022, and also actually 15-year capacity to, to start from 2027 in German terminal Stade. There is a tender, going on for fifth, unit, in Dukovany.
There will be a slide on it, so I'll cover it later. We also continue to develop renewables in the Czech Republic. We have now investment support available of up to CZK 3 billion and for the projects to install capacity of 728 megawatts installed. We also started and launched tender actually for a supplier of waste incineration plant in Mělník, that is part of our energy solution to actually burn waste and generate heat and power. We also completed the heat pipe between our nuclear plant Temelín and City of České Budějovice, which is actually largest heating project of the decade supplying heat from the nuclear plant to the city central heating system.
On CSR, corporate social responsibility, our goal that we set actually in 2021 was to become the best or to be among top 20% of best companies from ESG point of view, and we actually achieved it. Our ranking through ESG aggregator CSRHub, which compares 35,000 companies, is now at us being actually in top 16% of the companies. We also, our employees actually donated more than CZK 500 million, and actually originated those projects. So, important slide actually is on the tender for the new nuclear unit in Dukovany. As you know, in October 2023, actually, we received bids from 3 potential bidders or potential suppliers, which was French EDF, South Korean KHNP, and U.S.-Canadian company Westinghouse.
On January 31, the government of the Czech Republic approved the conclusion of new amendment to the current contract with ČEZ. Actually, bids were supplied by all three bidders at the same time. Actually, two bidders, French EDF and Koreans, were invited to participate in improving their bids by April 15th, 2024, and also extended to potential build of 2, 3, or 4 units, not only 1 unit. On May 31, actually, we will supply or Elektrárna Dukovany, which is our subsidiary, will supply or submit evaluation report to the Czech government, and the Czech government will choose the company or the supplier, actually, of nuclear plant during summer 2024. The contract with the supplier with the winner should be signed during the first quarter of 2025.
The next slide actually shows more detail on our two terminals, LNG terminals in Eemshaven and also Stade, providing some details. Actually, the next slide shows main strategic financial targets for 2024. So our EBITDA estimate is at CZK 115 billion-CZK 120 billion, adjusted net income CZK 25 billion-CZK 30 billion. Key assumptions, total electricity supply is actually 41-42 TWh. We expect to achieve average price of 130-135 EUR per MWh. We are accelerating depreciation of our coal-fired portfolio, which is reducing our adjusted net income. And we expect windfall tax of CZK 20 billion-CZK 30 billion for 2024. That's mainly these are the key elements actually of our financial targets. And we also expect to generate about 30 TWh in our nuclear plants. Dukovany bids should be actually evaluated during this year.
We should continue into decarbonization of our portfolio of both power generation and also heat portfolio, increase, and further deploy digitalization and efficiency and innovation in our both sales and distribution processes, and continue with our ESCO development. On the next slide, it's important news and kind of hot news, because this was really all concluded yesterday. We actually, after quite a lengthy process, are able to acquire a 55% stake in a gas distribution company in the Czech Republic called GasNet. We are actually buying assets from Macquarie and replacing them in shareholder structure. There are two more shareholders, BCI and Allianz, holding 26.29% and 18.5%.
As you can see, based on the map, actually, this gas distribution covers significant amount of territory of the Czech Republic and practically 100% is 100% identical to our electricity grid that we actually operate distribution network. So we expect a lot of synergies from that situation. There are some basic information about GasNet. We should be physically taking over the company sometime during the summer after European Commission anti-monopoly clearance is received and also Czech Ministry of Industry clearance is received. Only then we can actually physically take over the company. So now switching to financial results and more numbers on generation segments. So overall, on slide 12, you can see selected financial metrics. EBITDA and net income were already mentioned. I think it's important to say that we also increased our CAPEX by CZK 11 billion to CZK 45.8 billion.
Our net debt has not practically changed. It's a bit lower than it was a year ago and has reached CZK 115.3 billion. Our net debt to EBITDA ratio is actually 1.2. We actually produced or sold 43.5 TWh of electricity at average achieved price EUR 126 per MWh, and we consumed 13.4 million tons of CO2, and average purchase price per ton of CO2 was EUR 61. On the next slide, you can see the changes on our EBITDA year-on-year. There are basically very few big moving parts. In generation facilities, although the variance is fairly small, CZK 700 million, we actually had one big positive move and one negative.
Positive was higher prices contribution of CZK 8.4 billion, and negative was actually a, you know, a gap on power prices, where we had to pay CZK 8.8 billion Czech crowns difference, variance versus last year. In total, it was CZK 10 billion paid, but CZK 1.2 billion was paid in 2022 as well. So variance is 8.8. Generation segment trading, CZK 12.3 billion lower, but this is really compared to record high result, which was close to CZK 27 billion in 2022. This year, we achieved CZK 9.4 billion. I mean, in 2023, we achieved CZK 9.4 billion only. However, normal number under normal times would be somewhere between CZK 1 billion and CZK 2 billion Czech crowns. So, CZK 9.4 billion is still the second best trading result in our history. Nevertheless, it is lower than in 2022. We had positive impact of more than CZK 5 billion, actually, which is revaluation of hedging position for future years.
So negative variance is then CZK 12.3 billion. Mining [had a] significant contribution of CZK 6 billion, mainly due to higher coal prices both to power plants of CEZ and also external supplies to our external customers, mainly due to increase in coal prices that actually are linked to electricity prices. Sales segment has improved its performance by CZK 1.9 billion, CZK 1.2 of which is actually a result of our court case between us and Railway Authority, where they did not actually buy contracted electricity in 2010 and 2011. And actually now we are being reimbursed lost profit from them. So this is one of items [that] will not repeat itself clearly in 2024. Next slide, you can see the main causes of year-on-year changes in net income. We have higher depreciation and amortization due to increased depreciation of coal plants and also our mining company.
Asset impairments, we have a negative impairment or impairment of CZK 5 billion, which is related to impairment in our coal mining business, where actually last year, we had a reversal of impairment due to significantly better outlooks in mining industry. It has changed very rapidly, so now we actually have an impairment of CZK 5 billion, total variance of CZK 8 billion. Other expenses and income, actually, what is worth mentioning is that despite our level of debt of CZK 115.1 billion, we basically have no interest expense because all the, all, all interest income from our free cash is covering or was covering our interest expense from, from the, on the financing. Interest on nuclear and other provisions is significantly higher than last year or than in 2022, and it reached CZK 7.3 billion. This is due to higher interest rates.
significant variance actually is in the income taxes line, CZK 30.5 billion higher tax due to the windfall profit tax that was introduced actually in 2023. So now we are getting down to net income of CZK 29.6 billion and adjusted net income, which is adjusted for CZK 5 billion impairment in mining company, so CZK 34.8 billion non-adjusted net income. On the next slide, you can see actually our generation on the nuclear and renewable side. We had 1% lower generation compared to 2022, with 2% lower nuclear due to scheduled or planned actually maintenance. The same will be the case in 2023 for the nuclear segment.
the renewable segment, we have a 9% better result mainly due to better hydro-hydrological conditions in the Czech Republic, and we are planning to increase our renewables generation by another 10%, mainly due to new photovoltaic power plants, new wind power plants in France, and also biomass availability in Poland. When we look at our emission electricity generated from actually coal and natural gas, you can see decrease of 13% year-on-year between 2022 and 2023 and another 9% between 2023 and planned 2024 to in 2024 to total 16 terawatt-hours, mainly due to market conditions both in the Czech Republic and Poland, where it is less and less profitable to start the power plant, especially when you have a free or a cheaper alternative of importing cheaper power from Germany, for example, during summer days.
The same applies for natural gas, where actually it is difficult to predict power generation from gas as it is really peaking plant. So our estimate stays on the level of 2023 numbers, which is 2 TWh, but can be, can be actually different, depending on how market conditions will, will work out. Now, on next slide, here, we have details of generation mining segment. I will not go through all, all the details that you can read by yourself. Actually, the total EBITDA from this segment is CZK 90.4 billion, and mining segment actually CZK 12.3 billion, so significant contributor with zero emissions contributing CZK 59.2 billion and emission generating facilities CZK 21 billion and trading CZK 9.9 billion, actually. On next slide, you can actually see year-on-year change between 2023 EBITDA and 2024 estimate.
We expect lower income from generation due to the details that are provided on the right side of the chart. The same with mining. With falling power prices, we would expect also coal prices to go down. Better contribution from distribution, sales CZK 0-CZK 2.2 billion positive. And that's how we should get actually to our estimates of CZK 115-220 billion. Next slide, important slide. We actually can see the level of electricity sold as of 31st of December 2023, for 2024, 2005, 2006, and 2007. Same actually with contracted emission allowances for the same period or purchased carbon credits. And to provide you even a fresher number, the number below actually in the bottom part of the slide shows the level of hedged power for 2024 through 2027 as of the end of February.
So as of the end of February, we are basically sold out, other than 6% that we have for potential peaks and potential spot market to be sold actually in 2024. Next slide. We have a reconciliation of our Vision 2030 project where in 2021, we actually announced that we would like to increase our EBITDA from CZK 61 billion to something like CZK 80 billion-CZK 90 billion in 2030. And this is just to demonstrate that we are on a good track. Even in 2025, we are actually splitting the column and showing the impact of the hedges of power prices were higher than normally anticipated in the plan, which is additional benefit of CZK 26 billion Czech crowns, but the baseline comparable baseline would be CZK 79 billion-CZK 89 billion.
On next slide, actually, last slide, you can see the share of our zero emission activities in EBITDA will be increasing to 0.90% in 2025. And by 2030, actually, coal EBITDA should be replaced with gas, with leaving minimum actually coal assets in our portfolio. So that's all for my part. And now I will hand over to Pavel to guide you through customer segments and fulfillment of our 2030 vision.
Okay. Well, thank you, Martin. And hello, everyone. Let me walk through the information on the customer-facing segments. First, on page 23, there's a recap of all the trading activity. As Martin already mentioned, we had a very good result to be the second biggest in history of CZK 9.4 billion, yet quite a drop from the very extraordinary year of 2022.
Still, just for comparison, you see, what is the volume of transactions. It's about, on the natural gas, it's more than 10 times Czech consumption. And on electricity, it's about 5 times the Czech consumption. And the reason being that, a large part of the profit is made from trading in other markets. In terms of distribution, there's a slight decrease year-on-year, partially driven by the decrease in electricity distribution, combined with higher fixed operating expenses driven by inflation. If you allow me, I'll comment on the consumption. There's a 4% drop. It's actually driven by kind of three things combined. One is we still see the effect of people saving electricity, driven by the higher prices of the previous years. Secondly, year 2023 was a very warm year.
It was the record highest temperature on average, which has effect on especially heating use. It's more so with gas, but also on electricity. Last but not least, there is a surge of people installing their rooftop solar. So obviously, rooftop solar falls out of the distributed electricity through the grid. On the other hand, we consider it temporary because we are already seeing the first signs of both people, households and companies switching from other fuels to electricity. In general, we actually expect the electricity consumption to grow significantly. So this trend of downward or decline of electricity distributed is temporary in our perspective.
On the following page, there's a recap on the activities in the sales and supply segment, a drop in the retail segment, which was mostly driven by the very high wholesale prices last year, which obviously creates push on the margins, which was even more so driven by the fact that basically we had a regulated price last year for the household segments with the price ceilings where the costs of suppliers above price ceilings were then offset by subsidies from the government. Again, this is, in our perspective, a temporary thing that will not repeat itself this year as the price ceilings are no longer in effect.
On the other hand, we saw a surge in both revenues and profits for the energy services with companies asking for all kinds of measures to self-produce and or reduce the consumption of electricity and gas. And also, we had a very good year in terms of purchasing electricity from all the distributed renewables that have been installed in the past two years. In terms of the volumes on the next page, I already commented on electricity. You see even a higher drop on gas. This is mostly driven by the average temperature, gas being used mostly for heating. So this is what we see in terms of the number of customers. There is a slight drop. Obviously, it needs to be seen in the perspective that we have gained several hundred thousands of customers over the past two years.
So there was some correction last year, but we aim to stabilize the portfolio this year and either keep it stable or even slightly grow it, going forward. On page 27 is some more detail on the revenues from the energy services. I mentioned that we see an increased demand for these types of services. Obviously, the 32% is not only the growth in demand. There's also inflation factored in because these are nominal revenues from these services. And again, we aim to continue, although not at such a high pace, in year 2024. We wanted to because this is an annual call, annual presentation. We wanted to set some of the achievements and results in the framework of our strategy Vision 2030, which obviously was announced pre-war in Ukraine. So it was more articulated in terms of the protection of climate.
But given that it reduces the use of and need for fossil fuels, which are important to a large degree from abroad and historically have been mostly imported from Russia, it also increases the energy independence of Czechia and the region. So on the next two pages, 29 and 30, let me just quickly recap things that you have seen in the presentation. We obviously still focus on two pillars, the first one being the reduction of emissions in our power and heat generation, where we exceeded again 30 TWh for nuclear and 34 TWh combined nuclear and renewables. And our emission intensity of heat and power generation declined year-over-year in all the measures, both CO2, SO2, and NOx.
We have also, apart from the comments Martin made on the nuclear tender, we have received a zoning permission for a new nuclear facility in Dukovany. And we have completed the documentation for environmental impact assessment notification for the small modular reactor in Temelín. We have completed the preliminary feasibility studies for our locations. There was the LNG terminals already mentioned. We've also started a pretty significant program of replacement of the lignite heating power plants. The first one, where we already started construction in Dvůr Králové, a small town, but others lined up. We are already running the supplier selection. And all of these will be enabled by two types of supports. One is an investment subsidy drawn from the Modernisation Fund.
So all of these projects have won or will apply for investment support from the Modernisation Fund. And the second measure is the Combined Heat and Power support program, which is now being notified in the European Commission. And hopefully, that will be finished soon and will be swiftly succeeded by first auctions run by the Ministry of Industry in which we obviously plan to participate with these projects. Last but not least is the construction of new photovoltaic based on the investment support that we've won from the Modernisation Fund. In terms of the second pillar, it's a combination of providing new services, increasing capacity, and also focus significantly on digitalization of all activities. I'll just highlight a couple of things.
We have connected more than 50,000 new photovoltaics, mostly rooftop solar power plants with capacity over 600 MW to our Czech distribution grid. We have also built more than 4,000 rooftop solar plants with our own hands through ČEZ Prodej and another almost 100 through ČEZ ESCO. We have put out new applications, meaning kind of smartphone applications, which increase the share of contacts that we run through digital channels. Maybe last comment on this one is that we are also continuing in building up our e-mobility charging stations, adding more than 145 last year with the total capacity reaching almost 50 MW. All in all, both these activities are being recognized by the ESG rating agencies. All of them increased our ESG rating year-on-year with us falling in the 84th percentile of ESG companies or ESG rating of companies.
On the last page of the presentation, we obviously aim to continue with these strategic priorities, both in continuing transforming our generation portfolio and providing, secondly, the most cost-effective energy solutions. And this all also supported by our sustainability priorities, and financial targets. Martin already mentioned, we aim to achieve CZK 115 billion-CZK 120 billion EBITDA and adjusted net income of CZK 25 billion-CZK 30 billion. And with this, Bára, back to you.
Yes. This finishes the presentation. If you want to ask a question, you can raise your hand on the Teams by pressing the icon. You can also ask the questions over the telephone by pressing star 5. I will unmute you, and then you can ask your question. I can see that we have the first question from Anna Webb. Yeah. Anna, you can unmute yourself and ask your question. Hi.
Thank you very much for taking my question, Anna Webb from UBS. I've got two questions for you. Firstly, on the dividend, you've said this morning that the 60%-80% dividend policy would imply a dividend of CZK 39-CZK 52 per share. Are you ruling out paying above that policy as you did in 2022, or does that still remain open? And this was an indication of what it would be inside the current policy, just trying to find out what flexibility there is or not.
And then secondly, maybe digging into the 2024 guidance, which came a little bit below consensus and seems to be driven primarily by the generation division, which you're guiding for CZK 5 billion-CZK 15 billion lower EBITDA in that business this versus 2023, despite obviously a better achieved price, given the lack of levy in place there. Can you discuss the main drivers of the lower expected earnings? I think you put a few on the slide, but could you kind of quantify what are the most significant impacts year-on-year, offsetting that higher achieved power price? Thank you.
Okay. So I will comment on those questions. Actually, dividend, you know, we provided a calculation of 60%-80%, as this is our dividend policy.
However, of course, shareholders can propose different number as it happened, for example, last year when actually majority shareholder, if I'm not mistaken, proposed higher dividend, actually close to 100%, which was approved at the shareholder meeting. So, our proposal will fall, I guess, to 60%-80%. But this is no guarantee that this is how it will end up at the end. And second, actually, 2024 guidance, compared to 2023, actually was our generation segment where we expect 15-5, again, relatively large spread, or large, actually, interval is given by the fact that we don't budget really such a high level of proceeds from trading, from prop trading, which achieved actually CZK 9.4 billion. And as I said, this is the second best result. And this is not reasonable to assume that we would be able to achieve something like that.
Of course, we'll be happy to do if it happens. But we have no guarantee. So quite a few billion CZK are actually attributable to this one item. Actually, we also assume, which is about CZK 5.6 billion, I think, lower estimate. Then we also expect close to CZK 4 billion lower actually ancillary services, which might be better, but we really don't know. We also have higher cost due to inflation pressures. And we also have a currency hedge test lower levels due to stronger crowns in the past. So we actually receive less Czech crowns for our euros, you know, so and it's about CZK 2 billion. So those are the main effects, actually, in generation segment.
Perfect. Thank you very much.
Yes. We have the next question from Arthur Sitbon.
Yes. Hello. Thank you for taking my question.
I hope you can hear me well. The question is on the potential group reorganization of ČEZ. I was wondering if there had been any development on that. Obviously, the market environment has changed quite a lot in the past months with lower power prices. We're also closer to the conclusion of the tender on the new nuclear plant. So I was wondering if you could update on that and if it was still on the agenda. Thank you very much.
So this is a question that should be more directed to the government. But our current understanding is that exactly in the face of what you mentioned, a larger reorganization is currently not being discussed.
Obviously, there is the interministerial commission that is looking on financing more than one nuclear unit if the government should decide to actually start construction of more than one, which can have some effect. But as I put it, kind of the more general or larger reorganization is currently not on the table as we understand it.
Okay. I see no raised hands. I just read the question that came from chat, from Michał Kozak. He's asking, "What are the main assumption changes that lowered your expected 2023 EBITDA forecast? Is there anything else causing that, apart from the energy prices revision?" Yeah. I assume that when we talk now about forecast, it's actually 2024, right, you know? Yeah. In 2023 EBITDA target, yeah, that was updated. Yeah.
Yes. That was updated. Yeah. It was caused mainly by the different power price assumptions. We have the next question from Petr Bártek. Petr? Okay. I think we lost him. So I'll ask, Bram Buring? Bram? Yeah. Sorry. Yeah.
Yeah. So regarding the GasNet acquisition, generally, I'm pretty positive on this. It's a good Czech business. But I'm curious on management if you're able to give any sort of feedback about how you expect this to feed into your capacity to pay dividends, from 2024 earnings and onwards. Is it going to be a tailwind, a headwind? Thank you.
Look, I think in general, this is the GasNet work is a good cash flow generator. It is definitely under less demand growth in terms of new CapEx compared to the electrical distribution.
So I do not expect that it should have any, you know, adverse effect on our ability to pay dividends. So that answers your question. I would not, I could not say now that it has like a positive effect. Obviously, we expect this to pay the dividends in line with its ability to kind of generate cash flow and in line with the regular term, return on capital.
So overall, neutral.
Yeah. I would say at worst, neutral and neutral.
Thank you.
And we have the next question from Robert Maj. Yes.
Hi. It's Robert Maj from IPOPEMA Securities. To just follow up on this Gas acquisition, you stated that this company makes around CZK 10 billion a year in 2022, I believe.
Should we expect that this is like a recurring result that which should just plug into the Czech forecast, CZK 10 billion a year? And does your forecast for 2024 include this CZK 10 billion from this new acquisition, this number question number one? And question number two is, what would be the impact on your net debt? I mean, is this company I believe this is a debt-free company as it generates cash. But correct me if I'm wrong. And the third question is, as you say that you would like to be, to have 97% of your EBITDA in 2025 carbon-free, in carbon-free in respect of emissions, what does that mean for your Polish assets? Would you like to try to have another attempt of disposing it, or are you just going to shut it down? Thank you.
Okay. So many, many questions.
In terms of our forecast for 2024 does not include or any of the forecasts that we have 2025 and 2030 outlooks for the Vision 2030 does not include GasNet, because the final steps in the acquisition were made only late last night. In terms of the forecast, I think using the last two years as an indication of the next year is a good approach. Obviously, similar to the electricity business, the next potential change will come when there is the new regulatory period, which is aligned with the electricity regulatory period. Now, in terms of the debt, it's actually not a debt-free company. There is quite some debt. There's about CZK 55 billion of debt on the whole company.
and, the reason is not that it will not generate cash flow, but the reason is obviously the cash—I mean, that the capital structure optimization. And, at least that's what I assume that the previous shareholders have done or the reason they have done it. So it will, after consolidation, increase our net debt to EBITDA ratio. At the same time, it will obviously improve our risk profile. So we believe that the rating agencies should recognize that the share of the regulated and stable business is increasing. And therefore, they should also recognize it when looking at the increased ratios of net debt to EBITDA. And now I maybe there was some GasNet and but there was some.
Yeah. Then there was actually Polish assets.
Oh, the Polish assets, the call.
Yes.
Actually, we don't count on our Polish assets in our EBITDA, because we will definitely start another round of disposal process and should it not be successful, where we believe it will. But should it happen, we will definitely think about basically discontinuing the operations because we don't want to operate core assets, and it will not be very economic either. So we'll have to find another solution.
Robert, did we answer all your questions?
Yes. Thank you very much.
Okay. So we could take the next question from a person who dialed in. I don't know exactly who it is. It's a Polish number, +42 721 550.
Hi. It's Piotr Dzięciołowski from Citi. I have two questions, please. GasNet and Netrading. So first of all, you said in the morning there was some couple of headlines that you may accelerate the coal phase out.
So I just wanted to understand, can you please tell us about the economics of running the lignite at the moment? When do you think that could break even or that will be positive? Or how is the, basically, operation looking from the kind of an EBITDA perspective as well as the, cash perspective? And second, on your GasNet, I just wanted to, clarify. So we have limited numbers for 2022 performance. And the valuations based on the 2022 RAB or, an EBITDA looks a little bit punchy for a gas distribution asset. So I just wanted to understand how this business developed between 2022 and expected 2024 as we are kind of ending first quarter now. Thank you.
Well, in terms of the business development, obviously, we do not control the business yet. We have only signed the SPA.
We are now going for the regulatory approvals by the European Commission and the Minister of Industry. So I think on this, it's better to wait for GasNet to publish its annual results, which I think should happen sometime, like in the spring. And there, the numbers will be public. But as I said, I think looking at the previous two years is a good indication. In terms of the price and the multiples, just not to mix up kind of two perspectives of the numbers. As the numbers that we've published that we are paying, the purchase price is a 55% stake, equity, right? Now, if you look at, you know, if you look at the kind of multiples type of valuation, you are typically looking at the enterprise value 100%.
So this is what you need to kind of look at it how you need to. If you want to look at the multiples to RAB or to EBITDA, you need to take our purchase price, extend it to 100% of equity, and then add the, as I said, roughly CZK 55 billion of net debt.
And then. Yes. But I was just referring that if I do the math, I get to almost 40% premium to RAB, which for the Gas distribution asset I mean, in public market, you typically would see a lower number. In a private market, maybe, you know, people kind of can get it. So I was just thinking whether the business, based on what you see, improves between 2022 to 2024, and this multiple is a little bit lower or better.
I wonder how obviously the kind of the simple RAB multiple, obviously it first of all needs to be compared to the 2023 and 2024 RABs, which are now, like, in the making. I don't want to publish these numbers, although obviously for the valuation, we had access to them. This is to be published by GasNet and by us once we consolidate it, include it in the accounting, and then, yeah. I guess that's all I can say at this moment. So
that's okay. I understand. No problem.
EBITDA multiple, which yeah.
Coal phase out.
And the coal phase out look, we in general, what we say is that, by 2027, the coal assets get under significant pressure. In our specific case, the situation is better, through a couple of things.
One is we have a pretty high share of assets which are also delivering heat, where the heat, obviously, is not hit by the reduction of electricity prices. And the heat prices are basically rising kind of roughly with inflation. Second, we also supply other heating stations with coal and lignite. So actually, we can amortize part of the lignite mine costs, fixed costs, and operating costs to the lignite supply to others. And then there's the power station. So it would be difficult to say, like, and pinpoint it to exact date. It depends a little bit on how other players also how they uptake lignite for their heating stations and also how exactly the spreads develop.
But as we put it, 2027 is the year where really it hits the Lignite station significantly. And between 2027 and 2030, it's basically when you really start looking at closing it down. Obviously, for the heating, it needs to be replaced by new heating stations, because otherwise, you wouldn't have no other ways to supply the heat. And also, as long as we have uptake for Lignite for, you know, third parties, we also are in a better position.
Okay. Thank you very much for the answer.
We can take the next question from Yashraj Sankpal. Piotr,
Can you hear me? Yes. We can hear you. Yeah.
My question is on the CapEx guidance for 2024 and an average ballpark figure if you can provide for the Vision 2030, so annual figure on an average that we'll be looking to spend as CapEx for the next six years six to seven years.
Yeah. So actually, CapEx is presented in our financial statements. You will find it actually in on the last page, basically, last page of the financial statements. It's Note 38. And our estimate of CapEx, total CapEx for 2024 is CZK 56.9 billion, 2025, CZK 73.9 billion, 2026, CZK 81.4 billion, 2027 is CZK 75.4 billion, and 2028, CZK 70.5 billion. In total, for the following five years, CZK 358.1 billion. There is a significant CapEx devoted mainly to renewables, photovoltaics in Czech in the Czech Republic, and also in Europe, in general, Germany, for example, where we own company Belectric. There is also a significant portion going into Czech distribution, as always.
Of course, to development of our new gas portfolio as well. Of course, there is a lot of kind of staying business CapEx. The CapEx growth is significant. The investment period is clearly starting, you know. So this is what can be seen, actually, on those numbers.
All right. Yeah. Thank you.
Okay. We can take the next question from Petr Bártek. I need to, yeah. Yeah. I think still you're not able to unmute. Petr, can you hear?
Sorry. Can you hear me now?
Yes. We can hear you now.
I'm sorry. This was, this time, my mistake. So three questions. First, back to the dividend. You said a dividend payout ratio of 60%-80%. That's fine.
In previous years, you always hinted at the higher end of the range of 80%. So is there any change in your approach, or are you still leaning, let's say, towards the 80% payout from 2023 profit? Then a second question would be to nuclear. The government asked you to extend the tender from one unit to potentially up to four units for the conventional nuclear, let's say. So what is the plan, or what would be this financing scheme if there are, for example, two units in Dukovany, which, in my view, would make complete sense from a technical point of view?
But what would be the financing background for that if you would still go for the contracts for difference, or would anything different be considered, like, I don't know, regulated asset base or something like that? And also, you mentioned small modular reactors that you are accelerating the development of this field. So if it would be purely on Czech balance sheet, Czech investment, or would that be some kind of SPV and potentially looking for joint ventures or some again contracted revenues or prices? And first question, maybe I didn't get the comment regarding the potential support for the new gas units and biomass units versus the modernization fund. And the second, what's the scheme which is now pending notification? If you can repeat it. Thank you.
So I will start with the dividend.
We actually say 60%-80%, as you as you noted. Don't really say more than that, you know. I think it is too early to make any commitments. So, as you could see, we are entering investment period, heavy investment period. So we'll be announcing our proposal of the dividend later, during the spring. That's all I can say. Okay. In terms of the nuclear, the committee of the Ministry of Industry and Ministry of Finance that should evaluate and design the financing of the additional units is now kind of working. And they should come up with a proposal by the end of the year. So I think, by only then we will know how the financing should happen.
Obviously, what we as Czechs keep always in mind is that we need to retain our rating and ability to finance our other businesses. And this is always for us a number one priority in any type of design of financing of the additional units. In terms of the small modular reactors, again, also, the discussion on financing is pending. What we are now looking for is what would be the best technology or the best technology partner for us, because especially on the small modular reactors, we want to also include our company, such as Škoda JS, into the supply chain. So the partnership we are trying to select is broader than just an uptake of a unit.
Then, once we have it, obviously, we need to also discuss with the government and with the partner on how to approach financing. The clarification question on the additional support where the European Commission notification is pending, it is so-called the support for combined heat and power production, provozní podpora CHP, which is basically a subsidy scheme where electricity produced in this high-efficiency combined heat and power gets a, a, a per megawatt-hour subsidy. And this will come on top of the CapEx support or the investment support from the modernization fund.
Yeah. Thank you. Maybe if there is an indication, what would be the level of this subsidy?
No. It will actually the notification is for for auction. So it will be auctioned.
Okay. Thank you.
Okay. It seems we do not have any further questions. So let's conclude the call.
As always, Investor Relations Department is available just after this call or any time you come up with some query. Thank you very much, and goodbye. Goodbye.