Dear ladies and gentlemen, welcome to the Conference Call of ČEZ. At our customers' request, this conference will be recorded. As a reminder, all participants will be in a listen only mode. After the presentation, there will be an opportunity to ask questions. If any participants have difficulty hearing the conference, please press star key followed by zero on your telephone for operator assistance. May I now hand you over to Barbara, Head of Investor Relations, who will lead you through this conference. Please go ahead.
Hello everyone, also from me, and welcome on our regular quarterly results call of ČEZ Group. Let me introduce today's speakers. It is Martin Novák, Chief Financial Officer, and Pavel Cyrani, Chief Sales and Strategy Officer. I'm now handing over to Martin to start with the presentation.
Good afternoon, good morning, everybody. Let's start on page three, where we have our highlights financial results for first half of 2022. Our operating revenue has increased by 21% up to CZK 130.5 billion. More important, EBITDA increased by 88% to CZK 59.3 billion. Net income reached CZK 33.6 billion, which is basically CZK 32 billion more than during the last year. We also had actually some adjustments last year, impairments on coal assets on the coal mines. Compared to adjusted net income, we are almost 200% higher than last year.
We also decided to increase our EBITDA guidance to the range of CZK 110 billion-CZK 115 billion versus old guidance CZK 95 billion-CZK 99 billion . Our adjusted net income is also raising significantly to CZK 60 billion-CZK 65 billion . Another important highlight, our shareholder meeting approved dividend of CZK 48 per share at our annual general meeting, and which actually the dividend will be paid on November 1, 2022. Main, on the next slide, you can see actually main changes on year-on-year numbers.
Clearly the largest variance is in generation, CZK 30.4 billion out of CZK 30 billion variance. More than our variance is actually related to generation. There are a few important factors. The key important factor are extremely high power prices. CZK 21.5 billion is actually coming from high prices. We also had a record, I think our record high ever, result of trading of CZK 7.1 billion within the first six months of 2022. You know, before such a volatility in the past years, we used to have anything between CZK 1 billion-CZK 2 billion annually, now CZK 7.1 billion for first six months.
Also some specific temporary effects of hedging contracts basically, and time swaps of emission allowances, CZK 3.7 billion. The negative variance actually is related to sales, where we had a CZK 3.2 billion lower result than in previous period of 2021. I will show you later on explaining what happened actually with that one. Next slide, you can see the details of what I just described on the previous slide. We can skip that slide and go to slide number six. Here again, we are showing change in our estimate of today for 2022 numbers versus our May 10 estimate that we published just three months ago.
Significant growth both in EBITDA and also net income. Three main reasons are even higher power prices, especially those on the spot market, because we, at the beginning of the year, we had about 10% of our electricity positions still open. Now it is actually 5%, as you will see later on, but it will generate another 19% of sales this year. Spot prices are extremely high and we are benefiting heavily in 2022. We also have higher income from trading activities, as I said, and also high availability of nuclear power plants that had a 3% higher power generation compared to 2021. Of course, those factors also have an impact on adjusted net income.
We also have some risks and opportunities. Of course, there is always a risk of power prices going down, which doesn't seem to be very probable these days. Of course, always availability of generation facilities. Further gains on trading activities and potential introduction of extraordinary tax in Czech Republic. We don't have any more information about that. There is a political discussion only. There is nothing, no proposal, for example, the law or anything like that. Still just a political discussion, and that's why we don't put any estimates of how much it could be, because we really have no information.
Dividend from 2022 earnings, if we stick to our range, to the upper part of the range, meaning 80% of our adjusted net income, the total dividend would be somewhere between CZK 48 billion-CZK 52 billion, so almost CZK 100 per share, or basically doubling the dividend for last year. We also, on the next slide, actually show our reaction to geopolitical developments in Europe and within EU, we have three strategic initiatives. We would like to deliver affordable energy, be independent from Russia, and be emission-free.
Nothing changes on our decarbonization plans, so we still, you know, stick to what we announced earlier, and basically, are helping also to secure gas from other sources other than Russia, as you will see later, in later parts of the presentation. On another slide actually, we have selected measures to ensure energy independence and meeting our vision 2030. I will only read headlines. The details are actually included. Emission-free nuclear industry, we are preparing facilities, tendering new units. Of course, with state support, we also selected new nuclear suppliers for nuclear fuel in Temelín, which are our companies Westinghouse and Framatome, so switching from Russians to U.S. and French suppliers.
Renewables, we won actually an auction for support, CapEx support for 170 MW of installed capacity and we are on a path to reach 1,500 MW by 2025. Now actually, the second round of the bidding is open and we are again bidding with our further projects. Decarbonization commitments, no change. We also have enough gas inventory for our customers, both retail and large customers. We also purchased strategic storage for Czech state. As you will see further on, we actually also participated and won auction in Netherlands for LNG terminal, where we secured the amount of one equivalent, 1/3 of Czech gas consumption.
We also secured transportation lines between Netherlands and Czech Republic, so we have the capacity. Depending on the need of the gas and prices of the gas, we will be able to use this facility. We also manage our liquidity and credit risks, especially related to relatively significant margining due to significant increase in power prices. I will comment it later. We have special slides on that. Selected events in the past quarter and generation already basically commented on all of them, so there's just more detail. On slide 10, there is information about LNG terminals. As I said, 1/3 of Czech annual gas consumption contract is concluded for five years. The capacity will be commercially managed by ČEZ, but together with the Czech government.
We actually have a deal with Czech government that includes option for capacity side and mainly especially cost-sharing with the government. That's probably it. The terminal will start operating in September, so next month actually. Should there be any need, we can start buying LNG straight away. Important slide 11 on liquidity. Our liquidity on the 30th of June is actually on the right side in the table. Our total liquidity was CZK 92 billion. During July, we have drawn another CZK 50 billion or EUR 2 billion from Czech state as part of their liquidity support scheme.
We have EUR 1 billion or CZK 25 billion, which is the last line actually, or the one before last, contracted with ČEZ first standby facility, that can be drawn within five days. Total liquidity as of August 2nd is CZK 133 billion. It never had such a liquidity in the past. On the other hand, margins actually have reached that day CZK 89 billion.
There was an increase between June, when it was only CZK 63 billion. Our liquidity position is very robust, very strong, and as the riskiest year, 2022, will be going to an end, because the margin requirements are the highest for 2022, and of course, with average achieved price for 2023, 2024 and 2025 being much higher, the margin requirements are lower than in 2022, so the risk will be much lower as well. Slide number 12 actually shows our ESG area and structure of ČEZ activities according to EU Taxonomy. You can see the charts of our activities. Science Based Targets initiative validated our climate targets for 2030.
We are fully in line with the well below two-degree scenario. We also decided and declared moving our carbon neutrality by 10 years from 2050 to 2040, so we would like to be carbon neutral by 2040. We published our sustainability report in line with the new EU Taxonomy and other standards that are listed here. We launched special ESG website for those of you who would like to go through it, and many other initiatives. Important, following the upgrade of our ESG rating by MSCI to AA from BBB, we are now among the top 33% of energy companies, so we are getting close to our target to move to top six financial centers.
Our share performance comparison to our peer group, both for 2021 and also in 2022, so despite what's happening on the market, we are still the best share for past one half years, with power prices, of course, where they are and where they will be in the future, now when we sell actually forward, the outlook seems to be fairly bright. Market cap has increased by 1,540%, compared to 30 years ago. As our company is 30 years old now. You know, stock performance actually was + 75% last year and + 29% this year. On May 6, we had a—we celebrated 30 years of ČEZ.
Again, some important numbers for you if you want to go through it. What I would stress out, apart from financials that you can actually see for yourself, there is emission reductions. We are now compared to 30 years ago at half of CO2 emissions, 11% of NOx emissions, and only 1% of sulfur emissions. We reduced our sulfur emissions by 99%, which is extremely efficient. 8,000 tons of SO2 versus 769 tons 30 years ago. Big achievement in that area. We also show next slide how much we paid actually in taxes, dividends, donations, carbon balances. This is more for stakeholders. Now we will move to generation mining.
On slide 17, you can see actually EBITDA for segment generation mining, which I basically covered when at the beginning. You can see also much more details on year-on-year effects in first half of the year and also second quarter, mainly about power prices. It's mainly about trading success of CZK 7.4 billion and specific effects, which is mainly timing during the year actually between the quarters. Mining 1 billion better due to higher deliveries to both ČEZ Group and also to external customers. On slide number 19, you can see generation from renewables and nuclear sources. As I already mentioned, 3% higher generation from nuclear.
We had a decline in hydro in the Czech Republic of 22%. On the other hand, better windy conditions in Germany by 20% compared to last year. Hydro is significantly larger, of course, than wind in Germany. Overall decline of 16%. We expect renewables to be down by 10% because we will not catch up for less snow this winter in the Czech Republic. We expect basically even results on our nuclear facilities. On coal and natural gas generation, there is a slight increase on coal generation due to shorter outages at two of our plants. We also saw actually a year ago on 17th of August, we shut down actually terminated the plant in Mělník III.
The impact of not making power will be seen further, and we have longer outages in our Ledvice for new plant actually. We had a significantly lower generation from natural gas due to market conditions. It wasn't worth running the plant as much as it was in 2021. It's important to note that actually for 2022 full year, we are showing 1.3 TWh to be produced by CCGT, which is basically what was produced for first seven months of the year. As it is very hard to predict whether market conditions will be suitable for running CCGT and whether we will be allowed to run it if there is any shortage of gas in Europe.
This would be probably the first plant to shut down because to save gas because Czech Republic really doesn't need this plant for making power for power generation. So it's kind of nice to have, I would say, opportunistic plant as it always has been. We might generate something, but we don't plan for it, and we don't show it in our guidance any longer. Next slide. Actually, emissions, we are doing very well compared to in on the chart. So basically you can see CO2 emissions intensity. You can also see sulfur dioxide and nitrogen oxides reductions year-on-year between 2020 and 2022. Important slide 22.
Here you can see that actually our open position on power actually generated to be sold is only 5%. On the revenue side for 2022 it will be 19% because we basically sell those remaining 5% at peak prices around EUR 400-EUR 500 easily. Which of course adds to our average achieved price significantly. Our achieved price now has moved to EUR 103-EUR 107 per MWh on average. We also have 7% open position on our carbon credits. Hedging. We continue hedging our power straightforward basically three years ahead.
Here you can see on the slides both hedging of electricity and also carbon emissions, carbon allowances with every average achieved prices in the bubbles. Of course, those prices now are, I would say growing very fast due to, for example, selling 2023 power at levels above EUR 400. An average of EUR 90.5 will be moving fast upwards. You can also see proportion of our hedges, 70% for 2023, 36% 2024 and 13% 2025. That's all for power generation sales. Now I wanna hand over to Pavel Cyrani to share with you some news on distribution and sales segment.
Okay. Thank you, Martin. Hello, everyone. A quick overview of the distribution and sales segment. On the distribution side, I'm on page 25. You see the EBITDA being stable year-over-year in the first half of this year. We see a drop in consumption and I will comment this more on page 26. Now this is consumption, not the one that we would be supplying, but overall on our distribution area which can serve as a proxy also for the whole country. On page 26, what we see is that we see almost no development in the large customer and retail customer businesses segment. Still, limited impact of the high electricity prices on the production.
Where we see a significant drop is in the residential customers, but this one should not worry us, because it's driven by two things, mainly, by a milder winter this year compared to 2021, so something that kind of fluctuates with weather. There's also some impact driven by the fact that consumption of 2021 among residential customers was higher than usual because a lot of people, many people were home working from home. The residential consumption increased in 2021 and now in a normalized in this sense. You also see that the overall consumption decrease is significantly lower if you compare, if we do it a temperature and calendar adjustment, which is temporary in type. Now on the sales segment.
That's a segment that was hit by the high electricity prices naturally. Again, let me repeat that, all the supply companies of ČEZ Group are buying power at arm's length from the generation side of ČEZ Group, so normal standard market prices. On the retail segment, represented by ČEZ Prodej, we see a drop of CZK 2.2 billion, mainly driven by basically two things. One is, as the electricity prices and gas prices increase very quickly, the reaction time for changing the tariffs is slower. At normal times, you know, having one, two or three months reaction time, depending on what kind of tariff it is, was always okay. Now with electricity prices and gas prices changing by tens of euros in days and hundreds of euros in months.
The reaction times creates volatility that this in the specific year of 2022 factors in negatively. Secondly, also all the kind of deviations market purchases depending as the consumption varies day- to- day are significantly more expensive than we have been used to. Also this part of the cost needs to be factored in in the tariffs and again duration times is slower than the volatility that we are observing in the market. Now, this should obviously normalize over time in 2023 to some degree and even more so 2024 and 2025. A similar situation is in the B2B segment, because when you look at the energy services they are pretty much stable.
Where you see the biggest drop is the commodity sales in Czech, you know, supply commodity to B2B segment in Czech Republic, and it's a similar story as in the retail segment. Now, in terms of volumes, you see that on page 28 that the volumes that our group is supplying have increased. This even after taking into account that they should normally decrease driven given the milder winter. This is all driven by the inflow of customers that we have received as a number of other suppliers went bankrupt at the end of last year.
Now again, this created some extra costs in terms of serving these customers, but I consider them good investment in this customer base to be a good source of margin and profits going forward, as we catch up with the tariffs with the current situation in the wholesale market. On page 29, you see the revenues from energy services. They are increasing significantly. There is obviously a very increased demand for all kinds of services that help the customers to cope with high electricity prices, and also trying for the customers to reduce their dependency on gas. Naturally switching to electricity, we see a 30% growth.
You may ask why this has not factored in the EBITDA yet. There are two things to it. Number one, the EBITDA always catches up more towards the end of the year. Secondly, we also, at this very moment, see a decreased availability of kind of supply and supply chains. We are also coping with increased costs of these solutions. You know, we're selling quick PV panels and any other technology you can name. So again, we hope this will be a good base, all these relationships, you know, with our B2B customers, more for the years to come. This year the impact on our profits is that we keep them stable. I think this is it.
Martin, back to you. Barbara.
Sorry, we are now ready for questions.
Ladies and gentlemen, if you have a question for our speakers, please dial zero and one on your telephone keypad now to enter the queue. Once your name has been announced, you can ask a question. If you find your question is answered before it is your turn to speak, you can dial zero and two to cancel your question. If you're using speaker equipment today, please lift the handset before making a selection. One moment please for the first question. Again, if you want to ask a question, please press zero and one on your telephone keypad. We receive the first question from Astrid Bradscheid. Your line is now open. You can ask your question. Maybe you're on mute from Erste Group. Okay, we will move on to the next question. It is from Wanda Serwinowska, Credit Suisse. Your line is now open.
Good afternoon. Wanda Serwinowska, Credit Suisse. Two questions from me. The first one is on the risk of the political, adverse political intervention. I noticed your comment that you don't really know what would happen, but if you could walk us through the options that are on the table, that would really help us to understand the potential impact. The second comment would be on the supply business. Have you seen any increase in the bad debts so far? Thank you very much.
Okay. Risk of tax, you know, the political debate is as in many other European countries, about excess profit tax that would actually be used to compensate for higher power prices for households and companies.
Both for energy companies and also banks are being discussed. The discussion is definitely not over because current government is right-wing government, so this is something you would not really expect. On the other hand, the energy prices are really significant, and the electricity and gas bills are growing fast, you know. This is one of the options. We don't have any other information. I think technically what would happen there would be something like higher corporate income tax rate. That is today 19%, so it could be more than that, but by how much, you know, we really don't have any idea.
As soon as we know more, for example, when there is some tax bill proposal, if at all, you know, it's not necessarily certain that it would happen, then we would calculate the potential impact for the future years. It's also not clear whether, you know. What we hear actually from politicians, from the media, it should probably be applied on 2023 year, meaning payable in 2024, which on the other hand doesn't help very much consumers, you know. Plenty of information that is not 100% credible, you know. That's the only thing we can say, basically. Supply business, we don't see any bad debts increase.
We allow our customers on retail side, for example, when they have high bills to settle compared to low advances, we are able to provide them some payment schedules. We don't see any significant or even insignificant impact yet, you know. We'll see what will come when fixed contracts and fixed tariffs will be over for big part of the consumers. So far we don't see any significant increase in bad debts at all.
Yes. Martin, to complement you also, there should be that the government is preparing what they call a savings tariff. Basically an allowance or subsidy for all the customers towards their electricity and gas bills to start first of October. Also starting from then to reduce the contribution to renewables from tariffs, the payments towards renewables from the tariffs. Again, it should help the customers to cope with the increasing prices once their fixed tariffs expire. That should also help. Otherwise, as Martin said, no impact yet.
Can I just ask one quick follow-up? I mean, on the windfall profit taxes or extra taxes, in general, is it possible that it will be applied to 2022 earnings as well? Or I'm just thinking is it only 2022 or 2023 and 2024? I mean, is there any clarity there or it's still hard to say?
There is totally no clarity, but what we understood from media, it would be valid as of January 1, 2023. Meaning it would apply for 2023, but we really don't know. It's all speculations, you know. There is no official communication on that topic. Now there is a really political discussion going on. Plus there is August when the discussion is not very, very intensive, of course, due to holidays.
When should we expect the clarity? Is there any timeline when we should get the announcements from the government?
I think we should know something in September, October. Pavel, you may have more information on that, you know, but that's probably what it is. If at all, you know.
Obviously the parliament, and together with the government, they will come from the holidays in September. That's when I would expect the discussion to restart or continue.
Yeah. They will need to-
Thank you very much. Yes.
... basically put together some kind of law, proposal first, you know. There is, I would say, a long way to that.
Thanks a lot.
The next question is from Jana Schindler at Raiffeisen. Your line's now open.
Hi, good afternoon. Two questions. The first, on the earlier carbon neutrality target. When you presented the 2050 target, we got the shutdown plan for the lignite units. Do you plan to publish anything like that also now for the earlier target, and could you provide us maybe with that? That's the first one. Also, is there an update to your CapEx plans, also with having in mind the increased cost for your contract partners? How do they react to the increasing prices? Are they renegotiating the contracts or are they trying to add commodity inflation clauses? What's going on on the CapEx side?
You know, really.
On the CapEx side.
Okay. Go ahead, Pavel.
No, in terms of our generation station shutdowns, we are not changing the plan at this moment, because it fits in the 2040 carbon neutrality as well. Where the change comes from is the stricter target in terms of greenhouse gas, because beyond 2040, the only carbon we could emit before would come from natural gas. Now, with a significantly stricter or more ambitious targets on the green gases, we plan to supply our gas-fired stations with green gases. Now, in terms of the CapEx plan, I think it's a good question. On this one, the jury is still out. We are expecting what will happen, let's say, one or two years down the road.
We only start with a significant CapEx investment in generation or more significant, I say two-three years from now, with the stations in Mělník coming online 2027, first one, and the second around 2030. We'll see how the supply chains will kind of react. We obviously see a significant shortage right now, but I would hope that this is not something that would last for many years, but it would be over as the supply chain catch up with the changes in the demand. Martin?
Yeah, that's all I think. I think you answered it all.
Thank you very much.
We have no further questions. If you want to continue with the Q&A session, I would like to state a reminder. As a final reminder, please press zero and one on your telephone keypad.
Hello. Okay. Thank you very much for participating in our Q&A and our conference call. If you have any other questions or follow-up questions, please do not hesitate to contact Investor Relations, me or Barbara Seidlová. Thank you very much.
Ladies and gentlemen, thank you for your attendance. This conference has been concluded. You may disconnect.