Bloomberg News

CEZ Retreats as UBS Names Stock Least-Preferred on Albania Risk

May 14, 2012

CEZ AS (CEZ), the biggest Czech electricity producer, fell after two days of gains as UBS AG (UBSN) added the stock to its list of least-preferred utilities, citing losses from the company’s investments in Albania.

CEZ slid 0.4 percent to 714.9 koruna, taking its losses this year to 9.1 percent. Power for next-year delivery in Germany, where the company exports part of its output, dropped 0.7 percent to 49.40 euros per megawatt-hour.

First-quarter profit fell 16 percent from a year earlier, more than analysts expected, after the Albanian regulator forced CEZ’s local distribution unit to pay the state-owned electricity producer higher tariffs without allowing it to pass on the extra costs to customers, the company said last week.

“We added CEZ to least preferred as we see uncertainties in Albanian business impacting financial targets,” UBS analysts Per Lekander in Paris and Alberto Gandolfi in London wrote in a report to clients today.

The Swiss bank removed E.ON AG (EOAN) from the list, citing the German utility’s “good” first-quarter earnings and an expected drop in the tax rate the company will have to pay this year, according to the report.

To contact the reporter on this story: Krystof Chamonikolas in Prague at

To contact the editor responsible for this story: Gavin Serkin at

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