Cez As S/Gdr 144A

Hello everyone and welcome at Chess Group Financial Results Conference call for... This meeting is being recorded.

This meeting is being transcribed.

It's my pleasure to welcome Martin Novak, Chief Financial Officer, and Ludek Horn, the Head of Trading, who will be going through the presentation and be available for the questions. I'm now handing over to Martin to start the presentation.

Thank you. Good afternoon. Good morning. So I'll quickly go through our presentation, and then we can jump to Q&A session. So if you look at slide three, our total financial results, our EBITDA is about 3% higher than in the same period of last year. We achieved 103.2 billion check rounds. Our net income is 7% lower, 21.5 billion and adjusted net income that is a base for paying dividend is 22.2 billion CZK. Our net operating cash flow is down by 40%. This is due to very strong net operating cash flow in 2024 and we were still receiving back some cash from margining from previous years. And then we had 11% higher CAPEX spending that reached 38.7 billion CZK. Important slide, slide number 4, you can actually see main courses of year-over-year change in EBITDA. 3% or 2.9 billion, as I already said. We have a few negative effects and a few positive effects. The negative effect is actually by far the strongest decline in power prices. Our average cheap price for 2025 is estimated at 121 to 124 euros per megawatt hour versus something above 130. in 2024. So this effect of kind of 10 euros per megawatt hour causes 10.5 billion check rounds decline on generation facilities. Another negative effect is actually lower generation volumes of hydro plants due to mild winter and not enough snow in 2025. On the other hand, positive is actually impact of fuel cycle extension and increased capacity at Dukovany nuclear power plant, which is 3.5 billion positive, and other effects, mainly higher fixed expenses of 200 million. Trading activities are down by 3 billion. Check rounds. We have low prop trading margins by 2.6 billion. compared to previous period and that those are actually negative effects and generating. Mining is somewhat down as well due to lower coal sales volumes and low prices of coal. Positive is actually coming from three main factors. One is actually just distribution, meaning power distribution, which is helping us with 4.6 billion. We have higher allowed revenue thanks to growing investments in distribution assets in the past, which is 2.1 billion. Then we have so-called correction factors, 1.3 billion both from two years before, meaning 2023 and also something that we will be handing over back in 2027. But positive effect on 2025 is 1.3 billion. Gasnet, important acquisition of 2024. Gasnet is a Czech distribution of gas, natural gas, which we actually started to consolidate as of September 1, 2024, meaning it was not in our numbers for eight months in 2024, only the ninth month. And actually, 2025, it is in our numbers for the full year. So that's why there is such a huge variance of 7.4 billion Czech crowns. Sales segment is also doing better, 4.3 billion improvement, mainly due to lower cost of commodity acquisition, impact of sales of undelivered commodity of chest per day. When they actually had to sell some undelivered commodity in 2024 at a lower price compared to current year when they delivered it to end customers. and also proceeds from litigation with the Railway Administration that actually brought us last year 1.3 billion, it didn't this year. So overall sales segment improvement is 4.3 billion and it gets us 203.2. Year-on-year change in net income, by far the most important change is actually in the depreciation and amortization line. You can see pretty significant increase in depreciation and amortization. It has a few reasons. One of them is actually consolidating gas net that we did not consolidate last year almost at all. And it is 6.7 billion CZK high depreciation. We also started to depreciate or accelerated depreciation of our lignite assets that are being depreciated much faster in 2025-6 and of course slower towards the end of 2030, basically copying hours of production, which is an announcement of under-accounting or first accounting when you can see the end of the asset and uneven power generation. We started this type of depreciation as of October 1, 2024, so this extra-easy depreciation is not in a comparable period of 24 at all, because now we are comparing only 9 months. So the difference is actually net difference of 5.6 billion CZK of extra-easy depreciation on coal assets. Those are the main variations. Then, of course, we have higher interest income expenses, mainly due to lower, actually, lower interest received as interest rates go down and deposits that we have are there, lower interest than in the past. And that's basically Basically, there is lower income tax due to lower pre-tax profit. And finally, we get two net income of 21.5 billion and 22.2 billion. It's just the net income. Next slide, you can see limited data, which I will skip. And we'll go to slide 7, which is the financial outlook. We are keeping our EBITDA outlook at 332,237 billion pounds. We are narrowing it. range of our estimate for adjustment income that was 26 to 30, now it is 26 to 28 billion Czech pounds. We are coming close to the end of the year, so we are able to narrow down this range. You can see selected assumptions on power prices and platform credits, and also on the level of Infotech, which is now estimated at 71 to 74 billion Czech pounds. important milestone in our acquisition the territory of acquisitions we acquired gas distribution operator on the south south of the country this is the it's called gas distribution and it's actually dark green color on the chart So now we control entire area of the Czech Republic gas distribution with the exception of capital city of Prague that is controlled by municipal company. So this was an important add-on to our assets. We acquired actually gas distributions through Gasnet. So we are not 100% owners. It makes sense to do this through the entity that already owns vast majority of gas distribution in the country. The transaction should be closed during the first quarter after all the anti-monopoly decisions are made and the approvals are received. It's relatively smaller compared to what we actually already own. EBITDA is about 800 million Czech crowns, that income about 100 million Czech crowns, no debt. So, very interesting company into our portfolio. Now let's switch to generation mining segment. It's important to see actually how our generation mining did. I already made a few comments on that on the EBITDA slide at the beginning of the presentation. It's important to know that actually, as I said, power crisis, despite some positives, like for example, positive operating effects on the thermal power plant, mainly fuel cycle extensions and so on, are still not high enough to beat the decline in power prices. So, decline in power prices on our zero emission generating facilities or nuclear facilities is about 3% or declining EBITDA, which is mainly caused by declining power prices. On renewables, it's more significant with 26% down mainly due to insufficient water conditions in 2025, the beginning of this year. Emission generating facilities generated, as you will see later on, almost the same and will generate almost the same amount of electricity. However, EBITDA is down by 61% or 6 billion check rounds. mainly due to, again, decline in power prices and narrowing margins in coal-fired power plants. Trading at 1.6 billion of net income, which is 60% down compared to previous year. Entire generation segment and mining in total is actually down 17%, reaching 64.8 billion check rounds EBITDA. When you look at nuclear and renewable generation on slide 11, you can see actually charts comparing first nine months and also estimates for 2004 year 25. We should be achieving pretty much highest level of our nuclear generation, close to 32 terawatt hours, mainly due to fuel cycle extension that is now longer than it used to be in the past. So there are years, which is this year, when we will be running nuclear units without interruption during that year, which is the case for the many power plants this year. And so that's an increase of, planned increase of 7% year-on-year. Decline in renewables of 13% that I already commented on, and total numbers, which is 35.1. Electricity generation from coal is on slide 12, pretty much in line with last year, with one exception, which is steep decline in Poland. As many of you know, the first or second week in February 2025, we finally disposed our Polish coal assets, and that's why there is no more EBITDA coming and generation, of course, in terawatt hours coming from those assets. That's why there is such a significant decline. There will be a little decline on natural gas and a little decline on coal generation in the Czech Republic, which will be about 2% lower. However, in EBITDA numbers, as you can see, it was a 60% decline. One of the most important slides is actually our hedging on page 13. You can see 2026 average achieved price of 94 euros so far, declining to 72 euros in 2029, but we are only 5% sold or secured for 2029, so it's a pretty mature number. Same for carbon credits on the right side of the chart. And at the bottom you can see the percentage of power sold, which means there will be significant decline in average sales price because average sales price for this year is estimated between 121 and 124 euros per megawatt hour, which is something like 30 euro decline year-on-year, which is pretty significant and will definitely be seen in our sales numbers and EBITDA numbers next year. Distribution and sales segment is doing rather well. Distribution segment is up by 75%, mainly due to gas assets that contributed 8.1 billion for the first nine months, versus 600 million, which was numbered for September 2024, because it was consolidated as of September. So 7.4 billion in improvement. And then actually distribution, electricity distribution, our number is 30% better than it was last year. But 1.3 are those correction factors. So I discussed from year minus 2 and year plus 2 in total 1.3 billion difference compared to last year. The details of distribution segment are listed on the slide. Another important factor is the most important factor and buff correction factors is actually higher allowed revenue thanks to growing investment base in distribution assets. Year-on-year development of electricity and gas distribution, electricity distribution On Chess distribution territory is up by 1% in total. Basically little change. Residential customers are somewhat higher. But this is mainly due to climate. When you actually adjust for climate, it is decrease of 0.2%. And calendar, if you adjust it for number of days, it's increased by 0.3%. So pretty much steady distribution numbers. KS distribution increased by 9%. Climate adjusted consumption only by 1%. So it is colder winter, 25, then 24. Sales and EBITDA, sales segment EBITDA in total actually 10.7 billion, which is 67% improvement. You can see the details in just probably which is Czech retail business, 84% improvement and then ESCO companies in various countries. There are a few positive effects influencing just per day. or retail business, one of the most important half of the difference actually, most of the difference actually, full difference is lower cost of commodity acquisitions and lower cost of deviations thanks to the market stabilization after it was deregulated. So that's the main chart here. On page 18 we have volume of electricity and gas sold and number of customers. so electricity you are allowed to unmute to unmute yourself press star six number of customers is basically steady we lost little in electricity being dominant player and gain five percent actually in gas business so uh in uh total number of customers is pretty much not changing their customers are much less uh much less involved in changing suppliers than they were before the crisis when many of the smaller companies or even large companies went bankrupt and they had to switch to different suppliers under fairly stressful conditions, I would say. Revenues from sales of energy services, meaning ESCO, ESCO activities are actually 8% down, but we expect them to be pretty much in line with last year or only 2% down. mainly because we had a few kind of big significant projects last year that were invoiced last year that did not repeat themselves now. However, organic growth is fairly reasonable and that's why we are able to make up actually on a full year basis. So that's all for the presentation and now I think we are ready to take

You can just raise your hand and when I call your name you will be able to ask your question. So the first question comes from Emmanuel Ogiondi.

Hello, can you hear me? Yes, we can hear you. Okay, perfect. Thank you. Thank you for the presentation and for taking my questions. The first one is on the distribution and BDA guidance for 2025. We have seen another increase after the increase in the guidance in H1 for this business unit. So basically from the beginning of the year, the change would have been between 7 and 9 billion CZK, now is between 12 and 13, so more than 50% compared with the start of the year. So probably you explained this in slide 30, so if you could add more color on the slide 30, and this incrementally positive distribution factor is repeatable or not in 26, and what is your expectation on 26 about this business unit, as you exceeded the guidance, the original guidance to a larger stand in 25. So the question is not only an explanation on 25, but also about the outlook on 2026. This is the first question. The second is on the guidance on the sales bda sales also in this case there is an increase that was an increase to two times in a row and also in this case the question is if the positive drivers the positive moving parts which lead to a this increase are also valid and visible for 2026. So we can expect a slightly higher profitability after a stronger than expected profitability in 2025 also in 2026. And the third and last question by my side for the time being is on the generation business, is on the development of a data centers market in Europe. in Czech Republic and also in Central Europe because you are related the power prices is related also to the power price of Germany so the question is what is the situation as regards the development of the projects of data centers in Central Europe and obviously in your country and this could change in your opinion in the mid-term obviously not in the short term, not the next quarter or next year, but could change something in order to sustain the electricity prices in Central Europe thanks to the development of data centers. Thank you.

Distribution, as you rightly noted, there is a significant increase in distribution segment and it's mainly due to acquisition of Gasnet. which is actually natural gas distribution on the slide 30, which is in dependencies. Just because it was basically, we did not consolidate, we did not own GasNet first eight months of 2024, so that's why there is such a huge move. In electricity distribution, it is improvement of 4 to 5 billion compared to last year. Half of it is investments, capex actually, increased asset base from last year, last year's actually of investment and the rest are correction factors that one year go in your favor, next year they go against you. Now actually we have a positive effect of 1.3 billion, out of which half will have to be returned in 2027. So in 2027 there will be a negative impact of something like half of this 1.3 billion of this amount. But generally I would say that regulatory framework especially due to our CAPEX is favorable. We would not expect other than those correction factors to decrease our profitability in power distribution in the future. However, it is a regulated business, so you don't have much space for any significant increases of EBITDA either. Gas distribution is very similar. Again, you can make certain changes, you can make certain improvements in the business, but again, you are not able to double the number other than through acquisitions. of Grasa Distribution, which is actually the company that we acquired and that will be put into our numbers as of next year. We'll bring another one billion, close to one billion of EBITDA next year. Sales segment is very strong this year. I would say that this is a really coincidence of the market conditions. Normally, you know, we did not have that high EBITDA in the past, as you can see, compared to the previous year. And that's why, actually, for the first nine months, actually, especially so, I would think that profitability might be lower in the future, coming back to normal, I would say. but by how much it is of course difficult to predict. You can see that actually now we are 84% higher on retail, which is probably something that will be hard to repeat in the future as well. And generation data centers, you know, there is some discussion, but we really didn't see much real, real, real kind of projects in the region so far, especially when you compare it to other geographic locations like the US. Power price is much higher here in Europe than in the US and also it's difficult to compete. We had a few contacts with potential investors but so far it didn't really work out and I don't know of many new kind of huge projects in this region that will really come to final decision so uh you know let's see let's see how it goes but as you said we are tied to German price plus you have distribution tariffs so so the power is not that cheap and power is actually the commodity that you need for data centers so maybe in the future there are some discussions you know for example if you have nuclear units you would be supplying data centers directly from them but so far we are not there We have our own data center. We are planning one more. They are all within parameters of our power plants, so they are connected directly to the power plant, taking power from the plant, not from the distribution grid, but that's for our own use. So, that's it.

Thank you. Thank you so much.

We can take the next question from Oleg Kalbur.

Good afternoon. I hope you can hear me well. Thank you for the presentation and for the opportunity to ask questions. I have several, actually. And let me start with a question regarding your full year guidance for the nuclear electricity generation of 31.9 terawatts, which implies quite a high utilization, both for the fourth quarter, so almost 90%, but also for the full year, 85%. So what I'm trying to understand is what should we expect going forward on the annual basis? Should, for example, this 85% be like a new normal? Or how do you comment on that? And then a similar question on the guidance for electricity generation from coal, the $14 our guidance implies an increase in coal generation to almost 4 terawatts in the fourth quarter. And if this is really the case, how is such an increase justified by the low, if not even negative, level of coal spark spreads? And lastly, according to my calculation, the proprietary trading was negative in the third quarter. significantly lower obviously in comparison to the first half results. So maybe you could provide a bit more details on what has caused this result in the third quarter and perhaps also shed some lights on the expectations for the fourth quarter or for the full year, again, on the trading results. Thank you.

Okay. So thank you for questions. Close to 32 terawatts or 31.9 is something that we will be hopefully seeing from time to time. The reason is that we moved actually from 12 months refueling cycle, which means that every reactor was at least for a few days shut down for refueling every single year, to 16 or even 18 months cycles for Dukovany and Temeli. This means that utilization oscillates between 80 and 85 percent, depending on how many outages fall into given year. Utilization in Q4 will be high, because there is no outage actually in Tamaleen plant, and there was actually outage of 8 weeks in Q4 2024 in Tamaleen, second unit. In 2026, both terminal units will have planned outage, and therefore, nuclear utilization will be lower compared to 2025. It will be around 80%, so we would expect our power generation roughly of 30 TWh. And then in 2027, again, there will be no outages, so it would be close to 32 TWh. So our utilization now will be kind of oscillating between 30 and 32, depending which years will be hit by refueling and which years will be run without any interruption and refueling. Second question, coal spark spread is actually not negative, you know, because we are hedging the power. so we actually sold power at those 121 to 124 euros per megawatt hour while carbon credits were at the level of 90 maybe at the time when we were selling it so actually the spread was very positive and it's also important to note that our power plants are making most of the power and also heat because all of them are heat plants in q1 and q4 so q4 is kind of a very important quarter because it's winter it's uh october november december are usually very cold months uh that's why uh The hedging or trading results so far for the first nine months of 2025 are proxying at 1.6 billion chequers. In this segment, we are not only showing proxying as such, but also revaluation of stereotypes. estimate at the end of the year is that they would make something like 1 to 2 billion check rounds more. So the trading could achieve 2.6 to 3.6 billion check rounds of the result. Clearly, it's less than it was in the past. But on the other hand, we are back to volatility we were used to in the past. I mean, in the before the energy crisis in 2021-2023, so the volatility was easily 500 euros per day. Today it's definitely not that, it is the market has spread a lot and with volatility of a few euro cents per day, it's very hard to make profit of 20 billion Czech crowns as it was in the past. So I would say we are back to normal. Normally, or usually, our trading was making something between 1 and 2 billion check rounds annually as a standard result in a standard environment. So that's it for me.

Thank you. Thank you very much. That's very useful.

We can take the next question from Anna.

Hi, Anna Webb from UBS. Hopefully you can hear me okay. Just one question for me on the gas distribution acquisition. I was just wondering if you see kind of any synergies from now controlling almost all of the gas distribution in Czechia, kind of above and beyond just the contribution from gas distribution? I mean, I'm aware it's quite a moderate the modest contribution from that business you brought for me on, but just wondering if you see kind of synergies and cost savings for the overall gas distribution business, as in gas distribution in Czechia, including gas net. Now you've got that kind of majority of the business and obviously you've now had gas net for a year and how you see that evolving. It would be great to hear. Thank you.

Yes, clearly we do, you know, and that's the reason why actually the gas distribution was acquired by GasNet and not by us directly. It makes sense to consolidate all gas distribution assets under one company. So we would expect to have synergies from technical management of the assets, you know, call centers, all the financial systems, but it's too early to say how much it would be. You know, gas distribution is not that sizable company, as you pointed out rightly. So there would be some synergies, but now it's too early to say. And probably, you know, given the size of our overall business, they will not be very material.

Thank you. We can take the next question from .

Hi, yes, good afternoon, everybody. Two questions, please. So first one, I wanted to ask you, because there were some headlines about your total until the end of a decade. Do you think, so the question around it would be, where do you think your leverage will end up at the end of a decade? And do you think you will need to revisit the dividend policy in light of this high requirement? And the second follow-up I have, like if you, assuming the takeover story has some legs and the government goes ahead with it and it imposes the objective on the company to do a buyback, how much of this capex, the total capex envelope is flexible that you would not need to do it? And is it a reasonable scenario to assume that you could cut certain amount, like one third of this capex, if there was a need to do it to facilitate some other objectives?

Okay, so first question. Our capex is above 400 billion check rounds to be spent till the end of this decade. We are aiming at our target ratio of 3.5 Mbps to EBITDA by then. And we should be able to make it with projection of power prices that we are now seeing actually on the power exchange and also paying the dividend in the range of 60 to 80% of our adjusted net income. that you know we are usually sticking closer to 80% rather to 60%. So all those things kind of fit the puzzle and we should have no issues to do any changes. Regarding share buyback, we don't comment at all on this topic. It was mentioned in actually proposition of the government of the kind of what government proposes, but it's preliminary. It has not been approved by the government, actually, future government. So until it is more stable document, we are kind of not commenting on political announcements at all.

Thank you very much. And a quick follow-up, just technical follow-up on this three and a half times net debt. We are talking here about the financial net debt. we would have to assume that the nuclear provisions come on top, right? Yes, yes. Okay, thank you very much.

Okay, next question from please.

Hello, can you hear me?

Can you hear me?

Yes, very well.

Yeah, good afternoon. I have one question about, once again, gas distribution company. You indicate annual EBITDA almost 1 billion CZK. As you said, GasNet was realized this acquisition, so it means 55% effective ownership share, but understand I correctly that you have fully consolidated EBITDA of gas distribution to CHES EBITDA?

Yes, that's how you normally do under accounting rules and then actually in adjusted net income we are actually taking out the minority share of net income that is attributable to 45% shareholders.

Okay, thank you. So, one billion to EBITDA and then correction at... Yes. Okay, thank you very much. Thank you.

Okay. We can take the next question from Arietta Ferizoli.

Hi, thank you. Thank you for the call. I just had one question more on the political side in the Czech Republic, specifically if you had any comments about any kind of political, potential political interference or nationalization, for example. There were a few headlines, so any update on that?

You know, I already answered that we actually don't comment any political pronouncements until they actually reach our doors, which has not happened, you know, so that's all we can say.

Okay, thank you.

And we have a follow-up question from Oleg Galbur.

Yes, thank you very much for that. Too short, first of all, on the CapEx. Could you please tell us what level of CapEx in the generation segment should we expect for the full year? And maybe you can also remind us what would be the expectations for the full year CapEx at the group level? And secondly, on the acquisition of the gas distribution company in the third quarter, could you disclose the price or the multiples that you paid? Anything that could be very useful. And more of a general question. So you mentioned in your presentation that due to the declining oil prices, you expect also a negative impact on your ABDA. Probably the lower generation in coal assets due to a gradual phasing out that will also have a negative impact in the medium term. So my question is, what is the strategy or what are the measures that you're considering taking in order to at least partially offset the impact of this developments on the generation business earnings.

Thank you. So, first, thank you for the question. So, first of all, CAPEX. Full-year CAPEX is now estimated at 60 billion Czech crowns, out of which power generation would be close to 34 billion. Then mining close to 2 billion, distribution about 19, sales about 6. So this is around 60 in total. So it's less than originally anticipated. So far we spent close to 39. Usually fourth quarter is pretty strong in spending capex and also we assume that we will be able to do that. Price for gas distribution is not announced. We agreed with the seller that it will not be announced until we close the transaction next year and then it will be properly reported. And the third question was on... What can we do to offset the declining generation? Well, we will be, of course, you know, offset it... is through future projects and entire business, but how we will actually deal with coal assets, we will definitely decline power generation. It will be run for following few years in kind of winter-summer mode of operations, so winter it will be running. providing also heat as an interesting by-product. In summer, it will be running much less. And towards the end of the decade, those power plants will likely be decommissioned together with coal mining activities. And generally, as a group, of course, we are concentrating more on services like ESCO activities, which will be growing, distribution assets. for example, through acquisition of gas distribution and growing our distribution in beta. And, of course, replacing coal heat plants with gas plants and all the renewables and all those projects.

Okay. Thank you very much. I was asking the third question also in light of your comments earlier today in the press conference. This is what Bloomberg is writing, that although you expect the low prices to negatively impact the EBITDA, you're quoted here saying that, but on the other hand, some other acquisitions could take place, so things may look different. So I was also expecting maybe some more comments on this statement, if it's possible.

Thank you. Yeah, I think it's probably what you can say now, but that's the way it is. Okay, understood. Thank you.

Okay. Now, we can take a question from Brown Boring from .

Hi. Two questions, please. The first, I guess, well, the second, but related to the previous comment, acquisitions and distribution assets, you're kind of full up in the Czech Republic, if I'm not mistaken. Are you potentially interested in acquiring abroad? That would be the first question. The second question, again, you've already sort of touched on it, but I'm thinking about cold generation for 2026. Will the margins allow you to, you know, produce? What are we, should we be looking for closer to 10 or closer to six for 2026 in the cold generation? Thank you.

You know, so you are right in a gas distribution. I don't think we can get more in the Czech Republic. On the other hand, we are not looking at foreign gas distributions. I think we already kind of did divested actually power distribution companies abroad in a few Balkan countries and, you know, gas distribution is interesting for us for a few reasons. First, it's in our home country where we have the same regulator for power and gas, so we are able to actually bundle the negotiations together. We also have a side effect of building fleet of CCGTs and gas-powered heat plants where having an access to gas grid definitely helps in terms of gas connection. This is something we would not necessarily do abroad, you know, so we are not looking abroad at guest distribution. Great. And then power plants, you know, it's really hard to say what will be power generation of our power plants now. I think we'll announce it actually in our March press conference where we'll be announcing what will be our EBITDA expectations and power generation and so on. So it's March information.

Okay. Thank you.

We can take the next follow-up question from Jan Raška.

No, no, thank you. No question. No, thank you.

Okay. So then Andrzej Kedzierski.

Hello. My question is regarding the energy price curve. Do you think that the current curve may be too long? For example, if if we assume that the CO2 prices would rise, even if we assume that gas prices will be lower in a few years. So, what are your expectations on the future electricity prices?

Okay, I will take the answer from trading perspective. We expect that gas prices will go down, as you mentioned, in the mid-term future, connecting with, let's say, oversupply of US RNG and so on and so on. But it's hard to say how it will be converted in electricity prices in Europe, because the plants, coal plants and gas plants are, let's say, not marginal plants as it was before so often, so maybe even with the higher CO2 price we will have on average lower electricity price. So there are different scenarios how it could look like, but it's hard to say how it finally will be.

Okay, thank you.

Okay, we can take the next question from a fixed, from a telephone line, starting with plus 33.

Yes, hello, this is Arthur from Morgan Stanley. Can you hear me? Yes, we can hear you, Arthur. Yes, apologies, the right hand was not working on TV. So, yes, my question was about the outlook beyond 2025. I imagine it's a bit too early to give precise guidance for 2026 net income, but you did share, you did make some comments. You made some comments around the fact that in distribution, distribution is currently higher than its normalized level. You also flagged the fact that realized power price should come down on the power generation segment in 2026. But on the other hand, I know there is the removal of the windfall tax. So I was thinking overall, well, first, are we missing any key moving parts in EBITDA and in profit for 2026? And second, I see consensus as significant growth in net income in 2026 versus 2025. I don't know if you can be very precise, but is a significant pickup in net income in 2026 something that you're comfortable with? Thank you very much.

So you are right.

You actually named it all. I think it is significant decline in power prices. I think one of the most significant declines we have ever seen in the history, so the euros per megawatt hour year on year is quite a lot. Then we will have lower generation of nuclear plants because this will be, 2026 will be the year when we will be actually refueling the marine power plant. Then correction factors in distribution, yes, probably lower sales results because of kind of getting back to normal on the sell side. And again, see that the big positive is windfall tends to be discontinued, that this year, in 2025, we'll hit our P&L, or it's 31 to 34 billion check pounds. However, you know, I cannot really comment on the 2026 numbers yet, because they are not out yet, and they will be in March. But I saw some of the estimates of net income for next year, and I think they are kind of not taking into consideration those negative factors as much as they should, you know. So that's all I can say.

Thank you very much. That's helpful.

Okay, it seems it was the last question. Therefore, let me conclude this call. But as always, investor relations is always available if some further clarifications are needed. Thank you very much and goodbye.

Goodbye. Goodbye.

This meeting is no longer being transcribed. This meeting is no longer being recorded.