Czech Utility CEZ Falls Most in Two Weeks as Windfall Tax Stays

(Bloomberg) — Shares in the Czech Republic’s dominant power utility CEZ AS declined the most since the Aug. 5 global selloff as the government signaled it’s no longer considering ending the windfall tax before its original expiration date.
The state-controlled CEZ closed down 2.3%, extending this year’s decline to 7.8% and underperforming industry peers in Europe. The share price drop brought the market value of eastern Europe’s biggest traded electricity producer to 475.6 billion koruna ($21 billion).
Earlier on Thursday, Finance Minister Zbynek Stanjura was quoted as saying that he doesn’t plan to propose an earlier abolition of the special levy on the largest energy companies and banks, which was approved for years 2023-2025. 
The overall revenue from the windfall tax still hasn’t covered the state’s expenditure on mitigating the impact of Europe’s energy crisis, the CTK newswire cited Stanjura as saying. The government is trying to balance rising spending on infrastructure projects and defense with its promise to cut the fiscal deficit, and the windfall tax represents a significant portion of extra budget revenue.
CEZ, in which the state holds about 70%, contributes by far the largest part of the government’s income from the windfall tax, which has triggered clashes between the Finance Ministry and private investors.
“The main victims of the state’s approach are the minority shareholders in CEZ,” said Lukas Kovanda, the chief economist at Trinity Bank AS in Prague. “The state could obtain money from CEZ in a different way. It could simply request a sufficiently high dividend.” 
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