Preliminary figures for Czech blue-chip companies are mixed

In preliminary 2002 profit results for the nation's largest established companies, the sector showing the most-impressive profitability was banking. Telecoms disappointed, and oil and utility companies were generally profitable. Komercni banka posted a record net profit in 2002 of 8.8 billion Kc ($302 million), according to International Accounting Standards, up from 2.5 billion Kc in 2001. That result beat the net profit of 6.5 billion Kc reported by Ceska sporitelna, more than double its 2001 net of 3 billion Kc. Meanwhile, the largest Czech bank, CSOB, generated a net profit of 5.8 billion Kc, up from 4.2 billion Kc in 2001. Though impressive, the good results came as little surprise to the market. In the case of Komercni banka, analysts had counted on improvement, as the bank significantly reduced its expenses. "Komercni banka compensated for declining revenue by radically cutting operating costs," said analyst Jan Hajek of Patria Finance. According to analyst Petr Kalina of investment house PPF Burzovni, the success of Ceska sporitelna reflected the bank's successful targeting of individual savers, a trend he believed would become more widespread in the sector. Results were not as impressive in the Czech fixed-line telecom sector. Cesky Telecom announced a significant net profit drop of one-third to 4.3 billion Kc from 2001's 6.1 billion Kc. The dominant telecom, which operates nearly 3.7 million fixed lines, kept its leading position but in the future will have to contend with tougher price competition from alternative operators. Meanwhile, one of the country's main alternative providers, Aliatel, reported that its 2002 loss deepened nearly 40 percent to 686 million Kc.