EAST CAPITAL SUMMIT, Prague 9 September: Company bites

CEZ
Barbara Seidlova, head of investors relations at power utilities company CEZ, said the Czech company has decided to focus on EU candidate countries rather than in the less developed but higher growth markets of Russia and Ukraine. "The regulatory environment is difficult to operate in and the size of assets are a problem in those countries, so we have decided to focus rather on EU candidate countries," she said, adding that the continent is heading towards becoming one whole electricity market operating on the same grid.

Immofinanz
Eduard Zehetner, CEO and CFO of Austrian property investor Immofinanz, called the property market in Russia "drastically undervalued", where yields at shopping centres stand at 12.5% compared with Poland where they are 6.5%. "You cannot argue 600 basis points between Moscow and Katowice is right, the valuation gap will close," he said.

Regarding Immofinanz, which is only now emerging from a near-bankrupt situation in the aftermath of the crisis, Zehetner said the current share price of his firm, around 80 cents, is well up from the low of 25 cents, but is still some way below the net asset value. "The share price means that the Western Europe part of the business trades at the NAV, while you get the CEE business virtually for free at the current price."

Central European Media Enterprises
Central European Media Enterprises (CME) Petr Dvorak, senior vice president of broadcasting, said there is still a huge level of growth in the advertising market in the six emerging European countries in which it operates, where there are far better prospects than those markets further west.

Using figures to illustrate his point, he said total ad spend per capita in Western Europe is $248 but only $44 in CME's markets. "If you're a car maker or a manufacturer of consumer goods, it's much cheaper to do an ad here than in Germany and the growth potential is pretty high."

Regarding M&A opportunities, Dvorak said CME would certainly be interested if it could find an acquisition like the one it completed in Bulgaria, where it bought the number one player for about $400m.