Economy

For the 2005 accounting period, ZSE generated a profit after taxes of SKK 2,945,203 thousand, which means an increase of 12% compared to year 2004.

The total increase of assets by SKK 1,352,447 thousand was due to the increase of non-current assets by SKK 1,501,607 thousand whereas current assets, including accruals and prepayments, decreased by SKK 149,160 thousand.

Total liabilities (equity plus payables) grew by SKK 1,352,447 thousand, of which SKK 732,407 thousand is attributed to the increase in equity and SKK 620,040 thousand to the increase of payables including accruals and deferred income.

	Overview of 2005 Indicators
		TSKK
	Sales revenues	23,585,185
	EBIT (Earnings Before Interest and Taxes)	3,660,601
	EBIT-Margin	15.52 %
	EBITDA	4,232,107
	EBITDA-Margin	17.94 %
	Profit for the accounting period	2,945,203
	Profit before taxes	3,652,684

Financing
The Company utilized its available financial resources mainly through repo-trades and earned interest of SKK 71 million.

Loans
Západoslovenská energetika, a.s., has an available line of credit of SKK 500 million. Financing is available in both SKK and EUR currencies. Part of the line of credit is allocated for the bank guaranty for Slovenská elektrizačná prenosová sústava, a.s. In spite of cash flow fluctuations in 2005, ZSE, a.s., covered all operation and investment costs from its own sources.

Profit distribution
The General Meeting of the Company held on May 24, 2005 approved the proposal to distribute the profit from 2004. In June 2005 the Company shareholders, the National Property Fund, E.ON Energie AG and EBRD London, received dividends totaling SKK 2,212.9 million. Dividends were payable in SKK. In 2004 one dividend per share represented SKK 373.

Financing of daughter companies
Daughter companies OTC, s.r.o. and Enermont, s.r.o. paid the remaining principal and interest from loans provided by ZSE in the total amount of SKK 46 million. In 2004 ZSE provided a new loan to E.ON IS Slovakia in the total amount of SKK 70 million payable in December 2006.

Dividends for 2004 from companies with minority interests in ZSE, a.s, - E.ON IS Slovakia and Energotel, a.s., totaled in SKK 1,700,150.

Trade Receivables and Trade Payables
In comparison to 2004, the number of overdue receivables in 2005 increased mainly due to implementation of new systems; a change in the billing system to annual billing and because of the discontinued process of managing overdue bills related to the changes is the billing system and setting of advance payments.

	Trade Receivables and Trade Payables
		at ec. 31, 2003	at Dec. 31, 2004	at Dec. 31, 2005
	Trade receivables	2,158,392	1,978,857	3,381,184
	of which: overdue	1,191,879	637,672	1,479,902
	Trade payables	1,368,953	2,063,951	2,213,799
	of which: overdue	715	42,585	167,213

	Financial Indicators
		Jan.- Dec. 2003 non-consol. data	Jan.- Dec. 2004 non-consol. data	Jan.- Dec. 2005 non-consol. data
	1. Liquidity indicators
	Available liquidity (0.2-0.6)	1.08	1.65	0.77
	Current liquidity (1-1.5)	2.26	2.58	2.09
	2. Activity indicators
	Stock turnover in days	2.13	1.40	0.96
	Receivables days	30.79	33.83	41.43
	Payables days	27.69	35.20	43.37
	3. Debt indicators
	Debt level (from bank loans in %)	2.69	0	0
	Debt level (from liabilities, accruals   and deferredincome in %)	22.42	22.39	24.55
	Degree of financial independence	28.90	28.85	32.54

Investments
In 2005 Západoslovenská energetika, a.s., invested SKK 2,154 million, of which SKK 510 million was invested in industrial parks.

The Company invested SKK 1,837 million into the distribution system representing an increase of 92% compared to year 2004.

The most significant investments:
- Reconstruction of the HV power line 8754 Nové Zámky-Levice (65,239 TSKK)
- Reconstruction of 22 kV control room Elektrosvit Nové Zámky (55,449 TSKK)
- Reconstruction of the transformers T101+T102 Bratislava, Čulenova (54,998 TSKK)
- Reconstruction of the 110 kV control room Bošáca II (47,629 TSKK)
Buildings to improve environmental impact cost over SKK 20 million.





The Company intends to follow positive trends of development in the future. How the Company sets its regulatory systems will impact its successful economic development. Continuation of unbundling processes creates conditions for change processes to support the Company’s performance.

Risks and uncertainties
In 2006, the Company expects decision by Network Industries Regulatory Authority (ÚRSO) on the method of calculation of allowable revenues from electricity distribution, on electricity deliveries to households until 30 June, 2007, and on Universal Service to households after 1 July 2007 for the next regulatory period.

In 2006, privatisation is expected of Slovenské elektrárne, a.s., by the company Enel, the major electricity supplier to our Company.

Significant events that occurred after the end of 2005
As part of the unbundling process of the different activities of the Company as required by the Energy Law as well as by European Union legislation, Charter of Foundation of the 100% subsidiary of ZSE, ZSE distribúcia, a.s., was signed on 20 April,2006, which was subsequently recorded in Register of Companies on 20 May, 2006.

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