Strong real helps Brazil's Cesp reverse Q3 loss

SAO PAULO, Nov 11 (Reuters) - Cesp (CESP6.SA), Brazil's third-largest power generator, posted on Wednesday third-quarter net income of 255.1 million reais ($149 million), reversing a loss a year ago as a strengthening local currency helped trim financial expenses.

In the third quarter of 2008, the Sao Paulo-based company had a loss of 114.2 million reais, according to a securities filing.

Cesp, which is controlled by the state of Sao Paulo, said the real's (BRBY) 11 percent gain in the quarter helped lower interest payments on its dollar-denominated debt.

Cesp also said the stronger currency helped it post a 186.8 million reais gain in currency-related hedging, compared with a a currency-related charge of 387 million reais in the third quarter of 2008.

Cesp also trimmed its debt by 7 percent on a quarter-on-quarter basis to 5.73 billion reais. Dollar debt tumbled 9.6 percent in the third quarter, the filing said.

Net operational revenue fell 5.9 percent, faster than the 0.3 percent decline in operational costs.

Revenue fell mainly due to lower sales volumes to consumers on the spot market, which account for about 40 percent of the company's sales. Sales were also saddled with a state tax that was imposed in June, as well as lower spot electricity prices.

Earnings before interest, taxes, depreciation and amortization, a measure of operational profitability and cash generation known as EBITDA, slipped 3 percent to 435.8 million reais in the third quarter from the year-earlier period.

Cesp shares closed 2.8 percent higher on Wednesday at 22.71 reais in Sao Paulo trading. ($1=1.711 reais) (Reporting by Guillermo Parra-Bernal; Editing by Gary Hill)