UPDATE 1-Italy's Terna Q1 net falls as investments weigh

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MILAN, May 12 (Reuters) - Italian power grid Terna SpA (TRN.MI: Quote, Profile, Research) posted a 4.5 percent drop in first-quarter net profit on Monday, partly because of investment spending.

Terna's net profit was 89.6 million euros ($138.5 million), down from 93.8 million euros the year before.

Terna said in a statement the drop stemmed from higher amortisation and depreciation linked to its investment activity and to increased financial charges.

Earnings before interest, tax, depreciation and amortisation were 246.2 million euros, up 2.7 percent. Revenue rose 3.8 percent to 337.3 million euros.

Investments rose to 143.3 million euros in the first quarter, up 19.8 percent from the same period last year.

The shares were up 0.87 percent at 2.8475 euros at 1447 GMT, in line with the DJ Stoxx utilities index .

Terna has a price/earnings ratio of 17.64, in line with the median for the European sector, according to Reuters data. Terna is 30 percent owned by the state.

(Reporting by Ian Simpson; editing by Sue Thomas)