May 10, 2018 / 4:58 PM / 17 days ago

Portugal's EDP profit falls on regulatory pressure, forex

LISBON (Reuters) - EDP-Energias de Portugal (EDP.LS) posted a 23 percent drop in first-quarter net profit on Thursday due to regulatory pressure at home, an unfavourable exchange rate in Brazil and a one-off gain a year ago, despite rising electricity output.

FILE PHOTO: Banners bearing the logo of Energias de Portugal (EDP) are seen at the company headquarters in Lisbon December 13, 2011. REUTERS/Jose Manuel Ribeiro

Portugal’s largest company by assets made 166 million euros (146.5 million pounds) in January-March in net profit, while earnings before interest, taxes, depreciation and amortization (EBITDA) fell 12 percent to 893 million euros, it said in a statement.

Revenues from electricity sales fell 9 percent to 1.39 billion euros despite a rise in electricity output of 7 percent in the first quarter, when rains finally refilled most of its hydroelectric dams after a severe drought in 2016-17. The utility’s installed capacity rose 3 percent from a year earlier.

In Portugal, EDP incurred losses from a government-imposed reduction in the final compensation paid to the former monopoly for giving up some long-term power-purchase deals, an increase of clawback tax in August 2017, and higher costs of the so-called social tariff for low-income households.

    Without these effects, EBITDA would have risen 2 percent, the company said.

    EDP said EBITDA at its Brazilian unit rose 18 percent in local currency, but fell 1 percent in euros due to a sharp depreciation of the Brazilian real.

    On Wednesday, EDP’s wind energy subsidiary EDP Renewables (EDPR.LS) posted a 39 percent rise in quarterly profit thanks to some asset sales, but its revenues remained flat.

    EDP shares closed 1 percent higher on Thursday before the results were announced, outperforming the broader market in Lisbon, up 0.2 percent.

    Reporting by Andrei Khalip; Editing by Mark Potter

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