UPDATE 1-Russia's OGK-5 H1 net profit more than doubles

* Enel-owned power group OGK-5 says EBITDA and sales rise

* Results beat expectations - Renaissance Capital

(Adds background, analysts)

MOSCOW, July 28 (Reuters) - Russian power producer OGK-5, controlled by Italy's Enel (ENEI.MI), said its first-half net profit more than doubled year-on-year as sales grew and costs were cut.

"These results more than meet market expectations for improved margins from OGK-5," said Derek Weaving from investment bank Renaissance Capital.

Net profit rose to 3.7 billion roubles from 1.73 billion in the year-ago period, the company reported on Wednesday.

"This shows that new generation markets are working, with the best gencos - of which OGK-5 is certainly one - finally creating real value for their shareholders," Weaving said.

Earnings before interest, tax, depreciation and amortisation (EBITDA) rose to 5.3 billion roubles from 3.73 billion and sales jumped to 25.8 billion in H1 2010 from 19.21 billion in H1 2009.

Enel has invested heavily in Russia and holds 19.6 percent in SeverEnergia, a partnership with Italy's Eni SpA (ENI.MI) and Russia's Gazprom (GAZP.MM). At peak production, SeverEnergia will supply Enel with 5 billion cubic metres of gas for its power plants in Russia.

Enel, which bought OGK-5 in 2008, is Europe's most indebted utility and the second biggest utility market player in Europe with 55 million customers.

The company had 51.9 billion euros of debt at the end of March and aims in October to raise between 3 billion and 4 billion euros.

The funds would stem from the sale of a minority stake in Enel Green Power (EGP), in what would be Europe's largest initial public offering (IPO) so far this year. (Reporting by Ben Judah; Editing by Jon Loades-Carter)