UPDATE 2-RWE further reduces exposure to high import prices
* Says has renegotiated more contracts
* Q1 EBITDA 3.1 bln eur vs 3.11 bln Rtrs poll
* Q1 sales 15.6 bln eur vs 15.78 bln Rtrs poll
* Shares down 1.1 percent (Adds details, background, shares)
FRANKFURT, May 10 (Reuters) - RWE, Germany's No.2 utility, said it has further reduced its exposure to previously agreed high import prices and is on target to be free from crippling gas losses after 2012 at the latest.
The company said it was conducting price reviews with its gas suppliers and had already received compensatory payments for some contracts, the last one of which was in April.
"More contracts have been renegotiated to be based on wholesale gas prices," Chief Executive Juergen Grossmann said as the company published first-quarter results in line with expectations.
Like other European sector peers caught out by high oil-indexed gas import prices on the one hand and low local distribution prices on the other, RWE is, however, still struggling in talks with suppliers like Russia and Norway to claw back some of its huge outlays.
"Our earnings would improve considerably if we obtained further positive results from our price reviews, albeit probably only after 2012 for the biggest parts," the company added.
RWE already receives 58 percent of its gas via cheaper European trading hubs and own production, and is working to disconnect more of the remaining import contracts from oil, slides for the first-quarter earnings report showed.
The company reported in line first-quarter profits, as gas losses and falling margins in generation were offset by higher profits at its oil and gas exploration unit.
Earnings before interest, tax, depreciation and amortisation (EBITDA) reached 3.1 billion euros ($4.01 billion) in the first quarter, down 9 percent compared with the year-earlier figure.
That was in line with the 3.11 billion euro average analyst forecast in a Reuters poll. Recurrent net profit reached 1.3 billion euros, also in line with the 1.33 billion average analyst forecast.
The company's trading and gas midstream business recorded an operating loss of 220 million euros in the first quarter, pointing to the gas contracts that force the company to buy gas at higher prices than it can charge customers.
RWE warned investors in March to expect 2012 losses on gas trading to significantly exceed last year's 800 million euro hit.
Russian supplier Gazprom is in talks with many counterparties about discounts, including RWE, and recently awarded Italy's Eni better terms.
In a similar vein, RWE rival E.ON said on Wednesday its talks with Gazprom were paving the way towards a return to profitability in gas in the medium term.
RWE's oil and gas exploration unit DEA, in turn, achieved an operating profit of 241 million euros in the first quarter, up 37 percent, as higher oil prices came to play.
Its power generation business saw operating profit losses of 12 percent due to the loss of a nuclear power reactor at Biblis and some higher fuel costs. ($1=0.7733 euros) (Editing by Mike Nesbit)
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