* Q1 earnings from ordinary activities 116.8 mln eur
* Divestment income flatters earnings
* Combined ratio improves to 98.3 pct (Adds CEO quotes)
VIENNA, May 17 (Reuters) - Austrian insurer Uniqa nearly doubled first-quarter earnings from ordinary activities to 116.8 million euros ($150.9 million), highlighting its earnings power before a planned share issue to boost its free float.
Excluding a gain of 49.1 million euros from selling hotel assets, profit rose 14 percent.
"This was a very good start. After the first quarter we now have something to show off," Chief Executive Andreas Brandstetter told Reuters.
He left open whether the share sale that will boost its free float to as much as 49 percent from just 7.5 percent now would take place this year or next, saying market conditions would decide this.
Uniqa plans to use the proceeds to fuel expansion in eastern Europe, where it is seeking acquisitions worth up to 150 million euros. "I can imagine that something will come up in the course of the next 18 months," Brandstetter said.
Profits from eastern Europe fell to 1.7 million euros in the first quarter from 4.3 million a year earlier, hit in part by a bitter price war in Romania, but Brandstetter said this trend would halt.
"I am sure that we will make this up over the course of the year," he said, reiterating Uniqa's forecast that 2013 group profit will grow significantly from 205 million in 2012.
Its combined ratio, a measure of profitability in the property and accident segments, improved to 98.3 percent from 99.4 percent a year earlier.
Group embedded value after minorities swelled 86 percent to 2.86 billion euros in 2012, it said.
($1 = 0.7742 euros) (Reporting by Angelika Gruber, Editing by Michael Shields)