Brazil's Eletrobras posts quarterly profit fall
* Q2 profit down 87.7 pct from same quarter last year
* Company struggling under new concession terms
* Employee buyout program adds to short-term costs
SAO PAULO, Aug 14 (Reuters) - Brazilian state-led electricity utility Eletrobras posted an 87.7 percent drop in second-quarter net profit as it continued to struggle with the effects of a government plan to reduce rates for consumers.
The company, formally called Centrais Elétricas Brasileiras SA, posted a net profit of 164 million reais ($70.7 million) according to a securities filing on Wednesday, compared with a year-earlier net profit of 1.35 billion reais.
Eletrobras agreed in December to a government plan to renew expiring hydroelectric dam concessions in exchange for electricity rate cuts of between 18 percent and 32 percent.
The changes drove the company to a 36 million reais loss in the first quarter and continued to weigh on Eletrobras in the second quarter, as net revenue dropped 23.3 percent from a year ago to 5.9 billion reais.
The company is struggling to adapt to the new reality of lower rates by cutting costs and reorganizing its management structure, which is spread across a range of subsidiary companies.
Earlier this year the company said it planned to spend 1.4 billion reais to cut 5,000 jobs as it embarks on a three-year turnaround effort aimed at slashing costs by 30 percent. About 1.2 billion reais of the costs associated with the buyout program were accounted for in the second quarter.
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