* 2014 EBITDA seen around 690 mln eur instead of 850 mln
* Net profit seen around 70 mln eur vs 150 mln
* Shares drop 3.7 percent (Adds details on reasons, background, shares)
VIENNA, July 10 (Reuters) - Austrian hydropower utility Verbund slashed its 2014 earnings forecasts due to low water supply, a difficult business environment and expenses for closing power plants.
Verbund said on Thursday it now expected net profit of around 70 million euros ($95 million) instead of 150 million, and earnings before interest, tax, depreciation and amortisation (EBITDA) of around 690 million euros instead of 850 million.
Shares in Verbund fell 3.2 percent to 14.315 euros by 0852 GMT, against a flat European utilities index.
The warning was Verbund's second this year as it struggles, like other utilities, with low wholesale electricity prices in Europe caused by weak demand and a glut in the market thanks to high German subsidies for wind and solar power.
"The persistently difficult market environment and continued pressure on the European wholesale prices are having a more negative impact on earnings than planned," Verbund said.
Verbund said its reduced forecasts assumed average water supply for the remainder of 2014, after it reached just 93 percent of the long-term average in the first half of the year.