UPDATE 1-German utility MVV's profit hurt by mild winter and falling prices

Fri Aug 15, 2014 2:31am EDT

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FRANKFURT, Aug 15 (Reuters) - Germany's No.5 utility MVV Energie said its operating profit fell 15 percent in the first nine months of the year and joined its larger peers in blaming both a mild winter and an ongoing overcapacity crisis that is hurting prices and earnings.

MVV said its nine-month adjusted earnings before interest and tax (EBIT) fell to 185 million euros ($247 million).

"Alongside developments in the energy industry, where generation prices witnessed a further decline, the company's business performance between October 2013 and June 2014 was affected above all by very mild weather conditions throughout the winter," MVV said in a statement on Friday.

Since Germany's decision to abandon nuclear energy by 2022, the country's utilities firms face competition from a massive expansion of renewable energy as well as declining wholesale power prices, pushing their gas and coal plants into loss.

Larger German peer RWE and France's GDF Suez have also pointed to mild temperatures as one factor when reporting a decline in profits.

MVV confirmed its adjusted EBIT would rise again in the fiscal year 2014/2015, which starts in October, after an expected decline in profits by up to 19 percent to 170-175 million euros this year.

This recovery will be driven by two biomass and energy-from-waste plants in Britain, which are both scheduled to become operational next year.

MVV, with a free float of just 4.8 percent of its equity, is 50.1 percent owned by the city of Mannheim. German peers EnBW and RheinEnergie own 22.5 percent and 16.3 percent respectively, while GDF Suez holds 6.3 percent. ($1 = 0.7483 euro)

(Reporting by Christoph Steitz; editing by Thomas Atkins and Sophie Walker)

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