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UPDATE 1-Portugal's biggest company EDP warns of tough year ahead
March 5, 2013 / 6:41 PM / 5 years ago

UPDATE 1-Portugal's biggest company EDP warns of tough year ahead

* 2012 net profit fell to 1.01 bln euros

* CEO sees recovery only in 2014

* Regulatory price changes in Portugal, Spain and Brazil hurt (Adds CEO quotes, more detail)

LISBON, March 5 (Reuters) - EDP Energias de Portugal , the country’s biggest company, posted a 10 percent fall in net profits on Tuesday, hit by the recession in Portugal and Spain, and said another tough year lies ahead due to a regulatory squeeze on energy prices.

The company said net profits last year fell to just over 1.01 billion euros ($1.31 billion), in line with the average of analysts’ forecasts, while net revenues were also in line, edging up to 14.7 billion euros.

“We have told the market, very clearly, that 2013 is going to be just as tough, or tougher than 2012, since it is the first year that the whole of regulatory changes will impact,” Chief Executive Antonio Mexia told reporters.

“2014 is a year in which we will grow again.”

Dealing with a crunching debt crisis, governments in Spain and Portugal have been negotiating and revising down what they pay utilities like EDP for the production of renewable energy.

“Earnings in Iberia and Brasil fell but our renewable energy units in Poland, Romania, United States and other geographies had strong growth,” Mexia said.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) fell 3 percent to 3.63 billion euros, in line with the consensus of market forecasts of 3.68 billion euros.

Mexia said operations in Brazil, where EBITDA fell 22 percent, were hurt by regulatory changes that delayed tariff payments from the government.

EBITDA also fell in Iberia - 57 million euros year on year -- also due to regulatory changes, with the two austerity-stricken governments scrambling to cut spending.

Portugal is in its worst recession since the 1970s after resorting to painful austerity measures under an 78-billion euro EU/IMF bailout. ($1 = 0.7687 euros) (Reporting by Filipe Alves and Andrei Khalip; Writing by Daniel Alvarenga; Editing by Greg Mahlich)

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