* Loss of 800,000 reais beats estimates in poll
* Costs of thermal power purchases soar in quarter
* Debt remains within covenant limit
SAO PAULO, May 9 (Reuters) - Eletropaulo Metropolitana Eletricidade de São Paulo SA, Brazil’s largest power distributor, reported a smaller-than-expected first quarter loss on Thursday as cost-cutting measures and a reduction in capital expenditures helped offset a surge in thermal power costs.
The São Paulo-based company lost 800,000 reais ($400,000) in the first three months of the year, down from a 97-million-reais profit in the same period last year, according to a securities filing late Wednesday. Six of eight analysts polled by Thomson Reuters predicted an average 31 million reais shortfall in the first quarter.
Eletropaulo and other distributors struggled early this year after the government ordered generators to switch on thermal plants to protect dwindling reservoirs at hydropower plants. Industry groups estimate that the cost of electricity produced in thermal plants using gas, fuel oil and coal is at least five times costlier than power produced by hydroelectric dams.
The government said early in March that it would help distributors, whose cash positions were being drained by the high price of thermal energy, by tapping a sector fund account to compensate for the costs. Eletropaulo got 282.8 million reais from that fund, less than the 317 million reais it estimated for those costs, the filing added.
Net revenue came in at 2.29 billion reais in the first quarter, 7.4 percent lower than the first three months of 2012 and in line with analysts’ estimates.
Manageable personnel, material, services and other expenses (PMSO) fell 3.4 percent to 286.6 million reais in the quarter, while capital expenditures fell by 21.3 percent on a reduction in maintenance costs.
Eletropaulo’s revenue sank in the wake of a government decision last year to cut electricity prices despite rising operational costs. The move triggered a 53 percent tumble in shares this year.
Earnings before interest, tax, depreciation and amortization, a widely used gauge of operational profitability known as EBITDA, fell to 128.1 million reais, compared with 298.2 million reais in the year-earlier period. Analysts in the poll estimated EBITDA in the first quarter at 140.4 million reais.
The ratio of net debt to EBITDA reached 4.4 in the first quarter, remaining within the 5.5 limit bondholders and the company agreed to in March.
Management will discuss first-quarter earnings on a conference call on Thursday.