* First-half core profit up 2.9 pct to 2.6 bln euros
* Expects 90 mln euro pre-tax hit from energy reform to end-2013
* Sees further 180 mln euro hit next year
* Shares rise 1.8 pct, recovering from recent declines (Recasts with estimated impact from energy reform)
By Tracy Rucinski
MADRID, July 23 Spanish utility Gas Natural Fenosa plans to focus increasingly on business abroad to compensate for weakness at home, where it expects Spain's energy overhaul to hit earnings this year and next.
The country's utilities are suffering from falling energy demand in an economy racked by recession and unemployment, as well as reforms aimed at plugging a 26 billion euro ($34.3 billion) gap between regulated power prices and generation costs
The latest reform, announced this month, includes a cap on regulated returns for distributors such as Gas Natural and cuts the fees companies receive from the state to maintain capacity at gas-fired power plants.
Gas Natural said the measures would wipe 90 million euros from pre-tax earnings in the rest of 2013 and 180 million euros in 2014.
"We are very unhappy about this reform," Chief Executive Rafael Villaseca said in a conference call on Tuesday, leaving the door open to potential legal action over measures that also hit renewable energy companies and consumers.
The Barcelona-based company's first-half earnings already showed the impact of a new 7 percent tax on electricity generation, also part of measures to curb the tariff deficit built by years of mismatched prices and costs.
Net profit in the six months to June 30 rose by a modest 1.7 percent year on year to 780 million euros, in line with a forecast range of 749 million to 794 million euros, and helped by growth abroad.
Gas Natural's shares rose 1.8 percent to 14.77 euros, rebounding from a 7 percent decline since the energy reform was announced on July 12.
A growing presence in Latin America, where the company will focus future investments, helped to drive a 2.9 percent rise in first-half underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to 2.6 billion euros.
EBITDA from Latin America rose 6.2 percent, with Gas Natural's international business now accounting for 43.4 percent of the group's total.
Gas Natural's electricity business, most of which comes from Spain, posted a 2.6 percent decline in EBITDA.
The company benefited from rising international liquefied natural gas (LNG) sales, though it continued to be hit by political unrest in Egypt, where its Damietta LNG plant has had to halt operations.
In Spain, strong hydraulic production thanks to heavy rainfall in the first half helped to diminish the impact of the generation tax.
Net debt totalled 15 billion euros at June 30, down 10.6 percent from a year earlier. The company said it had enough liquidity to cover its financing needs for the next 24 months.
Elsewhere, Spanish gas grid operator Enagas reiterated 2013 growth and dividend targets on Tuesday after the contribution from new assets drove a 9 percent rise in first-half net profit to 202 million euros.
Enagas was not affected by this month's energy sector overhaul, but it could suffer from a potential domestic gas market reform being considered by the government, given that 93 percent of its business comes from Spain.
Spanish utility Iberdrola is due to present first-half results on Wednesday. ($1 = 0.7580 euros) (Editing by David Goodman)