UPDATE 1-ERG Q3 core profit up, sees lower 2008 capex

* EBITDA at replacement cost 165 mln euros, up 49 pct * Net profit at replacement cost 40 mln euros, up 236 pct

(Adds details, conference call)

By Ian Simpson

MILAN, Nov 14 (Reuters) - Italian oil refiner ERG SpA (ERG.MI) posted a 49 percent jump in third-quarter core profit on Friday and said it would trim capital spending by a third this year as the credit crisis bites.

ERG, Italy's second-biggest oil refiner, said in a statement on Friday earnings before interest, tax, depreciation and amortisation (EBITDA) and at replacement cost rose 49 percent to 165 million euros ($209 million).

Replacement cost does not include inventory gains or losses or one-off items.

It said net profit at replacement cost climbed 236 percent in the quarter to 40 million euros. The 2007 results had been lowered because of a court ruling that upheld reduced sales rates that affected refining and power generation results.

Revenues rose to 3.3 billion euros from 2.5 billion euros.

Shares in ERG closed up 4.05 percent at 11.55 euros, while the DJ Stoxx index of oil and gas companies .SXEP rose 1.95 percent.

ERG plans to cut its capital spending this year to about 400 million euros from a forecast 620 million euros, Chief Executive Officer Alessandro Garrone said.

Renewable energy spending will almost halve to 60 million euros because of a delay at its Fossa del Lupo plant and reduced merger and acquisitions activity, he said in a conference call with analysts.

The 2009 capital spending plan of 576 million euros also could be revised, with renewable energy seeing a revamp, Garrone said.

Although ERG was still committed to renewable energy, he said "tough credit market conditions" were causing ERG to rethink its plans.

"We confirm the refining and downstream investments. The main revision will be on the renewable investment plan, and we will announce the new plan by the beginning of next year," he said.

ERG also had no plans to change its dividend policy in light of Russian oil major Lukoil's (LKOH.MM) 1.35 billion euro purchase of 49 percent of ERG's Isab di Priolo refinery, Garrone said. The deal closes on Dec. 1.

"The main target is to invest the money to grow the company, not to boost the dividend," he said.

ERG also said it expected one of its two power generation lines damaged by a fire in October to be operating again by January next year.

ERG's ISAB Energy power generation plant in Sicily has been shut since mid-October after the fire. The blaze had no impact on ERG's refinery, the company has said.

The second production line, or power train is expected to remain offline throughout 2009, ERG said. (Additional reporting by Svetlana Kovalyova and Stephen Jewkes, editing by Will Waterman)