May 7, 2020 / 4:28 PM / 20 days ago

UPDATE 1-Portugal's EDP posts 45% profit rise, sees only small impact from lockdown

(Adds details, background)

By Sergio Goncalves and Catarina Demony

LISBON, May 7 (Reuters) - Portugal’s largest utility EDP posted on Thursday a 45% rise in first-quarter net profit to 146 million euros ($158 million) despite the wider impact of the coronavirus on the economy.

EDP said its profit during the first three months of the year grew exponentially after last year’s first quarter was hit by abnormally low hydro production, especially in Portugal.

Portugal declared a state of emergency on March 18, shutting all non-essential services and confining people to their homes, but EDP said that for now the lockdown had only had a “small impact” on its operation.

The country this week embarked on a three-phase plan to open up different sectors of the economy every 15 days starting with hairdressers, small neighbourhood shops, car dealerships and bookshops from Monday.

In a statement, EDP, which has as its main shareholder China Three Gorges, said its consolidated earnings before interests, taxes, depreciation and amortization (EBITDA) increased 6% to 980 million euros.

EDP’s recurring net income increased 51% to 252 million euros, while the utility’s net debt dropped 8% to 12.7 billion euros, the lowest level in the last 13 years, it said.

In the first three months of 2020, EDP’s wind energy subsidiary EDPR reported a 2% increase in net profit to 62 million euros, with its revenues falling 7% to around 487 million euros.

Last month, EDP said it would maintain capital expenditure at 9 billion euros over the next three years, saying its situation was “robust”. It also said it expected not to cut its dividend, keeping the payout ratio at 75%-85% of net income, with a floor of 0.19 euros per share.

Though Portugal’s economy will enter recession due to the coronavirus, with the International Monetary Fund expecting it to contract by 8% this year, EDP said it will invest 3.5 billion euros in the country until 2022. (Reporting by Catarina Demony and Sergio Gonçalves, Editing by Andrei Khalip and Elaine Hardcastle)

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