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Portugal's EDP profits drop 7% due to no capital gains

Portugal's biggest power utility EDP reported on Thursday a 7% drop in net profit for the first half despite an increase in output. The reason given was lower returns from assets sales.

It reported a net profit of 709 million euro ($812 millions) compared to a 775 million euro profit accumulated a year earlier.

EDP reported that it had not booked any capital gains on the sale of solar and wind assets in the first six months. This was part of its strategy to dispose of stakes in mature plants in order to finance new ones. In the first half of last year, EDP logged 184 millions euros in these types of gains.

It said that excluding capital gains, the recurring net profit grew by 27%. This was due to a robust increase in electricity production, "with a significant contribution from U.S. Operations, and solid performance of electricity network in Iberia, and Brazil".

EDP Renovaveis' subsidiary, the fourth largest wind energy producer in the world, reported on Wednesday a 56% drop in net profit, to 93 millions euros. However, its recurring profit tripled from a year earlier, boosted by U.S. operations.

EDP reported that total electricity production increased by 12%, to 34.6 Terawatt-hours. This was due to high rainfall in Iberia which filled reservoir volumes up to 87% capacity and natural gas power stations.

After the power outage of April 28, Iberia, the production from natural-gas plants has been prioritised in order to strengthen the resilience and reliability of the electrical grid.

The average spot price for electricity in the Iberian region rose from 39 euros to 62 euro per megawatt-hour during the first half of this year.

The recurring EBITDA, which excludes capital gains, increased by 7%.

EDP installed capacity in June was 32.3 GW. This is 3.1 GW more than a year earlier.

(source: Reuters)