By Pietro Lombardi
MADRID (Reuters) -Spanish power company Naturgy's profit rose more than 20% last year, beating analyst expectations, as a strong performance in renewables helped offset lower prices and a dip in demand that hit its gas business.
Net profit rose to 1.99 billion euros ($2.16 billion) from 1.65 billion euros in 2022, beating analysts' average estimate of 1.94 billion euros in an LSEG poll.
Core earnings - before interest, tax, depreciation and amortisation - leapt 41% at the renewables business, driven by the company's home market of Spain.
But that was partly offset by a slowdown in the gas business, and the company did not provide guidance for this year due to the "extreme" volatility of energy markets and weather.
Earnings from liquefied natural gas (LNG) operations declined sharply in the second half of 2023, RBC analyst Fernando Garcia said.
"Looking at the year ahead, the performance of the gas business will be key," he added.
Naturgy shares were down 0.8% around 1400 GMT.
Chief Executive Officer Francisco Reynes said the "solid" results showed the company had effectively navigated a volatile period with falling prices.
The company has a long-term contract to import some 3 billion cubic metres (bcm) of Russian LNG every year, an agreement it is obliged to honour, Reynes said, despite Europe's drive to shun Russian energy over the war in Ukraine.
"Since the beginning of the war we have not bought a single kilowatt more than what our contract says and therefore we have not taken advantage of this situation," he told reporters.
Spain, along with Belgium and France, is the largest importer of Russian LNG.
Shareholders will receive a dividend of 1.40 euros a share for 2023, in line with a policy aimed at assuaging investors by increasing the dividend floor through 2025 while trimming expected investment.
($1 = 0.9212 euros)