By Sergio Goncalves
LISBON (Reuters) - Portugal's largest utility EDP posted on Thursday a nine-month net profit little changed from a year ago as strong income growth in its wind and solar unit was offset by a sharp drop in hydroelectric generation in Iberia and high taxes.
EDP-Energias de Portugal said in a statement its consolidated net income edged 1% higher to 518 million euros ($517 million) between January and September.
The bottom line was hampered by a severe drought in Iberia that increased EDP's production costs, which, combined with an extraordinary tax on the energy sector in Portugal, caused a loss of 181 million euros in its domestic business after a profit of 160 million euros a year earlier.
Chief Executive Officer Miguel Stilwell said "the positive performance of renewables and electricity networks, mainly in Brazil, was offset by Iberia, which were significantly negatively impacted by the drought, and the losses in Portugal."
EDP's consolidated earnings before interest, taxes, depreciation and amortisation (EBITDA) increased 21% to 3.05 billion euros.
EDP said its hydro generation in Iberia fell 53% to 3.57 terawatt-hours, forcing it to use more expensive gas and coal plants, an impact that was only partially alleviated by an Iberian cap on gas prices agreed with Brussels.
Stilwell said that in order to fulfil the contracts agreed with its customers, EDP also had to buy electricity at much higher prices.
Its wind and solar unit EDP Renovaveis, which accounted for 70% of electricity generated by the group in the period, on Wednesday reported that its nine-month profit tripled to 416 million euros. EDP's Brazilian unit Energias do Brasil posted a 5% rise in net profit on Thursday.
As of September, EDP had 27.8 gigawatts (GW) of installed capacity and a record 4.3 GW of wind and solar projects under construction. The company more than doubled its investment to 5.5 billion euros in the nine months.
($1 = 1.0019 euros)