Portugal's EDP to change its global structure, eyes relevant cost cuts

By Sergio Goncalves

LISBON (Reuters) - Portugal's main power utility EDP has launched an internal restructuring to streamline its worldwide organisation, focus on growth and achieve cost cuts in a challenging market environment, its CEO told Reuters on Wednesday.

Miguel Stilwell d'Andrade said "the global context is more difficult than a year ago as energy prices are much lower now, reducing EDP's revenues, and interest rates are expected to remain higher for longer".

"We have to act... it will be a deep internal restructuring that will simplify, streamline the organisation and increase efficiency," he said, adding that it was needed to help EDP meet its strategic goals.

EDP - owner of the world's fourth-largest renewable energy producer EDP Renovaveis - operates in 29 countries in Europe, Asia and the Americas.

However, its structure has not evolved consistently to promote synergies and efficiency at a global level, as in some places it is organised by countries or regions, while in others it is more structured by businesses.

It will now focus on "less than 20 markets with greater depth and growth potential", and reorganise itself into five regional hubs: Iberia; Europe; North America: the United States, Mexico and Canada; South America: Brazil, Colombia and Chile; and Asia-Pacific.

In terms of operations, EDP will have four platforms transversal to the five regions: Renewable Generation Assets, Global Energy Management, Client Solutions and Networks.

For instance, large companies such as Amazon or Microsoft that are EDP clients in Europe, the United States and Singapore will from now on have an account manager at Client Solutions.

The CEO expected the restructuring, due to be completed by year-end, "to have a relevant impact on reducing operating costs", without elaborating further. Last year, such costs amounted to around 2 billion euros ($2.13 billion).

EDP committed in 2023 to spend 25 billion euros over four years to nearly double its renewable energy capacity to 33 gigawatts by 2026, when it expects a recurring net income of 1.4 billion to 1.5 billion euros.

($1 = 0.9403 euro)

(Reporting by Sergio Goncalves; editing by Andrei Khalip and Jonathan Oatis)