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Portugal's EDP swings to quarterly loss on Ukraine war impact, drought

·2-min read
FILE PHOTO: View of a thermal power plant of Portuguese utility company EDP

LISBON (Reuters) -Portugal's largest utility EDP-Energias de Portugal swung to a first-quarter loss of 76 million euros ($80 million) from year-ago profit of 180 million, hit by energy market turbulence due to Russia's invasion of Ukraine and a drought at home.

EDP said in a statement that skyrocketing energy prices in the Iberian wholesale market and the drought had a 400-million-euro negative impact on its accounts.

Chief Executive Miguel Stilwell said that despite a sharp drop in hydro generation, EDP "kept the selling price of electricity to customers at 60 euros per MWh, but had to buy it at 230 euros per MWh" in the Iberian wholesale market MIBEL.

"We kept our commitments to our customers and EDP was the one who absorbed the impact of the energy crisis and severe drought," he said, expecting to "mitigate part of this negative impact throughout the year".

Even as its overall electricity output rose 3% to 17,055 gigawatt hours (GWh) in the quarter, supported by an 11% increase in wind power, hydro generation in Iberia slumped 64% due to a severe drought in Portugal and Spain, forcing EDP to nearly double generation from expensive gas and coal plants.

Its consolidated earnings before interest, taxes, depreciation and amortisation (EBITDA) fell to 710 million euros from 864 million euros a year ago.

In Portugal, the October-March rainy season was the driest since 1931, and the government in early February ordered EDP to halt electricity production at several of its dams.

EDP's wind and solar power unit, EDP Renovaveis, posted on Wednesday a 75% rise in net income, while the Brazilian unit Energias do Brasil reported a 5.4% increase.

"EDP Renovaveis and Brazil are both doing well and we are taking some measures to try to offset the impact with operations outside Portugal," Stilwell said.

He said the energy crisis reinforced EDP's strategy of becoming coal-free by 2025 and all-green by 2030.

As of March, 78% of EDP's 25.6 GW of installed capacity was from renewable sources.

($1 = 0.9513 euros)

(Reporting by Sergio Goncalves Editing by Andrei Khalip and Mark Potter)