By Sergio Goncalves
LISBON (Reuters) -Portugal’s largest utility EDP raised 2025 profit targets on Thursday after first-half earnings improved thanks to cost savings and higher electricity generation.
EDP said it expected to make recurring net profit, which excludes capital gains on the sales of assets, of between 1.2 billion euros and 1.3 billion euros ($1.4-1.5 billion) this year, up from the previously estimated 1.2 billion euros.
Recurring earnings before interest, taxes, depreciation and amortisation (EBITDA) in 2025 would be around 4.8 billion to 4.9 billion euros, up from previous guidance of 4.8 billion euros.
EDP shares were little changed in early trading.
“We had a good first half with solid (recurring) results, in operational terms … with efficiency gains and cost reductions and this allowed us to improve our guidance for this year,” Chief Executive Miguel Stilwell de Andrade told Reuters.
In the first half, EDP’s recurring net profit rose 27% to 752 million euros, and recurring EBITDA increased 7% to 2.6 billion euros.
EDP said that total electricity generation increased 12% to 34.6 terawatt-hours, sustained by high rainfall in the Iberian peninsula, which filled reservoirs to 87% of their capacity, and by natural gas power plants.
It said that after the major power outage in Spain and Portugal on April 28 production from gas plants was prioritised to strengthen the resilience of the electricity grid.
The CEO said that for large grid investments needed in Iberia to materialise “it is crucial that regulators in Portugal and Spain, in their upcoming reviews, increase the rates of return on this asset base”.
He said the rates of return were now around 5.6% in both countries, but should be increased “to more reasonable levels”, in line with other European countries where investments are rewarded with returns as high as 7.5%.
As of June, EDP’s installed capacity was 32.3 gigawatts, 11% more than a year earlier.
($1 = 0.8733 euros)
(Reporting by Sergio Goncalves Editing by Inti Landauro and Mark Potter)
