UPDATE 1-EDP 2007 net profit falls 3.6 percent

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LISBON, March 6 (Reuters) - Energias de Portugal (EDP) (EDP.LS: Quote, Profile, Research) posted a slightly smaller-than-expected 3.6 percent drop in net profit on Thursday, hurt by high costs due to lay-offs and a rise in Iberian pool energy prices.

Net profit slipped to 907 million euros ($1.39 billion) from 941 million euros in 2006.

EDP said costs for lay-offs reached 193 million euros last year while there was a "negative tariff deviation" in Portugal of 58 million euros -- essentially the difference between what it can charge customers and what it pays for electricity.

There were additional tariff-related costs at EDP's Brazilian unit, Energias do Brasil.

Earnings before interest, taxes, depreciation and amortisation (EBITDA), rose 14 percent to 2.628 billion euros.

EDP said it would propose a dividend of 0.125 euros per share for 2007, up from 0.11 euros in 2006.

The 2007 net profit was slightly higher than 898 million euros predicted on average by 16 analysts polled by Reuters. The analysts predicted EBITDA of 2.683 billion euros. (Reporting by Axel Bugge; Editing by Quentin Bryar)