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EDP more upbeat on earnings as shows resilience to pandemic

LISBON, Oct 30 (Reuters) - The interim CEO of Portugal’s largest utility EDP is more optimistic about underlying earnings this year after nine-month results showed the company’s resilience to the economic disruption caused by the pandemic, he said on Friday.

EDP now expects recurring net income, excluding one-off effects, of around 900 million euros ($1.1 billion) this year, at the upper end of its forecast and up from 854 million euros in 2019, the company said.

It sees recurring core earnings (EBITDA) of 3.7 billion euros, slightly above its previous target of 3.6 billion.

High hydro reservoirs in Iberia and a more positive outlook on Brazil, after previous concerns over foreign exchange effects, were the main drivers of new recurring EBITDA estimate, interim CEO Miguel Stilwell de Andrade said.

The company also expects 200 million euros more in gains from asset deals than a few months ago, as well as more benefits from energy management and a decline in interest costs.

EDP reported on Thursday an 8% drop in nine-month net profit to 422 million euros, hit by lower demand in Iberia and Brazil, primarily due to the pandemic and the closure of a major coal plant.

Its consolidated earnings before interest, taxes, depreciation and amortisation (EBITDA) dipped 2% to 2.63 billion euros between January and September from a year ago.

However, recurring net profit increased 14% to 669 million euros and recurring EBITDA, excluding exchange rates effects, particularly from Brazil where EDP owns a major utility, grew 3% to 2.65 billion euros.

“These solid results really show, in this challenging times, the resilience of our business model and the focus of our team to deliver the commitments,” Stilwell de Andrade said during a conference call with analysts.

“I think we’ll have a lot good, positive news and targets to talk about in the first quarter of next year,” he added.

EDP shares were last up 2.13% at 4.225 euros, against a Portuguese stock market up 1.46%.

$1 = 0.8461 euros By Sergio Goncalves, Editing by Victoria Waldersee and Mark Potter