EDP's profit falls 16% to € 380 million in the first half of 2018
Net profit fell 16% to € 380 million, despite improved water conditions on the Iberian Peninsula. The profit was heavily penalized by regulatory changes in Portugal and the exchange rate effect. The value of Portugal in total recurring net profit falls to only 29% vs. 38% in the same period. International operations from EDP Renováveis and EDP Brasil contribute to result growth.
The regulatory changes in Portugal implemented in the 2nd half of 2017 and the recent approval of the final CMEC adjustment explain a drop of €140 million in EBITDA in the first quarter of 2018.
EBITDA fell 10% to €1,722 million, marked by the following effects:
- EBITDA in Portugal fell 3%, where the improvement in water conditions in the second quarter of the year was not enough to mitigate the strong impact of regulatory cuts in Portugal, which affected business production (reduction of revenues with CMECs, increase in taxes and fees) and distribution (14% cut in revenues regulated under the regulatory review for 2018-2020).
- EDP España's EBITDA rises 8%, benefiting from improved operating conditions in the Iberian electricity market.
- EDP Renováveis's EBITDA fell 5% as a result of the depreciation of the USD against the EUR. Excluding this effect, it would rise 1%, supported by the average capacity expansion (+ 7%), especially in the US and Brazil;
- EDP Brasil's EBITDA rises 17% in local currency, supported by good operating performance.
Net debt increased from €13.9 billion on December 17 to €14.2 billion in June of 2018, while the average cost of debt fell from 4.1% in the first half of 2017 to 3.7% in the first semester of 2018.
The value of renewable energies continues to rise and prove EDP's focus on clean technologies. The generation mix reached 74% in terms of renewable installed capacity (+ 0.6GW wind and solar). In terms of production, the value of renewables increased by 12pp in year-on-year terms to 72%, benefiting from the recovery of hydraulics on the Iberian Peninsula.
The number of customer contracts grew by 44,000 in the last 12 months to a total of 11.4 million, reflecting our strong commitment to customer satisfaction, service quality and greater engagement.
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