HomeWorld RegionsEuropeCosts to be cut at Portugal power utility

Costs to be cut at Portugal power utility

20 March 2002 – Electricidade de Portugal (EdP) yesterday released its 2001 results showing a 17.8 fall and said it would be cutting costs by €88m ($78m) over the next four years as part of the planned integration of the Iberian electricity market.

The EdP group earned consolidated net income of €451m in 2001 compared to €549m in 2000. Earnings per share were € 0.15 and the proposed dividend is €0.113, which represents a 75 per cent payout.

The fall in profitability was largely due to losses within the telecommunications division and a loss of revenues following the partial disposal of Ren, Portugal’s national grid operator.

Francisco Sanchez, chairman, said the group aimed to spend €48.2m a year less on external services and supplies in 2005 and €13.5m a year less on fuel costs.

He said synergies between EdP’s operations in Portugal and Hidroelectrica del Cantabrico, the Spanish power company in which EdP is the dominant shareholder, should produce another €25m in annual savings.

The group also faces the challenge of greater liberalisation in its domestic market. More than 20 000 EdP customers, mainly small and medium-sized companies, have been free to choose other suppliers since January, compared with only 200 big companies previously.