PORTUGAL'S EDP PROFIT DIPS LESS THAN FORECAST.
EDP (Electricidade de Portugal) announced net profit slipped slightly in 1999 to 103.04 billion Escudos (Euro 514 million), from 104.81 billion the previous year, but the figure was above most analysts' forecasts. EDP said that the slight drop in profit reflected a 6.4% fall in the average electricity tariff during the year and its ongoing investment programme. But it had succeeded in restricting the impact of these factors through cost controls. Financial costs were 28 billion Escudos, only five billion more than at the end of the third quarter, compared with 40 billion in 1998. EDP said that it expected electricity consumption growth to slow in 2000 to 4 or 5% against 5.9% in 1999. But it said it saw little impact in 2000 from the deregulation of the energy market, although some large clients could opt for alternative supplies. EDP Chairman Mario Cristina de Sousa told a news conference that the company had no immediate plans to raise its 3% stake in Spain's Iberdrola, but he did foresee greater co-operation between the two firms. Cristina de Sousa said EDP would sell its 25% stake in mobile phone firm Optimus within "days or weeks", adding that the sale value had already been evaluated. The EDP statement also pointed out that the 6.4% decline in average tariffs in 1999 cost the company 40 billion Escudos in lost revenue. A company spokesman said this placed EDP's industrial charges 3.5% below the European average, while domestic charges were 3.2% less. The operating margin fell as a result to 29.5% of sales against 35.2% in 1998. EDP said that it was studying, together with the Regulator ERSE, alterations to the current price structure. It gave no further details.