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Portugal's EDPR cuts investment plan on tougher market backdrop

<html xmlns="http://www.w3.org/1999/xhtml"><head><title>UPDATE 3-Portugal's EDPR cuts investment plan on tougher market backdrop</title></head><body>

To invest 12 bln euros in 2024-26 vs initial plan of 15 bln

Q1 net profit up 4%, just ahead of expectations

Shares up over 4%

Adds investment targets by region and by technology

By Sergio Goncalves

LISBON, May 9 (Reuters) -The world's fourth-largest wind energy producer, EDP Renovaveis EDPR.LS, cut its investment plan for 2024-26 by a fifth on Thursday, blaming lower power prices and high financing costs.

Updating its strategy, the renewables arm of Portugal's largest utility EDP EDP.LS said it would now invest 12 billion euros ($13 billion) over the three years, down from an initial plan of 15 billion euros.

The average annual investment of 4 billion euros is below last year's level of around 4.5 billion euros.

"The market has changed dramatically in the last 12 months" with forward prices falling significantly in Europe, while interests rates are likely to stay "higher for longer, particularly in the United States", Chief Executive Miguel Stilwell de Andrade told analysts.

North America will receive 47% of the investment and Europe 25%, while 16% will go to Ocean Winds - a joint venture with French company Engie ENGIE.PA for offshore wind - and other final investment decisions, EDPR said.

Solar projects will get 45% of the spending, with 20% for onshore wind, and 16% for offshore wind parks.

EDPR, which operates in 28 countries across Europe, Asia and the Americas, said it aimed to add 10 gigawatts (GW) of capacity by 2026, and be more selective in new additions. As of March, its installed capacity was around 16.5 GW.

EDPR shares, which had lost around 25% this year, were up 4.2% in afternoon trading.

The company expects its recurring net profit to drop to around 400 million euros this year from over 500 million in 2023, but sees it recovering to about 700 million euros in 2026.

EDPR said its recurring earnings before interest, taxes, depreciation and amortisation (EBITDA), which stood at 1.85 billion euros in 2023, were expected to reach 1.9 billion this year and 2.4 billion in 2026.

Its first quarter net profit rose 4% to 68 million euros, just ahead of expectations as capital gains made on the sale of wind farms offset falling revenue.

($1 = 0.9320 euros)

Reporting by Sergio Goncalves; Editing by Andrei Khalip and Mark Potter


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