Brazil's Eletrobras posts $393 mln quarterly loss

Reuters

SAO PAULO, Nov 14 (Reuters) - Brazilian state-runelectricity utility Eletrobras posted a net loss of915 million reais ($393.34 million) for the third quarter as itcontinued to adapt to government-mandated tariff reductions,according to a securities filing on Thursday.

That compares to a net profit of 1 billion reais a yearearlier.

Eletrobras agreed in December to a government plan to renewexpiring hydroelectric dam concessions in exchange forelectricity rate cuts of between 18 percent and 32 percent.

The changes led to weak first and second-quarter profits andcontinued to weigh on the company in the third quarter, as netrevenue dropped to 6.1 billion reais compared to 6.7 billion ayear earlier.

The company is struggling to adapt to the new reality oflower rates by cutting costs and reorganizing its managementstructure, which is spread across a range of subsidiarycompanies. In mid-August the company announced it had hiredMunich-based consulting firm Roland Berger to advise on itsrestructuring.

Earlier this year the company said it planned to spend 1.4billion reais to cut 5,000 jobs as it embarks on a three-yearturnaround effort aimed at slashing costs by 30 percent.

As part of its restructuring, Eletrobras is seeking approvalfrom the government to sell its six distribution units, whichlost a combined 1.33 billion reais for the company in 2012.

The company said severance costs weighed on its results, aswell as the impact of tariff reductions.

Earnings before interest, tax, depreciation and amortizationfell to a negative 436 million reais. The company did not give acomparative figure for the previous year.

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