CORRECT: Gas Natural 4Q Net Profit EUR252 Million Vs Profit EUR233 Million

MADRID (Dow Jones)--Spain's Gas Natural SDG SA (GAS.MC) Tuesday reported an 8.2% rise in its fourth-quarter net profit, helped by higher electricity prices and an increase in power output.

Spain's largest gas distributor by market value said its net profit in the fourth quarter ended Dec. 31 rose to EUR252 million, from EUR233 million a year earlier.

A Dow Jones Newswires survey of four analysts had predicted an average net profit of EUR279.6 million.

Profits were boosted by higher Spanish electricity pool prices, and a rise in electricity output in Spain and Latin America. By contrast, Gas Natural's gas distribution receded slightly in the fourth quarter, while its gas supply also fell.

Spanish power prices rose as a drought led to a lower output of cheap hydroelectric power. Gas Natural in 2008 consolidated five gas-fired power plants it had bought in December 2007 in Mexico.

The company's net debt rose 33% on the year to EUR4.91 billion at the end of 2008.

Debt was boosted by the purchase of a first 9.9% of power company Union Fenosa SA (UNF.MC) from leading shareholder Actividades de Construccion y Servicios SA (ACS.MC), or ACS, in August.

Spain's competition authority CNC in coming days or weeks is expected to approve Gas Natural's purchase of the remaining 35.4% of Union Fenosa from ACS.

Market observers are likely to focus on whether the CNC will ask Gas Natural for divestments, and in particular whether it will allow the company to keep Fenosa's gas unit Union Fenosa Gas. Italy's Eni SpA (E) owns 50% in Union Fenosa Gas and has preemptive rights to purchase the other half in case Fenosa is sold.

Once Gas Natural has bought at least 30% of Fenosa, by Spanish law it is obliged to make a full bid for the company. When Gas Natural announced its plan to buy Fenosa in July, Fenosa was valued at EUR16.75 billion.

To finance the acquisition, Gas Natural plans a EUR3.5 billion capital increase, which is scheduled for shareholder approval in an extraordinary meeting on March 10.

Gas Natural's results came mostly in line with expectations, Banesto analyst Antonio Cruz said, but won't have much of an impact on the stock as the market will focus on the upcoming capital increase.

Gas Natural's shares rose 2.5% to EUR17.83 at 0826 GMT in a falling Madrid market. Shares are down 52% over the past 12 months.

Gas Natural's earnings before interest, taxes, depreciation and amortization, or Ebitda, rose to EUR638 million, from EUR576 million a year earlier.

Sales rose to EUR3.84 billion in the period, from EUR2.76 billion in the fourth quarter of 2007.

Gas Natural Tuesday also said that its full-year 2008 net profit rose 10.2% to EUR1.06 billion from EUR959 million a year earlier.

Company Web Site: http://www.gasnatural.com

-By Bernd Radowitz, Dow Jones Newswires, 34-91-395-8125, [e-mail]