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UPDATE 2-A2A "upset" by partner's nuclear deal with Enel

Published 08/06/2009, 12:39 PM
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* Says "upset" by partner's nuclear deal with rival

* First-half net profit down 18.9 percent

* Power demand down, revs up from acquisitions

* Chairman says no change to div policy

(releads with chairman comments on EDF-Enel deal)

MILAN, Aug 6 (Reuters) - Italy's A2A SpA was "upset" by a deal on nuclear business between rival Enel and EDF, its French partner in Edison, the utility's chairman said on Thursday.

"The deal between Enel and EDF took us by surprise and upset us a bit," Giuliano Zuccoli told a conference call with analysts after the company turned in an 18.9 percent drop in first-half net profit.

"Our relationship with EDF is positive, but we are in the situation today to watch closely the need for some key interventions on Edison itself," he said.

A2A and EDF jointly control Edison, which is Italy's second-biggest power producer behind Enel.

Earlier this week, EDF and Enel set up a joint venture to develop nuclear power in Italy.

There has been media speculation in recent months that A2A would like a change in the Edison ownership structure in order to get more synergies from its ownership of Edison.

First-half results for A2A, Italy's biggest municipally-owned utility, reflected falling demand, triggered by Italy's worst economic downturn since World War II.

Other European utilities have also felt the impact of the global downturn on power consumption.

Spain's Iberdrola said it expected domestic power demand to recover in the fourth quarter when it reported a 23 percent fall in first-half net profit last month.

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Germany's E.ON and RWE will report in August, as will France's GDF Suez.

A2A reported an 8.1 percent downturn in power sales while overall revenues were up 2.7 percent, boosted by the purchase of French district heating company Coriance and Aspem, a Varese power company.

Net profit was 129 million euros but excluding the effect of a tax repayment for state aid, net profit was 185 million euros, up 16.4 percent from the same period last year.

Zuccoli said he expected a full year result in line with previous forecasts made at the start of the year.

On dividend policy, he said this was tailored for a "reasonable" scenario and "going forward we don't believe the scenario will worsen. There is still the crisis but we don't see it worsening any more," he said.

A2A shares closed down 5.38 percent at 1.231 euros. The DJ Stoxx utilities gauge was down 0.66 percent. (Reporting by Ian Simpson; editing by David Cowell and Karen Foster)

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