Gas distributor Gas Natural SDG SA (GAS.MC) Friday said first-quarter net profit rose 10%, supported by strong growth in its main gas distribution and electricity generation businesses.
Barcelona-based Gas Natural, Spain's largest gas distributor by market value, said net profit increased to EUR335.8 million for the three months to March 31 from EUR304.7 million in the same period a year ago.
Analysts had expected a EUR338.7 million net profit.
"The results are strong, especially electricity and gas distribution", local brokerage Banesto said. Banesto added the solid earnings were likely to boost the shares, and show the company's stock is attractive on fundamentals, not just due to mergers and acquisitions speculation.
Banesto rates Gas Natural at overweight with a EUR46.87 target price.
At 0709 GMT, Gas Natural shares rose 0.4%, or EUR0.14 to EUR38.05 leading the benchmark IBEX-35.
Gas Natural said earnings before interest, taxes, depreciation and amortization, or Ebitda, rose 15% to EUR725.9 million, boosted by strong electricity generation in Spain and the addition of five combined cycle plants in Mexico, the company said.
Gas Natural has recently been at the focus of M&A speculation, with several local media reporting plans for a possible friendly deal with Spain's largest power utility by market value, Iberdrola SA (IBE.MC). These reports come as an earlier talk of a move into Spain by state-controlled Electricite de France (1024251.FR) has faded away.
Barcelona-based savings bank La Caixa is Gas Natural's top shareholder, with a 33% stake. Spanish-Argentine oil company Repsol YPF SA (REP.MC) owns a 30.9% stake, while French conglomerate Suez SA (SZEZY) owns a 11.4% stake.