* EDP net profit falls to 748 million euros
* Operating profit flat, EBITDA edges up 2 percent
* Sees demand stabilisation in Iberia, Brazil
(Adds quotes from EDP's CEO CFO)
By Sergio Goncalves
LISBON, Oct 29 (Reuters) - Energias de Portugal on Thursday posted a 20 percent fall in nine-month net profit after a drop in power distribution and prices as well as a big one-off gain a year ago, but beat expectations amid stabilising demand.
Net profit reported by Portugal's main utility and largest company fell to 748 million euros ($1.10 billion) compared with 709 million euros average in a Reuters poll of 10 analysts.
Last year, EDP had a capital gain of over 400 million euros from an initial public offering in its wind power unit EDP Renewables.
EDP said that excluding non-recurrent items, net profit rose 9 percent to 780 million euros. Operating profit remained practically flat at 1.47 billion euros, helped by higher power generation and new capacity at EDPR.
"These are the best recurrent results in EDP's history. We had focussed growth, management and risk cover and we increased efficiency with cost reduction," EDP CEO Antonio Mexia told reporters.
"The results are very positive particularly in the current market context," Mexia added.
EDP's total installed capacity rose 8 percent to 19,147 megawatts on EDPR additions, chiefly in the United States.
The utility said earlier this month its power distribution in Portugal and Spain ebbed 2.6 percent in the first nine months of 2009, but demand was stabilizing in the Iberian Peninsula after being suppressed by the worst economic downturn in decades. .
The company's Brazilian operations were also affected by a fall in electricity sales to large industrial clients, but it has seen favourable signs in the third quarter, a period which also saw the Brazilian real gain ground against the euro.
"We see stabilisation signs in Brazil and the operating results are clearly recovering in relation to the start of the year," Mexia said.
Earnings before interest, taxes, depreciation and amortization (EBITDA) edged up 2 percent to 2.43 billion euros. Analysts polled by Reuters had forecast, on average, EBITDA of around 2.39 billion euros.
EDP stock closed 0.4 percent higher at 3.016 euros before the results were announced, underperforming the broader market in Lisbon, up 3.1 percent.
Chief Financial Officer Nuno Alves said EDP's liquidity of 5 billion euros meant the company had "no current need" to sell more of its 67 percent stake in EDPR after last year's IPO, but added that such a sale "is not a taboo".
Meanhwile, EDP is mulling the sale of small financial stakes it holds in other companies. (Additional reporting by Andrei Khalip; Editing by David Cowell and Rupert Winchester)