Gas Natural, the Spanish utility company, has reported higher full-year profit, but blamed regulatory changes and currency effects for falling short of market expectations.

Net income at the Barcelona-based company rose 1.2 per cent year-on-year to €1.46bn for the calendar year 2014, falling short of analyst expectations, while earnings before interest, tax, depreciation and amortisation were flat at €4.85bn.

“This year has been difficult because of exchange rate reasons, regulatory reasons [ . . .] but we’re satisfied because we have balanced out the situation,” said Rafael Villaseca Marco, chief executive, on Tuesday.

In Gas Natural’s home market, where it is the largest natural gas supplier, new regulation of tariffs reduced earnings by €141m over the year. However, the group said that the regulatory environment brings “both higher stability and predictability” and “incentivises growth”.

Even so, Gas Natural has sought additional growth through investments abroad. In October, it launched a €2.6bn bid for Compañía General de Electricidad, the Chilean power company.

“Our investments internationally are gaining more and more weight,” Mr Marco said. “Our international sales are becoming more and more important.”

Over 2014, the group increased its international investment by 20.9 per cent compared with the previous year, compared with an increase of 4.4 per cent in domestic investment. Gas sales by gigawatt hour increased 9.5 per cent in Latin America in 2014, boosted by industrial demand in Colombia and power generation in Brazil.

In Spain and Italy, by contrast, gas sales fell 10.1 per cent over the same period, which the company attributed to weak demand caused by “unusually” warmer weather.

Gas Natural’s international operations were not without complications, though. In South and Central America, profits were impacted by exchange rate weakness, which reduced net income by €44m over 2014, the company said.

Gas Natural also incurred impairment charges from other international ventures, including €485m from reducing the value of its Damietta gas plant in Egypt, which became inactive following supply problems.

Aside from one-off costs, the company’s results were boosted by one-off capital gains of €252m on the sale of its telecoms unit to private equity firm Cinven Ltd last summer.

Within the broader context of a troubled global energy environment, Mr Marco denied that the fall in oil prices would have any explicit impact on gas markets. “There is no direct correlation between oil and gas,” he said. “Even if it’s true that they are in some way connected, it’s not true that this connection is 100 per cent.”

Shares in the company fell 2 per cent on Tuesday to close at €20.61.

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