The group said it had suffered from changes to regulations in Spain, but expected to lift net profit from next year with heavy investment in countries where regulations were foreseeable.

Net profit for the quarter surged by 8.4 percent from the equivalent figure last year to €952.6 million euros ($1.32 billion).

But sales fell by 4.8 percent to €8.325 billion.

Earnings before interest, tax, depreciation and amortization (ebitda) was slightly down by 0.3 percent to €2.127 billion.

However, activities outside Spain had shown growth of 22.3 percent whereas in Spain they had fallen by 25.2 percent.

In Spain, regulatory changes including new taxes and cuts in subsidies for renewable energies, had crimped the gross profit margin by €260 million so that it rose by 1.0 percent to €3.386 billion.

In the whole of this year, these measures would have an impact totalling €380 million, it estimated.

But for activities in Brazil, ebitda earnings had jumped by 45.6 percent to €47.1 million.

This reflected an 8.9-percent rise in demand, increased tariffs and government compensation for drought paid to companies distributing energy.

The group stood by its forecasts for the year, expecting net profit to fall further to €2.3 billion and the ebitda figure to €6.6 billion.

But it then expected net profit to rise by 4.0 percent in 2015 and in 2016, boosted by diversification with investment of €9.6 billion from 2014 to 2016 in countries with stable regulatory environments.

Of this amount, 41 percent would be invested in Britain, 23 percent in Latin America but mainly in Mexico, and 17.0 percent in the United States.