The third-quarter net profit of Chile's largest power producer, Empresa Nacional de Electricidad SA (EOC, ENDESA.SN), dropped 18.7% on the year to 116.28 billion Chilean pesos ($232.1 million) due to a drought in Chile and tax changes in Colombia, the company said Wednesday.

Reduced hydrogeneration in Chile, where Endesa has 38% of its installed capacity, due to a prolonged drought forced Endesa to use more-expensive thermal generation and purchase energy on the spot market to cover its contracts. Some 59% of the company's capacity is in hydroelectric generation and the rest is in thermal-generation plants.

Through the first nine months of the year, Endesa's hydroelectric power production in Chile fell 13.9% to 7,717.8 gigawatt hours, compared to 8,959.8 gigawatt hours in the year-ago period.

The power generator's third-quarter revenue slipped to CLP628.95 billion from CLP662.87 billion in the same quarter of last year.

Endesa's earnings before interest, taxes, amortization and depreciation declined 15.6% on the year to CLP664.42 billion for the January-through-September period, the company said.

Endesa didn't provide Ebitda figures for the third quarter.

Endesa said its 370-megawatt Bocamina II coal-fired thermal plant in southern Chile will likely start operations by the end of the first quarter. Startup of Bocamina II, originally slated for early 2011, was delayed after a massive February 2010 earthquake caused damage.

Endesa has 13,846 megawatts of installed capacity in Argentina, Chile, Colombia and Peru, and owns an equity stake in 987 MW of installed capacity in Brazil.

Endesa is controlled by power-holding company Enersis SA (ENI, ENERSIS.SN), which in turn is controlled by Spain's Endesa SA (ELEZF, ELE.MC).

-By Anthony Esposito, Dow Jones Newswires; 56-2-715-8929; anthony.esposito@dowjones.com