Mytilineos says Q1 net drops on lower sales

* Power plant unit Metka disappoints * Hedging, lower material cost improve operating margin * Metka in final talks to win new orders ATHENS, May 27 (Reuters) - Greek metals and energy group Mytilineos said first-quarter profit dropped about 76 percent year-on-year, hurt by weaker revenues from its power plant building unit Metka. Mytilineos said on Wednesday net income came in at 1 million euros ($1.39 million), below the average 1.8 million euro forecast of analysts in a recent Reuters poll. Revenues dropped 32 percent to 154 million euros from 227 million last year, the company said, slightly below analysts' 155.6-million-euro average estimate. Metka sales dropped to 50.1 million euros from 87.9 million euros because of project delays. But Mytilineos said it expects Metka to win new orders soon. "Metka is in the final negotiation stages for a number of equally large and important projects in Greece and abroad, with good prospects for a successful outcome," Mytilineos said. Earnings before interest, tax, depreciation and amortisation (EBITDA) fell 18 percent to 21.1 million euros, beating analysts' 20.3 million euros estimate, helped by successful hedging operations and lower prices for raw materials. The company's operating margin improved to 13.7 percent from 11.3 percent last year, Mytilineos said. Mytilineos, a major producer and trader of aluminium and alumina in southeast Europe, is expanding into the energy sector to benefit from increasing demand for electricity in the region. Mytilineos shares have gained 36 percent since the start of the year, outperforming a 29 percent advance in the Greek benchmark index <.ATG>. The stock trades about 14 times estimated 2009 earnings, compared to a P/E ratio of 21 for European peers, according to Reuters Estimates data.