WRAPUP 1-Europe utilities boost divs but outlook uncertain

* International Power warns on 2009 profit

* International Power, Terna raise 2008 dividends

* Terna confirms investment strategy

* Both shares down 5 percent

LONDON/MILAN, March 11 - Britain's International Power warned on Wednesday that falling gas prices and lower energy demand would hit this year's profits while joining Italian grid operator Terna SpA in offering shareholders a fatter 2008 dividend.

"In the absence of a significant improvement in pricing in the US and the UK, it is likely group profitability in 2009 will be lower than in 2008," International Power Chairman Sir Neville Sims said.

Gas prices have fallen since mid-2008 and economies are slowing, spelling trouble for power generators such as International Power, which operates in 20 countries.

International Power turned in a 16 percent rise in 2008 profits and hiked its dividend 20 percent but its shares shed 5 percent on the 2009 profit outlook.

Terna, helped this year after Italy's energy regulator approved rules to cap any rise or fall in consumer power demand at 0.5 percent, posted a 5.6 percent fall in 2008 net profit hit by one-off items.

But it too raised its 2008 dividend, lifting it by 4.6 percent to 0.158 euros per share.

The company, which announced its plans for the next four years in February, aims to increase its payout to investors by at least 4 percent per year through to 2013.

For 2009, its focus is investment as it kicks off a 4-year plan to spend more than 3 billion euros.

"The company will work hard on the timely implementation of investments laid out in the development plan," Terna said.

E.ON CUTS OUTLOOK, ENEL EYED

On Tuesday, E.ON, the world's biggest utility by sales, cut its 2010 profit expectations by around 10 percent and said the global economic crisis meant its outlook for the current year was "burdened with insecurities".

E.ON cited lower electricity and gas sales volumes because of the economic crisis among factors prompting it to cut its 2010 guidance.

It said 2009 adjusted operating profit would be unchanged from 2008's 9.9 billion euros.

Top Italian power generator Enel reports results on Thursday and 20 brokers on average are expecting net income of 5.259 billion euros, up from 3.977 billion euros in 2007, according to Enel's website.

Chief Executive Fulvio Conti has already committed the company -- burdened with over 60 billion euros of debt -- to an unchanged dividend payout of 0.49 euros on 2008 results.

But investors may still be tapped for a capital increase -- which a source close to the operation has said could be for as much 8 billion euros -- as it looks for ways to cut its debt.

Enel added 11 billion euros to its debt earlier this year when it bought out Spain's Acciona to take 92 percent of Spanish utility Endesa.

Analysts have suggested another option for Enel would be to cut or pass on its dividend or sell assets -- although current low valuations make that a less appetising choice.

Another option could be to cut back on capex plans, a step which E.ON has indicated it will take.

International Power stock was down 5.6 percent at 193-1/2 pence while Terna was down 5.35 percent at 2.21 euros as of 1536 GMT.