SAO PAULO, May 16 (Reuters) - Brazilian state-run power company Eletrobras on Monday reported first-quarter net profit surged 69% as the federal government hopes its plans to fully privatize the utility this year win court approval as early as this week.

Centrais Eletricas Brasileiras SA, as the majority state-owned company is formally known, posted 2.716 billion real ($537 million) in net income in the first quarter, driven by currency gains and a 12% jump in gross revenue.

"The negative highlight was the writedown of 1.23 billion reais in loan-loss provisions due to an Amazonas Energia's default," Eletrobras said in a securities filing, in reference to a former subsidiary sold in 2019.

Recurring earnings before interest, taxes, depreciation and amortization (EBITDA) rose 9.6% year on the year to 5.428 billion reais. Net operating revenue grew 12% to 9.18 billion reais, Eletrobras said.

The company said the growth in its recurring indicators reflects a better operating performance.

President Jair Bolsonaro's administration expects Brazil's audit court to grant approval to Eletrobras' privatization early as this week in a key trial on the matter scheduled to resume on Wednesday.

A decision in the government's favor would pave the way to full privatization and a share offering by July.

Brazil's government currently holds 72% of Eletrobras' common shares, including its own stake and those held by state development bank BNDES and the national development fund (FND), according to Refinitiv data.

Privatizing Eletrobras, Latin America's largest utility, is seen as crucial for Bolsonaro's government as he has so far delivered few of the ambitious privatizations he pledged before taking office.

The far-right leader will seek re-election in October, and his main rival, former leftist president Luiz Inacio Lula da Silva, is a vocal opponent of privatizing the company.

Lula leads Bolsonaro in opinion polls, though his lead has tightened in recent weeks.

Shares in Eletrobras were trading near 10-month highs at Friday's close. Year-to-date, they are up roughly 30%, outperforming Brazil's Bovespa stock index. (Reporting by Gabriel Araujo; Editing by Chris Reese and Kenneth Maxwell)