Spanish solar panel maker Solaria said Monday it expects energy prices to recover over the course of the year, which would help the company reach its 2024 profitability target.

The company expects earnings before interest, taxes, depreciation and amortization of between €232 million and €251 million ($252 million and $272 million) this year, up from €200 million in 2023.

Solaria shares rose as much as 6% before trimming earnings and trading up 5.2% at the close.

Falling energy prices and rising interest rates are weighing on the profits of solar panel makers, which have benefited from rising electricity prices over the past two years.

Solaria, however, said it expected wind and hydro output to decline, which would push up electricity prices later in the year.

Victor Peiro, head of equity analysis at GVC Gaesco, however, predicted further price moderation in the short term, after weak demand and high production of cheaper hydro power depressed prices in March.

"The same thing happened in April, so the second quarter will also be weak," Peiro said.

Despite lower prices, the solar panel maker posted a smaller-than-expected drop in first-quarter net profit thanks to higher revenues and the sale of some of its assets.

Solaria's net profit fell 5% to €23.6 million in the quarter compared with a year ago, well above analysts' average forecast of €10.7 million, according to LSEG data.

Solaria earned €13 million from the sale of non-core assets in Spain and Portugal in the quarter.

Solaria's sales rose 6% to €40 million in January-March, thanks to a 22% increase in electricity production to 406 gigawatt-hours, which helped offset weak prices.

The company announced that it will update its strategic plan in September.

Along with drug maker Grifols, Solaria has been the worst-performing stock in the Spanish blue-chip index this year, down around 37%.

(1 US dollar = 0.9212 euros)

(Reporting by Matteo Allievi; editing by Milla Nissi, Mark Potter and Tomasz Janowski; edited in Spanish by Tomás Cobos)