Results: Iberdrola increases profit by 64% to 4.134 million, thanks to sales in Mexico | Companies

Iberdrola has made a net profit of 4,134 million euros in the first half of this year, up 64% compared to the same period last year, as the company reported this morning to the National Securities Market Commission (CNMV), thanks to the sale of assets in Mexico (essentially its combined cycles). Iberdrola is recording a record investment of 5,276 million euros until June, up 16% compared to 2023. For its part, the group’s gross operating result (EBITDA) reached 9,614 million euros, up 27%. Excluding the sale of Mexico, EBITDA reaches 7,897 million euros, up 9% compared to the first half of 2023. Shares started the day up 1.27%.

According to Iberdrola, the increase in profits is due to the expansion of the network asset base and new tariff frameworks in the United States, the United Kingdom and Brazil. In addition, he recorded historical growth in renewable energy production and continued growth in hydroelectric energy production through storage, which in the Iberian Peninsula reached 3,000 GWh in six months (25% of total hydroelectric production). Another factor that enabled operational growth was the increase in the portfolio of PPAs (clean power purchase and sale agreements) with industrial customers, as well as the improvement of the commercial markets in the Iberian Peninsula and the United Kingdom.

In the first half of the year, the company, chaired by Ignacio Sánchez Galán, made purchases worth more than €7 billion from tens of thousands of suppliers, and tax payments worldwide increased by 20%, reaching €5,300 million.

Strategic plan

The company says it is making “strong” progress on its 2024-2026 Strategic Plan, presented in March. Of the €5.276 million invested during the period, 56% was allocated to the United States and the United Kingdom, 19% to the Iberian Peninsula, 15% to Latin America and 10% to other European countries and Australia. 51% of the investment was in networks (€2.708 million), representing a 23% increase compared to the same period last year. The network asset base reached €43.3 billion, up 7% from the first half of 2023.

For its part, investments in renewable energy increased by 10% in the first half of the year, reaching 2.167 million. Thanks to these investments, the group has installed 3,100 new MW of renewable energy, which currently exceeds 43,400 MW worldwide. Over the past 12 months, nearly 800 MW of offshore wind power have been installed, representing an increase of 60% compared to the same period of the previous year, thanks to the inclusion of Saint Brieuc in France, Vineyard Wind 1 in the United States and Baltic Eagle in Germany, whose capacity now reaches 2,300 MW.

The offshore wind projects included in the plan are already secured and under construction, with 4,800 new MW expected to come online by 2026, contributing €1,800 million to EBITDA this year, up from €400 million this term.

Thanks to the good development of the company’s business and the sale of the Mexican business, the group achieved an operating cash flow of 11,362 million euros in just six months, compared to 5,731 million in the same period of the previous year, representing an increase of 98%. The sale of assets in Mexico generated a gain of more than 5,400 million euros, with a capital gain of 1,165 million euros after tax, reflected in the profit and loss account for the half-year.

With debt of 45,153 million euros, which it has reduced by 2,679 million since December, the group increased its cash flow to net debt ratio by 10 basis points compared to the first half of 2023, to 25%, reaching 4.8%. billion euros of new financing, resulting in liquidity of 21.7 billion euros. Iberdrola will therefore be able to cover its 24-month financing needs without having to turn to the market.

In addition, in accordance with the decision of the general meeting of shareholders, the remuneration was increased by 11.4%, to 0.558 euros per share, taking into account the results of 2023. On July 29, the company will pay an additional dividend of 0.351 euros per share. Iberdrola has already reached the minimum dividend level of 0.55 euros per share set in the strategic plan, and the company expects it to increase to a range of 0.61 to 0.66 euros per share in 2026.

The group’s full-year forecasts call for double-digit net profit growth (excluding capital gains from asset rotation) thanks to the contribution of new investment in networks, tariff revisions in the US, UK and Brazil, and 1,600 renewable energy MW under construction.

In the current market context, Iberdrola has more than 100 million kWh of storage, plus 20 million kWh under construction and 150 million kWh for future projects to benefit from renewable energy and reduce price volatility. Given the exponential growth of data center energy needs, Iberdrola claims to be in a “unique position, having already allocated 8,000 GWh per year to large technology companies.”

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