Iberdrola España's net profit falls 26%

Iberdrola continues to advance in its role in the energy transition to achieve a more sustainable energy system that is less dependent on fossil fuels. Thanks to more than 4,700 million euros of investments in the first half of the year and despite the fall in profits in Spain, consolidated net profit has grown to 2,075 million euros, driven by good results in international business, as reported to the Spanish National Securities Market Commission (CNMV).

The strong growth in the United States, Brazil and the United Kingdom, mainly, as in the previous quarter, offset the adverse result of Iberdrola Spain, where it recorded a 26% fall, affected mainly by high energy prices, which have not been passed on to customers with previously agreed fixed prices.

Global operating cash flow generated in the first half amounted to Euro 5,560 million, up 31% year-on-year.  

Shareholders received a remuneration charged against 2021 results of EUR 0.449 per share, 6.4% more than the previous year. This was approved at the AGM held last month with a quorum of 72%, where shareholders supported all items on the agenda with an average vote of 98% in favour.

The company invested 4,741 million euros in the first half of 2022, a 5% increase, totalling more than 10,200 million in the last year. Of this amount, 90% has been allocated to renewables and smart grids to accelerate the energy transition in the areas where it is present.

Iberdrola's Chairman, Ignacio Galán, said: "At Iberdrola we continue to increase our investments to strengthen energy autonomy and accelerate the green transition, reducing dependence on fossil fuels. The projects we have underway in Spain and around the world are enabling us to generate economic activity and support 400,000 jobs at more than 19,000 suppliers".

As a result of the investments already made, the group has installed 3,400 new renewable MW in the last 12 months - 1,241 MW of photovoltaic, 996 MW of onshore wind, almost 1,000 MW of hydroelectric storage and 116 MW of batteries - and strengthens its renewable leadership by almost 39,000 MW of green capacity worldwide. It also has a project portfolio of 95,000 MW, of which 10,800 MW are under construction or secured with long-term contracts.

By country, Iberdrola has continued to promote its commitment to decarbonisation in Spain, where it has allocated almost 1,100 million euros of investment in the first half of the year, 23% of the total. It has also invested 1,246 million euros in the United States, 837 million euros in Brazil, 801 million euros in the United Kingdom, 153 million euros in Mexico and 619 million euros in the rest of the countries.

In recent months, the company has consolidated its growth plan with several new projects. In renewables, it has been awarded 2,094 MW in the United Kingdom - 1,372 MW of offshore wind, 396 MW of onshore wind and 326 MW of photovoltaic - which will require an investment of 3.7 billion pounds sterling (4.4 billion euros).

In networks, Iberdrola has accelerated growth in the UK, where the new RIIO-ED2 distribution framework will involve investments of £3.4 billion (around EUR 4 billion) from next year to 2028, for a total of £6 billion (EUR 7.1 billion), including those related to transmission networks. In addition, 2,000 new kilometres of transmission lines have been awarded in the latest auction in Brazil, bringing the total number of kilometres awarded in recent years to 8,000.

These projects underpin the group's future growth, which will be described in greater detail at the next Capital Markets Day, to be held in November.

In this current context, Iberdrola has once again demonstrated that growth is fully compatible with the generation of value for all its stakeholders.

In fact, it is one of the companies most committed to the public coffers. In 2021, it contributed 7,836 million euros globally, 5% more than the previous year, i.e. 361 million euros more. Nearly half of this amount, 3,469 million euros, corresponds to Spain.

Iberdrola has placed orders for 8,200 million euros in the first half of the year with its more than 19,000 suppliers, giving visibility and certainty to a supply chain that generates 400,000 jobs worldwide. In addition, it has hired more than 2,100 people in the first half of the year, exceeding 5,000 in the last 12 months.

All this work is carried out in a company that promotes a fairer and more egalitarian society, both within the company and in society as a whole. According to its Diversity and Inclusion Report, there is no wage gap at Iberdrola, employees of 79 nationalities of all races work at the company, and women now account for 34% of positions of responsibility.

In the last six months, the company has once again strengthened its balance sheet with more than 8,000 million euros of financing - 77% with ESG (environmental, social and governance) criteria - with favourable conditions. In this way, the group is anticipating its financial needs for the year as a whole. In fact, in recent weeks it has signed a new sustainable credit line with 24 financial institutions for EUR 2.5 billion at a historically low rate and has closed a EUR 550 million green loan with the EIB.

The group has thus once again demonstrated its leadership in green and sustainable financing, reaching a total of EUR 43.8 billion.

It also has liquidity of EUR 25 billion, which would allow it to cover 27 months of financing needs without recourse to the market.

The company has improved its cash flow to net debt ratio to almost 25%. Moreover, in an inflationary context, 75% of its debt is at a fixed rate, and the company has managed to reduce its cost of financing by 4 basis points to 2.86% at the end of June, excluding Neoenergia, whose revenues are also linked to inflation.

The chairman stressed that Iberdrola is prepared to face the current macroeconomic context, as it has a sustainable business model based on renewables, grids and storage. 90% of its production in Europe is emission-free, reaching only 55 grams of CO2 per kWh, much lower than the average of its competitors. Moreover, it has insisted that it has no dependence on gas or oil from Russia.

The performance during the first half of the year, together with the expectations for the second half of the year, allow Iberdrola to reaffirm its prospects of achieving a net profit of between 4,000 and 4,200 million euros for the year as a whole.