June 22, 2024
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ELECTRICITY

Iberdrola Raises Profit Target Following Strong First Quarter

Spanish electric utility company Iberdrola has increased its profit forecast for the year after a robust performance in the first quarter, driven by high renewable energy output in Spain and tariff hikes in its network business in the United States and other regions.

According to Reuters, the company now anticipates high single-digit profit growth for the year, up from its previous guidance of 5% to 7% growth. Net profit for the first quarter surged to €2.76 billion ($2.95 billion) compared to €1.49 billion in the same period last year, boosted by asset sales.

Iberdrola’s strategic focus on upgrading and expanding grids in the United States and other markets, coupled with a more selective approach to renewable energy, has been paying dividends.

The company recently unveiled a $45 billion investment plan to further bolster this strategy, initiated in 2022.

Excluding one-time gains, such as a €1.2 billion gain from asset sales in Mexico, the company reported a 28% increase in profit and a 10% rise in core earnings before interest, taxes, depreciation, and amortization (EBITDA).

Iberdrola’s investment in the first quarter reached a record €2.38 billion, with €1.2 billion allocated to networks, primarily in the U.S. Improved tariffs in Britain, the U.S., and Brazil bolstered the company’s network business.

The company highlighted strong renewable energy production in Spain, driven by output from hydroelectric plants reaching a 10-year high. Additionally, offshore wind capacity expansion occurred in France and the U.S.

“We have started positively in the delivery of our strategic plan to 2026,” Executive Chairman Ignacio Sanchez Galan said in a statement.

Iberdrola aims to invest €12 billion this year following record spending in the first quarter.

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