Iberdrola earns 2.075 million despite Spain collapsing 26%

The president of Iberdrola, Ignacio Galán. / RC

The energy company indicates that the drop in national activity is explained by the high prices of energy that it has not transferred to the customer

Jose Maria Waiter

Iberdrola improved its results by 36% in its activities around the world with which it managed to obtain a net profit of 2,075 million euros in the first half of this year. However, Spain became the company’s Achilles’ heel, seeing a 26% decline in earnings.

The company clarifies that the Spanish business has been fundamentally affected “by high energy prices which have not been passed on to customers with previously agreed fixed price contracts”. Already in the first quarter, Iberdrola Spain earned 29% less than in the same period of the previous year compared to the 3% increase for the group as a whole.

The publication of these results coincides with the imminent presentation of the bill approving a tax that taxes the extraordinary profits of electricity companies and banks. The President of the Government, Pedro Sánchez, announced this tribute during the last debate on the state of the nation, with which he estimates to raise 2,000 million euros in two years.

For its part, the strong growth in the United States, Brazil and the United Kingdom, mainly, as in the previous quarter, compensated for the unfavorable result of Iberdrola Spain.

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

The president of Iberdrola, Ignacio Galán, assured that 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 allow us to generate economic activity and maintain 400,000 jobs with more than 19,000 suppliers.

Thanks to the investments already made, the group has installed 3,400 new renewable MW in the last 12 months -1,241 photovoltaic, 996 onshore wind, nearly 1,000 hydroelectric storage and 116 MW of batteries- and is strengthening its renewable leadership by reaching nearly 39,000 MW of green capacity worldwide. In addition, it has a project portfolio of 95,000 MW, of which 10,800 MW is under construction or secured by long-term contracts.

By country, Iberdrola continued to promote its commitment to decarbonization in Spain, where it allocated nearly 1,100 million euros of investments in the first half, or 23% of the total. In addition, it has invested 1,246 million in the United States, 837 million in Brazil, 801 million in the United Kingdom, 153 million in Mexico and 619 million in other countries.

In recent months, the company has reinforced its growth plan with several new projects. In renewables, 2,094 MW have been awarded to the UK -1,372 MW offshore wind, 396 MW onshore wind and 326 MW photovoltaic – representing an investment of £3,700 million -4,400 million euros-.

On the other hand, in the networks, Iberdrola accelerated its growth in the United Kingdom, where the new RIIO-ED2 distribution framework will lead to investments of 3,400 million pounds -about 4,000 million euros- of the year next until 2028, for a total of 6,000 million pounds -7,100 million euros- including those related to transport networks. In addition, 2,000 new kilometers of transmission lines were awarded at the last auction held in Brazil, bringing the number of kilometers awarded in recent years to 8,000.

Iberdrola placed orders for 8,200 million euros during the semester with its more than 19,000 suppliers, giving visibility and certainty to a supply chain that generates 400,000 jobs worldwide. Additionally, it hired more than 2,100 people during the semester, surpassing 5,000 in the last 12 months.

Over the last 6 months, the company has further strengthened its balance sheet with more than 8,000 million euros in financing -77% with ESG (environmental, social and governance) criteria-, with favorable conditions. The group thus anticipates its financial needs throughout the year. Indeed, in recent weeks it has signed a new sustainable credit line of 2,500 million euros at a historically low rate with 24 financial institutions and closed a green loan of 550 million euros with the EIB.

The President wanted to emphasize that Iberdrola is ready to face the current macroeconomic context, as it has a sustainable economic model, based on renewable energies, networks and storage. 90% of its production in Europe is emission-free, reaching only 55 grams of CO2 per KWh, well below the average of its competitors. Furthermore, he insisted that he was not dependent on Russian gas or oil.

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

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