Iberdrola’s profits in Spain plummet 26%

Iberdrola achieved a net profit of 2,075 million euros in the first half of the year, which represents an increase of 36% compared to the same period of the previous year, driven by its international activity.

However, the results in Spain of the energy company chaired by Ignacio Sanchez Galan they collapsed by 26%. These poor numbers are due to the ongoing fiscal and political attacks the company is under from the government. The latest blow from Pedro Sánchez’s executive to the electricity sector is the “exceptional and temporary” tax to tax the extraordinary profits obtained in 2022 and 2023″. In the case of Iberdrola, it is clear that there are no such extraordinary profits In our country, with the tax on electricity, gas and oil companies, Sánchez wants to raise 2,000 million euros per year.

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. For its part, the operating cash flow generated in the first half worldwide amounted to 5,560 million euros, which represents an increase of 31% compared to the same period of the previous year.

The shareholders have obtained compensation charged to 2021 results of 0.449 euros per share, i.e. 6.4% more than the previous year. This was approved at the General Meeting held last month with a quorum of 72%, during which shareholders supported all items on the agenda with an average favorable vote of 98%. .

Intense investments for the energy transition

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: “At Iberdrola we continue to increase our investments to strengthen energy autonomy and accelerate the green transition, by reducing dependence on fossil fuels. The projects we have underway in Spain and around the world allow us to generate economic activity and support 400,000 jobs at more than 19,000 suppliers”.

Following the investments already made, the group installed 3,400 new renewable MW in the last 12 months -1,241 photovoltaic units, 996 MW of onshore wind power, nearly 1,000 of 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 in 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.

Over the past few months, the company has strengthened its growth plan with several new projects. In renewables, 2,094MW has been awarded to the UK – 1,372MW offshore wind, 396MW onshore wind and 326MW photovoltaics – which will represent an investment of £3.7bn – €4.4 billion.

On the other hand, in networks, Iberdrola accelerated its growth in the UK, where the new RIIO-ED2 distribution framework will involve investments of 3,400 million pounds -about 4,000 million euros- from next year to 2028, for a total of 6,000 million pounds -7,100 million euros – including those relating 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.

These projects underpin the future growth of the group, which will be detailed at the next Capital Markets Day, to be held in November.

Commitment to society

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

In reality, is one of the companies most committed to public funds. In 2021, it contributed €7,836 million globally, 5% more than the previous year, or €361 million more. About half of this amount, 3,469 million euros, corresponds to Spain.

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.

A context-resistant business model

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. In fact, in recent weeks it has signed a new agreement with 24 financial entities sustainable credit line of 2,500 million eurosIt has a historically low rate and concluded a green loan of 550 million euros with the EIB.

Thus, the group has once again demonstrated its leadership in green and sustainable financing, reaching a total of 43,800 million euros. Moreover, it has a liquidity of 25,000 million euros which would enable it to cover 27 months of financial needs without resorting to the market.

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

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 zero emissions, reaching only 55 grams of CO2 per KWh, well below the average of 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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