Profit at Spanish energy giant Iberdrola soars 50% due to increased focus on United States and UK

Spanish energy giant Iberdrola has achieved a net profit of 5.47 billion euros up to September 2024, an increase of 50% compared to the same period of the previous year, latest figures show. The company achieved this by making record investments of 12.3 billion euros in the past 12 months, an increase of 13% compared to the same period last year.

Gross operating profit (Ebitda) reached 13.26 billion euros, 23% higher than in the same period of the previous year. Recurring ebitda grew 11% to 11.55 billion euros. The United States and the United Kingdom drove the result, with increases of 25% and 15% in ebitda, respectively.

The increase in results was mainly driven by higher investments, the good performance of renewable generation and results from asset rotation.

The results also show that Iberdrola is accelerating its strategic plan and taking advantage of new electricity generating opportunities. For this reason, it plans to increase its investment forecasts in renewables and networks in “an environment of greater regulatory support”. However, it makes no reference to the energy tax that the Spanish government plans to extend and which has caused friction between the government and other companies in the sector due to its threat to freeze investments or accelerate them in other countries, as Repsol announced in Portugal.

Ibedrola has allocated some 4.4 billion euros to networks – a 25% increase – in the first nine months. At present, the electricity network asset base stands at 47.6 billion euros (including the British ENW, whose transaction closed on Tuesday), with the United States and the United Kingdom now accounting for 60% of the total. In addition, it has invested 4 billion euros in generation and customers, which has enabled it to install more than 2,300 megawatts of renewable energy in the period.

Thanks to investments and new renewable generation, the company’s production set an all-time record at 63,300 gigawatts per hour in the first nine months, an increase of 7.4%. The electricity distributed by the company was also historic, with 177,943 gigawatts per hour, 2.5% higher than in the same period of the previous year.

With these investments, the group has increased its presence in countries with an ‘A’ rating (the best credit rating) in regulated businesses to 82% of recurring operating profit in these regions.

In its third quarter results presentation, the corporation set its profit forecast for the full year at 5.5 billion euros, an increase of 14% year-on-year (excluding any capital gains from asset rotation), driven by new network tariff frameworks, increased installed capacity and higher long-term contracts.

Iberdrola has also increased its interim dividend by 14% to 0.23 euros per share, after reaching this year’s dividend floor for 2025, set at 0.55 euros – this year it has distributed 0.558 euros per share.

Iberdrola’s chairman, Ignacio Galán, also pointed out the positive growth of the strategic plan, at a time when the company has a capitalisation of around 90 billion euros and has a good outlook from investment banks.

Iberdrola currently has 90% of the supply chain secured for grids and renewables until 2026. In offshore wind, the company has already secured 100% of contracts and in grids, 95% by 2026, while it is also securing purchases for 2027 and beyond.

The company has increased its investments, mainly in the United States and the United Kingdom. It closed the purchase of the British company ENW and obtained approval of Avangrid’s shareholders for their merger.

Iberdrola is also set to triple its offshore wind capacity to 6,500 megawatts by 2030, as the company has been awarded two new offshore projects in the UK – East Anglia 2 and 3 – for 1,000 megawatts and one in the US – New England – for 800 megawatts.

Iberdrola has an important portfolio of long-term customers: it has closed long-term contracts for five million megawatts in 2024 and supplies more than 10 terawatts per hour to technology companies.

It also plays a facilitating role in the development of data centres, as it has 615 megawatts with assured connection in Madrid and Aragon and a potential portfolio of five gigawatts. The company has developed a model of alliances, in which Iberdrola will have a minority stake, contributing land, renewable assets, grid connection and long-term contracts with clean energy 24 hours seven days a week.

Record capitalisation

Investors continue to value the company’s good performance. Barely a week ago, Iberdrola’s shares broke the 14 euro per share mark for the first time, setting a new stock market record for the company, bringing the group’s capitalisation to almost 90 billion euros. Specifically, the shares of the energy company closed at over 14 euros, a price that allowed it to surpass by far the sum of all the energy companies on the Ibex-35, consolidating its position as the most valuable electricity company in Europe and the second most valuable in the world.

On Tuesday, Iberdrola announced the acquisition of 88% of Electricity North West (ENW), with the total value of the company – 100% of the company including debt – amounting to approximately five billion euros, making it the second largest electricity network operator in the United Kingdom, according to the energy company. From now on, Iberdrola will distribute electricity to some 12 million people and will have more than 170,000 kilometres of networks. It will also employ more than 8,500 people throughout the country.

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