Iberdrola Reveals Strong Financial Growth for H1 2024

In a recent earnings call, Iberdrola reported impressive growth for the first half of 2024, with net profit skyrocketing by 64% to €4.134 billion and EBITDA rising by 27% to €9.614 billion compared to the previous year. These results were significantly influenced by extraordinary items, particularly a capital gain from a transaction in Mexico.

The company highlighted its robust operating performance across various sectors, with record investments in electrification opportunities and nearly double the cash flow from the previous year. Shareholders can expect increased remuneration, with a dividend complement of €0.351 per share set to be paid in late July.

Key Insights

• Financial Performance: Net profit increased to €4.134 billion, up 64%, with EBITDA reaching €9.614 billion, a 27% rise.
• Extraordinary Gains: The financial results were notably impacted by capital gains from a transaction in Mexico.
• Record Investments: A total of €5.276 billion was invested, focusing on offshore wind and new transmission infrastructure in the US and UK.
• Shareholder Returns: Shareholder remuneration increased by 11.4%, with a complementary dividend of €0.351 per share.
• Sector Commitment: The company is enthusiastic about the growth prospects in electric mobility and plans to expand its charging infrastructure.
• Investment in Storage: Iberdrola is committed to enhancing storage infrastructure to cater to the rising demand from sectors such as data centers and electric mobility.

Future Outlook

• Iberdrola anticipates double-digit growth in reported net profit for the full year, excluding capital gains from asset rotation.
• Continued investments in pumped storage facilities and batteries are expected to support the demand for storage infrastructure.
• The company plans to install a minimum of 3,000 megawatts of storage by 2030 in strategic locations including the US, UK, and Australia.

Challenges to Watch

• A decline in solar production in Spain was noted, although there were no curtailments reported.
• Increased competition within the retail sector has affected customer numbers and profit margins.

Positive Trends

• There is strong demand anticipated in the electrification sector, with substantial growth opportunities identified.
• Relations with the new UK and US governments are viewed positively, which is expected to enhance business operations.
• The Networks segment reported a 5% increase in EBITDA.

Highlights from the Q&A Session

• CEO Ignacio Galán reaffirmed the company’s commitment to producing nuclear power, adjusting output based on market conditions.
• The company welcomes the increased competition in the retail sector while maintaining leadership with over 10 million power contracts in Spain.
• Discussions regarding regulatory frameworks in both the UK and Spain are ongoing, with positive outlooks for network investments reported in Spain.
• Construction of Vineyard Wind 1 continues, despite a specific issue concerning one blade, which remains under GE’s responsibility.

Iberdrola’s financial results for the first half of 2024 illustrate its strong position within the energy sector while capitalizing on growth opportunities and maintaining a sustainable investment strategy. The company’s focus on electrification, renewable energy, and infrastructure development positions it well for future success. With a commitment to enhancing shareholder value and a clear strategic vision, Iberdrola is confidently navigating the evolving energy landscape.