Iberdrola's Net Profit Soars by 50% in the First Nine Months of 2024

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Iberdrola's Net Profit Soars by 50% in the First Nine Months of 2024

Iberdrola (BME: IBE) reported a significant increase in its financial performance for the first nine months of 2024. The company’s net profit rose by 50% to €5.471 billion, while EBITDA grew by 23% to €13.269 billion.

These strong results were driven by performance improvements across all business segments, particularly Networks, and were supported by the company's strategic investments and commitment to renewable energy. Iberdrola also raised its net profit forecast for the year to approximately €5.5 billion.

Key Points:

  • Iberdrola’s net profit for the first nine months of 2024 increased by 50% year-on-year to €5.471 billion.
  • EBITDA reached €13.269 billion, up by 23%, while recurrent EBITDA grew by 11%.
  • The company's cash flow increased by 69%, providing a strong liquidity position of over €22 billion.
  • Investments reached €8.6 billion, with a significant portion focused on Networks and renewable energy projects.
  • Shareholder dividends rose by 14% to €0.23 per share.
  • Iberdrola complies with the European Securities and Markets Authority’s tightened ESG investment labeling rules.

Company Outlook:

  • Iberdrola raised its net profit forecast for the year to approximately €5.5 billion.
  • A Capital Markets Day is planned to present updated growth targets, scheduled for autumn 2025.
  • An asset rotation worth approximately €2 billion is expected by early 2025.

Negative Aspects:

  • Regulatory concerns in Spain and the potential impact of the U.S. elections on operations were noted.
  • Supply chain constraints affecting vessel availability for offshore projects were acknowledged.

Positive Aspects:

  • Strong performance across all business segments, particularly Networks, due to tariff increases.
  • Two new offshore wind projects with a total capacity of 1,100 megawatts have been secured, set to start operations between 2028 and 2029.
  • Nearly 85% of energy production during the period was emissions-free.

Shortcomings:

  • Non-recurrent items amounting to €254 million, primarily related to activated interest and regulatory assets.
  • A decline in foreign exchange contributions compared to the previous year.

Q&A Highlights:

  • Executives confirmed tariff cases set for 2025 and 2026 in the U.S. Networks sector.
  • Electricity demand is rising due to electrification across various sectors.
  • Iberdrola is currently not pursuing additional mergers and acquisitions, focusing instead on integrating recent acquisitions.

Iberdrola's strong financial performance is a testament to the company's strategic focus on Networks and renewable energy investments. With its interim dividend increase and positive outlook for net profit, Iberdrola is positioning itself for sustainable growth in the electrification and renewable energy sectors. Despite challenges posed by regulatory concerns and supply chain constraints, the company remains confident in its operational strategy and future plans.