Iberdrola breaks all investment records in June with 5,276 million euros
- Greater commitment to society
- Commitment to the 2024-2026 Strategic Plan
- Growth coupled with financial strength
- Improved outlook for 2024 and optimal long-term position
Historic investments: more activity and employment and a reduction in emissions
- Investments grew by 16% in the first half of the year to 5,276 million euros.
- Purchases of more than 7,000 million euros from tens of thousands of suppliers, supporting more than half a million jobs worldwide.
- Contribution to public coffers grows by 20%: 5.3 billion euros in the first half of the year.
- Record renewable production reduces emissions in Europe to just 26 gCO2 /kWh. Nearly 90% of production is already emission-free.
Strong growth
- Reported net profit amounted to EUR 4,134 million, up 64%, and reported EBITDA grew by 27% to EUR 9,614 million.
- Recurring EBITDA increased 9% to EUR 7,897 million in the first half.
- Operational growth driven by:
- Increased network asset base and new tariff frameworks in the US, UK and Brazil.
- Record highs in renewable production.
- Recurrent growth in pumped storage production, which reached 3,000 GWh in 6 months in the Iberian Peninsula (25% of total hydroelectric production) and enables optimal integration of renewables into the system.
- The increase in the portfolio of PPAs with industrial customers and the improvement in the commercial markets of the Iberian Peninsula and the United Kingdom.
Growth and financial strength
- Total cash flow increased by 98% to Euro 11,362 million. Recurrent cash flow reached EUR 5,925 million.
- Balance sheet strength: financial soundness improved, and liquidity stood at EUR 21,700 million, covering 24 months without the need for new financing.
- The sale of assets in Mexico was completed for more than EUR 5,400 million, with capital gains of EUR 1,165 million after tax recorded in the income statement for the first half.
Investment plan
- The United States and the United Kingdom account for 56% of the investments. The Iberian Peninsula receives 19%, Latin America 15% and other European countries and Australia the remaining 10%.
- Investments in electricity grids account for 51% of the total. More than 2,700 million invested in grids (+23%), with a strong increase in transmission grids. The company now has more than 43,300 million euros in regulated network assets.
- Incorporation of 3,100 MW of renewable capacity, reaching 43,400 MW.
- 800 MW of new offshore wind capacity in France, Germany and the United States: installed capacity in this technology grew by 60% in the first half of the year to 2,300 MW. Projects under construction in the US, Germany and the UK are on schedule.
Shareholder remuneration
- Shareholder remuneration increased by 11.4% to EUR 0.558 per share. A final dividend of EUR 0.351 per share will be paid on 29 July.
- Improved earnings forecast for 2024
- Double-digit increase in net profit forecast for 2024, excluding capital gains from asset rotation, thanks to the contribution of new network investments, tariff revisions in the US, UK and Brazil and 1,600 MW of renewables under construction.
Optimally positioned to take advantage of electrification in the medium to long term
- Global network investment needs to double by 2030: the company is already closing transmission and distribution investment plans in the UK and US for the next decade.
- Steady growth in storage needs: the company has more than 100 million kWh of storage operational, 20 million kWh under construction and a further 150 million kWh for future projects.
- Exponential increase in electricity needs for data centres: Iberdrola has already committed 8,000 GWh per year to large technology companies.
- Click here to watch the webcast of the Results Presentation
Iberdrola is making steady progress on its 2024-2026 Strategic Plan. The company, which today presented its results for the first half of the year, has made record investments of 5,276 million euros, 16% more than in the same period last year.
Thanks to this investment effort, net profit amounted to 4,134 million euros in the first half of 2024. Gross operating profit (Ebitda) reached 9,614 million euros, 27% higher than in the same period of the previous year. Excluding the sale of assets in Mexico, Ebitda was EUR 7,897 million, 9% more than in the same period of 2008.
Profit growth was driven by an increase in the network asset base and new tariff frameworks in the US, UK and Brazil. In addition, the company recorded record renewable production and recurrent growth in hydroelectric storage, which reached 3,000 GWh in six months in the Iberian Peninsula (25% of total hydroelectric production), enabling the integration of renewables into the system.
Another factor that has enabled operational growth has been the significant increase in the PPA portfolio (clean energy purchase agreements) with industrial customers and the improvement in the commercial markets of the Iberian Peninsula and the United Kingdom.
Greater commitment to society
Iberdrola continued to contribute to creating value in all areas of society. In the first half of the year, it made purchases of more than 7,000 million euros from tens of thousands of suppliers, which generates a significant leverage effect on society, enabling it to support more than half a million jobs around the world.
In addition, the contribution to the public coffers worldwide has grown by 20% in the first half of the year, reaching 5.3 billion euros.
The company continues to drive forward its commitment to decarbonisation. Record renewable production has reduced emissions in Europe to 26 gCO2 /kWh. As a result, nearly 90% of Iberdrola's production is now emission-free. Iberdrola generates 100% emission-free energy in the United Kingdom, Brazil, France, Italy, Germany, Poland, Portugal, Greece and Bulgaria.
Commitment to the 2024-2026 Strategic Plan
The company is making firm progress in its Strategic Plan 24/26 presented last March. Of the EUR 5,276 million invested by the company in the first half, 56% of the investments went to the United States and the United Kingdom, 19% to the Iberian Peninsula, 15% to Latin America, and 10% to other European countries and Australia.
By business, the networks area received 51% of the investments, reaching 2,708 million euros in the first half of 2024, an increase of 23% compared to the same period of the previous year. It is worth highlighting the 63% increase in investments in transmission grids, which now account for 39% of total investments in this area. As a result, the network asset base reached 43,300 million euros, 7% more than at the end of the first half of 2023.
Investments in renewables grew by 10% in the first half of the year, reaching EUR 2,167 million. Thanks to these investments, the group has added 3,100 MW of new renewables, exceeding 43,400 MW worldwide. In the last 12 months, some 800 MW of offshore wind power have been installed, an increase of 60% compared to the same period last year, with the incorporation of Saint Brieuc (France), and the first wind turbines in operation at the Vineyard Wind 1 (USA) and Baltic Eagle (Germany) farms, bringing the total to 2,300 MW.
With this progress, the offshore wind projects envisaged in the 24-26 strategic plan are now secured and under construction, and 4,800 new MW are expected to be operational by 2026, contributing EUR 1.8 billion to EBITDA by 2026, compared to EUR 400 million in the first half of the year.
Growth coupled with financial strength
Iberdrola has accelerated the pace of its investments, while maintaining the solidity of its balance sheet. Thanks to the good performance of the company's business and the sale of the Mexican business, the group has achieved an operating cash flow of 11,362 million euros in just six months, compared to 5,731 million euros in the same period last year, an increase of 98%.
The sale of assets in Mexico generated proceeds of more than EUR 5,400 million, with capital gains of EUR 1,165 million after tax recorded in the income statement for the first half.
The group once again demonstrated its leadership in sustainable financing with an increase of 10 basis points in the cash flow to net debt ratio compared to the first half of 2023, to 25%, and obtaining EUR 4,800 million in new financing, bringing liquidity to EUR 21,700 million. Iberdrola could thus cover 24 months of financing needs without resorting to the market.
In addition, as approved at the General Shareholders' Meeting, the company has increased shareholder remuneration by 11.4% to 0.558 euros per share against 2023 results. In fact, on 29 July the company will pay a final dividend of 0.351 euros per share.
Iberdrola has already reached the dividend floor of 0.55 euros per share set in the strategic plan, and the company expects it to rise to a range of between 0.61 and 0.66 euros per share in 2026.
Improved outlook for 2024 and optimal long-term position
In this context, Iberdrola's chairman, Ignacio Galán, has upgraded the outlook for 2024 to double-digit net profit growth (excluding any capital gains from asset rotations) from €4,803 million in 2023, thanks to the contribution of new investments in networks, tariff revisions in the US, UK and Brazil and the 1,600 MW of renewables under construction.
The chairman stressed that the company is well positioned to take advantage of new opportunities in all business areas. According to international organisations, global network investment needs will double by 2030, so the company is already closing investment plans in transmission and distribution in the United Kingdom and the United States for the next decade.
Furthermore, in the current market context, Iberdrola has more than 100 million kWh of storage, in addition to 20 million kWh under construction and 150 million kWh for future projects to capture the value of renewables and reduce price volatility.
Moreover, given the exponential increase in electricity needs for data centres, Iberdrola is in a unique position, as it has already committed 8,000 GWh per year to large technology companies.
