Iberdrola is making steady progress on its 2023-2025 Strategic Plan. The company has demonstrated its positive evolution during the presentation of its third quarter results. Iberdrola posted net profit of Euro 3,637 million in the first nine months of 2023, up 17% year-on-year and 22% excluding the extraordinary gain from the sale of part of the business in Mexico.
Gross operating profit (Ebitda) increased 13% to EUR 10,783 million in the first nine months, driven by a diversified growth model, solid project execution and increased financial strength.
Thanks to investments of around 11,000 million euros (10,842 million euros in the last 12 months), the company has increased its network assets by 9% to 41,300 million euros and has installed 3,100 MW of renewable energy.
The chairman highlighted the positive evolution of the business. "The execution of the strategy presented last November is allowing us to grow, preserve our financial strength and increase the dividend", said Ignacio Galán.
The company has improved its net profit forecast for 2023 to double digits (excluding any additional capital gains from asset rotation), driven by higher production and new renewable capacity, the normalisation of commercial activity, the increase in tariffs in the network business and despite the complex macroeconomic context. Assets will reach EUR 150 billion by the end of the year.
In addition, it has increased the interim dividend for 2023 results by 11%, to EUR 0.20 per share, after reaching this year's dividend floor for 2025.
2023-2025 business plan that anticipates the current macroeconomic context
The chairman also highlighted the positive evolution of the strategic plan. By business area, network assets amounted to EUR 41,300 million at September, with regulatory frameworks 96% closed by 2025. Iberdrola has guaranteed 85% of the grid supply chain by 2025, a percentage that rises to 100% in transmission projects.
In renewables, installed capacity grew by 3,100 MW in the last 12 months and it has 8,000 MW under construction. In addition, it has 100% of the supply chain assured for 2025 in this area.
Another of its other main businesses is offshore wind, which will reach 3,100 MW in 2025 and 4,800 MW in 2026/27. The company has 3,500 MW under construction, representing an investment of 10,000 million euros. It is also on schedule, with an assured supply chain and 100% of the energy sold through PPAs and CFDs within 15 to 20 years. This technology will contribute €1.9bn to EBITDA in 2026/27, up from €700m in 2022.
Thanks to a mature offshore wind portfolio at competitive costs (€60/kW), the company has opportunities beyond 2027: 3,600 MW of licensed projects in the UK and US, plus 8,000 MW of seabed rights.
The renewables business is currently complemented by a significant development of storage in hydro power plants, enabling the integration of more renewables capacity as part of the future energy mix. In fact, it is making progress in the full development of this new capacity, taking advantage of the 100 million kWh Iberdrola has in operation, with 20 million kWh under construction.
At present, the company has reached the EUR 7,500 million forecast in the asset and alliance rotation plan for 2025, which has enabled it to strengthen its balance sheet and maximise access to new growth opportunities.
Sound balance sheet and good financial strength
Business growth has been accompanied by financial strength. The company has again strengthened its balance sheet with almost EUR 6 billion of financing in the first nine months, on favourable terms. As a result, operating cash flow increased by 11% to EUR 11,103 million in the first nine months of the year, bringing the FFO/net debt ratio to 23.2%.
It also has liquidity of 20,204 million euros, which would allow it to cover 21 months of financing needs without resorting to the market.
Iberdrola has announced that the next Capital Markets Day will be held in March.