Iberdrola's profit rises in first half due to asset sales

Spanish energy giant Iberdrola posted a sharp rise in profits in the first half of the year, up 64% year-on-year, thanks to major asset sales and an increase in its electricity production, especially from hydroelectric power.

The Spanish flagship, which has become one of the world's leading renewable energy companies, generated 4.134 billion euros (4.485 billion dollars) in net profit between January and June, up from 2.52 billion in the first half of 2023, according to results released by the company on Wednesday.

In the second quarter alone, its profit reached 1.37 billion euros, a level above the expectations of analysts polled by financial information provider Factset, who had expected an average of 1.22 billion euros.

Iberdrola achieved these results despite a sharp fall in the company's turnover, which peaked at 22.637 billion euros (24.558 billion dollars), down from 26.263 billion a year ago, against a backdrop of falling oil prices in its main markets.

The sharp increase in profit during the first half of the year is largely due to the sale to the Mexican government of 13 power plants that Iberdrola owned in Mexico, a transaction concluded after a long confrontation with the government of the Latin American country.

The sale, for 6,000 million dollars and which became effective at the end of February, meant an extraordinary contribution of 1,720 million euros to the company's net profit in the first half of the year, Iberdrola said in its press release.

The increase in profit is also linked, according to the group, to the good operating results of recent months, driven by strong hydroelectric production in Spain (+49%) and by the increase in its installed capacity in renewable energies.

The energy giant, which generated a record profit of 4.8 billion euros last year, says it has increased this capacity to more than 43.4 gigawatts (GW) by the end of the first half of 2024, having added almost 3.1 GW of new installations in the last 12 months.

Iberdrola operates in dozens of countries, mainly in Spain, the United Kingdom, the United States, Brazil and Mexico.