Iberdrola forecasts record profits whilst investing in renewables and other countries

Iberdrola expects to earn between 8% and 10% more in 2025 than it will in 2022. The company presented its new roadmap to investors in which it plans to invest up to 47 billion, focusing on renewable energy.

Of this amount, up to 17 billion euro will be allocated to the improvement and implementation of renewable energies in all its markets. “We have to abandon fossil fuels and electrify the economy,” said the president of the electricity company, Ignacio Sánchez Galán. The largest electricity company in Spain will put 27 billion euro on the table to improve networks.

By the end of the decade, Iberdrola expects to exceed 65 billion euro in network assets and 100,000 MW of capacity, more than 80% renewable, thanks to new investments of between 65 and 75 billion between 2026 and 2030.

Regarding the benefits that the company expects to obtain, Ignacio Sánchez Galán has indicated that the company will earn between 5,2 and 5,4 billion, that is, between 8 and 10% more per year, as indicated previously.

This increase in profits will mean a higher return to its shareholders. Thus, the dividend will grow in line with the net profit (65-75% pay-out) with a forecast of reaching between 0.55-0.58 euro per share in 2025, with a floor of 0.46 euro in 2023- 24 and 0.50 euro in 2025.

The president of the company, on the other hand, has confirmed what he has been warning for months: Spain is less and less important for Iberdrola.

The United States will be the main investment destination (47%, including organic investments and the integration of PNM Resources), followed by the United Kingdom (16%), Spain (13%) and Latin America (11%). The company will promote its presence in other European markets such as Germany and France, and also in Australia, to which it will allocate 13% of the total investment.

In recent quarters, the United States and the United Kingdom have dominated the announcements of the most investments. It should be remembered that in the last presentation of results, Iberdrola assured that Spain is the worst of the markets in which it operates.

All in all, In Spain, investments will exceed 6 billion euro in three years, in line with the average of recent years, but far from the amounts that Iberdrola will allocate to other markets.

Iberdrola plans to maintain a stable electricity price policy for its customers in Spain until 2025, in the range of 65-70 euro per megawatt hour (MWh), not linked and lower than wholesale market prices.

According to the data provided by the group on the occasion of its Capital Markets Day, which was celebrated on Wednesday in London, the energy company estimates these revenues per client, for a production already sold at 100% for this year, at 90% for 2023, at 70% by 2024 and 55% by 2025.

Last March, the Government approved reducing the benefits received by electricity companies in the new fixed-price bilateral term contracts that they enter into that exceed 67 euro/MWh.