Iberdrola's profit jumps in H1 2024, FY outlook lifted again

Spanish utility Iberdrola SA (BME:IBE) posted a reported net profit of EUR 4.13 billion (USD 4.48bn) for the first half of 2024, jacked up by 64% year-on-year on the multi-billion-dollar sale of power plants in Mexico earlier this year.

Without the capital gains from the Mexico deal, which added EUR 1.7 billion to the net profit level, the bottom line of close to EUR 3 billion was still higher by 18% compared to the year-ago period, Iberdrola said on Wednesday.

Reported EBITDA rose by 27.2% to EUR 9.61 billion on the Mexico capital gains. Excluding the extraordinary impact of the deal, reported EBITDA stood at EUR 7.9 billion, higher by 9% compared to the same six-month period last year.

Revenues fell by 13.8% to EUR 22.6 billion. Cheaper procurement costs, down 28% year-on-year, offset the decline in revenues, boosting gross income by 3% to EUR 12.5 billion.

As previously reported, power production from Iberdrola’s renewables around the worldwide rose by 5.3% to 45,181 GWh from January through June. Spain and the market known as the Rest of the World (ROW) experienced the highest increase in output during this period. In Spain, the production growth was led by hydroelectric plants, while the ROW market benefited from the commissioning of the 496-MW Saint-Brieuc offshore wind farm in France.

Financial performance of Iberdrola’s renewables is included in the electricity production and customers business segment. Figures for this business are presented in the table below:

Other figures of note in Iberdrola’s earnings report are record-high investments for a first-half-year period, which increased by 16% year-on-year to EUR 5.28 billion. Over 90% of the amount went to support grids and renewables, with the latter receiving EUR 2.16 billion.

Backed by “strong operational performance” and the profitable first quarter, Iberdrola again raised the net profit outlook for the fiscal year 2024, anticipating new capacity additions in the second half of the year. The utility now forecasts a double-digit net profit growth in 2024, excluding capital gains from asset rotation, after previously setting the bar at high-single digits.

Iberdrola Executive Chairman Ignacio Galan said: “Record renewables production and robust performance in our networks business has helped to deliver a strong set of results for the first half of 2024. We have also invested more than ever before in the first 6 months which will drive benefits in the second half of the year, in terms of new renewables capacity and a higher rate base in networks. This allows us to increase our profit guidance for the year”.

(EUR 1.0 = USD 1.085)

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