Iberdrola increased its net profit by 17.2% up to September compared to the same period last year, to 3,637 million euros, thanks to higher production and lower energy purchases.
According to the National Securities Market Commission (CNMV), the electricity company, which is involved in legal proceedings in the National Court for the manipulation of electricity prices, reported on Thursday that gross operating profit grew by 13.2% to 10.783 billion euros in the first nine months of the year, including the annual impact of the new 1.2% tax on sales in Spain, 213 million, and other smaller effects, such as the higher hydroelectric canon and the higher expenditure on the social bonus.
Iberdrola raises its dividend
The company, which has announced that after reaching this year’s dividend floor for 2025 it will increase the interim dividend in 2023 by 11% to 20 euro cents per share, has improved its net profit forecast for the year to double digits, excluding any additional capital gains from asset rotations.
Iberdrola reported gross capex of 10.842 billion euros in the last 12 months, with regulated asset base (RAB) growth in the networks business of 9% to 41.2 billion, installing 3,100 megawatts (MW) of renewables in the last twelve months to a total of 41,300 MW.
Turnover fell by 1.9% to 37,193 million euros, while net operating expenses were 4,340.6 million, up 14.5%, due to the effect of the excess pension provision recorded in 2022 in the United States and the impact of the cancellation of the Park City Wind and Commonwealth Wind projects.
Excluding these impacts, net operating expenses would grow by only 6.5%, according to the utility.
213 million euros of excise tax on energy companies
As for taxes, this item totalled 2,076 million euros in the first nine months of 2023, including the impact of the 1.2% tax on sales in Spain, 213 million euros, applicable for two years, and which PSOE and Sumar announced this week, in their agreement to renew the coalition government in Spain, that they want to renew it, along with the extraordinary tax on banks.
Iberdrola has also had to pay more for the hydroelectric tax due to the increase in production with this technology and has had a higher expenditure on the social bonus, with the extension in March 2022 of the discounts on the bill for vulnerable customers who are beneficiaries.
Iberdrola’s depreciation and amortisation charge increased by 1.9% to €3,494.6 million to September compared to the first nine months of 2022, due to the group’s larger asset base, while provisions increased by €40.8 million to €475.6 million, due to higher provisions for bad debts as a result of higher turnover.
Electricity sales in the first nine months of 2023 declined by 3.3% due to lower spot and forward market sales.
Iberdrola’s adjusted net financial debt at the end of September stood at 47,951 million euros, 8.3% higher than in September 2022, due to the investment effort and the evolution of exchange rates.
The liquidity position of the Iberdrola group, which has announced that it will hold its Capital Markets Day next March, is 20,204 million euros, which allows it to cover financial needs for 21 months without resorting to the market in the base case and 16 months in the risk case.