Iberdrola SA reported better-than-expected earnings as its network business boomed, vindicating a decision to ramp up power-grid investment.
(Bloomberg) — Iberdrola SA reported better-than-expected earnings as its network business boomed, vindicating a decision to ramp up power-grid investment.
A focus on regulated assets from the US to Brazil ensured steady returns last year as the war in Ukraine roiled markets and inflationary pressures mounted. Iberdrola’s results follow a strong showing by many European peers, with EON SE, RWE AG and Centrica Plc all beating profit estimates in recent weeks.
Shares dropped as much as 1.1% by 11:56 a.m. in Madrid, in line with a decline of the broader Stoxx 600 Utilities index, which trades 1.3% lower.
The firm’s net income rose 11.7% to €4.34 billion ($4.6 billion) in 2022, beating analyst estimates of €4.25 billion, in spite of a 19% decline in its home market of Spain. Iberdrola’s networks business reported a profit of €2.19 billion after €1.47 billion the previous year, it said in a statement Wednesday.
The Bilbao-based company expects net income to grow by 8% to 10% this year excluding the impact of Spain’s tax on domestic revenue, or by mid-single-digits if the levy is taken into account. Â
Read more from BI: Iberdrola 2022 Affirms Defensive Aim, M&A Catalyst Ahead
In November, Spain’s biggest utility said it would allocate €27 billion over the next three years to power grids, expanding and strengthening capacity as more renewable energy flows into the system and industries electrify. That outlay is more than half of its total investments planned for the period.
Iberdrola operates electricity networks in Europe and the Americas. In the US and Brazil, especially, it has benefited from currency tailwinds over the past year.
(Adds share price move, additional details on outlook from third paragraph.)
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