Net Profit: EUR2,004 million, up 23% year-on-year. EBITDA: EUR4,343 million, up 12% in like-to-like terms. Investments: EUR2,720 million in Q1, up 14% year-on-year. Cash Flow: Increased by 11% to EUR3,502 million. Regulated Asset Base: EUR49 billion, with a significant contribution from the UK. Revenue: Increased by 1%, mainly in the Network business. Gross Margin: Increased by 5% to EUR7.2 billion. Net Operating Expenses: Decreased by 10.4% excluding divestments. Network EBITDA: Grew 43% to EUR2,415 million. Renewable Investments: Increased by 7% to EUR1,064 million. Funds from Operations (FFO): Increased by 11% to EUR3,502 million. Liquidity: EUR21 billion, covering 19 months of financial needs.

Warning! GuruFocus has detected 8 Warning Signs with IBDRY.

Release Date: April 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Iberdrola SA (IBDRY) reported a 23% year-on-year increase in net profit, reaching EUR2,004 million, excluding capital gains from last year's divestment of thermal generation. The company achieved a record investment of EUR2,720 million in the first quarter, with significant growth in the US and UK, representing two-thirds of total investment. EBITDA increased by 12% to EUR4,343 million, driven by strong performance in Networks and higher generation volumes from new assets in the US, Iberia, and globally. Iberdrola SA (IBDRY) secured more than 4 terawatt hours per annum in new Power Purchase Agreements (PPAs) with Tier 1 customers, enhancing future revenue stability. The company's liquidity remains robust at EUR21 billion, sufficient to cover 19 months of financial needs, supporting its financial stability and investment plans.

Negative Points

EBITDA in Spain decreased by 70%, primarily due to margin normalization, impacting overall financial performance in the region. The energy production and customer business in Spain contributed less in the first quarter compared to the previous year, affected by lower hydro and wind production. The company's EBITDA in the UK fell by 17.2% due to lower wind resources and prices, partially offset by reduced windfall tax. In Brazil, EBITDA decreased by 40% due to lower thermal contribution, impacting the overall performance in the region. The impact of new tariffs in the US is expected to increase group investment costs by up to $130 million, although this is within planned contingency levels.

Q & A Highlights

Q: Can you please provide a little more clarity on the net profit guidance for the end of 2025? A: We reaffirm our mid- to high single-digit growth guidance, excluding the past cost recognition in the US. Including this impact, we expect net profit to grow at double digits. In all cases, guidance excludes capital gains from asset rotations. - Jose Ignacio Sanchez Galan, Executive Chairman of the Board

Story Continues

Q: Could you explain the key elements that will provide the mid- to high single-digit growth for this year? A: Key elements include actions taken in 2024, such as the electricity transaction and full acquisition of Avangrid minorities, efficiency measures, and organic growth. We expect a higher regulated asset base surpassing EUR51 billion and more than 4,000 megawatts of new capacity contributing to EBITDA. - Jose Ignacio Sanchez Galan, Executive Chairman of the Board

Q: Could you provide your opinion on the recent blackout in Spain and its potential recurrence? A: The blackout's cause should be clarified by the system operator. Our generation fleet was ready and at the disposal of Red Electrica. Our team did an excellent job restoring service quickly. - Jose Ignacio Sanchez Galan, Executive Chairman of the Board

Q: Has the recent US administration's measures changed your view on the country, and what is the future of renewable projects there? A: We have a strong presence in the US with over $50 billion in assets. The US is focused on promoting infrastructure investment, which aligns with our main business in Networks. We see huge opportunities and continue to invest significantly. - Jose Ignacio Sanchez Galan, Executive Chairman of the Board

Q: Do you expect any impact on your offshore projects in the US from the government's decision to stop construction of several power plants? A: Our construction is progressing well, and we expect to finalize before year-end. We have several turbines exporting energy to the grid, and we are confident in completing the project by year-end. - Jose Ignacio Sanchez Galan, Executive Chairman of the Board

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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