By Nicholas Earl
Scottish Power’s parent company Iberdrola has posted robust first quarter profit of £1.32bn, a 40 per cent hike on the £940m earnings it posted for the same three months last year.
Iberdrola’s hefty earnings comes of the back of an improved performance in its renewables division and the recovery of retail deficits in the UK.
The firm, which is Spain’s biggest utility provider, now expects profit to grow by mid- to high-single-digit this year, up from a previous outlook of mid-single-digit growth.
This based on an acceleration of investments in the next three quarters and improved business conditions.
However, its earnings will be tapered slightly by a new Spanish tax on revenues, as the country looks to ease the burden of household energy bills and the cost of living on customers.
Increased output from wind, solar, hydro, and nuclear compared to last year has resulted in lower spot market energy purchases to fulfil customer demand – easing pressure on Iberdrola’s margins.
The results also include £265m in pre-tax proceeds from the recovery of outstanding credit in the balances of Scottish Power customers, generated in in the UK during the energy crisis.
Planned organic investments have also increased to £10.6bn during 2023, with 60 per cent of planned renewable capacity under construction or secured and 100 per cent of networks investments agreed or in advanced negotiations.
It will also look to scale up its co-investment partnership with Singapore’s sovereign fund to invest in transmissions in Brazil.
Commenting on the results, Ignacio Galán, executive chairman of Iberdrola, said: “The first quarter has seen strong operating performance across the world, with normalisation of renewable production and continuing stabilisation in wholesale and retail markets after the challenges experienced in the same period last year.
“We are now seeing faster progress on energy policy and regulation, driven by green energy security in most of the countries where we operate. We are well positioned to support the acceleration of electrification in our key markets, and we remain fully committed to growing our business with more renewables, more networks and more storage in countries with ambitious targets and stable regulations.”
Iberdrola kicks off the latest round of quarterly updates from energy majors, with Chevron and Exxon Mobil also expected to post results later this week.
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