Iberdrola ((IBDRY)) has held its Q1 earnings call. Read on for the main highlights of the call.
Iberdrola’s recent earnings call revealed a strong financial performance, marked by significant net profit and investment growth. The Networks segment delivered excellent results, contributing positively to the company’s cash flow. Despite these achievements, challenges were noted in the energy production segment and specific regional performances, particularly in Spain.
Significant Net Profit Increase
Iberdrola reported a net profit of €2,004 million for Q1 2025, representing a 26% increase year-on-year, excluding capital gains from the previous year’s divestment of thermal generation. This substantial growth underscores the company’s robust financial health and strategic focus.
Record Investments
The company achieved record investments of €2,720 million in Q1, marking a 14% increase year-on-year. The U.S. and U.K. markets were significant contributors to this growth, highlighting Iberdrola’s strategic expansion in these regions.
Strong Performance in Networks Business
The Networks segment saw a remarkable 43% increase in EBITDA, reaching €2,415 million. This growth was driven by improved performance in the U.K. and U.S., reinforcing the importance of these markets to Iberdrola’s overall strategy.
Positive Cash Flow Growth
Iberdrola’s cash flow increased by 11% to €3,502 million compared to Q1 2024. This growth supports the company’s financial metrics and ratings, providing a solid foundation for future investments and operations.
Expansion in Regulated Asset Base
The regulatory asset base in the U.K. has doubled over five years, reaching €15.5 billion, with expectations to exceed €51 billion by year-end. This expansion reflects Iberdrola’s commitment to strengthening its infrastructure and market presence.
Decreased EBITDA in Energy Production and Customer Business
The energy production and customer business segments faced challenges, with EBITDA falling 9% compared to adjusted Q1 2024. This decline was attributed to margin normalization and lower wind resources.
Reduced Performance in Spain
Iberdrola’s EBITDA in Spain decreased by 70%, partly due to the normalization of margins. This highlights the regional challenges the company faces in maintaining consistent performance across all markets.
Impact of Blackout in Spain
A recent unprecedented blackout in Spain affected operations, but Iberdrola managed to restore service swiftly. This incident underscores the operational challenges and resilience of the company’s infrastructure.
Forward-Looking Guidance
Iberdrola reaffirmed its guidance for mid- to high single-digit net profit growth for the year, excluding asset rotation capital gains. The company anticipates double-digit growth if the recognition of past costs in the U.S. is included. This optimistic outlook is supported by a 12% rise in EBITDA and a 14% surge in investments, particularly in renewables and offshore wind.
In summary, Iberdrola’s earnings call highlighted a strong financial performance with significant growth in net profit and investments. While the Networks segment showed robust results, challenges remain in energy production and regional performances, especially in Spain. The company’s forward-looking guidance remains positive, with expectations of continued growth driven by strategic investments and market expansion.