Iberdrola raises outlook again, sees higher profit growth through 2030

Iberdrola Increases 2030 Profit Outlook with Accelerated Network Investments

Profit Growth and Strategic Investments Drive Iberdrola's Outlook

By Pietro Lombardi

Upgraded Profit Targets for 2023 and Beyond

MADRID, Oct 21 (Reuters) - Europe's largest utility, Iberdrola, on Wednesday raised its profit target for this year for the second time and said it expects profit to grow faster than previously forecast, as its focus on power networks pays off.

The Spanish company now expects adjusted net profit to grow by at least 10% this year, up from previous guidance of more than 8%, adding that it sees adjusted net profit growing at an average annual rate of 10% over the next five years.

Comparison with Previous Forecasts

While Iberdrola has increased profits by double digits every year since 2022, the medium-term outlook is above the one it gave through 2028 and other recent forecasts, which usually guided for single-digit growth.

Strategic Shift Towards Power Networks

The upgraded outlook reflects a strategic shift, years in the making, towards building and upgrading power networks in countries such as Britain and the United States.

Selective Approach to Renewables

Combined with a more selective approach to renewable energy generation projects, this strategy has made Iberdrola Europe's top utility and the world's second-largest by market capitalisation.

Expansion of Regulated Grid Assets

The value of Iberdrola's regulated grid assets worldwide is expected to reach more than €90 billion ($100.97 billion) by the end of the decade from the current €56 billion. The company also plans to add 15 gigawatts of new power capacity by 2030.

Iberdrola will hold a capital markets day in March 2027.

Executive Commentary and Shareholder Returns

"As never before, we are leading the way globally in investing and delivering the electricity infrastructure essential for energy security and economic growth," Executive Chairman Ignacio Sanchez Galan said in a statement.

"Across all our geographies, unprecedented demand is driving accelerated grid build-out to 2030 and beyond."

Dividend and Shareholder Payouts

Iberdrola proposed an interim shareholder payout of €0.275 per share, an increase of 8.7%, with a supplementary dividend to be announced in 2027 after the shareholders' meeting.

Recent Financial Performance

Net profit for the first nine months rose 10% to €5.8 billion, due in part to capital gains from the sale of its assets in Mexico to Spain's Cox group. Excluding the Mexico sale, adjusted net profit was up 9% to €5.1 billion.

($1 = 0.8913 euros)

(Reporting by Pietro Lombardi; Editing by David Latona and Louise Heavens)