Spanish power company Iberdrola on Thursday raised its 2023 profit outlook for the second time after a strong performance in Europe and Britain drove a 21% increase in first-half net profit.
The green energy giant is investing heavily in renewable capacity and network assets. It plans to invest 47 billion euros ($52 billion) between 2023 and 2025, with a further 65-75 billion euros for the rest of the decade. That's on top of the roughly 20 billion euros invested in 2021 and 2022.
To raise cash for the plan, it has sold minority stakes in its wind projects, keeping control of the assets.
On Wednesday, it announced the sale of a 49% stake in its 476 megawatt (MW) [Baltic Eagle] offshore wind farm in German waters in the Baltic Sea to Abu Dhabi's Masdar for about 375 million euros. Earlier this year, it reached an agreement to sell gas assets in Mexico for $6 billion.
Investments should accelerate in the second part of the year, reaching around 10-12 billion euros, Executive Chairman Ignacio Galan told analysts in a first-half results call. A similar amount should be earmarked for next year, he said.
Iberdrola has also moved to cut its debt pile, and on Thursday, was upbeat about the next few months.
The net debt outlook for this year has "significantly improved," Chief Financial Officer Jose Sainz told analysts. Net debt is now seen falling to around 42 billion euros by the end of the year, compared with a previous forecast of around 49 billion euros.
The company expects to achieve "high-single-digit net profit growth" this year thanks to a strong performance in the second half, "driven by further investments and new capacity in renewables, positive production forecasts and new rate cases in the U.S. and Brazil," it said. The guidance doesn't include potential gains from asset sales.
In April, it had raised the guidance to "a mid-to-high single-digit increase".
Net profit for the first half rose to 2.52 billion euros from 2.08 billion euros a year earlier.
Asked about the potential impact of Sunday's snap general election in Spain, which ended in political gridlock, Galan said that he doesn't expect significant changes in energy policies, since the European Union plays a key role.
($1 = 0.9083 euros)
(Reuters - Reporting by Pietro Lombardi; Editing by Inti Landauro, Sharon Singleton and Mark Potter)