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Iberdrola’s net profit surges by 13% on the back of strong renewables and network performance

Image: Iberdrola.

Image: Iberdrola.

Spanish energy giant Iberdrola saw increases in profit across all of its markets in 2019, including in the UK.

The company, which owns UK supplier ScottishPower, saw a 13% increase in net profit, largely due to strong renewables performance. This drove its EBITA to €10 billion, and its annual net profits up by 13% to €3.4 billion according to its financial statement for 2019, released today (26 February).

In the UK, net profit hit €409.5 million, an increase from €388.9 million in 2018. The gross margin for renewables was up 5.3% at €677.6 million. This is due to a 1.6% increase in wind production, driven by offshore wind, and higher prices.

However the company continued to lose customers in the UK, with 19,539GWh of electricity supplied to customers, down 9.1% on year-end 2018 as its contracts fell to 2,816,000.

As such its gross margin for supply fell to €684.4 million (-20.7%), due to smaller margins and a drop of 9.7% in sales of electricity.

A total of 33,670GWh of energy was distributed in 2019 by ScottishPower, down slightly, by 2.9% on 2018. The company states that this is mainly due to mild winter weather.

The company’s struggles in the supply side were offset by its networks focused business, ScottishPower Energy Networks, which reached a gross margin of €1,310.7 million in 2019. This is up 7.2%, due to higher revenues from transmission and distribution as a result of a larger asset base, said Iberdrola.

The company’s Regulatory Asset Base (RAB) increased in the UK to £6.7 billion, from £6.5 billion in 2018.

By the end of 2019, Iberdrola had 2,520MW of renewable energy in the UK, predominantly onshore wind. It is continuing to invest in bringing more projects online in the coming year.

During 2019, renewable production was down slightly in the UK to 4,640GWh. There was a decrease of 2.8% in onshore wind, largely due to a breakdown according to the company.

The results follow a strong year for Iberdrola. In July it upgraded its net profit expectations for the year after multi-billion-euro investments in renewables and networks drove the company forward.

Following this, its profits continued to surge through the year thanks to the strong performance of renewables and networks. Iberdrola posted a 20% surge in net profit for the first nine months of 2019, to €2.5 billion.

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