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"Ignacio Galán: Iberdrola Renovables Is In The Right Place At The Right Time"

26/06/2008

The Chairman told the Shareholders Meeting that an €18.8 billion investment plan will help revitalize the economy and Spanish industry

 “IGNACIO GALÁN: IBERDROLA RENOVABLES IS IN THE RIGHT PLACE AT THE RIGHT TIME”

  •  “2007 has been an historic year for the Company,” said Galán, who added that IBERDROLA RENOVABLES expects to achieve a net profit of €1 billion in 2012 and a payout similar to the current Iberdrola Group ratio in that year
  • Galán said the transfer of IBERDROLA RENOVABLES headquarters to Valencia “reflects the policy of reorganizing Group decision-making centres and “will bring a competitive advantage for the Company”
  • Xabier Viteri, CEO of IBERDROLA RENOVABLES, said profit in the first half of  2008 surpassed that for all of 2007, with EBITDA of approx. €570 million and net profit of €170 million

“IBERDROLA RENOVABLES is a business enterprise in the right place and at the right time”, Chairman Ignacio Galán said this morning in an address to the Company’s first General Shareholders Meeting after its recent stock market listing, held at the  Recinto Ferial Juan Carlos I in Madrid.

Galán based his comments on the current world energy context, in which “all available energy sources are essential and will continue to be so, especially those that offer clean, secure, sustainable and self-sufficient supply, as is the case with renewables.”

This scenario, with demand expected to double in the next 20 years, reserves of primary energy sources in decline and oil prices that have hit record levels of around $140 per barrel “will substantially alter the relative competitiveness of electrical energy technologies, with those less intensive in consumption of fossil fuels and CO2 emissions becoming the most economically efficient”.
Galán said “there is a growing social awareness that renewables are part of the answer to the energy challenge,” and praised the government’s extension of the financial regime for renewables last year in Spain, “creating a framework of stability and predictability that reaffirms the country’s commitment to these technologies.“

The Chairman of IBERDROLA RENOVABLES also highlighted the recent government announcement of a new Renewable Energy Plan 2011-2020, to be supported by a new Renewable Energy and Energy Efficiency Law.

“We welcome this new impulse for clean production technologies because we are convinced that this is a great opportunity for Spain to have a strong, competitive and solid renewable energy sector, capable of contributing significantly to sustainable growth in our economy and meeting its environmental goals, “ said Galán.

A year for the history books

“2007 has been an historic year for IBERDROLA RENOVABLES marking the beginnings of this excellent business enterprise,” Galán said, drawing attention to the “magnificent present and brilliant future of a company that from its creation has been undisputed world leader in its sector*.”

The Company’s chairman acknowledged the “great and intense effort” made by employees last year, founded on IBERDROLA’s strategic decision seven years ago to promote renewables. This culminated with the stock market listing on 13 December 2007 for the renewables subsidiary, “the largest ever carried out in Spain and whose proceeds are being assigned to finance the Company’s ambitious growth plans.

Once again, Galan said, the listing of IBERDROLA RENOVABLES shares “has paved the way for new approaches now being adopted by other companies. Anticipation and efficient execution have been decisive in the important achievements of our Company in its short history.”

CEO Xabier Viteri, after reviewing operational and financial performance last year, announced results for the first half of 2008. “At the end of June, we are estimating EBITDA at €570 million, while the projection for net profit of €170 million is nearly 1.5 times that of last year.”
In this context, Galán said the “major investments projected for the year, more than €3.5 billion, will drive an increase in capacity to well over 9,000 MW”. He added that EBITDA expected for all of 2008 will be around €1.3 billion – more than double that in 2007- and net profit to be close to €400 million, nearly three and a half times last year’s.

Viteri said that between January and June this year a total of 851 MW have been installed in eight different countries. This doubles the installation rate of the same period of previous years and ensures the target of 2,000 MW installed in 2008 will be met.

Presence in the most important markets

The CEO of IBERDROLA RENOVABLES, who stressed that the Company is operating in a highly favourable environment for clean energy, said the Company’s international expansion “has been highly selective, with a solid presence in the most important markets and especially active in countries with higher growth potential and favourable regulatory conditions.”

Reinforcing the Company’s world leadership in the sector* is the fact that “we have developed major wind farms in leading markets,” said Viteri. In Spain at Maranchón with more than 200 MW of capacity, in the UK at the 320 MW Whitelee complex where  construction is near completion on what will be Europe’s largest wind farm, and Klondike III in the U.S., whose more than 400 MW makes it among the largest on the American continent.

In order to strengthen this leadership, IBERDROLA RENOVABLES today announced its 2008-2012 Strategic Plan, with an investment programme of €18.8 billion and a goal of achieving an EBITDA close to €3.4 billion and a net profit of €1 billion, installed capacity of close to 18,000 MW and production of more than 42,000 GWh. These significant investments will contribute to revitalizing Spanish industry and the economy as a whole.

Galán said IBERDROLA RENOVABLES expects to achieve payout similar to  that of the Iberdrola Group in 2012. “These results will allow us to distribute increased dividends over the next five years, with a payout rising progressively from 25% to 50% at the end of the period.” In the interim, the Company expects to double its current capacity to more than 13,500 MW by 2010, by when it projects multiplying its 2007 net profit by seven to reach €800 million.

Corporate headquarters transferred to Valencia

Galán said the transfer of IBERDROLA RENOVABLES’ headquarters to  Valencia**, one of the agenda items approved today by the General Shareholders Meeting, “reflects a policy of decentralization of the decision-making centres” of the Group, previousy put into practice with the operations in the UK and the United States.

 “Valencia is a dynamic region offering major growth opportunities. This new location in the Mediterranean area will give the Company a competitive advantage, with ample availability of natural and human resources, as well as great potential for development of renewable energy.”

Among the proposals approved by Shareholders were the 2007 financial accounts and management reports, authorization for the Board to buy back shares up to a máximum of 5% of capital, ratification of Ernst & Young as auditors and a new share plan for employees.

Adoption of best corporate governance practices

Finally, the IBERDROLA RENOVABLES chairman made special mention of initiatives in adopting corporate governance norms since the stock market listing, “which have been born out of vocation and a conviction that transparency, business ethics, rigour and honesty are the basis for building relationships of confidence with shareholders and society.”

He recalled in 2007 for the Company Bylaws were amended in 2007, and approval obtained for Regulations for the General Shareholders Meeting, the Board of Directors and the Internal Code of Conduct in Securities Markets, “which substantially follow the recommendations of the Unified Code of Corporate Governance approved by the National Securities Market Commission (CNMV) in May 2006”.

Galán said that the Board of IBERDROLA RENOVABLES approved the policies of Corporate Governance, of Control and Risk Management, and of Corporate Social Responsibility.

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* Source: New Energy Finance (December 2007)
** The Company has established its headquarters at calle de Menorca, Valencia
IMPORTANT INFORMATION
 
This announcement is not an offer for sale, purchase or exchange or an request for sale, purchase or exchange of securities.  Shares in Iberdrola Renovables, S.A. may not be sold in the United States absent registration or an exemption from registration.

FORWARD-LOOKING STATEMENTS
 
This communication contains forward-looking information and statements about Iberdrola Renovables, S.A. These include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, capital expenditures, synergies, products and services, and statements regarding future performance. Forward-looking statements are statements that are not historical facts and are generally identified by the words “expects,” “anticipates,” “believes,” “intends,” “estimates” and similar expressions.
 
Although Iberdrola Renovables, S.A. believe that the expectations reflected in such forward-looking statements are reasonable, investors and holders of Iberdrola Renovables, S.A. shares are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of Iberdrola Renovables, S.A., that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements, including those contained in the Prospectus filed by Iberdrola Renovables, S.A. with the Comisión Nacional del Mercado de Valores (“CNMV”) on 22 November 2007, and those that may be included in future Prospectuses and Documentation filed in the future by the Company with the CNMV and with other regulatory bodies.

Forward-looking statements are not guarantees of future performance. They have not been reviewed by the auditors of Iberdrola Renovables, S.A. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date they were made. All subsequent oral or written forward-looking statements attributable to Iberdrol Renovables, S.A. or any of its members, directors, officers, employees or any persons acting on its behalf are expressly qualified in their entirety by the cautionary statement above. All forward-looking statements included herein are based on information available on the date hereof. Except as required by applicable law, Iberdrola Renovables, S.A. undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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