Iberdrola has today posted financial results for the full-year 2016. Below is an overview of the results including a UK breakdown.
- Iberdrola EBITDA increased 5.5% to 7,808 million euros
- Net Profit increased by 11.7% to 2,705 million euros, mainly driven by the contribution of US business, AVANGRID, which grew 53%
- Net investments increased by 32.3% to 4,264 million euros
- As a result, the Board of Directors will propose, to the Annual General Shareholder Meeting, an increase in 2016 shareholder remuneration of nearly 11%, to 0.31 euros per share
Update to the Outlook for 2016-2020
- Looking ahead Iberdrola is accelerating its investments due to specific projects for growth and strong financials: adding €1 billion, mostly allocated to renewable projects in the United States, and bringing the total up to €25 billion
- The company will be allocating around 90% of its investments to network extension and digitisation (42%), renewable energy (42%) and regulated generation (7%), areas accounting for 81% of EBITDA at the end of the period
- This means that Iberdrola is improving its outlook for net profit annual average growth of around 7.5% to €3.5 billion by 2020
2016 UK Results
- In the United Kingdom, Networks EBITDA came to GBP 799.1 million, down 3.3% from 2015 (GBP 826.4 million) mainly due to the anticipated revenue profile as part of the new regulatory framework for the distribution network (RIIO ED1), which came into force in April 2015
Generation and Supply
- In the UK EBITDA for generation and supply fell to GBP 240.3, down 21.5% from GBP 306.2 million in 2015.
- The Energy Wholesale business increased. Whilst overall plant production fell following the closure of the coal-fired Longannet plant in March 2016, operating costs improved.
- The reduction in the Retail business is influenced by lower gas and electricity sales due to the warmer weather. In addition, whilst domestic revenue and energy prices fell in 2016, non-energy costs increased by £75m year on year.
- UK Renewables EBITDA fell 31% to GBP 218.5 million, down from GBP 318.1 million in 2015, largely driven by a drop in production (-17%). 2015 was a record year for wind power generation (3,710 GWH). The 2016 figure of 3,098 GWH is on a par with wind power production in 2014 (3,110 GWH).
- In total ScottishPower placed over £3 billion of contracts in 2016, for planned investments in renewable energy, smart meters and reinforcing the company’s network of power lines and substations in Scotland and Merseyside and North Wales
2017 UK Outlook
- In 2017 SP Energy Networks will complete the Western Link project, in partnership with National Grid. This £1 billion project will see more than 380km of subsea HVDC cables installed between Ayrshire and Deeside, North Wales, which will increase the interconnection between Scotland and England by 2,200 MW. It will take renewables from North to South, and bring power the other way when required.
- Work will continue on the Transmission investment programme, RIIO-T1, and Distribution investment programme, RIIO-ED1
- The Wikinger Offshore Windfarm, a 70 turbine 350 megawatt project in the Baltic Sea, will be completed during 2017. All foundations are now installed, and towers are currently being erected. This is Iberdrola’s first solely-owned offshore windfarm.
- East Anglia ONE, the 102 turbine 714 MW project in the southern North Sea, will see onshore construction work start. This will include work on the cable route and onshore substation. The project will deliver industry-leading levels of UK content, above 50%, as well as being the best value offshore windfarm ever to go in to construction. Contracts placed to date are supporting jobs and investment in Great Yarmouth, Lowestoft, Hull, Belfast and Aberdeen.
- ScottishPower Renewawbles will complete the 2016/17 onshore investment programme, which has included the construction of eight new windfarms with capacity of just under 500MW
Generation and Supply
- ScottishPower’s smart meter rollout will continue across the UK. To date, over 240,000 meters have been installed, and ScottishPower will install an average of 2,500 meters every day during 2017, supported by 500 field engineers.
- The new ScottishPower HQ in Glasgow welcomed the first employees in Q4 2016
- All 1,600 staff will move in during 2017
- At 14 floors, it is the largest single-occupier development in Glasgow for 20 years
- The new office will also double as Iberdrola Group’s Global Offshore Wind HQ
Commenting on the results, ScottishPower Chief Corporate Officer, Keith Anderson, said: “2016 was a challenging year, but ScottishPower continued to make significant investments. We are investing in projects to help improve services for customers and to deliver new low carbon generation and efficient networks, which are critical if the UK is to achieve climate targets and ensure continued security of supplies.
“Even amidst future uncertainties in global markets, we can continue to deliver on our planned investment programme, so long as stable regulatory frameworks remain in place.”
To view Iberdrola's full press release, supporting documentation and investor day materials, please click the links below:
Simon McMillan – 07753622257
Paul Ferguson – 07702665924