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Iberdrola Posts €793 Million First Quarter Profit: International Area Offsets Lower Spain Contribution


Negative business conditions in Spain contribute to 34.2% decline in net profit


Ebitda rose  9% to €1,952 million, driven by new international businesses


  • Diversification by region and business helped the Company increase operating profit, with solid contribution from UK and US businesses
  • Production rose 4% to 36,845 million kWh reflecting the positive impact of the company’s international strategy
  • Slowdown in Spain due to lower demand, lower wholesale prices and higher financing costs due to the tariff deficit and regulatory uncertainties


  • Group liquidity exceeded €9.1 billion, supported by €5 billion in bond issues on the international markets
  • The transformation of the Group, with strong international expansion, has equipped it face the adverse economic situation and declining business in Spain
  • IBERDROLA is cementing the foundations for future growth through new wind, hydro and nuclear projects around the world

IBERDROLA recorded a net profit of €793 million in the first quarter of 2009, a fall of 34.2% over the same period last year, due to sharply lower extraordinary gains and declining business in Spain affected by falling demand and lower prices. Ordinary income, excluding gains from asset sales, increased by 0.4%.
Diversification by region and by business over recent years enabled the Company to offset lower income in Spain and achieve a 9% rise in Ebitda to €1,952 million. The contribution of ScottishPower, Energy East and IBERDROLA RENOVABLES has been key to sustaining business in a negative economic climate. 

Energy business in Spain contributed 30% to Ebitda, ScottishPower 27%, Renewables 17%, Energy East 12%, Latin America 10% and others 4%. Revenues rose 21.3% to €7,642.5 million, net operating profit (Ebit) was up 8.1% at €1,424.8 million, operating cash flow rose 14% to €1,274 million, and gross margin was 15.7% higher at €2,953 million.

In Spain, IBERDROLA activity was affected by a 7.5% decline in demand and a 34% fall in wholesale prices.

In addition, financing costs rose as a result of the tariff deficit, which in the case of IBERDROLA came to €2,635 million at the end of 2008. The Company hopes the Government will assume responsibility in the near future for the debt owed to utilities, as in the Supreme Court ruling of 28 January 2009. This would resolve regulatory uncertainty and help investments which will allow the Company to continue to play a role as economic engine to meet the crisis.

Despite the situation in Spain, the strength of IBERDROLA’s international business model allowed it to increase overall production by 4% in the first quarter to 36,845 million kilowatt hours (kWh), of which more than half was generated outside Spain. The Company has continued to diversify and grow its generation assets around the world to reach 43,670 megawatts (MW), a rise of 6% over the same period last year, and characterized by low CO2 emissions and flexible costs.

The Company obtained €26.6 million in capital gains from asset sales, mainly from its stake in Guatemalan company Navega, compared with €536 million in the same period of 2008.

IBERDROLA maintained its solid financial position in the first quarter, with a leverage of 52.2% (excluding the impact of the tariff deficit). It has a solid ’A’ rating and more than €9.1 billion in liquidity, enough to meet financing and investment needs for the next two years. This has been made possible by recent issues in the international capital markets of more than €5 billion.

In the first quarter, the Company achieved efficiency gains with a rise of just 1% in operating costs against the same period last year, excluding Energy East, which had yet to be integrated.

A strategy for the future

IBERDROLA will this year consolidate its activities in the U.S. and the UK, as well as other countries among the 44 where it is present, maintaining a high level of investments in the year (€4.2 billion) in line with cash flow generated, while continuing to improve efficiency and reduce costs.

The Group will take advantage of opportunities arising from initiatives in different countries to deploy the energy sector as an engine for economic recovery. These include new incentive plans expected in the U.S. to improve grid infrastructure and drive renewable energy, and in Europe with the Green Package and infrastructure investment plans in the UK.

The Company has prepared the foundations for growth in the coming decade with a number of hydro and nuclear generation projects to add to promising prospects in wind power especially in the United States. It will develop 3,000 MW in hydro capacity including 1,050 MW in Spain, 1,000 MW in Brazil and 1,134 MW in Portugal, and has formed a consortium with GDF-Suez and Scottish and Southern Energy to bid for sites to build new new nuclear power stations in the UK and potentially in other countries.

Investments since the year 2000 have exceeded €53 billion, creating wealth and prosperity. IBERDROLA has created  more than 35.000 indirect jobs, accumulated procurements of €21 billion, has assets totalling nearly €86 billion and shareholder funds of close to €26 billion.

Key operational aspects in the first quarter of 2009


IBERDROLA was affected in Spain during the first quarter by adverse operacional conditions, with a significant fall in pool prices (-34%) and a drop in electricity demand (-7.2%) to 25,743kWh.

Despite this, the Company increased production by 2.3% over the same period last year to 16,972 million kWh thanks to a balanced generating mix.

Consistent with its focus on clean energy technology, IBERDROLA increased hydro production by 94.2% to 3,130 million kWh, and that from renewable sources by 6.1% to 2,769 million kWh. This increased clean energy contribution meant 70% of production in Spain was emission free, with CO2 per kWh emissions down significantly from 171 to 143 grams.

The international expansion followed in recent years, diversifying and expanding its generating capacity around the world, has allowed IBERDROLA  to offset the difficult situation in Spain.
The Company closed the first quarter with installed capacity of 43,670 MW, a rise of 6%. By technology, combined cycles accounted for 30.1%, hydro-electricity for 22.6%, renewable energy for 22%, thermal for 10.8%, nuclear for 7.7%, fuel-oil for 4.1% and cogeneration for 2.7%. As a result, IBERDROLA was able to increase production by 4% to 36,845 million kWh.

The Company increased capacity significantly outside Spain, a rise of 12.6% from 15,273 MW to 17,204 MW. Production came to 19,873 million kWh, nearly 54% of the total.

Emissions came to 298 grams of CO2 per kWh at Group level, against 302 grams in the same period last year, and more than 40% of total production was emission free thanks to the focus on clean generating capacity. The strategy, which has led it become a front-runner in the fight against climate change*, will continue in coming years with the startup of more renewable energy capacity and hydro plants.

IBERDROLA has also increased distributed energy by 14.9% in the quarter to 52,767 million kWh.  With the incorporation of Energy East, it now distributes more energy outside Spain than within.


The Company confirmed its leadership of the world wind power sector**, recording Ebitda of €338.1 million and net profit of €113.6 million. An additional 323 MW in new capacity was installed during the quarter,  with 700 MW more capacity on stream, for a total capacity of 9,624 MW at the end of the period, a rise of 27.3%. Of this, 96.4% or 9,282 MW was wind power and the remaining 342 MW was in mini hydro plants.
The Company expanded further abroad, with strong growth in the United States where installed capacity came to 3,031 MW (a rise of 155 MW in the period) and in the United Kingdom where it rose 39 MW to 704 MW. In Spain, capacity stood 6% higher at 4,959 MW.

Production rose 20% to 5,398 million kilowatt hours (kWh), with wind power accounting for 96.8% of the total. By region, Spain contributed 2,597 million kWh (48.1% of the total), the United States 1,731 million kWh (32.1%), the UK 466 million kWh (8.6%) and the rest of the world 431 million kWh (8%). Mini hydro plants generated 172 million kWh in the period, accounting for 3.2% of the total. 


The Company has become one of the main drivers of growth for IBERDROLA, with Ebitda totalling €529.3 million in the first quarter, accounting for 27% of gross operating profit of the Group. Continuing efficiency gains have favoured synergies and cost savings.

Installed power in the UK rose 4.3% in the first quarter to 6,740 MW, with the startup of 276 MW in renewable capacity. Production rose 10.1% to 7,981 million kWh, driven in particular by a 45.6% rise in renewable energy output to 466 million kWh.

At the same time, a slower decline in demand in the UK has meant energy distributed by ScottishPower fell just 3.2% to 10,237 million kWh, equivalent to 19.4% of all electricity distributed by the Group.


Energy East results were incorporated for the first time for an entire quarter, following the company’s integration last September. It contributed €228.1 million to Group Ebitda, or 12% of the total.

IBERDROLA reinforced its profile in the United States, not only with the acquisition of Energy East but also with strong growth from its renewable energy business. Installed capacity in the country stood at 3,965 MW, a rise of 1,373 MW over the same time last year, with 3,031 MW from renewable sources, a rise of 1,245 MW.

As a result of this increase, IBERDROLA lifted production in the U.S. by 19.3% to 2,569 million kWh, and distributed energy came to 9,146 million kWh, 17.3% of the Group total.


Gross operating profit from this region came to €187.8 million, accounting for 9.6% of the Group total. Installed capacity was 5,569 MW, a rise of 15 MW over March 2008, and production came to 8,892 million kWh representing 24% of total output. Distributed energy declined slightly (-0.8%) to 7,641 million kWh or 20.7% of the total.

For further information:
Iberdrola Communications
Jesús García +34-91-784-2502
Keith Grant +34-91-784-3556

Simon McMillan 0141 566 4875

* In September 2008 the Company was named best utility in the World for its strategy in combatting climate change, according to the  Climate Leadership Index.

** Source: New Energy Finance.