Iberdrola posted net profit of €827.6 million in the first quarter of 2017, (4.7% down on the same period last year).
Net operating profit (Ebitda) attained €1.86 billion (-8.2%). The company expects to offset lower figures reported in the first quarter as the year progresses, in line with estimates.
In particular, Ebitda was supported by the networks business performance whose contribution rose by 9.1% to €1.02 billion, benefiting from US operations. Balance sheet was affected by lower rain and wind resource during the quarter, by increased taxes in Spain and the poor performance of liberalised business in the UK.
Iberdrola continued making progress towards delivering its 2016-2020 Outlook. Throughout the quarter, investment grew by 13.4% to €1.02 billion. Of that amount, 93% was allocated to renewables (46%), networks (37%) and contracted generation (10%). As a result of its investment strength, the company plans to commission a total 2,011 megawatts (MW) in renewables and regulated generation in 2017.
Also, the group currently has a project pipeline of 6,500 MW scheduled to be commissioned by 2020, out of which 3,527 MW are contracted generation; 1,546 MW onshore wind power; 1,064 MW offshore wind, and 336 MW photovoltaic solar projects.
Q1 2017 ScottishPower Financial Results
Investment in the UK accounted for nearly 40% of Iberdrola’s global investments in the first quarter of 2017. Approximately £364 million was invested, primarily in renewable energy and investments in the distribution and transmission electricity networks.
SP Energy Networks:
EBITDA £210m (-6% from £223m Q1 2016)
The returns for SP Energy Networks are largely driven by the phasing of investments following the implementation of the RIIO-ED1 distribution investment programme from April 2015. In the first quarter of 2017 approximately £160m has been invested in the UK Networks Business to upgrade power lines and substations.
Generation and Supply
EBITDA £47m (-73% from £173m in Q1 2016)
UK Generation has decreased by £45m, with the closure of Longannet Power Station in March 2016 a key factor in the comparison to Q1 2016. The Retail business is down by £81m due to increases in non-energy costs, mild weather conditions and tighter margins. At the same time customer accounts have increased to 5.5 million (3.29 m electricity, 2.21 m gas), against approximately 5.4 million in Q1 2016.
EBITDA £90m (+7% from £84m in Q1 2016)
Renewables has increased against a backdrop of higher production for Q1 2017 with 1,164 gigawatt hours (GWH) generated against 918 GWH for the same period last year. Over £168m has been invested in renewables in the first quarter of 2017, with several major contracts placed for the East Anglia ONE offshore windfarm, which will begin full construction this year.
Keith Anderson, ScottishPower Chief Corporate Officer, said: “We have seen an uplift in Renewables, due to stronger production, and the Networks business is performing in line with expectations. We anticipated the closure of Longannet would result in a year-to-year fall in the generation business.
“The retail business has seen a redution due to tighter margins, increasing non-energy costs and mild weather. We have increased our customer numbers year-on-year, and we have also increased the number of customers actively on a fixed product. More than half of our customers are now on a product rather than the Standard Variable Tariff, which is the best of the major suppliers.
“Margins across the industry are tight because competition has been increasing, and switching numbers remain high. We will continue to work hard to get even more customers on to products.”
Commenting on a potential price cap, Keith Anderson said:
“A potential price cap could harm competition, so the bold move by government would be to set a deadline to abolish Standard Variable Tariffs (SVT) and get every customer on a fixed-price deal instead – a recommendation we made 2 years ago to the Competition and Markets Authority inquiry.
“Just as you insure your car every year and go to the market for the best deal for you, so every energy customer should engage with the market at least once a year to make sure they are on the best deal for them.
“The government could impose a target that two out of three customers should be on a deal by the end of 2018, and all customers on a deal by the end of 2019 with SVT abolished once and for all. Any company that fails to meet these targets should have a price cap not only imposed but retained until all their customers are on deals.“
For further information on Iberdrola Q1 Results, please click here